4
Conflicts of Interest

INTRODUCTION

The goal of successfully resolving complaints brought on behalf of elderly residents of long-term care (LTC) facilities lies at the heart of the LTC ombudsman program. Serving as a consumer presence in state and federal policy forums is another part of the ombudsman program’s advocacy function. The LTC ombudsman is authorized to play a much more significant role than that of neutral mediator or problem solver.1

If care in nursing and board and care (B&C) homes in the United States were provided in a manner in which minimal standards of care were met, no disagreement nor disharmony arose, and no personal rights were violated, there would be little, if any, need for the ombudsman program. However, this is not the case, and the program was designed to function in settings where disagreement can be expected. The ombudsman’s assignment is to advocate on behalf of consumers when the government or providers do not serve them or their interests. The ombudsman may at times not only encounter disagreements but also create disagreements in the normal course of duties, for example when investigating and resolving complaints, a principal task of any ombudsman. The ombudsman’s job involves pressuring governments and LTC facilities to adopt policy and programmatic directions to (1) resolve complaints made by or on behalf of residents; (2) improve the quality of care and quality

1  

Much of the background information provided in this chapter was taken from a commissioned paper by Roland Hornbostel (1994). The committee appreciates his contribution.



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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act 4 Conflicts of Interest INTRODUCTION The goal of successfully resolving complaints brought on behalf of elderly residents of long-term care (LTC) facilities lies at the heart of the LTC ombudsman program. Serving as a consumer presence in state and federal policy forums is another part of the ombudsman program’s advocacy function. The LTC ombudsman is authorized to play a much more significant role than that of neutral mediator or problem solver.1 If care in nursing and board and care (B&C) homes in the United States were provided in a manner in which minimal standards of care were met, no disagreement nor disharmony arose, and no personal rights were violated, there would be little, if any, need for the ombudsman program. However, this is not the case, and the program was designed to function in settings where disagreement can be expected. The ombudsman’s assignment is to advocate on behalf of consumers when the government or providers do not serve them or their interests. The ombudsman may at times not only encounter disagreements but also create disagreements in the normal course of duties, for example when investigating and resolving complaints, a principal task of any ombudsman. The ombudsman’s job involves pressuring governments and LTC facilities to adopt policy and programmatic directions to (1) resolve complaints made by or on behalf of residents; (2) improve the quality of care and quality 1   Much of the background information provided in this chapter was taken from a commissioned paper by Roland Hornbostel (1994). The committee appreciates his contribution.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act of life of residents; and (3) protect the health, safety, welfare, and rights of residents. The Older Americans Act (OAA) mandates that the ombudsman work toward changing government and other institutions for the betterment of the residents of LTC facilities. The OAA requires the ombudsman to: “…seek administrative, legal, and other remedies to protect the health, safety, welfare, and rights of the residents”; “recommend any changes in such laws, regulations, policies, and actions as the Office determines to be appropriate”; and “facilitate public comment on the laws, regulations, policies, and actions.” Thus, by accepting OAA monies, state governments agree to allow one of their own employees (or a contractor of the state) both to criticize openly and publicly their policies and procedures and to work toward implementing improvements. The directive to “seek administrative, legal, and other remedies” is broad enough to include the state government itself as a target of ombudsman advocacy. Conflicts of interest can easily occur in such situations. This chapter reviews the conflict of interest arena relevant to the LTC ombudsman program. The first section reviews the pertinent statutory provisions. A discussion of definitions and related conceptual dimensions follows. Four types of conflicts of interest are then examined: organizational conflicts; individual conflicts; willful interference; and conflicts related to the provision of legal counsel. Several mechanisms that help ameliorate conflicts of interest are delineated in the context of the ombudsman program. The committee states its conclusions and offers recommendations on this topic at the end of the chapter. LEGISLATIVE AND CONCEPTUAL ASPECTS OF CONFLICT OF INTEREST Older Americans Act Provisions on Conflict of Interest OAA ombudsman program provisions have always contained prohibitions against conflict of interest. The reauthorization of the act in 1992 placed even greater emphasis on sheltering the ombudsman program and ombudsman representatives from conflicts of interest. The program can better serve residents with focused, independent advocates. The legislation includes several important provisions on the subject. They are cited and explained here in some detail to underscore their breadth and the significance that Congress attached to this issue. On organizations that may not house the Office of the State LTC Ombudsman and people serving as the state ombudsman:

