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Office of the Attorney General - State of Texas John Cornyn |
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April 11, 2001 Mr. Miles T. Bradshaw
OR2001-1454 Dear Mr. Bradshaw: You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 145399. The Houston Independent School District (the "district") received three requests for information that is contained in certain proposals submitted to the district in response to its solicitation to obtain prescription benefit management services. On behalf of third parties whose interests may be implicated by the release of the responsive information, the district raises sections 552.101, 552.110, and 552.128 of the Government Code. You indicate that the first request was clarified on December 19, 2001, the second request was received December 20, 2001, and the third request was received on February 22, 2001. Your letter seeking to consolidate the third request with the first two is dated March 6, 2001, and was received by this office on March 8, 2001. You relate that the district was closed for business from December 21, 2001 through January 1, 2001. Therefore, the tenth business day following the district's receipt of the clarified first request was January 12, 2001, and the tenth business day following the district's receipt of the second request was January 15, 2001. The tenth business day following the district's receipt of the third request was March 8, 2001. Your request for a decision regarding the first and second requests for information is dated, and was received by this office on, January 23, 2001. Your request for a decision regarding the third request for information is dated March 6, 2001, and was received by this office on March 8, 2001. Therefore, your request for a decision regarding the third request for information was timely, but you did not submit your request for a decision in response to the first or second request for information within the ten business day deadline specified by section 552.301(b) of the Government Code. When a governmental body fails to comply with section 552.301, the requested information is presumed public. Gov't Code § 552.302; Hancock v. State Bd. of Ins., 797 S.W.2d 379 (Tex. App.--Austin 1990, no writ); City of Houston v. Houston Chronicle Publishing Co., 673 S.W.2d 316, 323 (Tex. App.--Houston [1st Dist.] 1984, no writ); Open Records Decision No. 319 (1982). The information responsive to the first and second requests is therefore presumed to be public. A compelling interest to withhold requested information must be shown in order to overcome this presumption. See id. A compelling interest is demonstrated where information is made confidential by other law, or where third party interests are at issue. Open Record Decision No. 150 (1977). You suggest that the property rights of third parties may be implicated by the release of the responsive information. The district does not provide any argument in support of the application of the exceptions it raises or raise any exceptions that protect the interests of the district. See Open Records Decision No. 542 (1990) (determining that statutory predecessor to Government Code section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exceptions in certain circumstances). Therefore, we shall address the exceptions to disclosure raised to protect the rights of third parties, where those exceptions are supported by argument provided by the third party. See Gov't Code § 552.305 (permitting interested third party to submit to attorney general reasons why requested information should not be released). The district indicates that release of the requested information implicates the interests of following third parties: Advance Paradigm; Aetna US Healthcare HMO; American Healthways, Inc.; Carewise, Inc.; Cor Solutions, Inc.; Express Scripts, Inc.; Health Management Corporation; Lifemasters Supported Selfcare; Merk-Medco Managed Care; and Optum. The district provided notice to these third parties, under section 552.305 of the Government Code. The required notice includes a statement that the notified party is entitled to submit in writing to the attorney general not later than the tenth business day after the date the person receives the notice each reason the person has as to why the information should be withheld and a letter, memorandum, or brief in support of that reason. Gov't Code § 552.305(d). Express Scripts, Inc., Health Management Corporation, and Merk-Medco Managed Care did not respond or otherwise provide comment to this office. Because these companies did not submit argument, we have no basis to conclude that these companies' information is excepted from disclosure. See Open Records Decision Nos. 639 at 4 (1996) (to prevent disclosure of commercial or financial information, party must show by specific factual or evidentiary material, not conclusory or generalized allegations, that it actually faces competition and that substantial competitive injury would likely result from disclosure), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3 (1990). The requested information in the proposals of Express Scripts, Inc., Health Management Corporation, and Merk-Medco Managed Care must therefore be released as requested. AdvancePCS (formerly Advance Paradigm; "Advance"), Aetna US Healthcare HMO ("Aetna"), American Healthways, Inc. ("American"), CareWise, Inc. ("Carewise"), Cor Solutions, Inc. ("CSI"), Lifemasters Supported Selfcare ("Lifemasters"), and Optum, or their representatives, responded to the district's notice. Each of these companies provided argument for withholding information that implicates that company's interests and identified the responsive information that the company asserts is excepted from disclosure. These companies raised sections 552.101, 552.104, 552.110, and 552.128 of the Government Code. Section 552.101 excepts information that is confidential by law. The arguments presented under this exception are more properly addressed under section 552.110 of the Government Code.