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OCA recommends adjusted growth targets for 11 ‘high‑cost’ hospitals; opens 45‑day comment period
Summary
The Office of Health Care Affordability proposed on Feb. 25 to identify hospitals that are repeatedly high cost using both a unit‑price metric (commercial inpatient net patient revenue per case‑mix‑adjusted discharge) and a relative‑price metric (commercial to Medicare payment‑to‑cost ratio), and to set slower allowable spending growth for those hospitals; the Board opened a 45‑day public comment period that closes April 11, 2025.
OAKLAND/Monterey — The Office of Health Care Affordability on Feb. 25 recommended a methodology and specific adjustment steps to set lower allowable spending‑growth targets for hospitals the agency identifies as “disproportionately high cost.” The agency said it will publish a statute‑required memorandum and opened a 45‑day public comment period ending April 11, 2025, before the Board must set targets by June 1, 2025.
OCA staff told the Health Care Affordability Board the office would identify repeat outliers using two metrics and a persistence rule: commercial inpatient net patient revenue per case‑mix‑adjusted discharge (a unit‑price measure) and a relative‑price measure (commercial to Medicare payment‑to‑cost ratio). Staff proposed labeling hospitals that are above the 85th percentile on both measures for at least 3 of the most recent 5 years as disproportionately high cost. Those hospitals would be eligible for an adjusted, lower growth target than the statewide…
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