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act The state agency may not enter into the contract or other arrangement described in subparagraph (A) [which allows the state unit on aging (SUA) to operate the program directly or contract or designate another entity to serve as the Office of the State LTC Ombudsman] with (i) an agency or organization that is responsible for licensing or certifying LTC services in the state; or (ii) an association (or an affiliate of such an association) of LTC facilities, or of any other residential facilities for older individuals. (§712(a)(4)(B)) The state agency shall ensure that the Ombudsman (A) does not have a direct involvement in the licensing or certification of a LTC facility or of a provider of a LTC service; (B) does not have an ownership or investment interest (represented by equity, debt, or other financial relationship) in a LTC facility or a LTC service; (C) is not employed by, or participating in the management of, a LTC facility; and (D) does not receive, or have the right to receive, directly or indirectly, remuneration (in cash or in kind) under a compensation arrangement with an owner or operator of a LTC facility. (§712(f)(3)) The state agency shall establish, and specify in writing, mechanisms to identify and remove conflicts of interest referred to in paragraphs[(f)] (1) and (2) [which refers to those who directly or indirectly designate the ombudsmen or the ombudsmen entity], and to identify and eliminate the relationships described in subparagraphs (A) through (D) of paragraph (3), including such mechanisms as (A) the methods by which the state agency will examine individuals, and immediate family members, to identify the conflicts; and (B) the actions that the state agency will require the individuals and such family members to take to remove such conflicts. (§712(f)(4)) On the designation of individuals and entities by the Office of the State LTC Ombudsman: (C) Entities eligible to be designated as local ombudsman entities, and individuals eligible to be designated as representatives of such entities, shall …(ii) be free of conflicts of interest. (§712(a)(5)(C)) (f) The state agency shall (1) ensure that no individual, or member of the immediate family of an individual, involved in the designation of the ombudsman (whether by appointment or otherwise) or the designation of an entity designated under subsection (a)(5), is subject to a conflict of interest; and (2) ensure that no officer or employee of the office, representative of a local ombudsman entity, or member of the immediate family of the officer, employee, or representative, be subject to a conflict of interest;

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act On policies developed by the state agency: (iii) The state agency shall develop the policies and procedures in accordance with all provisions of this subtitle regarding confidentiality and conflict of interest (§712(a)(5)(D)(iii)) On assuring that the Ombudsman be allowed to operate free from interference: (j) The State shall (1) ensure that willful interference with representatives of the Office in the performance of the official duties of the representatives (as defined by the Commissioner) (sic) shall be unlawful. (§712(j)(1)) On providing legal counsel for the Office of the State LTC Ombudsman program: (g) The state agency shall ensure that adequate legal counsel is available without conflict of interest. (§712(g)(1)(A) On promulgating regulations for the Office of the State LTC Ombudsman program: (§713) The Assistant Secretary for Aging shall issue and periodically update regulations pertaining to conflicts of interest listed in §712(f). (§713) Definitions and Conceptual Variations Professionals of many disciplines encounter situations that create conflicts of interest. Issues pertaining to conflict of interest have traditionally been discussed in the context of a set of norms applicable to a given profession; such norms may be set forth in laws or adopted as professional norms (Rodwin, 1989; AAHC, 1990; AAMC; 1990; IOM, 1991b). Despite extensive provisions in the OAA referring to numerous aspects of conflict of interest in the ombudsman program, the act, its regulations, and AoA, to date, do not provide an adequate working definition of conflict of interest. Moreover, the issue of conflict of interest in the ombudsman program remains a very difficult one when the realities of program operation are addressed. The several references in the legislation to conflict of interest support an interpretation that conflict of interest situations pertinent to the LTC ombudsman program are likely to occur in situations other than those specifically precluded in the statute. Other professions provide examples of operating norms. Conceptual variations for the LTC ombudsman program can also be articulated.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Professionals: Personal Interests and Public Obligations The American Heritage Dictionary (Second College Edition) defines conflict of interest in terms of the tension that occurs between private, personal interests and public obligations stemming from an official position. Specific professions tend to identify features or characteristics of situations wherein conflicts of interest may occur. For example, a task force that reviewed science policy in the context of academic health centers stated that “a potential or actual conflict of interest exists when legal obligations or widely recognized professional norms are likely to be compromised by a person’s other interests, particularly if those interests are not disclosed” (AAHC, 1990). In its work on conflicts of interest pertinent to biomedical researchers, an IOM committee advising the Agency for Health Care Policy and Research on its multiyear Patient Outcome Research Team Program (IOM, 1991b) wrote that “conflict of interest arises in a situation in which (1) one is in a fiduciary relationship with certain others, and (2) one’s financial or professional self-interest substantially differs from the interest of those others.” The biomedical research community is especially sensitive to concerns of real or perceived conflicts of interest because of the risk of eroding scientific objectivity and engendering the loss of public trust. A review of pertinent instructions for the legal profession provides some insight in identifying the key criteria for defining conflict of interest in an advocacy profession (ABA, 1983). Model Rule of Professional Conduct 1.7 outlines the general conflict of interest rule for attorneys. It proscribes (a) representation that is “directly adverse” to another client and (b) representation that “may be materially limited by the lawyer’s responsibilities to another client, or to a third person, or by the lawyer’s own interest.” For example, the rule allows disclosure and consent to remedy at least some of these conflicts, although that relief is justified only because of clients’ ability to hire other attorneys who are free of conflict. The comment to Rule 1.7 elaborates on what is meant by “materially limited”; it suggests that the essential question is “whether [the conflict] will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.” The criterion offers a useful model for evaluating conflicts of interest in the context of the ombudsman program. Conceptual Variations The AoA, the aging network, and the ombudsman community for the elderly have not adopted or agreed upon a common definition of conflict of interest or a method to identify situations in which it occurs. The National

