Marin Healthcare District Sues Sutter Health Over Alleged Cash Transfers
On Thursday, the Marin Healthcare District filed a lawsuit claiming that Sutter Health "systematically and improperly" diverted funds from Marin General Hospital during Sutter's ownership of the facility, the Sacramento Bee reports.
In 1995, Sutter Health took over management of Marin General Hospital as part of an agreement with Marin Healthcare District (Calvan, Sacramento Bee, 8/27).
In 2006, disagreements over a possible management contract prompted the health care district and Sutter to take steps toward ending their partnership.
On June 30, Marin Healthcare District regained control of Marin General Hospital (Rauber, San Francisco Business Times, 8/26).
The lawsuit, which was filed in Marin County Superior Court, argues that Sutter Health improperly transferred more than $30 million annually out of Marin General Hospital since 2006, when it became clear that Sutter would soon give up control of the hospital.
Marin General officials note that Sutter made cash transfers of less than $3 million annually during the five years prior to 2006.
They add that the Marin hospital needs the funds for operational costs, physician recruiting and seismic safety updates.
Sutter Health Response
Kathryn Graham, spokesperson for Sutter's West Bay region, declined to comment on the lawsuit. However, she said, "it is indeed regrettable that the Marin Healthcare District has elected to pursue legal action as there is no basis whatsoever for any such action" (Colliver, San Francisco Chronicle, 8/26).
Graham also said Sutter Health has "responded to the district's concerns throughout the transition and have explained our financial policies to the satisfaction of the regulatory agencies that govern nonprofit health care entities." She added, "While we had hoped to put the contentious relationship of the past behind us, Sutter Health will now vigorously defend itself and will likewise vigorously pursue all claims against the Marin Healthcare District" (San Francisco Business Times, 8/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.