Sutter Health to Stand Trial on State Antitrust Allegations
- Sutter Health, a nonprofit provider with 24 hospitals, 34 surgery centers, and over 5,000 physicians in northern California, is set to stand trial in a class-action lawsuit accusing Sutter of violating state antitrust laws. State Attorney General Xavier Becerra has joined 1,500 California self-insured employers and employer trusts in accusing the system of illegally using its dominance to overcharge for services.
- The case concerns allegations Sutter engaged in contracting practices with health insurers and employers in a manner preventing them from offering consumers lower-cost options. One claim is that Sutter imposed “all or nothing” contracting terms, meaning insurers and employers had to contract with all Sutter hospitals or none at all.
- According to a Sutter spokesperson, “The lawsuit wrongly blames Sutter’s integrated network for higher health care prices. While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which lead to greater patient choice… Sutter is disappointed that insurance companies and the state of California ignore these realities.”
- The lawsuit is seeking at least $500 million in damages, although antitrust violations may result in treble damages, meaning Sutter could be liable for as much as $1.5 billion. The trial is set to open on September 23.
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James (Jim) A. Dietz is a Member at FBT who provides an array of legal services to hospitals, physicians, long-term care providers, diagnostic facilities, and others across the spectrum of patient care.