Court of Appeals says leased hospital subject to KORA

February 10, 2017

From the Lawrence Journal-World

 — The Kansas Court of Appeals said Friday that financial records of a county-owned hospital are subject to the Kansas Open Records Act, even if the hospital is administered on contract by an outside nonprofit corporation.

The case involved the Kiowa County Memorial Hospital in Greensburg. In 2001, the hospital's board signed a lease agreement with Great Plains of Kiowa County Inc. to administer the hospital.

Great Plains, which was formed for the sole purpose of operating the Kiowa County Hospital, is a subsidiary of Great Plains Health Alliance Inc., another nonprofit corporation, but the court noted the two entities have identical officers and directors.

Kiowa County levies a tax to support the hospital, but the hospital also receives revenue from federal grants, the state of Kansas and from patients or their insurers.

Each year, according to the court's decision, Great Plains would present the county commission with bottom-line numbers showing the hospital's revenues and expenses, and would submit a request for the amount of tax subsidy it would need the following year.

From 2011 to 2014, according to the court's opinion, Great Plains asked for steadily increasing support from the county to cover a larger and larger share of the hospital's overall cost of operations.

In October 2014, the Kiowa County Commission filed an open records request with the Great Plains board of directors, seeking documents about the hospital's budget and vouchers for payments for professional and management fees, as well as information about the salaries and titles of administrative or executive employees of Great Plains and registrations for any vehicles the company operated.

Great Plains denied that request, claiming it was not a public entity subject to the Open Records Act. It argued that it only leased the hospital and that the records request should be filed with the hospital's board of trustees.

The county responded, saying it had already contacted the hospital board and was advised that the hospital board did not have the records but Great Plains did.

The county sued, and the Kiowa County District Court sided with the commission saying the documents the county sought were open public records. It also fined Great Plains $500 for violating the Open Records Act.

Great Plains appealed, but the Kansas Court of Appeals on Friday affirmed the lower court ruling and sided with the county.

"The (hospital) Board cannot hide its records by delegating the operations to GPKC and violate its statutory duty to maintain adequate financial records pertaining to the operations of the County-created hospital," the court said. "By assuming the role as the sole operator of the hospital on behalf of the Board, GPKC's operating records are deemed to be public records."

The opinion was written by Judge G. Joseph Pierron Jr. and joined by Judges Anthony J. Powell and Stephen D. Hill.