AMENDED IN SENATE AUGUST 19, 2026
AMENDED IN SENATE JULY 2, 2026
AMENDED IN SENATE JUNE 15, 2026
AMENDED IN ASSEMBLY MARCH 26, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
95
Introduced by Assembly Member Valencia
February 19, 2026
An act to amend Section 14087.59 of, and to add Section 14087.591 to, the Welfare and Institutions Code, relating to Medi-Cal.
Vote: majority Appropriation: no Fiscal committee: yes Local program: yes
LEGISLATIVE COUNSEL’S DIGEST
Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law authorizes a county board of supervisors to establish a commission to negotiate an exclusive contract with the department to provide, or arrange for the provision of, health care services under the Medi-Cal program.
Pursuant to the authority described above, the County of Orange established a commission and existing law established the governance of that commission, known as the Orange County Health Authority or CalOptima, to provide health care services under the Medi-Cal program. Existing law prescribes who can serve on the 10-member governing body of the commission and requires each member to serve a 4-year term, except as described.
This bill would require the terms for members of the governing body to be staggered and would require, for the term beginning prior to January 1, 2027, 3 members to serve 2 years, with a 4-year term beginning thereafter. bill, for terms commencing after January 1, 2027, would impose one-, 2-, and 4-year terms of office, as specified. The bill would also prohibit specified voting members from serving more than two consecutive terms and from serving in that capacity for more than 10 consecutive years. The bill would require the governing body of the Orange County Health Authority to
authorize and pay for an independent external audit of its governance procedures and practices, including the roles and responsibilities of the governing body, executive leadership, and staff, among others. The bill would require the audit to be completed by July 1, 2027, and would require that a copy of the report be provided to the Legislature and made public. Because this bill would impose a unique requirement on how services are provided on a local government and would require additional duties of county authorities, the bill would impose a state-mandated local program.
This bill would make legislative findings and declarations as to the necessity of a special statute for County of Orange.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
The people of the State of California do enact as follows:
SECTION 1.
Section 14087.59 of the Welfare and Institutions Code is amended to read:
14087.59.
(a) (1) Notwithstanding subdivision (d) of Section 14087.54, governance of the commission in the County of Orange established pursuant to Section 14087.54, known as the Orange County Health Authority, shall be vested in a governing body consisting of 10 members: 9 voting members and 1 nonvoting member. The nonvoting member shall be the Director of the Orange County Health Care Agency. The nine voting members shall be nominated by the Orange County Health Care Agency and appointed by a majority vote of the Board of Supervisors of the County of Orange and shall consist of the following:
(A) Two members shall each be a member of the Board of Supervisors of the County of Orange, with one additional member of the Board of Supervisors of the County of Orange to serve as an alternate.
(B) One member shall be a current or former hospital administrator.
(C) One member shall be a representative of a community clinic, which may include, but is not limited to, a representative of a federally qualified health center, as defined in Section 1396d(l)(2)(B) of Title 42 of the United States Code.
(D) One member shall be a member of the public who is a legal resident of the County of Orange.
(E) One member shall be a practicing licensed medical provider who is not an owner or officer, or a member of the board of directors, of a contracted independent physician’s association or provider network.
(F) One member shall be a current Orange County Health Authority member or a family member of a current Orange County Health Authority member.
(G) One member shall be an accounting or public finance professional, or an attorney who is an active member of the State Bar.
(H) One member shall be a practicing licensed physician who is a representative of a contracted independent physician’s association or provider network.
(2) For purposes of identifying qualified individuals to be considered as members of the governing body, the Board of Supervisors of the County of Orange shall consult with stakeholders in the County of Orange, including, but not limited to, providers who serve CalOptima members, consumers, and advocates.
(b) Each member of the governing body shall reside in, or be employed in, the County of Orange and shall be generally representative of the diverse backgrounds, interests, and demography of persons residing in the County of Orange. Each member of the governing body shall have a commitment to a health care system that seeks to improve access to high-quality health care for persons served by the commission and that in fact delivers high-quality care and is financially viable. Each member shall possess the requisite skills and knowledge necessary to design and operate a quality publicly assisted health care delivery system.
