March 12, 1992

FACTS:




Quincy Hospital is a municipal hospital, established pursuant
to St. 1919, c. 134 (as amended and supplemented by ordinances of
the City) to "construct and maintain a hospital for the reception,
care and treatment of persons who by reason of misfortune or
poverty may require temporary medical or surgical relief and
treatment for sickness or injuries." Among the hospital's
objectives are to develop a community hospital, to fulfill
community service needs, to attract physicians, to promote and
participate in scientific research, and to provide hospital
facilities and services for the care and treatment of persons who
are acutely ill and who require the care and services "customarily
furnished most effectively by hospitals which may be financed
pursuant to Section 242 of the National Housing Act." See Quincy
Hospital Bylaws Preamble. The Hospital is governed by a Board of
Managers (Board) appointed by the Mayor. The Board is responsible
for, among other things, the general management of the Hospital,
appointing the Hospital's director, establishing a budget,
requiring the Medical staff to establish by-laws, charging the
medical staff with providing a high quality of medical care, and
determining the standards for and verifying the qualifications of
physicians who request privileges to practice medicine at the
Hospital. Quincy Hospital By-laws Article II.

Physicians who wish to practice medicine or admit patients to
the Hospital are required to apply for privileges and appointment
to the Medical Staff. According to Joint Commission for
Accreditation of Hospitals (JCAHO) standards, each hospital is
required to form "a single organized medical staff that has overall
responsibility for the quality of the professional services
provided by individuals with clinical privileges as well as the
responsibility of accounting..to the governing body." 1987 JCAHO
Accreditation Manual for Hospitals, MS.1.[1] Individuals who are
granted privileges to admit to the Hospital are required to be
members of the Medical Staff. Quincy Hospital Medical Staff
By-laws, JCAHO Standard MS. 4.3. JCAHO defines clinical privileges
as "permission to provide medical or other patient care services in
the granting institution, within well-defined limits, based on the
individual's professional license and his experience,
competence, ability, and judgment." 1987 JCAHO Accreditation Manual for
Hospitals, MS.1.

At the Hospital, physicians apply for privileges and medical
staff appointment at the same time. Most of the physicians at the
Hospital also hold appointments and privileges at other hospitals.
Members of the medical staff will review a physician applicant's
credentials and will provide a recommendation to the Board of
Managers concerning appointment and privileges. The Board of
Managers may accept the recommendation, reject the recommendation
or seek further information. Quincy Hospital Medical Staff By-laws.
Articles VI. An initial appointment is valid for a period of one
year. Each reappointment is valid for a two year period. Medical
Staff By-laws, Article VI. Each physician is granted specific
delineated privileges and the scope of the physician's practice
within the hospital is defined by those privileges. Medical Staff
By-laws, Article III.[2]

There are various categories of medical staff membership. Most
physicians are members of the active Medical Staff. Active staff
members, who are voting members of the Medical Staff, may admit
patients to the Hospital, hold positions within the Medical Staff,
become Chairmen of the clinical departments, and serve on medical
staff committees. Physicians who are appointed to the Courtesy
Medical Staff are not eligible to vote or hold office in the
Medical Staff, are limited to admitting no more than six patients
during a twelve month period and are not required to serve on
Committees. Consulting Staff Members are physicians who are
considered to be

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experts in their fields. These physicians may not admit patients to
the hospital, are not eligible to vote or hold office within the
Medical staff, and are not required to sit on Committees. These
physicians are permitted to perform special procedures or
examinations on patients at the request of a member of the Active
or Courtesy staff. Members on the Honorary Staff are senior
physicians who have been recognized for their service to the
Hospital, or their reputation, or contributions to patient care.
These physicians do not have admitting privileges, are not eligible
to hold Medical Staff office, or to vote, or to serve on
Committees. Medical Staff By-laws, Article IV.

Physicians on the Medical Staff elect their officers and
appoint Committee members without input from the Hospital Board of
Managers. Physicians within each clinical department elect a
department Chairman who is subject to approval by the Board of
Managers, but the Board does not select, hire or interview the
Department Chairmen. Medical Staff By-laws, Article XI. Active and
Courtesy staff members are required to pay dues to the Medical
staff, which dues are used for a general fund and an education
fund. These monies are controlled by members of the Medical Staff,
which has its own bank accounts and manages its own funds, separate
from any City revenues. Medical staff members are required to
establish by-laws, subject to the approval of the Board of
Managers, but neither the Medical Staff nor the Board may
unilaterally amend the medical staff by-laws. JCAHO Accreditation
Manual MS.2.1. The Medical Staff does not receive any funding from
the Hospital or the City. The primary purpose of the medical staff
as an organization is to ensure that all patients receive optimal
care, to monitor the quality of care and to account to the Board
for quality of care issues. Medical Staff By-laws, Article II. To
fulfill its purpose, the Medical Staff has established various
committees, such as a physicians' credentials committee, quality
assurance committee, infection control committee, critical care
committee, operating room committee. Medical Staff By-laws, Article
XII.