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Association of State Long-Term Care Ombudsman Programs (NASOP) has adopted a statement that identifies their perspective on organizational and individual conflicts of interest (Table 4.1). The statement reiterates the structural prohibition in the OAA regarding the location of the ombudsman in a provider association or in an entity that licenses or certifies LTC facilities. TABLE 4.1 Statement on Conflicts of Interest of the National Association of State Long-Term Care Ombudsman Programs There is a potential for conflict of interest for the ombudsman within their organizational location as well as in the performance of their individual activities. A. ORGANIZATIONAL A conflict of interest on the part of the ombudsman exists whenever: The long term care ombudsman program is a part of an entity that is responsible for licensing or certifying long-term care facilities. It should not be located with a provider association. The long term care ombudsman program is located within an organization that may impair the ability of the ombudsman to objectively and independently investigate and resolve complaints. The ombudsman role is not seen as independent. The ombudsman must be free to take action on behalf of residents, to publicly represent the concerns of residents, to bring together individuals who have the authority to solve problems, to make recommendations to boards, committees, and task forces in developing long-term care policy. The contract (sponsoring) agency does not understand the ombudsman function. There must be a recognition that there are inherent conflicts in the job, and a need to support the role and goals of the ombudsman through any conflict. B. INDIVIDUAL Individual ombudsman must be aware of anything that will impair their ability to objectively investigate complaints. The ombudsman must avoid conflict of interest in the establishment of personal relationships that may affect impartiality on the job.   SOURCE: NASOP, 1989.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act It also highlights in general terms impairments to objectivity to independence, both real and perceived. Hornbostel (1994) suggests that the LTC ombudsman program encounters conflict of interest when other interests intrude upon, interfere with, or threaten to negate the primary mission of the organization or individual—that being to advocate without compromise on behalf of LTC facility residents. In part because of the lack of any parameters other than the exclusions set forth in the OAA, no sound data exist on the frequency of occurrence and magnitude of burden of conflicts of interest within the LTC ombudsman programs. As part of its examination of these matters, the committee considered three dimensions as variations on the general notion of conflict of interest. Conflicts of loyalty involve issues of judgment and objectivity. These conflicts most often involve financial and employment considerations. The incentives that shape one’s judgment and the loyalties that drive behavior become dominant forces in situations in which conflicts of loyalty are present. The OAA addresses these primarily by establishing criteria that disqualify people from serving as ombudsmen; for example, the act specifically prohibits the ombudsman from receiving compensation from LTC facilities (§712(f)). Conflicts of commitment involve issues of time and attention. Toward which goals or obligations does one direct one’s efforts—i.e., one’s time and energies? Concerns about the adequacy of resources come into play because pressures to do more occur when available resources are limited. Compliance with the OAA mandate that each state employ a “full-time” state ombudsman is relevant in this context. In regional or local programs, ombudsmen who assume several other employment-related responsibilities in addition to their ombudsman responsibilities may experience conflicts of commitment. Conflicts of control involve issues of independence. According to the federal statute, the ombudsman should be able to pursue all reasonable courses of action that are in the best interest of the resident. If limitations or restrictions are placed on the ombudsman that effectively foreclose actions that might be considered, the ombudsman’s ability to act independently is compromised. The “willful interference” prohibition in the OAA targets overt conflicts of control. In this context, certain questions may arise such as: Do other interests, priorities, or obligations of the agency that houses the ombudsman materially interfere with the ombudsman’s advocacy on behalf of residents? Do administrative or political forces materially interfere with the professional judgment of the ombudsman? Is the ombudsman able to act responsibly without fear of retaliation by superiors?

