Judge Orders Marin Healthcare District Claims to Arbitration
Sutter Health Argued a 2006 Transfer and Settlement Agreement Requires Marin Healthcare District and Sutter Health to Arbitrate Differences
SACRAMENTO, Calif., Dec. 29, 2010 - A Marin Superior Court Judge has compelled the District-controlled Marin General Hospital (District) to comply with a 2006 Transfer and Settlement Agreement (Agreement) that requires both parties to arbitrate differences. The ruling was in response to a motion filed by Sutter Health in October after the District refused to agree to submit its claims in the case of Marin General Hospital Corporation vs. Sutter Health to arbitration.
The Agreement that was approved by the Marin Superior Court in 2006 became necessary because the District chose to part ways with Sutter Health and re-assume operational control of Marin General Hospital (MGH). The District made its decision despite significant improvements by Sutter Health in the quality of care and financial strength of MGH and an offer by Sutter to build a new state-of-the-art hospital at no cost to Marin taxpayers.
“We appreciate that the court ordered the matter to arbitration because we have always believed that the 2006 Agreement requires that both parties arbitrate differences,” said Sutter Health spokesman Bill Gleeson.
While pleased with the favorable ruling, Gleeson expressed disappointment that conflict with the District continues.
“We had sincerely hoped the negotiated agreement and the return of a higher quality, financially stronger hospital in June would bring an end to the divisiveness,” said Sutter Health spokesman Bill Gleeson. “Unfortunately, despite the fact that we complied with the terms of the separation agreement, the District sued us weeks after we transferred management of the hospital and now wants different terms.”
In accordance with the agreement, Sutter Health agreed to end the affiliation five years early and left MGH with substantial assets, including millions of dollars in cash and accounts receivables.
Although Sutter Health met or exceeded the terms of the Agreement, the District has caused MGH to sue the health care network, attempting to gain access to Sutter Health financial reserves. However, the agreement negotiated by both parties provides that “excess working capital” is the property of Sutter Health. The District was well aware when it affiliated with Sutter Health and also when it signed the agreement that Sutter Health pools these assets for the benefit of all the communities it serves.
“Sutter Health not only met the specific requirements outlined in the agreement, but also returned a high-quality, well-run hospital that, at the time of transfer, generated revenue well in excess of its monthly expenses. We look forward to putting differences behind us and continuing to focus on the healthcare needs in Marin,” said Gleeson.
About Sutter Health
Serving patients and their families in more than 100 Northern California cities and towns, Sutter Health doctors, not-for-profit hospitals and other health care service providers share resources and expertise to advance health care quality and access. The Sutter Medical Network includes many of California’s top-performing, highest quality physician organizations as measured annually by the Integrated Healthcare Association. Sutter-affiliated hospitals are regional leaders in cardiac care, women’s and children’s services, cancer care, orthopedics and advanced patient safety technology.
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