Attorney General Rob Bonta announced Wednesday that he has filed a lawsuit against AHMC Healthcare, the operator of Seton Medical Center, over the temporary closure of its Coastside emergency room in Moss Beach.
AHMC, a key health care provider for northern and coastal San Mateo County, has struggled with operational difficulties since taking on the beleaguered hospital in 2020. In March, employees on the Daly City site protested changes to their health care advantages, and county officials criticized the prolonged closure of the Moss Beach emergency room for repairs attributable to last yr's storms.
Hospital officials expect the work to be accomplished by December 2024, which some residents say is taking far too long because it is the one emergency room within the coastal area.
As a stopgap measure, San Mateo County awarded the Dignity Health Medical Foundation $480,000 last June to expand its emergency take care of coastal residents.
AHMC acquired Seton from Verity Health Systems following bankruptcy proceedings. The hospitals function a security net for the region's low-income residents.
Then-Attorney General Xavier Becerra approved the sale on the condition that Seton's Daly City and Coastside centers remain open for not less than five and a half years and supply care to people earning lower than 250% of the federal poverty level while partially subsidizing the care other economically disadvantaged patients.
“The conditions established with AHMC should protect patients and ensure continued access to essential health services,” Bonta said. “Unfortunately, AHMC has failed to meet these obligations, endangering patient care and public health. This is unacceptable and we will hold them accountable.”
Bonta is asking the court to implement the agreement, impose fines and issue an order reopening Coastside facilities and restoring services at Seton Medical Center.
Under state law, the sale or change of control of a nonprofit health care facility requires approval from the attorney general. When AHMC purchased Seton, the corporate agreed to take care of services including emergency rooms, stroke certification, heart attack care and expert nursing facilities. According to Bonta's office, AHMC allowed key certifications to lapse and closed facilities, including Coastside's emergency room, without notifying the attorney general.
In response to the lawsuit, Seton spokesman and chief operating officer Tim Schulze said the emergency room closure was essential since the constructing remains to be “unsafe for human occupancy.”
“The attorney general is under the false impression that Seton Coastside could open its doors once the roof replacement is completed in early fall,” Schulze said. “Not like that. Even after the roof was replaced, the building was still unsafe for human occupancy, and there was no safe way to occupy the building while the other emergency repairs were still needed.”
He also said the lawsuit's claim that the upgrades were purely cosmetic and that the shutdown was to deal with deferred maintenance issues slightly than storm damage was “false and misleading.”
“We have diligently addressed these matters and made the necessary repairs to reopen the Seton Coastside emergency room and skilled nursing facilities and otherwise comply with the AG’s terms,” Schulze said. “We have also cooperated with the AG’s office’s investigation of these issues as they relate to the AG’s conditional approval of the sale of this distressed hospital in 2020, which faced closure had AHMC not purchased it.”
San Mateo County Supervisor Ray Mueller, who represents the coastal areas, insists Coastside's closure is “more than a breach of contract.”
“It was a violation of the trust that our community placed in them,” Mueller said. “The attorney general’s lawsuit lays the foundation for a lawsuit by the county that AHMC violated the terms of a multimillion-dollar loan provided to San Mateo County.”
Rep. Anna Eshoo, who represents parts of San Mateo and Santa Clara counties, wrote to Bonta back in July, calling the shutdown “devastating” for her constituents. She noted that the county has spent $500,000 on emergency care for the reason that shutdown.
“I am very pleased that the California Attorney General has responded forcefully to my call to hold AHMC accountable for its blatant violations of the law and violations of the purchase agreement,” Eshoo said. “Today’s action underscores an important message: irresponsible actors must not jeopardize patients’ well-being.”
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