Sutter's pricing practices under microscope in antitrust case

A trial in a class-action lawsuit alleging Sacramento, Calif.-based Sutter Health violated California's antitrust laws by using its market power to overcharge patients and employer-funded health plans began Sept. 23, according to Bloomberg Law.

The lawsuit dates back to 2014. Self-funded employers and union trusts initially filed the case, which was later joined with a lawsuit brought in 2018 by California's attorney general.

In March, California Attorney General Xavier Becerra said a six-year investigation revealed Sutter restricted health insurers from providing consumers with more low-cost health plan options, and the health system set excessively high out-of-network prices. Sutter also allegedly restricted publication of provider cost information, which impeded transparency.

The class members allege Sutter's inflated prices led to $756 million in overcharges, according to Bloomberg Law.

"We're in this lawsuit ... to make sure no provider, including Sutter Health systems, offers care in a way that doesn't provide the lowest and best price and the highest quality," Mr. Becerra said during a media briefing, according The Sacramento Bee. The "bottom line is we're alleging that Sutter Health systems is offering care at a higher price and perhaps even undermining quality by the way it goes about doing its business."

Sutter said the allegations in the case, which could lead to a more than billion-dollar liability, are misguided.

"Sutter is not violating antitrust laws by integrating its hospital system and negotiating systemwide contracts with insurance companies," Sutter said in a statement to The Sacramento Bee. "There is no evidence that Sutter has hurt competition, as demonstrated by the fact that new hospitals continue to open and existing facilities continue to expand in markets that Sutter Health serves, including in the San Francisco Bay Area and the greater Sacramento region."

Access the full article from The Sacramento Bee here.

Access the full Bloomberg Law article here.

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