97.13

OPINION NO. 97-13

A Staff Specialist (the Requestor) in the Medical Assistance Policy Administration in the Department of Health and Mental Hygiene (DHMH) has requested advice as to whether the post employment provision of the Ethics Law would apply to bar her acceptance of employment with a health maintenance and managed care provider (the Provider) pursuant to her agency's programs. We advise that her employment to carry out the program implementation functions as described would be barred by this provision of the Public Ethics Law (State Government Article, §15-504(b), Annotated Code of Maryland).

The medical assistance program is established by Maryland law to implement the federal Social Security Act, funded by both State and federal funds. Its purpose is to ensure the provision of comprehensive medical and other health care services to the indigent and medically indigent in the State. Medical services under the program have been provided through two mechanisms—the fee for service system and the HMO system. Selection of one or the other of these approaches has in the past been totally voluntary for the recipient. Under the HMO system the recipient selects an HMO and receives all medical services through this entity or its subcontractors. The entity is paid on a capitation basis, or a fixed amount per patient served. The HMO entity is an organization that has demonstrated professional and financial ability to deliver specific health care services consistent with State and federal law and has contracted with the Department to deliver services to medical assistance recipients. Participating HMO providers must qualify as HMO's under the Social Security Act, and also have a certificate of authority from the Maryland Insurance Administration as an HMO. These entities provide services in accordance with relatively brief regulations (COMAR 10.09.16) and contractual agreements with DHMH that set forth in detail the rights and obligations of the entity under the program.

In 1995 as a result of anticipated changes in both the substance and the funding of the program under the Social Security Act, the State enacted legislation reflecting the intention of DHMH to apply for a waiver under §1115 of the Social Security Act to establish an initiative to expand medical assistance benefits and provide for a managed care (MCO) program that would become mandatory for medical assistance recipients. Section 15-103(b)(1) of the Health-General Article of the Annotated Code thus provides for the Secretary to establish a program under which medical assistance recipients are required to enroll in managed care organizations. The benefits and other provisions of the program are to be developed and adopted by regulations. Though the agency indicates that the MCO program is thus more substantially a regulatory program than a contract program, the statute specifically authorizes the Secretary to contract with providers for delivery of care, and in fact contracts are executed between the providers and the agency defining the obligations of the parties largely by reference to the regulations (COMAR 10.09.62 thru 10.09.72).

The MCO program as a general matter provides the same benefits as the HMO program. There are some expansions in coverage, however, and a major difference is that for the vast majority of medical assistance recipients enrollment in an MCO will be mandatory. The MCO provider population is also expanded, as eligible providers include organizations that need not be commercially licensed insurers under the Maryland insurance laws. These entities need to submit application directly to the Health Department and, in addition to meeting the insurance type requirements jointly developed by the Health Department and the Insurance Administration, must meet other qualification requirements both as to quality of care and financial stability. There will continue to be an HMO program, at least in the foreseeable future, though it is anticipated that it will be a very small program. Since the federal Medicare program prohibits Medicare recipients from being included in a mandatory enrollment system such as the Maryland MCO program, persons who are "dually eligible" for both Medicare and medical assistance will continue to have access to an HMO and a fee for service system as in the past. The Provider is an existing HMO that will continue to maintain an HMO program along side of the MCO program.

The Requestor has worked at DHMH for 5 years as a staff specialist in the Medical Assistance Policy Administration's (MAPA) HMO program. Her duties have involved commitment of about 50 percent of her time to negotiating the annual contracts with the five or so HMO providers. This entails working on collection of background information on the populations and development of statistics as to a particular provider. It includes reviewing policy changes and developments during the course of a year and working with other staff (such as compliance and operations staff in other administrations of the medical care program) to identify issues that have arisen in the year that need to be presented in a contract review. The Requestor and her supervisor indicate that she has been a key participant in the development of the agency's approach to the negotiations, and participates in the process, though they point out that she is not the final decision maker. Her remaining work is as a liaison working with the providers in carrying out the program, functioning in some ways as a contract officer. She would be the initial contact in the agency, for example, if questions or problems arise as to any aspect of program implementation by a provider. Her role also has included monitoring processing types of issues, relating, for example, to compliance with advertising limitations in the contract, processing requirements for enrollments, and monitoring of the language of the HMO's subcontracts with other providers to ensure compliance with federal requirements.

Apparently the Requestor's role in the MCO program has been more limited, as the substantial work in development and implementation of the MCO program has been done by the University of Maryland Baltimore County, Center for Health Policy (UMBC), which has contracted with the Department as to this program. The regulations were developed by this group, and applications to be an MCO provider, though initially submitted to MAPA, are transmitted to UMBC for review and processing. As to the Requestor's role in the initial implementation of the MCO program, the regulations (COMAR 10.09.65.23) require prior approval by the Department of marketing activities, and limit certain kinds of activities (such as telephone solicitation and financial incentives). The Requestor has reviewed and approved materials of the MCO's, including the Provider, in accordance with these regulations, and indicates that this activity has involved return of proposed materials and interaction with the providers to ensure compliance with the requirements. She has also handled some situations where a question has arisen about compliance with the regulations and has been responsible for approval of MCO handbooks that are being generated for distribution to enrollees.

