TITLE 31 HEALTH

Section 7. Regulation and Construction of Hospitals and Other Health Care Facilities, 31-7-1 through 31-7-412.

ARTICLE 4 COUNTY AND MUNICIPAL HOSPITAL AUTHORITIES

31-7-75. Functions and powers.

Every hospital authority shall be deemed to exercise public and essential governmental functions and shall have all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this article, including, but without limiting the generality of the foregoing, the following powers:

To sue and be sued;
To have a seal and alter the same;
To make and execute contracts and other instruments necessary to exercise the powers of the authority;
To acquire by purchase, lease, or otherwise and to operate projects;
To construct, reconstruct, improve, alter, and repair projects;
To sell to others, or to lease to others for any number of years up to a maximum of 40 years, any lands, buildings, structures, or facilities constituting all or any part of any existing or hereafter established project. In the event a hospital authority undertakes to sell a hospital facility, such authority shall, prior to the execution of a contract of sale, provide reasonable public notice of such sale and provide for a public hearing to receive comments from the public concerning such sale. This power shall be unaffected by the language set forth in paragraph (13) of this Code section or any implications arising therefrom unless grants of assistance have been received by the authority with respect to such lands, buildings, structures, or facilities, in which case approval in writing as set forth in paragraph (13) of this Code section shall be obtained prior to selling or leasing to others within 20 years after completion of construction;
To lease for any number of years up to a maximum of 40 years for operation by others any project, provided that the authority shall have first determined that such lease will promote the public health needs of the community by making additional facilities available in the community or by lowering the cost of health care in the community and that the authority shall have retained sufficient control over any project so leased so as to ensure that the lessee will not in any event obtain more than a reasonable rate of return on its investment in the project, which reasonable rate of return, if and when realized by such lessee, shall not contravene in any way the mandate set forth in Code Section 31-7-77 specifying that no authority shall operate or construct any project for profit. Any lessee shall agree in the lease to pay rent sufficient in each year to pay the principal of and the interest on any revenue anticipation certificates proposed to be issued to finance the cost of the construction or acquisition of any such project and to pay off or refinance, in whole or in part, any outstanding debt or obligation of the lessee (including any redemption or prepayment premium due thereon) which was incurred in connection with the acquisition and construction of facilities of such lessee and the amount necessary in the opinion of the authority to be paid each year into any reserve funds which the authority may deem advisable to be established in connection with the retirement of the proposed revenue anticipation certificates and the maintenance of the project. Any such lease shall further provide that the cost of all insurance with respect to the project and the cost of maintenance and repair thereof shall be borne by the lessee. In carrying out a refinancing plan with regard to any outstanding debt or obligation of the lessee which was incurred in connection with the acquisition and construction of facilities of such lessee, the authority may use proceeds of any revenue anticipation certificates issued for such purpose to acquire such outstanding debt or obligation, in whole or in part, and may itself or through a fiduciary or agent hold and pledge such acquired debt or obligation as security for the payment of such revenue anticipation certificates. The powers granted in this paragraph shall be unaffected by the language set forth in paragraph (13) of this Code section or any implications arising therefrom unless grants of assistance have been received by the authority with respect to such project, in which case approval in writing as set forth in paragraph (13) of this Code section shall be obtained prior to leasing to others within 20 years after completion of construction. Any revenues derived by the authority from any such lease shall be applied by the authority to the payment of any revenue anticipation certificates issued in connection with the acquisition and construction of the project and the payment, in whole or in part, of any outstanding debt or obligation of the lessee which was incurred in connection with the acquisition and construction of facilities of such lessee (including any redemption or prepayment premium due thereon) or to the payment of any other expenses incurred in connection with acquiring, financing, maintaining, expanding, operating, or equipping the project;
To extend credit or make loans to others for the planning, design, construction, acquisition, or carrying out of any project, which credit or loans may be secured by such loan agreements, mortgages, security agreements, contracts, or other instruments or fees or charges, for a term not to exceed 40 years, and upon such terms and conditions as the authority shall determine reasonable in connection with such loans, including provisions for the establishment and maintenance of reserves and insurance funds, and in the exercise of powers granted by this Code section in connection with a project, to require the inclusion in any contract, loan agreement, security agreement, or other instrument such provisions for guaranty, insurance, construction, use, operation, maintenance, and financing of a project as the authority may deem necessary or desirable;
