California senator withdraws bill to end 'all or nothing' health system-payer contracting

Emily Rappleye (Twitter) - Print  | 

California state Sen. Bill Monning, D-Carmel, withdrew his bill aimed at ending health systems' "all or nothing" approach to contracting with payers, which requires payers to contract with all hospitals in a system or none, according to a San Francisco Chronicle report.

Although no health systems were named in the bill, it targeted practices at the heart of an antitrust lawsuit against Sacramento, Calif.-based Sutter Health. The lawsuit was filed in March by California Attorney General Xavier Becerra after a six-year investigation into Sutter's business practices. Mr. Becerra alleges Sutter uses its market power to control prices, in part by using "all or nothing" contracting, according to the San Francisco Chronicle.

An aide of Mr. Monning's would not comment on why the bill was withdrawn, according to the report. Opponents of the bill, including the California Hospital Association, say it would fragment hospital networks. Proponents, which included major payers and consumer advocacy groups, say the bill would help lower costs where consolidation has driven them up.

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