Sutter Health Asks Marin Superior Court to Enforce Agreement
2006 Transfer and Settlement Agreement Requires Marin Healthcare District and Sutter Health to Arbitrate Differences
SACRAMENTO, Calif., Oct. 8, 2010—Sutter Health today filed a motion with the Marin Superior Court asking the court to compel 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 motion was made 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 had sincerely hoped the negotiated agreement and the return of a higher quality, financially stronger hospital would bring an end to the divisiveness,” said Sutter Health spokesman Bill Gleeson.
In addition to specifying how much money would remain with the hospital upon its return to the District, the agreement stipulated that certain disputes between the parties would be resolved through arbitration— thus avoiding more costly and protracted litigation in court. As required by the terms of the agreement, the District assumed operational control of the hospital on June 29, 2010.
“We have complied with the terms of the Agreement; it’s time for the District to do the same,” said Gleeson.
As required by the agreement, Sutter Health left MGH with at least $20 million in patient accounts receivables, $5 million in operating cash at the time of transfer and $5 million for the MGH Foundation.
Although Sutter Health met or exceeded the terms of the Agreement and left MGH with the agreed upon amount of cash and assets, 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 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. Now it’s time for the District to respect and honor the terms of our agreement,” 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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