February 9, 2016 VIA HAND DELIVERY The Honorable John M. W. Moorlach Chair, Orange County Board of Supervisors Hall of Administration 333 W. Santa Ana Blvd. Santa Ana CA 92701 RE: No good act goes unpunished (CalOptima issues) Dear Chairman Moorlach: We, the Board of Directors of the Irvine Health Foundation, wish to express our grave concerns regarding the ongoing campaign to besmirch the good reputation of CalOptima, its staff and its Board of Directors. Because the most recent salvo in this campaign falsely attacked our President, Ed Kacic, and by association all of us along with the Irvine Health Foundation (“IHF”), we are compelled to respond. The Irvine Health Foundation was formed in 1985, and in the ensuing 26 years has worked toward one goal – to improve the health and health status of the residents of Orange County. We began with an endowment of $15 million, and since inception we have awarded over $25 million in grants, all for the benefit of the residents of Orange County. In short, we have an outstanding record of fiscal management and commitment to our community. IHF has also been entrusted with funds from the sales of Anaheim Memorial Medical Center and South Coast Medical Center by the Attorney General of the State of California. These funds will be used to provide needed health care services to persons residing in the service areas of those hospitals. IHF was chosen to administer these funds (a portion of which have been awarded to the Vietnamese Community of Orange County’s Asian Health Center through a collaborative effort between IHF and the County of Orange Health Care Agency) because of our history of supporting health care efforts in our community and because we refused to accept a fee or any reimbursement for managing the funds. In its 26 plus years, the Irvine Health Foundation has demonstrated its leadership and its willingness to work collaboratively to achieve its goals. For nearly ten years, IHF’s primary focus has been to improve the health care “safety net” in this County. We have worked alone on some activities, but primarily we have worked in collaboration with many agencies and organizations – including the County of Orange, towards solutions to this crisis. As Mr. Kacic explained to reporters and others, there was no “self-dealing” involved when IHF agreed to be the applicant on behalf of Orange County’s Managed System of Hon. John Moorlach February 9, 2016 Page Two Care (“MSC”) in its application for a federal Centers for Medicare and Medicaid Services Innovation Grant. Mr. Kacic made it clear to the MSC steering committee, the IHF board and others that the Foundation was only serving as the applicant because MSC is not yet an incorporated non-profit organization, and that IHF would not accept any funds, should the grant be approved. Rather, Mr. Kacic insisted that the grantor would have to send funds to a different entity, such as a 501(c)(3) to be formed by the MSC, or to another nonprofit agreeable to the MSC Steering Committee and to the grantor. We are incensed that the authors of this vicious smear did not have the decency to check their facts with IHF before acting. We are angry and surprised that they have maliciously impugned our President and our organization when we were simply facilitating an opportunity for Orange County to receive funding for much-needed programs to benefit our community’s poor and sick. We are further concerned that this defamatory accusation may have jeopardized MSC’s success in securing the grant. We are also surprised and disappointed that senior executives of the Hospital Association of Southern California have continued to spread this damaging misinformation despite having received the facts disproving the allegation. In his nearly 23 years at the Irvine Health Foundation, the Board of Directors has continuously supported Mr. Kacic’s activities in the community. We view this as part of our mission. This support for Mr. Kacic’s work includes backing his efforts with the Managed System of Care, and his service on the Board of Directors of CalOptima as an extension of our mission. We continue to encourage him to devote his valuable time to support these endeavors and recommend that you provide favorable consideration for his re-application to the CalOptima Board of Directors, so that CalOptima will benefit from his experience and wise leadership. The Irvine Health Foundation will continue its efforts to improve the health and health status of the residents of Orange County. That is our mission, and that is our pledge to our community. We urge you to help us maintain that pledge. Sincerely, Timothy L. Strader, Chairman Carol M. McDermott, AICP, Vice-Chair Jeffery E. Flocken, Treasurer Thomas C. Cesario, MD, Secretary John C. Gaffney, Director Douglas M. Mancino, Esq., Director Margarita Pereyda, MD, Director Gerald B. Sinykin, MD, Director cc: Members, Orange County Board of Supervisors Media MSC Steering Committee CalOptima Board of Directors, MAC and PAC