The board of commissioners of our public hospital district is appointing an interim superintendent effective mid-month, which is the last day our current superintendent will be in the position. I am familiar with the regulations that require a superintendent contract proposal at a regular board meeting and acceptance at the following regular board meeting. Our next regular meeting is a few days after the current superintendent is leaving, and the next regular meeting after that is in the middle of next month. What do you recommend?

RCW 70.44.070 provides that a superintendent shall be appointed by resolution, introduced at a regular meeting and adopted at a subsequent regular meeting by a majority vote. We did not find case law or an opinion from the state attorney general’s office on this specific situation involving an interim superintendent appointment. Note, however, that neither this provision, nor chapter 70.44 RCW more generally, makes a distinction between an interim and permanent (for lack of a better term) appointment. It would be unreasonable to prohibit a public hospital district (PHD) from appointing an interim superintendent other than through this two meeting requirement, especially in an emergency situation (e.g., superintendent leaves unexpectedly or dies while in position). In situations, as is the case here, where the PHD only holds regular meetings once per month, if the PHD had to wait two regular meetings to make even an interim appointment, the most important non-elected position in the PHD would be vacant for well over a month.

May the county treasurer issue a non-collateralized line of credit to a public hospital district? If so, are there other considerations to note regarding public hospital districts?  

It is our opinion that the county treasurer, with approval of the board of county commissioners, could issue a line of credit to a public hospital district. RCW 36.32.470 appears to provide the authority for such a loan; it states in relevant part:

The legislative authority of any county shall have the power to furnish, upon such terms as the board may deem proper, with or without consideration, financial or other assistance to any municipal corporation, or political subdivision within such county for the purpose of implementing the fire protection, ambulance, medical or other emergency services provided by such municipal corporation, or political subdivision: ...

However, the county prosecuting attorney should be consulted first regarding this issue to determine whether he/she concurs.

Can a public hospital district (PHD) have its superintendent be an independent contractor through, for example, a three year contract, or must the superintendent be a PHD employee?

The tests commonly applied by the Internal Revenue Service to determine an "employee" as opposed to an "independent contractor," as well as other general concepts related to what constitutes an employee, lead to the conclusion that a PHD superintendent is an employee.

One of the key components of the IRS analysis in determining employee vs independent contractor is that an employee is under the control of the employer. We have indicated:

Under the IRS rules, the test for an independent contractor measures the degree to which the worker is controlled. Under this test, a worker who performs services subject to the will and control of the employer is an employee. If the employer has the right to exercise control over the worker, then the worker is an employee. Generally, an employment relationship exists if the employer (1) has the right to discharge the worker, (2) furnishes tools and supplies, (3) provides a place to work (e.g., an office) and (4) has control over what is to be done and how it will be done. See, Principles of Payroll Administration, 1999 Ed., Section 204.

Generally, whether a particular person is regarded as an employee or independent contractor depends upon the nature of the relationship between the person and the employer. The IRS brochure, "Independent Contractor or Employee," describes the criteria that are used to differentiate between the two. Also, an explanation of the twenty factor analysis the IRS uses is included in a checklist entitled, "Twenty Factor Checklist to Determine Independent Contractor vs. Employee Status." See also the IRS Web site, "Government Workers: Employee or Independent Contractor," which has links to IRS Publication 15-A, and the IRS "Independent Contractor or Employee?" Web page.

Here, the PHD, through its board of commissioners, presumably has "control" over the superintendent under the IRS test, given that, for example, the board hires and fires the superintendent and sets the policies the superintendent is responsible for implementing as part of the superintendent’s responsibility over the administrative functions of the district.

As stated in RCW 70.44.070(1), the superintendent is at-will and serves for an indefinite time at the pleasure of the board. As provided in RCW 70.44.090, the superintendent’s duties include carrying out the orders of the commission, seeing that all the laws of the state pertaining to matters within the functions of the district are duly enforced, keeping the commission fully advised regarding the financial condition and needs of the district, and making recommendations to the commission about what work should be undertaken and a range of salaries to be paid to district employees.

Based upon RCW 70.44.070(1), RCW 70.44.090, and the IRS test, the superintendent position seems to be sufficiently under the "control" of the PHD board of commissioners for the superintendent to be regarded as an employee and not an independent contractor. This does not mean, however, that the superintendent is prohibited from having a contractual arrangement with the PHD. A PHD can enter into an employment agreement with a superintendent and such an agreement can address a variety of issues.

Which key statutory and WAC provisions address the certificate of need requirement for public hospital districts?

Health care facilities owned and operated by public hospital districts are subject to the certificate of need requirement. RCW 70.38.025(6) defines "health care facility" for the purposes of chapter 70.38 RCW to include "hospices, hospice care centers, hospitals, psychiatric hospitals, nursing homes, kidney disease treatment centers, ambulatory surgical facilities, and home health agencies ..." when such facilities are "owned and operated by a political subdivision or instrumentality of the state." This includes such facilities owned and operated by public hospital districts.

RCW 70.38.105 describes a variety of activities that are subject to certificate of need review, including: construction or other establishment of a new health care facility (including a hospital); sale, purchase, or lease of part or all of an existing hospital as defined in RCW 70.38.025; certain capital and other expenditures related to nursing homes and nursing home services; a change in bed capacity of a health care facility that increases or redistributes the total number of licensed beds in some circumstances; any increase in the number of dialysis stations in a kidney disease center; and certain types of new tertiary health services.

Note also that RCW 70.41.170 requires that a hospital obtain a license from the state to operate, including a certificate of need under RCW 70.38.105 and RCW 70.38.115.

RCW 70.38.115 provides procedures and criteria for review regarding certificates of need.

WAC 246-310-020 explains which types of "undertakings" shall be subject to the certificate of need requirement and the provisions of chapter 246-310 WAC, including with respect to the types of activities referenced in RCW 70.38.105 (see above).

Issues arise at times regarding certificate of need requirements related to certain tertiary services. "Tertiary health service" is defined generally in RCW 70.38.025(14) as:

... a specialized service that meets complicated medical needs of people and requires sufficient patient volume to optimize provider effectiveness, quality of service, and improved outcomes of care.

More specificity is provided in RCW 70.38.105(4)(f) regarding the types of activities subject to certificate of need review, including:

Any new tertiary health services which are offered in or through a health care facility or rural health care facility licensed under RCW 70.175.100, and which were not offered on a regular basis by, in, or through such health care facility or rural health care facility within the twelve-month period prior to the time such services would be offered;

Additional explanation is provided in WAC provisions, including WAC 246-310-010(58), which generally defines "tertiary health service" as in RCW 70.38025(14), and WAC 246-310-020(1)(d), which explains that the certificate of need requirement is applicable to new tertiary health services as described in RCW 70.38.105(4)(f).

WAC 246-310-020(1)(d)(i) provides more detail and explains that tertiary services include such activities as specialty burn services, intermediate care nursery and/or obstetric services level II, neonatal intensive care nursery and/or obstetric services level III, transplantation of specific solid organs, open heart surgery and/or elective therapeutic cardiac catheterization, inpatient physical rehabilitation services level I, and specialized inpatient pediatric services. See also WAC 246-310-035 (tertiary services identification).

How are the number of days counted for military leave?

The short answer is that a day means any calendar day in which an employee cannot report to work because he/she is on military leave, regardless of the number of hours the employee would have worked that day. See, e.g., AGO 1999 No. 2.