Pursuant to G.L. c. 268B, § 3(g), the requesting party has consented to the publication of this opinion with identifying information.
You are the president of the board of directors of the Western Massachusetts Health Planning Council, Inc. (Council). The Council is a health systems agency (HSA) established under the National Health Planning and Resources Development Act, 42 U.S.C. s. 300K et seq. (Act). Specifically, the Act mandates that HSAs are to be non-profit private corporations". . . which are) not a subsidiary of, or otherwise controlled by, any other private or public corporation or other legal entity. . ." 42 U.S.C. § 3001-1(b)(1). The sole function of HSAs is to engage in health planning and development. There are thirty-one members of the Council board who serve in a volunteer unpaid capacity. The Act provides that each HSA establish its own process for the selection of its board members providing it meets certain statutory requirements for broad representation of the population. 42 U.S.C. s. 3001-1 (3)(D). The board members are not appointed by state or local officials. As an HSA organized under federal law, the Council is required to comply with the conflict of interest standards prescribed at 42 U.S.C. § 3001-1(b)(3)F. Meetings of the board are required to be public in accordance with the Act. The Council's major source of funding is through the federal government. You also have a contract with the Executive Office of Human Services to do health planning for your area. This contract amounts to twenty percent of your total budget.
Under the federal statutory scheme and complementary state law, any institutional provider of health care that wishes to offer new services must apply to the Department of Public Health (DPH) for a determination of need (DON). The prospective DON applicants are required to seek advice from the appropriate HSA. See G.L. c. 111, § 25B and 25C. The HSA may comment on the DON and forward its recommendation to DPH. 105 CMR 100.530. DPH then decides whether to make a positive finding of need.
Are the members of the Council's board "state employees" within the meaning of G.L. c. 268A § 1(q)?
Chapter 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). The issue of whether board members are considered state employees therefore depends upon whether the Council is a state agency, which is defined by the conflict of interest law as "any department of state government including the executive, legislative or judicial and all councils thereof and thereunder and any division, board, bureau, commission, institution. . ." G.L. c. 268A, § 1(p).
In its previous determinations concerning the public agency status of an entity for the purposes of Chapter 268A, the Commission has focused on the following four factors:
- The means by which it was created (e.g. state legislative or administrative action);
- The entity's performance of some essential state governmental function;
- whether the entity receives and/or expends state funds; and
- the extent of control and supervision exercised by state government officials or agencies over entity.
None of these factors standing alone is dispositive; rather, the Commission has considered the conjunctive effect produced by the extent of each factor's applicability to a given entity. For example, the Commission in EC-COI-84-55[1] concluded that the Statewide Health Coordinating Council is a state agency because it was established by a Massachusetts Executive Order and its members are appointed by the governor. In EC-COI-84-65, however, a fund privately established as a charitable trust for the benefit of the City of Boston was found not to be a municipal agency. Based on the foregoing factors, the establishment, funding and functions of the Council can be distinguished from those entities deemed to be public agencies by the Commission.
1. Creation
The Council was not created by state legislation or administrative action, but rather was established solely by the federal Act which required the Secretary of Health, Education, and Welfare (renamed Health and Human Services) to create health service areas in the country. The Act mandates that HSA's are to be non-profit corporations which are not controlled by any other private or public corporation or other legal entity. The Council is established as a non-profit corporation. There are no indicia of state involvement in the creation of the Council. HEW has the obligation to designate HSAs for all health service areas.
The selection of its board members is guided by requirements of the Act 42 U.S.C. § 3001-1 (3)(D). The board members are not appointed by state or local officials. The Council acts purely as a private vendor in its relationship to the state.
2. State Governmental Functions
The functions of a HSA include compiling and analyzing data, 42 U.S.C. § 3001.2(b)(1); establishing and reviewing a comprehensive "health systems-plan," 42 U.S.C. § 3001.2(b)(2); making grants to public and nonprofit entities in furtherance of the health systems plan, 42 U.S.C. § 3001.2(c)(3); and reviewing and approving or disapproving certain proposed uses of federal funds within the areas for which they have responsibility, 42 U.S.C. § 3001.2(c)(1). The HSAs were established by Congress to advise the federal government as to the nature of health care in the particular area. See Tex. Acorn v. Tex. Area 5 Health Systems Agency, 559 F.2d 1019 (5th Cir. 1977). Although your role in health care benefits the state, your relationship with the state is more akin to a vendor than as part of a state agency. Furthermore, it is evident that the Act's own conflict of interest provision focuses on HSA's loyalty to the federal government's scheme of health planning rather than the state.
3. Funding
The Council's source of funding is also relevant as to whether it is considered a state agency. Because its money from the state is received through a contract with EOHS to conduct health planning for your area, The Council is at most a vendor corporation in its relationship to the state.[2] The Council receives the bulk of its funds directly from the federal government. Accordingly, as long as the major funding source remains the federal government, the Council would not be considered a state agency based on this factor.
4. State Control over the Council
The Council is a non-profit corporation designated as a health systems agency pursuant to 42 U.S.C. 3001-1(b)(1). The Act mandates that HSAs are not to be controlled by any other public or private entity. The Council's input on determination of need applications is provided for under G.L. c. 111, §§ 25B and 25C which indicates that the appropriate "regional comprehensive health planning agency" as designated by the Act shall be a party to the DON procedure. However, the Council has authority only to make recommendations to DPH regarding a DON. The state has no authority to control the actions of the Council through the DON procedure nor is it authorized by any state statute to exercise control over HSA's.
Based on the foregoing, the Commission concludes that the Council is not a state agency for the purposes of Chapter 268A, and therefore Board members are not considered state employees. The Commission has no jurisdiction to render an opinion on the applicability of other state or federal statutes; thus the scope of this opinion is limited to the Commission's construction of G.L. c. 268A.
End Of Decision