To acquire, accept, or retain equitable interests, security interests, or other interests in any property, real or personal, by mortgage, assignment, security agreement, pledge, conveyance, contract, lien, loan agreement, or other consensual transfer in order to secure the repayment of any moneys loaned or credit extended by the authority;
To establish rates and charges for the services and use of the facilities of the authority;
To accept gifts, grants, or devises of any property;
To acquire by the exercise of the right of eminent domain any property essential to the purposes of the authority;
To sell or lease within 20 years after the completion of construction of properties or facilities operated by the hospital authority where grants of financial assistance have been received from federal or state governments, after such action has first been approved by the department in writing;
To exchange, transfer, assign, pledge, mortgage, or dispose of any real or personal property or interest therein;
To mortgage, pledge, or assign any revenue, income, tolls, charges, or fees received by the authority;
To issue revenue anticipation certificates or other evidences of indebtedness for the purpose of providing funds to carry out the duties of the authority; provided, however, that the maturity of any such indebtedness shall not extend for more than 40 years;
To borrow money for any corporate purpose;
To appoint officers, agents, and employees;
To make use of any facilities afforded by the federal government or any agency or instrumentality thereof;
To receive, from the governing body of political subdivisions issuing the same, proceeds from the sale of general obligation bonds or other county obligations issued for hospital authority purposes;
To exercise any or all powers now or hereafter possessed by private corporations performing similar functions;
To make plans for unmet needs of their respective communities;
To contract for the management and operation of the project by a professional hospital or medical facilities consultant or management firm. Each such contract shall require the consultant or firm contracted with to post a suitable and sufficient bond;
To provide management, consulting, and operating services including, but not limited to, administrative, operational, personnel, and maintenance services to another hospital authority, hospital, health care facility, as said term is defined in Chapter 6 of this title, person, firm, corporation, or any other entity or any group or groups of the foregoing; to enter into contracts alone or in conjunction with others to provide such services without regard to the location of the parties to such transactions; to receive management, consulting, and operating services including, but not limited to, administrative, operational, personnel, and maintenance services from another such hospital authority, hospital, health care facility, person, firm, corporation, or any other entity or any group or groups of the foregoing; and to enter into contracts alone or in conjunction with others to receive such services without regard to the location of the parties to such transactions;
To provide financial assistance to individuals for the purpose of obtaining educational training in nursing or another health care field if such individuals are employed by, or are on an authorized leave of absence from, such authority or have committed to be employed by such authority upon completion of such educational training; to provide grants, scholarships, loans or other assistance to such individuals and to students and parents of students for programs of study in fields in which critical shortages exist in the authority's service area, whether or not they are employees of the authority; to provide for the assumption, purchase, or cancellation of repayment of any loans, together with interest and charges thereon, made for educational purposes to students, postgraduate trainees, or the parents of such students or postgraduate trainees who have completed a program of study in a field in which critical shortages exist in the authority's service area; and to provide services and financial assistance to private not for profit organizations in the form of grants and loans, with or without interest and secured or unsecured at the discretion of such authority, for any purpose related to the provision of health or medical services or related social services to citizens;
To exercise the same powers granted to joint authorities in subsection (f) of Code Section 31-7-72; and
To form and operate, either directly or indirectly, one or more networks of hospitals, physicians, and other health care providers and to arrange for the provision of health care services through such networks; to contract, either directly or through such networks, with the Department of Community Health to provide services to Medicaid beneficiaries to provide health care services in an efficient and cost-effective manner on a prepaid, capitation, or other reimbursement basis; and to undertake other managed health care activities; provided, however, that for purposes of this paragraph only and notwithstanding the provisions of Code Section 33-3-3, as now or hereafter amended, a hospital authority shall be permitted to and shall comply with the requirements of Chapter 21 of Title 33 to the extent that such requirements apply to the activities undertaken by the hospital authority pursuant to this paragraph. No hospital authority, whether or not it exercises the powers authorized by this paragraph, shall be relieved of compliance with Article 4 of Chapter 18 of Title 50, relating to inspection of public records unless otherwise authorized by law. Any health care provider licensed under Chapter 30 of Title 43 shall be eligible to apply to become a participating provider under such a hospital plan or network which provides coverage for health care services which are within the lawful scope of his or her practice, provided that nothing contained in this Code section shall be construed to require any such hospital plan or network to provide coverage for any specific health care service.