(c) In order to stagger the terms of the voting members of the governing body, for terms commencing after January 1, 2027, the term of office shall be as follows:
(1) Members of the governing body described in subparagraphs (B), (D), (F), and (H) of paragraph (1) of subdivision (a) shall serve a term of office of four years.
(2) For the first new term commencing after January 1, 2027, members of the governing body described in subparagraphs (C), (E), and (G) of paragraph (1) of subdivision (a) shall serve a term of office of two years. Thereafter, the term of office shall be for four years.
(3) Members of the governing body described in subparagraph (A) of paragraph (1) of subdivision (a) shall serve a term of office of one year.
(4) Members who are appointed to fill the unexpired term of a vacant seat shall have an initial term that corresponds to the unexpired term of the vacant seat. A vacancy that occurs in the last 90 days of a term shall not be filled until the expiration of the term.
(5) A member of the governing body described in subparagraphs (B) to (H), inclusive, of paragraph (1) of subdivision (a) shall not serve no more than two consecutive terms. The limitations set forth in this paragraph apply only to service for consecutive terms. No other limitation on the number of terms a person may serve is intended.
4-year terms and shall not serve in that capacity for more than 10 consecutive years.
(6) A member serving on the governing body pursuant to subparagraph (A) of paragraph (1) of subdivision (a) shall not be appointed to serve as a member pursuant to subparagraphs (B) to (H), inclusive, of paragraph (1) of subdivision (a) within 12 months of the expiration of their one-year term.
(7) A member of the governing body of the commission may be removed from the governing body by a vote in favor of that removal of at least two-thirds of the full membership of the Board of Supervisors of the County of Orange.
(d) The governing body of the commission, subject to a two-thirds vote of the full membership, may increase the number of public members, or the number of members who are current Orange County Health Authority members or family members of current Orange County Health Authority members who may serve as a member of the governing body, subject to an affirmative vote by a majority of the Board of Supervisors of the County of Orange, provided, however, that a change in the composition of the governing body under this subdivision shall not result in the elimination of any member described in paragraph (1) of subdivision (a).
(e) Each member of the governing body shall have the responsibility and duty to follow the requirements of applicable federal and state laws and regulations, including Section 1090 of the Government Code, the applicable provisions of Sections 87100 to 87500, inclusive, of the Government Code, and Section 14047.6 of this code, to serve the public interest of the members of the Orange County Health Authority, and to ensure the operational well-being and fiscal solvency of the Orange County Health Authority. Members of the governing body shall further strive to improve health care quality, promote prevention and wellness, ensure the provision of cost-effective health and behavioral health care services, reduce health disparities, address the needs of Medi-Cal members who are affected by homelessness and housing instability, improve quality outcomes, and manage the risk and needs of Medi-Cal beneficiaries through whole-person care approaches and addressing social determinants of health. The Orange County Health Authority shall work to earn the public’s trust through its commitment to accountability, responsiveness, transparency, reliability, and cooperation.
(f) A member of the governing body who has a financial interest, within the meaning of Section 87100 of the Government Code, in a decision before the governing body shall, upon identifying a conflict of interest or a potential conflict of interest and immediately prior to the consideration of the matter, do all of the following:
(1) Publicly identify the financial interest that gives rise to the conflict of interest or potential conflict of interest in detail sufficient to be understood by the public, except that disclosure of the exact street address of a residence is not required.
(2) Recuse the member’s own self from discussing and voting on the matter.
(3) Leave the room until after the discussion, vote, and any other disposition of the matter is concluded, unless the matter has been placed on the portion of the agenda reserved for uncontested matters.
(4) Notwithstanding paragraph (3), the member may speak on the issue during the time that the general public speaks on the issue.
(g) (1) A member of the governing body shall not, for a period of one year after leaving office, act as an agent or attorney for, or otherwise represent, for compensation, any other person, by making any formal or informal appearance before, or by making any oral or written communication to, the commission, or any committee, subcommittee, or present member of the commission, or any officer or employee of the commission, if the appearance or communication is made for the purpose of influencing administrative action or influencing any action or proceeding involving the issuance, amendment, awarding, or revocation of a permit, license, grant, or contract, or the sale or purchase of goods or property.
