Highmark Inc. v. C.L. Voltz, Esq. , 163 A.3d 485 ( 2017 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Highmark Inc., :
Petitioner :
: No. 1325 C.D. 2016
v. : Argued: March 8, 2017
:
Christopher L. Voltz, Esq., :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JOSEPH M. COSGROVE, Judge
OPINION
BY JUDGE SIMPSON FILED: June 2, 2017
Highmark, Inc. (Highmark) petitions for review of a final determination
issued by the Office of Open Records (OOR) granting the request of Christopher L.
Voltz, Esquire (Requester) pursuant to the Right-to-Know Law (RTKL),1 and
directing the Insurance Department (Department) to release provider reimbursement
rate information Highmark submitted. Highmark argues the information is protected
by another state law, and it is confidential proprietary information under Section
708(b)(11) of the RTKL, 65 P.S. §67.708(b)(11). Highmark contends it presented
sufficient evidence to support nondisclosure. Additionally, Highmark asserts OOR
violated its due process rights, and on that basis, it asks this Court to accept
supplemental evidence. Because OOR erred as a matter of law, we reverse.
1
Act of February 14, 2008, P.L. 6, 65 P.S. §§67.101-67.3104.
I. Background
On March 11, 2016, Requester submitted a request seeking:
(1) All documents submitted by Highmark to the
[Department] regarding reimbursement adjustments for
physical therapy, allergy testing and venipuncture
services, including, without limitation, correspondence
filings and competitor and market performance data
related to Highmark’s Special Bulletin dated July 22,
2015, wherein Highmark states that Highmark has filed
with, and has now received approval from, the
[Department] to implement Premier Blue Shield and
Keystone Health Plan West (KHPW) reimbursement
adjustments;
(2) [a]ll documents submitted by Highmark to [the
Department], including, without limitation, correspondence,
filings and competitor and market performance data,
relating to Highmark’s Special Bulletin dated February 15,
2016 (revised February 17, 2016)[,] concerning
Highmark’s adjustment to its provider fee schedule to
implement new fees for its [KHPW] and Premier Blue
Shield ACA individual (direct-pay) products; and,
(3) [a]ll documents evidencing the [Department’s]
approval, disapproval or other response to Highmark’s
above-described submissions to the [Department] ….
Reproduced Record (R.R.) at 10a (Request).
The Department denied the Request, stating the records were
confidential proprietary information or trade secrets of Highmark under Section
708(b)(11) of the RTKL, 65 P.S. §67.708(b)(11). The Department noted that
Highmark “objected to the release of such records.” R.R. at 19a.
2
Requester appealed to OOR, requesting in camera review. In addition
to the Request and response, Requester submitted emails between the Department
and the Pennsylvania Physical Therapy Association (PTA). OOR invited the
parties to supplement the record and directed the Department to notify third parties,
(i.e., Highmark), of their ability to participate in the appeal.
Highmark filed a brief asserting the records were protected confidential
proprietary information under Section 708(b)(11) of the RTKL, 65 P.S.
§67.708(b)(11). In addition, Highmark asserted Section 309 of the Accident and
Health Filing Reform Act (Reform Act),2 40 P.S. §3801.309, and Section 6329 of
the Professional Health Services Plan Corporations Act (HPCA), 40 Pa. C.S. §6329,
exempted rate information submitted to the Department. Highmark also submitted
an affidavit of its Director of Regulatory Affairs (Highmark Affidavit) attesting the
records were part of a provider reimbursement filing with the Department, marked
confidential. The Department submitted no evidence, deferring to Highmark.
Requester submitted a letter brief and an affidavit of the PTA attorney
who corresponded with Department counsel (PTA Affidavit). Therein, the attorney
confirmed the Department advised PTA that Highmark’s submissions were not
voluntary, but were required by Section 6329 of the HPCA. PTA Affidavit, ¶9.
Highmark submitted a reply brief responding to Requester’s legal arguments.
Neither the parties nor Highmark requested a hearing. OOR denied
Requester’s request for in camera review.
2
Act of December 18, 1996, P.L. 1066.
