CalOptima Board Responds to Critical Grand Jury Report

The CalOptima board of directors last week voted unanimously without discussion to respond to a critical county grand jury report by sending a two-page letter that largely dismisses the grand jury’s findings.

The board voted to include in its letter, "[W]e wish to note that the basis for some of the findings and recommendations is not substantiated in the Report, which makes it difficult for the CalOptima Board of Directors to respond.”

The board voted April 4 to draft the letter and send it to Superior Court Presiding Judge Thomas J. Borris, who oversees the civil grand jury.

The 15-page grand jury report, titled “CalOptima Burns While Majority of Supervisors Fiddle,” was highly critical of the way CalOptima has been governed since Supervisor Janet Nguyen, in what was widely seen as a political power play, reorganized its board of directors in 2011 to give the hospital industry a stronger voice on the board.

“Political turmoil threatens the organization, jeopardizing its membership’s access to quality healthcare and potentially putting the entire entity at risk,” concluded the grand jury report.

Nguyen, who is the only member of the Board of Supervisors on the CalOptima board, abstained from voting on the agency's reply, because she was already a part of an earlier response to the report by supervisors.

CalOptima is the county’s $1.5-billion state and federally financed health plan for 427,000 disabled, low-income and elderly residents.

Peter Agarwal, the CalOptima board member who chaired the board committee that wrote the grand jury response, said Friday the committee considered all issues raised by the grand jury but only responded to items the grand jury specifically said required a reply.

One issue the CalOptima response didn’t address because it wasn’t required was a determination by the grand jury that last year “an unidentified CalOptima board member privately stopped staff from hiring an outside law firm to investigate allegations against four board members, even though the board had voted unanimously to hire the firm.”

Nguyen is the only remaining CalOptima board member from a year ago when those allegations were raised.

It is unclear what, if anything, the grand jury will do with the CalOptima response. Both the Board of Supervisors and the CalOptima board were required to officially reply by April 25.

The CalOptima response states: “While there is always room for improvement in any organization, we believe the (grand jury) Report has painted a much more negative picture of the current state of the organization than is warranted, and certainly does not reflect actual performance and recent accomplishments.”

At least 16 top or key executives, including the CEO, the chief operating officer and the chief medical officer, have left CalOptima since Nguyen began her effort at the end of 2011 to remake the board.

The grand jury recommended adding more supervisors, and when the report was released in January, three of the five supervisors immediately agreed. A Board of Supervisors ad hoc committee is developing recommendations as part of its response to the grand jury.

In its findings, the grand jury reported a “CalOptima board member [Nguyen] and two CalOptima [staff] lawyers have been disruptive and created an atmosphere that according to current and former CalOptima employees is ‘unsafe for senior executives.’ ”

In its response, the CalOptima board said it "wholly disagrees with the finding."

“The Report does not contain adequate documentation or any substantiated basis for this finding," the response reads. "The new CEO has indicated that the executive team has not been reluctant to express their views or recommendations on any issues.”

But the CalOptima response doesn’t say whether board members talked to former staff about why they left for jobs in private industry or other government agencies. And it doesn’t say whether the board members who drafted the CalOptima response spoke directly to existing staff about their experiences.

Another issue the CalOptima response doesn’t address because it is included in the grand jury report but not as a specific “finding” is the decision by the current CalOptima board to seek a total of $90,321 from two former board chairmen, Ed Kacic and Michael Stephens, for reportedly using office space or staff for a project that ultimately brought CalOptima $12 million.

The CalOptima board action to go after Kacic and Stephens “had all the earmarks of retribution by the retooled Board of Directors against the Chairmen for fervently opposing the ordinance change,” the grand jury reported.

The CalOptima response states CalOptima has acted on other recommendations. Among them, it is studying the pay of its executives to make sure it can hire well-qualified healthcare professionals.

And it will educate its new board of directors on “why it operated effectively as a hybrid between private industry and County agency; its relevance to the County’s less fortunate’s well-being and healthcare needs; and why CalOptima should be free from lobbyists and those who want to use it for political gain.”

Please contact Tracy Wood directly at and follow her on Twitter:

Comments are closed.