By Ron Shinkman 

(February 17, 2026) -- A philanthropy headed by the chairman of the CalOptima health plan and another organization he helps oversee are vying for more than $20 million to provide care for its enrollees, prompting conflict of interest charges by Orange County Supervisor Janet Nguyen.

Nguyen, who also serves on the CalOptima board, said she had not been informed the Irvine Health Foundation submitted an application last month for a $9.3 million grant from the Center for Medicare and Medicaid Innovation – a process sources say received extensive assistance from CalOptima staff. The CMMI is a division of the Centers for Medicare and Medicaid Services.

The Irvine Health Foundation's president, Edward B. Kacic, 57, has served on the CalOptima board since 2009. He was appointed its chairman last August.

"That is very problematic for me...it is a direct conflict of interest," said Nguyen on Thursday. She added that she would confer with the Board of Supervisors and County Counsel on Friday about what actions should be taken.

"We have a chairman on the (CalOptima) board who is applying for these grants and doing all those other things none of use were aware of," Nguyen said. "If you're not on the board, have fun. But as a public official or as an appointee to a government agency board, you're held to a different standard."

Documentation submitted for the federal grant said the funds would be used to create the Healthcare Innovation Center for Orange County. It would create medical homes and other potentially money-saving initiatives for CalOptima and other Medi-Cal enrollees. It proposed a staff of 12 employees, managed by the Irvine Health Foundation.

"Innovations will be tested primarily using CalOptima's highest risk membership of about 100,000 members, providing a pre-defined ‘laboratory' that is readily measured and compared," read an abstract of the proposal.

Kacic, along with CalOptima Chief Executive Officer Richard Chambers and Orange County Health Care Agency Director David Riley, simultaneously hold seats on the CalOptima board along with seats on the steering committee of the Managed System of Care. That body is in line to receive as much as $12.7 million in funding from CalOptima. It is described by various observers as an ad hoc group of 22 Orange County healthcare leaders and professionals intent on bringing more efficiencies into the region's safety net system. It includes top executives from Hoag Memorial Hospital Presbyterian, Monarch Healthcare, Kaiser Permanente and the Memorial Care hospital system. Its member organizations have contributed more than $1.4 million toward its operations since its formation in 2009.

Nguyen noted that she had already raised concerns regarding the roles of Kacic, Chambers and Riley with the Managed System of Care, particularly regarding the plan for CalOptima to give it the funds, which would be comprised of intergovernmental transfers from the Department of Health Care Services and matching funds from CMS. Documents obtained by Payers & Providers say the money would be used ostensibly to perform the same tasks as the federal grant sought by the Irvine Health Foundation.

Nguyen said she had raised objections to a request by Robert Gates, a Managed System of Care project manager and onetime director of the Orange County and Los Angeles County health departments, to put the IGT payment issue on the board agenda last month as an action item.

"I wanted to see a budget, some performance measures, and how consultants were going to be managed," Nguyen said, before she would agree to provide any funds to the Managed System of Care. The action item was changed to a report item for both the January and February meetings. According to minutes from the Jan. 5 CalOptima board meeting, Kacic, Chambers and Riley recused themselves from the discussions.

"I can't get an answer as to who's paying for who, who is on first and who is on second, and that is the problem," Nguyen said.

During a telephone interview Thursday afternoon, Kacic disclosed that the Managed System of Care played a role in the Irvine Health Foundation being selected to apply for the grant.

"I agreed to do so on one condition - that the IHF not accept any money (for its services)," said Kacic, who denied assertions by sources that he had engineered much of the process himself. Kacic could not say why philanthropic organizations affiliated with Memorial Care, Hoag or Kaiser did not apply for the grant instead.

Gates, reached at home late Thursday, said the intent was to have the Irvine Health Foundation act as a temporary conduit. The application needed to be submitted by a 501(c)3 non-profit organization, which the Managed System of Care is not, and had to be completed by late last month.

"We didn't have a lot of time to spend submitting the application, and this was mostly as an accommodation for the Managed System of Care...and they were essentially a placeholder," said Gates. He added it was likely the Managed System of Care may soon convert to a 501(c)3 and eventually receive most or all of the grant money.

Although the documents suggest the Irvine Health Foundation would eventually cede authority to manage the funds to another unnamed entity, no timeline for such a transfer was included in the documentation. And while Kacic said CMS officials had been notified of his relationship with CalOptima, no mention of it was made in the grant application, which also included letters of support from local political leaders such as Rep. Loretta Sanchez and state Sen. Lou Correa.

Aside from Nguyen, the various arrangements involving Kacic have also raised the ire of at least one CalOptima employee, who described the grant application process as "self-dealing" in a letter of complaint sent to the CalOptima board on Thursday.

"Many of us working at CalOptima are just sick about what is happening to our company, and we are tired of these kind of dealings by our board," a portion of the letter read.

The revelations regarding the funding plans surfaced the same week that longtime CalOptima CEO Chambers announced he would step down in April to take a position with Molina Healthcare. News of Chambers' departure came soon after an internal audit in late November was critical of his leadership and suggested CalOptima had been mismanaged. The Board of Supervisors also recently approved a plan to expand the CalOptima board and extend Nguyen's term by another year.

The new allegations brought out a mixture of weariness and wariness from those involved with health plan, which insures 400,000 Orange County Medi-Cal enrollees.

I'm getting tired of all this anonymous mudslinging that is going on," said CalOptima spokesman Laer Pearce.

"I'm not thrilled of accusations of impropriety," Gates said. "We're just trying to provide for the county's safety net."