Sutter Health’s $575M Antitrust Settlement Approved

Sutter Health, a nonprofit hospital operator in California, received final approval to pay a US$575 million antitrust settlement to a health benefit trust and certain employers for allegedly using its market powers to force illegal insurance contract and payment terms.

The settlement with the United Food and Commercial Workers & Employers Benefit Trust (UBET), announced in late 2019 and approved Friday, August 27, by San Francisco Superior Court Judge Anne-Christine Massullo after the parties’ tussle over attorney fees, includes injunctions to last for at least 10 years.

The settlement resolves a class action lawsuit brought on by UEBT in 2014 claiming that Sutter’s anticompetitive business practices caused them to pay more for healthcare items and services than necessary.

Attorney General Becerra later filed a similar lawsuit on behalf of the people of California seeking injunctive relief to compel the health system to correct any anticompetitive practices moving forward. The lawsuits were combined by the court.

The anticompetitive practices identified in the lawsuit included intentionally establishing, increasing, and maintaining market power in Northern California, which it used to negotiate significantly higher healthcare prices than would have been charged in a competitive market.

Plaintiffs described the approach as an all-or-nothing strategy, which required payers in the region to negotiate with all facilities in the health system or have their contracts terminated.

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