(1) Therefore section 552.101 will not be discussed separately. Section 552.104 protects only the interests of a governmental body and may not be asserted by a third party. Open Records Decision No. 592 (1991). Since the district does not raise or support section 552.104, no responsive information may be withheld under this exception. Section 552.128 protects information submitted by a potential vendor or contractor to a governmental body in connection with an application for certification as a historically underutilized or disadvantaged business. There is no indication that the responsive information was submitted in connection with an application for certification as a historically underutilized or disadvantaged business. Further, subsection 552.128(c) provides that information submitted in connection with a specific proposed contractual relationship is not excepted from disclosure by section 552.128, even if the information is submitted in an application for certification as a historically underutilized or disadvantaged business. Here, the responsive information is from proposals to enter a specific proposed contractual relationship to provide prescription benefit management services to the district. We conclude that no responsive information may be withheld under section 552.128 of the Government Code. Since the requirements of section 552.110 apply equally to each of the companies whose information is at issue, we will discuss those requirements generally before addressing the specific arguments of each of these companies. Section 552.110 protects the property interests of entities that submit information to governmental bodies. Subsection 552.110(a) excepts from disclosure trade secrets obtained from a person and privileged or confidential by statute or judicial decision. The Texas Supreme Court has adopted the definition of trade secret from section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex.), cert. denied, 358 U.S. 898 (1958); see also Open Records Decision No. 552 at 2 (1990). Section 757 provides that a trade secret is any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to single or ephemeral events in the conduct of the business . . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management. Restatement of Torts § 757 cmt. b (1939). In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980). The six factors that the Restatement gives as indicia of whether information constitutes a trade secret are: (1) the extent to which the information is known outside of [the company]; (2) the extent to which it is known by employees and others involved in [the company's] business; (3) the extent of measures taken by [the company] to guard the secrecy of the information; (4) the value of the information to [the company] and [its] competitors; (5) the amount of effort or money expended by [the company] in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Restatement of Torts § 757 cmt. b (1939). This office has held that if a governmental body takes no position with regard to the application of the trade secret exception now found in subsection 552.110(a) of the Government Code, we must accept a private person's claim for the exception as valid if that person establishes a prima facie case for the application of the exception, and no argument is submitted that rebuts the claim as a matter of law. Open Records Decision No. 552 at 5-6 (1990). No argument has been submitted in rebuttal to any of the claims made by the subject companies. Therefore, if a company whose information is at issue here makes a prima facie case that its information responsive to the subject requests constitutes a trade secret, that information may be withheld under section 552.110(a) of the Government Code. Section 552.110(b) of the Government Code excepts from disclosure commercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained. To withhold information under this exception, the business enterprise whose information is at issue must make a specific factual or evidentiary showing, rather than conclusory or generalized allegations, that substantial competitive injury would result from disclosure of the information. See Open Records Decision No. 661 at 5-6 (1999); see also National Parks and Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974). Also note that in applying the predecessor statute to section 552.110, this office has held that material that is essentially technical in nature and that relates to the substance of a proposal may ordinarily be withheld under this exception, while information relating to organization and personnel, market studies, professional references, qualifications and experience, and pricing ordinarily may not. Open Records Decision No. 319 (1982). We now turn to the comments submitted by the subject companies. The page numbers used for reference here are the numbers Bates-stamped on the documents submitted by the district. Advance Paradigm All of the information submitted by Advance has been requested. Advance argues that the