To Close or Not to Close: Tennessee Attorney General Weighs in on Hospital Bonuses and What Constitutes a Strategic Plan

On January 28, 2015, the Tennessee Attorney General (“Attorney General”) issued a formal opinion (“Opinion”) addressing (1) whether Tennessee law permits “the board of a public hospital to meet in closed session to discuss executive compensation and executive bonuses;” and (2) whether records from a closed session addressing the public hospital’s “marketing strategies” and “strategic plans” must be made available to the public pursuant to Tennessee law.[1]

In maintaining that a board of a Tennessee public hospital may not meet in a closed session to discuss executive compensation and executive bonuses, the Opinion offers the Attorney General’s interpretation of Tenn. Code Ann. § 68-11-238, which carves out an exception to both the Tennessee Opening Meetings Act and the  Tennessee Public Records Act. In brief, Tenn. Code Ann. § 68-11-238 permits the boards of public hospitals to “discuss and develop marketing strategies and strategic plans in closed meetings” that are not open to the public.[2] The statute also states, however, that the actual adoption, as opposed to the discussion and development, of “marketing strategies” or “strategic plans” remains subject to the open meetings laws.[3]

The Opinion is instructive to companies and medical practices that partner with a public hospital in Tennessee (a “Public Hospital”) in terms of how certain records may or may not remain protected from public disclosure. In particular, in interpreting Tenn. Code Ann. § 68-11-238, the Attorney General maintains that (1) the statute does not require records to be kept from closed meetings involving “marketing strategies” and “strategic plans;” and (2) to the extent records are kept in such meetings, they “may be treated as confidential and not public records.”[4]

However, the Opinion adds an important caveat based on the language of the statute. It states that if any “studies . . . were considered in the adoption of the specific strategy or plan,” those studies remain subject to the public records laws and must “be made available for inspection at least seven days before any public meeting of the board to adopt such strategy or plan.”[5] Given that the Opinion does not seek to clarify the meaning of “studies” as used in the statute, the term can potentially be interpreted in an expansive manner to cover a range of records that the board of a public hospital may review in eventually adopting a specific marketing strategy or strategic plan.

As such, those that partner with a Public Hospital should remain aware of the Opinion, its interpretation of Tenn. Code Ann. § 68-11-238, and its potentially expansive understanding of records that must be publicly disclosed under the statute. Specifically, before providing records to a Public Hospital, you and your company/practice should:

  • Remain generally aware, based upon applicable public records laws, that records submitted to a Public Hospital may become public;
  • Consider whether certain records submitted to a Public Hospital may be used by the hospital in the adoption of a marketing strategy or strategic plan and thereby may become public. If such use is likely, make certain that you are comfortable with the public disclosure of such records before submission; and
  • Consider methods by which sensitive data may be made available for review by the Public Hospital without actually delivering either a hard or electronic copy.

 


[1] See Tenn. Op. Atty. Gen. 15-08 (January 28, 2015)
[2] Tenn. Code Ann. § 68-11-238
[3] Id.
[4] Tenn. Op. Atty. Gen. 15-08
[5] Id.

Read Attorney General’s Opinion.