(Ga. L. 1941, p. 241, § 5; Ga. L. 1945, p. 349, § 1; Ga. L. 1957, p. 116, § 1; Code 1933, § 88-1805, enacted by Ga. L. 1964, p. 499, § 1; Ga. L. 1964, Ex. Sess., p. 15, § 1; Ga. L. 1969, p. 103, § 2; Ga. L. 1969, p. 805, § 1; Ga. L. 1978, p. 1970, § 1; Ga. L. 1980, p. 1140, § 1; Ga. L. 1982, p. 712, §§ 1, 2; Ga. L. 1983, p. 3, § 22; Ga. L. 1983, p. 1566, § 2; Ga. L. 1990, p. 310, § 1; Ga. L. 1991, p. 1391, § 3; Ga. L. 1995, p. 901, § 1; Ga. L. 1999, p. 296, § 24; Ga. L. 2003, p. 569, § 2.)

Cross references.

- Certificate of need required for offering of health care facilities and services, § 31-6-40.

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 2001, "not for profit" was substituted for "not-for-profit" in paragraph (25).

Law reviews.

- For survey article on local government law, see 34 Mercer L. Rev. 225 (1982). For annual survey of local government law, see 35 Mercer L. Rev. 233 (1983).

JUDICIAL DECISIONS

Hospital authorities have unlimited and unqualified right to sue and be sued, just as any private corporation. Hipp v. Hospital Auth., 104 Ga. App. 174, 121 S.E.2d 273 (1961).

Hospital authorities are subject to suits for negligently inflicted injuries.

- Phrase to sue and be sued subjects a hospital authority corporation to suits for damages for personal injuries the hospital negligently inflicts on one of the hospital's patients. Hospital Auth. v. Shubert, 96 Ga. App. 222, 99 S.E.2d 708 (1957).

Hospital authorities not entitled to sovereign immunity.

- Hospital authorities, because the authorities are neither the state nor a department or agency of the state, are not entitled to the defense of sovereign immunity. Thomas v. Hospital Auth., 264 Ga. 40, 440 S.E.2d 195 (1994); Randolph County Hosp. Auth. v. Johnson, 215 Ga. App. 283, 450 S.E.2d 318 (1994).

Attack by authority upon state statute on state constitutional grounds.

- Hospital authority has standing by statute to attack state law on grounds that the law violates due process and equal protection clauses of Georgia Constitution. Caldwell v. Hospital Auth., 248 Ga. 887, 287 S.E.2d 15 (1982).

Paragraph (1) not construed as waiver of sovereign immunity.

- Ga. Const. 1983, Art. I, Sec. II, Para. IX does not require courts to construe the "sue and be sued" language of paragraph (1) of O.C.G.A. § 31-7-75 as a waiver of sovereign immunity. Howard v. Liberty Mem. Hosp., 752 F. Supp. 1074 (S.D. Ga. 1990).

State action immunity.

- Hospital authority was an instrumentality, agency, or "political subdivision" of the state for purposes of the state action immunity doctrine and, thus, was immune from an antitrust action brought by a doctor who was denied staff privileges. Crosby v. Hospital Auth., 93 F.3d 1515 (11th Cir. 1996), cert. denied, 520 U.S. 1116, 117 S. Ct. 1246, 137 L. Ed. 2d 328 (1997).

In O.C.G.A. §§ 31-7-71 and31-7-75, the Georgia legislature authorized hospital authorities (HA) power to acquire and lease hospitals to others, and must have anticipated that HA's could reduce competition, so state-action immunity applied to defendant HA's acquisition of a second hospital and the HA's lease to another defendant, an entity the HA created, and plaintiff Federal Trade Commission's complaint under 15 U.S.C. § 18 properly failed. FTC v. Phoebe Putney Health Sys., 663 F.3d 1369 (11th Cir. 2011)(Unpublished).

