ORANGE, Calif. (May 2, 2023) — CalOptima Health today announced the implementation of recommendations made by the California State Auditor in a recently released report. The comprehensive audit reviewed an eight-year lookback period from January 2014, when the Patient Protection and Affordable Care Act was implemented, through June 2022.
CalOptima Health is the county organized health system providing publicly funded Medi-Cal coverage for more than 978,000 members, representing nearly one in three Orange County residents. The health plan’s annual budget is $4 billion. Over the past year and a half, CalOptima Health has undertaken an organization-wide effort to strengthen its core mission and launch several groundbreaking initiatives that advance care for our members. The findings and recommendations outlined in this report will support our efforts to do even more.
Notably, many of the recommended reform measures have been implemented by CalOptima Health since June 2022, or are currently underway. The report verifies that CalOptima Health hired a consulting firm in 2018 to conduct a compensation survey that found that salary levels at CalOptima Health were below market median. There were no recommendations related to salaries. In addition, there were no recommendations regarding timely access or quality of care for members. CalOptima Health is a top Medi-Cal plan in California, receiving a rating of 4 out of 5 from the National Committee for Quality Assurance for eight years in a row.
Further, in light of the State of California’s expected budget deficit of at least $22 billion in Fiscal Year (FY) 2023–24, CalOptima Health’s strong fiscal health will allow the health plan to sustain high-quality care and implement its current five-year strategic plan that includes capital investments, expanding access and a $100 million investment toward Information Technology transformation. As a public agency, CalOptima Health is committed to ensuring prudent use of taxpayer dollars.
Michael Hunn, Chief Executive Officer of CalOptima Health, offered the following statement in response to the report:
“As the largest health insurer in Orange County serving our most vulnerable populations, opportunities to increase transparency and improve services provide a major benefit to CalOptima Health and the patients we serve. CalOptima Health would like to thank the Joint Legislative Audit Committee, as well as Assemblymember Sharon Quirk-Silva, and the California State Auditor’s office for working with CalOptima Health while performing a comprehensive audit covering January 2014 through June 2022. We were pleased to learn that there were very few findings in the Auditor’s report. Actions are already underway to implement all recommendations.”
“Beyond the implementation of practical reforms that began when I became interim CEO in November 2021 and was made permanent CEO in March 2022, CalOptima Health is leading the way in providing innovative health care solutions to our community, including pioneering Orange County’s first Street Medicine Program, launching the largest cancer prevention program in CalOptima Health’s history, and allocating more than $300 million from the reserve fund to housing, member engagement, health care, navigation services and more. CalOptima Health is also seeking approval to build a health center that would combine recuperative care services and a Program of All-Inclusive Care for the Elderly (PACE) under one roof — a groundbreaking approach that could end up serving as a nationwide model for delivering care to vulnerable seniors.”
Clayton M. Corwin, Chair of the CalOptima Health Board of Directors, offered the following statement in response to the report:
“CalOptima Health’s financials remain strong, with 93.0% of the budget spent directly on health care services and only 4.4% on overhead, which is one of the lowest overhead rates for any health care provider in California. As CalOptima Health continues to improve, expand and innovate services, quality of care and transparency will remain top priorities, and common-sense reforms will continue to be embraced.”
CalOptima Health offered an official audit response to the California State Auditor that highlights the extensive changes that have been made since June 2022 and in which the health plan concurred or partially concurred with all findings and recommendations. Below are the findings and excerpts from CalOptima Health’s response.