3
Ultimately, OOR determined Highmark did not meet its burden to
prove an exemption under the RTKL or other state law. Voltz v. Ins. Dep’t &
Highmark, Inc., OOR Dkt. AP 2016-0773 (filed July 5, 2016) (Final Determination).
OOR reasoned the Reform Act did not exempt the rates at issue because only
“[p]ayment rates and fees requested by the [D]epartment shall be given confidential
treatment.” 40 P.S. §3801.309(c) (emphasis added). OOR found no evidence that
the Department “requested” the payment rate or fee information, so the provision
did not apply. OOR rejected Highmark’s argument that rate information must be
filed with the Department under Section 6329 of the HPCA, emphasizing the partial
repeal of Section 6329(a) “insofar as [it] provides for the approval of rates and
contracts.” Section 5101 of the Reform Act, 40 P.S. §3801.5101 (emphasis added).
Because Highmark did not submit the rate information pursuant to the Department’s
explicit request, OOR determined the Reform Act did not protect it.
OOR also reasoned the requested records did not qualify as financial
records because they did not relate to an agency disbursement. In addition, OOR
found the Highmark Affidavit insufficient evidence to prove the rate information
was confidential proprietary information or trade secrets under Section 708(b)(11)
of the RTKL. Accordingly, OOR directed disclosure of the records.
Highmark filed a petition for review.3 The Department did not
participate. After briefing and argument, the matter is ready for disposition.
3
Highmark participated in the proceedings before OOR pursuant to Section 1101(c) of
the RTKL, 65 P.S. §67.1101(c) as a direct-interest participant. Although the RTKL does not
expressly confer an appeal right on such participants, our Court recognizes a third-party
contractor has a due process right to protect information in which it maintains a property interest.
W. Chester Univ. v. Schackner (Bravo), 124 A.3d 382 (Pa. Cmwlth. 2015).
4
II. Discussion
On appeal,4 Highmark contends OOR erred in holding: (1) the rate
information was not protected from disclosure under the insurance statutes; and,
(2) in holding Section 708(b)(11) of the RTKL did not protect the rate information.
It argues the Highmark Affidavit substantiated that the exemptions applied, and
OOR erred in deeming the evidence insufficient.
Highmark also challenges the adequacy of the proceedings, claiming
OOR violated its due process rights by directing disclosure without a hearing.
Additionally, Highmark asks this Court to grant its application to supplement the
record.
Requester counters that Highmark did not meet its burden to prove the
asserted exemptions. He argues the Highmark Affidavit was insufficient proof of
any competitive harm, so OOR properly ruled in his favor. He maintains the
Reform Act does not exempt the requested information because the Department
did not request the rates here, which is a precondition to their protection. He also
asserts the partial repeal of Section 6329(a) of the HPCA amounted to a total repeal
because that part pertained to approval, and approval was no longer required.
A. RTKL Framework
Section 305 of the RTKL provides that records in possession of a
Commonwealth agency like the Department are presumed “public” unless they
4
“For a question of law under the RTKL, our scope of review is plenary.” Bagwell v.
Dep’t of Educ., 76 A.3d 81, 86 (Pa. Cmwlth. 2013) (en banc).
5
are: (1) exempted by Section 708 of the RTKL; (2) protected by a privilege; or (3)
exempted “under any other Federal or State law or regulation or judicial order or
decree.” 65 P.S. §67.305 (emphasis added). State statutes that designate public or
nonpublic nature supersede the RTKL. Section 306 of the RTKL, 65 P.S. §67.306;
Dep’t of Labor & Indus. v. Heltzel, 90 A.3d 823 (Pa. Cmwlth. 2014) (en banc).
This Court recognizes a third party’s interest in protecting its records
in an agency’s possession that may not be waived by the agency. Dep’t of Educ. v.
Bagwell, 131 A.3d 638 (Pa. Cmwlth. 2016) (Bagwell (2016)); Dep’t of Conserv. &
Natural Res. v. Vitali (Pa. Cmwlth., No 1013 C.D. 2014, filed July 7, 2015)
(unreported) (remanding to allow third party to prove exemption before factfinder).
