California Health and Safety Code § 127500.2

As used in this chapter, the following definitions apply: (a) (1) “Administrative costs and profits” means the total sum of all expenses not included in the numerator of the medical loss ratio calculation under state or federal law, including, but not limited to, all of the following: (A) All categories of administrative expenditures. (B) Net additions to reserves. (C) Rate dividends or rebates. (D) Profits or losses. (E) Taxes and fees. (2) For purposes of this chapter, “administrative costs and profits” for a fully integrated delivery system means those associated with its nonprofit health care services plan. (b) “Affordability for consumers” means considering the totality of costs paid by consumers for covered benefits, including the enrollee share of premium and cost-sharing amounts paid towards the maximum out-of-pocket amount, including deductibles, copays, coinsurance, and other forms of cost sharing for public and private health coverage. (c) “Affordability for purchasers” means considering the cost to purchasers, including, but not limited to, health plans and health insurers, employers purchasing group coverage, and the state, for health coverage and shall include premium costs, actuarial value of coverage for covered benefits, and the value delivered on health care spending in terms of improved quality and cost efficiency. (d) “Alternative payment model” means a state or nationally recognized payment approach that financially incentivizes high-quality and cost-efficient care. (e) “Board” means the Health Care Affordability Board established by Section 127501.10. (f) “Director” means the Director of the Department of Health Care Access and Information. (g) (1) “Exempted provider” means a provider that meets standards established by the board for exemption from either of the following: (A) The statewide health care target. (B) Specific targets set for health care sectors, including fully integrated delivery systems, geographic regions, and for individual health care entities. (2) The factors used in setting standards for exemption may include, but are not limited to, annual gross and net revenues, patient volume, and high-cost outliers in a given service or geographic region. (3) In determining whether a provider is an exempted provider, the board shall also consider any affiliates, subsidiaries, or other entities that control, govern, or are financially responsible for the provider or that are subject to the control, governance, or financial control of the provider. (4) A physician practice that does not meet the definition in subdivision (r) is an exempted provider. (h) “Fully integrated delivery system” means a system that includes a physician organization, health facility or health system, and a nonprofit health care service plan that provides health care services to enrollees in a specific geographic region of the state through an affiliate hospital system and an exclusive contract between the nonprofit health care service plan and a single physician organization in each geographic region to provide those medical services. (i) “Geographic region” may either be the regions specified in Section 1385.01 or may be otherwise defined by the board. (j) “Health care cost target” means the target percentage for the maximum annual increase in per capita total health care expenditures. (k) “Health care entity” means a payer, provider, or a fully integrated delivery system. ( l ) “Hedge fund” means a pool of funds managed by investors for the purpose of earning a return on those funds, regardless of the strategies used to manage the funds. Hedge funds include, but are not limited to, a pool of funds managed or controlled by private limited partnerships or other types of private corporate or partnership formations. A hedge fund does not include either of the following: (1) Natural persons or other entities that contribute, or promise to contribute, funds to the hedge fund, b

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