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HomeMy WebLinkAbout06-002 Metzgar Jr.I. ISSUE: OPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella Reverend Scott Pilarz DATE DECIDED: 2/23/06 DATE MAILED: 3/13/06 06 -002 Joseph T. Metzgar, Jr. RR #1, Box 207 Altoona, PA 16601 Re: Former Public Employee; Section 1103(g); Auditor II; Department of Public Welfare, Bureau of Long Term Care Programs, Division of Nursing Home Rates; Appeal of Advice. Dear Mr. Metzgar: This Opinion is issued in response to the appeal of Advice of Counsel, 06 -508, which was issued on January 13, 2006. Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., would impose any prohibition or restrictions upon an Auditor II following termination of service with the Commonwealth of Pennsylvania Department of Public Welfare ( "DPW "), Bureau of Long Term Care Programs, Division of Nursing Home Rates, particularly with regard to providing services to DPW and working out of a DPW field office as the employee of a private sector minority subcontractor. II. FACTUAL BASIS FOR DETERMINATION: By letter dated January 22, 2006, you appealed Advice of Counsel, 06 -508 issued January 13, 2006. Metzger, 06 -002 March 13, 2006 Page 2 In the initial letter requesting an advisory, you presented the following material facts. As an Auditor II for DPW's Bureau of Long Term Care Programs, Division of Nursing Home Rates, you audit the filed Medical Assistance Cost Reports ( "MA -11 ") for compliance with Pennsylvania regulations. Pennsylvania long term care nursing homes are required to file these cost reports to document their requests for reimbursement for costs incurred in caring for Pennsylvania Medical Assistance ( "MA ") residents in their facilities. You have submitted a copy of your job description, which is incorporated herein by reference. It is noted that according to your job description, your position involves advanced professional work. Your job duties and authority include, inter alia, the following: • Serving as the lead worker and person in charge of the more complex examinations; • Providing on- the -job training, guidance and assistance to assigned staff; • Determining examination procedures to be used; • Identifying objectives and adjusting the examination program as necessary for the review and testing of providers' records and procedures, and if necessary, expanding the scope of the examination to meet objectives; • Directing the review of work performed by other staff of equal grade or reviewing financial transactions and accounts, providers' financial statements, and applicable agreements, contracts, and regulations, to determine the proper accounting for and allowability of costs; • Performing analytical, developmental and evaluative functions in the examination, evaluation and reporting of private Long Term Care providers, to ensure that providers participating in the Medical Assistance Program and providing care and services to medical assistance recipients are reimbursed in conformity with DPW reimbursement policy and regulations; and • Conducting examinations of the financial records and financial transactions of resident personal fund accounts in accordance with the Federal Omnibus Reconciliation Act of 1987 (OBRA) to ensure the protection of residents; management of personal funds; depositing of resident funds; establishment and maintenance of adequate accounting records; notification of certain balances; conveyance of funds upon death; assurance of financial security; and limitation on charges to personal funds. Your work is performed with considerable independence under the direction of an administrative superior. (Job Description at 1). You have accepted an offer of employment in the private sector with " Avysion." Avysion is a minority subcontractor of Pennhurst Medical Group, P.C., which provides contract nurses and contract Financial Representatives to DPW's Bureau of Long Term Metzger, 06 -002 March 13, 2006 Page 3 Care, Division of Provider Services. You have explained that the contracted nurses review the medical charts of all MA residents in the Pennsylvania long term care nursing homes to ensure proper medical care is provided to the MA residents as required. The Financial Representative accompanies the nurses to the long term care nursing homes and reviews the nursing homes' billings to the Commonwealth for the care of MA residents in their facilities in order to recoup all overpayments made to the nursing homes by the Commonwealth. The particular employment position that you have accepted with Avysion is as a Financial Representative working at the Hollidaysburg Field office of DPW's Division of Provider Services. The employment offer is conditioned upon your retiring from the Commonwealth prior to commencing this new job. It is noted that you have submitted copies of the following documents: job description(s) for the Financial Representative position; a document identified as "Exhibit A — Special Terms and Conditions," which you indicate is part of the contract between the Commonwealth and Pennhurst Medical Group, P.C.; and a December 23, 2005, e -mail from Ms. Donna Snyder of Avysion to you regarding Avysion's subcontract with Pennhurst Medical Group, P.C. You have stated that in your thirty -three (33) years of Commonwealth employment, you have never been part of any type of contract or negotiations with the Commonwealth nor have you had any dealings or involvement with