Iowa court rules pharmacy audit report in drug theft investigation must be made public

The Iowa Supreme Court has ruled that an internal pharmacy audit in a drug theft investigation is a public record. With its decision, the court reversed a lower court's ruling that allowed a taxpayer-funded hospital to withhold audit reports from the public.

On Friday, the high court ordered Broadlawns Medical Center to release a 2008 audit conducted by Mark Hall, who oversaw pharmacy operations at the time, to The Des Moines Register. Hall performed the internal audit after an employee admitted to "diverting" prescription drugs from the pharmacy when she was arrested on suspicion of operating a vehicle while intoxicated.

“This was a great ruling by the Iowa Supreme Court. We had long viewed that this was a public document and we made that argument several times and we are grateful that the court understood the logic behind it,” said Rick Green, editor of the newspaper, which requested the audit under Iowa's Open Records Act.

“This is a taxpayer-financed hospital and the actions, the decisions and the things that are integral to that publicly financed hospital need to be done in a public manner,” he said.

According to the court's ruling, Hall conducted the audit independently to find out if drugs were stolen. He turned his findings over to the Iowa Board of Pharmacy indicating shortages in the pharmacy’s controlled substances inventory. A year later, the licensing board charged Hall for allegedly failing to maintain adequate records of controlled substances, citing the internal audit he prepared.

After reviewing the statement of charges against Hall, The Register requested the audit in November 2009, but Broadlawns refused to release the document deeming it a confidential investigation exempt from disclosure. Hall also filed an injunction to prevent the hospital from releasing the audit, which the Polk County District Court granted, temporarily barring the information. In January 2010, the newspaper joined the litigation.

The district court ruled the audit was exempt from disclosure under an Iowa law giving the pharmacy board investigatory powers along with the ability to maintain investigatory records in confidence. The lower court found that regardless of whether the audit was held by a third party, because it was used in the internal investigation and employee review, the privilege of confidentiality afforded to the board was also extended to Broadlawns, therefore preventing disclosure of the document.

The Iowa Supreme Court reversed this decision, ruling that providing information to a licensing body "should not transform otherwise discoverable information into privileged material" as Hall admitted the document was created for his own auditing purposes independent of any resultant state investigation. The court therefore found there was no justification for protecting the already existing documents, finding the claimed exemption inapplicable.

The district court will now decide if Broadlawns will have to pay the newspaper's attorney's fees.

Related Reporters Committee resources:

· Iowa – Open Government Guide

· Iowa – Open Government Guide: L. Hospital reports.