Indeed, a direct interest party who submitted the records at issue to an agency may
be in the best position to establish their protected nature. Bagwell (2016).
The party asserting an exemption bears the burden of proving the
exemption applies. See, e.g., Global Tel*Link Corp. v. Wright, 147 A.3d 978 (Pa.
Cmwlth. 2016) (party with confidential proprietary interest in financial submission
appealed, and established RTKL exception applied); Dep’t of Corr. v. Maulsby
121 A.3d 585 (Pa. Cmwlth. 2015) (remanding to OOR to allow third party to
participate and challenge release of confidential proprietary information); see also
Allegheny Cnty. Dep’t of Admin. Servs. v. Parsons, 61 A.3d 336, 342 (Pa.
Cmwlth. 2013) (third-party contractors wear “shoes of [an] agency for purposes of
the burden of proof when the contractor performs a governmental function ….”).
Under Section 708(a)(1), a party bears the burden of proving any RTKL exception
applies “by a preponderance of the evidence.” 65 P.S. §67.708(a)(1).
6
B. Due Process – Supplementing the Record
Before reaching the merits, we consider Highmark’s due process claim.
This Court construes the RTKL to afford due process to third parties, including the
ability to submit evidence and assert exemptions at the appeals officer level.
Maulsby; W. Chester Univ. v. Schackner (Bravo), 124 A.3d 382 (Pa. Cmwlth.
2015). When a RTKL request seeks confidential proprietary information that a
third party submitted to an agency, we recognize that third party’s right to due
process before disclosure. See, e.g., Office of the Governor v. Bari, 20 A.3d 634
(Pa. Cmwlth. 2011) (remanding for hearing so third party may prove exception).
In the RTKL context, a right to due process does not entail a right to a
hearing. Giurintano v. Dep’t of Gen. Servs., 20 A.3d 613 (Pa. Cmwlth. 2011).
The essential elements for due process before an OOR appeals officer are notice
and an opportunity to be heard. Wishnefsky v. Dep’t of Corr., 144 A.3d 290 (Pa.
Cmwlth. 2016). An appeals officer has discretion in developing the record to allow
meaningful appellate review. Dep’t of Educ. v. Bagwell, 114 A.3d 1113 (Pa.
Cmwlth. 2015) (Bagwell (2015)). To develop the record, an appeals officer may
undertake in camera review or request submissions as to material facts. Id.; Office
of Open Records v. Center Twp., 95 A.3d 354 (Pa. Cmwlth. 2014) (en banc).
Generally, this Court declines to serve as factfinder, a “role … best
reserved for unique occasions” like maximizing efficiency. Heltzel, 90 A.3d at 834.
Where OOR’s “record contains no information on [records’] nature and content,” we
may supplement the record. Pa. State Police v. Grove, 119 A.3d 1102, 1105-06
(Pa. Cmwlth. 2015), appeal granted, 133 A.3d 292 (Pa. 2016) (emphasis added).
7
Highmark contends OOR violated its due process rights by failing to
hold a hearing before directing disclosure of the rate information. Highmark
asserts its proprietary rights in nondisclosure are property rights warranting further
development of the record before this Court or on remand. We are unpersuaded.
Highmark suggests “OOR’s failure to adequately develop the record”
violated its due process rights. Reply Br. at 12. However, Highmark’s argument is
premised on the lack of due process afforded to third parties by the RTKL, without
regard to the adequacy of the process afforded here at the fact-finding stage before
OOR.
Highmark had both notice and an opportunity to be heard before
OOR. OOR recognized Highmark’s direct interest when it allowed participation in
the administrative proceedings pursuant to Section 1101(c) of the RTKL, 65 P.S.
§67.1101(c). Highmark submitted two briefs in support of its legal position, and
evidence in support of its factual allegations in the Highmark Affidavit. OOR
reviewed and considered Highmark’s submissions. See Final Determination.
Moreover, there is no indication that OOR denied Highmark an
opportunity to submit additional evidence. Highmark did not request a hearing.
