A legal dispute over transparency at Perry County Health System (PCHS) will move forward after a Perry County judge refused to dismiss a lawsuit challenging the hospital’s compliance with Missouri’s Sunshine Law.
Judge Scott Lipke issued the decision on Wednesday, June 25, denying a motion from PCHS to end the case brought by Joe Hutchison, a trustee of the Perry County Memorial Hospital Board. Hutchison is asking the court to determine whether the health system must abide by state open records requirements. Representing PCHS, attorney Benjamin Askew maintained that the hospital is a private, not-for-profit entity and therefore not subject to the Sunshine Law.
Askew also stated that the hospital responded promptly to Hutchison’s records requests, and some of the documents sought do not exist. In Missouri, most not-for-profit hospitals are considered private organizations. They are required to file annual IRS Form 990s, which disclose certain financial information such as executive salaries, to retain their tax-exempt status.
These filings, however, do not obligate them to comply with state open records laws. PCHS, though, is partially funded by public money. The Perry County Memorial Hospital Board of Trustees collects about $350,000 in tax revenue each year — a small portion of the health system’s overall income, but part of a long-standing taxpayer contribution that has totaled millions for capital improvements.
Hospital officials emphasize that these funds are reserved for capital projects, not operating expenses, and note that the hospital has functioned privately for 30 years. Hutchison, who joined the board following a merger with Mercy, has requested records pertaining to hospital operations prior to the merger. He argues that the hospital’s receipt of public funds and oversight by an elected board qualifies it as a public © 2017, Perryville or quasi-public body, which attempt to dismiss Sunshine Law case refused by county judge .
A legal dispute over transparency at Perry County Health System (PCHS) will move forward after a Perry County judge refused to dismiss a lawsuit challenging the hospital’s compliance with Missouri’s Sunshine Law. Judge Scott Lipke issued the decision on Wednesday, June 25, denying a motion from PCHS to end the case brought by Joe Hutchison, a trustee of the Perry County Memorial Hospital Board.
Hutchison is asking the court to determine whether the health system must abide by state open records requirements. Representing PCHS, attorney Benjamin Askew maintained that the hospital is a private, not-for-profit entity and therefore not subject to the Sunshine Law. Askew also stated that the hospital responded promptly to Hutchison’s records requests, and some of the documents sought do not exist.
In Missouri, most not-for-profit hospitals are considered private organizations. They are required to file annual IRS Form 990s, which disclose certain financial information such as executive salaries, to retain their tax-exempt status. These filings, however, do not obligate them to comply with state open records laws. PCHS, though, is partially funded by public money.
The Perry County Memorial Hospital Board of Trustees collects about $350,000 in tax revenue each year — a small portion of the health system’s overall income, but part of a long-standing taxpayer contribution that has totaled millions for capital improvements. Hospital officials emphasize that these funds are reserved for capital projects, not operating expenses, and note that the hospital has functioned privately for 30 years.
Hutchison, who joined the board following a merger with Mercy, has requested records pertaining to hospital operations prior to the merger. He argues that the hospital’s receipt of public funds and oversight by an elected board qualify it as a quasi-public body, which would require compliance with the Sunshine Law.
State law defines a quasi- governmental body as one that primarily contracts with public agencies or receives appropriated funds and performs a public function. Hutchison’s requests include information on executive terminations, financial arrangements, board meeting minutes, contract votes, job offers, the dismissal of a former CEO, and conflict-of-interest discussions.
PCHS has countered that it is not covered by Chapter 610 of Missouri statutes, which governs public records. During a June 18 hearing, Askew told the court that all relevant documents had been provided to Hutchison, and that some requested records did not exist, arguing this nullified any legal controversy. Attorney John P. Clubb, representing Hutchison, stated that the lawsuit simply seeks a judicial ruling on whether PCHS is subject to the state’s open records law.
The court’s eventual decision could set a precedent that affects how hospital systems like PCHS conduct their business. A ruling that deems PCHS a public entity would require its board of directors to make meeting agendas public, hold open meetings, and disclose contracts and staff salaries. Hospital executives have expressed concern that such measures could harm their competitive standing.
The hospital’s governance structure was reconfigured in 1998, creating a hybrid system approved by both the board of trustees and the county commission. While the five-member elected board remained in place, a new executive board was established to manage daily operations, with two trustees serving on the executive board.
At that time, county officials stressed the importance of maintaining voter oversight and retaining county ownership of the hospital and related facilities. The original lease agreement also stipulated that the board of trustees be granted “reasonable access” to the hospital’s financial records.
