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 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 to include a management services organization, as defined, as a health care entity. The bill would also update a provider to mean specified private or public health care providers and would include a health system, as defined, and an entity that owns, operates, or controls an entity specified in the existing definition, regardless of whether it is currently operating, providing services, or has a pending or suspended license. The bill would include additional definitions, including, but not limited to, a health system to mean specified entities under common ownership or control and 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.
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 private equity group, hedge fund, or newly created business entity created for the purpose of entering into agreements or transactions with a health care entity to provide the office written notice of agreements or transactions between any of the above-described entities and a health care entity, or an entity that owns, or controls the health care entity, that perform the same specified actions described above.