Sutter Health denied claim that case lacks legal basis
A visiting judge of Del Norte Superior Court ruled last week that a lawsuit against Sutter Coast Hospital’s plan to convert to a Critical Access Hospital may go forward.
Beverly Hussey, the widow of the donor of the land where the hospital was built, filed suit against Sutter Coast in April, alleging that plans to convert to a Critical Access facility violate the contract outlining conditions of the land donation.
In May, Sutter Coast filed a demurrer (a request for dismissal of a lawsuit on the point that even if facts are true there is no legal basis for a lawsuit), but on Friday, the court overruled the demurrer in all respects, moving the lawsuit closer to the possibility of a trial.
“We’re strongly hopeful that through this lawsuit Mr. Hussey’s intent in the donation will continue to survive as intended from the beginning,” said Majed Dakak, an attorney for the law firm handling the plaintiff’s case, Blecher Collins Pepperman and Joye P.C.
Sutter Coast’s court documents in support of demurrer say that the “requirements for a ‘Critical Access’ designation tend to be misunderstood or mischaracterized by opponents of Critical Access.”
Critical Access is a federal designation for rural hospitals that allows the facilities to receive considerably higher, cost-based reimbursements for Medicare patients, and Sutter Coast has maintained that converting to Critical Access is necessary for the hospital to stay financially viable. Critical Access hospitals are required to have a maximum of 25 inpatient beds and patient stay must be an average of 96 hours annually.
“What cannot be disputed is that Sutter Coast is required to continue to operate as a hospital if it is designated as ‘Critical Access,’” state Sutter Coast’s documents supporting demurrer. “This lawsuit is an improper attempt to embroil the judiciary in a political controversy and to use the pendency of a lawsuit to lend credence to the arguments of opponents of Critical Access designation.”
Sutter Coast also argues that the phrase “full service,” which is commonly used in the plaintiff’s complaint, “has no practical, legal, or regulatory significance. Acute care hospitals are not differentiated between those that are ‘full service’ and those that are not. There is neither a legal nor regulatory definition of ‘full service’ as it applies to medical facilities,’” Sutter Coast’s court filings state.
The 1988 Covenants, Conditions & Restrictions (CC&Rs) that outlined conditions for the donation state that the property donated by Francis “Sonny” Hussey “shall be used primarily for healthcare related purposes. Permissible uses shall include, but not be limited to, acute care hospital, medical laboratories, medical offices, trauma centers, convalescent care and similar uses.”
Sutter Coast attorneys point to the fact that the contract says “healthcare related services” and not an acute care hospital, and that a Critical Access Hospital is an acute care hospital, beholden to the same state and federal regulations as all general acute care hospitals.
“All Critical Access Hospitals must be, and are, state-licensed general acute care hospitals,” Sutter Coast’s demurrer documents state.
The plaintiff’s written argument calls Sutter Coast’s definition of Critical Access hospitals “linguistic sleight of hand” and states that “even were this Court to entertain Sutter Coast’s argument that a Critical Access Hospital designation met the technical definition of an ‘acute care hospital’ found in the CC&Rs, the facility’s downgraded status would not comport, in good faith, with the intent of the parties as expressed in the terms of the CC&Rs.”
The plaintiff’s written opposition to the demurrer states that Mr. Hussey could not have known to make the distinction of a Critical Access Hospital because the designation was not in place until 1997 and the contract was penned in 1988.
To prove the intent of Mr. Hussey, the plaintiff’s point to a statement he made to the media after the donation: “[Now the] people in Del Norte County will be able to get close to the same type of treatment available in Medford and south of here.”
In response, Sutter Coast filed documents stating: “Mr. Hussey’s subjective intent as expressed to either his wife or to the press is not legally relevant or at all dispositive of the meaning of the CC&Rs.”
Sutter Coast attorneys also stated that “the reduction of bed count is only potentially relevant if it reflected an actual reduction in service
To distinguish between Critical Access facilities and other hospitals, the plaintiff’s written opposition points to a clause from the U.S. Department of Health and Human Services summarizing that Critical Access hospitals “are structured differently than the acute care hospital, ... The limited size and short stay length allowed to [Critical Access Hospitals] encourage a focus on providing care for common conditions and outpatient care, while referring other conditions to larger hospitals.”
Opponents of Sutter’s plans have said that Sutter Health is the first hospital system in the country to downsize the amount of inpatient beds it has in order to fit the requirements of a Critical Access facility. This was successfully completed with much less controversy for Sutter Lakeside Hospital in Lakeport.
After Friday’s decision by the court, whether or not the conversion to Critical Access will be allowed to take place in Crescent City, will continue to play out in court.