following information is excepted from disclosure by section 552.110 of the Government Code: (1) Page 00792. Information that relates to fees, payments to be received, rebate arrangements, reimbursement rates and other financial proposals. (2) Pages 00833 through 00853. Information that relates to fees, payments to be received, rebate arrangements, reimbursement rates and other financial proposals. (3) Pages 00859 through 00863. Information defining the strictness of Advance's guarantees and the amount of the penalties set forth. (4) Pages 01089 through 01101. Information that relates to reimbursement rates. (5) Pages 00817 through 00823 and "the formulary booklet included in the RFP." (6) Pages 00864 through 00865. Network analysis. (7) Pages 01104 through 01105. Performance guarantees. Advance has asserted specific factual allegations sufficient to demonstrate that substantial competitive injury would result to Advance from disclosure of each of the above enumerated items of information. We conclude that Advance has demonstrated that this information may be withheld under section 552.110(b) of the Government Code. All other information provided by Advance must be released. Aetna US Healthcare HMO Aetna was the successful bidder. The relevant request related to its proposal is for "the prescription portions of the documents" that it submitted. Aetna argues that the following information is excepted from disclosure by section 552.110 of the Government Code: (1) Page 00013, Question 14. Number of members enrolled in Aetna's self-insured and self-funded products, as well as the total membership. (2) Pages 00015 through 00018, Questions 19 through 23 (inclusive). Aetna plan member years of enrollment by age and sex; average age and percentage of males in the total Aetna plan population; group contract coverage by coverage tier; and statistical information about Aetna's four largest accounts. (3) Page 00024, Question 8. Percentage of Aetna's total enrollment that is covered by prescription benefits. (4) Page 00038, Question 7, item c. The percentage of the Aetna plan's total prescriptions filled in 1999 using formulary drugs. (5) Page 00040, Question 14. Average number of prescriptions filled by the Aetna plan annually. (6) Page 00041, Question 15. How the Aetna drug benefit plan is structured for retail and mail order. (7) Page 00026, Question 12, subparts b, c, and d. Information relating to non-renewals and terminations of Aetna plan physicians. (8) Page 00026, Question 13. Information about the Aetna plan's hospital network. (9) Pages 00026 through 00027, Questions 18 and 19. Statistical information about the Aetna plan's provider network. (10) Page 00028, Questions 20 and 21. Statistical information about physician visits in Aetna's network. (11) Page 00029, Questions 22 and 23. Information about Aetna's network utilization. (12) Page 00029, Question 24. Statistical information about physician contracts in the Aetna plan. (13) Pages 00029 through 00031, Questions 25 through 28. Statistical information about physician access, self-referrals, and patient wait times. (14) Page 00034, Question 1. Statistical data about inpatient hospital utilization consisting of discharges and inpatient days per member and average length of stay. (15) Page 00063, Question 19. Administration of benefits claims filed by plan members. (16) Page 00081, Question 6. Performance of Aetna's member services department. (17) Page 00066, Question 1. Expenses incurred by type of service provided per patient. (18) Page 00067, Question 2. Percentage of total costs by category. (19) Page 00072, Question 13. Average PMPM for past five years. (20) Page 00072, Question 15. Percentage services of primary care physicians and specialists by type of payment. (21) Page 00073, Question 16. Percentage of inpatient and outpatient hospital expenses reimbursed by type of payment. (22) Page 00074, Question 19. Average costs per hospital day by category. (23) Page 00086. Rates charged per Aetna plan participant. (24) Pages 00087 through 00096. Comprehensive marketing survey results. (25) Pages 000111 through 000157, inclusive. Report on the accessibility of the Aetna plan for district employees. Aetna notes that the subject information was submitted to the district with certain portions identified as confidential. Information is not confidential under the Public Information Act simply because the party submitting it anticipates or requests that it be kept confidential. Open Records Decision No. 479 (1987). Nor is information excepted from disclosure merely because it is furnished to a governmental body with the expectation that access to it will be restricted. Open Records Decision No. 180 (1977). However, Aetna has asserted additional specific factual allegations that are sufficient to demonstrate that substantial competitive injury would result to Aetna from disclosure of each of the above enumerated items of information. We conclude that Aetna has demonstrated that this information must be withheld under section 552.110(b) of the Government Code. All other information provided by Aetna that is responsive to the subject requests must be released. American Healthways, Inc. All of the information submitted by American has been requested. American argues that the following information is excepted from disclosure by section 552.110 of the Government Code: (1) Pages 01534 through 01535. Description of American's internet capabilities and terminated contracts. (2) Page 01538, Question 5. How American distinguishes