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Types of Conflict of Interest for the Ombudsman Programs Conflicts of interest may arise from the structure in which the ombudsman program exists, from situations faced by the ombudsman, and from individual ombudsman relationships or conduct. The OAA charges the state agency and the state ombudsman with responsibility to establish mechanisms to identify and remove conflicts of interest pertinent to the ombudsmen (both state and local), their immediate family members, and the entities that host the program. Implementation of this policy is very difficult to actualize. It is almost impossible to eliminate all potential conflicts of interest because of how the LTC ombudsman programs operate and where they are located. This is especially true if the definition of situations where conflicts of interest arise is understood to include more than those noted in the OAA [see (f)(3) subparagraphs (A) through (D) in Appendix B]. Nevertheless, the importance of addressing certain situations where conflicts of interest may be expected to arise with some frequency is not to be understated. In some cases, measures can be taken to prevent the occurrence of conflicts of interest or reduce or eliminate them once identified, but other desirable aspects of program management or operation may also be eliminated by such actions. The duties of the LTC ombudsman program, if properly carried out, present multiple situations in which conflict of interest can occur. In the early years of development of the program, major concerns were twofold: (1) SUAs were prohibited from contracting for the operation of the ombudsman program with agencies that license or certify LTC facilities, and (2) conflicts of interest arose from relationships, such as employment arrangements, with LTC facilities. Concern over conflicts of interest or potential conflicts of interest are justifiable given the multiple forces and incentives that influence the behavior and decision making of the ombudsman, those with whom the ombudsman must work, and those who provide funding. Since the list of duties for SUAs, area agencies on aging (AAAs), and ombudsmen has grown in length and specificity during the last two reauthorizations of the OAA (see, for example, Generations, 1991, and Appendix A), an even greater potential for conflict of interest exists between LTC ombudsman programs and the public agencies that typically house them. This growth in responsibility has occurred at the same time that state governments have faced increased fiscal constraints. The OAA has clearly designated the LTC ombudsman program as the voice representing the LTC resident to government, yet in most cases the program continues to be housed within state and local governments that are increasingly responsible for service provision to older persons (Buford, 1984; Rango, 1984; Coleman, 1991; Holstein, 1994; Hornbostel, 1994).

