Judge Approves Sutter Health’s $575M Antitrust Settlement

The antitrust settlement will resolve allegations that Sutter Health engaged in anticompetitive practices, resulting in higher healthcare prices for self-funded plan members.

A Superior Court of California judge has granted preliminary approval for a $575 million antitrust settlement Sutter Health proposed to resolve a case alleging that it engaged in anticompetitive practices that drove up healthcare prices in Northern California.

The Sacramento-based health system reached the settlement agreement over a year ago with plaintiffs, including California Attorney General and current HHS Secretary nominee Xavier Becerra and the United Food and Commercial Workers International Union (UEBT).

The settlement agreement will now be heard by a court for final approval on July 19, 2021.

The settlement resolves a class action lawsuit brought on by UEBT in 2014 claiming that Sutter’s anticompetitive business practices caused them to pay more for healthcare items and services than necessary.

Attorney General Becerra later filed a similar lawsuit on behalf of the people of California seeking injunctive relief to compel the health system to correct any anticompetitive practices moving forward. The lawsuits were combined by the court.

The anticompetitive practices identified in the lawsuit included intentionally establishing, increasing, and maintaining market power in Northern California, which it used to negotiate significantly higher healthcare prices than would have been charged in a competitive market.

Plaintiffs described the approach as an all-or-nothing strategy, which required payers in the region to negotiate with all facilities in the health system or have their contracts terminated.

Other claims included setting excessively high out-of-network rates and limiting publication of provider cost information and rates.

Sutter denies the claims and has pointed to data showing that it actually charged less for inpatient stay compared to hospital hospitals in the region and citing other hospital systems in the area including Kaiser Permanente, Dignity, and Adventist.

The settlement recently approved by a judge will prohibit the health system from anticompetitive conduct, such as charging exorbitant fees for out-of-network services, all-or-nothing contracting, and anticompetitive bundling of services and products.

Additionally, the health system will have to grant payers, employers, and self-funded payers access to pricing and quality information, more clearly define clinical integration and patient access considerations, and cooperate with a court-approved compliance monitor.

The settlement money will also go toward compensating employers, unions, and others covered by the class action lawsuit to cover legal costs and fees.

In a prepared statement on the California Attorney General website, Becerra said the settlement “represents a huge step toward making healthcare more accessible and affordable for patients who need it, especially for Northern California patients served by Sutter.”

“This landmark settlement will require Sutter to stop practices that drive patients into more expensive health services and to operate with more transparency. The California Department of Justice will continue to work to keep the healthcare market competitive so that patients, families, and employers aren’t left holding the bag when big players dominate the market,” Attorney General Becerra continued.

Sutter was not immediately available for a comment, but a spokesperson told the American Hospital Association (AHA) that the ruling “enables the settlement approval process to continue moving toward final approval, which will ultimately help preserve our integrated network of care and is in the best interests of our patients and the communities we serve.”

Sutter is the largest hospital system in Northern California with 24 acute care hospitals, 36 ambulatory surgery centers, and 16 cardiac and cancer centers. The system also includes about 12,000 physicians and over 53,000 employees total.

The health system also negotiates contracts on behalf of Palo Alto Medical Foundation and some affiliated physician groups in the region, according to the Attorney General’s office.

Market concentration has been associated with higher healthcare prices. A University of California Berkeley report assessing the impact of hospital consolidation in California actually found that outpatient cardiology procedures in Southern California cost nearly $18,000 compared to almost $29,000 in Northern California, which is considered more concentrated.

For inpatient hospital procedures, the cost in Southern California is nearly $132,000 versus more than $223,000 in Northern California.


Call Today: 614.706.5206

 

 

 

 

 

 

Popular posts from this blog

IMPORTANT UPDATE: Ohio Medicaid is upgrading its provider enrollment system

Effective August 1, 2022, ODM will not be accepting new provider enrollment applications or continue any in-progress enrollment applications through the MITS Provider Enrollment System. Details on the process for enrollment of new OhioRISE providers from August 1 to October 2022 will be communicated prior to August 1st. Effective October 1, 2022, all provider enrollment applications must be submitted using Ohio Medicaid’s new Provider Network Management (PNM) portal. After its implementation, the PNM portal will be the single point for providers to complete provider enrollment, centralized credentialing, and provider self-service. Provider Network Management Portal and Centralized Credentialing Beginning on October 1, 2022 the Provider Network Management (PNM) portal will accept Medicaid provider enrollments and carry out centralized credentialing functions. This transition will reduce administrative burden for providers and enable providers to focus on the more meaningful and importan...
Read more

CO Supreme Court: Hospital Cannot Enforce $229K Surprise Bill

The surprise bill stemmed from the hospital’s chargemaster rate, but the hospital did not provide this information to the patient before her surgery. The Colorado Supreme Court has ruled that a woman is not liable for her $229,000 surprise bill from a Centura Health hospital, as the hospital did not disclose the amount to her before the procedure. Lisa Melody French received spinal surgery at St. Anthony North Hospital in Westminster, Colorado, in 2014. The hospital initially estimated that the surgery would cost $57,601, with French responsible for paying $1,337 out-of-pocket. But the cost increased to $229,112 following the surgery. According to the court document, the new price tag reflected Centura’s full chargemaster rates for the surgery. Additionally, Centura determined that it had misread French’s insurance card and she was an out-of-network patient. French was left with the nearly $230,000 bill after her insurance paid $73,597 of the new charge, which was over $300,000. Fren...
Read more

Governor DeWine Announces Local Government Payments from National Opioid Settlement Begin

Image
    Ohio Governor Mike DeWine announced Friday that the first payments of funds to local governments from the OneOhio settlement with national opioid distributors have been made electronically. Local governments will determine how to use the payments, totaling more than $8.6 million, to best combat the opioid epidemic in their own communities. Following these initial payments, governments will continue receiving payments from the settlement over the next 18 years. In 2017, as Ohio Attorney General, Governor DeWine was one of the first in the nation to sue opioid makers and drug distributors for their role in flooding the market with massive amounts of highly addictive opioids. A complete list of payments made to eligible and participating political subdivisions may be found at https://nationalopioidsettlement.com/states/ohio/ . The list also indicates if the payment was made directly to the entity or, if less than $500, was redirected to the county. Questions about payments c...
Read more