Author: WorkCompAcademy

In 2022, the California Health Care Quality and Affordability Act (SB 184, Chapter 47, Statutes of 2022) established the Office of Health Care Affordability (OHCA) within the Department of Health Care Access and Information (HCAI). (Health and Safety Code, Division 107, Part 2, Chapter 2.6). Title 22, Division 7, Chapter 11.5, Article 1 of the California Code of Regulations sets forth the regulatory requirements for Material Change Transaction Notices and Cost and Market Impact Reviews.

A lawsuit filed this week in San Francisco County Superior Court by the California Hospital Association (and its membership of about 400 hospitals) alleges that the California Office of Health Care Affordability’s (OHCA) board, what the Association claims is “a group of eight unelected bureaucrats,” has raced to implement health care spending caps while ignoring critical factors, including:

– – The underlying costs of care (labor expenses, advancements in clinical care, pharmaceutical prices, etc.)
– – A rapidly aging population that will require more intensive care
– – National and statewide inflationary pressures
– – State and federal policy changes, such as passage earlier this year of the One Big Beautiful Bill Act, which will strip tens of billions of dollars from California’s health care system over the next decade

The California Hospital Association asks the court to prohibit OHCA from implementing five actions, effectively requiring the board to revisit:

– – The creation of a 3.5% statewide spending target for 2025, declining to 3% by 2029
– – The adoption of a hospital sector
– – The adoption of a hospital sector spending target equal to the statewide cost target
– – The adoption of criteria for identifying supposed “high-cost outlier” hospitals
– – The adoption of reduced spending targets for the “outlier” hospitals, starting at 1.8% for 2026 and declining to 1.6% by 2029

“Since its inception, OHCA has continually flouted both the letter and spirit of the law that created it,” said Carmela Coyle, President & CEO of the California Hospital Association. “Lawmakers intentionally established a multi-year time frame for OHCA – to ensure its board engaged in a thoughtful, data-driven approach to making health care more affordable without sacrificing access to care, quality of care, health care jobs, and more. Yet, the office’s illegal and breakneck pursuit of cost-cutting – regardless of the impact on patients and workers – has now put vital health care services for all Californians at risk.”

According to the lawsuit, the Legislature’s intent was clear: “OHCA’s work to improve health care affordability must promote, rather than come at the expense of, health care access, equity, and quality, and the stability of the health care workforce.”

Instead, it alleges that OHCA has rushed to establish hospital spending targets while ignoring “voluminous and complex information,” according to the lawsuit. OHCA has “relied on incomplete and at times faulty data” in establishing “improperly-focused, and unattainable cost targets, which neither consider the actual factors that impact hospital costs nor are constructed to actually ensure consumer affordability,” the lawsuit states.

The lawsuit alleges that actions taken to date by OHCA officials are “arbitrary and capricious,” contain repeated violations of state law, and do not ensure that savings from the imposed cost targets “would be passed to consumers in the form of lower premiums and cost sharing, rather than simply being retained by payers as higher profits.” While OHCA has targeted hospitals with “unattainably low” cost targets, health insurance companies are increasing the premiums paid by consumers by 10% or more each year – calling into question the agency’s actual impact on the pocketbooks of working Californians.

“The spending caps set by politically appointed bureaucrats could force cuts that result in many Californians traveling farther for care, facing longer emergency room wait times, experiencing more overcrowding, and losing access to critical services like maternity care, cancer treatment, behavioral health services, and surgical care,” Coyle said. “OHCA has unfairly targeted hospitals without the necessary research and analysis. This has resulted in a handful of unelected individuals who have chosen to cut billions from California’s health care system, endangering access to health care in vulnerable communities across the state.”

On October 14, 2025, during Oracle AI World in Las Vegas, Oracle announced a significant partnership with Children’s Hospital Los Angeles (CHLA), a top-ranked pediatric hospital and research center. The collaboration highlights CHLA’s adoption of Oracle’s Autonomous AI Database on Oracle Cloud Infrastructure (OCI) to dramatically boost the performance of its mission-critical business systems – achieving up to 98% improvement in speed and efficiency.

This is part of CHLA’s broader digital transformation strategy, which includes a long-term migration of key operations like finance, human resources (HR), supply chain, and customer experience to Oracle Fusion Cloud Applications. The initiative aims to modernize legacy systems (including PeopleSoft applications), enhance data security, and free up resources for patient care in a high-stakes pediatric environment.

Oracle’s major AI push was unveiled during the keynote at Oracle AI World in Las Vegas, featuring Chairman and CTO Larry Ellison and other executives. The event, formerly known as Oracle CloudWorld, shifted focus to AI as a core business differentiator. The announcements center on integrating AI deeply into Oracle’s cloud infrastructure, databases, and data platforms, aiming to make enterprise data “AI-ready” while emphasizing security, scalability, and agentic automation (AI agents that can act autonomously). This builds on Oracle’s prior AI efforts, like embedding AI agents in cloud apps and partnerships for large language model (LLM) training.

CHLA plans pilot programs for advanced AI features, like predictive analytics for patient resource allocation, and potential expansions into machine learning for research data. Success will be tracked via metrics like reduced processing times and staff satisfaction, with possible joint publications to guide the sector. This could accelerate Oracle’s penetration in U.S. healthcare, especially among academic medical centers, amid a market projected to exceed $50B for cloud AI in health by 2027.

Oracle Health (formerly Cerner) competes in electronic health records (EHRs), cloud infrastructure for healthcare, AI-driven analytics, revenue cycle management (RCM), and enterprise resource planning (ERP) for providers like hospitals and clinics. Its strengths lie in integrated AI agents, autonomous databases on Oracle Cloud Infrastructure (OCI), and end-to-end solutions post-2022 Cerner acquisition.

However, it faces stiff competition from EHR giants, cloud hyperscalers with healthcare-specific offerings, and specialized analytics/RCM vendors. Oracle holds about 23% market share in acute care EHRs (as of 2024 data), trailing leaders like Epic.Epic leads with customization, but Oracle’s “voice-first” AI EHR aims to differentiate via OCI’s semantic database for “army of AI agents.” KLAS reports mixed Oracle satisfaction but optimism for AI features.

Jillian DiFusco filed an Application for Adjudication of Claim in 2010, claiming injury to various body parts on July 21, 2008, while she was employed by Hands On Spa as a massage therapist.

On December 7, 2012, a WCJ awarded applicant home health care services of four hours, twice per week. Defendant was ordered to employ a nurse case manager to manage home health care services.

On July 31, 2017, a WCJ issued a Findings, Orders and Award, in which the WCJ found that applicant sustained injury arising out of and in the course of employment to various body parts; that the injury caused temporary total disability and temporary partial disability for various time periods between 2008 and 2012; that the injury caused permanent partial disability for additional time periods between 2009 and 2014; that the injury caused permanent total disability commencing on September 22, 2013; and that there is need for further medical treatment.

On September 21, 2018, applicant filed a Declaration of Readiness to Proceed alleging that the home health care services that applicant had received since 2013 had been discontinued and requesting that the matter be set for expedited hearing to reinstate these services.

A number of expedited hearings took place culminating on February 17, 2021, when the parties entered into another Stipulation, approved by a WCJ, that required defendant to pay the outstanding invoices from the home health care services agency. With respect to defendant, the typed caption states “Hands On Spa; Insured by Employers Compensation Insurance Company; Administered by Employers Insurance Group.”

On the same day applicant’s attorney requested that defendant’s attorney provide coverage information on the case pursuant to former WCAB Rule 10550 (Cal. Code Regs., tit. 8, § 10550, now repealed) and the Coldiron cases. Coldiron v. Compuware Corp (2002) 67 Cal.Comp.Cases 289 (Appeals Board en banc) [Coldiron I]; Coldiron v. Compuware Corp. (2002) 67 Cal.Comp.Cases 1466 (Appeals Board en banc) [Coldiron II].

Defense attorney declined to provide detailed information stating “there is no legal authority requiring disclosure of the policy limit, the primary and the secondary excess carrier on the claim, the limits of each carrier’s policy, or any stake holder with actual or potential financial responsibility for this claim.”

A Findings of Fact and Order (F&O) issued by a workers’ compensation administrative law judge (WCJ) on April 19, 2022, wherein the WCJ found that in response to applicant’s discovery request, defendant was only required to comply with WCAB Rule 10390 (Cal. Code Regs., tit. 8, § 10390) and disclose the name of the employer’s workers’ compensation insurance carrier.

The WCJ concluded: :This evidentiary record makes clear that the recently promulgated Regulation § 10390 not only repealed Regulation § 10550, but supercedes [sic] Coldiron. It is illogical to believe that the Appeals Board instituted Regulation § 10390 to cause a conflict in the law. The Regulation’s purpose is to simplify and clarify the obligations of defendant to identify the legally responsible entity – not create this current litigation or obfuscate a party’s disclosure obligations.”

Applicant’s petition for reconsideration was granted in the En Banc case of DiFusco v Hands On Spa, Employers-Compensation Insurance Group et.al. -2025-EB-03 (October 2025). The WCAB rescinded the WCJ’s April 19, 2022 F&O and returned this matter to the trial level for further proceedings consistent with this decision.

Applicant contends that the WCJ’s conclusion that WCAB Rule 10390 only requires that a defendant disclose the name of its insurance carrier was too narrow, and that the en banc decisions by the Appeals Board in Coldiron I and II require additional disclosures, including disclosure of a high self-insured retention, a large deductible, or any other provision that affects the identity of the entity liable for compensation.