Avysion, Pennhurst Medical Group, P.C. or any related party of either of the aforesaid entities. You have described the Division of Provider Services and the Division of Nursing Home Rates as "independent divisions" of DPW. Advice of Counsel, 06 -508 determined that as an as an Auditor II for DPW's Bureau of Long Term Care Programs, Division of Nursing Home Rates, you would be considered a "public employee" as defined by the Ethics Act, such that upon retiring from DPW, you would become a "former public employee" subject to Section 1103(g) of the Ethics Act. The Advice of Counsel noted that Section 1103(g) of the Ethics Act restricts a former public official /public employee from "representing" a "person" before the governmental body with which he has been associated." The Advice determined that upon retiring from DPW, your former governmental body would be DPW in its entirety, including, but not limited to, the Bureau of Long Term Care Programs, Division of Nursing Home Rates. The Advice of Counsel determined that it would be impossible for you to perform the functions of a Financial Representative employed by Avysion working out of a DPW office without engaging in prohibited representation before DPW in contravention of Section 1103(g) of the Ethics Act. The Advice stated that the fact that the Division of Nursing Home Rates and the Division of Provider Services are independent of each other would be irrelevant. Citing this Commission's decision in Ziegler, Opinion 98 -001, the Advice of Counsel advised you that during the first year following your retirement from the Commonwealth, Section 1103(g) of the Ethics Act would apply to restrict you from engaging in prohibited representation before DPW in its entirety. By letter of January 22, 2006, you appealed Advice of Counsel, 06 -508. Your appeal letter did not state any particular basis for the appeal, but merely exercised the right to appeal the Advice of Counsel. By letter dated January 25, 2006, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting on February 23, 2006, you appeared and offered commentary, which may be fairly summarized as follows. Based upon the result of Advice of Counsel, 06 -508, you did not retire from the Commonwealth. However, you stated that if this Commission would grant your appeal of the Advice of Counsel and would permit you to take the Financial Representative position, you would retire from the Commonwealth if and when the Financial Representative position would become available. Metzger, 06 -002 March 13, 2006 Page 4 You stated your view that the conclusions of the Advice of Counsel are contrary to the intent of the Ethics Act, which you characterize as being to protect against persons leaving government service and immediately going to the other side" and immediately being capable of using the knowledge and influence gained in the previous position to some advantage against the previous governmental body. You contended that your acceptance of the Financial Representative position with Avysion would not have any negative economic impact on the Commonwealth. You stated that as a Financial Representative employed by Avysion, you would continue to only represent the Commonwealth, not Avysion, Penn Hurst, or anyone else. You stated that you would continue to work on the Commonwealth's behalf for the Commonwealth's benefit. You further contended that you would not be functioning in a manner that would represent a person or persons before your former governmental body. You stated that either in your current Auditor 2 position with DPW or as a Financial Representative employed by Avysion, nothing would change as to your relationship with the provider community except the manner in which you would be paid, and you would be viewed as a regulatory inspector auditor /reviewer to the casual observer who did not know the source of your paycheck. You stated that the only dealings that you would have with Avysion would be that it would pay you. You stated that per the Avysion contract, there are no extra payments of monies to Avysion if Avysion employs you. You requested that this Commission act favorably on your appeal and permit you to take the Financial Representative position if and when it becomes available. In addition to your submissions, we take administrative notice of the job classification specifications for your position with DPW, which job classification specifications are incorporated herein by reference. The job classification specifications dated 6/1/1989 for the position of Auditor II of DPW (Job Code 03621) describe the position as advanced and complex auditing work. Per the job classification specifications, the responsibilities and authority of the position include, inter alia: • Conducting audits and analyzing books, financial records, and cost reports to determine proper reimbursement levels to Medical Assistance providers; • Examining hospital cost reports to determine the acceptability of allowable costs under the Medical Assistance Program; • Assigning work, reviewing team members' completed audits, providing guidance to audit team members, and preparing the final audit report as the auditor -in- charge; and • Attending and testifying as an expert witness on departmental policies and regulations at appeal hearings initiated by providers. III. DISCUSSION: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, this Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the Metzger, 06 -002 March 13, 2006 Page 5 inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice, but any person may then submit a signed and sworn complaint, which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may and shall be addressed. Our review of this matter is de novo (Reese /Gilliland, Opinion 05 -005; Clarke, Opinion 04 -012; Spear, Opinion 04 -011): "De novo review entails, as the term suggests, full consideration of the case anew. The reviewing body is in effect substituted for the prior decision maker and redecides the case." D'Arciprete v. D'Arciprete, 323 Pa. Super. 