02.01

OPINION NO. 02-01

This request for advice arose as a result of the newly appointed Acting Director of the Mental Hygiene Administration's (MHA or Administration) asking us to review the circumstances of his limited private practice of psychiatry in order to ensure conformance with the law. He further requested that we review our previous opinions regarding limitations on the private practices of State mental health professionals in light of the Administration's implementation of the Maryland Public Mental Health System (PMHS). In this opinion, we have limited our advice to the Acting Director's circumstances and find that his private practice is permissible with the limitations he has proposed and the resolution of two concerns we raised regarding his practice. With regard to his request for advice as to mental health practitioners in general, including psychiatrists, psychologists, social workers, psychological nurses, and professional counselors, we recognize that the application of the secondary employment and prestige provisions of the Public Ethics Law, (Md. Code Ann., State Gov't 15-502, 15-506 (Supp. 2001)), may vary with the facts of each particular situation. We have directed the Commission staff to work with the Requestor and his staff to evaluate the propriety of secondary employment situations for mental health professionals. Past opinions advised that private practices and other secondary employment situations that did not contract with or have other authority relationships with the employees' agencies and do not involve referrals or financial reimbursement from the agencies or acceptance of clients or family members of clients who had in any way been affiliated with the agencies, are generally permissible.1

The Administration operates within the Department of Health and Mental Hygiene (DHMH or Department) and is charged with the responsibility for treating and rehabilitating individuals with mental disorders (Md. Code Ann., Health-Gen. I Title 10 (Supp. 2001)). It has traditionally done so through the operation of eleven institutions, public clinics associated with county health departments, and private clinics funded by grants. In July 1997 the Administration began the implementation of a redesigned public mental health system for the State combining Medicaid and State funds. In most cases reimbursement to providers for medical services is on a "fee-for-service" basis. According to the Administration, the goal of the system is to make it easier for individuals to seek help, be referred to the appropriate services, and be provided with quality care.

The Administration contracts with Maryland Health Partners, Inc. (MHP) to provide administrative support and assist Core Service Agencies (CSA). MHP, a private corporation, maintains a list of all providers approved by the Department and provides statewide 24-hour telephone screening, determines the eligibility and medical necessity of the individual, and refers the individual to a service provider. MHP processes billing claims for services and remits payments to providers. The CSA's are the local mental health authorities responsible for planning and managing services at the local level. CSAs are agents of county governments, which approve the structure of the organization. In most locations, the county health department serves as the CSA. The PMHS includes individual providers, such as psychiatrists, psychologists, social workers, nurses, and professional counselors; community mental programs including outpatient clinics and rehabilitation programs; residential treatment centers and group homes; and psychiatric hospitals.

Basically there are three groups of individuals served by PMHS: (1) Medical Assistance recipients enrolled in managed care organizations; (2) Medical Assistance recipients who are also eligible for Medicare or remain in the Medicaid fee-for-service system; and (3) Individuals for whom, because of their medical and financial need, the cost of mental health services is subsidized by State and local funds. Additionally, as part of this system, individuals discharged from State hospitals are generally referred to PMHS qualified community based mental health aftercare programs and providers. The requestor, during his appearance before us, noted that the implementation of the PMHS has blurred the lines between public and private providers. Any professional provider who is approved by MHA and provides medically necessary treatment to an individual eligible to receive publicly-funded services in a private practice or as part of a clinic or community based program, is entitled to receive a fee for services through the PMHS. He also noted that historically, the State has encouraged its mental health professionals, clinicians and administrators to maintain private practices in order to maintain clinical skills and treatment practices, as well as to subsidize their State salaries, which are lower than the private sector.2

The Requestor, as the Acting Director of MHA, is responsible for supervising the "custody, care, and treatment of individuals who have mental disorders" Md. Code Ann., Health-Gen. I, 10-204 (Supp. 2001). He must organize and manage the Administration to best carry out its duties. He provides both Executive level direction for implementation of the PMHS and supervision of eight Assistant Directorates, each of which has certain statewide responsibilities. For example, the Assistant Director of Operations & Facilities Management oversees the administrative and fiscal of aspects of the eleven State mental health facilities; the Assistant Director for Special Populations coordinates statewide services which are specifically directed to the needs of special populations; and the Assistant Director of Health Systems Management who is responsible for the administration and financing of the PMHS including oversight of the contracts with Maryland Health Partners and the Core Services Agencies. The annual budget of the Administration exceeds $600 million.

The Requestor, who has been an employee of the MHA since 1987, has maintained a private psychiatric practice throughout his tenure with the State.3 His practice has been limited to eight hours a week during recent years and he proposes to limit it to four hours per week should he become the permanent director of MHA. In the past he has limited his practice to private patients and has not received any referrals from MHA, DHMH or any other government agency. The majority of patients are referred from private insurance companies and he does not accept payment from PMHS.

The Commission raised two issues. First was the fact that he rented office space and secretarial services from a health services provider within the PHMS. The office lease agreement allowed his use of the space in the provider's administration building one day per week and was identical to lease agreements offered to other practitioners at the facility. Second was an agreement with other independent practitioners to provide weekend on-call coverage. The agreement provided that the Requestor see their patients one weekend a month, and, in return, the other independent providers rotated to cover his private patients on the other three weekends. According to the Requestor, when he saw one of the other practitioner's patients, he billed the patient on a fee-for-service basis. If the patient was a PMHS referral, the Requestor did not bill for his services.

These two issues present concerns under several Ethics Law provisions: outside employment, participation, and prestige under 15-502, 15-501 and 15-506 of the Law. 15-502(b)(1) bars officials and employees from having employment with entities that contract with or are subject to the authority of their agencies, or are subject to the authority of the official or employee. Subsection (b)(2) further prohibits any other employment that would impair the official or employee's impartiality or independence of judgment. 15-506 prohibits officials and employees from using the prestige of their offices or public positions for private gain or that of another.

As it relates to the PMHS in Maryland and to individual providers in the system, the Requestor's prestige of office is substantial. As noted, he provides, Executive leadership for the entire system. His landlord-tenant relationship with an entity providing services to the system and receiving PMHS referrals, and his "week-end on-call agreement" with practitioners fall within the provisions addressing outside affiliations in the Ethics Law. We have previously addressed similar circumstances and have prohibited them as inconsistent employment and subject to the prestige provisions of the law. See our Opinion Nos. 96-7, 95-11, 95-9, 92-4, 91-5 and 88-21.

When brought to the Requestor's attention, he immediately terminated his lease and obtained new office space. He has also terminated the week-end on call agreement. We believe that his actions, together with his agreement to limit his private patients to individuals with no affiliation to the MPHS, are sufficient to allow him to continue his limited private practice in accordance with the constraints set forth in this opinion.

Charles O. Monk, II., Chairman
    Dorothy R. Fait
    Michael L. May
    D. Bruce Poole

Date: August 15, 2002

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1 See, for example our Opinions No. 85-1, 88-16, and 88-26.

2 The Secretary of the Department of Health and Mental Hygiene submitted a letter in support of this request. He noted that allowing employees to have private practices assists them in staying current with standards of care and is helpful in the recruitment and retention of licensed professionals in State positions.

3 The Requestor has disclosed his private practice on his annual financial statement filed with the Commission beginning in 1987 and continuing through 2001.