A member of a Board in the Department of Health and Mental Hygiene has inquired as to whether appointees to health regulatory boards may serve on health claims arbitration panels.
The Requestor (or the Member) is a member of and secretary to the State Board of Chiropractic Examiners. The request involves an issue that applies to the Requestor in a limited way in his own status. It also relates to comparable situations as to members of health licensing boards organized very like the Member's Board. Established in §3-201 et seq. of the Health Occupations Article, Annotated Code of Maryland, this Board consists of five members, four of whom must be licensed chiropractors. The other must be a consumer member. Appointments of professional members are made by the Governor from a list submitted by the Maryland Chiropractic Association. The Board conducts examinations of individuals seeking to be licensed as chiropractors. It issues licenses and has the authority, subject to a hearing on the record, to suspend, revoke or deny a license, to issue a reprimand, and to impose monetary penalties. The Board may also issue regulations and perform other administrative functions in connection with conducting its hearings and other business.
The Member's question is whether he or members of comparable health licensing boards may serve as panel members in health claims arbitration matters. The Requestor believes that such service would constitute a conflict of interest. The Maryland system for processing health claims is set out in §3-2A-02 of the Courts and Judicial Proceedings Article, Annotated Code of Maryland. Basically the system provides for administrative arbitration of medical malpractice claims, the goal being to avoid protracted litigation in these types of civil cases. The statute provides for establishment of an arbitration panel that processes the claim, conducting a hearing on the record and handling related pre-hearing matters. The panel hears the testimony of witnesses and makes a determination as to liability, and, if a health care provider is found to be liable, considers, assesses and apportions damages against the defendants found liable. Any party may petition the panel for reconsideration, but an award not changed by this process becomes final and binding on all the parties, and when confirmed by the circuit court constitutes a final judgment. A party may reject the award by filing a notice of rejection and filing an action in court.
The panels for arbitrating a health claim within this system are established by the Director of the Health Claims Arbitration Office (HCAO) in accordance with statutory requirements. Each panel includes an attorney, a health care provider and a consumer member. Panel members are selected from panel lists, which in turn are picked from larger pools of potential members. The health provider panel members are pulled from a pool that includes those licensed in the various health care disciplines whose activities could be subject to health care malpractice claims. This includes medical doctors, nurses, podiatrists, dentists, chiropractors, and others. Service by individuals in those areas is voluntary, except for medical doctors. Section 3-2A-03(c)(4)(ii) provides that "every physician who is licensed to practice medicine in the State, and who is a resident of the State, shall be available to serve as an arbitrator of health care malpractice claims."
Panel lists for each category (health care provider, attorney, consumer) containing six names each are provided by the HCAO Director to all of the parties, which are entitled to strike names from the list (2 peremptory and 1 for cause). The panel is then put together by the Director from those who have not been stricken by any party. According to the HCAO Director, the agency's goal is to ensure that the panels are randomly selected. The potential pool of health care providers is included on a computer disk maintained by the Secretary of State. A list of about 30 names is provided to HCAO staff for each particular case, based on a computer search of the disk that reflects a random sampling as well as information relevant to that case, such as geographical location and medical specialty if the claim identifies a particular specialty.
From the lists provided by the Secretary of State, HCAO staff conduct interviews with potential panel members to see if they can or will serve. Individuals are advised of the parties and attorneys involved, of the general subject matter of the claim, and, if possible, of the hearing date and expected length of the proceeding. A person may be deleted by an interviewer if they have a professional or personal relationship with a party or attorney, or if they are not available for a particular date. The Director also says that a person who wanted to decline because of his service on a licensing board would probably also be deleted at this stage. He says that he is not specifically aware of licensing board members serving on panels, though some probably have. Apparently there is some difficulty in getting people to serve, given the time commitment that could be involved, and according to the Director this is especially so in the more sparsely populated counties and in the specialties where there are fewer practitioners. He indicates there are some practitioners who are willing to serve that may show up more frequently, but that he tries to guard against this since it would violate the randomness of the panel selection.