430, 470 A.2d 995 (1984) (citations omitted). See also, Hayes v. Donohue Designer Kitchen, Inc., 2003 Pa. Super. 84, 818 A.2d 1287 (2003); Commonwealth v. Krut, 311 Pa. Super. 64, 457 A.2d 114 (1983); In re Audit of School District, 354 Pa. 232, 47 A.2d 292 (1946). We shall begin our analysis by considering whether as an Auditor II for DPW's Bureau of Long Term Care Programs, Division of Nursing Home Rates, you would be considered a "public employee" as defined by the Ethics Act and the Regulations of this Commission. The Ethics Act defines the term "public employee" as follows: § 1102. Definitions "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidies; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. The term shall not include individuals who are employed by this Commonwealth or any political subdivision thereof in teaching as distinguished from administrative duties. 65 Pa.C.S. § 1102. The Regulations of this Commission similarly define the term "public employee" and set forth the following additional criteria: (ii) The following criteria will be used, in part, to determine whether an individual is within the definition of "public employe ": Metzger, 06 -002 March 13, 2006 Page 6 (A) The individual normally performs his responsibility in the field without onsite supervision. (B) The individual is the immediate supervisor of a person who normally performs his responsibility in the field without onsite supervision. (C) The individual is the supervisor of a highest level field office. (D) The individual has the authority to make final decisions. (E) The individual has the authority to forward or stop recommendations from being sent to the person or body with the authority to make final decisions. (F) The individual prepares or supervises the preparation of final recommendations. (G) The individual makes final technical recommen- dations. (H) The individual's recommendations or actions are an inherent and recurring part of his position. (1) The individual's recommendations or actions affect organizations other than his own organization. (iii) The term does not include individuals who are employed by the Commonwealth or a political subdivision of the Commonwealth in teaching as distinguished from administrative duties. (iv) Persons in the following positions are generally considered public employes: (A) Executive and special directors or assistants reporting directly to the agency head or governing body. (B) Commonwealth bureau directors, division chiefs or heads of equivalent organization elements and other governmental body department heads. (C) Staff attorneys engaged in representing the department, agency or other governmental bodies. (D) Engineers, managers and secretary- treasurers acting as managers, police chiefs, chief clerks, chief purchasing agents, grant and contract managers, administrative officers, housing and building inspectors, investigators, auditors, sewer enforcement officers and zoning officers in all governmental bodies. (E) Court administrators, assistants for fiscal affairs and deputies for the minor judiciary. (F) School superintendents, assistant superintendents, school business managers and principals. (G) Persons who report directly to heads of executive, legislative and independent agencies, boards and Metzger, 06 -002 March 13, 2006 Page 7 commissions except clerical personnel. (v) Persons in the following positions are generally not considered public employes: (A) City clerks, other clerical staff, road masters, secretaries, police officers, maintenance workers, construction workers, equipment operators and recreation directors. (B) Law clerks, court criers, court reporters, probation officers, security guards and writ servers. (C) School teachers and clerks of the schools. 51 Pa. Code § 11.1. The following terms are relevant to your inquiry and are defined in the Ethics Act as follows: § 1102. Definitions "Ministerial action." An action that a person performs in a prescribed manner in obedience to the mandate of legal authority, without regard to or the exercise of the person's own judgment as to the desirability of the action being taken. "Nonministerial actions." An action in which the person exercises his own judgment as to the desirability of the action taken. 65 Pa. C. S. § 1102. Status as a "public employee" subject to the Ethics Act is determined by an objective test. The objective test applies the Ethics Act's definition of the term "public employee" and the related regulatory criteria to the powers and duties of the position itself. Typically, the powers and duties of the position are established by objective sources that define the position, such as the job description, job classification specifications, and organizational chart. The objective test considers what an individual has the authority to do in a given position based upon these objective sources, rather than the variable functions that the individual may actually perform in the position. See, Phillips v. State Ethics Commission, 470 A.2d 659 (Pa. Cmwlth. 