Sutter Health seeks pricing information in antitrust case

Sacramento, Calif.-based Sutter Health confirmed it seeks pricing and payer contract information from other area hospitals to defend itself against antitrust allegations.

Eight things to know:

1. California Attorney General Xavier Becerra filed a lawsuit against Sutter Health in March following a yearslong investigation. The lawsuit alleges, among other things, that Sutter used its market power to control prices by keeping health insurers from providing more low-cost health plan options to patients and setting excessively high out-of-network prices. The lawsuit also alleges the health system impeded cost transparency by restricting publication of provider cost information.

2. Sutter Health disputes the lawsuit's allegations. System spokesperson Amy Thoma Tan told Becker's: "The lawsuit gets the facts wrong and mischaracterizes how Sutter Health serves patients and communities as a nonprofit organization in the competitive Northern California healthcare environment. Our integrated network of high-quality doctors and care centers aims to provide better, more efficient care — and has proven to help lower costs."

3. The case is ongoing in San Francisco Superior Court. As part of the case, Sutter has subpoenaed 50 other Northern California hospitals — including UC San Francisco Medical Center, Stanford (Calif.) Health Care, San Francisco-based Dignity Health, Walnut Creek-based John Muir Health and Greenbrae-based Marin General — seeking proprietary pricing information from the hospitals, including payer contract terms, according to a San Francisco Chronicle report. It seeks data between 2000 and 2012, not current pricing information.

4. Sutter said it will use the data about the broader healthcare marketplace in its defense against the lawsuit's allegations. "The court has agreed that contracts and pricing from other hospitals are relevant in the case, and while Sutter won't ever see this information, in order to defend ourselves and demonstrate that the plaintiff's' claims are false, this information provides important evidence of the actual prices in California and the contracting terms commonly used in the industry," said Ms. Tan. "Sutter will use the information to provide an accurate picture of what the healthcare industry really looks like in California."

5. But competitor hospitals are fighting the system over the issue, according to the report. The report states many of the same facilities are part of a 2012 lawsuit in which employers and consumers accuse Sutter of anticompetitive behavior and charging inflated prices. That case is also ongoing.

6. The San Francisco Chronicle reports that Sutter Health has said claims in that lawsuit, just like Mr. Becerra's, are untrue or misleading.

7. Various hospital rivals took issue with providing pricing information, telling the San Francisco Chronicle it would be providing their "secret sauce" to a competitor without knowing whether Sutter Health will benefit from the information later. Sutter Health reiterated it will not see the information from other systems, but the information will be used in court to show "evidence of the actual prices in California and the contracting terms commonly used in the industry."

8. A San Francisco Superior Court judge has heard arguments from Sutter Health and other providers regarding Mr. Becerra's lawsuit. In early September, the judge specified a limited and confidential production of materials from other providers relevant to the case, Ms. Tan told Becker's. She said some providers decided to follow the order, and others still challenged it. The court eventually withdrew that prior order of production. Ms. Tan said Sutter Health now "continues to work with both groups of providers to obtain information relevant to the case in a way that protects the confidentiality of other provider information, which will not be shared with Sutter."

Access the full San Francisco Chronicle report here.


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