8 things to know about Sutter Health's legal battles over prices

 An antitrust lawsuit against Sacramento, Calif.-based Sutter Health over prices could have a national effect, according to a Kaiser Health News report published by the LA Times.

Here are eight things to know.

1. California Attorney General Xavier Becerra filed the lawsuit against Sutter earlier this spring 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. While the case involves Sutter, it could have a national effect with other systems if California wins, according to Ge Bai, PhD, an assistant professor at Baltimore-based Johns Hopkins University who has researched U.S. hospital prices. He told KHN: "A major court ruling in California could be a deterrent to other hospital systems. We're getting to a tipping point where the nation cannot afford these out-of-control prices."

3. In addition to the lawsuit filed by Mr. Becerra, employers and consumers have also sued Sutter, accusing the 24-hospital nonprofit health system of anticompetitive behavior and charging inflated prices, according to the report. Both cases are ongoing in courts.

4. In California, there is also proposed legislation that would prohibit large health systems from using certain contracting practices, according to the report.

5. Sutter, for its part, is fighting back against Mr. Becerra's allegations. According to the report, the health system denies anticompetitive behavior and alleges in court papers that Mr. Becerra's allegations are a "sweeping and unprecedented effort to intrude into private contracting." KHN also reports the American Hospital Association and its California counterpart are backing Sutter.

6. Overall, Mr. Becerra hopes to force Sutter to negotiate reimbursements separately for each of its hospitals and tighten rules on sharing details of the negotiations across Sutter facilities, according to the report.

7. The lawsuits against Sutter come as the system reports $12 billion in annual revenue. In the past, Sutter has faced accusations from physicians and consumers of trying to maximize revenue by eliminating hospital beds and critical services in rural areas, according to the report. However, Sutter said Northern California patients have a wide range of provider options and that it has kept its average health plan rate increases to less than 3 percent each year for the last six years, reports KHN.

8. According to the report, a San Francisco superior court judge is allowing Mr. Becerra's case to be consolidated with a separate class-action suit against Sutter — led by a health plan covering unionized grocery workers. A trial in the grocery workers' lawsuit is scheduled for next year.

Read the full report here.

Ayla Ellison contributed to this report.

 

 

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