CalOptima board extends CEO’s contract, raises salary to $841,500 [The Orange County Register]

Orange County Register (CA)

In just shy of a year at the helm of CalOptima, the safety-net health insurer for Orange County’s poorest residents, CEO Michael Hunn has impressed his board of directors so much, they increased his salary by about 50% to $841,500 a year.

The board voted Oct. 6 to extend Hunn’s three-year contract to five years, increase his salary to be more in line with his industry peers, and make him eligible starting next year for an annual performance bonus of up to 10%.

CalOptima was created by the Orange County Board of Supervisors in 1993 to manage care for county residents covered by MediCal. It later spun off as a stand-alone agency, though the county supervisors appoint CalOptima’s 11-member board and two supervisors hold board seats, with a third supervisor as an alternate member.

Two board members said Hunn has done an exceptional job since he was brought in last November after the previous CEO’s retirement. Richard Sanchez, who had headed the OC Health Care Agency, was hired in April 2020 and left less than 18 months later. Hunn’s annual salary both as interim CEO and when he was given a permanent contract this March was $560,000.

“I’ve never seen us move, or any organization move, as rapidly as we have” since Hunn came on board, said OC Supervisor Doug Chaffee, who sits on CalOptima’s board.

The agency is creating a street medicine program to bring often neglected or hard-to-access care directly to people who are homeless, it’s implementing the state’s redesigned Medi-Cal program, and it’s working toward a 2027 goal of ensuring same-day approvals of treatment requests and payment of claims, Chaffee noted.

“We’re just moving light-speed on stuff and we wanted to keep him longer,” Chaffee said, though he added that he had no information indicating Hunn might have been planning to leave.

Through a CalOptima spokesman, Hunn declined an interview request. A statement from the agency said Hunn’s contract was extended “in order to lead the agency in fully executing its mission and vision, financial and operational improvements, and improving the care it provides to one in four Orange County residents.”

The spokesman said Hunn proposed the contract extension, but didn’t request the pay raise.

State Assemblywoman Sharon Quirk-Silva, who previously requested a state audit of CalOptima to improve transparency of services that is now underway, said Friday she was “shocked” by the boost to a salary that already seemed ample and added the board’s decision “seems to not really take into consideration the constituents they’re serving,” which include many of the county’s homeless residents.

In the past 10 years, CalOptima has more than doubled its membership, which it says is now at 940,508 residents. Its budget is about $4 billion, with most of the revenue coming from state and federal funding, and it has nearly 1,500 employees.

Both Hunn’s March contract and the one the board approved last week say he’s eligible every year for a merit raise of no more than 5%. But in deciding on his new salary, board members considered a comparison chart of five other Southern California health care CEOs’ compensation; pay ranged from the $574,376 to $1.7 million.

CalOptima board member Isabel Becerra, who heads the Coalition of Orange County Community Health Centers, joined Chaffee in praising Hunn’s performance.

Hunn has brought a range of stakeholders into discussions about how to design programs and implement new regulations, and he personally attends every event held by CalOptima sponsors, Becerra said, which shows a dedication she hasn’t seen from other CEOs.

“I have been in this space (community health) for over 20 years and never have I been as involved in this conversation as I am today,” she said.

Chaffee said he expects some of Hunn’s innovations to save CalOptima more than it’s paying him.

OC Supervisor Don Wagner, who is not on CalOptima’s board, said he recently voted against what he called a “comfortable raise” for Orange County Transportation Agency CEO Darrell Johnson, not because Johnson hasn’t performed well, but because he doesn’t think that’s the best way to use taxpayer money. (OCTA’s website says Johnson’s base salary is $391,810.)

Wagner said he’s not prepared to say Hunn’s pay is out of line with comparable positions, but for an agency “that exists to serve the poor,” Wagner said, “that’s a stunning amount of money.”

Quirk-Silva said she appreciates the work CalOptima has done lately, including stepped-up homeless outreach and partnering with the new Be Well OC, which provides behavioral and mental health services to everyone, regardless of insurance. It was prior discussions of service to the homeless in Orange County that had first brought her attention to the agency.

She hopes to learn more from the audit about how the agency is spending public money to administer health care to OC residents, she said.

“Millions of dollars move through that organization, and we have to make sure that we’re caretakers of those dollars and make sure that money gets to the most needy individuals – and that’s where my concern still lies.”