The physicians ordinarily bill their patients or the patients'
insurers directly for their services and do not receive any fee
from the Hospital, unless they have a contract directly with the
Hospital to provide services. The amount of time that a physician
spends in the Hospital is a function of the physician's specialty
and the number of patients she has admitted at any given time.

QUESTION:

Are physicians who receive appointment to the Medical Staff
and are granted clinical privileges considered to be municipal
employees for purposes of the conflict of interest law?


ANSWER:


In the absence of additional circumstances, physicians who are
appointed to the medical staff and granted clinical privileges at
the hospital are not considered to be municipal employees under
G.L. c. 268A, s. 1(g).


DISCUSSION:


This opinion presents an opportunity for the State Ethics
Commission to re-evaluate and refine a prior Commission opinion,
EC-COI-85-31, within the context of an expanded factual record. In
EC-COI-85-31, the Commission concluded that physicians who were
members of the Medical Staff were always municipal employees under
the conflict of interest law. That decision focused on the medical
staff as an entity, without regard to the different categories of
staff membership, and focused on the role played by the medical
staff in monitoring hospital quality of care issues. The opinion
did not address the nature of clinical privileges. We now conclude
that mere status on the Medical Staff for the purpose of exercising
clinical privileges, without other factors, is insufficient to
confer municipal employee status on physicians for purposes of the
conflict law.

Under G.L. c. 268A, s. 1(g), a municipal employee is defined
as "a person performing services for or holding an office,
position, employment or membership in a municipal agency, whether
by election, appointment, contract of hire or engagement, whether
serving with or without compensation, on a full, regular,
part-time, intermittent, or consultant basis." One of the
underlying themes in prior Ethics Commission cases where
individuals have been found to be public employees is that the
individuals are able to exercise governmental power, participate in
governmental functions, or provide services directly to a public
body. See, e.g., EC-COI-90-3 (raising funds to support and
subsidize a public college); 89-1 (search for new revenue producers
for public hospital); 88-24 (perform functions traditionally
performed by redevelopment authority); 87-17 (advisory committee
with substantive role in regulation process); 86-4 (same); 85-66
(assisting governmental function). In

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contrast, where individuals are not appointed or elected to perform
government functions or to exercise the power of governmental
office, the Commission has not found that these individuals are
public employees. See e.g., EC-COI-88-19 (agency not a municipal
entity where it is performing a public service but not a function
that is inherently or exclusively governmental); 88-2 (individuals
elected at municipal election not expected to perform public
service, but rather to serve on political committee); 84-76
(non-profit corporation not performing function expected of a
municipality); 84-65 ( trust's purpose excludes trust funds from
being used for essentially governmental purpose).

A physician who is appointed to the medical staff[3] of a
public hospital like Quincy and who is granted privileges at said
hospital is not performing an inherently governmental function when
she exercises those privileges. In essence, granting privileges is
granting a physician permission to practice medicine within the
hospital.[4] Upon receiving privileges, a physician's loyalty does
not shift to the City, but rather remains with her individual
patient.[5] While a hospital is required to provide supportive
facilities and services to patients, a hospital cannot practice
medicine.[6] See, G.L. c. 6A, s. 72. The Hospital does not
supervise or control the details and clinical decisions made in
medical treatment and does not assign or select the physician's
patients.[7] The Hospital does not usually bill patients for the
physician's services, does not compensate physicians to be members
of the Medical Staff, and does not compensate or select Department
Chairmen.

We also conclude that a physician's obligation, as a Medical
Staff member, to monitor care is incidental to the exercise of
privileges in the treatment of patients and does not confer public
employee status on the physician. The function of the Medical Staff
is to monitor the quality of care provided to patients and review
the professional practice of Medical Staff physicians. M.
MacDonald, K. Meyer, B. Essig, Health Care Law, s. 15.02[3]
(1989). Similar to other ad hoc advisory committees, a physician's
obligation in medical staff committees is to provide outside expert
advice in the review of other physician care and treatment of
patients and to recommend improvements. This is not a function
ordinarily expected of government employees as the practice of
medicine is within the exclusive domain of physicians, not public
hospitals. See e. g., EC-COI-87-28; 80-49. See also, 11A Aspen
Systems, Hospital Law Manual
, 12-2 (1982) (governing Board relys on
judgment of Medical Staff in quality of care).

