Bеfore issuing a license to a “government or governmental agency” for a new ambulance service, OCGA § 31-11-32 (d) requires the license officer for the Department of Human Resources (DHR) to establish that, due to inadequate private service, the public’s convenience and necessity require the proposed ambulance service. The question in this case is whether a private non-profit corporation which discharges the functions of a hospital authority is a government or governmental agency within the meaning of the above statute.
Nоrtheast Georgia Primary Care, Inc. (Primary Care), a Georgia nonprofit corporation, submitted an application to the DHR for a license to operate an ambulance service in Hall County. The license officer concluded that Primary Care is a governmental agency, merely the vehicle through which the Hospital Authority of Hall County and the City of Gainesville (the Hospital Authority) seeks to operate the proposed ambulance service. Finding that Primary Care did not prove that private ambulance service in the county is inadequаte, DHR denied its application. Primary Care appealed to the superior court under OCGA § 31-5-3 (3). The court reversed. We granted DHR’s application for discretionary appeal.
Primary Care’s sole member is Northeast Georgia Health Services, Inc. (Health Services), likеwise a Georgia nonprofit corporation. Health Services is a holding company controlling various for-profit and non-profit corporate entities (the Health Services group). The non-profit corporations include Primary Care; Northeast Georgia Mediсal Center, Inc. (Medical Center); and Northeast Georgia Health Resources, Inc. (Health Resources).
The Hospital Authority owns the Medical Center, an acute-care regional hospital operated
As a result, a corporate reorganization plan was developed resulting in the formation in 1986 of Health Services, Medical Center, and Health Resources. Likewise in 1986, a lease agreement was entered into between the Hospital Authority and Medical Center, which manages and operates most of the inpatient activities of the Health Services Group. Health Resources, which is primarily responsible for the outpatient functions of the Health Services Group, is a sublessee of certain assets under the leasе agreement. The function of Primary Care, which was incorporated in 1993, is to employ and manage primary care physicians in a primary care network maintained in the Northeast Georgia area by the Health Services Group. It has a management contract for the operation of outpatient primary care facilities owned by Health Resources.
In the 1986 lease agreement, Medical Center agreed to provide servicés to the indigent sick of Hall County, to operate emergency care facilities available tо all citizens regardless of ability to pay, and to continue to participate in Medicaid and Medicare programs. In its application for a license to operate the ambulance service, Primary Care stated that indigent patients would constitute a substantial portion of its transport patients.
Both Health Services’ and Medical Center’s by-laws state that two members of their regular board of trustees shall be serving members of the governing body of the Hospital Authority if two such members are willing and able to serve. No members of the Hospital Authority аre on the board of trustees of Primary Care.
1. The superior court reversed the DHR’s denial of Primary Care’s license application, based on its conclusion that under
Thomas v. Hosp. Auth. of Clarke County,
At the outset, DHR asserts that the superior court did not have jurisdiction to consider Primary Care’s argument that a hospital authority is not a governmental agency because Primary Care never raised this issue before the department. See
Ga. Power Co. v. Ga. Pub. Svc. Comm.,
In
Thomas,
supra, the plaintiff sued a county hospital authority seeking damages for permanent injury sustained in a slip and fall. The question was whether the action was barred under Art. I, Sec. II, Par. IX (e) of the Georgia Constitution under which “sovereign immunity extends to the statе and all of its departments and agencies.” The
In Division 1 of its opinion, the Court arrived at the legal conclusion that a hospital authority, though a governmental instrumentality, is nоt an agency or department of either the state or county because it is a public, non-profit corporation. See
Richmond County Hosp. Auth. v. McLain,
In Division 2, the court in
Thomas
delineated the policy considerations in support of its determination that a hospital authority is not entitled to sovereign immunity. The court posited that “the function of a hospital [authority] is not, in essence, a governmental function.”
2.
Crosby v. Hosp. Auth. of Valdosta & Lowndes County,
Crosby involved the state action immunity doctrine under which states are immune from federal antitrust law for their actions as sovereign. Id. A political subdivision of the state is likewise immune if it acted pursuant to clearly-articulated and affirmatively-expressed state policy. Id. at 1521-1522. Even private parties are entitled to such immunity, if it is shown both that the challengеd restraint was clearly articulated and affirmatively expressed as state policy and that the policy was actively supervised by the state. Id. at 1522.
Crosby
held that because a state hospital authority is a government instrumentality, for state action immunity purposes it should be evaluated as a political subdivision of the state rather than as a private actor. Id. at 1522-1526; see also
Cox Enterprises v. Carroll City/County Hosp. Auth.,
3. The question in this case is whether Primary Care is a government or governmental agency within the meaning of a statute prohibiting a government-oрerated ambulance service unless private service is inadequate.
(a) One asserted purpose of the statute is effectuation of the general rule — espoused in
Keen v. Mayor &c. of Waycross,
(b) The other asserted purpose for limiting competition between thе governmental and private sectors is that a government agency which provides a service also provided by private enterprise has unfair competitive advantages over the private entities with which it competes.
A hospital authority does have certain competitive advantages, such as the ability to issue tax-free debt instruments, eligibility for a certain amount of public funding, a governmental exemption from taxation, and grant of the power of eminent domain. But it also has one major competitive disadvantage, i.e., the obligation to provide indigent medical care. As a private corporation, Primary Care is an entity separate and distinct from the Hospital Authority,
Richmond County Hosp. Auth. v. Richmond County,
We conclude that Primary Care is not a government or governmental agency within the meaning of the statute.
4.
Red & Black Publishing Co. v. Bd. of Regents,
Red & Black involved the student Organization Court of the University of Georgia, which had authority to hear and adjudicate cases involving violations of certain University rules and regulations. The Board of Regents delegated such authority to the University and, in turn, to the Organization Court. Like the present case, Northwest Ga. involved private, non-profit corporations which were the vehicle through which various public hospital authorities functioned. In the 1986 lease agreement, in the instant case, Medical Center agreed to hold public meetings and allow public access to its records to the same extent required of the Hospital Authority.
The two earlier case decisions are based on the applicability of the Open Records Act to items received or maintained by a рrivate person or entity on behalf of a public office or agency (OCGA § 50-18-70 (a)) and to the principle that the Open Meetings Act “must be broadly construed to effect its remedial and protective purposes.”
Atlanta Journal v. Hill,
Judgment affirmed.
Notes
As stated in a lease agreement between the Hospital Authority and Medical Center, reviewed infra, these changes include: “(i) Changing reimbursement schemes pursuant to which large purchasеrs of health care are actively seeking ways to decrease their health care expenditures creating a need for efficiency in order to assure survival; (ii) Increasing population over age 65 creating a greater demand for health care services; (iii) Changing technologies being developed to provide treatment in a less traumatic way but at some times prohibitive costs requiring the balancing of the cost of care with the quality of care; (iv) A physician oversupply creating greater competitiveness; (v) Limited aсcess to equity capital because [the Hospital Authority] is prohibited from entering profit making joint ventures; (vi) Increasing costs for care for the poor.”
In Keen, the City of Waycross was engaging in a general plumbing business on private premises. In Maloof, DeKalb County offered sewer services on privately-owned sewer lines.