Healthcare District Files Intent To Appeal Court Decision With Sutter

By Steven Tavares

The Eden Township Healthcare District could be on the hook for an additional $700,000 in legal fees if it does not win its appeal of a Superior Court decision last November.

The District has already spent over $2 million in fees to its legal council since Sutter Health filed suit against it in October 2009 over the title of San Leandro Hospital. Lawyers for Sutter filed a memorandum of costs Mar. 28 enumerating $700,117 in bills including attorney, filing and deposition fees. Over $679,000 of the total is attorney fees alone. A hearing to discuss awarding Sutter’s potential spoils is scheduled for Aug. 19, but in the meantime, the District hopes the legal process fails to get that far.

Lawyers for the District filed a notice to appeal the November decision on Monday. The move had been expected for months after the District Board of Directors approving the action in December.

The nearly three-year-old battle between the District and Sutter over the fate of San Leandro Hospital has been long and contentious. After the blocking Sutter’s right to purchase San Leandro Hospital and lease it to the Alameda County Medical Center in the summer of 2009, Sutter took the dispute to court hoping to gain title of the facility.

In early 2010, the District fought back, approving a strategy to file a cross complaint against the Sacramento-based health care provider on the grounds members of the previous District board possessed a conflict of interest in their employment by Eden Medical Center, which is operated by Sutter. Along with former District board member Dr. Francisco Rico and current director Dr. Rajendra Ratnesar, lawyers for the District alleged the CEO of Eden George Bishalaney also had a conflict as the operating officers for both the District and Eden when the controversial 2008 Memorandum of Understanding was negotiated and signed.

The deal, in effect, guaranteed Eden to be rebuilt and financed by Sutter, but also put San Leandro Hospital’s fate in a precarious position. Within in a year of the agreement, Sutter groused over the hospital’s ability to be self-sufficient, saying it consistently incurred monthly losses of up to $600,000. Critics, though, said Sutter’s unique position as operator of both Eden and San Leandro Hospital allowed it to pass losses to San Leandro’s book in an effort to limit competition for its new $300 million facility in Castro Valley.

Last November, a Superior Court judge ruled against the District’s cross complaint finding it did not prove Rico, Ratnesar and Bischalany possessed a conflict in negotiating the MOU leading to the notice to file an appeal this week.

Categories: appeal, Eden hospital, Eden Township, Francisco Rico, George Bishelany, Rajendra Ratnesar, S.L. Hospital, Sutter

11 replies

  1. apeal means one more year of services from SL hospital to the san leandro comunity!! that's one more year of saving lives. thankyou Eden township


  2. It's actually 1-1/2 to 2 years of more service. And if SLH loses that one, then another appeal and another 2 years of service. And maybe by then Sutter will realize it's not such a bad idea to keep SLH open after all, as it sucks up all the low-end patients, thus saving Eden's brand-new spanking — but much smaller — new ER, from being OVERWHELMED by undesirables at a rate of about 20,000 heads a year while it struggles to operate in a permanent state of siege 24-hrs a day. Not to mention the dramatic overall percentage increase in Medicare-Medical inpatient clientele.


  3. where's all the smart ass comments from doc Rico???


  4. Hello! It is I, Doc Rico, S.A. I'm puzzled. Why the big difference between the legal costs for Sutter ($700,117) and the legal costs for the District (over $2,000,000)? I'm not smart enough to answer that question or am I?


  5. Dr. Rico, come on, you're old enough to know this: In America you get what you pay for. SLH is still running and will be running for 2-4 years minimum due to the appeal and the future appeals District's well-paid lawyers have filed on its behalf. Two million is what it costs to thumb finger in Sutter's nose. And let me tell you — it's been worth every penny. SL can only hope Sutter will finally get smart, or Pat gets canned in the next few years, and a brand new Sutter leadership will take a close look at the kind of decisions he's been making, and stop the nonsense. BTW you have consistenly NOT been addressing my 5 cents here lately… Just FYI. I know, my arguments make sense and are hard to rebut.