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act The ombudsman program has a mandate to focus on the individual resident. If the ombudsman finds him or herself in a conflict of interest situation (whether it is a conflict of loyalty, commitment, or control), the resident, even more than the program, may suffer. The resident’s problem may not be resolved, certain avenues of resolution may be foreclosed, the resident’s voice may not be heard by policymakers, and the resident’s interests will be inadequately represented or altogether absent from the table at which public policy is made. Four types of conflicts of interest are of particular relevance in the LTC ombudsman program: (1) organizational conflicts of interest; (2) individual conflicts of interest; (3) conflicts arising in the context of willful interference; and (4) conflicts relevant to the provision of legal counsel. Organizational Conflicts of Interest Organizational conflicts of interest can be classified into two broad categories: those arising from organizational location and those arising from organizational governance. Organizational location. The OAA specifically prohibits the Office of the State LTC Ombudsman from being housed in an entity that licenses or certifies LTC services or that is an association of LTC facilities. The act does not address the potential for conflict of interest when the ombudsman program is housed in an agency that is responsible for reimbursing LTC facilities or for determining appropriate placement in LTC facilities. Entities designated as ombudsman representatives by the state office must themselves be free from conflict of interest. Consider the following examples, which illustrate conflicts arising from the organizational location of the ombudsman program. The State of X contracts with its department of health to operate the Office of the State LTC Ombudsman. The department of health also inspects and licenses nursing facilities. The act prohibits such a contract. In the State of Y, the SUA decides to designate its AAAs to serve as local ombudsman programs. One AAA manages a county-owned B&C facility. The act also prohibits designation of this entity as an ombudsman program.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act The above examples are simple and occur infrequently, and the presence of conflict of interest is obvious and the legislative prohibitions are unmistakable. However, the issue of organizational location becomes less clear when the realities of state and local organization intrude, as exemplified in the following, fairly typical situation. The State of Z operates one combined human services “umbrella” agency. One division of the agency licenses nursing facilities. Another division serves as the state’s Medicaid agency—a principal funder of institutional LTC. Yet another division of the human services agency serves as the SUA and is responsible for the Office of the State LTC Ombudsman. States have interpreted the OAA in a manner that draws a distinction between (a) contracting out the Office of the State LTC Ombudsman to a licensure or certification agency, which the act clearly prohibits, and (b) locating the program in the SUA that is part of an umbrella organization that also houses the licensing agency. The act is silent on this second practice. In states where the operation of the State LTC ombudsman program is not being contracted out, the majority of state officials take the position that the prohibition against placement in an agency that also licenses or certifies a LTC provider does not apply. Generally, these states are in compliance with the specific OAA conflict of interest provisions regarding location, but from the IOM committee’s perspective these state ombudsman programs are prone to organizational conflicts of interest. The committee saw evidence of conflicts in loyalty, commitment, and control in some ombudsman programs that are operating in these organizational structures. According to some ombudsmen who participated in the IOM study, independence in the organizational structure of the state and local ombudsman programs helps avoid situations that might make them subject to conflicts of commitment and control. The concept of conflict of control, as one aspect of conflict of interest, encompasses these concerns about independence. Fourteen percent (n=50) of all state LTC ombudsmen responding to inquiries from the IOM study cite co-location in the same agency with the licensing and certification unit of the state as a conflict of interest (Chaitovitz, 1994b).2 When the state LTC ombudsman is located in the same department with agencies making major decisions affecting LTC facilities or services, such as licensing and certification, the ability of the department’s attorney to provide legal counsel to the ombudsman is compromised, perhaps fatally. Ten percent 2   The questions called for open-ended responses. One cannot conclude from these data that 86 percent thought that co-location was not a conflict of interest.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act of the state ombudsmen specifically mentioned this as a conflict. The Office of the Inspector General (OIG) found that many ombudsmen consider program independence to be an important feature of successful ombudsman programs. The issue of organizational location is further exacerbated when program expansion is considered (see Chapter 7). Expansion is problematic in two ways. First, if the LTC ombudsman program expands its purview to include community-based LTC services in addition to institutional LTC, some of the complaints investigated by the program will probably involve services that are funded or even operated directly by the SUA or by local entities, such as AAAs, housing the local ombudsman program. Second, the role of the aging network is expanding to include far greater responsibility for aspects of care for residents of LTC facilities than was envisioned when the OAA was written. SUAs and AAAs have assumed new responsibilities for residential LTC. Some are responsible for the preadmission screening of nursing facility residents; some either contract for or operate services that are provided to residents of LTC facilities; some are responsible for providing adult protective services; and some are responsible for the operation of home- and community-based service programs that operate under waivers granted by the federal government. Any of these AAA functions can lead to conflicts of interest. The housing and funding of the ombudsman program in AAAs that directly provide inhome supportive services to residents of LTC facilities creates the same conflicts as would occur if the ombudsman program were housed or funded in a nursing or B&C home association. Another important aspect of the organizational location of the ombudsman program at the regional and local level stems from the OAA concept of “designation.” Designation is the process by which the Office of the State LTC Ombudsman program determines which entities—agencies that house local LTC ombudsman programs and individuals who perform the work—become part of the state office. Various organizations and individuals within the state actually function in an ombudsman capacity, yet these organizations and individuals are not directly controlled or housed by a single agency or by the state ombudsman office. The Office of the State LTC Ombudsman does not necessarily “legally own” the program, does not directly hire and fire the employees, and does not manage the day-to-day operation of the entity designated. Nevertheless, it is through the designation process that the various agencies and individuals become a unified, integrated statewide program—that is, the Office of the State LTC Ombudsman program. The issue of designation can, nevertheless, present real problems in the context of conflict of interest, especially in designated agencies that perform multiple functions—some of which directly involve the provision of LTC. If the beneficial effects of designation are to be fully realized, it is important that those who designate ombudsman entities and representatives also be free from conflicts of interest, as required by the OAA.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act resident transfers out of nursing facilities. Further assume that, while the interests of residents would clearly be promoted by an interpretation that granted a hearing right, the financial implications for the state’s health and social services agency responsible for these hearings were significant. At the same time, the governor has promised to “downsize” significantly the health and social services agency. In this scenario, the attorney general’s office faces a troublesome conflict of interest in representing both the health and social services agency’s interests and the interests of the ombudsman acting on behalf of residents. In the face of interagency conflict, some states allow one of the agencies in question to hire an outside private attorney. Many states have limited resources for hiring private attorneys, however, or do not support the idea of one state agency ever taking legal action against another. In cases of conflict between state agencies generally, state courts have not always found a conflict of interest when a state attorney general’s office has represented both sides of the dispute (Stevens, 1989). One theory for this finding is that neither state agency is actually the client; rather the state is the only client. Thus, there is no conflict of interest between the attorneys because there is only one client—the state. However, this rationale has questionable validity in the case of the ombudsman program, since the ultimate beneficiaries of the legal representation are residents of LTC facilities (Owen and Schuster, 1994). Conflicts of interest regarding legal counsel are not easily and adequately solvable for all ombudsman programs. The OAA minces no words in requiring the ombudsman to “represent the interest of the residents before governmental agencies.” The mandate magnifies the importance of independent legal counsel in matters that concern residents’ interests. Moreover, the availability of independent legal counsel also enhances the program’s ability to identify and remedy a range of conflicts of interest. The nature of conflicts of interest with legal counsel plays out somewhat differently when state ombudsman programs, instead of being managed within the state government, are contracted by the state to entities outside government. For ombudsman programs operating in the nongovernment sector or using nongovernmental legal counsel, conflicts of interest relative to legal counsel should be analyzed and remedied (or avoided) through adherence to the rules of professional conduct for the legal profession (see ABA, 1983, Rule 1.7). Legal counsel conflicts of interest encountered at the local ombudsman program level may mirror some state-level problems, depending on whether the ombudsman program is housed in a local government entity and on which sources provide counsel.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Amelioration of Individual Conflict of Interest The complexity of the ombudsman program and the serious nature of its mission do not allow for easy, simple answers to remedy all real or potential conflicts of interest. According to a study conducted by AoA and OIG on states’ compliance with OAA mandates (AoA/OIG, 1993), states tended to use signed statements by employees that indicated the absence of conflicts of interest as the preferred means (43 percent of the time) to implement the mandate of assuring no conflict of interest. State regulations (31 percent) and laws (17 percent) were used also.4 Policies and procedures at the state and local program levels that assist in identifying potential conflicts of interest are an essential first step toward ameliorating such conflicts. The OAA requires such policies. Apart from mechanisms designed to affirmatively identify potential conflicts of interest, several mechanisms are commonly employed to remedy conflicts: prohibition, disclosure, disclosure with alternative options offered, disclosure with refusal to represent a potential client, everyday ethical behavior, and public accountability. For the most part, these mechanisms ameliorate individual conflicts of interest rather than conflicts of interest arising from organizational location and organizational governance. Prohibition In the early stages of the ombudsman program’s development, it was widely believed that a simple prohibition of all conflicts would suffice as a remedy. However, enough gray areas of overlapping and competing interests among multiple organizations and individuals have developed as the reality of program implementation has emerged to lead most to eschew complete reliance on simple strictures against conflicts of interest. Nevertheless, prohibition of conflict of interest remains a significant remedy. If prohibition is expected to be effective, however, the situations that create or have the potential to create conflicts of interest must be clearly defined, and such situations must be easily identifiable. 4   The 1993 AoA/OIG study did not assess whether state ombudsmen or local representatives were subject to conflicts of interest but instead asked about mechanisms used to identify and resolve conflicts of interest.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Disclosure Common in the academic world and in the legal profession, disclosure of potential sources of conflict of interest is often viewed as an important remedy. However, this strategy has limited use in the ombudsman program because the resident often has nowhere else to turn once the conflict is disclosed. Therefore, for disclosure to be effective as a cure or protection against conflict of interest in the ombudsman program, it must be coupled with some other remedy, including alternative options or recusal. Disclosure With Alternative Options Offered Experienced ombudsmen frequently are able to select among several approaches to resolve complaints. Good practice always involves the resident in making decisions on the options for resolving a given complaint, and such practice also serves as a potential remedy to some conflicts of interest. If the conflict involves the individual ombudsman, the conflict may be remedied by assigning a different ombudsman representative. If the local ombudsman entity is the source of the conflict, then it may be possible to transfer the case to an adjacent program in a neighboring jurisdiction. If all local ombudsman entities possess the same conflict, then the case can be transferred to the state ombudsman office. Even in most circumstances where disclosure and referral are appropriate, considering the wishes of the client is still paramount. Disclosure With Recusal Legal professionals frequently recuse themselves (decline to represent a client) to avoid conflicts of interest. However, in dealing with a resident or a client on behalf of a resident, recusal by an ombudsman or by the ombudsman program clearly will not be any more effective than disclosure alone; indeed it is a step backward. In remedying other conflicts of interest, however, recusal may be effective. Perhaps the best example of effective disclosure and recusal occurs when a member of a governing board or advisory council has a clear conflict of interest. In such circumstances, an effective remedy is to require disclosure of all potential conflicts of interest by board members accompanied by a recusal on the part of the board member from any further involvement in the subject. An effective recusal policy requires that the individual with the conflict excuse him or herself from any further discussion of the subject and may even necessitate that the member be absent from the meeting(s) at which the subject is discussed.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Everyday Ethical Behavior The ombudsman may engage in behavior either as a professional or in private life that creates a perception that a conflict of interest exists. By acting in an ethical fashion, ombudsmen can eliminate a majority of the causes that give rise to these perceptions. Professional conduct and codes of ethics frequently include provisions that apply to personal behavior. Public Accountability Even when the remedies discussed above are sincerely employed, some situations will continue to present conflicts of interest that are not easily or willingly resolved. Indirectly, several functions of the LTC ombudsman program can help to ameliorate conflicts of interest. For example, the LTC ombudsman program is mandated to interact with citizen organizations and the family and resident councils of LTC facilities. In so doing, the program becomes more visible to the public. Consumers who serve on program advisory councils also can help alert officials to situations that might lead to conflicts of interest. Public accountability can help bring balance to the resolution of conflict of interests in one or more government entities. Media exposure of improper conduct can result in changes that remove conflicts of interest. The effectiveness of the mechanisms to ameliorate conflicts of interest depends, in part, on the willingness of the ombudsman or the ombudsman program to use them. Other measures may better apply, however, to address significant conflicts of interest that are not ameliorated voluntarily. Residents concerned about conflicts of interest within the ombudsman program may seek remedies through the legal system, although to do so may require more financial resources and skills in accessing services outside the LTC facility than some residents may have. Employers may find that significant conflicts of interest hinder the ombudsman’s performance and constitute grounds for dismissal. Both public and private sponsors that provide funds to support ombudsman programs may withhold a portion or all of their support until conflicts of interest are resolved. CONCLUSIONS AND RECOMMENDATIONS Determination of actual and potential conflicts of interest in the administration and operation of the LTC ombudsman programs depends primarily on two factors: (1) the definition or parameters describing occurrences of conflicts of interest, and (2) the circumstances of the situation

