OKA outlines how performance improvement plans will be used before penalties

OKA staff on March 25 presented a detailed framework for performance improvement plans (PIPs), the statutorily required mechanism entities must implement to come into compliance with statewide spending targets.

Staff said PIPs will be developed by the regulated entity and evaluated and approved by OKA, and may run up to three years. Each PIP must include a data‑supported cost‑driver analysis, specific SMART goals (specific, measurable, achievable, realistic, time‑bound), strategies and evidence for expected cost savings, assessment plans, risk‑mitigation steps, and a plan to preserve access, quality, equity and workforce stability.

The office will monitor implementation through regular progress reports and ad‑hoc meetings; the final progress report is due within 45 days of the end of the implementation period. Staff said some supporting documents submitted during implementation may be confidential, and that OKA may brief the board in closed session where appropriate.

Board members asked whether a PIP’s goal must simply bring future growth down to the statewide target (for example, 3.5%) or whether plans should aim to recoup past excess spending. Staff said the statutory framework requires providing the entity an opportunity to improve through a PIP before assessing penalties and that the office will return with more detailed recommendations and draft policy for the board in April.

Public commenters, including labor representatives and nurses’ organizations, urged that PIP development include worker and community input and warned that enforcement must have clear, meaningful consequences when entities fail to comply. Hospital commenters asked for multi‑year assessments and flexibility in implementation timelines given year‑to‑year volatility.

Staff committed to returning with refinements to the PIP protocol for board review, and to identify how PIP outcomes would be measured against the office’s annual reported data.