88.14

OPINION NO. 88-14

An opinion has been requested as to whether the Assistant Director for the Western Region of the Mental Hygiene Administration (MHA) and the Director of a residential facility in the Region (the Center) may contract with the MHA to provide on-duty psychiatric services to the Center. Based on the information provided in connection with our review, and the views expressed by the agency regarding this situation, we advise that Directors and Superintendents of facilities such as this may not, as a general matter, provide private contractual services to their own facilities.

This request is presented by an employee of the Department of Health and Mental Hygiene (DHMH) who is an Assistant Regional Director of the MHA and the Director of the Center. This is a 136 bed residential psychiatric facility located in Allegany County and serving the four Western Maryland counties (total population base 350,000). It provides general psychiatric services to a population that ranges from adolescent to elderly. The Center has a professional staff of approximately 150, including six psychiatric physicians, 3 of whom are full-time and 3 of whom are half-time. The total medical coverage is thus 4-1/2 full-time equivalent positions. Other authorized professional staff include 110 nursing personnel, 6 psychologists, 9 social workers, and 12 rehabilitation specialists.

The Requestor's position is a joint position as Director of MHA for the Western region and Director of the Center. His job as Regional Director is generally to plan, coordinate and monitor the MHA programs in this region, including working with the local health departments and other State and governmental entities. The position also includes the duty of being director of the Center. The Requestor is responsible for preparation of budget recommendations and supervising fiscal and general administrative matters within the facility, as well as general program direction within the Center. This includes serving as an ex-officio member of the Center's medical staff.

The duties of the Director of the Center include responsibility for staffing the facility with 24-hour medical coverage through identifying and contracting with physicians to provide "on-duty" services. In a prior position as the Center's Clinical Director, the Requestor contracted with the agency to provide these types of services. The appointing authority was the Director (who was not a physician). When the Requestor became Director, the question arose as to whether he could continue to provide these services, since he would be the appointing authority.

Resolution of the issue requires some understanding of the Health Department's on-duty system, which is the agency's response to the requirements arising out of the need for the DHMH to provide for licensed physician coverage on a 24-hour-a-day basis at those facilities that have 24-hour patient occupancy. The agency policy regarding on-duty service (DHMH Policy 3.2) defines on-duty coverage as "licensed physician coverage where the physician is physically in the facility; available at all times for routine and emergency medical service; location constantly known; and prepared to render medical services at once wherever medical services are needed in the facility." The method of procuring these services varies among the various DHMH facilities. At some, provision of on-duty services on a rotating basis is a part of a physician's regular employment, and at other facilities these services are provided by contract with a private provider entity.

A third method of on-duty coverage is reflected in DHMH Policy 3. 2, which declares it to be "the policy of the Department of Health and Mental Hygiene to permit the hospital or health treatment facility to use the services of physicians on the hospital's or health treatment facility's payroll to provide 'On-Duty Coverage' and to reimburse the physician on a monetary or compensatory time basis." The choice of compensatory time or monetary payment is within the discretion of the local appointing authority, and monetary payments are required to be within the agency's policy for payment of part-time medical personnel. Monetary compensation must also be within the general policies regarding contractual employees as set forth in DHMH Policy 3 and State Department of Personnel procedures. These provisions, in addition to other procedures, provide that the classification in which the individual is to be hired must have been determined to be needed for secondary employment with the DHMH. Physicians are included in the list of classifications or professional categories identified by DHMH as approved for secondary employment.

The Requestor indicates that the need to provide 24-hour service at the Center has resulted in a requirement that physicians be hired under this system. He says that each physician at the time of hiring is offered the opportunity to sign an on-duty contract, and that in the past most have because it enhances their income. Apparently in the past some individuals received monetary payments as on-duty physicians even though they were using a beeper system and were not actually at the facility. This discrepancy with the requirement of DHMH Policy 3.2 was an item noted by the Legislative auditors, and the Department has recently directed that the facility comply strictly with the requirement that on-duty physician personnel be physically on-site at the facility. The Requestor indicates that on-duty service has not at this facility been viewed as part of regular State duties; it has been treated as purely voluntary on the part of the facility's regular staff, and in this area of Maryland it has always been necessary to provide monetary payments for this service.

