California hospitals sue attorney general over conditions for affiliation

Pasadena, Calif.-based Huntington Hospital and Los Angeles-based Cedars-Sinai have filed a lawsuit challenging the conditions imposed for approval of their affiliation by the California attorney general, according to a March 30 update from the hospital systems.

The lawsuit, filed March 29, takes aim at what the hospitals call "unprecedented conditions" that they say would place Huntington Hospital and its patients at a distinct disadvantage compared to other hospitals in the region. 

The 619-bed Huntington Hospital entered into a definitive agreement to join Cedars-Sinai in July 2020, about four months after the organizations signed a letter of intent. In December 2020, the California attorney general conditionally approved Huntington Hospital's plans to join Cedar Sinai. 

To gain full approval from the attorney general's office, as required by California law, Huntington Hospital and Cedars-Sinai are required to accept the conditions outlined.

One of the conditions challenged in the lawsuit places price caps on Huntington Hospital's rates to insurance companies for a decade, without requiring insurers to pass savings to consumers. Another condition requires the organizations to agree to insurers' demands for a "winner take all" arbitration decision in contract negotiations. According to the lawsuit, no other hospital is subject to those conditions.

"The conditions primarily benefit health insurance companies," instead of the community, said Lori Morgan, MD, president and CEO of Huntington Hospital. "This unlevel playing field jeopardizes Huntington's and Cedars-Sinai's future ability to provide access to quality care for the many communities we serve." " 

The California Attorney General's Office told My News LA that it has not seen the lawsuit and is unable to comment. 

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