Open Meetings Laws, 2d

By the publication in 1994 of Open Meeting Laws, Ann Taylor Schwing made a substantial down payment towards the cost of insuring that our fundamental freedoms survive. With this, an updated, second edition of that work, Ms. Schwing reprises that contribution.

From the Foreword by Robert K Puglia
Former Presiding Justice, California Court of Appeal,
Third Judicial District (1974-1998)

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§ 4.106.3. Private Entities Providing Health Care

Actually or nominally private entities that provide health care present sometimes difficult questions of application of the open meeting laws. By the nature of their activities, many such entities receive substantial funding from governmental sources, but the funding may be provided in payment for goods and services so that the simple fact of funding should not justify imposition of open meeting requirements.

As amended in 1993, the California open meeting law applies to certain hospital lessees that exercise any material authority of a public body delegated to the lessee by the public body. A private nonprofit public benefit corporation operating hospitals under a 30 year lease from a hospital district is not subject to the open meeting act. The fact that a county hospital has joined a consortium of private hospitals does not subject the consortium itself to the open meeting law.

In a series of court and attorney general opinions, Florida has held private nonprofit corporations operating hospitals under lease from public hospital districts subject to the open meeting law. The Florida Attorney General held in 1991 that the Indian River Memorial Hospital, Inc., operating a hospital under a lease from the Indian River County Hospital District providing that the corporation would comply with the Sunshine and Public Records Laws when engaged in the operation and management of the hospital was subject to the laws when engaged in operation and management of the hospital but was not subject to the laws when conducting business as a private organization unrelated to the lease and not acting on behalf of, or at the direction of, the hospital district. The Attorney General considered the same corporation again in 1998, ruling that intervening court decisions had broadened the test to focus on whether the private entity is merely providing services to the public agency or is standing in the shoes of the public agency, quoting an appellate decision:

If one merely undertakes to provide material–such as police cars, fire trucks, or computers or agrees to provide services–such as legal services, accounting services, or other professional services for the public body to use in performing its obligations, then there is little likelihood that such contractor's business operation or business records will come under the open meetings or public records requirements. On the other hand, if one contracts to relieve a public body from the operation of a public obligation–such as operating a jail or providing fire protection–and uses the same facilities or equipment acquired by public funds previously used by the public body then the privatization of such venture to the extent that it can avoid public scrutiny would appear to be extremely difficult, regardless of the legal skills lawyers applied to the task.

The Attorney General also held the Sunshine Law applied to Board of Directors meetings of the Big Sun Healthcare Systems, Inc., a not-for-profit corporation that had entered into an agreement with the Marion County Hospital District to manage and operate the district hospital facilities, in part because seven of the fifteen members of the corporation's board were members of the district board and selected the remaining eight members and the corporation's articles of incorporation required compliance with the law.

Georgia excepts from the private entities subject to its open meeting law hospitals, nursing homes, dispensers of pharmaceutical products, or any other type of organization, person, or firm furnishing medical or health services to a citizen for which they receive reimbursement from the state whether directly or indirectly. Nevertheless, the Georgia Court of Appeals has held that nonprofit hospital corporations that have contractually agreed to operate public hospital authority assets for the public good, obligating themselves to be the vehicle through which the public hospital authority carried out its official responsibilities, are properly held subject to the open meeting law.

A committee of health providers assisting the Kansas department of social and rehabilitation services in implementing a drug utilization review program for patients receiving medical assistance under Medicaid is subject to the Kansas open meetings act. The committee was appointed pursuant to a Kansas statute and receives public funds through the department. The contract between the department and the Kansas Pharmacy Foundation, a nonprofit organization under contract with the department to administer the Medicaid program, does not insulate the committee from the applicability of the law because the department maintained ultimate authority to control the program.

Maryland excepts the governing body of a hospital as defined in section 19-301(f) of the Health-General Article, namely, an institution that has a medical staff of at least five physicians, maintains facilities for two or more unrelated persons, and admits patients for overnight care.

North Carolina applies its open meeting law to the governing boards of public hospitals and to the governing boards of nonprofit corporations to which a hospital facility has been sold and their parents and subsidiaries.

Peer review proceedings at health care facilities are typically either excepted from the definition of the meetings subject to open meeting requirements or are authorized to be conducted in executive sessions.

Open Meeting Laws 2d, § 4.106 3. (Footnotes omitted.)

Copyright 2006

Fathom Publishing Company