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act under review. Without a doubt, most state and local ombudsman programs are subject to one or more of the conflicts of interest reviewed by the committee. Of particular concern to the committee is the prevalence of potential and actual conflicts of interest that arise from the structural location of many of the Offices of the State LTC Ombudsman programs. Situations in which real, potential, and perceived conflicts of interest exist may be more prevalent than is typically understood, and perceived conflicts of interest may be as detrimental to operating the ombudsman program as real conflicts of interest. All conflicts of interest work to the disadvantage of the vulnerable client. Ombudsmen—particularly state ombudsmen—operate in a politically charged environment exacerbated by the fact that most often state ombudsmen are state employees. Government cannot function efficiently if its employees work in opposing directions. At all levels of government in the United States, formal and informal standards govern the chain of command. Every executive branch of government justifiably exercises some control over its employees’ contacts with the legislative branch and with the media. By federal statute, the ombudsman is required to speak out against government laws, regulations, policies, and actions when the circumstances justify such action. However, taking such steps is antithetical to the hierarchical rules of government. It is not surprising, therefore, that conflicts occur. The imposition of a state’s routine chain-of-command rules for the ombudsman can significantly constrain the independence of the ombudsman, although no person in such situations may intentionally act to interfere with the work of the ombudsman. The committee began its review of conflicts of interest with the statutory provisions of the OAA that prohibit conflicts of interest in the LTC ombudsman programs. The parameters set forth in the act to identify situations of conflicts of interest are quite limited and outdated, focusing almost exclusively on financial interests and nursing facility settings. They provide little guidance for addressing the conceptually related variations of conflicts of loyalty, commitment, and control that shadow the environments in which the ombudsman program operates in the 1990s. Conflicts of interest can be dealt with either by prevention or by detection and correction. Not all conflicts of interest can be prevented from occurring in the ombudsman programs, although prevention is clearly the preferred method of program administration and the most effective in assuring compliance with statutory provisions. Numerous mechanisms for ameliorating individual conflicts of interest exist, including disclosure, ethical behavior, and accountability to the public. The committee determined that conflict of interest problems are sufficient to warrant greater vigilance and a broader array of tactics to prevent, identify, and correct pertinent and significant conflicts.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Organizational Location and Governance Simply to organizationally separate the LTC program from other public agencies that have interests in LTC facilities or services will not prevent all organizational conflicts of interest. The committee acknowledges that its information is limited on the degree of importance or significance of organizational location of the Office of the State LTC Ombudsman program to outcomes such as the effectiveness of the program in improving quality of life in LTC facilities. However, the information is sufficiently compelling for the committee to act based on judgment. Effective programs must work with various state agencies, but such cooperation does not demand that the ombudsman programs be located under the auspices of a sister agency that controls or funds LTC facilities and services. Title VII of the OAA provides direction to ensure that the state focuses attention on advocacy programs, but it does not require that any specific organizational structure be implemented to bring this about. Having “a seat at the table” is neither guaranteed by location within the state bureaucracy nor precluded by location within a private agency. Nevertheless, after review and discussion of state-specific information available on effectiveness, conflicts of interest, and organizational location, the committee concluded that significant conflicts of interest pertinent to the Office of State LTC Ombudsman program can be avoided only by prohibiting the colocation of the ombudsman program with certain other entities. In the committee’s judgment, states can comply fully with the OAA goal of avoiding conflict of interest only if the ombudsman program is located outside state government in a freestanding organization that has a commitment to an advocacy mission. If the program is located within state government, then the only acceptable structural alternatives that may sufficiently constrain conflicts of interest are to place the program in an independent government entity without LTC regulatory responsibilities that is directly accountable to the governor or that resides in an independent state commission. The committee recognizes that structural changes in organizational placement must be implemented over time and in an orderly fashion that creates the least amount of disruption overall to the program. But neither should structural change be unduly delayed, especially in light of two significant factors: the enhanced involvement of state and local agencies on aging in LTC over the last decade and the likelihood of even more participation of the network on aging in the health care system as the financing and delivery systems of health care are reformed over the coming years. Taking these developments into consideration, the committee advises that now is the time to begin in a constructive manner to relocate those Offices of the State LTC Ombudsman programs that are structurally exposed to significant conflicts of interest. Changes in organizational placement do not necessarily