Hospital was entitled to sovereign immunity for any judgment in a medical malpractice action in excess of the hospital's liability insurance. Howard v. Liberty Mem. Hosp., 752 F. Supp. 1074 (S.D. Ga. 1990).

Discharge of governmental obligation to provide for health of people.

- Under the Hospital Authorities Law, the governmental obligation to provide for the health of people can be discharged by acquisition of existing hospital facilities, by construction of completely new hospitals, and by sale or lease of hospital to others (as well as by the hospital authority's operation thereof). Bradfield v. Hospital Auth., 226 Ga. 575, 176 S.E.2d 92 (1970).

Suitable private corporation could properly operate a hospital, either as lessee or as owner, so as to promote the public health functions of government. Richmond County Hosp. Auth. v. Richmond County, 255 Ga. 183, 336 S.E.2d 562 (1985).

Hospitals are intended to discharge identical governmental obligation.

- Hospitals, whether owned directly by a county or city, or by an authority, are designed and intended to serve identical purposes of discharging the governmental obligation to provide for the health of the people. Bradfield v. Hospital Auth., 226 Ga. 575, 176 S.E.2d 92 (1970).

Lease between related corporations.

- Since corporations are separate and distinct entities in the eyes of the law, notwithstanding even common ownership of two corporations and the relationship of one corporation as the wholly-owned subsidiary of another, the requirement that there be a lease to others is fully satisfied by a lease between two such related corporations. Richmond County Hosp. Auth. v. Richmond County, 255 Ga. 183, 336 S.E.2d 562 (1985).

Funding of project not for purely charitable purpose not unconstitutional.

- Even assuming a purely charitable purpose is not involved in a project, the project's funding by a hospital authority does not violate Ga. Const. 1976, Art. IX, Sec. IV, Para. III (see now Ga. Const. 1983, Art. IX, Sec. II, Para. VIII), because a hospital authority is not a county, municipal corporation, or political subdivision of this state. Bradfield v. Hospital Auth., 226 Ga. 575, 176 S.E.2d 92 (1970).

Language of O.C.G.A. § 31-7-75 does not require an "investment"; the language simply indicates that if an investment is made in connection with a lease, the rate of return will be limited to that which is reasonable. Richmond County Hosp. Auth. v. Richmond County, 255 Ga. 183, 336 S.E.2d 562 (1985).

Cash and accounts receivable are "personal property" under paragraph (14) of O.C.G.A. § 31-7-75. Richmond County Hosp. Auth. v. Richmond County, 255 Ga. 183, 336 S.E.2d 562 (1985).

Hospital authority members' action on corporations' boards did not breach their fiduciary duties or create a conflict of interest. Richmond County Hosp. Auth. v. Richmond County, 255 Ga. 183, 336 S.E.2d 562 (1985).

Hospital authority was engaging in ultra vires activity by renting and selling durable medical equipment to general public since there is no legislative authorization for such activity. Tift County Hosp. Auth. v. MRS of Tifton, Ga., Inc., 255 Ga. 164, 335 S.E.2d 546 (1985).

Limitation on delegation of functions of hospital authority.

- Hospital authority did not have the statutory authority to create a trust and delegate to the trust the power and discretion to carry out the authority's functions, missions, and responsibilities. Kendall v. Griffin-Spalding County Hosp. Auth., 242 Ga. App. 821, 531 S.E.2d 396 (2000).

Liability for punitive damages.

- Under appropriate circumstances, a hospital authority may be held liable for punitive damages. Hodges v. Effingham County Hosp. Auth., 182 Ga. App. 173, 355 S.E.2d 104 (1987).

Requirement that physician use hospital facilities and services is valid.

- Hospital authority's resolution requiring a physician to use in-house facilities and services for hospital patients, where offered, does not invade a physician's province. Although the physician is required to use the facilities and equipment provided within the hospital complex for testing rather than similar facilities and equipment outside, the physician is nevertheless free to interpret the results of such tests and free to diagnose and prescribe treatment for all the physician's patients. Cobb County-Kennestone Hosp. Auth. v. Prince, 242 Ga. 139, 249 S.E.2d 581 (1978).

