With the dawn of January 1, 2024 edging ever closer, the California Office of Health Care Affordability (OHCA) is prepping to launch its advanced regulatory review for specific health care transactions. As discussed in our prior examination, a broad spectrum of Health Care Entities, subject to specific exceptions, will soon be under the OHCA’s purview for potential prospective evaluations.
This scope entails third-party payers and administrators, hospitals and hospital systems, fully integrated delivery systems, pharmacy benefit managers, physician organizations, and other health care providers. As such, Health Care Entities are bracing for a fundamental change in the solicitation, conduct, and closure of health care transactions. The state of California, through the OHCA, is shifting gears towards a more detailed pre-closing review of these transactions.
A public comment period has been put in motion, set to suspend on October 17, 2023. The period lends a platform for all involved parties to share viewpoints and considerations regarding the proposed regulations. These insights and concerns will be pivotal, potentially determining the shape and direction of the revised regulations. They will also play a crucial role in determining the enforcement and interpretive efforts made by OHCA.
The publication of an advance draft of the regulations has been significantly beneficial, setting expectations for present and future Health Care Entities. Of equal importance is the latitude given to these entities to strength-test the proposed regulations, highlighting areas for improvement and growth, which the OHCA may revise accordingly.
Health Care Entities are thus charged with maneuvering these shifting legal landscapes, aiming to meet the perhaps daunting task of ensuring compliance with emerging California regulations. The ensuing period is one of reformulation and strategizing for these entities, with scrutiny especially centered on upcoming health care transactions.
The implications of this regulatory review are extensive, not only within California but also on a wider national and potentially global scale. A successful implementation in California may inspire subsequent adaptation in other states or countries. As such, these developments warrant close observation by all stakeholders in the health care sector.