In conclusion, granting staff privileges and Medical Staff
appointment does not per se create public employee status, but we
emphasize that if a member of the Medical Staff has additional
public duties or contract obligations to the City and/or the
Hospital, she will be deemed to be a municipal employee for
purposes of G.L. c. 268A. For example, if a physician is hired by
the City as an employee, or if the Hospital bills for the
physician's services, she will be considered a municipal employee.
EC-COI-85-56. Also, if the Hospital contracts with a physician or
a physician group to provide specific services to the Hospital,
each physician in the group may be a municipal employee. See
EC-COI-87-19; 86-21; 80-84 (contract specifically contemplates that
all of the partners will provide services, so that each partner
will be considered special state employee).

-----------------------------------

*Pursuant to G.L. c. 268B, s. 3(g), the requesting person has
consented to the publication of this opinion with identifying
information.

[1] Failure to comply with JCAHO standards would jeopardize a
hospital's accreditation and ability to receive government
payments.

[2] Under certain circumstances, a physician may be granted
temporary privileges for no longer than thirty days to attend a
specific patient or to attend patients while the physician's
application is pending.

[3] For purposes of this opinion, we view appointment to the
Medical Staff and the granting of staff privileges as synonymous
because appointment only confers delineated privileges and a
physician cannot admit or attend patients at the hospital without
receiving an appointment. According to the Medical Staff By-laws,
"[m]embership on the medical staff ... is a privilege extended by
the Hospital and is not the right of any practitioner ...
appointment to and membership on the Medical Staff shall confer on
the appointee or member only such clinical privileges and
prerogatives as recommended to the Board of Managers by the
Executive Committee of the Medical Staff and granted by the Board
of Managers in accordance with these By-laws. No practitioner shall
admit or provide services to patients to [sic] this Hospital unless
he

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is a member of the Medical Staff." Medical Staff Bylaws, Article
III. Further, for physicians who are members of the courtesy,
consulting or honorary staff, appointment is largely symbolic
because said members are not eligible to vote, hold office in the
Medical Staff, and are not required to serve on Medical Staff
Committees. See also, 11A Aspen System, Hospital Law Manual, P.2-2
(1982); M. MacDonald, K. Meyer, B. Essig, Health Care Law, s.
15.02[1], 1989.

[4] An analogy can be made between the relationship of
physicians to this public hospital and the relationship of
attorneys to the court system. The court system is a governmental
entity. Lawyers are licensed by the Commonwealth, subject to
Disciplinary Rules promulgated by the Supreme Judicial Court, hold
a title as Officers of the Court, and have permission to practice
their profession within the Courts. Yet, a lawyer's loyalty during
practice remains with her client, not the Commonwealth, and she is
not considered to be a state employee solely because she is
licensed to practice and does practice law in the state court
system.

[5] We note that Quinn v. State Ethics Commission, 401 Mass.
210 (1987) is distinguishable from your situation. The Quinn case
involved a state employee who also served as a bail commissioner
but whose compensation, similar to Medical Staff physicians, was
paid by third parties, not the Commonwealth. Id. at 212213.
However, unlike the Medical Staff physicians, the bail
commissioners perform a governmental function when they conduct
bail hearings and their loyalty is to the Commonwealth, not to the
individual requesting bail. According to the Supreme Judicial
Court, "[t]he fact that a prisoner pays the commissioner's fee and
may receive a benefit from the commissioner's services does not
alter the fact that the commissioner is performing a service for
the Commonwealth in the same way a judge or a clerk magistrate
does. The bail commissioner's duty is owed to the judicial
department of the Commonwealth, and it is to conduct the bail
proceedings according to law." Id. at 213. Also, the bail
commissioner's duties and compensation, unlike a physician's, are
required by statute. Id. at 212-213.

[6] We note that a hospital may limit or deny privileges if it
is unable to provide adequate services for the physician/applicant
and her patients. 1987 JCAHO Accreditation Manual MS.1.2.3.

[7] The issue of governmental control is the primary question
asked when a Court considers whether a physician is a public
employee for purposes of G.L. c. 258, s. 2, the Massachusetts Tort
Claims Act. See Hopper v. Callahan, 408 Mass. 621, 634 (1990);
Smith v. Steinberg, 395 Mass. 666, 668 (1985); Kelly v. Rossi, 395
Mass. 659, 662-665 (1985). The Supreme Judicial Court has
acknowledged that "the very nature of a physician's function tends
to suggest that in most instances he will act as an independent
contractor. Another person, unless a physician himself, would have
no right ... to exercise control over the details of the
physician's treatment of a patient; the profession is distinct and
requires a high level of skill and training; and the physician must
use independent judgment." Kelly, 395 Mass. at 662.

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End Of Decision