|Office of the Attorney General - State of Texas
December 20, 2000
Ms. Mary Ann Slavin
Dear Ms. Slavin:
You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 141870.
The Texas Department of Health ("TDH") received a request for ten categories of information, including "all Provider contracts with all Medicaid HMOs going back five years, with any necessary attachments if the terms of the reimbursement rates/amounts are not contained in the body of the contracts." You state that you have released all of the requested information except for the provider contracts. You claim that the provider contracts are not public information subject to the Public Information Act (the "act"). Under section 552.002(a) of the Government Code, information is public information if it
is collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business:
(1) by a governmental body; or
(2) for a governmental body and the governmental body owns the information or has a right of access to it.
You admit that you possess some of the requested contracts. However, you indicate that some of the requested contracts are not in your possession, but in the possession of the Managed Care Organizations ("MCOs"). Based on your arguments and our review of the information, we find that those contracts in your possession are public information for purposes of the act; however, those contracts that you do not possess are not public information and are therefore not subject to required disclosure under the act. See Gov't Code § 552.002(a).
We also note that although you notified over twenty different third parties under section 552.305 of the Government Code, you have submitted to this office the contracts of only five MCOs--Metro West Health Plan, AMERICAID, Superior Health Plan, HMO Blue, and IntegraNet-Gulf Coast--in response to the request. You do not state whether the submitted contracts constitute the entirety of the responsive information in your possession. Without the information, we are unable to determine whether it is excepted from disclosure under the asserted exceptions. Thus, to the extent you possess responsive information that you have not submitted to this office, you must release the information to the requestor. See Gov't Code §§ 552.301, .302. Furthermore, while nine MCOs have submitted briefs under section 552.305, we need consider only the arguments pertaining to the MCOs whose contracts were submitted to this office because we assume either that the contracts of the other MCOs are not in TDH's possession or TDH possesses their contracts but failed to submit their contracts to this office and thus we cannot determine the applicability of the raised exceptions.
You claim that to the extent the contracts are subject to the act, they are excepted from disclosure under sections 552.101 and 552.110 of the Government Code. Pursuant to section 552.305, you have notified interested MCOs that their provider contracts are the subject of a public information request. Some of the MCOs have submitted their own briefs, arguing that the requested information is excepted under sections 552.101 and 552.110. We have considered the arguments of TDH and the MCOs and reviewed the submitted information.
We first note that subsections 552.301(a) and (b) of the Government Code provide:
(a) A governmental body that receives a written request for information that it wishes to withhold from public disclosure and that it considers to be within one of the [act's] exceptions . . . must ask for a decision from the attorney general about whether the information is within that exception if there has not been a previous determination about whether the information falls within one of the exceptions.
(b) The governmental body must ask for the attorney general's decision and state the exceptions that apply within a reasonable time but not later than the 10th business day after the date of receiving the written request.
It appears from the documents submitted to this office that TDH received the request for information on July 28, 2000. You did not request a decision from this office until October 2, 2000. Consequently, you failed to request a decision within the ten business day period mandated by section 552.301(a) of the Government Code. Because the request for a decision was not timely submitted, the requested information is presumed to be public information. Gov't Code § 552.302. In order to overcome the presumption that the requested information is public information, a governmental body must provide compelling reasons why the information should not be disclosed. Id.; Hancock v. State Bd. of Ins., 797 S.W.2d 379, 381 (Tex. App.--Austin 1990, no writ); see Open Records Decision No. 630 (1994). Sections 552.101 and 552.110 of the Government Code can provide compelling reasons for withholding information that is presumed public.
The first exception you raise, and which is also raised by Metro West Health Plan, Americaid, and Superior Health Plan, is section 552.101 of the Government Code. Section 552.101 of the Government Code protects "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." You contend that the contracts here are made confidential under article 20A.17(2) of the Texas Insurance Code and section 11.204 of title 28 of the Texas Administrative Code. Article 20A.17 provides
A copy of any contract, agreement, or other arrangement between a health maintenance organization and a physician or provider shall be provided to the commissioner by the health maintenance organization on the request of the commissioner. Such documentation provided to the commissioner under this subsection shall be deemed confidential and not subject to the open records law, Chapter 552, Government Code.
