Orange County’s publicly funded health plan for the poor is facing a state probe for controversial hiring and contracting practices – along with large salary spikes.
“We have administrators in our public agencies making close to $1 million from public tax dollars. [That] to me is something we should be shining a light on,” said Assemblywoman Sharon Quirk-Silva, who prompted the state audit by making a formal request last year.
The review by the California State Auditor’s Office comes after Voice of OC reported how CalOptima – which runs the public health insurance for hundreds of thousands of Orange County’s lowest-income residents – is increasingly being placed in the hands of OC Supervisor Andrew Do and one of his top aides.
[Read Local Politicos Fuel Takeover of Orange County’s Health Plan For the Poor]
The aide was hired into a $282,000-per-year top agency position as chief of staff, despite having less than one year of healthcare administration experience, Voice of OC’s reporting revealed.
Do, who also is CalOptima chairman, presided over major pay raises for the agency’s executive positions – including raising the CEO’s maximum base salary from $600,000 to $765,000 in fall 2021.
Under Do’s leadership, CEO Michael Hunn’s salary was set for another jump in December to a maximum pay of just over $840,000 per year.
It’s “startling” to see what some of CalOptima’s executives are making, she told Voice of OC in a recent interview about the audit.
“The pay scale that [CEO Michael Hunn] has – which I believe is close to $850,000 – this, to me, is something that we should be looking at,” Quirk-Silva said.
CalOptima is Orange County’s largest health insurer, managing the publicly-funded health coverage of 850,000 low-income children, adults, seniors and people with disabilities.
That’s one in every four residents and one in every three children.
It was set up in the mid-1990s by a coalition of leaders seeking to bring community control to the federal health coverage funded by Medicare and Medicaid.
Now, the California State Auditor’s Office review is looking at “CalOptima’s hiring practices and job requirements,” as well as comparing those to other public insurance plans in the state.
CalOptima leaders, including Do, Hunn and the agency’s lead spokeswoman, didn’t return messages for comment. The request included questions about Hunn’s salary and a reported $300,000 in salary increases awarded to the agency’s top HR official, Brigette Hoey.
In the latest round of increases in December, Hoey’s salary range was proposed to jump again to between about $415,000 to $515,000 in December, according to page 667 of this CalOptima agenda.
Hunn’s salary was also proposed to rise to a maximum of $841,500.
When Do presided over a round of large salary jumps for executives in 2021, board members had no public discussion or explanation for the raises.
“[There’s] a pattern of very highly paid salaries for an agency that services the most vulnerable people in our community,” Quirk-Silva told Voice of OC.
“The bottom line: Every penny that goes into that agency should be preserved – within reason – for these patients.”
State Auditors Eye Contracting and Services
The audit also is looking at CalOptima’s spending on homeless health services and other programs – whether those services are being delivered quickly and if CalOptima is being transparent about the spending.
CalOptima arranges billions of dollars per year in contracts with medical providers across the region – something also being examined in the state probe.
“How are vendors selected to provide services? As we know they’re very lucrative contracts, again, that can be very long-term,” Quirk Silva said about the questions the audit is exploring.
“And what kind of public process do they go through when they’re choosing new vendors?”
That kind of vendor selection has already led to a “pay to play” fine against Do.
Last year, state regulators fined Do $12,000 for violating “pay to play” laws by using his CalOptima board position to try to push through lobbying contracts for two of his campaign donors.
Quirk-Silva also has been questioning the move of Do’s aide to the high-ranking chief of staff role at CalOptima.
Veronica Carpenter, who had less than a year of professional experience in healthcare administration, moved from Do’s county staff into a newly-created chief of staff role at CalOptima, which at the time paid $282,000 plus benefits as a top advisor to the CEO.
That salary was proposed to rise again this past December to a range of $299,000 to $372,000. The top end of the range is nearly as much as the $400,000 salary of the President of the United States.
“The public should know about this and it should be very transparent,” Quirk-Silva said.
The only known public information about salary increase was on page 667 of a more than 1,000-page agenda for a CalOptima board meeting.
Also last year, Quirk-Silva introduced a bipartisan bill – which is now law – banning Do and all other county supervisors from working for the health plan for one year after leaving office.
It also bans them from lobbying CalOptima, and stops them from working for any organization that receives federal health dollars from CalOptima.
She described the effort as providing “key guardrails to protect against the further politicizing of CalOptima.”
Do didn’t return previous phone calls, emails and text messages asking for his take on the legislation.
The state probe is slated to wrap up in April with a public report.
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