itself from other providers of the subject services. (3) Pages 01539 through 01566. How American organizes its staffing structure; American's staffing ratios; American's unique technology implementation, data management, tracking and reporting; American's unique program implementation methods; American's unique disease management program components; American's frequency of contact with providers and disease members; American's unique monitoring and intervention methods; American's unique methodology for identifying and stratifying disease members; American's unique methodology for engaging and enrolling disease members; American's coordination strategy with payors and health plans; American's unique methodology for evaluating and reporting its results; American's unique methodology for payment, performance guarantees, placing fees at risk and savings calculations. (4) Pages 01580-01584; 1593 through 01599; and 01601 through 01606. Descriptions of the procedures by which American provides its unique services to its customers. (5) Pages 01695 through 01699 and 1701 through 01714. Sample reports. (6) Pages 01716 through 1789; 01802 through 01847; and 01850 through 01865. Communication materials that American has specifically developed for continuous use in its business. From our review of the information at issue and American's arguments against disclosure, we conclude that American has alleged sufficient facts to establish that substantial competitive injury would result from disclosure of the information responsive to question 14 on page 1534. This response may be withheld under section 552.110(b) of the Government Code. We find that American has not alleged specific facts sufficient to establish that any other information is excepted under section 552.110. Therefore, all other information submitted by American must be released. CareWise, Inc All of the information submitted by Carewise has been requested. Carewise has highlighted specific information that it argues is excepted from disclosure by section 552.110 of the Government Code. Carewise categorizes this information as: (1) specific details of how [Carewise] operates its services, including delivery processes, clinical content development, and similar matters; (2) actual performance results from [Carewise's] services, including call outcome data, utilization rates, and similar matters; (3) pricing information; (4) contract terms and conditions; and (5) performance guarantees. Carewise has asserted specific factual allegations that are sufficient to demonstrate that substantial competitive injury would result to Carewise from disclosure of each of the above enumerated categories of information. We conclude that Carewise has demonstrated that the information that it has highlighted must be withheld under section 552.110(b) of the Government Code. All other information provided by Carewise that is responsive to the subject requests must be released. Cor Solutions, Inc. All of the information submitted by CSI has been requested. CSI argues that the following information is excepted from disclosure by section 552.110 of the Government Code: (1) Pages 00565 through 00569. (2) Pages 00667 through 00702. (3) Page 00750. (4) Pages 00756 through 00759. (5) Page 00763. (6) Pages 00771 through 00775 and 00777 through 00785. (7) Page 00789. CSI provides sufficient factual allegations to establish a prima facie case that the information described as item 6 in this subpart consists of trade secrets. Therefore, pages 00771 through 00775 and 00777 through 00785 must be withheld under section 552.110(a) of the Government Code. CSI provides factual allegations sufficient to establish that release of the information described as items 3 and 5 in this subpart would likely result in substantial competitive injury to CSI. Therefore, pages 00750 and 00763, must be withheld under section 552.110(b) of the Government Code. All other responsive information submitted by CSI must be released. Lifemasters Supported Selfcare The "non-proprietary information" submitted by Lifemasters has been requested. Lifemasters argues that the following information is proprietary and is excepted from disclosure by section 552.110: (1) Pages 01407 through 01409. (2) Pages 01412 through 01415. (3) Pages 01418 through 01444. (4) Pages 01444 through 01446. (5) Pages 01456 through 01457. (6) Pages 01462 through 01463. (7) Pages 01490 through 01492. (8) Pages 01494 through 01495. (9) Page 01497. (10) Page 01499. (11) Pages 01501 through 01512, and page 01519. (12) Pages 01523 through 01524. Lifemasters provides sufficient factual allegations to establish that release of each of the items of information enumerated in this subpart, would likely result in substantial competitive injury to Lifemasters. Therefore, this information must be withheld under section 552.110(b) of the Government Code. All other responsive information must be released. Optum All of the information submitted by Optum has been requested. Optum argues that the following information is excepted from disclosure under section 552.110 of the Government Code: (1) Page 01198. Client names. (2) Page 01159. Program Set-up and Cost, sections 1 and 2. (3) Pages 001160 and 01161. Performance Guarantees and Conditions, section 1, 2, and 3. (4) Page 001168. Financial and rate information. (5) Page 001183. Section 21. (6) Page 001185. Rates of EAP only. (7) Page 001381. Financial and rate information. (8) Page 001383. Rates of EAP only. (9) Page 001127. List of vendors. (10) Pages 001131 through 01132. Question 