Young's ties to health-care firms stir questions

THE BALTIMORE SUN

State Sen. Larry Young chairs a powerful subcommittee that molds legislation worth millions of dollars to hospitals, health insurers and nursing homes.

Yet at the same time, Mr. Young has significant financial ties to those interests that pose potential ethical conflicts. For example:

* He is a top aide to the owner of one of the largest private ambulance companies in the state. In that capacity, Mr. Young routinely solicits business from the same health-care enterprises whose fortunes he helps to decide in Annapolis.

This year, he helped his company, American Ambulance and Oxygen Service Co., nail down a potentially lucrative contract with Blue Cross and Blue Shield of Maryland, which would be affected significantly by bills pending in Mr. Young's subcommittee, a new health-care subcommittee of the Senate Finance Committee.

In another case, Mr. Young helped his company gain ambulance business with Maryland General Hospital while he was pushing a bond bill for the hospital.

* Mr. Young owes $55,000 to three people in the nursing home business who backed him in an unsuccessful 1987 bid for Baltimore City Council president.

Mr. Young is pushing a bill that would pump millions of dollars into nursing homes, including two with links to his creditors.

Mr. Young, 45, a Baltimore Democrat, maintains that there is no conflict between his role in the General Assembly and his financial ties to the health-care industry.

"I don't feel I'm in any way compromised," he said in an interview last week. "I'm fine with the fact I do an exceptional job here."

Mr. Young, a 20-year veteran of the General Assembly, is recognized as an expert on health-care matters who has worked in the industry over the years. Since November 1991, he has been an assistant to American Ambulance owner Willie Runyon.

The Baltimore company has come under scrutiny in the past few weeks after it was disclosed that Mr. Runyon, his daughter and American gave a total of $95,000 to Gov. Parris N. Glendening's legal defense fund. The money is for expenses stemming from Republican Ellen R. Sauerbrey's unsuccessful challenge of the November election.

In addition, Mr. Runyon, his companies and family members gave Mr. Young at least $47,600 in campaign contributions for the 1994 election and at least an additional $15,000 in Mr. Young's name to Governor Glendening's inaugural festivities.

According to Mr. Young, Mr. Runyon also allows him to help dole out some $500,000 of Mr. Runyon's money to charity each year.

American Ambulance has provided ambulance service for patients in Blue Cross' basic insurance plans for the last decade. But last year, the company went after a piece of the insurer's growing health maintenance organization business.

Mr. Young said he, along with other American representatives, met twice with Blue Cross officials last year, including once just before Christmas, to negotiate a contract to transport the company's HMO patients to and from hospitals and other medical facilities.

American's contract with Blue Cross went into effect Feb. 1, according to spokeswoman Linda Wilfong.

Meanwhile, several bills that could help or hurt Blue Cross are before Mr. Young's subcommittee.

Perhaps the most far-reaching is a controversial measure that would require HMOs to accept any qualified physician as part of their networks. Blue Cross and other HMO operators have lobbied against the idea, which they say would drive up their costs.

Mr. Young declined to comment on the bill publicly, but lobbyists and legislators involved in the issue say he has made clear that he opposes it.

A potentially bigger issue for Blue Cross is its effort to gain state permission to establish a for-profit subsidiary to run its HMOs.

State insurance regulators have rejected the idea, but the company still is considering seeking introduction of a bill to accomplish the goal this session. Blue Cross Chief Executive William L. Jews appeared in January before the Senate Finance TTC Committee, of which Mr. Young is a member, to explain the company's plans and ask for support.

If Blue Cross does seek a bill to establish the for-profit subsidiary, the bill would come before Mr. Young's subcommittee.

Mr. Young said he would judge any issues affecting Blue Cross strictly on their merits.

"I guess if I have to make a choice between what the Blues present, the only consideration is how does it affect the constituents of my district," he said.

In another area where he appears to have a potential conflict, Mr. Young is co-sponsoring a bill that would adjust the state's formula for paying nursing homes through the Medicaid program -- a change that would benefit homes that care for large numbers of Medicaid patients.

The bill, if enacted, would cost the state $19 million in additional -- Medicaid payments next year.

