What’s happening: At its April 22 meeting, the Office of Health Care Affordability (OHCA) board voted 5-0 to move forward with reduced targets for a handful of hospitals. All other hospitals remain subject to the 3.5% target for 2025, which ramps down to 3% by 2029.
What else to know: This vote occurred on the same day the board reviewed nearly 100 written and verbal comments from the hospital field urging the board to reject the proposal until further analysis — including of the potential impact on patients — is completed.
Following a months-long campaign advising the OHCA board to reject the proposed hospital sector target, CHA released a media statement denouncing the board’s decision.
With Tuesday’s action, the board approved a modified version of its February proposal to apply reduced spending targets for the seven so-called “high-cost” hospitals. Under the proposal, spending growth for hospitals designated as high cost will be capped at 1.8% in 2026, dropping to 1.6% by 2029. These targets will apply to seven of the 11 hospitals OHCA previously identified. Four hospitals were removed from OHCA’s high-cost list because they had a small number of discharges or improved trends in at least two consecutive years.
The board also approved an amendment requiring OHCA to annually provide the board with an updated list of hospitals that meet the “high-cost” criteria and factors to consider in identifying such hospitals. This would allow, but not require, the board to modify its list of high-cost hospitals annually.
OHCA staff also updated the board on its:
- Approaches to measuring hospital outpatient spending, including potential data sources to inform the measure and plans to engage with stakeholders in developing and refining the measure through fall 2025
- Work from its Cost and Market Impact Review program, specifically that 16 transactions have been reviewed in the past year
- Progress toward measuring quality and equity performance, including its plans to present recommendations for hospital patient safety measures in fall 2025
Finally, due to the extensive public comment provided on the hospital sector target proposal, OHCA deferred to the May board meeting discussion of its work on establishing a behavioral health investment benchmark.