Thus, Highmark cannot demonstrate that OOR did not afford Highmark ample
opportunity to prove the asserted exemptions.
Contrary to Highmark’s contentions, it is not incumbent upon OOR to
request additional evidence when developing the record. Rather, it is the parties’
8
burden to submit sufficient evidence to establish material facts. Here, Highmark
did not distinguish between assertions in briefs and sworn statements in affidavits.
Pet’r’s Br. at 52. OOR properly recognized unsworn statements are not evidence.
Bagwell (2015).
In short, Highmark had a full opportunity to establish the exemptions
before OOR. That the evidence Highmark submitted was found wanting by OOR
does not mean the procedure was flawed. Because Highmark identified no flaws in
the process before OOR, in which it fully participated, we discern no due process
violation.
We also discern no cause to consider additional evidence here.
Critically, Highmark offers no explanation for not submitting the evidence comprised
in its request to supplement the record when it had the chance to do so before OOR.
Therefore, we decline to review the additional evidence as factfinder, or to remand
to OOR to open the record to accept this evidence. To allow a remand under these
circumstances amounts to giving Highmark the proverbial second bite at the apple.
C. Merits
Highmark argues OOR committed legal error when it did not construe
the relevant insurance statutory provisions together. Highmark maintains the
records are protected by Section 309 of the Reform Act, 40 P.S. §3801.309,
because Section 6329 of the HPCA, 40 Pa. C.S. §6329, requires filing of payment
rates and fees with the Department. That the Department no longer approves the
9
rates does not alter the overall statutory scheme that mandates filing of such rates
and fees with the Department before they take effect.
Requester construes the exemption in Section 309 of the Reform Act
strictly, to apply only to rate information that the Department explicitly requested.
40 P.S. §3801.309. He argues OOR properly concluded the Reform Act does not
exempt the rates because the precondition of a Department request was not met.
Requester contends that such rates do not need to be filed pursuant to Section 6329
of the HPCA because Highmark is no longer required to submit applications for
approval based on the repealer in Section 5101 of the Reform Act, 40 P.S.
§3801.5101. As a consequence of repealing the approval requirement, there is no
reason for submitting the rates.
There is no dispute as to the following facts. Highmark submitted a
provider reimbursement filing containing the requested information to the
Department through the System for Electronic Rate and Form Filing (SERFF).
Highmark Affidavit, ¶4. Highmark marked its rate information “Confidential and
Proprietary,” believing it was protected from disclosure under Section 309(c) of the
Reform Act. Id. ¶¶7, 12. Highmark continued to request “approval” for its filings,
despite the repeal of the approval requirement. Since the repeal of the approval
requirement, applications are deemed approved, and their receipt is acknowledged,
not approved. After receiving Highmark’s submission through SERFF, the
Department acknowledged receipt, and it marked the filing “closed.” Id. ¶¶10, 14.
10
1. Insurance Statutes
Highmark asserts an exemption from disclosure under “any other …
State law.” Section 305(a)(3) of the RTKL, 65 P.S. §67.305(a)(3). Here, the other
state laws are the Reform Act and the HPCA (collectively, Insurance Statutes).
The HPCA is the enabling legislation for the Pennsylvania Blue Plans.
Section 6329 of the HPCA provides, with emphasis added:
(a) General rule.— All rates charged subscribers or groups
of subscribers by any professional health service corporation,
and the form and content of all contracts between any such
corporation and its subscribers or groups of subscribers, all
methods and rates of payment by such corporation to health
service doctors serving its subscribers, all acquisition costs in
procuring subscribers, the reserves to be maintained by such
corporation, and all contracts entered into by any such
corporation and extending over a period of more than one year
or calling for the expenditure by the corporation of any
amount in excess of 20% of its reserves, shall be approved by
the [D]epartment before they become effective.
(b) Procedure.— Every application for such approval shall
be made to the [D]epartment in writing and shall be subject to
the provisions of subsections (c) through (f) of section 6102 of
this title (relating to certification of hospital plan
corporations), except that the [D]epartment may substitute
publication in the Pennsylvania Bulletin of notice of
reasonable opportunity to submit written comments for
publication of opportunity for hearing in any case where the
right to an oral hearing is not conferred by the Constitution of
the United States or the Constitution of Pennsylvania. Within
60 days after the filing of the application[,] the [D]epartment
shall approve or refuse such application.
