Refowitz New CalOptima Chairman

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Mark Refowitz, director of the Orange County Health Care Agency, Thursday was elected chairman of the board of directors of the $1.4-billion CalOptima health care plan for low-income and disabled children and adults.

Refowitz replaces Ed Kacic, who was temporarily removed as chairman by the 11-member board in May in what was supposed to be a short-term inquiry into anonymous conflict of interest allegations.

None of the allegations, which first surfaced in anonymous letter sent to CalOptima officials in February, have been substantiated. But they did prevent Kacic from being appointed to another term on the CalOptima board and ended up forcing his removal as board chairman.

The final result of the controversy is a newly constituted board, with eight of its 11 members, including Refowitz, having served only a few months. Refowitz’s election, which came via a unanimous vote with three abstentions, completes the months-long effort by Supervisor Janet Nguyen to reorganize the board and give providers a stronger voice. Nguyen represents the Board of Supervisors on the CalOptima board.

The vote came with no public mention of a letter sent to the CalOptima board this week by Ann Marie Mortimer, lawyer for the nonprofit Irvine Health Foundation. The anonymous letter in February alleged that Kacic funneled millions to the foundation, for which he serves as president.

Mortimer, a member of the Los Angeles law firm Hunton & Williams, sent a copy of her letter to the Orange County Board of Supervisors. The goal, she said, was to “set the record straight” and end speculation about any possible wrongdoing by the charity.

“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 law suit but said the Irvine Health Foundation “will not be made the scapegoat of anyone’s political ambitions.”

While not making any mention of the letter, Refowitz and several other board members thanked Kacic for his prior service. He still has about two months to serve before his term expires.

Asked after the meeting about the status of its investigation, Refowitz referred reporters to the CalOptima compliance officer, Denise Corley, who reports directly to the board and is conducting the investigation. But CalOptima officials said Corley is on vacation. It wasn’t immediately clear when she will be back.

The CalOptima investigation parallels a similar approach taken by the Board of Supervisors, who made a big issue of the anonymous letter, saying Kacic’s reappointment needed to be delayed until an investigation of the conflict of interest allegations was resolved. But then the board did nothing to settle the issue for two months and still hasn’t determined the validity of the anonymous charges.

Refowitz wouldn’t estimate when the CalOptima probe would end or say whether it would continue until Kacic’s term expires in September.

The three board members who abstained from voting on the chairmanship and vice chairmanship were Refowitz, Kacic and Lee Penrose, who was elected vice chairman.

Originally, the board was scheduled to hold its annual election of officers in June but after a closed-door executive session postponed it to Thursday.

Kacic had said he would seek re-election as board chairman because the original CalOptima conflict of interest investigation began in May and was supposed to be finished in two weeks. But as it entered its third month, Kacic withdrew and Refowitz ran unopposed.

The board has three upcoming vacancies and the Health Care Agency has been accepting applications. One deadline is today and another has been extended until the end of July because, Nguyen said, no one applied.

“Some people are submitting applications to my office, but I don’t know why,” she said.

In other action, the board received an update on the search for a new chief executive officer. Nearly a dozen top and midlevel executives left for jobs in private industry or with other government health plans in recent months. Sources with knowledge of the situation say the departures are related to Nguyen’s reorganization efforts.

According to the update, candidates for the position of chief executive officer are being identified and screened, a slate of top contenders will be presented to the board in the fall, and a new chief executive officer could be in place by November.

Acting Chief Executive Officer Michael P. Engelhard told the board that the major impact of the U.S. Supreme Court decision allowing the new federal health plan to go ahead will be the addition of “at least” 100,000 new county residents to the health plan’s rolls in 2014.

CalOptima now serves about 400,000 generally low-income Orange County children and disabled or elderly adults. No county money goes into CalOptima. Its funds come from the federal and state governments.

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

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