A local public health officer has requested an opinion as to whether he may be employed as a private physician consultant on an Alcohol Control Administration grant made to his agency.
This request is presented by the Health Officer for two Eastern Shore counties, Caroline County and Kent County. Basically, it involves his participation, compensated in his private capacity, in an inpatient alcoholism treatment program being implemented by the Kent County Health Department under a grant from the Alcohol Control Administration (ACA), another unit of the Department of Health and Mental Hygiene (DHMH). This program is an Alcohol Subacute Detoxification and 28-day Rehabilitating Program based at the Upper Shore Community Mental Health Center. It reflects a program determination by ACA to have such a program in this facility, implemented by a grant award based on competitive process. ACA issued a Request for Proposals and received 5 proposals from both public and private entities, including one out-of-State group. The Kent County proposal was evaluated based on the same criteria as the other, non-government, entities and scored the highest in the key evaluation criteria.
The Kent County program serves the 5-county area of the Upper Eastern Shore, and is one of 3 subacute detoxification programs run by local health departments. There are nine other such inpatient programs managed by private non-profit entities. All program grantees, public and private, are accountable to the ACA regarding fiscal accountability, data reports, regulatory requirements, and quality of care. All are monitored by ACA personnel and all must submit regular reports and annual renewal applications. The funding is on a single flat grant basis, though it is by law a fee-charging program, and must regularly account for all funds received. The grant agreement is signed by the ACA and the Health Officer and it is the Health Officer who is looked to as the program official ultimately responsible for management of the program within the terms of the grant.
The Health Officer serves as chief administrative director and public health official for both Caroline and Kent counties, and is the person who supervises all of the Health Department personnel responsible for implementing the ACA alcohol inpatient program. He supervised and was involved in the development and submission of the County's proposal and is a signer of the grant agreement. He hires and supervises the general program director; the clinician who is the operational manager of the program (and who would prepare most of the reports submitted to ACA); and the nurses, counselors, and other personnel assigned to the program. He also supervises the fiscal officer in the Kent County Health Department who will be responsible for developing financial information for submission to ACA.
The program is a residential subacute detoxification program that has minimum requirements for a medical doctor. Basically, the services of a physician are expected to be used to do intake physicals, evaluating for general physical condition and the existence of any alcoholism-related physical problems, and reviewing the patient's medication program. The physician, who would be expected to provide from 3-6 hours per week to the program, may also be called on an emergency basis should some medical illness develop in a patient. The physician would be compensated based on his board certification status, the hourly rate being $26.75 for a board certified physician. The reason for this request is that the Health Officer proposes to serve himself, in his private capacity, as the medical consultant to the program. He indicates that he would do this during off hours (which, he indicates, would not be a program problem given the nature of the physician's duties), and would be paid at the $26.75 per hour rate (he is board certified in pediatrics).
The Health Officer indicates that this proposal is suggested solely as a last resort. He states that both he and the program director have made significant, unsuccessful, efforts to find a private physician. He believes that the reason for the negative reaction to the position is based on the low rate of pay and a general unwillingness to work with alcoholics. The Director of the Local Health Administration in DHMH Headquarters is generally supportive of this approach, which she believes is necessary to accommodate the special circumstances prevailing in rural counties. The Department itself had not taken a definitive position at the time of our consideration of this request.
This request raises issues primarily under the outside employment, interest, and prestige of office provisions of the Public Ethics Law (Article 40A, §3-103(a)(1) and 3-104, Annotated Code of Maryland, the Ethics Law). Section 3-103(a)(1)(i) prohibits an official or employee from being employed by or having an interest in an entity that contracts with or is regulated by his agency, or which is under his own individual authority. We have generally viewed private consulting activities as resulting in both an employment and interest relationship with an entity, the private consulting business. In our Opinion No. 82-16, for example, we applied this principle in a similar situation, barring the service by a Trustee of the Maryland Environmental Trust as a consultant on a contract between the Trust and another entity. Following this approach, we conclude that the Health Officer's consulting activity must be viewed as employment with and an interest in an entity that contracts with his agency.
This activity would thus be barred by §3-103(a)(1)(i), unless it is excepted under our outside employment regulations. Authority for this exception is set forth in the introduction to §3-103(a), which provides that the prohibition applies "except as permitted by regulation of the Commission...where such employment does not create a conflict of interest or appearance of conflict." This exception provision was added to the Ethics Law in 1981 partly based on the recommendation of the Commission that flexibility be added to the absolute prohibitions in §3-103(a), to avoid situations where a violation would result from purely technical application of the elements of §3-103(a) even where there is no conflict or appearance of conflict between the private interest or employment and official duties. In developing exception criteria implementing the employment portion of this provision (COMAR 19A.02.01), we sought to define circumstances where the relationship between an employee's official duties and private employment are so remote that the possibility of a conflict of interest or the appearance of conflict is unlikely.
If all of these regulatory standards of remoteness are met then the employment would be allowable, despite the existence of authority or contractual links between an individual's State and private employers. 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 involving no discretionary actions).
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 evaluating application of these exceptions to the circumstances presented by the Health Officer, we have considered the specific criteria set forth in the regulations as well as the total situation and the fundamental purposes of the Ethics Law, and have concluded that the activity proposed here is prohibited. We note, for example, that the Health Officer's duties would significantly impact on his "outside" activities as the consultant/physician (item A); that he is in the unit of his agency that is responsible for the ACA contract (item D); that he both supervises and is supervised by persons in his agency who are involved with the contract (items B and C); that he would necessarily be participating in matters relating to the contract, thus raising issues under another provision of the Ethics Law (§3-101, item E); that his "private" duties specifically involve carrying out the consultant contract between him and his agency (item G); and that his agency is the direct source of his private compensation (item H). Where a situation raises so many issues under the regulatory criteria, we do not believe that a conclusion that the private and official duties are remote from each other can be supported.
We recognize the concerns expressed by the agency and the necessity of its finding a physician to perform these services. However, we believe that these are matters that must be dealt with in the administrative process and within the program itself. The exception authority of §3-103(a)(1) does not envision exception from the Law's prohibitions based purely on agency convenience. The exceptions set forth in §3-103(a)(1) and implemented in our regulations were intended to allow flexibility to avoid technical application of a prohibition, where there is no conflict of interest or appearance of conflict. As our review of the exception criteria has indicated, this situation does not involve a technical application of the employment and interest prohibition; under the facts presented here there would be a conflict between the private consulting interests of the Health Officer and his official duties.
Under these circumstances, we advise the Health Officer that the prohibitions of §3-103(a)(1)(i) bar this proposed private consulting activity, and that our exception regulations do not work to overcome this bar.
Herbert J. Belgrad, Chairman
Reverend John Wesley Holland
Betty B. Nelson
Barbara M. Steckel
Date: March 17, 1983