40 Pa. C.S. §6329. However, Section 5101 of the Reform Act partially repealed
the above provision as follows:
11
(b) Partial.—the following acts and parts of acts are repealed
to the extent specified:
****
40 Pa. C.S. §§6124(a) and 6329(a), insofar as they provide for
the approval of rates and contracts.
40 P.S. §3801.5101 (emphasis added).
Section 309(c) of the Reform Act states in its entirety:
Provider contracts filed under this section need not contain
payment rates and fees unless requested by the [D]epartment.
Payment rates and fees requested by the [D]epartment shall be
given confidential treatment, are not subject to subpoena and
may not be made public by the department, except that the
payment rates and fee information may be disclosed to the
insurance department of another state or to a law enforcement
official of this State or any other state or agency of the Federal
Government at any time so long as the agency or office
receiving the information agrees in writing to hold it
confidential and in a manner consistent with this chapter.
40 P.S. §3801.309(c) (emphasis added).
OOR concluded it was unnecessary to construe the Insurance Statutes
together because the Reform Act repealed the approval of rates and contracts. As a
result, it determined “the filing and review of provider contracts and provider rate
information is governed solely by the Reform Act, which only affords confidential
treatment to ‘payment rate and fee information’ requested by the Department.”
Final Determination at 7 (emphasis in original). We disagree.
OOR’s analysis disregarded that the remainder of Section 6329 of the
HPCA was intact, in full force, and subject to implementation by the Department.
12
OOR’s strict construction of the exemption in Section 309(c) of the Reform Act is
incongruent with the submission requirements of the HPCA, as well as inconsistent
with the Department’s interpretation, which is entitled to deference.
As to administrative deference, our Supreme Court holds:
It is well-settled that when the courts of this Commonwealth
are faced with interpreting statutory language, they afford
great deference to the interpretation rendered by the
administrative agency overseeing the implementation of such
legislation. Thus, our courts will not disturb administrative
discretion in interpreting legislation within an agency’s own
sphere of expertise absent fraud, bad faith, abuse of discretion
or clearly arbitrary action.
Winslow-Quattlebaum v. Md. Ins. Grp., 752 A.2d 878, 881 (Pa. 2000) (emphasis
added) (citations omitted). The Department is entitled to such deference in its
construction of the Insurance Statutes because “[it] is specifically delegated
administration and enforcement of insurance matters.” Id.
The Department construed the Insurance Statutes consistent with
Highmark’s proffered construction. Specifically, in response to an argument that
the Reform Act did not protect the requested information, the Department
explained Section 6329(a) of the HPCA requires Highmark to file rates with the
Department, which rates include a doctor of chiropractic as well as a licensed
physical therapist. R.R. at 26a-27a. The Department emphasized in an email
forwarded by PTA’s counsel that “because Highmark is required to file the rates, it
cannot be said that Highmark ‘voluntarily’ provided them to the Department.” Id.
at 27a. “Rather, a statutory requirement to file the rates is tantamount to a
13
‘request’ from the Department. Thus, the rates may fairly be said to have been
‘requested by the Department,’ as specified in [Section 309(c)], and therefore
confidential as a matter of statute.” Id.
Significantly, Requester acknowledged that prior to submitting his
Request, counsel for the Department stated: “Highmark must file health service
doctor rates, including physical therapy rates, with the Department and, therefore,
Highmark’s submissions are not ‘voluntary.’” See Certified Record (C.R.), Item
No. 6, Requester Submission to OOR, at 3, ¶7. Highmark refers to this practice as
a “file and use” requirement, which replaced the approval requirement after its
repeal. Pet’r’s Br. at 23.
Based on the Department’s construction of the Insurance Statutes,
OOR erred in determining only the Reform Act governed the rate information.