The HCAO Director says he is not aware of any licensing board members that serve frequently or regularly on panels, and indicates that his staff does not particularly seek out such individuals. Given the way that the panel lists are developed through original lists generated by the Secretary of State, he does not think that there is much chance that a board member would be called, especially in the general medical field where board members represent a very small part of the available population. Both the Director and the Member point out that the matters being considered by an arbitration panel and the licensing board are different, one a matter of civil damages and the other a question of qualification to practice. They arise out of identical fact situations, however, and involve similar and related issues of professional competence. In fact, HCAO is required to notify licensing boards where malpractice cases are filed against their licensees, and apparently the Member's Board now has two or three cases pending which are or have been before a health claims arbitration panel.
Section 3-103(a)(1) of the Public Ethics Law (Article 40A, §3-103(a)(1), Annotated Code of Maryland, the Ethics Law) prohibits an official or employee from being employed by or having a financial interest in an entity that contracts with or is under the authority of his agency (subsection (a)(1)(i)), and further prohibits any other employment that would impair the individual's impartiality or independence of judgment (subsection (a)(1)(ii)). In our view, the primary question raised by this request is application of the latter prohibition against employment that would impair an individual's impartiality or independence of judgment. Panel members serve on a contractual basis and are paid fees in accordance with a fee schedule established by the HCAO pursuant to statutory and budget provisions. They are thus not employees of HCAO, but would be serving on an intermittent consultant basis. For purposes of §3-103(a) of the Law, we have consistently viewed consultants in this type of situation as having employment with a private practice or as an independent consultant. Thus, though panel members would have an employment relationship, it would not be with an entity subject to the authority of their agency. The strict prohibition of §3-103(a)(1)(i) therefore would not apply. There is, nevertheless, an issue as to whether the activity creates the kind of conflict of interest concern intended to be addressed by the impairment provision of subsection (a)(1)(ii).
We have looked at this provision as a complement to the restrictive provision of §3-103(a)(1)(i), to deal with inconsistent employment situations where technical contractual and authority relationships do not exist. We have in interpreting it primarily considered the person's official duties to evaluate whether performance of these duties would be impacted by the private activity. In the situation here, it would appear that consideration by a State Board member of a licensing matter, where the person has already heard the same factual situation in the civil arbitration forum, would involve some preconceived views and ideas regarding the evidence and the competence of the licensee. Thus, to the extent that panel service would involve members of the profession licensed by an individual's DHMH board, we think that the service would impact on the individual's impartiality and independence of judgment. Having considered and made a determination regarding the civil liability of a health provider, a Board member could not be expected to come to a licensing proceeding growing out of the same fact situation with an open mind. The process of the licensing board could be tainted, as a licensee would be unlikely to believe that he would get a fair hearing from a board whose membership included a person who had already ruled on the matter in another forum. We therefore advise that service on arbitration panels for individuals such as the Member would be inconsistent with §3-103(a)(1)(ii), where the arbitration matter involves a health care provider licensed by the individual's State Board.
Moreover, we do not believe, as a general matter, that disqualification under §3-101 of the Ethics Law would be a cure for this conflict. We have generally said that where there is a violation under §3-103(a), nonparticipation is not a sufficient cure, since very often the fact of disqualification is not known or easily expected to be known by members of the public impacted by agency actions. Disqualification from participation in and discussion of licensing decisions, no matter how carefully and scrupulously followed, is often simply not a matter of public knowledge. Moreover, these licensing boards tend not to be large (the Member's Chiropractic Board has 5 members), and the inability of one member to participate because of arbitration panel service could create problems in the entity's ability to function effectively in carrying out its public mission.
We do not believe that the Ethics Law's limitation of service on arbitration panels creates an inconsistency with the provisions of the health claims arbitration statute. First, the procedure of the HCAO apparently recognizes the fact that, even as to physicians who are required to serve, there are reasons why a particular individual could not serve on a particular case. We are advised by that agency's director that a person indicating a possible conflict with State board service would not be further considered for a particular panel, and in any case this disqualification from arbitration panel service would not appear to remove a significant number of individuals from potential service. Second, we note that the Ethics Law prohibition would only apply to bar panel service as to cases involving a particular board's specialty. The Member here could, for example, serve on a panel involving a nurse, dentist, surgeon or other practitioner not licensed by the Board of Examiners of Chiropractors.
*Thomas D. Washburne, Chairman
Reverend John Wesley Holland
Barbara M. Steckel
Date: January 29, 1987
* Mr. Washburne was a member and Chairman of the Commission when this request was considered and decided, but resigned prior to issuance of the formal Opinion.