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Were two Blount County Commissioners violating state law by working as providers through a third-party health care company that had a contract with the county?
According to an opinion from Tennessee Attorney General Robert E. Cooper Jr., the answer is yes.

The opinion, which was released Jan. 30 after being requested by Rep. Joe McCord, R-Maryville, covers two questions regarding Commissioners Bob Proffitt and Wendy Pitts-Reeves — the two were listed as providers with Highlands Health System (PHO), which had a health care contract with Blount County. Proffitt is a general practice physician and Pitts-Reeves is listed as having a medical specialty in social work.

The first question asks whether or not the two commissioners had a prohibited conflict of interest through their listing as providers with a company that has a contract with the county; the second asks if a conflict of interest exists if the two provide health services to county employees in general.

The answer to the second question is no — provided the services provided by Pitts-Reeves of Proffitt are not “furnished directly to the county or county agency,” according to the opinion.

Also according to the opinion, the answer to the first question, though, is that there is a conflict.

Because Pitts-Reeves and Proffitt were listed as providers with Highlands Health System, which no longer has a contract with the county, “the arrangement violates Tenn. Code Ann. § 5-14-114 because, under these circumstances, a commissioner would have an indirect personally beneficial interest in the contract between the county and Highlands,” the opinion stated.

Tennessee Code Annotated § 5-14-114 is a statute that deals with “illegal payments” and states: “Neither the county purchasing agent, nor members of the county purchasing commission, nor members of the county legislative body ... shall be financially interested, or have any personal beneficial interest, either directly or indirectly, in any contract or purchase order for any ... contractual services used by or furnished to any department or agency of the county government.”

In the analysis section of the opinion, it is explained that “under the facts presented, the two commissioners have a personally favorable interest in the contract between Highlands and the county because each is listed as a provider under that contract. For that reason, the statute (TCA § 5-14-114) prohibits the commissioners’ interest in the contract between Highlands and the county.”

In November, the Blount County Commission approved a contract with Cariten Healthcare to administer the county’s self-paid health insurance program. Pitts-Reeves abstained from the vote.

“Before Dec. 31, Highlands Health Partnership was our doctor network and Health Cost Solutions was our third-party administrator,” Blount County Finance Director Dave Bennett said. “Cariten now provides both of those services.”

But even though Highlands is no longer in the picture, the relationship between Pitts-Reeves and Proffitt, and Cariten — a company with which they are both listed as providers — seems to lead to the same problem.

According to the opinion, Bennett said, it appears to be a conflict of interest for a commissioner to have a relationship with Cariten as well.

“Basically, it was the same thing that (county mayor’s attorney) Rob Goddard and (the University of Tennessee County Technical Assistance Service) said that was under the County Purchasing Act of 1957,” he said. “It’s not legal.”

Conflict of interest?

The criminal penalties of that particular regulation — which categorized a violation of the statute as a Class D felony — were declared unconstitutional by the Tennessee Court of Criminal Appeals, but a conflict of interest could be used as a grounds for ouster (removing an elected official from office).

“That would be up to the citizens,” Bennett said.

In a previous opinion, Cooper wrote that, “While the Tennessee Court of Criminal Appeals has concluded that this statute is unconstitutional to the extent it imposes criminal penalties, we think it may still constitutionally serve as the basis for an ouster action ...” TCA § 8-47-101 gives the county’s district attorney general the authority to investigate claims of conflicts of interest and institute ouster proceedings, either on his or her own initiative, at the direction of the governor, or upon the filing of a petition with the signature of 10 or more county residents.

Pitts-Reeves replies

When contacted by The Daily Times Thursday, Pitts-Reeves said it was important to remember that the County Purchasing Act of 1957 was not in effect in Blount County until July 1, 2007 — months after she and Proffitt took office.

And, Pitts-Reeves said in the telephone interview, she never solicited business from county employees, “So it’s not like I was going out saying, ‘Give me business, county.’”

And because of the attorney general’s opinion, Pitts-Reeves said to make things right she would simply refuse referrals of county employees. That way, the conflict-of-interest issue would be moot.

“Because I don’t want there to ever be any doubt, and because I don’t want there to ever be any questions, and to be on the safe side, I will not accept any future county referrals,” she said. “I just won’t.

“I’ll make sure people get the help they need,” she added, explaining she will help patients affected by her decision to find another provider.

Proffitt answers

Proffitt, on the other hand, said he does not believe his affiliation with Cariten constitutes a conflict of interest.

The opinion by the attorney general “pretty much eliminates any conflict of interest,” he said during a telephone interview Thursday. “As far as this (attorney general) opinion, it didn’t leave any real question in my mind.”

Cariten is a much larger company than Highlands Health System, he said and “to call it a conflict would be really, really diluting any possible effect.”

“People are given a large, large, large list (of physicians) that participate,” he said.
“I don’t know how I could create a conflict of interest as a physician,” he added. “It would be almost like, you know, a conflict to vote on a tax rate because I’m a taxpayer.”

Proffitt said he could opt out of participation in Cariten, but feels, “It’s a legitimate attempt to give good medical service and try to keep as many patients in Blount County as possible.”

The attorney general opinion has parts that are “a little bit vague” and could indicate a conflict of interest, he said, “but I don’t feel (being a Cariten provider) is a conflict.”