The Reform Act and the HPCA must be construed in pari materia as they pertain
to the same subject matter and are part of the same regulatory scheme. 1 Pa. C.S.
§1932. Further, Section 5101 of the Reform Act specified a partial repeal of
Section 6329(a) of the HPCA that applied only to the approval of rates and
contracts. 40 P.S. §3801.5101.
“[T]he rules of statutory construction require that ‘whenever possible
each word in a statutory provision is to be given meaning and not to be treated as
surplusage.’” Winslow-Quattlebaum, 752 A.2d at 881 (quoting 1 Pa. C.S.
§1921(a)). Moreover, we construe statutory provisions so as to avoid an absurd
result or one that is unworkable. 1 Pa. C.S. §1922(1).
14
Aside from his disregard of the deference due the Department,
Requester’s suggested interpretation is inconsistent with these statutory
construction principles. First, his proffered construction of the repealer ignores
that Section 6329(a) of the HPCA remained intact other than the “approval”
requirement for rates and contracts. Construing Section 6329 of the HPCA as
Requester suggests would render almost the entirety of the remaining provisions
mere surplusage.
Second, from a practical perspective, the statute is rendered
unworkable if the repealer functioned as a total repeal based on the removal of the
word “approve.” Requester’s construction offers no basis for implementing or
construing Section 6329(b) of HPCA, which also remained intact. Now
applications are deemed approved and acknowledged, instead of “approved.”
Requester also does not account for the submission of the rate information and its
acknowledgement. That the rates are acknowledged or “deemed approved”
presupposes submission of something to the Department.
The repealer is not a model of clarity as to how the intact provisions
of Section 6329 of the HPCA operate. Repealing the term “approve” (as to rates
and contracts) without replacing it with another term, such as file or submit, creates
an ambiguity. In such cases, we employ statutory construction principles to
discern intent. Therefore, to give full effect to this provision, we consider the
following: “the occasion and necessity for the statute …; the circumstances under
which [it] was enacted; the mischief to be remedied; the object to be attained; the
former law, if any, including [those] upon the same or similar subjects; the
15
consequences of a particular interpretation; and administrative interpretations of
such statute” by the Department. Freedom Med. Supply, Inc. v. State Farm Fire &
Cas. Co., 131 A.3d 977, 984 (Pa. 2016) (citing 1 Pa. C.S. §1921(c)).
Following these principles, and to give effect to the statutory scheme,
we construe the HPCA to mean “file and use” as Highmark and the Department
have construed it. Interpreting the HPCA in this manner gives effect to the
remaining language, and is consistent with the Department’s implementation and
interpretation of the statutory scheme. Thus, we conclude Highmark was required
to file the rate information under the HPCA.
During oral argument, Requester conceded that the Reform Act would
exempt the rate information, had the Department requested the information from
Highmark. Highmark contends the request need not be in writing or explicit, and
is not necessary when another statute requires filing of the information at issue.
We agree.
The meaning of “requested” in the context of the statutory exemption
here does not entail that rates must be specially requested by the Department to be
confidential without regard to the parties’ course of conduct or other laws. The
“request” language in Section 309(c) of the Reform Act is satisfied when the
Department requires filing of rate information under Section 6329 of the HPCA.
Essentially, the statutory requirement obviates a need for a separate Department
request.
16
In sum, OOR erred in reasoning it was unnecessary to construe the
Insurance Statutes in pari materia based on the repealer. In so doing, OOR
disregarded the partial nature of the repeal and erred in its statutory construction.
Here, Section 309(c) of the Reform Act provided a statutory exemption for the rate
information, despite lack of an explicit Department request, because Highmark
submitted the information, and it came into the Department’s possession pursuant
to the file and use provisions in Section 6329 of the HPCA. Therefore, we reverse
OOR’s order directing disclosure.
2. Record of an Agency
In the interest of completeness, we also consider the implication of
Requester’s argument that records submitted to an agency by a third party, when
not required by that agency, are subject to access under the RTKL.
The RTKL provides a means of access to government records.