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act result in severing the cooperative ties that the Office of the State LTC Ombudsman programs have developed with their host agencies. For example, if an ombudsman program moves outside state government to a freestanding organization, the committee envisions that the SUA would continue to work with the ombudsman program to ensure the provision of adequate and independent legal counsel. Ombudsman programs and individual ombudsmen are particularly vulnerable to actual or perceived conflicts of interest that arise through governance boards. By definition, members of such boards exercise authority over the ombudsman program. Policies are needed that prohibit participation by LTC providers and regulators on these governing boards. To signal the importance it attaches to these steps, the committee offers the following two recommendations. 4.1. The committee recommends that Congress amend the Older Americans Act to include the following policy directive. By fiscal year 1998, no ombudsman program should be located in an entity of government (state or local) or agency outside government whose head is responsible for: licensure, certification, registration, or accreditation of long-term care residential facilities; provision of long-term care services, including Medicaid waiver programs; long-term care case management; reimbursement rate setting for long-term care services; adult protective services; Medicaid eligibility determination; preadmission screening for long-term care residential placements; or decisions regarding admission of elderly individuals to residential facilities. 4.2. The committee recommends that the Assistant Secretary for Aging adopt a clear policy that prohibits parties who provide, purchase, or regulate services that are within the purview of the ombudsman program from membership on policy boards having governance over the long-term care ombudsman program. The policy should not prohibit these parties from membership on boards and councils that serve solely in advisory capacities.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Individual Conflicts of Interest The LTC financing, regulatory, and service delivery system is now dispersed among many more government and private sector entities than when the ombudsman program began. Conflicts of interest encountered by individual ombudsman or designated representatives are not limited to situations of pecuniary interest in LTC facilities. The network on aging has also changed over the past two decades, and it is not uncommon to find SUAs and AAAs actively involved in many aspects of the LTC system, such as certifying B&C homes and operating a home care program directly or through a contract. The more involved ombudsmen are in the LTC system at large, the more likely they are to encounter situations that present conflicts of interest on obligating resources of time and commitment. State ombudsmen operate in politically charged environments, are usually state employees, and by federal statute are required to speak out against government on behalf of residents of LTC facilities when they judge such actions necessary. Ombudsmen must be able to pursue independently all reasonable courses of action that are in the best interest of residents. Willful interference with the ombudsman is unlawful. Particularly in circumstances where the state ombudsman office is housed in an umbrella human services agency, the state agency must maintain strong policies to ensure that the ombudsman is sheltered from such interference and to enforce such policies vigorously. Written policies with unambiguous terms are but one essential element. Widespread publicity emphasizing the role of the ombudsman office and its duty to act on behalf of residents irrespective of other legitimate state concerns will increase the appreciation of state and local leadership of the importance of ensuring that ombudsmen have the authority to work independently but responsibly. Being able to work free of willful interference does not imply that ombudsmen can accomplish their goals without the cooperation of many. The more independent authority the ombudsman has, the greater the number of opportunities that exists for the ombudsman to cooperate with others to improve LTC. Multiservice agencies, including AAAs, that house local ombudsman entities must adopt policies that ensure the independence of ombudsmen. 4.3. The committee recommends that the Assistant Secretary for Aging establish procedures and resources by which to identify potential conflicts of interest in the areas of loyalty, commitment, and control that are pertinent to the long-term care ombudsman and ombudsman representatives and provide guidance on how to address such conflicts of interest.