1984); Eiben, Opinion 04 -002; Shienvold, Opinion 04 -001; Shearer, Opinion 03 -011. The Commonwealth Court of Pennsylvania has specifically considered and approved this Commission's objective test and has directed that coverage under the Ethics Act be construed broadly and that exclusions under the Ethics Act be construed narrowly. See, Phillips, supra. In applying the objective test in the instant matter, we conclude that in your capacity as an Auditor II for DPW's Bureau of Long Term Care Programs, Division of Nursing Home Rates, you would be considered a "public employee" as defined by the Ethics Act and the Regulations of this Commission. The objective sources defining your position (job description and job classification specifications) establish that as an Auditor II for DPW, you have authority and responsibility to conduct audits as to private long term care providers participating in the Medical Assistance Program. You analyze books, financial records, and cost reports to determine proper reimbursement levels to Medical Assistance providers. You have authority to examine hospital cost reports to determine the acceptability of allowable costs under the Medical Assistance Program. You also have authority and responsibility to conduct audits as to resident personal fund accounts. Such auditing duties are sufficient to establish your status as a public employee subject to the Metzger, 06 -002 March 13, 2006 Page 8 Ethics Act. 65 Pa.C.S. § 1102. Moreover, you serve as the lead worker and person in charge of the more complex of such examinations. You have the authority to direct the work of other staff. You have authority to determine the examination procedures to be used and to identify objectives and adjust the examination program as necessary. The first portion of the statutory definition of "public employee" includes individuals with authority to take or recommend official action of a nonministerial nature. 65 Pa.C.S. § 1102. Likewise, the regulatory criteria for determining status as a public employee, as set forth in 51 Pa. Code § 11.1( "public employee ")(ii), include not only individuals with authority to make final decisions but also individuals with authority to forward or stop recommendations from being sent to final decision - makers; individuals who prepare or supervise the preparation of final recommendations; and individuals who make final technical recommendations. Based upon the above, we find that your authority includes responsibility for taking or recommending official action of a nonministerial nature with regard to categories (4) and (5) of the Ethics Act's definition of "public employee," specifically, "inspecting, licensing, regulating or auditing any person" and any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person." 65 Pa.C.S. § 1102. As noted above, the objective sources defining your position are dispositive of your status under the Ethics Act —not claims as to actual duties performed. Having determined that as an Auditor 11 for DPW's Bureau of Long Term Care Programs, Division of Nursing Home Rates, you are a public employee subject to the Ethics Act, it necessarily follows that upon retiring from DPW, you would become a "former public employee" subject to Section 1103(g) of the Ethics Act. We agree with the Advice of Counsel that your former governmental body would be DPW in its entirety including, but not limited to, the Bureau of Long Term Care Programs and Division of Nursing Home Rates where you serve. Since the enactment of Act 9 of 1989, the Ethics Act has defined the term "governmental body with which a public official or public employee is or has been associated" to include the entire body: "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 P.S. § 402, now 65 Pa.C.S. § 1102 (Emphasis added). The legislative debate as to Act 9 of 1989 clearly establishes the specific intent of the General Assembly that the restrictions of Section 3(g), now Section 1103(g), apply as to the entire governmental body: We sought to make particularly clear that when we are prohibiting for 1 year that revolving -door kind of conduct, we are dealing not only with a particular subdivision of an agency or a local government but the entire unit, and my language simply makes it clear in the definition of "governmental body" that we are including subdivisions and offices within that entity. Legislative Journal of House, 1989 Session, No. 15 at 290, 291. Since Act 9 of 1989 was enacted, based upon the above statutory definition and Metzger, 06 -002 March 13, 2006 Page 9 legislative debate, this Commission has consistently determined that a public official's /public employee's former governmental body includes the entire body, not just the district or other unit served. The above legislative debate has been routinely cited in Advices of Counsel and Commission Opinions, including the Advice issued to you. See, Metzgar, Advice 06 -508 at 4. We further determine that Advice of Counsel, 06 -508 accurately apprised you of the nature of the Section 1103(g) restrictions and of certain important Commission precedents pertaining to those Sections. Accordingly, we adopt and incorporate herein by reference the Advice's recitation of the Section 1103(g) restrictions. Therefore, for the first year after termination of service with DPW, Section 1103(g) of the Ethics Act would apply to you and would restrict "representation" of "persons" before DPW with promised or actual compensation. 