Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Supervisor Ray Mueller, Third District
Supervisor Jackie Speier, First District
Subject: Letter to Attorney General Rob Bonta Requesting Inclusion of Conditions Regarding Seton Coastside and the County of San Mateo in any Settlement of Litigation with AHMC Seton Medical Center, LLC and AHMC Healthcare, Inc. (collectively, AHMC).
RECOMMENDATION:
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Authorizing and directing the President of the Board of Supervisors or the Board of Supervisor’s Designee to sign and transmit to the Office of Attorney General a Letter requesting inclusion of conditions regarding Seton Coastside and the County of San Mateo in any Settlement of Litigation with AHMC Seton Medical Center, LLC and AHMC Healthcare, Inc. (collectively, AHMC).
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BACKGROUND:
On October 2, 2024, the Office of California Attorney General Rob Bonta’s (AG) filed suit against AHMC Seton Medical Center, LLC and AHMC Healthcare, Inc. (collectively, AHMC) in San Mateo County Superior Court for Specific Performance, Civil Penalties, and other Equitable Relief.
The Complaint seeks to enforce compliance with conditions the AG required of AHMC prior to approving the purchase of Seton Medical. In addition to the allegations regarding breach of the AG’s conditions, AHMC’s actions are in breach of and Agreement with the County of San Mateo to maintain conditions similar to those required by the AG.
Since the closure of Seton Coastside, patients have not been able to receive services from the Seton Coastside Facility. In 2024, the Third Supervisorial District looked for options for coastside residents to mitigate the effects of the closure.
HISTORY OF SETON COASTSIDE
According to AG Bonta’s Complaint, Seton Medical Center shares a consolidated license with Seton Coastside, which is licensed for 116 skilled nursing beds and five general acute care beds. Seton Coastside was originally founded as Moss Beach Rehabilitation Hospital in 1970. In 1980, the City of Half Moon Bay acquired ownership of the facility and entered into an agreement with the Daughters of Charity to manage operations and renamed it St. Catherine’s Hospital. In 1993, St. Catherine’s Hospital became Seton Coastside when it was integrated into a single administrative entity with Seton Medical Center.
On December 3, 2015, the California Attorney General conditionally approved the sale of Daughters of Charity to Blue Mountain Capital Management, LLC. The transaction closed on December 14, 2015, and the health system was renamed Verity Health System of California, Inc. The Attorney General’s conditions, subsequently assumed by AHMC as part of its purchase of Seton Medical Center and Seton Coastside, required maintenance of services at Seton Medical Center and Seton Coastside through December 13, 2025.
Simultaneously with the purchase of the hospital by AHMC, the County of San Mateo entered into an agreement with AHMC in 2021 to provide funds for seismic retrofitting, and conditioned forgiveness of the loan on AHMC complying with the AG’s terms and conditions and continuing to provide services at Seton Medical Center and Seton Coastside for the term of the agreement with the AG. The County reserved the right to require repayment of the loan if AHMC didn’t meet the conditions through 2027.
DISCUSSION:
AHMC’s decision in April 2024 to close the Seton Coastside emergency department, despite its contractual obligations and explicit requirements to maintain emergency service at the facility through December 2025 constituted a serious breach not only of state-imposed conditions, but also of contractual commitments AHMC made directly to San Mateo County. Under the County’s 2021 agreement, which provided AHMC with $10 million in County funding for seismic upgrades, AHMC agreed to operate Seton Medical Center as a full-service general acute care hospital-including with emergency services, through 2027. AHMC’s actions have undermined these commitments and harmed the public access to timely emergency care for San Mateo County’s coastside residents. As of December 4, 2025, the emergency room still remains closed.
Because of AHMC’s failure to honor the terms of its agreements with the AG and the County the Third District requests this Board approve sending a letter to the AG requesting that any settlement by the AG of the State’s pending litigation with AHMC include the following conditions:
1. A comprehensive tolling agreement covering all County-related contractual claims for the entire duration of the emergency department’s closure and any subsequent period of noncompliance;
2. Formal acknowledgment of AHMC’s breach of contractual obligations owed to San Mateo County;
3. Clear remedies and compliance mechanisms requiring AHMC to meet all operational commitments under both state-imposed conditions and County agreements; and
4. Provisions ensuring that the County retains full legal rights to pursue restitution or
enforce contract terms should AHMC fail to comply.
COMMUNITY IMPACT:
Seton Coastside is an important medical resource for the Coastside community as it can be isolated and difficult to access care. Holding AHMC accountable to the residents of that community advances equitable access to health care for all communities and residents in San Mateo County.
FISCAL IMPACT:
None.