Office of Health Care Affordability staff provided an overview of enforcement options and introduced Performance Improvement Plans (PIPs) as a required progressive step under statute for entities that exceed spending targets without reasonable cause.

Staff reviewed PIP models in other states: Massachusetts requires entities to submit a PIP within 45 days and concluded its single, required PIP with measurable savings; Oregon’s process allows 90 days to submit and a 24‑month implementation period. Under California statute described by staff, OCA may require PIPs, which may last up to three years; PIPs must not propose measures that would erode access, quality, equity or workforce stability. Entities that fully comply with an approved PIP but still fail to meet spending targets are not automatically assessed administrative penalties, though penalties may follow repeated noncompliance or willful failures.

Board members asked several clarifying questions: whether PIPs are mandatory or discretionary (staff said the director has discretion to require a PIP but statutes build in progressive enforcement steps), whether PIPs create a de facto deferral of penalties (staff noted statute requires stepwise measures and penalties generally follow unsuccessful corrective efforts), and how OCA will prioritize cases if multiple entities miss targets (staff said enforcement considerations will prioritize which entities to take beyond technical assistance).

Several board members pressed for transparent criteria and reporting requirements for PIPs and for board review of penalty scope and range. OCA staff agreed to return with details on reporting cadence, confidentiality tradeoffs, and a proposed penalty framework for board approval.

Public commenters urged both meaningful transparency and sufficient enforcement teeth so that PIPs lead to real price reductions rather than merely delay penalties.