12, account servicing approach information. (11) Page 01139. Sections 2 and 3. Nurse staffing information. (12) Page 01140. Section 5. Doctor staffing information. (13) Pages 001144 through 01145. Sections 10 and 11. How services are packaged and the resources available to nurses. (14) Page 001149. Section 15. How self-care implementation and support services are packaged. (15) Page 001151. Section 3. How specific online services are packaged. (16) Page 001152. Section 6. Demo website address and communication support section 1. (17) Pages 001154 and 001155. Telephone and Information Systems and Management Reporting Section 1, 2, 3, 4, 5, and 6. (18) Pages 001157 and 001158. Quality Management Sections 1, 2, 3, 4, 5, and 6. (19) Pages 001165 through 00116 inclusive. (20) Page 001176. Section 12. (21) Pages 001177 through 001179. Section 13 subsections a, b, c, d, and e and section 14. (22) Pages 001260 through 001278 inclusive. (23) Pages 001330 through 001351 inclusive. (24) Pages 001354 through 001367 inclusive. (25) Page 001376. (26) Page 001136. Section 5. (27) Pages 01189 through 01193 inclusive. (28) Pages 001995 and 01196 inclusive. (29) Pages 1202 through 01205 inclusive. (30) Pages 01378 and1379 inclusive. (31) Page 001129. General question 5. (32) Pages 01137 and 01138. Clients, Sections 1, 2, 3 and Staff, Section 1. (33) Pages 01141 and 01142. Nurse Advice Services, Sections 1, 2, and 3. (34) Page 01143. Section 6. (35) Page 01151. (36) Page 01162. Section 6. (37) Page 01174. Section 8. From our review of the information at issue and Optum's arguments against disclosure, we conclude that Optum has alleged facts sufficient to establish that substantial competitive injury would result from disclosure of all of the information that it asserts is excepted from disclosure, with the exception of pages 001378, 001189 through 001193, and 001203. The information on these pages must be released, and the remaining information that Optum has designated as excepted from disclosure must be withheld under section 552.110(b) of the Government Code. This letter ruling is limited to the particular records at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other records or any other circumstances. This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For example, governmental bodies are prohibited from asking the attorney general to reconsider this ruling. Gov't Code § 552.301(f). If the governmental body wants to challenge this ruling, the governmental body must appeal by filing suit in Travis County within 30 calendar days. Id. § 552.324(b). In order to get the full benefit of such an appeal, the governmental body must file suit within 10 calendar days. Id. § 552.353(b)(3), (c). If the governmental body does not appeal this ruling and the governmental body does not comply with it, then both the requestor and the attorney general have the right to file suit against the governmental body to enforce this ruling. Id. § 552.321(a). If this ruling requires the governmental body to release all or part of the requested information, the governmental body is responsible for taking the next step. Based on the statute, the attorney general expects that, within 10 calendar days of this ruling, the governmental body will do one of the following three things: 1) release the public records; 2) notify the requestor of the exact day, time, and place that copies of the records will be provided or that the records can be inspected; or 3) notify the requestor of the governmental body's intent to challenge this letter ruling in court. If the governmental body fails to do one of these three things within 10 calendar days of this ruling, then the requestor should report that failure to the attorney general's Open Government Hotline, toll free, at 877/673-6839. The requestor may also file a complaint with the district or county attorney. Id. § 552.3215(e). If this ruling requires or permits the governmental body to withhold all or some of the requested information, the requestor can appeal that decision by suing the governmental body. Id. § 552.321(a); Texas Department of Public Safety v. Gilbreath, 842 S.W.2d 408, 411 (Tex. App.--Austin 1992, no writ). Please remember that under the Act the release of information triggers certain procedures for costs and charges to the requestor. If records are released in compliance with this ruling, be sure that all charges for the information are at or below the legal amounts. Questions or complaints about over-charging must be directed to Hadassah Schloss at the General Services Commission at 512/475-2497. If the governmental body, the requestor, or any other person has questions or comments about this ruling, they may contact our office. Although there is no statutory deadline for contacting us, the attorney general prefers to receive any comments within 10 calendar days of the date of this ruling. Sincerely, Michael Jay Burns
MJB/er Ref: ID# 145399 Encl: Submitted documents cc: Mr. John H. Sattler, R. PH, Senior Vice President
Mr. James Hainsworth
Mr. Peter McCann, Vice President
Ms. Donna T. Spicer, MPH,. CEBS
Mr. Clanton Lynch
Mr. Ed Ignaczak
Mr. Douglas C. Shibut, Coordinator
Ms. Kimberly C. Howe
Mr. Christopher J. Goetz
Mr. John Bye
Mr. Timothy D. Sterling, Coordinator
Footnotes 1. Cor Solutions, Inc. also alludes to a statutory confidentiality provision that it acknowledges does not apply to the subject information, and is raised only as an analogy. POST OFFICE BOX 12548, AUSTIN, TEXAS 78711-2548 TEL: (512) 463-2100 WEB: WWW.OAG.STATE.TX.US |