ATLANTA, GA – December 14, 2016 – On Thursday of last week, the Supreme Court of Georgia decided to hear oral arguments in Smith v. Northside Hospital in April 2017. At issue in the case is whether certain documents related to Northside’s acquisition of four privately-owned physician practices should be available to the public under the Georgia Open Records Act. Georgia Watch filed an amicus brief on September 20, 2016 in support for the petition for writ of certiorari in the case. In their decision granting the petition, the Supreme Court indicated that they are “particularly concerned” with “whether the documents requested by Smith are ‘public records’ and subject to disclosure under the Georgia Open Records Act.”

Georgia Watch is pleased with last week’s decision because the Supreme Court has signaled that they feel this case presents an important question that will have a significant impact on transparency in our state. It has long been the law that nonprofit hospital corporations that lease their facilities from county hospital authorities are subject to the “Sunshine Laws,” the Georgia Open Records Act and the Georgia Open Meetings Act.  The Sunshine Laws exist to ensure that the public has access to information regarding the activities and decisions of state agencies, including public hospitals.  These laws help to shine a light for consumers and ensure transparency and accountability in state government activities.

The case at issue

In Smith v. Northside Hospital, an attorney sought, through an Open Records Act request, to gain access to certain documents related to Northside Hospital’s recent acquisition of four privately owned physician groups, including Atlanta Cancer Care, Georgia Cancer Specialists, Atlanta Gastroenterology Associates and Atlanta Surgery Center. (Northside hospital is a private 501(c)(3) nonprofit corporation created by the Fulton County Hospital Authority in 1991 to operate the hospital facility under a lease agreement.) The Court of Appeals issued a narrow decision in this case holding that the specific documents requested in this case were not public records subject to the Georgia Open Records Act (GORA) because they were not “prepared and maintained or received by Northside in the performance of a specific service or function on behalf of the Authority.”  The Court referenced specific language in Northside’s lease agreement and the by-laws of the Fulton County Hospital Authority in making the determination that the Authority has no responsibility for hospital operations and had “no involvement whatsoever” in the transactions.

The history of the issue

Many Georgia counties created hospital authorities in the 1960s.  These authorities were tasked with promoting the public health function of government and ensuring that the residents of their counties have access to quality, affordable healthcare.  A changing healthcare landscape prompted many of these authorities to enter into lease agreements with private nonprofit corporations that were tasked with carrying out their designated functions of promoting public health and healthcare access.  Georgia law authorized these lease arrangements but required that the authorities maintain sufficient control over any project so as to ensure that there is a reasonable rate of return.  The law is clear that no authority shall operate or construct any project for profit.  Thus, all of these lease arrangements are with nonprofit corporations.  There are more than 80 hospital authorities in Georgia, and many of them have restructured to enter lease arrangements with nonprofits to operate their hospital facilities.

Georgia Watch has a history of advocating for hospital and healthcare system transparency and accountability.  We issued a series of accountability reports on Georgia hospitals from 2007-2009, several of which are nonprofit corporations that lease facilities from county hospital authorities.

A 1995 Georgia Court of Appeals case (Northwest Ga. Health Sys. v. Times-Journal) held that nonprofit hospital corporations that enter into lease agreements with county hospital authorities are subject to the Sunshine Laws, including GORA.  This case arose from a request of the Marietta Daily Journal to access certain meetings and records of the local hospitals.  The hospital corporations involved in the case contended that the Sunshine Laws did not apply to them since they are private nonprofit corporations.  The Court disagreed and determined that they had to comply with the Open Records Act request.  The Court reasoned that “[w]ithout question, these private, nonprofit corporations became the vehicle through which the public hospital authorities carried out their official responsibilities.”  The Court further held that the documents at issue were public records within the definition of GORA.

In March 2016, the Georgia Court of Appeals unsettled this long-standing law with the decision in Smith v. Northside HospitalGeorgia Watch believes that it is important for the Supreme Court to review the present case in order to stop erosion of this existing accountability for Georgia’s public hospitals.

For more information:

Georgia Health News December 2016: State’s highest court will hear Northside open records case

Georgia Watch’s September Press Release: GA Watch Amicus Blog

Georgia Watch’s September Amicus Brief: Amicus Brief

Supreme Court of Georgia December Decision: 12/8/16 Decision

Written by: Beth Stephens, Senior Director of Public Policy and Advocacy