However, the statute applies only to “records” of an agency. Although all records
in an agency’s possession are presumed public, not all records within an agency’s
possession qualify under the definition of record in Section 102 of the RTKL, 65
P.S. §67.102. Under the definition, a “record” qualifies for access through the
RTKL when it “documents a transaction or activity of an agency and that is
created, received or retained pursuant to law or in connection with a transaction,
business or activity of the agency.” Id. (emphasis added). These definitional
parameters are particularly significant for information that only came into an
agency’s possession because a third party submitted it.
17
Here, Highmark argued the rate information at issue was exempt
because it submitted the information to the Department pursuant to the Insurance
Statutes. Because the HPCA mandated submission, the Department received the
information as part of its oversight and implementation of the statutory scheme.
However, OOR rejected Highmark’s argument.
Instead, OOR essentially agreed with Requester that there was no
legal requirement to submit the rates, because the Reform Act repealed the
approval requirement. Absent a legal requirement to submit the rate information,
or an explicit request by the Department to submit it, “Highmark voluntarily
submitted its provider payment rates to the Department ….” Resp’t’s Br. at 25.
Taking Requester’s argument to its logical conclusion, where it
presumes Highmark submitted this information voluntarily, there is a tenuous
connection to any agency action. Indeed, in the event the Department had no need
for the rate information to perform its agency duties, and it was voluntarily
submitted, the information would not qualify under the definition of “record.”
Allegheny Cnty. Dep’t of Admin. Servs. v. A Second Chance, Inc., 13 A.3d 1025
(Pa. Cmwlth. 2011).
Highmark raised this argument to OOR in its reply brief. See C.R.,
Item No. 7, Highmark’s Reply Br. at 3. However, OOR did not analyze whether
the information Highmark submitted without a separate request by the Department
qualified as a “record” under the RTKL. Accordingly, for this additional reason,
18
we hold the rate information is not accessible to Requester under the RTKL, and
OOR erred in directing its disclosure.
3. Section 708(b)(11) of the RTKL
Because OOR erred as a matter of law in construing the Insurance
Statutes, we reverse its order directing disclosure. Accordingly, it is unnecessary
to address Highmark’s argument under Section 708(b)(11) of the RTKL, 65 P.S.
§67.708(b)(11).5
III. Conclusion
For the foregoing reasons, OOR’s Final Determination is reversed.
We also deny Highmark’s application to supplement the record.
ROBERT SIMPSON, Judge
JJ. Cohn Jubelirer and Brobson did not participate in the decision in this case.
5
Nevertheless, we caution that Highmark did not establish the critical components of this
exception. Highmark bore the burden of proving the requested information is “confidential
proprietary” or a “trade secret” as those terms are defined in Section 102 of the RTKL, 65 P.S.
§67.102. Evidence of substantial harm to competitive position as result of disclosure is a
prerequisite for showing proprietary nature. Dep’t of Corr. v. Maulsby 121 A.3d 585 (Pa.
Cmwlth. 2015). OOR determined Highmark did not establish that element because the affidavit
did not address it.
19
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Highmark Inc., :
Petitioner :
: No. 1325 C.D. 2016
v. :
:
Christopher L. Voltz, Esq., :
Respondent :
ORDER
AND NOW, this 2nd day of June, 2017, the Office of Open Records’
Final Determination is REVERSED, and FURTHER, the Petitioner’s application
to supplement the record is DENIED.
ROBERT SIMPSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Highmark Inc., :
Petitioner :
: No. 1325 C.D. 2016
v. :
: Argued: March 8, 2017
Christopher L. Voltz, Esq., :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JOSEPH M. COSGROVE, Judge
DISSENTING OPINION BY
JUDGE McCULLOUGH FILED: June 2, 2017
I respectfully dissent because I do not believe that the provider
reimbursement rate information submitted by Highmark, Inc. (Highmark) was
requested by the Insurance Department (Department). Hence, this information
should not be deemed confidential under section 309(c) of the Accident and Health
Filing Reform Act (Reform Act), Act of December 18, 1996, P.L. 1066, as
amended, 40 P.S. §3801.309(c),1 and thereby exempt from public disclosure under
section 305(a)(3) of the Right-to-Know Law (RTKL).2
1
Section 309(c) of the Reform Act provides as follows:
Provider contracts filed under this section need not contain
payment rates and fees unless requested by the department.
