Settlement in Sutter Coast case

Written by Adam Spencer, The Triplicate July 10, 2013 04:03 pm

Details unavailable, but agreement may mean the binding arbitration process can be avoided

A settlement that would resolve the current legal conflicts between Sutter Health, Sutter Coast Hospital and the Del Norte County Healthcare District was reached over the holiday weekend, according to district attorney Martha Rice.

The binding settlement would be the last word on a dispute involving a lease agreement signed by the district and Sutter in 1985 that the district argued ensured a local governing board of Crescent City’s acute care hospital, according to Rice.

Sutter Health and Sutter Coast attorneys argued that the lease expired on its own terms several years ago.

Details of the settlement were not available Monday as the case was still considered open — and the settlement is not public information — until the arbitration panel signs off on the award drafted by the district and Sutter Health, Rice said.

Local governing power and ownership of the hospital would be dissolved through a “regionalization” process that many Sutter affiliates have undergone in recent years. Crescent City’s sole hospital is one of only two Sutter-affiliated facilities that have not been consolidated under regional management since 2008. Sutter Coast’s board of directors approved regionalization, 9-1, in November 2011.  

Since then, the possibility of  a Bay Area-based governing board and the possibility of downsizing the hospital to a Critical Access facility — with fewer hospital beds — drew opposition from the Del Norte County Board of Supervisors, Crescent City Council, a group of local doctors, hundreds of petition-signers and letter-writers, and the Del Norte County Healthcare District.

Last summer, the district won a restraining order and then an injunction that kept Sutter Coast’s local board in place and prevented Sutter Health from applying for Critical Access Hospital designation, a federal program that provides higher reimbursements for Medicare and Medical patients to facilities with 25 or fewer beds (Sutter Coast currently has 49). 

The judge also ordered the case to be moved out of the court system and into arbitration.  Sutter Health appealed the injunction, leaving the case to be fought in two separate legal venues: arbitration and the Court of Appeals.

The beginning of arbitration and an argument in the Appellate Court were both scheduled for  Wednesday morning, but that could change if the arbitration panels signs off on the draft award beforehand.

Rice could not provide any reasons as to why the arbitrators would not sign the award, but it was still a possibility.

“It’s already a done deal from our perspective,” Rice said.

If the arbitration panel does sign off on the award, Rice said the settlement outlines plans to also resolve the case in appellate court, although she could not say if that meant Sutter would drop the appeal.

Sutter Coast representative Beth Liles said it would not be appropriate to comment until a joint press release is issued, a release that is stipulated in the agreement. 

With expensive arbitration looming, the Healthcare District Board has been in negotiations to reach a settlement since a special meeting called last Tuesday, according to Rice.

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