(2) In addition to paragraph (1), a member of the governing body described in subparagraphs (A) and (G) of paragraph (1) of subdivision (a) shall not, for a period of one year after leaving office, serve as an employee, agent, or attorney, or otherwise represent, for compensation, the Orange County Health Authority or any other entity that received an expenditure of Medi-Cal funds from the Orange County Health Authority during the prior five years. This paragraph does not apply to expenditures of Medi-Cal funds from the Orange County Health Authority for routine administrative expenses for reimbursement for travel, continuing education costs, routine office expenses, and other ongoing routine administrative expenses. This paragraph does not prevent any member from returning to or continuing the role that they held when they were appointed to the governing body.
SEC. 2.
Section 14087.591 is added to the Welfare and Institutions Code, to read:
14087.591.
(a) The governing body of the Orange County Health Authority shall authorize and pay for an independent external audit of the Orange County Health Authority’s governance procedures and practices. The audit shall be conducted by an independent entity with demonstrated expertise in health care governance, board oversight, and managed care operations. The entity conducting the audit shall be announced at an Orange County Health Authority board meeting and opportunity for interested stakeholders to submit input to the entity for particular actions to be reviewed shall be permitted.
(b) The independent external audit shall evaluate, at a minimum, all of the following:
(1) The Orange County Health Authority’s conflict-of-interest policies and procedures, including policies governing disclosures, recusals, and potential conflicts involving members of the governing body, officers, employees, and individuals participating in contracting or procurement decisions.
(2) The roles and responsibilities of the governing body, executive leadership, and staff to ensure appropriate separation between governance and oversight functions and the day-to-day operations and management of the Orange County Health Authority.
(3) The Orange County Health Authority’s policies and practices governing contracting, procurement, and vendor selection to ensure decisions are made consistent with applicable laws, regulations, fiduciary obligations, and established governance practices. In reviewing the governing practices, the independent audit shall review particular actions identified by interested stakeholders as described in subdivision (a).
(4) The Orange County Health Care Agency’s policy for nominating members to the governing body. The audit shall determine if the policy sufficiently prioritizes strategies to attract and retain professionals with a background in health care to be nominated to the board and provide suggestions on recruitment as necessary.
(5) Whether the Orange County Health Authority’s governance structure, policies, or practices appropriately preserve the ability of executive leadership and staff to independently conduct contracting and procurement functions consistent with the governing body’s oversight role.
(6) Recommendations to strengthen governance practices, accountability, transparency, and appropriate oversight by the governing body.
(c) In order to evaluate the items in subdivision (b), the independent audit shall conduct interviews with staff of the Orange County Health Authority and provide anonymous opportunities to share feedback. All information provided by staff will be stripped of identifying information and staff will not be subject to professional discipline in retaliation for participating in the audit or for information they share in the audit process.
(d) The independent external audit shall be completed and the governing body shall submit the audit report to the Legislature and the department no later than July 1, 2027.
(1) The requirement for submitting a report imposed under this subdivision is inoperative on July 1, 2031, pursuant to Section 10231.5 of the Government Code.
(2) A report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.
(e) The governing body of the Orange County Health Authority shall review the findings and recommendations of the independent external audit and develop a corrective action plan, as appropriate, to address any identified deficiencies.
(f) The Orange County Health Authority shall make the audit report and any corrective action plan available to the public, consistent with applicable confidentiality and proprietary information requirements.
SEC. 3.
The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances applicable to the County of Orange with respect to the operation and governance of the Orange County Health Authority, which is a county-organized health system known as CalOptima.
SEC. 4.
The Legislature finds and declares that Section 2 of this act, which adds Section 14087.591 to the Welfare and Institutions Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to balance the public’s right to access records with the need to protect proprietary information and interviewed staff of the Orange County Health Authority from retaliation, it is necessary that proprietary information and an interviewed staff’s identity be kept confidential.
SEC. 4.SEC. 5.
No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district are the result of a program for which legislative authority was requested by that local agency or school district, within the meaning of Section 17556 of the Government Code and Section 6 of Article XIIIB of the California Constitution.