(Footnote continued on next page…)
As the Majority aptly notes, section 6329(a) of the Professional
Health Services Plan Corporations Act (HPCA), 40 Pa.C.S. §6329(a), originally
required the Department’s approval of the following: all rates charged to
subscribers; contracts between a professional health service corporation and its
subscribers; all methods and rates of payment by such corporation to health service
doctors; all acquisition costs in procuring subscribers; the reserves to be
maintained by such corporation; and all contracts entered into by such corporation
that extend for more than a year or which call for the expenditure of any amount in
excess of 20% of the corporation’s reserves. However, section 5101(b) of the
Reform Act, 40 P.S. §3801.5101(b), partially repealed section 6329(a) of the
HPCA insofar as it required Department approval of rates and contracts. As the
Majority notes, Highmark referred to this repeal as a shift from an approval
requirement to a simpler file and use requirement.
(continued…)
Payment rates and fees requested by the department shall be given
confidential treatment, are not subject to subpoena and may not be
made public by the department, except that the payment rates and
fee information may be disclosed to the insurance department of
another state or to a law enforcement official of this State or any
other state or agency of the Federal Government at any time so
long as the agency or office receiving the information agrees in
writing to hold it confidential and in a manner consistent with this
chapter.
40 P.S. §3801.309(c).
2
Act of February 14, 2008, P.L. 6, 65 P.S. §67.305(a)(3). This section exempts from
disclosure any record that “is exempt from disclosure under any other Federal or State law or
regulation or judicial order or decree.” Id.
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As Highmark itself recognized in its brief, prior to the enactment of
the Reform Act, the affirmative approval required by section 6329(a) of the HPCA
proceeded in the manner set forth in section 6329(b), 40 Pa.C.S. §6329(b).
(Highmark brief at 33.) Highmark correctly noted that in partially repealing
section 6329(a) of the HPCA insofar as it relates to the approval of rates and
contracts, the General Assembly intentionally did not modify section 6329(b)
because there are categories of information provided in section 6329(a) that do not
relate to rates and contracts, such as all costs in procuring subscribers and the
reserves to be maintained by the professional health service corporation, which still
require affirmative approval by the Department. Id. Highmark acknowledged that,
by removing the approval requirement from section 6329(a) of the HPCA, but
leaving the language of the section intact, the General Assembly has made clear
that the procedure under section 6329(b) of the HPCA is no longer applicable with
respect to rates and contracts and that the file and use framework of the Reform
Act replaced the need for affirmative approval.3 Id. at 33-34.
Moreover, while section 309 of the Reform Act does require insurers
to file provider contracts and states that such contracts shall be reviewed by the
Department, section 309(c) specifically provides, in pertinent part, that “[p]rovider
contracts filed under this section need not contain payment rates and fees unless
requested by the department.” 40 P.S. §3801.309(c) (emphasis added). Given that
these payment rates and fees no longer require approval under section 6329 of the
HPCA, it follows that such information is no longer required by the Department.
3
Indeed, section 5102(3) of the Reform Act provides that “[t]his act shall apply to all
forms or rate filings made and all provider contracts filed after February 17, 1997.” 40 P.S.
§3801.5102(3).
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Hence, as the provider reimbursement rate information was not requested by the
Department, Highmark cannot take advantage of the confidential status afforded by
section 309(c) of the Reform Act.
Nevertheless, given Highmark’s legitimate belief that it was still
required to submit this information to the Department and the fact that this appears
to be a novel issue regarding the interplay between section 5101(b) of the Reform
Act and section 6329(a) of the HPCA, I would grant Highmark’s request to
supplement the record regarding its claim that the requested information
“constitutes or reveals a trade secret or confidential proprietary information” under
section 708(b)(11) of the RTKL, 65 P.S. §67.708(b)(11), but remand to the Office
of Open Records to first consider this new evidence.
________________________________
PATRICIA A. McCULLOUGH, Judge
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