Likewise, section 11.204 of title 28 of the Texas Administrative Code provides that an HMO applying with the Department of Insurance for a certificate of authority must provide to the Department of Insurance, among other things:
a written description of the types of compensation arrangements, such as compensation based on fee-for-service arrangements, risk-sharing arrangements, or capitated risk arrangements, made or to be made with physicians and providers in exchange for the provision of, or the arrangement to provide health care services to enrollees, including any financial incentives for physicians and providers ….
Section 11.204 further provides that "such compensation arrangements shall be confidential and not subject to the open records law, Chapter 552, Government Code." We note that both of these confidentiality provisions apply to information provided to the Department of Insurance, not to information collected, assembled, or maintained by or for the Department of Health. Therefore, we find both article 20A.17 of the Texas Insurance Code and section 11.204 of title 28 of the Texas Administrative Code inapplicable to the information here.
Metro West Health Plan also contends its contracts are excepted under section 552.101 because the contracts contain confidentiality clauses. However, information is not confidential under the act simply because the party submitting the information anticipates that it will be kept confidential. Industrial Found. v. Texas Indus. Accident Bd., 540 S.W.2d 668, 677 (Tex. 1976), cert. denied 430 U.S. 931 (1977), see Open Records Decision Nos. 479 (1987) (information is not confidential under Public Information Act simply because party submitting it anticipates or requests that it be kept confidential), 203 (1978) (mere expectation of confidentiality by individual supplying information does not properly invoke section 552.110). Section 552.101 excepts from disclosure only "information considered to be confidential by law, either constitutional, statutory, or by judicial decision." Gov't Code § 552.101 (emphasis added). Here, while the contracts may include confidentiality clauses between the parties, the contracts are not made confidential by constitution, statute, or judicial decision, and are therefore not excepted under section 552.101.
Next, you contend that the MCOs claim their requested information is excepted from disclosure under section 552.110(a) and (b) of the Government Code. Indeed, HMO Blue, Americaid, and Superior Health Plan argue that the reimbursement information contained in their contracts is excepted from disclosure under section 552.110(a). Section 552.110(a) provides that "[a] trade secret obtained from a person and privileged or confidential by statute or judicial exception is excepted from the requirements of Section 552.021."
The Texas Supreme Court has adopted the definition of trade secret from section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex.), cert. denied, 358 U.S. 898 (1958); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is
any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to single or ephemeral events in the conduct of the business . . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management.
Restatement of Torts § 757 cmt. b (1939). In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. Restatement of Torts § 757 cmt. b (1939).(1) This office has held that if a governmental body takes no position with regard to the application of the trade secret branch of section 552.110 to requested information, we must accept a private person's claim for exception as valid under that branch if that person establishes a prima facie case for exception and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 at 5-6 (1990). We have reviewed the arguments of HMO Blue, Americaid, and Superior Health Plan under the trade secret branch of section 552.110 and we conclude that both Americaid and Superior Health Plan have made a prima facie showing that the reimbursement information contained in their contracts is trade secret information for purposes of section 552.110. On the other hand, we find HMO Blue has failed to establish that its contracts contain trade secrets for purposes of section 552.110. We have marked the information that must be withheld as trade secret information. Based on this conclusion we need not reach Americaid's and Superior Health Plan's remaining claims under section 552.110(b).
HMO Blue also argues that its contracts contain information excepted from disclosure under section 552.110(b) of the Government Code. Under section 552.110(b), "[c]ommercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained is excepted from the requirements of [the act]." The commercial or financial branch of section 552.110 requires a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would result from disclosure. See Open Records Decision No. 661 (1999). After reviewing HMO Blue's arguments, we find that it has failed to adequately show that substantial competitive injury would result from disclosure of the submitted contracts.