At a hearing last Tuesday, testifying for the bill before Mr. Young and the rest of the Senate Finance Committee was Sonya Goodman, the owner of a West Baltimore nursing home, one of 79 homes statewide that would benefit from the bill.

Not mentioned was the fact that Mr. Young still owes Mrs. Goodman $36,500 -- the balance of a $95,000 loan she made during his unsuccessful run for City Council president eight years ago, according to campaign reports he filed with the state election board.

Mr. Young also owes $15,000 to Dr. Uthman Ray Jr., medical director for Mrs. Goodman at Irvington Knolls Nursing Home, and $3,500 to Charles J. Nabit, owner of a Northeast Baltimore nursing home, according to his campaign reports.

Mr. Nabit's nursing home, Harford Gardens Nursing Center, would also benefit from Mr. Young's bill, though he said he opposes it.

Efforts to reach Mrs. Goodman, whom Mr. Young once called his "fairy godmother," and Dr. Ray, a Baltimore physician and friend of the senator, were unsuccessful.

The Medicaid bill is being pushed by the Long Term Care Association, a nursing home trade group that employed Mr. Young for 16 weeks in 1991, just before he started working for American Ambulance.

Mr. Young's subcommittee approved the bill Friday by a 4-1 vote. Mr. Young voted yes.

Other bills affecting nursing homes also are pending before Mr. Young's subcommittee. But he said his long-standing debts do not influence his legislative actions. "I'm not doing any favors for them. There is no pressure," he said. "I don't feel compromised."

Blue Cross is not the only company doing business with Mr. Young and American Ambulance that has legislative dealings with the senator. In 1993, for example, Mr. Young helped persuade Maryland General Hospital to give its ambulance business to American Ambulance.

That same year, Mr. Young unsuccessfully sponsored a $1 million bond bill to improve Maryland General's emergency room, a bill he re-introduced in 1994 and again this year. Maryland General, like all state hospitals, has much at stake in the General Assembly, particularly in Mr. Young's subcommittee.

Timothy D. Miller, the hospital president, said American Ambulance won the business because its proposal was financially attractive. Mr. Young's involvement did not create any ethical problems, he said.

"It didn't strike me as being unusual," he said. "Typically, the delegates do other things for a living."

Mr. Young said he saw no conflict in helping Maryland General, which has been in his legislative district for two decades. "Within reason, anything they want and have asked for I have tried to do," Mr. Young said. "I'm going to be an advocate for them if I can."

Senate President Thomas V. Mike Miller Jr., who appointed Mr. Young to head the new health-care subcommittee this year, said he knew little about Mr. Young's activities on behalf of American Ambulance.

But he said that, generally speaking, Mr. Young and many other legislators face potential conflicts because of their outside employment -- jobs that for most lawmakers provide their primary source of income.

"You're walking through a minefield every single day to avoid possible conflicts of interest," Senator Miller said.

Under state law, legislators are presumed to have a conflict of interest if the lawmaker benefits from a business that would be affected by his or her vote. That benefit is defined as being either a direct one or from a "close economic association" with a person who has a direct interest in the affected business.

When a presumed conflict exists, legislators are prohibited from voting on legislation that would affect the business in question -- unless the lawmaker declares the conflict and files a signed affidavit saying he or she believes that any action would be fair and objective.

As required by the law, Mr. Young has alerted the General Assembly's Joint Committee on Legislative Ethics about possible conflicts arising from his employment by routinely notifying the committee of his job.

In February 1992, after Mr. Young informed the ethics committee of his employment with American Ambulance, the panel's co-chairman wrote to the senator that "if legislation should arise regarding this business, you should file the appropriate disclosure form."

But only once, in February 1993, did Mr. Young file such a form -- that time on legislation requiring private ambulance companies to carry more liability insurance.

Last year, Mr. Young helped to enact a measure that could benefit Mr. Runyon's business supplying oxygen to homebound patients. The bill required providers of home-medical equipment, including oxygen supplies, to be licensed and regulated by the state.

Like all new regulatory efforts, the legislation could drive smaller companies out of business, to the benefit of larger companies, such as American Ambulance and Oxygen.

Mr. Young said that he had never considered the possibility that the bill might benefit his employer.

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