California Health Care Quality and Affordability Act.

Plain English Breakdown

The exact impact on health care costs and affordability remains uncertain.

California Health Care Quality and Affordability Act

This act updates definitions, requires more research on management services organizations, and mandates that certain entities report their agreements to the Office of Health Care Affordability.

What This Bill Does

• Updates the definition of a provider to include specific types of health care service providers.
• Adds new terms like 'hedge fund' and defines it as a pool of funds managed by investors for earning returns, regardless of strategies used.
• Requires the Office of Health Care Affordability to study management services organizations and set rules for them.
• Makes sure that noticing entities must report certain agreements or transactions with health care entities or management services organizations to the office.

Who It Names or Affects

• The Office of Health Care Affordability within the Department of Health Care Access and Information
• Health care providers and payers in California
• Management services organizations

Terms To Know

hedge fund

A pool of funds managed by investors for earning returns, regardless of strategies used.

noticing entity

An organization that must report certain agreements or transactions with health care entities to the Office of Health Care Affordability.

Limits and Unknowns

• The bill does not specify when it will take effect.
• It is unclear how these changes will affect health care costs for consumers and purchasers in California.

Official Summary Text

AB 1415, Bonta.
California Health Care Quality and Affordability Act.
Existing law, the California Health Care Quality and Affordability Act, establishes within the Department of Health Care Access and Information the Office of Health Care Affordability to analyze the health care market for cost trends and drivers of spending, develop data-informed policies for lowering health care costs for consumers and purchasers, set and enforce cost targets, and create a state strategy for controlling the cost of health care and ensuring affordability for consumers and purchasers. Existing law requires the office to conduct ongoing research and evaluation on payers, fully integrated delivery systems, and providers to determine whether the definitions or other provisions of the act include those entities that significantly affect health care cost, quality, equity, and workforce stability. Existing law defines multiple terms relating to these provisions, including a
health care entity to mean a payer, provider, or a fully integrated delivery system and a provider to mean specified entities delivering or furnishing health care services.
This bill would update the definitions applying to these provisions, including defining a provider to mean specified entities delivering or furnishing health care services. The bill would include additional definitions, including, but not limited to, a hedge fund to mean a pool of funds managed by investors for the purpose of earning a return on those funds, regardless of strategies used to manage the funds, subject to certain exceptions. The bill would require the office to conduct ongoing research and evaluation on management services organizations, as specified, and to establish requirements for management services organizations to submit data and other information as necessary to carry out the functions of the office.
Existing law requires a health
care entity to provide the Office of Health Care Affordability with written notice of agreements or transactions that do specified actions, including sell or transfer, among other things, a material amount of its assets to one or more entities.
The bill would similarly require a noticing entity, as defined, to provide the office written notice of agreements or transactions between the noticing entity and a health care entity or management services organization, or an entity that owns, or controls the health care entity or management services organization that perform the same specified actions described above. The bill would additionally require a management services organization to provide the office with written notice of any agreement or transaction between the organization and any other entity.

Current Bill Text

Download Bill PDF