91.14

OPINION NO. 91-14

An opinion has been requested by the Department of Health and Mental Hygiene (DHMH) regarding whether the Mental Hygiene Administration may contract with psychiatrists employed by the agency to perform psychiatric evaluation reviews as required under a federal mandate. We advise that this undertaking is allowable only if the individuals are properly employed through the agency's contractual payroll system, rather than as private vendors.

This request involves the State's implementation of a federally mandated psychiatric evaluation program that requires states to conduct screening and evaluation for every patient entering a nursing home as a pre-admission criteria, and a similar screening and evaluation annually for every elderly person in a nursing home. The agency's coordinator for the program (the Coordinator) indicates that there are currently approximately 24,000 such persons in nursing homes in Maryland, and with approximately 3,000 new admissions annually, this results in a total population of 27,000 subject to this requirement. The first step of the process is a basic screening process in which the patient is personally seen and asked several questions designed to identify whether there is any history or other basis for concluding that psychiatric care may be needed. The second step (involving about 10 percent of the population, or 2,700 patients) is the conduct of a psychiatric evaluation, which is done by the Geriatric Evaluation Services (GES) units in the local health departments. The review results in certain basic recommendations, though not a specific clinical plan, as this is the obligation of the physician and the nursing home.

All second step evaluations are forwarded for review by the Coordinator who manages the third stage of the process. This stage does not involve actually seeing the patient, but is rather, he indicates, a quality assurance review of the evaluations done by the GES units. The function is to read the entire report (which may be about 15—20 pages) and evaluate whether it was conducted by the proper people, whether the recommended results are appropriate for the situation, and whether there is an adequate rationale for the result. He says that for a person reasonably familiar with this type of population and skilled in the process, this third step evaluation should take about 15 to 20 minutes for each review. Compensation for these evaluations is $20 per evaluation, or a total of approximately $54,000 annually. The Coordinator indicates that about half of this, at $9,000 each, is paid to the three State employees currently involved in this process.

This request involves recruitment by the Department of psychiatrists to handle the third level, or quality assurance, stage of the process, which, according to the Coordinator, requires persons who are Board certified psychiatrists, who have expertise in and are willing to work in the geriatric field, and who have quality assurance review skills. The Coordinator describes certain difficulties in recruitment of reviewers, including the level of compensation, the nature of the work and the limited number of experts in geriatric psychiatry. He advises that the three high level State psychiatrists who are doing this were selected because they work in State programs that have relatively large geriatric populations. They are to do the evaluations on their own time at home, though the Coordinator recognizes that this is an aspect of the situation that is difficult to monitor. He also notes that some of the patients in the State facilities are discharged into nursing homes and evaluated under this process. Assignments of reviews are controlled in the Deputy Secretary's office, however, and no psychiatrist reviews a patient from his facility.

According to both the Coordinator and the DHMH ethics representative, these services are purchased by the State pursuant to a vendor contract through the procurement system. These individuals are not contractual State employees. It is the Department's view that it is very unlikely that the review could be assigned to existing DHMH employees as part of their official duties, because its residential health facilities are pressed for staff due to a recent hiring freeze, and even where this is lifted recruiting people to work in State facilities will be difficult. The Coordinator believes it is important to be able to recruit employees from the agency in order to meet the federal mandate. The agency concurs in this and has expressed a willingness to monitor this process from the State personnel standpoint.

This request presents issues 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). Subsection (a)(1)(i) of this section prohibits an official or employee from being employed by or having an interest in an entity that contracts with their agency. We have generally been concerned with situations where employees propose to serve as vendors contracting with their own agency to provide supplies or services. In these situations the individual has been viewed as having a private proprietorship business endeavor. For example, in Opinion No. 84-12, home care aides in the Department of Human Resources wishing to contract with their agency as private home care providers were considered to have private businesses in which they had both employment and interest relationships, and that activity was found to be barred by § 3-103(a)(1)(i).1 Our concerns in this area have been the potential for use of prestige of office in acquiring State business and contracts, the appearance of unfair competition with private providers, and the difficulty for the State in monitoring activities of its own employees.

Since the current process for acquiring psychiatric review services involves vendor contracts rather than contractual employment, we believe that this situation would come within the prior approach. It would therefore be barred by the strict prohibition of the Law unless an exception is allowed pursuant to provisory language in §3-103(a) and implementing regulatory criteria (COMAR 19A.02.01 and .02). Whether exception is possible would depend on the specific duties and relationships of the particular individuals involved in view of these criteria. Although this opinion is in response to a request for general Ethics Law policy and not a specific review of the current program staff, we are aware that all three work as upper level psychiatrists in the Mental Hygiene Administration. They all report to managers in the Administration that are responsible for this program, and work with geriatric populations that may be subject to the screening and evaluation process. Also, they would be being paid directly by their agency for performance of nonministerial work as private vendors in implementation of an agency contract.

Thus, even though the current State employee reviewers do not have specific official duties regarding the program, we believe there are substantial conflict of interest and appearance of conflict issues here that would bar an exception in this situation. We believe, however, that if the Department concludes that use of State personnel is essential for management of this program, this can be accomplished within the confines of the Ethics Law as discussed in our Opinion No. 88-14. This opinion involved application of the Law to employment of "on-call" psychiatrists in the Mental Hygiene Administration's residential facilities. In that situation the psychiatrists were hired as contractual employees to cover evenings and week-ends at State 24-hour residential facilities. We reviewed there the DHMH policies regarding secondary employment by agency physicians in various agency positions, concluding that, in view of their treatment as employees rather than vendors, and the application of significant personnel policies and procedures, on-duty physician services could, for purposes of the Ethics Law, be viewed as secondary employment with the State and not employment on behalf of a private entity.

Secondary employment with the State is, however, subject to the impairment provisions of subsection (a)(1)(ii) of §3-103, which prohibits employment that would impair the individual's impartiality or independence of judgment. As noted in Opinion No. 88-14, we have in considering secondary State employment looked at the relationships between the two employments to determine whether there are private economic interests and loyalties present in the secondary job that would impact on the proper carrying out of the primary duties. We have prohibited such employment 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." In Opinion No. 88-14, the on-duty contractual employment by the Regional Director (who was responsible for making assignments and for managing the on-duty system) was prohibited. On-duty service was allowed for other clinical staff who did not have management duties.

In our view, the guidelines outlined in Opinion No. 88-14 can be applied to the situation presented by the Coordinator to allow use of agency employees if private reviewers are not available. Reviewers would be employed in the contractual payroll rather than as vendors, and the employment would be managed and monitored by the agency in the context of its personnel policies and procedures for contractual employees. Procurement of such services from employees acting as private vendors would be within the prohibition of § 3-103(a)(1)(ii) of the Law, and inconsistent with the prior interpretation and practice under the Ethics Law.

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

Date: October 30, 1991