| Date: | 04/17/1984 |
|---|---|
| Organization: | State Ethics Commission |
A Statewide Health Coordinating Council member is advised that Council members are state employees for conflict of interest law purposes and are subject to the restrictions set forth in §§ 4, 6, 7 and 23(c).
You are a member of the Statewide Health Coordinating Council (SHCC). The current SHCC was established by Massachusetts Executive Order No. 234 (the Order) to fulfill the requirements of the National Health Planning and Resources Development Act (the Act) (42 U.S.C. § 300K et seq.). Any state which desires to take advantage of the funding and other resources available pursuant to the Act is required by 42 U.S.C. § 300M-3 to establish an SHCC. Massachusetts has chosen to participate. The organization and functions of SHCC's are set out with specificity in 42 U.S.C. § 300M-3, and the Order and the by-laws drafted by the Massachusetts SHCC essentially mirror the federal requirements. They are summarized below.
The SHCC membership is composed of health care consumers and providers of which the consumers are the majority. The SHCC is required to meet at least four times a year, and those meetings must be open to the public.[1] SHCC members serve without compensation, but they are reimbursed for certain expenses connected with SHCC service, such as travel.
The general purpose of the SHCC is to coordinate the activities of the state's health planning agencies. The specific responsibilities of the SHCC are as follows. It must review the annual implementation plans of each of the state's health systems agencies.[2] It then incorporates these plans into a state health plan which delineates how the health needs of the state's population are to be met.[3] The SHCC is required to hold a public hearing on the proposed state health plan. Although the state health plan must be approved by both the Governor and the Secretary of the U.S. Department of Health and Human Services (the Secretary), neither of them may disapprove a plan or ignore a recommendation without giving a detailed statement of their reasons. The existence of an approved state health plan is a prerequisite to a state's receipt of federal money.
SHCC members are affected by two other provisions of 42 U.S.C. § 300M-3. First, there is an express limitation on the individual liability of any SHCC member for payment of damages under state or federal law "if he believed he was acting within the scope of his duty, function, or activity as such a member... and acted with respect to that performance, without gross negligence or malice toward any person affected by it." (§ 300M-3(d)). Second, there is a conflict of interest provision which prevents any SHCC member from voting on any matter respecting "any individual or entity with which such member has (or, within the twelve months preceding the vote, had) any substantial ownership, employment, medical staff, fiduciary, contractual, creditor or consultative relationship." (§ 300M-3(e)). The SHCC has incorporated this provision into its own by-laws at Article IX.
1. Are the voting members of the SHCC "state employees" within the meaning of G.L. c. 268A, § 1(q)?
2. If so, are the conflict of interest provisions set forth in Article IX of the SHCC by-laws consistent with the requirements of G.L. c. 268A?
1. Yes.
2. Yes, but there are additional limitations as set out below.
G.L. c. 268A defines a state employee as:
a person performing services for or holding an office, position, employment or
membership in a state 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 . . . G.L. c. 268A, § 1(q). (emphasis added)
Prior opinions issued by the Commission have applied criteria to analyze what constitutes "performing services for a state agency."[4] Among those criteria are:
On the basis of these precedents, the Commission concludes that SHCC members perform services for a state agency.
The status of the SHCC as a mandatory, permanent component to the implementation of the Act in Massachusetts distinguishes it from those temporary, ad hoc advisory committees which the Commission has regarded as exempt from the definition of state agency. Compare, EC-COI-80-49; 82-81; 82-139. Moreover, the formality of the SHCC's organization, responsibilities and work product as detailed in 42 U.S.C. § 300M-3, Executive Order No. 234, and the SHCC's own by-laws makes it clear that the SHCC is something more than an informal outside resource.
Examples of the SHCC's organizational formality include the requirement of a specific consumer/provider ratio for membership, the requirement that there be at least four SHCC meetings a year, and the provision for removal of SHCC members for good cause. The fact that the SHCC meetings must be open to the public pursuant to federal law (and that SHCC members have chosen to make their meetings subject to the provisions of G.L. c. 30A, §§ 11A, 11A 1/2 and 11B) further compels the conclusion that the SHCC is a state agency within the meaning of c. 268A.[5]
The fact that a majority of SHCC members must be consumers does not alter the Commission's conclusion. While it is clear from a reading of 42 U.S.C. § 300M.3 that consumer and provider viewpoints are an integral part of the health planning process, it is equally clear that the SHCC performs a governmental function. Federal funding of many state health programs is predicated on the state's having an approved state health plan. This state health plan is the work product of the SHCC. Additionally, the SHCC's recommendations appear to be given great weight by the Secretary in determining who is to receive federal grant money. Finally, as you point out in your letter, there are strong links between SHCC activities and the activities of the statutorily established Massachusetts Determination of Need program (DON). Pursuant to G. L. c. 111, § 25B et seq., major expenditures of health care facilities are subject to approval by the state Public Health Council. The Council's decisions must be consistent with the SHCC's state health plan. In essence, the SHCC exerts considerable control over the DON process.[6]
As state employees, SHCC members are subject to the restrictions set out in G.L. c. 268A,[7] but because members are not compensated for the services, they per-form, the Commission concludes that they are special state employees within the meaning of G.L. c. 268A, § 1(o).
