As chair of Health and Welfare, McPherson -- a nursing home operator -- will help direct Louisiana's health care policy. His committee also will write the state's rules for adult residential care facilities. One Lake Charles media critic protests McPherson's appointment as a "definite conflict of interest," noting that the senator is "on the receiving end of some of the $600 million in Medicaid dollars that go to nursing homes each year."
McPherson is one of three state legislators who own nursing homes that receive Medicaid patients. The legislators are paid from a 30 percent state match for 70 percent federal funds. McPherson and his wife jointly own Acadian Oaks Nursing Home LLC in Pineville, which received $2.3 million in Medicaid money in fiscal year 2003, up from $2.2 million the previous fiscal year, according to state records requested by Gambit Weekly. The McPhersons also jointly own Camellia Gardens Nursing Home in Woodworth, which received $905,612 in Medicaid funding for fiscal year 2003, a 50 percent drop from $1.85 million the previous fiscal year.
McPherson's income from the state may scream "conflict of interest," but it's legal. Under state ethics laws (which must be approved by the Legislature), such business arrangements "shall not be considered a contract or subcontract" but a "provider agreement" with the state Department of Health and Hospitals. Lawyers call that "a distinction without a difference."
Critics fear that McPherson will continue to champion placing Louisiana's elderly in its 225 Medicaid nursing homes as opposed to funding alternatives such as in-home or community care. McPherson says that throughout his 12 years in the Legislature, he has championed "patient rights and patient protection" -- not just the nursing home industry. He is a critic of assisted living homes, which he calls an ill-defined, under-regulated industry that lacks sufficient safeguards for Alzheimer's patients.
But McPherson, who once had an interest in eight nursing homes, says he is now "paying notes on a million-dollar piece of property" upon which he plans to build an assisted living home. "The reason I haven't done it is because I can't feel comfortable going into an industry that is ill-defined and I don't know what regulations I will ultimately be working under."
As chair of Health and Welfare, his comfort level may increase. Last year, Hines -- McPherson's predecessor on the panel -- authored unsuccessful legislation on state oversight and regulation of "adult residential facilities." Both bills were updated and assigned last week to McPherson's committee.
We give McPherson credit for candor, though it's not enough to offset his potential for profit as a result of his role as a public steward. He recalls only one recusal vote (in 1986). He refuses to categorically deny he has cast or ever will cast a vote in the Legislature to benefit himself or his business. "I don't know if anybody (in the Legislature) would, could categorically deny it," he says. "We have always had lawyers handling the judiciary committees. I guess if you look at insurance and commerce and all the other committees ... it would be a little bit foolish to put people on committees -- because of a potential conflict of interest -- that had no knowledge of the industry." He argues that lawmakers list their business interests in annual disclosure forms with the ethics board, which are public record. (Critic C.B. Forgotston notes that legislators are only required to disclose business interests in which they have 10 percent or more ownership.)
While McPherson's 2003 income disclosure form lists his auto dealership and $8,866 in "repair service income" from the Grand Coushatta Casino, it does not record his nursing home income from the state. On the form, the senator says that information could be retrieved from the state Department of Health and Hospitals -- which Gambit Weekly did, after some delay. The information should be on the form and immediately available to the public. However, it's unknown if such referrals violate state ethics laws. "It's never come up," says ethics board attorney Maris LeBlanc.
McPherson further argues that what benefits a legislator personally might also be good for the public. "If a legislator voted with a majority of the Legislature ... on something that was in the public's good, should he have voted against the public's good or should he have refrained from the debate and voting?" he asks.
We think the answer is clear. Lawmakers should avoid even the appearance of self-dealing. The Legislature is overdue for an ethical overhaul. The Public Affairs Research Council of Louisiana's "White Paper on Ethics" correctly recommends legislators and their families be barred from non-competitive contracts with the state. PAR also calls for detailed annual personal financial disclosure reports from all elected officials. Unfortunately, for the next four years, all ethics proposals must pass through the committee chaired by Jones, who, like McPherson, has just been miscast in a bad movie.