Provider Rates • Medicaid • “Public Records” • Third Party Records
Dental Benefit Providers, Inc. v. Eiseman, PICS Case No. 14-0320 (Pa. Commw. Feb. 19, 2014) Simpson, J. (30 pages).
Provider rates contained in contracts between subcontractors and providers are not accessible under the Right-To-Know Law as “records” of the Department of Welfare. Reversed.
To effectuate and pay for the dental care aspect of medicaid, Department of Public Welfare (DPW) enters into contracts with Medicaid managed care organizations (MCOs); the MCOs, on behalf of DPW, then enter into contracts with various business entities (subcontractors); and subcontractors enter into contracts with providers. The contracts between subcontractors and providers, “provider agreements,” contain “provider rates” that a person/entity receives for rendering dental services to medicaid beneficiaries.
Eiseman requested records from DPW relating to provider rates pursuant to the Right-To-Know Law (RTKL). DPW denied the request, objecting that the records are exempt from disclosure. Eiseman appealed to the Office of Open Records (OOR).
OOR ordered disclosure, concluding that none of the exemptions applied. Recognizing DPW had no contractual relationship with subcontractors, OOR nevertheless held the records related to a government function MCOs performed on behalf of DPW.
MCOs and subcontractors appealed. They argued that the records were not accessible through RTKL, and that MCO provider rates were exempt as confidential proprietary information. Eiseman countered that provider rates are paid with public funds that flowed from DPW to MCOs to subcontractors and ultimately to providers. He argued that the rates were in DPW’s constructive possession, or alternatively, were accessible under §506(d) of RTKL (access to third-party records). He further contended that none of the petitioners met their burdens of proving applicable exemptions. The Commonwealth Court reversed.
The RTKL contains a presumption of openness as to any records in an agency’s possession. Under the RTKL, records in possession of a commonwealth agency are presumed to be public unless they are: (1) exempted by §708 of the RTKL; (2) protected by a privilege; or (3) exempted under any other federal or state law or regulation or judicial order or decree (see 65 P.S. §67.305).
As a first step in evaluating a request for
It was undisputed that administration of the medicaid program constitutes a government function. However, that function must be performed pursuant to a contract with a government agency.
Here, the parties to the contract with a government agency were DPW and an MCO. The third party in possession of the records containing provider rates, a subcontractor, had no contractual relationship with DPW. A contractual relationship must exist between a third party and an agency to access third-party records. As there was no contract between DPW and subcontractors, the only way to reach provider rates is through MCOs contractual relationship with DPW, provided the records containing provider rates directly relate to the government function the MCOs provide to DPW. To satisfy the “directly relates” prong, the records must relate to the performance of the government function.
The quality of dental services rendered by providers directly relates to the performance of the government function formalized in the DPW/MCO contracts. However, the cost of obtaining those services does not directly relate to the performance of the government function. Provider rates did not “directly relate” to performing the government function of administering the Medicaid program. Therefore, provider rates were not accessible under §506(d) of the RTKL.