The Health Care Affordability Board on Wednesday declined to approve a draft penalty schedule for late or missing data and asked staff to rework the proposal and return in November after members and public commenters said the plan’s fines were too small to deter noncompliance.

CJ Howard, assistant deputy director for the health care spending targets branch, outlined staff’s draft: two flat untimely‑submission fines ($10,000 initially and an additional $50,000 if data were not filed by Nov. 1) and a per‑member failure‑to‑submit penalty that would begin Dec. 1 at $5 per member and double in each subsequent noncompliant year. Howard said penalties would be publicly posted and OCA could pursue legal remedies if entities continued to refuse data.

Board members and stakeholders argued the structure would not produce real deterrence for large, often nationally‑operated health plans. “These numbers seem way too low to me,” said Board Member Ian Lewis, urging a steeper penalty or a faster escalation schedule so the cost would not be easily absorbed as “the cost of doing business.”

Public commenters echoed that view. Beth Capel of Health Access California told the board that penalties sized in the “low millions” are not proportionate to the national revenues of large plans and would fail to motivate compliance. At least two labor and provider groups also urged stronger enforcement and limited use of waivers.

Staff defended the framework as reasonable and noted that most data submitters have complied: Pagani reported 48 of the office’s 50 submitters had filed or passed validations by the meeting. But the office acknowledged that if the per‑member penalty does not motivate compliance, other remedies — including administrative action and referral to licensing bodies — are available.

Board members pressed staff on timing and on whether the office could make the penalty increase sooner than a year. “If the main use is for December,” said member Richard Pan, “then a larger penalty in December probably makes more sense.” Counsel emphasized an administrative action would typically lead to an administrative‑law process that could compel payment and data, but the timing and costs of those proceedings vary.

After extensive discussion, the board chair proposed tabling the item and asked staff to return in November with a revised recommendation that clarifies how penalties, the timeline for escalation, and legal remedies interact. The board did not set new numeric thresholds but signaled it wants a tougher enforcement posture than the draft provided.

What’s next: staff will bring an updated penalty proposal back to the board in November that addresses concerns about scale, timing and interplay with administrative enforcement.