Hospital authority did not violate Clayton Act.

- Whether the hospital authority authorized the purchase of the hospital without considering, among other factors, the anticompetitive adverse effect of the acquisition on healthcare in the community and alternatives to leasing the hospital to the defendants were irrelevant. The state put the ultimate say-so for the provision and management of healthcare in the hands of the healthcare authorities. FTC v. Phoebe Putney Health Sys., 793 F. Supp. 2d 1356 (M.D. Ga. 2011), aff'd, 663 F.3d 1369 (11th Cir. 2011).

Private corporation's records were public.

- Private corporation's operation of a hospital and other facilities leased from a county hospital authority under O.C.G.A. § 31-7-75(7) was a service it performed "on behalf of" a county agency, so records related to that operation were public records under O.C.G.A. § 50-18-70(b)(2) of the Open Records Act, O.C.G.A. § 50-18-70 et seq.; whether other records were public required a factual determination as to how closely the records were related to this operation. Smith v. Northside Hosp., Inc., 302 Ga. 517, 807 S.E.2d 909 (2017).

Cited in Griffin-Spalding County Hosp. Auth. v. Radio Station WKEU, 240 Ga. 444, 241 S.E.2d 196 (1978); Cox Enters., Inc. v. Carroll City/County Hosp. Auth., 247 Ga. 39, 273 S.E.2d 841 (1981); Medical Ctr. Hosp. Auth. v. Andrews, 162 Ga. App. 687, 292 S.E.2d 197 (1982); United States v. Wingo, 723 F. Supp. 798 (N.D. Ga. 1989); Colquitt County Hosp. Auth. v. Health Star, Inc., 262 Ga. 285, 417 S.E.2d 147 (1992); United States v. Hosp. Auth. of Charlton County (In re Hosp. Auth. of Charlton County), 56 Bankr. Ct. Dec. (LRP) 220 (Bankr. S.D. Ga. July 3, 2012).

OPINIONS OF THE ATTORNEY GENERAL

County hospital authority is authorized to make term loans. 1969 Op. Att'y Gen. No. 69-9.

Hospital authority can lease unimproved land to third party subject to prohibition against gratuities contained in Ga. Const. 1976, Art. III, Sec. VIII, Para. XII (see now Ga. Const. 1983, Art. III, Sec. VI, Para. VI). 1971 Op. Att'y Gen. No. 71-190.

Authority's right to operate and charge for ambulance service.

- Hospital authority has right to operate ambulance service for transportation of patients to and from the authority's hospital and may make charges for such service. 1965-66 Op. Att'y Gen. No. 66-176.

Authority may contract with private ambulance service for back-up service.

- Hospital authority may enter into contract with private ambulance service, on trip by trip basis, to provide for back-up ambulance service for the authority. 1970 Op. Att'y Gen. No. 70-200.

Agreement to subsidize hospital authority ambulance service not violative of state Constitution.

- Agreement by county with hospital authority in nature of contract in which county agrees to subsidize ambulance service operated by hospital authority does not violate any provisions of state Constitution and county would be authorized to pay sums of money to hospital authority for this service. 1968 Op. Att'y Gen. No. 68-280.

Unemployment compensation coverage for authority employees.

- Inasmuch as creation and continued operation of a hospital authority is a joint venture of a hospital authority and the authority's supporting political subdivision or subdivisions, a determination as to whether the hospital authority's employees will be covered by unemployment compensation should be a joint determination made by both the hospital authority and the supporting political subdivision or subdivisions. 1971 Op. Att'y Gen. No. 71-55.

Open meetings and records provisions apply to hospital authorities.

- Provisions for open meetings and records apply to hospital authorities. 1980 Op. Att'y Gen. No. U80-6.

RESEARCH REFERENCES

Am. Jur. 2d.

- 40A Am. Jur. 2d, Hospitals and Asylums, § 8 et seq.

C.J.S.

- 41 C.J.S., Hospitals, § 11 et seq.

ALR.

- Hospital's liability for personal injury or death of doctor, nurse, or attendant, 1 A.L.R.3d 1036.

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