Feds Find “Serious Threat” to Health and Close Enrollment in County Medi-Cal Plan

Wednesday, January 29, 2014

Federal officials shut down enrollment in an Orange County health care plan that services 16,000 low-income and disabled people after finding “widespread and systematic” failures that posed a “serious threat to enrollees’ health and safety.”

In curtailing enrollment in CalOptima’s OneCare program, which that straddles Medi-Cal and Medicare, auditors for the U.S. Department of Health and Human Services (HHS) noted that participants were denied access to properly prescribed drugs covered by the plan, and were refused payment for legitimate emergency services. Medical providers weren’t paid in a timely fashion, and appeals by patients and doctors that coverage was incorrectly denied were improperly ignored.  

State officials immediately announced they would use the feds’ findings as a basis for auditing the rest of the $1.5 billion CalOptima plan, which has been under attack by critics for years.

CalOptima administers health insurance programs for low-income families, children, seniors and persons with disabilities. It is the only plan responsible for administering Medi-Cal in Orange County. One-third of the county’s children depend on it.

CalOptima has been accused of conflicts of interest in its dealings with hospitals, doctors, clinics and other medical groups. Over a period of 18 months, 16 senior-level executives, including the chief executive officer, the chief operations officer, the chief medical officer and the chief financial officer, left amid internal allegations of misconduct and inappropriate actions.

A grand jury in 2011 fired off a report with 100 allegations of misdeeds by senior executives. A grand jury report last year, entitled “CalOptima Burns While Majority of Supervisors Fiddle,” was not well-received by the county board of supervisors.

The Voice of OC said Tuesday that the Fair Political Practices Commission (FPPC) dropped its investigation of CalOptima board Chairman Ed Kacic, who is also president and CEO of the Irvine Health Foundation. He was accused by an anonymous source of conflicts of interest during a power struggle with the county Board of Supervisors over the CalOptima board.

Kacic opposed a move by three county board members to restock CalOptima’s board with people more friendly to the medical industry. The grand jury determined that the letter came from a fax machine in the Orange County office of the Hospital Association of Southern California.

The FPPC is investigation four of the five county board members.

–Ken Broder


To Learn More:

CalOptima Slammed By Federal Audit (by Tracy Wood, Voice of OC)

U.S. Regulators Fault O.C.'s CalOptima after Audit Sees Patient Harm (by Mike Reicher, Orange County Register)

State Watchdog Clears Former Chairman of CalOptima Board (by Tracy Wood, Voice of OC)

Feds Investigating Corruption in Conservative Bastion of Orange County (by Ken Broder, AllGov California)

Notice of Immediate Imposition of Intermediate Sanctions (Centers for Medicare & Medicaid Services in the Department of Health and Human Services) (pdf)

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