91.01

OPINION NO. 91-1

An advisory opinion has been requested regarding whether a member of the Board of Examiners of Nursing Home Administrators may also serve on the Board of Directors of the Health Facilities Association of Maryland (HFAM). Based on prior opinions applying the Public Ethics Law to members of Health Department licensing boards, we advise that this type of dual service is, unless exempted, within the employment prohibition of the Law.

This request is presented by an individual who was recently appointed to serve as a member of the Board of Examiners of Nursing Home Administrators (the Board) in the Department of Health and Mental Hygiene (DHMH). This Board is established pursuant to Health Occupations Article, §8-101 et seq., Annotated Code of Maryland, and includes 10 members. Two consumer members are appointed by the Governor with the advice of the Secretary and with the advice and consent of the Senate. Four members must be licensed nursing home administrators and the remaining four must be persons who are not nursing home administrators but who are actively engaged in professions dealing with care of the chronically ill, aged or infirm. The law provides that the Secretary's appointment recommendations should be made after consultation with associations and societies appropriate to the nature of the particular appointment. The HFAM is one of the organizations from which such recommendations are sought. The Requestor, the owner and administrator of a nursing home and formerly a member of HFAM's Board of Directors, was recommended by the Association.

The Board's function is to implement the State's program for licensing administrators of nursing homes. The law provides that an individual must be licensed by the Board before being able to practice as a nursing home administrator in the State. It further provides that a nursing home may not be operated unless it is under the supervision of a licensed nursing home administrator. The Board is empowered to adopt standards for license applicants and practice of licensees, and to create examinations and investigative processes for determining whether an applicant meets the standards and a licensee continues to meet them. It is also to conduct continuing study and investigation of nursing homes and nursing home administrators to improve licensing standards and procedures for enforcing them.

In addition to defining licensing requirements and administering the examination and licensing process, the Board has enforcement authority to suspend and revoke licenses and issue reprimands. The law also provides in connection with the renewal of licenses that the Board may establish continuing education requirements as a condition of renewal. The Board has in its regulations provided as a renewal requirement that a licensee must have completed 30 hours of approved continuing education. The regulations provide that continuing education courses must cover the subjects included in the initial licensing program, and establish a procedure requiring submission of programs or courses in continuing education prior to the course offering. The regulations also define the general powers of the Board as including the authority to enter any nursing home in the State in connection with its licensing responsibilities and further provide for access to the licensing file of any nursing home, as well as coordination with the nursing home certification agency in State government in connection with its function to monitor the continuing compliance with the law by licensees.

The Health Facilities Association of Maryland is a private industry/trade association of nursing home facilities. It functions as an association of businesses rather than an association of individual professionals. The organization also has associate members that are providers of other kinds of health services and also consultants, attorneys and other involved professions. According to the Requestor, though membership is by facility rather than individual, the member entities are represented by a variety of individuals who represent all of the various disciplines in this area, including nurses, physicians and also administrators of nursing homes that are organizational members. The current management of the organization appears to consist of seven elected officers and an immediate past president, and an elected board of eleven directors, all of whom currently appear to be nursing home administrators.

The HFAM is an organization that is broadly interested in all matters that relate to the operation of nursing homes in the State. It is therefore involved in addressing issues relating to planning and certification requirements for nursing home facilities, issues involving payment matters relating to health financing, and other related issues. Though it is not an entity directly involved as a representative of the nursing home administrators profession, HFAM appears to have substantial substantive interests in the activities of nursing home administrators, to the extent that the law requires nursing homes to be supervised by licensed administrators, and to the extent that the nursing home administrator licensing program deals with the continuing activities of licensed administrators. Also, as an association of a large and visible industry in a field that is subject to substantial government regulation and funding, the HFAM is an organization that is very visible and active in interacting with public entities in policy and other issues involving this field. It has now and in the past has had registered lobbyists who have been very active and have reported very significant expenditures in recent years.

The lobbying reports of HFAM registrants identify issues relating to nursing home administrators as lobbying subjects. One of the forms for the period covering the 1990 session of the Legislature specifically identified HB 1157. This was a bill that amended the nursing home licensing requirements, to provide in part that the Board could waive any of the law's educational requirements as to administrators licensed in another State. This bill (which was passed) was initiated by the HFAM, who met with representatives of the Board to discuss it. Apparently the Board did not oppose the bill.

