Judge denies suit for hospital's papers

Ruling: Children’s has no documents related to request that are subject to law

A Pulaski County circuit judge has rejected a Mabelvale woman's effort to force Arkansas Children's Hospital to hand over documents on how its spends its money.

Judge Tim Fox ruled Monday that the tax-exempt charity has no papers that are subject to the state's open-records law, but he did not declare the nonprofit hospital exempt from the law.

Dee Blakley had sought to force the hospital to comply with the Arkansas Freedom of Information Act under the theory that it received funds from a county property tax collection and that county officials had declared it a "public hospital" in 1978.

She had also questioned how the hospital spent money it raised from county-endorsed bonds.

The state's Freedom of Information Act covers public officials and public employees, governmental agencies and entities wholly or partially supported by public funds or expending public funds.

The law can be extended to apply to private organizations, and Blakley, through her attorney Luther Sutter, had argued that the hospital received sufficient financial support from government sources that it had to comply with the open-records law.

But hospital authorities testified at a hearing last week that they received no local dollars directly because all the tax money collected on behalf of the facility, whether raised by the county or state, first goes to Medicaid, where it is supplemented with federal dollars then returned to the hospital to reimburse expenses for indigent care.

The county has to endorse the hospital's bonds, but the hospital has the sole responsibility for paying them off, the judge was told.

Fox declared at that hearing that the hospital's nonprofit status alone is not sufficient to protect it from a Freedom of Information Act request.

In his Monday ruling, Fox also did not declare the hospital exempt from the open-records law.

He just stated that the hospital had no documentation related to Blakley's request that is required to be publicly disclosed.

Blakley had specifically asked for records "providing the amount of funding received from the county by the hospital, including funds received from hospital revenue bonds for each of the calendar years 2010-2014 [and] providing the manner in which the hospital expended county funding, including but not limited to funds spent on capital improvements for each of the calender years."

According to the hospital's most recent required financial disclosure, it earned $562,153,743 in general revenue in fiscal 2013, which ran from July 2013 through June 2014.

It reported annual expenses of $514,566,882, of which $430,955,679 was spent on its primary function of providing health care services and medical treatment to children.

The largest expense was for its 4,915 employees, who received $260,050,732 in salary and benefits, including payroll taxes, according to the disclosure, known as an IRS Form 990.

The hospital also reported spending $75,367,119 on medical supplies in fiscal 2013, $447,623 on advertising and $104,823 on lobbying.

Metro on 09/02/2015

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