Irvine Health Foundation Demands That Attacks From CalOptima Stop

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The nonprofit Irvine Health Foundation is calling on the directors of CalOptima to halt what they call “scurrilous” allegations aimed at the nonprofit by certain CalOptima board members.

In a strongly-worded letter dated July 9 aiming to “set the record straight,” attorney Ann Marie Mortimer of the Los Angeles firm Hunton & Williams warned CalOptima board members that the foundation “will not be made the victim of the political aspirations of certain CalOptima board members, and IHF is fully prepared to take action as appropriate to stop once and for all these scurrilous, demonstrably false, and damaging allegations.”

The letter was addressed to the CalOptima board with a copy to the Board of Supervisors.

The issue stems from an anonymous letter sent to the Board of Supervisors, news reporters and the CalOptima board in February that accused the foundation and its president, Ed Kacic, of conflict of interest.

The accusations were strongly denied at the time by both Kacic and the foundation.

While neither the Board of Supervisors nor the CalOptima board ever resolved the issue, the allegations prevented Kacic from being reappointed to another term on the CalOptima board and removed him as board chairman.

“The Irvine Health Foundation has been above reproach on all of this,” said Mortimer in a telephone interview.

The 27-year-old foundation makes grants to health-related organizations in Orange County and has distributed more than $25 million over the years.

Kacic said he was “pleased” the Irvine Health Foundation lawyer “got the facts out for the foundation and for myself.”

CalOptima board acting Chairman Mark Refowitz, who also is director of the county Health Care Agency, was unavailable for comment Wednesday, according to Deanne Thompson, the agency’s spokeswoman.

“The Cal Optima Board did receive a letter yesterday from the Irvine Health Foundation,” she stated in an email. “The Cal Optima Board is reviewing the letter and will respond as appropriate.”

Board of Supervisors Chairman John Moorlach is on vacation this week but said his staff referred the letter to Supervisor Janet Nguyen, the supervisors’ representative on the CalOptima board. Nguyen did not immediately respond to a request for comment.

The Irvine Health Foundation letter didn’t name specific CalOptima board members, but Nguyen led a three-supervisor majority in voting last fall to revamp the CalOptima board of directors, giving providers more influence.

Mortimer’s three-page letter on behalf of the foundation asserted that CalOptima’s own public records document the agency’s votes and association with the Managed System of Care, which is a consortium of local hospitals, clinics, other health providers, the county Health Care Agency and CalOptima.

The goal of the Managed System of Care, according to its web site, is to increase access to health care, reduce emergency room visits and improve the health of low-income residents. Ultimately, the Managed System of Care didn’t get the federal grant.

The anonymous letter had cited CalOptima’s involvement with the Managed System of Care as a possible conflict of interest for Kacic and the Irvine Health Foundation.

CalOptima is a $1.4-billion federal and state-financed county health plan for about 400,000 mostly poor children and disabled or elderly adults.

“Although certain CalOptima board members now feign ignorance about the existence of MSC [Managed System of Care] or its relationship to CalOptima, CalOptima’s awareness of and express ratification of CalOptima’s support of MSC is clearly apparent in CalOptima’s own documents,” Mortimer wrote in her letter.

“To now suggest that there is anything nefarious about this support, or CalOptima’s fully informed and Board approved decision to collaborate with, and provide support to, MSC is pure fiction,” Mortimer added.

Lastly, Mortimer noted that the Irvine Health Foundation didn’t profit from the relationship between CalOptima and the Managed System of Care, but “CalOptima has profited greatly.”

CalOptima will receive $12.5 million this year from a separate program created in connection with the Managed System of Care, according to Mortimer’s letter.

“We urge the CalOptima Board of Directors to set the record straight regarding these unfounded allegations,” Mortimer wrote.

The letter stopped short of threatening a lawsuit but declared that the Irvine Health Foundation “will not be made the scapegoat of anyone’s political ambitions.”

Mortimer concluded by warning the CalOptima board that “to the extent there was ever any legitimate confusion about IHF’s role in the issues raised as part of CalOptima’s internal investigation, I trust this ends that confusion. Please govern yourself accordingly.”

In February when county supervisors voted on who to appoint to the new CalOptima board, a decision on then-CalOptima chairman Kacic was deferred while the anonymous letter’s allegations were supposedly sent to the grand jury for review.

Kacic said at the time he welcomed the investigation as an opportunity to clear his name.

Yet county supervisors apparently took no action for two months, leaving the issue in limbo.

In late April, County Counsel Nicholas Chrisos sent a letter to the state Fair Political Practices Commission that included the anonymous allegations and asked whether they constituted a conflict of interest. But he never told the FPPC the facts were in dispute. The FPPC sent back a letter saying they didn’t give opinions to third parties, only those directly involved.

The county grand jury ultimately was asked to review the allegations, but the jury’s term ended June 30 and the county request didn’t come in in time for action. It’s possible the new grand jury will delve into CalOptima issues, but if they do, their report normally wouldn’t be released until next spring.

On May 8, the CalOptima board temporarily removed Kacic as chairman and made Refowitz acting chairman.

The move was supposed to last for about two weeks while CalOptima staff finished an internal investigation of the anonymous allegations, but that work apparently still is unfinished.

Please contact Tracy Wood directly at twood@voiceofoc.org and follow her on Twitter: twitter.com/tracyVOC.

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