Court denies Sutter Health's appeal to arbitrate antitrust claims

A state appeals court in San Francisco ruled Oct. 27 against Sacramento-based Sutter Health, denying its appeal to arbitrate allegations the health system uses its market dominance in North California to overcharge patients, employers and insurers, according to the Sacramento Business Journal.

The First District Court of Appeal ruled Sutter can't require United Food and Commercial Workers & Employers Benefit Trust to arbitrate its claim that Sutter engaged in anti-competitive practices that led to increased costs for thousands of workers.

UCFW & Employers Benefit Trust sued the health system in April 2014, alleging Sutter requires health plans and self-funded employers to include all Sutter hospitals in their networks, according to the report. The lawsuit further alleges Sutter uses contracts that set higher rates for out-of-network services to enforce this policy.

The court's decision Oct. 27 does not address the allegations against Sutter, only the efforts by the health system to arbitrate the case, according to the report.

Sutter argued an arbitration clause in a contract between the union trust and Blue Shield of California, which administered the provider network for the union, applied to the trust and lawsuit. The three-judge panel ruled the trust is not bound to arbitrate its claims "pursuant to an agreement it had not signed or even seen."

A Sutter spokesperson said the health system may appeal again, but if a secondary appeal fails, the case will be tried in a courthouse instead of an arbitration panel, according to San Francisco attorney Richard Grossman, who represents UCFW & Employers Benefit Trust.

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