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act Legal Counsel and Conflict of Interest The committee acknowledges the importance of the availability of adequate independent counsel for every LTC ombudsman program to ensure that appropriate remedies are pursued by ombudsmen on behalf of residents. Unless such counsel is provided free of conflicts of interest, many residents served by the ombudsman programs receive inferior service. The ombudsman program and its designated representatives cannot be held to high standards of program performance unless they can bring adequate legal counsel to bear on such cases, and adequate counsel must be free from conflicts of interest. Accordingly: 4.4. The committee recommends that each state unit on aging, in exercising its responsibility to ensure that legal counsel is available without conflict of interest to the statewide long-term care ombudsman program, adopt the following three principles to guide the selection of counsel: For purposes of representing the ombudsman in (a) employment, contract, or other administrative functions and (b) litigation brought against the ombudsman in connection with the performance of his or her official duties, representation by the state’s office of the attorney general is appropriate and generally free of conflict of interest. If advice and counsel related to the rights of long-term care facility residents is provided by a government-employed lawyer, then the lawyer and agency employing the lawyer, including any “umbrella” agency, should not advise or represent other agencies or interests that could conceivably have a conflict of interest with the resident’s interests or ombudsman’s responsibilities. If advice and counsel related to the rights of long-term care facility residents is provided by a lawyer not employed by government, then the ombudsman should receive assurances of conformance to state rules of professional conduct for the legal profession. SUMMARY The OAA has always contained prohibitions of conflicts of interest pertinent to the LTC ombudsman programs. Current provisions cover such areas as the location of the Office of the State LTC Ombudsman, the designation of individuals and entities as ombudsmen or host agencies, confidentiality policies and procedures, employment policies, and legal counsel. Additionally, the OAA prohibits any willful interference with representatives of the ombudsman office in the performance of their official

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Real People Real Problems: An Evaluation of the Long-Term Care Ombudsman Programs of the Older Americans Act duties. Willful interference is the only source of potential conflict of interest that the act categorizes as unlawful activity. The committee reviewed conflicts of interest in the context of three conceptual variations: conflicts of loyalty, conflicts of commitment, and conflicts of control. These address issues of judgment and objectivity, time and attention, and independence, respectively. Concern over conflicts of interest are justifiable given the multiple forces and incentives that influence the behavior and decision making of the many individuals and entities with whom the ombudsman interacts. To address the conflicts of interest problems that the committee judged to exist, it suggested four recommendations.

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