The Ethics Commission has received a request for an advisory opinion as to whether occupational and physical therapists at Deer's Head Center (Department of Health and Mental Hygiene, DHMH) may engage in part-time employment providing therapy services to private nursing homes.

Deer's Head Center (Deer's Head or the Center) is a State hospital for the chronically ill and aging, providing long-term care for individuals such as cancer patients, diabetic amputees and stroke victims. It is a part of a care continuum ranging from acute care general hospitals to a long-term facility such as Deer's Head, to the lower level of care involved in a nursing home or private home. The hospital's Director indicates that its patients are sick people, generally well enough not to require the acute care of a general hospital, but too sick for the less rigorous care of a nursing home setting.

Patients are admitted to Deer's Head based on an application submitted by an attending physician. The application sets out the nature of the patient's physical deficiency and vital statistics, a description of the care the patient is currently receiving, and the physician's diagnosis and discussion of the type of care required. Patients may be individuals currently in a nursing home who are determined to need a higher level of care than is being provided in that facility. The application is reviewed by an admissions committee that consists of representatives from each "hands on" department at the Center, including both occupational and physical therapists. Applications are evaluated based on the patient's rehabilitation potential and need for care services provided at Deer's Head. The therapists have significant responsibilities in admissions decisions and in borderline cases could exercise considerable judgment. Often the alternative to Deer's Head would be a private nursing home. Deer's Head is currently functioning at about 90% capacity. A significant percentage (possibly as high as 90%) of the Center's patients are funded by medical assistance.

As noted, some Deer's Head patients may come to it from nursing homes. Patients whose condition has improved beyond the need for the level of care provided by the Center may also be referred from it to a private nursing home in the area. The discharge/referral process is handled by the Center's Director of Social Work. Personnel in that office indicate that medicare and medicaid regulations require application to all nursing homes in the area, but note that as nursing home beds are so scarce, there is really no choice as to placement. There is a waiting list of patients referred for discharge to a nursing home; when a nursing home notifies the Center of a vacancy, the Social Work Division determines which patient will be referred, taking into account any limitations imposed by the nursing home, the services provided, and the location. Therapists and other health care personnel make their recommendations as to services required by the patient at the time of the referral for discharge. They are not necessarily involved in the actual placement, and cannot refer a patient to a particular nursing home.

Patients who are referred to a nursing home, or admitted to Deer's Head from a nursing home, are transferred pursuant to a "Patient Transfer Agreement" in effect between the Center and each nursing home in the area. The agreements set out conditions and guidelines regarding the transfer of patients between the facilities. They do not commit Deer's Head, or the State generally, to pay out any money to the nursing home, but they do reflect an undertaking by the Center to be responsible for payment of transferring expenses.

The primary issue presented by this request is application of the outside employment provisions of §3-103(a) of the Public Ethics Law (Article 40A, §3-103(a), Annotated Code of Maryland, the Ethics Law). This section prohibits a State employee or official from being employed by an entity that is regulated by or contracts with his agency (subsection (a)(1)(i)), or from having any other employment relationship that would impair his impartiality or independence of judgment (subsection (a)(1)(ii)). The Deer's Head occupational and physical therapists that are involved in this request are all employed by a facility that is part of DHMH. They seek to have outside employment with nursing home facilities that are subject to substantial regulation by DHMH and whose patients may be funded to a considerable extent by medical assistance programs managed by DHMH. Also, these facilities all have contractual relationships with the particular entity within DHMH where the individuals are employed.

Section 3-103(a) bars relationships with an entity that has or is negotiating any contract with an individual's agency, without reference to a level of State commitment of funds (unlike other provisions of the Law, such as §3-105 and the definitions of "doing business with the State" and "public official"). Thus we believe that the "Patient Transfer Agreements" come within §3-103(a)(1)(i) even though they involve operational ground rules more than the commitment of Deer's Head funds to the respective nursing home facilities. Moreover, given the regulatory relationship between the nursing homes and DHMH, it is our view that the proposed employment by the Center's therapists with local nursing homes would be considered at least a technical violation of §3-103(a)(1)(i) of the Law.

We have further considered this request, however, in view of our recently promulgated outside employment exception criteria. (COMAR 19A.02.01, 9:15 Md. R. 1517 (July 23, 1982).) The substance and approach of these regulations is discussed more fully in our Opinion No. 82-40. Briefly, however, they set forth several situations where relationships between State and private employment would be viewed as unlikely to present a conflict of interest or appearance of conflict. In applying these criteria to the Deer's Head request, we believe that several issues are raised under the specific criteria (items A through H) making it impossible for us to conclude that the employee's private and official duties are so unrelated as to make a conflict of interest or appearance of conflict unlikely. For example, the therapist's participation in admissions decisions as to patients coming to Deer's Head from a nursing home could raise questions as to compliance with other provisions of the Ethics Law (section 3-101(a)(2), see item E of the criteria).

More importantly, however, item I of the criteria requires a determination that the total circumstances of the employment situation do not result in a conflict of interest or the appearance of a conflict. We are reluctant to make such a finding given the close and continuing relationships between private nursing home facilities and State health care entities such as Deer's Head. We believe that in connection with the provision of services to a dynamic and interconnected patient population, the relationships of the nursing homes to the State health care system may be sensitive, and that private economic interests of private (sometimes "for profit") facilities are not always consistent with those of State care providers.

We are therefore concerned about the possible real and apparent conflicts of interest likely to arise in the total circumstances presented here, both in view of the employees' specific duties at Deer's Head and the fact that in situations where violations of State regulations occur in a nursing home the State employees could be placed in a difficult position. We therefore conclude that the provisions of §3-103(a)(1)(i) apply to bar the employment by the therapists with the nursing homes, and that the outside employment exception regulations may not be applied to overcome this bar.

Herbert J. Belgrad, Chairman
    Jervis S. Finney
    Reverend John Wesley Holland
    Betty B. Nelson
    Barbara M. Steckel

Date: September 22, 1982