California Health Care Quality and Affordability Act.

Assembly Member Bonta, with Coauthor Schiavo, advances a measure that ties health care cost visibility to market accountability by creating the Office of Health Care Affordability within the Department of Health Care Access and Information and establishing a board-driven framework to examine per-capita spending and cost targets. The measure assigns the office enforcement authority and broad data responsibilities, emphasizing data-informed policy development, public reporting, and a governing structure to monitor affordability for consumers and purchasers.

A central feature is an expanded definitional framework that encompasses management services organizations and hedge funds/private equity groups, broadens the concept of total health care expenditures to include administrative costs, profits, and certain drug costs, and refines terms such as provider, payer, and private equity–related entities. The bill requires ongoing data collection from diverse public and private sources, analysis of cost and quality trends (including drugs, labor, and profits where data permit), and the public reporting of cost drivers, affordability metrics, and sector-specific targets. It also directs the office to develop and promote alternative payment models, measure systemwide investments in primary care and behavioral health, and monitor workforce stability and training as they relate to costs, with enforcement mechanisms and potential penalties for noncompliance.

The measure also substantially expands oversight of health care transactions through new reporting obligations. Health care entities and “noticing entities”—including private equity groups, hedge funds, MSOs, and entities that own or control providers—would be required to give written notice of material changes in ownership, operations, or governance at least 90 days before the transaction, with public disclosure triggered under certain conditions. The office would regulate these reporting requirements, and regulations would be adopted to avoid duplicative reporting and to establish thresholds and fees. Several transactions are exempt from notice obligations (e.g., certain regulated health plans and insurers, county purchases to maintain access, nonprofit corporations reviewed by the Attorney General), though non-exempt entities may still be subject to cost/market impact reviews. The framework envisions coordination with the Department of Managed Health Care, the Insurance Commissioner, and the Attorney General, while preserving the corporate practice of medicine doctrine and avoiding broad regulatory overreach.

In implementation terms, the measure would create a near-term procurement exemption through January 1, 2026, for contracts entered into under the new chapter, and would obligate MSOs to submit data necessary to carry out the office’s functions. It envisions regulatory authority to carry out the chapter’s provisions, advisory committees, and ongoing analysis of market consolidation, venture capital activity, and other market dynamics. While it calls for extensive data infrastructure and public reporting to inform consumers and purchasers about affordability and price trends, it does not by itself specify an appropriation, delegating funding considerations to the budget process. The measure situates the office as a nexus for data-driven oversight of cost targets, quality and equity metrics, and market activity, seeking to align public transparency with regulatory scrutiny across major health care actors.