CalOptima’s board of directors this week put medical vendors who care for 15,000 low-income seniors on notice that they need to quickly improve performance or risk losing their contracts.

A majority of board members at Thursday’s public meeting indicated they will seek repayments from 11 health networks for at least part of the cost of training them to comply with strict federal regulations.

“It’s clear some networks are substantially behind” in meeting federal requirements, CalOptima Chief Executive Officer Michael Schrader told the board. “If they’re not ready, we’re (CalOptima) not ready” to pass an upcoming federal audit.

“We have partners (health networks) who are not meeting their share of the obligation,” added Supervisor Todd Spitzer, who was added to the CalOptima board in April by the Board of Supervisors to reduce the influence of Supervisor Janet Nguyen, the only supervisor on the board.

Nguyen did not attend Thursday’s meeting.

Also Thursday, one of the 11 voting CalOptima board members, lawyer and GOP activist Steve Knoblock, resigned, saying a new job in downtown Los Angeles requires a long commute and not enough time to also serve on the  $1.7 billion agency, Orange County’s largest.

Knoblock joined the board in 2012 after Nguyen, currently a Republican candidate for state Senate, took control of CalOptima and brought in all new board members.

He held the seat that was intended to represent the general public. The county will advertise for candidates to replace him.

The warnings Thursday to the 11 health networks who participate in the OneCare program came as the CalOptima board discussed the best strategy for successfully passing the upcoming federal audit at the same time it ensures patients covered by the networks receive high quality care.

Board members will receive more details from staff at their Sept. 4 meeting, but Schrader indicated some health networks may have their contracts terminated if they don’t move quickly to meet federal requirements.

“We need to take action or CMS (Centers for Medicare & Medicaid Services) will hold us accountable,” added CalOptima Vice Chairman Lee Penrose, president and CEO of St. Jude Hospital in Fullerton.

The OneCare program was the focus of a November, 2013 federal audit that resulted in CalOptima being temporarily barred from participating in a new program called Cal MediConnect. It also cannot enroll new OneCare members until problems are fixed.

OneCare is the health plan for seniors who are enrolled in both Medicare and Medi-Cal, the health plan for low income adults.

The federal audit cited CalOptima, but the problems include the vendor that handles prescriptions as well as the 11 health networks that directly care for the patients. Among other things, the networks are supposed to develop thorough treatment plans for each patient, ensuring there is coordination with all doctors and specialists who may be prescribing drugs or other care.

Schrader told the board some of the health networks may have viewed the audit by CMS as “CalOptima’s problem.” But, he said, networks also have to improve their work for CalOptima to successfully pass the next federal audit.

CMS has given CalOptima at least six more months to fix problems and it can take more time if necessary. Schrader and the board discussed balancing the advantages and disadvantages of moving quickly to pass the audit and win permission to join Cal MediConnect.

Without naming names, Schrader said about half of the 11 health networks likely would meet federal standards by October.

He and the board are trying to decide whether to schedule the federal audit for January, 2015 or wait longer. CMS officials told Schrader not to schedule the audit until he was confident CalOptima would pass.

But the longer they wait, the longer patients who now cannot enroll in OneCare also must wait. Currently, the program has about 15,000 members but Schrader estimated there are potentially 60,000 more older Orange County residents who could qualify for OneCare.

CalOptima’s total membership is roughly 600,000, most of them children.

Schrader said CMS officials wondered why CalOptima used networks at all and didn’t just contract directly with individual doctors.

He said they wanted to give the networks a chance but some are “not trying very hard.”

The 11 health networks and their current enrollments as of July 1 are:

• Alta-Med, 313

• AMVI/Prospect Medical Group, 3,380

• Arta Western Health Network, 244

• Edinger Medical Group, 43

• Family Choice Medical Group, 1,577

• Greater Newport, 727

• MemorialCare Medical Group, 772

• Monarch HealthCare, 6,085

• Noble Mid Orange County, 23

• Talbert Medical Group, 1,456

• United Care Medical Group, 284

• Total, 14,904

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

Since you've made it this far,

You are obviously connected to your community and value good journalism. As an independent and local nonprofit, our news is accessible to all, regardless of what they can afford. Our newsroom centers on Orange County’s civic and cultural life, not ad-driven clickbait. Our reporters hold powerful interests accountable to protect your quality of life. But it’s not free to produce. It depends on donors like you.

Join the conversation: In lieu of comments, we encourage readers to engage with us across a variety of mediums. Join our Facebook discussion. Message us via our website or staff page. Send us a secure tip. Share your thoughts in a community opinion piece.