Meetings
 
Agenda Item
Docket No. 13-307
 
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RE:
Advisory opinion request regarding whether Dr. Katherine Williams may serve as a member of the St. Tammany Parish Hospital Board and whether she may receive payments for services provided as a physician from insurers while a member of the St. Tammany Parish Hospital Board.
Facts:
St. Tammany Parish Hospital staff annually votes for a Board of Commissioners. Dr. Katherine Williams is an elected member of the Board, and is a full voting member. Dr. Williams is also a member of the Company. The Company is an LLC formed to integrate with STPH in order to provide high quality, cost effective healthcare. Membership in the Company is divided between two classes, Class A membership and Class B membership. Class A membership units will be held by physicians that qualify and request membership, while STPH will hold Class B membership. STPH will contract with the Company to perform several management functions for the Company, and will own twenty percent of the Company. To qualify as a Class A member, an individual must be licensed to practice medicine in Louisiana and be a member in good standing on the STPH medical staff. Managers on the Board of Managers will not be compensated for their services. Managers may receive reimbursement of business expenses.

Dr. Williams, as a member of the Company, would also be required to execute a Participating Provider Agreement (PPA) with the Company. The PPA is an agreement between the Company and physician members of the Company. Under the PPA, the Company will negotiate with payors, such as insurance companies, over payment for services rendered by the Company's physician members.

The Company will also establish performance measures and benchmarks to be met by all physician members. If the measures and benchmarks are met, contracts with the payor will hopefully result in payments back to the Company by the payor, which will then be distributed to all physician members on a currently undetermined basis. In addition, the Company will negotiate rates with payors on behalf of its physician members, which will, at least potentially, benefit physician members through better payment rates by the payors.

As a member of the Company, Dr. Williams will directly benefit from the rates set with payors from bonuses received. STPH will also receive benefits from these transactions with insurance providers activities. If costs are reimbursed from managers of the Company for their services to the Company, Dr. Williams will also benefit from the reimbursement.

Law:
Issue No. 1:

Section 1113 of the Code states that a member of a board or commission, or a legal entity in which he has a substantial economic interest shall not bid on or enter into or be in any way interested in any contract, subcontract, or other transaction under the supervision of his agency.

Act 703, 1 of the Louisiana Legislature's 2012 Regular Session provides: B.(1) Notwithstanding any other provision of law to the contrary, a licensed physician who is a member or former member of the board of commissioners. . . is not prohibited from contracting, subcontracting, with another provider who contracts, owning an interest in an entity that contracts, or accepting employment with St. Tammany Parish Hospital, provided that the contract is related to the licensed physician's practice of medicine or expertise as a licensed physician. However, such licensed physician shall recuse himself from participating in any transaction before the Board of Commissioners that is related to [the] contract.

Issue No. 2:

Section 1111A(1) and C(1)(a) of the Code states that a public servant shall not receive anything of economic value, other than compensation and benefits from the governmental entity to which he is duly entitled, for the performance of the duties and responsibilities of his office, or for services that are devoted substantially to the responsibilities, programs, or operations of the agency of the public servant and in which the public servant has participated.

Section 1111C(2)(d) provides that a public servant, or a legal entity in which the public servant exercises control, shall not receive any thing of economic value for services rendered to any person during his public services who has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency.

Recommendations:
Adopt proposed advisory opinion.

Assigned Attorney: Brent Durham
 
 
ATTACHMENTS:
Description:
2013-307 Draft Advisory Opinion
2013-307- Advisory Opinion Request