The WCAB wrote “This case involves the legal question of whether defendant was required to comply with applicant’s February 17, 2021 discovery request to defendant to identify potential insurance carriers, potential insurance policies and their limits, and other potentially liable persons or entities pursuant to the statutory discovery provisions, WCAB Rule 10390, and our en banc decisions in Coldiron I and II.”

“We answer this question in the affirmative. In light of our constitutional mandate to accomplish substantial justice, and our statutory mandate under Labor Code section 5500.34 to ensure uniform court procedures, we issue this decision en banc to clarify existing law and to ensure due process and consistency of practice at the trial level.”

“The California Supreme Court explained in People v. Bouzas that in interpreting legislation, “repeal by implication is disfavored…” (People v. Bouzas (1991) 53 Cal.3d 467, 480,” … “The same principle is applicable here: en banc opinions of the Appeals Board are not repealed “by implication” and thus, an en banc opinion cannot be “superseded” by the enactment of a regulation. Again, we emphasize that an en banc opinion issued by the Appeals Board is binding legal precedent, unaffected by the regulatory process, and continues to be binding legal precedent unless the Appeals Board explicitly rescinds it en banc, it is overruled by a higher Court, or it is rendered no longer applicable by legislative changes.”

“Read together, WCAB Rules 10390, 10400 and 10401 ensure that all parties, representatives and liable entities are fully identified in each case. Compliance with these rules is important to avoid errors such as misidentification of parties, inadvertent omission of parties from pleadings, and incorrect case captions.” … “The facts of the current case provide a clear example of why the Coldiron disclosure requirements are essential to accomplish our constitutional mandate to achieve substantial justice in all cases.”

Based on its review of the record, and for the reasons discussed in the Opinion, the WCAB held en banc that:

1. All en banc decisions are binding on panels of the Appeals Board and WCJs, and the binding en banc decisions in Coldiron I and Coldiron II require disclosure of any entities liable for payment and any insurance policies that impact liability for payment.
2. Only the Appeals Board is statutorily authorized to issue regulations for adjudication for workers’ compensation proceedings, and WCAB Rules 10390, 10400 and 10401 require that parties, their representatives, and their insurance companies be fully identified.
3. WCAB Rule 10390 does not supersede the Coldiron decisions. Defendants must comply with WCAB Rule 10390 and the disclosure requirements in Coldiron I and II, regardless of whether there is a third-party administrator.

New regulations, Title 2 CCR 11008 et.seq., promulgated under the California Civil Rights Department’s authority pursuant to AB 331 (the Automated Employment Decision-Making Law), establish requirements to promote fairness, transparency, and accountability in the use of automated tools for employment decisions.

They aim to prevent discrimination by mandating evaluations for adverse impacts on protected groups. These new regulations took effect on October 1, 2025, applying to private employers with 25 or more employees (or independent contractors) who deploy such systems in California. Initial assessments for pre-existing AEDS must be completed by January 1, 2026. CRD will issue FAQs and templates to aid compliance.

The purpose of these new regulations is to ensure automated employment decision systems (AEDS) do not perpetuate or exacerbate discrimination based on protected characteristics (e.g., race, gender, age, disability) in hiring, promotion, termination, or other employment decisions. Employers must conduct regular impact assessments to identify and mitigate biases.

An Automated Employment Decision System (AEDS) is defined as any computational process, including AI, machine learning, or statistical modeling, that analyzes data to make or assist in employment decisions. Excludes tools used solely for payroll, benefits administration, or non-decision-making functions.

Exemptions include Government entities. Use of AEDS for compliance with federal/state laws (e.g., EEO reporting). And temporary or one-time use without ongoing deployment.

Deployers of an AEDS must conduct an annual Impact Assessment for each AEDS, starting with the first deployment after October 1, 2025. Assessments are due by January 1 of the following year for initial use. Required Elements:

– – Description of the AEDS (purpose, data inputs, outputs, decision types).
– – Data analysis for adverse impacts: Compare outcomes across protected groups (e.g., selection rates, pass/fail rates) using statistical tests (e.g., 80% rule or four-fifths rule).
– – Identification of mitigations for any disparities found (e.g., adjusting algorithms, diversifying training data).
– – Notification to affected parties if adverse impact is detected.

The new regulations require Deployers to provide clear and conspicuous notices at least 45 days before deploying an AEDS. These must be provided to Individuals via job postings, application portals, or direct communication, including:

– – That an AEDS will be used.
– – Types of data collected and decisions affected.
– – Right to request accommodations or opt out (if feasible).
– – Contact info for questions.

Penalties include up to $100 per individual (for notice violations) or $200 per employee (for assessment failures). Injunctions my compel corrective actions, and damages for discriminatory outcomes. Willful violations can lead to enhanced penalties under FEHA. However there are Right to Cure provisions. First-time minor violations allow 30 days to correct before penalties are imposed.