The Pennsylvania Department of Human Services cannot be compelled to disclose nursing home provider rates if it does not possess or control the financial records requested under the Right-to-Know Law, the Commonwealth Court has ruled.

A split seven-judge panel determined Oct. 5 in UnitedHealthcare of Pennsylvania v. Baron that the Office of Open Records erred in directing the disclosure because it relied on an inapplicable case and the requested rates were not within DHS's constructive possession.

In a related decision issued Sept. 21, a unanimous seven-judge panel ruled in Baron v. Department of Human Services in a matter of first impression that an individual requesting records cannot enforce a disclosure order while an appeal of the order is pending.

Both cases stemmed from Bruce Baron's Right-to-Know request to the DHS for rates paid to nursing homes by managed care organizations participating in the medical assistance program HealthChoices. The DHS said it lacked possession of the rates and denied access, but the OOR ordered their disclosure. The managed care organizations, which were not directed to take any action, filed petitions for review of the order. Baron filed a mandamus petition alleging that DHS and the managed care organizations were bound to disclose the documents, and that there was no stay in effect delaying their release. The managed care organizations argued Baron didn't satisfy the prerequisites for mandamus relief, and that their appeals triggered an automatic stay under the Right-to-Know Law.

Because the disclosure order is subject to reversal or modification, Baron has no immediate right to relief, Commonwealth Court Judge Robert Simpson wrote for the court.

“Any attempt to enforce an appealed final determination before disposition of the merits is premature,” Simpson said in dismissing Baron's mandamus petition with prejudice.

In the UnitedHealthcare ruling, Simpson, writing for a 6-1 majority, said the OOR wrongly relied on the Pennsylvania Supreme Court's 2015 decision in Department of Public Welfare v. Eiseman in ordering the disclosure. In that case, the justices presumed the agency possessed the rates at issue, Simpson said, but in the present case “the credited evidence proves that the requested rates were not submitted to DHS, much less approved by DHS,” rendering Eiseman inapplicable.

Despite DHS's lack of actual possession, the OOR had determined that the agency had constructive possession of the rates through its contracts with the managed care organizations. Simpson said the agency lacked constructive possession for three reasons: precedent precludes access to a private company's records based solely on an agency's legal right to review those records; no applicable regulation requires the requested rates to be submitted to DHS; and, “most fundamental,” constructive possession is not the proper mechanism to reach records of a third-party contractor under the Right-to-Know Law.

Simpson further rejected the OOR's conclusion that the requested rates constituted financial records under the Right-to-Know Law, finding that they did not qualify under the plain language of the law, nor under the “essential component” test, because they are unknown to DHS and not used in performing the agency's functions.

Simpson remanded the matter to the OOR to determine whether there is a direct relationship between the requested rates and the managed care organizations' performance of their contractual obligations to the DHS, which would allow access to a third-party contractor's records under Section 506(d)(1) of the Right-to-Know Law. He requested that the managed care organizations' contracts be included in the evidentiary record to ensure adequate appellate review. If the OOR finds a direct relationship, he said, it must then determine whether any exemptions asserted by the managed care organizations in the initial proceeding apply.

Baron, who is an attorney in Camp Hill, said he appealed the mandamus decision from Sept. 21 to the Supreme Court. He said his case was brought in an attempt to clarify procedures under the Right-to-Know Law.

James J. Rodgers of Dilworth Paxson, who represented Health Partners Plans Inc., one of the managed care organizations, said the Commonwealth Court's resolution was “very practical and clear.”

Karl Myers of Stradley Ronon Stevens & Young, who represented several of the managed care organizations, did not return a call for comment. Jan Budman II of Buchanan Ingersoll & Rooney, who represented Gateway Health Plan Inc., one of the managed care organizations, did not return a call for comment. The DHS press office did not return a call for comment.

Contact managing editor Zack Needles at [email protected].