CEO 83-84 -- October 27, 1983

CONFLICT OF INTEREST

D.H.R.S. PHYSICIAN AT STATE HOSPITAL OWNING ADULT CONGREGATE LIVING FACILITY WITH SPOUSE

To: (Name withheld at the person's request.)

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, were a physician with the Northeast Florida State Hospital of the Department of Health and Rehabilitative Services to own an adult congregate living facility (ACLF) with his wife. As the physician does not have the authority to make referrals of patients to particular facilities and as he plays no role in the licensing and regulation of ACLF's, his ownership of the ACLF would not interfere with the full and faithful discharge of his public duties. CEO 77-147 is referenced.

QUESTION:

Would a prohibited conflict of interest be created were you, a physician with the Northeast Florida State Hospital of the Department of Health and Rehabilitative Services, to own with your wife an adult congregate living facility?

Your question is answered in the negative.

In your letter of inquiry you advise that you are employed as a Senior Physician by the Department of Health and Rehabilitative Services at the Northeast Florida State Hospital. According to your position description, you act as a consulting member of the multi- discipline therapeutic team involved in psychiatric and medical treatment of mental patients and participate in and implement treatment plans derived by members of the team. You also review and participate in short and long term treatment plans and programs of the patients, prescribe patient treatment as necessary, and recommend placement actions to the social workers and team members when a patient is ready to return home or to be transferred to other community health facilities. You advise that you have no responsibilities regarding the licensure and regulation of adult congregate living facilities.

In addition, you have advised in a telephone conversation with our staff that you and your wife have purchased an adult congregate living facility (ACLF) in the Jacksonville area. You intend to render medical care for the residents of the ACLF during your off- duty hours, and your wife will be responsible for managing the facility. Under Part II of Chapter 400, Florida Statutes, the Department of Health and Rehabilitative Services is authorized to license and regulate ACLF's. In the case of your facility, District IV of the Department will be responsible for licensure and regulation; there will be no relationship between the State Hospital and the ACLF. Referrals to the ACLF will come from all over the country, you advise, and any referrals coming from the State Hospital will be only those selected by staff who are not on your treatment team. Finally, you advised that referrals from the Hospital to a particular ACLF are made by the Hospital's Admission and Discharge Unit, which is separate from the Clinical Department within which you work.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1981).]

As your ownership of the ACLF constitutes "employment" for purposes of this provision (see CEO 81-67, CEO 80-13, and CEO 78-93), our inquiry focuses on the fact that the ACLF may receive residents referred from the State Hospital and the fact that the Department regulates ACLF's.

Section 112.313(7)(a) prohibits you from having any employment with a business entity which is doing business with your agency. The term "agency" is defined in the Code of Ethics to mean

any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), Florida Statutes (1981).]

In previous opinions, we have determined the "agency" of an employee of the Department by analogy to the department/division/bureau model specified in this definition. For the reasons expressed in CEO 79-48 and CEO 81-2, and as your position description indicates that your "bureau" is District IV, we find that this District is your "agency" for purposes of the Code of Ethics.

However, we do not find that your ACLF would be "doing business with" District IV if it were to accept referrals of residents from the State Hospital. We generally have advised that a business entity is doing business with an agency where the parties have entered into a lease, contract, or other type of legal arrangement under which one party would have a cause of action against the other in the event of a default or breach. See, for examples, CEO 77-36, CEO 80-87, and CEO 82-50. In our view, an ACLF and the State Hospital have not entered into such a relationship when the ACLF accepts a resident which has been referred by the Hospital.

Section 112.313(7)(a) also prohibits you from having any employment which presents a continuing or frequently recurring conflict of interest or which would impede the full and faithful discharge of your public duties. This provision

establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which 'tempts dishonor.' [Zerweck v. State Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982).]

With respect to referrals of clients from the Hospital, you advised in a telephone conversation with our staff that the patient's treatment team determines whether the patient may be discharged from the Hospital and, if so, whether the patient should be placed with a nursing home, an ACLF, a foster home, or with relatives. This decision is based on the needs of the patient. For example, you advised that patients who need complete nursing care, such as those who cannot feed, bathe and dress themselves, would be referred to nursing homes rather than to ACLF's, since ACLF's do not provide that type of care.

Once the decision of the proper type of placement is made by the treatment team, you advised, the Admission and Discharge Unit of the Hospital (a separate entity from the Clinical Department within which you work) is responsible for actually referring the patient to a particular ACLF, nursing home, etc. In doing so, the Unit tries to place patients in their county of residence and when possible within a particular area of the county. When necessary, the patient's special needs are matched with the services available at the facility. Thus, you advised, you play no role in determining to which particular facility a patient will be referred. In addition, you advised that of the 800 patients at the Hospital, you are responsible for one ward consisting of 30 patients. All of the patients in that ward, you advised, are unsuitable for placement in ACLF's, because they require the specialized services available only in nursing homes.

Under the circumstances, we are of the opinion that your ownership of the ACLF does not present you with a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of your public duties. As the decision of what particular facility a patient will be referred to is made by the Admission and Discharge Unit, it is not a decision which is within the extent of your duties. Moreover, we note your statement that the patients in your ward are not suitable for placement in an ACLF, which further indicates that you are not in a position to benefit your ACLF through the performance of your official duties.

The final issue we must address concerns the licensing and regulation of your ACLF by District IV, your agency. Section 112.313(7)(a) prohibits you from having any employment with a business entity which is subject to the regulation of your agency. However, in CEO 77-147 we found that various employees of a county department of public health were not prohibited from being employed part-time by nursing homes which were licensed and regulated by their department, where the employees had no responsibility whatsoever with respect to nursing homes, were not in a position to supervise or regulate those persons who were responsible for regulating nursing homes, and therefore were not in a position to obtain preferential treatment from or award public business to the nursing homes which employed them. Our conclusion was based upon the following provision of the Code of Ethics:

Construction. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes (1981).]

Similarly, here, we are of the opinion that your position at the State Hospital is sufficiently divorced from the District's regulatory activities over the ACLF that your employment at the ACLF would not place you in a conflict of interest situation.

Accordingly, we find that no prohibited conflict of interest exists by virtue of your ownership of the ACLF while you are employed as a physician with the Northeast Florida State Hospital.