  6. sutter has their own lawyers on payroll already where as the township has been forced to recieve private council which costs more because their previous lawyer under EMC undoubtedly was only concerned with with the interests of sutter and not that of the township


  7. At some point in the future all the appeals will be done and the bill will be due. Sutter will demand and probably be entitaled to collect significant money from the district. Who will pay for it? The tax payers of Alameda County will not Sutter. Lets be realiatic, its not the district fighting Sutter its SEIU but their using tax payor fund to do it. Its time to end this expensive war.


  8. Sutter's in house attorneys are not litigators hence Sutter has hired outside counsel that specializes in litigation. Yet the District, in spite of having spent more than double what Sutter spent, has lost at every step in the litigation! Or hadn't you noticed?


  9. The citizens of the District have won, Dr. Rico. Many lives have been saved; pain and suffering has been reduced over the last two years. I am completely happy with the money the District has spent, and will spend in the future. This money is spent in our service; it's an investment on our behalf.

    Like you'd know what Sutter has spent on attorneys. Sutter Health is dishonest. Goodness gracious, Dr. Rico, they were dishonest to YOU. Or hadn't you noticed?


  10. Sutter filed a memo of costs with the Superior Court asking for $700,117 for legal costs including over $600,000 in attorney fees. That's a public document that you can see and print by going to the Court's web site as I did. Now using your reasoning, Proud San Leandran, a dishonest Sutter would try to maximize the amount of their demand. If their costs were more they would have no reason to conceal that. Hello!?


  11. “State Accuses Sutter Health of Fraud

    Sutter Health, one of California's largest health care givers, fraudulently charged insurers up to hundreds of millions of dollars over the past decade for anesthesia services that in some cases weren't even provided, the state's insurance commissioner said Wednesday.

    “This is happening across all Sutter hospitals,” Commissioner Dave Jones said. “It's being done at the expense of private insurers and ultimately results in higher premiums that businesses and consumers are forced to pay.”…

    Sutter Health is a Sacramento-based health care provider with 24 hospitals – including half a dozen medical centers in the Bay Area – and 3,500 doctors in its network. It operates as a nonprofit, and reported $9.1 billion in revenues in 2010. Sutter's total income (profit) in 2010 was $878 million.

    Anesthesiologists generally are not employed by hospitals and their charges are not included on the hospital bill. Instead, they typically bill insurers separately. But the lawsuit alleges that Sutter hospitals routinely billed
    insurers for anesthesia services when patients were treated in an operating room, even when the anesthesiologist had already charged his or her own fee, and sometimes when no anesthesia had been used.

    In many cases, bills sent to insurers were exorbitant, the lawsuit said.

    A typical anesthesia bill for a hospital would be about $150 to $250 – often to cover the costs of a technician to prepare an operating room – but Sutter hospitals regularly were charging $3,000 to $5,000, according to the lawsuit.

    Contracts between Sutter Health and insurance providers forbade insurers from questioning charges, according to the lawsuit. Such contractual clauses are intended to prevent insurers from refusing to pay for medical services, and thus are useful to patients. But in this case, Jones said, they kept insurers from looking for and rejecting fraudulent charges.

    Consumer groups on Wednesday said they were furious, but not surprised, to see such allegations raised against a major health care provider. The lawsuit is Jones' first major case since becoming insurance commissioner in January.

    If a jury rules against Sutter Health, the organization could face massive penalties. But just drawing attention to the lawsuit itself may alert health care providers and insurers alike that the state, as well as consumers, is
    paying attention, said Doug Heller, executive director of Consumer Watchdog.

    “This is the other part of health care reform, getting the fraud and fat out of our health care system,” Heller said. “What is so angering to me is that it's the patients and consumers who are blamed for high health care costs. Yet, there are apparently hundreds of millions of dollars in fraud from one hospital chain.”


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