Your second question is whether the conflict of interest provisions set forth in Article IX of the SHCC by-laws are consistent with the requirements of G.L. c. 268A. The provisions set forth in Article IX are most analogous to § 6 and § 23 of the statutes. Article IX provides in relevant part that a conflict of interest exists when the action before the SHCC concerns
"[A]ny agency, institution, corporation, association, or partnership in which the member is
or within the past twelve months was an owner, stockholder, partner, officer, employee,
member of the board of directors or trustees, professional staff affiliate, serves or within
the past twelve months served as a consultant or otherwise has or within the past twelve
months had a significant financial interest, or. . . [A]ny agency, department, or subdivision
thereof of state government in which the member is or within the past twelve months was
employed or over which the member has or within the past twelve months had some
administrative control, or. . . [A] local government or department or instrumentality
thereof in which the member is or within the past twelve months was an elected or
appointed official, employee, or paid consultant thereto . . ."
Section 6 prohibits participation by state employees in particular matters in which
"he, his immediate family or partner, a business organization in which he is serving as
officer, director, trustee, partner or employee, or any person or organization with whom
he is negotiating or has any arrangement concerning prospective employment, has a
financial interest . . ."
Section 6 is more restrictive than Article IX in two ways. First, its prohibition extends to members of the employee's immediate family[8] and to prospective employers. Second, it prohibits participation by the employee. Participation is defined as
"participating in agency action or in a particular matter personally and substantially as a
state, county or municipal employee, through approval, disapproval, decision,
recommendation, the rendering of advice, investigation or otherwise."
G.L. c. 268A, § 1(j) (emphasis added)
This means that it is improper for SHCC members with conflicts of interest to even discuss any issue related to the matter in spite of the fact that they have disclosed the existence of the conflict. To participate even "in the formulation of a matter for vote is to participate in the matter." Graham v. McGrail, 370 Mass. 133, 138 (1976). The Court in Graham goes further to say that the wise course for one who is disqualified from all participation in a matter is to leave the room. We do not think he can be counted in order to make up a quorum." Id, at 138 (citations omitted). See also EC-COI-84-40.
Article IX is more restrictive than § 6 in that its prohibitions extend back to the twelve months preceding the action being taken.[9] While an agency's own standards of conduct may not be any less restrictive than those found in c. 268A, the Commission, absent special circumstances, will not evaluate rulings or standards established by the agency itself which give guidance to its employees in the area of conflict of interest and which are consistent with the principles and aims of § 23. See EC-COI-80-51.
Article IX also provides that a conflict of interest exists when an SHCC member's participation in a matter would give the appearance that a member is otherwise motivated by private gain. This is analogous to the § 23 prohibition on public employees engaging in conduct which would "...give reasonable basis for the impression that any person can improperly influence or unduly enjoy his favor in the performance of his official duties, or that he is unduly affected by the kinship, rank, position or influence of any party or person." Section 23 goes further than Article IX in its specifics, prohibiting as it does the acceptance of other employment that would impair one's independence of judgment in the exercise of official duties and the use (or attempt to use) one's official position to secure unwarranted privileges for himself or others. Section 23 also prohibits the disclosure of confidential information acquired in the course of one's official duties.
Although your request for an advisory opinion focuses on participation of SHCC members in matters before the SHCC, you should be aware of other provisions of G.L. c. 268A which will affect the conduct of SHCC members. Sections 4(c) and 7 in particular are relevant. Section 4(c) prohibits an SHCC member from acting as agent or attorney, other than in the proper discharge of his official duties, for anyone other than the Commonwealth in relation to a particular matter in which he participated as a state employee or which is or within one year has been a subject of his official responsibility. Section 7 prohibits an SHCC member from having a financial interest, directly or indirectly, in a contract made by an agency whose activities he participates in or has official responsibility for. See G.L. c. 268A, § 7(d). SHCC members may request guidance from the Commission over the application of these provisions to their specific situations.
End of Decision
