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Sen. Young defends his role in nursing home legislation


ANNAPOLIS -- Near the end of the 1992 General Assembly session, nursing home lobbyists perched along the Senate gallery's white marble railing like crows on a telephone wire, waiting for a vote that could have brought their industry $24 million.

Lobbyists aren't allowed to speak during Senate debate. But their bill had an official voice.

Sen. Larry Young, a Baltimore Democrat and once a paid consultant for nursing homes in Maryland, was sponsor and floor manager of the bill they wanted.

As recently as December, he was on the payroll of a nursing home association that had contemplated making him its interim director. He also had been a paid consultant to Sonya Gershowitz Goodman, a nursing home owner, operator and consultant.

During his unsuccessful 1987 campaign for president of the Baltimore City Council, Mrs. Goodman lent Mr. Young $80,000. And $36,500 of that loan remained unpaid even as he spoke for the bill she wanted.

A legislator who wants recognition as a health care expert, Mr. Young argued that the bill he was pushing would have promoted the welfare of nursing home operators statewide.

Nelson J. Sabatini, Maryland's secretary of health and mental hygiene, agreed with Mr. Young's assessment. The bill also fit in with the state's plans, because 60 percent of the nursing home patients in Maryland are cared for under the hard-hit Medicaid program.

The legislation would have restored up to $24 million in Medicaid cuts imposed by the state in recent years to make up for revenue losses induced by the recession.

Under the bill backed by Mr. Young, nursing homes with a high percentage of Medicaid patients would have been big winners.

Mrs. Goodman and her husband own Irvington Knolls Care Center on South Athol Avenue in Baltimore. Some 138 of the 150 beds there are occupied by Medicaid patients. In 1991, Irvington Knolls collected $2.8 million in combined state and federal Medicaid funds.

Mrs. Goodman, who did not return several phone calls, has received solid marks recently from state officials for her assistance as a consultant to nursing homes in trouble.

But in earlier years, a nursing home she owned was fined $10,000 and ordered to repay $90,000 in Medicaid payments based on charges that her firm lied about income and expenses. The state also found repeatedly that patients at the home were poorly cared for.

The bill sought to increase the federal share of Maryland's Medicaid program by imposing a fee on nursing home beds: the higher the state's reimbursable costs, the higher the federal payment. Some call this approach "creative financing." Some call it scamming the feds. But the practice is legal.

Maryland and other states desperately need the money to make up for revenue losses as well as the increasing cost of federal regulations that require coverage of more and more medical services.

Mr. Young said he was thinking only of the state's needs and the needs of the patients when he spoke for the bill. He said he gave no thought to the $36,500 his campaign owes Mrs. Goodman. The senator said he felt no obligation or pressure to support and promote a bill she wanted.

"It's not something we discussed. She has not asked me about the money," he said. "I've had people from nursing homes all over the state advocating and pushing for this thing and they don't owe me a dime."

But Senator Young should have been more sensitive to the potential conflict of interest, said Deborah Povitch, assistant director of Maryland Common Cause, the citizens' lobby.

Ms. Povitch said she believes "significant campaign contributions" such as the $80,000 loan create a conflict of interest under the legislature's ethics guidelines.

Ms. Povitch said that Senator Young should have excused himself from voting or advocating any position on the fee legislation.

Mr. Young's bill drew heavy opposition from a segment of the nursing home industry that doesn't handle Medicaid patients. Lobbyists for those nursing homes argued that the tax shouldn't be imposed on them because their clients would get no immediate benefit.

The opponents also wondered how the Senate could pass a targeted tax bill in a year when it was trying to avoid almost every other form of taxation. They said the bill was particularly unfair to patients who pay the entire cost of their care.

While the Senate passed the bill Mr. Young advocated on the last day of the session, it died without action in the House -- in part because the ferocious lobbying against it.

Under House and Senate rules, legislators with potential conflicts of interest on bills may excuse themselves from voting by declaring that they have a conflict -- though often they don't say what the conflict is. They're also prohibited from soliciting support for such legislation. Legislators call it "taking the rule."

According to the rules, a conflict of interest is presumed when a legislator is "soliciting, accepting or agreeing to accept any gift, loan, or payment of a significant value from a person who would be affected by or has an interest in an enterprise which would be affected by the legislator's vote on proposed legislation."

But the rule also allows a legislator to overcome the conflict by filing a sworn statement with the Joint Committee on Legislative Ethics.

That statement must outline the apparent conflict and the legislation to which it relates. It also must assert that the legislator feels he or she is able to act objectively in the public interest.

Mr. Young had informed the ethics committee of his relationships with Mrs. Goodman and a nursing home association, though not of the specific bill he was promoting this year. He indicated that because he was not an employee of a nursing home, he had no obligation to file such a statement. The senator also said he was about to sign a nine-month consultant contract with the Maryland Long-Term Care Association, which was thinking of making him its interim director.

The chairman of the ethics panel, Baltimore Democratic Sen. Julian L. Lapides, wrote back, saying:

"Should any legislation affecting the [association] come before the Legislature, you should, of course, file the appropriate disclaimer or abstain from voting on those issues."

Later, Mr. Young wrote again, saying he would not have a contract with the association after all. His ethics committee file does not include a disclaimer in regard to the nursing home fee bill.

Robert A. Zarnoch, an assistant state attorney general and counsel to the General Assembly, says any penalties assessable under legislative ethics rules are enforceable by action of the assembly itself -- a relatively rare occurrence.

The assembly's ethics committee could look into a conflict of interest question. Mr. Lapides declined to comment.

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