(Orange Co) O.C. health plan for poor 'appears to be imploding,' grand jury says

CalOptima sees executives depart amid political turmoil.

By ANDREW GALVIN / ORANGE COUNTY REGISTER -

CalOptima, the health plan for the poor that serves one of three children in Orange County, "appears to be imploding," the grand jury wrote in a report released Friday that puts the blame on a majority of the Board of Supervisors.

CalOptima's leadership "has been decimated by the departure of 16 senior executives" over the past 18 months, the report says. The $1.5 billion entity that serves 427,000 young, disabled, low-income and senior county residents is threatened by political turmoil, "jeopardizing its membership's access to quality healthcare and potentially putting the entire entity at risk," the grand jury said in the report.

The turmoil at CalOptima comes as the organization's membership is expected to grow by as much as 27 percent when President Obama's Affordable Care Act takes effect next year.

While not naming names, the report criticizes county Supervisor Janet Nguyen for her role in remaking CalOptima after she joined its board two years ago. Without naming the lobbying group, it says that lobbyists from Hospital Association of Southern California were allowed to rewrite the county's ordinance that governs CalOptima to give more control to health-care providers "and less to members and organizations representing members."

In a news release announcing the report, Raymond Garcia, the grand jury foreman, wrote that CalOptima's status as "a national model for county healthcare" has been undermined by "a series of unfounded internal allegations against senior management and a controversial ordinance passed by the Board of Supervisors last year dramatically changing CalOptima's board structure."

As part of the ordinance change, the number of county employees who sit alongside Nguyen on CalOptima's 11-member board was increased from one to two. The grand jury report recommends that county employees be removed from the CalOptima board as "county employees are reluctant to vote against a supervisor."

It also recommends that the CalOptima board should include more than one county supervisor."

Nguyen wrote to Garcia this week asking that the report's release be delayed "until you have had the opportunity to interview me." Nguyen wrote that she had briefly reviewed the report and "it does not present a complete picture of the facts and the current state of CalOptima."

"Excluding me from the investigation is indicative of a flawed process considering that I was intimately involved in CalOptima and its ordinance change," Nguyen wrote.
Nguyen said the grand jury had scheduled an interview with her in August but canceled it.

Supervisor Todd Spitzer said Friday that he believes all five supervisors should sit on CalOptima’s board

“I do anticipate a significant change in governance structure” for CalOptima, Spitzer said, adding that his vote “changes the dynamic” on the Board of Supervisors with respect to CalOptima issues by breaking up the majority that had supported Nguyen’s changes.

In a statement, CalOptima's newly hired chief executive, Michael Schrader, said: "As the new CEO for CalOptima, I appreciate the interest of the grand jury in the agency, and welcome public scrutiny and review of our operations. We look forward to the opportunity to respond to the report. The required formal response to the specific grand jury findings and recommendations applicable to CalOptima will be presented at an upcoming board meeting."

Julie Puentes of the Hospital Association of Southern California said her organization has a policy of not commenting on “investigative reports and studies performed by government watchdog agencies.”