Sacramento, Calif.-based Sutter Health has agreed to pay $228.5 million to settle a long-running class action lawsuit that the health system used its market power to charge supracompetitive rates to major insurers, which resulted in higher premiums for members.
There is no admission of liability and the settlement is subject to court approval, according to an April 25 filing in the U.S. District Court for the Northern District of California.
The lawsuit, which was initially filed in 2012, focused on Sutter’s contracts with Anthem Blue Cross, Blue Shield, Aetna, Health Net and UnitedHealthcare. The lawsuit alleged that the system used its market power to force insurers to contract with the entire Sutter system to avoid insurers being able to pick specific facilities. It also alleged Sutter forced insurers to contract for services at the health system’s more expensive hospitals to gain access to care patients needed.
The lawsuit had a certified class of around 3 million members who purchased health policies since 2011.
Sutter Health and the plaintiffs said in a joint statement shared with Becker’s that they “agree this settlement is what’s best for the parties, for patients and for the class, and the prospect of additional litigation is not in anyone’s interest.”
An agreement to settle the case was reached in March, but the financial details of the deal were not disclosed. The agreement came as the case was set to go to trial after a majority panel for the U.S. Court of Appeals for the Ninth Circuit reversed a 2022 jury verdict in favor of Sutter.
In 2021, Sutter paid $575 million to settle an antitrust case brought by employers and then- California Attorney General Xavier Becerra. The case revolved around allegations that Sutter violated state antitrust laws by using its market dominance in Northern California to overcharge patients and employer-funded health plans.