This request arises from the Requestor's interest in accepting employment with the Provider to serve as its Medicaid Program Manager. Though originally the job function for the position suggested general assignment for all medical assistance aspects of Provider's activities, this was subsequently adjusted to reflect an intention by the Provider to handle the HMO and MCO programs as separate programs. A Provider representative has indicated that the Requestor's job would be to manage and work with the entity's project team as to implementation of the MCO program only. This will entail meeting weekly with team managers in the program to review reports on activities under the project plan. The Requestor would also be the individual responsible for reviewing the appropriate manuals or directives to respond to questions about covered services and would be the Provider representative to contact the Department if an issue arises that is not clearly resolved by existing manuals or determinations. She would also be the person participating in any meeting or coordination with the agency regarding the Provider's involvement in the MCO program. Another Provider employee would be the individual responsible for managing the HMO part of its program, and both this individual and the Requestor would participate in any Department meeting relating to both the HMO and MCO programs.

The question presented here involves application of the post-employment provision of §15-504(b) of the Ethics Law, which prohibits a former official or employee from assisting or representing a party other than the State for compensation, in a matter involving the State, if the matter is one in which she participated significantly as an employee. As a general matter, this section has not been interpreted to flatly bar any employment with an entity involved in matters relating to a former agency, or an individual's appearance before the agency. Rather, it looks to identification of particular matters in which the individual was involved in any significant way in the context of their State service, and forbids assistance or participation as to these on behalf of another party. There is no time limit on this prohibition, although most matters end within some reasonable time frame following their inception.

A general philosophical basis of the provision, at least in part, is the avoidance of "switching sides" and the use for another party of special knowledge acquired in the context of one's State employment. Another goal is to avoid situations where an individual may be seen to be using a State position to create a private employment opportunity. The Law defines specific conduct and participation as prohibited. Applying this prohibition in most situations involves the question of whether the matter is the same matter and whether the person's participation while an employee was significant. In applying the prohibition we have generally viewed participation as not being limited to final authority or responsibility for a matter. Providing advice and recommendations as to a matter, for example, is viewed as participation.

It is clear from the information provided here that the Requestor participated significantly in development, negotiation and monitoring of implementation of the agency's HMO agreement with the Provider, and also that this agreement is the fundamental document that defines the relationship between the parties. In prior opinions we have interpreted the term matter as including any proceeding, application, submission, request for ruling or other determination, contract, claim, case or other such particular matter, and we have consistently advised that provider contracts under the medical assistance program are contractual matters under this definition.1 Under this interpretation, it is clear to us that the Requestor is barred from participation or assistance on the Provider's behalf as to the HMO portion of its activities as long as the current agreement exists. This is a contractual relationship that quite clearly is a "matter" as that term has been understood, and she has plainly been involved in the development and negotiation of the agreement, as well as monitoring aspects of its implementation. Though she may not be the senior manager responsible for major decision making, she seems to be relied upon by the agency as its expert staff person in managing this program as to the Provider. She therefore participated significantly in this matter, bringing the §15-504(b) prohibition into play.

We further believe that the post-employment prohibition applies to limit the Requestor's activities on behalf of the Provider as to its MCO interaction with the Department. Despite its more regulatory focus, this program also is based upon a contractual arrangement that this Commission has consistently concluded is a contractual matter for purposes of the Ethics Law. Moreover, from the information provided by the Requestor and the agency, she appears to have been involved in aspects of this agreement to the extent that she reviewed and approved advertising materials and enrollee handbooks. The Requestor has advised that the advertising review entailed substantive considerations and return of materials for adjustment by the providers. Given that her agency appears to have relied on her initial review and determinations as to this activity, we must conclude that these actions constituted significant participation for purposes of §15-504(b), and that this participation requires application of the post-employment bar against her assisting or representing the Provider as to the MCO contract as well.

In addition, we believe that the close relationship of these two programs reinforces our concerns that her proposed employment as described would come within the §15-504(b) restriction. Despite some limited differences in coverage, and the Provider's indication that computer and management controls of these programs are separate, the reality here is that both of these programs function under the same basic federal mandate and that most substantive service delivery, policy and fiscal aspects of their implementation are related if not identical. Under the circumstances, it is simply not credible to conclude that the Provider can actually maintain these programs with sufficient separation to avoid issues under §15-504(b). Our concern is that under the circumstances, if she is the primary functional manager of the MCO program for the Provider, the Requestor's assistance to it in connection with the HMO program, in which she has significantly and substantially participated for the past five years, is likely to be unavoidable.

Based on this review of the circumstances of this situation and application of our previous advice regarding these types of provider agreements, we therefore advise the Requestor, her agency, and the Provider that her employment with the Provider as proposed to manage its implementation of its MCO agreement with the Department would be barred by §15-504(b) of the Ethics Law. As the Requestor has been informally advised, this approach would not prohibit her employment with the entity as to aspects of its activities that do not involve its dealings with the Department's medical assistance programs. Also, when the current contracts expire, she would very likely be able to work for the Provider in the capacity proposed, provided she has not had any official involvement in any agency activities relating to the new agreements.

Michael L. May, Chairman,
    Mark C. Medairy, Jr.,
    Charles O. Monk, II,
    April E. Sepulveda

Date: November 18, 1997

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1 See, for example, Opinions No. 82-46, 84-9, 91-13, and 95-10. Opinions published in COMAR Title 19A.