We are advised that the Association also interacts with the Board in the context of regulatory and other matters, for example, in making comments and recommendations on proposed regulations of the Board. Representatives of the organization also tend to participate in public hearings that are held as to regulatory issues, and a special committee has been established by the Board to meet with representatives of HFAM and other similar entities to consider their recommendations and comments. In addition, HFAM is one of the entities that provides continuing education programs that must be approved by the Board. Though the entity is not one of the major contributors of continuing education, it does participate and its submissions must be reviewed and meet the same substantive and procedural requirements as other providers.

This request presents issues primarily under 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). These include the strict prohibition in subsection (a)(1)(i) against employment by an official with an entity that contracts with or is subject to the authority of his agency, as well as the impairment provision in subsection (a)(1)(ii) barring any other employment that would impair the individual's impartiality or independence of judgment. In several prior opinions the Commission has established the principle that service on the management and operational boards of private associations and other entities constitutes an employment relationship for purposes of these provisions. Service on such a board could therefore be covered by the prohibition if the Association has relationships with the Board or DHMH covered by the strict prohibition or if the service is viewed as inconsistent employment under the impairment provision.

In our view the facts here present a situation where both of these provisions apply. The Board has authority to establish and implement continuing education requirements and the HFAM is a participant in this program and required to submit its programs for approval. We therefore believe that this service is covered by the strict prohibition of subsection (a)(1)(i) of §3-103(a). Moreover, we believe that the Requestor's service on the HFAM Board also comes within the more general impairment provision of subsection (a)(1)(ii). In interpreting this provision we have generally looked to the duties and functions of the individual in his State position and have evaluated whether there are relationships between those functions and the private service. In particular, in situations regarding members of licensing boards, we have considered service on the managing operational bodies of private associations that interact with the State board. Our conclusion that this dual service generally results in impairment of impartiality as contemplated by §3-103(a)(1)(ii) of the Law is reflected in our Opinion No. 87-1 and reiterated in Opinion No. 90-14.

These opinions dealt with the specific facts relevant to each, and involved State boards with direct regulatory and licensing relationships between the boards and licensees who were members of the private associations involved. We recognize Requestor's point that HFAM is not an association of licensees, and that it is not the association that speaks in all cases for the interests of licensees. We recognize that its role is not to speak on behalf of the profession or to function as a policy-making body regarding the interests of the profession. Despite these and other possible differences between the specific circumstances of these entities, we do not believe that these distinctions are controlling in evaluating application of the general principle barring dual public and private offices for board and commission members.

Although the fact that HFAM is not an association composed solely of licensees is a factor to be evaluated, in our view the real test for applying the impairment provision of the Law is whether this organization and the Board would have differing objectives or policies that would result in conflict in areas such as regulations and legislation. In this situation there are significant other relationships between the two entities, and there seems to be little doubt that the regulation of nursing home administrators (who are required personnel for any nursing home) is a matter of important substantive interest to the HFAM and its members. The Association has regular interactions with the Board and its members and staff as to regulatory and other issues, and has significant lobbying activities that impact at least in part directly on legislative matters of concern to the Board and its licensees. Moreover, the licensees of the Board function solely within the context of nursing homes owned and managed by members of the Association.

Under these and other circumstances discussed above, we believe that there is a significant and real substantive relationship between the regulatory and administrative concerns of the Board and the activities and interests of HFAM. In our view these relationships raise the kinds of concerns about differing approaches that can lead to the impairment of impartiality intended to be addressed by §3-103(a). The Requestor's dual service on the State Board and as a Director of HFAM is therefore covered by the prohibition. As we have noted in several prior opinions, the Law provides for several possible exemptions that can be requested by the agency or the appointing authority. These provisions are intended to allow appointment of persons who would generally be viewed as having conflicting interests or employment, where the appointing authority determines that the person's services to the State are necessary to the functioning of the Board. This Commission has in the past considered favorably reasonably justified exemption requests from an appointing authority, and would consider such a request in this situation if it were presented.

William J. Evans, Chairman
   Mark C. Medairy, Jr.
   Robert C. Rice, Ph.D.
   Mary M. Thompson

Date: January 14, 1991