The Requestor advises that recruiting psychiatric physicians in the area is difficult. Apparently there are only 6 in the region and 4 are already employees of the Center. At the time when he became Director in February 1987, he continued to provide on-duty coverage under his existing contract. When contract renewal time came up in July 1987, the question was raised regarding his continuing since he would be the appointing authority. The immediate issue was handled by the transfer of appointment responsibilities as to the Requestor's on-duty coverage to the Administrator of MHA. It should be noted that the Requestor discloses on his annual financial disclosure statement that he has a private practice. He states, however, that his contract to provide on-duty service has been as an individual and not through a private practice, and the agency indicates that he is hired through and treated as a contractual employee rather than a contractor vendor.

This request raises potential issues under the outside employment provisions of §3-103(a) of the Public Ethics Law, as well as possibly under the participation and prestige provisions of §§3-101 and 3-104 (Article 40A, §§3-101, 3-103(a), and 3-104, the Ethics Law). Section 3-103(a) prohibits an employee from being employed by an entity that contracts with or is under the authority of his agency (subsection (a)(1)(i)) and also from having any other employment that would impair his impartiality or independence of judgment. Assuming that the DHMH approach to using its regular employees for on-duty work can be managed by the agency to avoid any outside employment or other ethics issues as to the general policy, the question for us under these provisions of the Ethics Law is whether there are any particular problems presented by the Requestor given his position as Regional Director.

In considering a variety of consulting and provider situations where medical and other services are provided to DHMH, we have treated these situations as involving a private entity that contracts with the agency and is therefore within the technical prohibitions of subsection (a)(1)(i). Based, however, on the agency's advice that personnel providing on-duty coverage are treated as employees rather than as vendors, and on the significant agency policies and procedures that administer the program as a personnel matter, we conclude that service as an on-duty physician may be viewed as secondary employment with the State for purposes of the Ethics Law. In considering this type of secondary employment in the past, we have held that though secondary employment with another State agency is not within the strict prohibition of subsection (a)(1)(i) (as a State agency is not an entity for purposes of this section), the more general impairment provisions of subsection (a)(1)(ii) can be applied to secondary employment in a State agency. (Opinions No. 86-5, No. 83-20, No. 83-16, No. 82-51 and No. 82-37.)

In applying the impairment provisions of the Law to particular situations, we have looked to the relationships of the two employments to determine whether the secondary employment would result in private interests or loyalties that would impact on the individual's ability to carry out his primary State duties objectively and impartially. As to secondary employment with a State agency, we have indicated that the Law could apply to bar "dual State employment situations, where there are clear personal and organizational conflicts intended to be addressed by the Ethics Law that cannot be controlled by the personnel and administrative systems." Applying these principles to the circumstances presented here, we believe that the Requestor's status in the Western Region and at the Center disqualify him from being involved in the provision of on-duty services.

As Director of the facility, the Requestor is the individual responsible for ensuring that medical coverage is provided on a 24-hour basis consistent with DHMH policy. He supervises the medical staff and either makes up schedules or supervises those who do, and is responsible for ensuring that the agency's procedural and administrative guidelines are met. That problems can result from implementation of these systems is evident from the issues raised by the legislative auditors and the action taken by the agency to adjust the facility's on-duty system. It is the Requestor's job to see to it that the agency's decision regarding this coverage is properly executed and to determine how coverage is to be achieved. His obligation to carry out this function objectively would not, in our view, be preserved by a transfer of the contract to the MHA administrator for signature.

This is the same type of situation addressed and prohibited in our Opinions No. 84-4 and No. 82-51, which also involved management positions where the individuals would have had both policy and operational roles that would impact on their secondary employment. We have the same reaction here as in those situations that it would be inappropriate for a person having these kinds of duties and responsibilities to also have a personal economic stake in the system. In our view this presents the kind of impairment intended to be covered by the outside employment provisions of Ethics Law. It could also present issues under the disqualification and use of prestige provisions of §3-101 and 3-104 of the Law, as the Requestor would be participating in management decisions that would impact on his own private economic interests.

We are also advised by agency managers of concerns that they have with Directors, Superintendents or others in comparable positions in agency facilities supplementing their income through secondary employment activities in their own facilities. In addition to their belief that this type of extra service is part of the job as the chief manager of a facility, the agency representatives expressed the same kinds of concerns discussed here as to the need for persons in these positions not to be in a position to benefit financially by their official actions.

Considering these concerns expressed by the agency as well as what we consider to be significant issues presented under the employment and other provisions of the Ethics Law, we advise this Requestor and the agency generally that the inclusion of facility directors in the contractual secondary employment on-duty system would generally be inconsistent with the provisions of the Ethics Law.

William J. Evans, Acting Chairman
   Rev. C. Anthony Muse
   Barbara M. Steckel

Date: June 28, 1988