82.45

OPINION NO. 82-45

The Director of Personnel, Department of Health and Mental Hygiene (DHMH), has requested an opinion concerning the outside activities of a physician in the Crippled Children's Program as a Trustee and consultant to Children's Hospital.

This Opinion has been requested in response to an inquiry raised by Legislative Auditors. It involves a Staff Physician D (the Physician) in the Division of Crippled Children's Services in the Mental Retardation and Developmental Disabilities Administration. The Crippled Children's Program is established in the Health-General Article, §15-205, Annotated Code of Maryland. It is designed to provide services to children who are crippled or who have diseases that led to crippling; it involves a clinic service in local health departments, as well as hospital outpatient and inpatient care, and provision of various other services and equipment.1 The Physician serves as assistant to the Chief of the Division in supervising the program, and also as coordinator of the local programs. His duties include:

1) Planning, consultation and direction of clinical services to local health departments;
2) Administrative duties connected with day-to-day referral, management, and follow up of cases, including clinical consultation;
3) Providing consultation to clinicians attending the specialty clinics; and
4) Reviewing and providing continuing consultation and technical assistance to the State Crippled Children's Diagnostic and Evaluation Centers at Johns Hopkins Hospital and University of Maryland hospital.

The Physician's duties include work in local health clinics which may result in referral of a patient for inpatient services at one of several specialty hospitals in the State, including Children's Hospital. His duties also include work at the Hospital as a consultant in the care and treatment of patients referred from county clinics and funded (on a reimbursement basis) with Crippled Children's Program funds.

The Physician has private employment serving as a pediatric consultant to Children's Hospital. This relationship predates his employment with DHMH, and was apparently disclosed to his supervisor at the time of his employment. His services to the Hospital involve being available for 24 hours per day, seven days a week on an on-call basis. To clarify the Physician's status at the Hospital in both his State and private capacities, a Memorandum of Understanding was executed between him and the Hospital. The agreement sets forth his State duties at the Hospital, and further provides that he will be available for pediatric consultation for private patients "from 4:30 p.m. to 8:30 a.m. daily and on weekends." An annual stipend is provided for his work at the Hospital. The Physician also serves as a member of the Board of Trustees of the Hospital, and on several of its committees. Children's is a private hospital specializing in care of children and children's diseases and conditions. It is licensed and regulated by DHMH.

This request presents an outside employment issue that has been under consideration by this Commission and its predecessor (the Board of Ethics) for some time. The activity, once identified by the auditors, has been allowed to continue while consideration was given to the general impact of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) on clinical personnel employed in DHMH who want to engage in clinical services in a private capacity. This review has resulted in legislative changes and subsequent Commission regulatory action implementing exception provisions added to the Ethics Law in 1981. In applying the provisions of §3-103(a) of the Law and these exception regulations (see COMAR 19A.02.01, 9:15 Md. R. 1517 (July 23, 1982)), as well as comments from DHMH, we have concluded that both of the Physician's activities at Children's are prohibited by §3-103(a)(1)(i) of the Law, and are required to be discontinued.

Section 3-103(a)(1)(i) prohibits an official or employee from being employed by or having an interest in an entity that is under the authority of or contracts with his agency. We believe both of the Physician's affiliations with Children's Hospital constitute employment relationships as contemplated in §3-103(a). We have consistently held that, in addition to paid consultant jobs, non-compensated service on a Board or other entity may also be viewed as employment. Our view in prior requests involving non-compensated board service has been that the substance of a relationship should control rather than solely whether or not there is compensation. Where a private affiliation involves a fiduciary relationship or other commitment or requirement of loyalty, we have held that an employment relationship exists even where there is no compensation. See our Opinions No. 82-43, No. 82-22, No. 82-2, and No. 80-4.

Children's Hospital is a medical facility licensed and substantially regulated by the DHMH. Moreover, it provides medical services under a reimbursement agreement to DHMH-funded patients referred and funded by the Physician's program. Under these circumstances, we believe that the Hospital is clearly an entity under the authority of or contracting with the Physician's agency. His employment with it is therefore forbidden by §3-103(a)(1)(i). We have further evaluated, however, the application to this situation of our outside employment exception regulations.

These regulations became effective on August 2, 1982, and implement introductory language in §3-103(a), which provides that the prohibitions of subsection (a)(1) apply "except as permitted by regulation of the commission where such interest is disclosed or where such employment does not create a conflict of interest or appearance of conflict." The purpose of the exception is to avoid situations where a violation would result from technical application of the elements of §3-103(a) even where there is no conflicting relationship between the private interest or employment and official duties. The exception criteria define the circumstances where the relationship between an employee's official duties and private employment is remote, And the possibility of a conflict of interest or the appearance of conflict is unlikely. The criteria include findings that:

A. The State duties do not significantly impact on the outside employer or a contract between the outside employer and the agency.

B. The employee is not directly supervised by a person whose duties significantly impact on the outside employer or a contract between the outside employer and the agency.

C. The employee does not supervise a person whose duties significantly impact on the outside employer or a contract between the outside employer and the agency.

D. The employee is not affiliated with the specific unit in the agency that exercises authority over or contracts with the outside employer.

E. The employee has complied with other relevant sections of the Ethics Law.

F. The outside employment involves no non-ministerial duties significantly relating to the agency's authority over the employer.

G. The employee's private duties do not involve negotiating or carrying out a contract between the agency and the outside employer (except for broad fixed reimbursement contracts).

H. The private compensation is not directly funded by the State contract.

I. The specific employment circumstances do not otherwise create a conflict of interest or the appearance of a conflict.

In applying these criteria to this request, we believe that several issues are raised under the specific criteria making it impossible for us to conclude that the Physician's private and official duties are so unrelated as to make a conflict of interest or appearance of conflict unlikely. For example, the Physician's duties regarding State-aided patients at Children's would not allow a determination that his "State duties do not significantly impact on the outside employer or a contract between the outside employer and the agency." (Item A.) Nor do we believe that his duties as a Children's Hospital Trustee would support a conclusion that his "outside employment involves no non-ministerial duties significantly relating to the agency's authority over the employer." (Item F.)

Application of items B, C, D and F of the criteria may be impacted to allow employment despite the existence of the relationship, if the agency head indicates that the employment would not result in a conflict or appearance of conflict that would impair the credibility of the agency. The DHMH, in responding to our request for the views of the agency head, has indicated that, while there is no question of his integrity,

based on the information available to us, including his job description as it is now written, we do not believe we can recommend acceptance of this request for approval to act as a Consultant at the Children's Hospital. Due to the nature of his current job, we believe that there could be a reasonable public apprehension about the existence of a conflict of interest and the possibility of the jobs impinging on each other.

We therefore conclude that the Physician's proposed employment as a consultant at Children's and service as a Trustee to the Hospital is prohibited by §3-103(a)(1)(i) of the Ethics Law, and that the regulatory exception criteria may not be applied to overcome this bar.2

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

Date: October 20, 1982

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1 See our Opinion No. 82-44 for a more complete description of the Program.

2 As we believe that application of §3-103(a)(1)(i) fully disposes of this request, we have not addressed issues presented under the disqualification provisions of §3-101 or §3-103(a)(1)(ii)'s inconsistent employment provisions.