In summary, while certain marked information contained in the contracts of Americaid and Superior Health Plan has been shown to constitute protected trade secret information, the remainder of the information has not been shown to be either confidential information under section 552.101 or trade secret or commercial or financial information under section 552.110. Thus, TDH must withhold the information we have marked. The remainder of the responsive information must be released to the requestor.
This letter ruling is limited to the particular records at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other records or any other circumstances.
This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For example, governmental bodies are prohibited from asking the attorney general to reconsider this ruling. Gov't Code § 552.301(f). If the governmental body wants to challenge this ruling, the governmental body must appeal by filing suit in Travis County within 30 calendar days. Id. § 552.324(b). In order to get the full benefit of such an appeal, the governmental body must file suit within 10 calendar days. Id. § 552.353(b)(3), (c). If the governmental body does not appeal this ruling and the governmental body does not comply with it, then both the requestor and the attorney general have the right to file suit against the governmental body to enforce this ruling. Id. § 552.321(a).
If this ruling requires the governmental body to release all or part of the requested information, the governmental body is responsible for taking the next step. Based on the statute, the attorney general expects that, within 10 calendar days of this ruling, the governmental body will do one of the following three things: 1) release the public records; 2) notify the requestor of the exact day, time, and place that copies of the records will be provided or that the records can be inspected; or 3) notify the requestor of the governmental body's intent to challenge this letter ruling in court. If the governmental body fails to do one of these three things within 10 calendar days of this ruling, then the requestor should report that failure to the attorney general's Open Government Hotline, toll free, at 877/673-6839. The requestor may also file a complaint with the district or county attorney. Id. § 552.3215(e).
If this ruling requires or permits the governmental body to withhold all or some of the requested information, the requestor can appeal that decision by suing the governmental body. Id. § 552.321(a); Texas Dep't of Pub. Safety v. Gilbreath, 842 S.W.2d 408, 411 (Tex. App.--Austin 1992, no writ).
Please remember that under the Act the release of information triggers certain procedures for costs and charges to the requestor. If records are released in compliance with this ruling, be sure that all charges for the information are at or below the legal amounts. Questions or complaints about over-charging must be directed to Hadassah Schloss at the General Services Commission at 512/475-2497.
If the governmental body, the requestor, or any other person has questions or comments about this ruling, they may contact our office. Although there is no statutory deadline for contacting us, the attorney general prefers to receive any comments within 10 calendar days of the date of this ruling.
Nathan E. Bowden
Ref: ID# 141870
Encl: Submitted documents
cc: Mr. Scott Polikow
Mr. Clint E. Jones
Mr. Barry Senterfitt
Dr. Michael D. McKinney, MD
Mr. Thomas J. Bond, P.C.
Ms. Diane C. Presti
Mr. Todd Lucksinger
Mr. George M. Hamilton, III
Mr. Marvan M. Gay
Ms. Margaret Lazaretti
Ms. Jill Ireland
Ms. Stacy Hull
Mr. Glen Johnson
Mr. Charles Kight
Mr. Carl Kidd
Ms. Sherry Knowlton
Ms. Becky Korenek
Ms. Marie Lange
Ms. Rose Myers
Ms. Kim Nettleton
Mr. Ralph Ramsey
Ms. L. Deborah Strane
Ms. Holly Williams
Ms. Leah Rummel
Ms. Martha Alikacem
Mr. Jerry Anderson
Ms. Cindy Chase
Ms. Sharron Cox
Mr. Kevin Dahl
Ms. Sue Denosowicz
Ms. Cheryl Dietz
Ms. James Donovan
Mr. Joe Duerre
Mr. John Evler
Mr. Michael Guyette
Mr. Glen Hudson
Mr. Gayland Daugherty
1. The six factors that the Restatement gives as indicia of whether information constitutes a trade secret are:
(1) the extent to which the information is known outside of [the company]; (2) the extent to which it is known by employees and others involved in [the company's] business; (3) the extent of measures taken by [the company] to guard the secrecy of the information; (4) the value of the information to [the company] and [its] competitors; (5) the amount of effort or money expended by [the company] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
Restatement of Torts § 757 cmt. b (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).