Slow Spending Growth

What does OHCA mean by granting a provisional NOLA?

OHCA considers all prospective non-supervisory organized labor cost adjustments (NOLA) to the target as provisional, pending review of actual expenditure data and labor agreements for providers and fully integrated delivery systems. Consistent with the statute’s requirements for validating supporting data and information, confirming actual expenditures ensures that any upward target adjustment above the “original” spending target (i.e., the target value prior to the provisional NOLA) is based upon increases in non-supervisory organized labor costs.  

Given the timeline for the board to approve adjustments to the spending target, the calculations will inherently rely on projections of future operating and labor costs. For example, providers and labor unions must submit NOLAs for performance year 2028 by Fall 2026 and include projected costs for calendar year 2027. Labor agreements for 2027 may not be completed at the time of submission, and cost projections will inherently be uncertain. As such, to prevent an entity from receiving unsubstantiated NOLA that does not track its actual growth in non-supervisory organized labor costs, all NOLAs are provisional until confirmed with actual expenditure data.  

What happens when an entity does not seek a provisional NOLA, but misses the target as a result of growth in non-supervisory organized labor costs?  

Every entity that misses the spending target will be sent a notice of exceeding the spending target and potential enforcement action. After the notice, the entity will have 45 days to submit additional information and data to the office to demonstrate that all or a portion of their excess spending growth was due to increases in non-supervisory organized labor costs.  

What happens when an entity receives a provisional NOLA based on projected changes in operational and non-supervisory labor costs, but the actual growth in non-supervisory labor costs merited an even higher adjustment (or did not merit the size of the adjustment)? 

Entities that received a provisional NOLA will be sent a notice that they have exceeded the original spending target, and as mentioned above, OHCA will confirm actual expenditure data and labor agreements. If actual growth in non-supervisory organized labor costs merits a higher adjustment, the entity must provide supporting data and information that explains all or a portion of their excess spending.  

Conversely, if the provisional NOLA target was too high, and the actual growth in non-supervisory organized labor costs was less than projected and does not explain all or a portion of their excess spending above the original spending target, OHCA may pursue enforcement action.  

Can a labor union submit a request for a NOLA? 

Yes. A labor union can initiate and ultimately submit a request for a NOLA on regulated entity’s behalf. Because the spending target and any subsequent enforcement actions apply solely to the regulated entity, a completed submission requires the regulated entity to attest to all data and projections submitted by the labor union on its behalf.  

Can a provider and labor union collaborate on a NOLA request? 

Yes. As noted above, a labor union may initiate a request, which will be sent to the regulated entity for attestation and confirmation. Alternatively, a provider and labor union(s) may collaborate on the information required for submission offline prior to initiating a submission to OHCA. 

How will the public learn which entities sought a NOLA adjustment? 

OHCA will make public the requests along with the related calculations underlying the request for a provisional NOLA as part of its formal recommendation to the board on annual target setting. This recommendation must be presented and discussed at a board meeting on or before March 1 each year. And the Board will have until June 1 to adjust targets for the following year.  

Can health plans seek a provisional NOLA adjustment?  

No. Per statute, the NOLA adjustments apply to providers and fully integrated delivery systems. In the event a health plan exceeds the spending target, the plan would be able to provide information related to non-supervisory organized labor costs in the 45-day period following notice from OHCA that the plan exceeded the spending target. OHCA will review this information and may use it to determine potential next steps in progressive enforcement.

How can an entity request a NOLA?

For the first year, OHCA must receive all requests for a provisional NOLA by November 16, 2026. For future years, OHCA must receive all requests by the end of October of each calendar year.  Requests can be submitted at the NOLA Portal.