65 Pa.C.S. § 1103(g). Based upon the submitted facts, it appears that in your prospective employment position as a Financial Representative with Avysion, you would be working out of a DPW office, specifically, the Hollidaysburg Field office of DPW's Division of Provider Services. We agree with the Advice of Counsel that it would be impossible for you to perform the functions of a Financial Representative employed by Avysion working out of a DPW office without engaging in prohibited representation before DPW in contravention of Section 1103(g) of the Ethics Act. As was noted in the Advice of Counsel, the terms "represent" and "person" are broadly defined in the Ethics Act: § 1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102 (Emphasis added). By working for Avysion, your new private employer, out of a DPW office, you would necessarily be taking actions on behalf of a "person" —your new employer, Avysion —at the very facility of your former governmental body, DPW. Such representation of your new employer before DPW would be prohibited by Section 1103(g) of the Ethics Act during the first year following your retirement from DPW. The fact that DPW's Division of Nursing Home Rates and Division of Provider Services are independent of each other is irrelevant. As the Advice stated, during the first year following your retirement from the Commonwealth, Section 1103(g) of the Ethics Act would apply to restrict you from engaging in prohibited representation before DPW in its entirety. See, Ziegler, Opinion 98 -001. In considering your arguments, we reject as irrelevant your argument that the interests of your new employer, Avysion, would be aligned with those of DPW as to the work of the Financial Representative. Even if such would be true in this case, Section 1103(g) would nevertheless apply to prohibit you from representing Avysion before DPW. Cf., Confidential Opinion, 93 -005; Confidential Opinion, 97 -008. There are no statutory Metzger, 06 -002 March 13, 2006 Page 10 exceptions to Section 1103(g) of the Ethics Act based upon aligned interests. In fact, there are no statutory exceptions to Section 1103(g) at all. Rather, Section 1103(g) of the Ethics Act applies to all former public officials /public employees during the first year after leaving a public position, without exception, and regardless of the existence or nonexistence of an economic detriment to the Commonwealth. Simply stated, the Ethics Act does not provide for exceptions to or waivers of the applicability of the restrictions of Section 1103(g). This Commission does not have the authority to grant that which is not authorized by law. See, McCain, Opinion 02 -009; Yatron. Opinion 02 -008; Rubenstein, Opinion 01 -007; Ziegler, Opinion 98 -001; Long, Opinions 97 -010 and 97- 010 -R; Richardson, Opinion 93 -006. Additionally, we disagree with your contention that as a Financial Representative employed by Avysion, working out of a DPW office, you would not be functioning in a manner that would "represent" a person or persons before DPW. To the contrary, you would be acting on behalf of, and therefore "representing," Avysion before DPW as an Avysion employee. Regardless of your claims that you would be performing the Financial Representative work on behalf of the Commonwealth only, the necessary conclusion is that for purposes of a legal analysis under Section 1103(g) of the Ethics Act, you would be deemed to be representing your new employer, Avysion, as to the performance of such work that Avysion is contractually responsible to provide. You are further advised that the perceptions of the provider community regarding your role would be irrelevant to this analysis. Likewise, it would in no way alter this analysis that per the Avysion contract, there would be no extra payments of monies to Avysion if Avysion would employ you. Based upon the facts that have been submitted, this Advice has addressed the applicability of Section 1103(g) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /public employee and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Based upon the above analysis, we deny the appeal and affirm Metzgar, Advice of Counsel 06 -508. Lastly, the propriety of the proposed course of conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Governor's Code of Conduct. IV. CONCLUSION: An Auditor II for the Commonwealth of Pennsylvania Department of Public Welfare ( "DPW "), Bureau of Long Term Care Programs, Division of Nursing Home Rates, would be considered a "public employee" subject to the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq. ( "Ethics Act ") and Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et seq. Upon termination of service with DPW, such individual would become a "former public employee" subject to Section 1103(g) of the Ethics Act. The former governmental body would be DPW in its entirety including, but not limited to, the Bureau of Long Term Care Programs and Division of Nursing Home Rates. The restrictions of Section 1103(g) of the Ethics Act as outlined above and in Advice of Counsel, 06 -508 must be observed. Advice of Counsel, 06 -508 is affirmed. The propriety of the proposed conduct has only been addressed under the Ethics Metzger, 06 -002 March 13, 2006 Page 11 Act. Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair