Jury finds Sutter Health not guilty of imposing restrictive contracts on insurers
This decision validates that providers have a right to evaluate whether to participate in health plan networks, CEO says.
The Sutter Health Alta Bates Herrick Campus in Berkeley, California.
Photo: Smith Collection/Gado/Getty Images
A jury has found Sutter Health not guilty of using its market power to force health insurance companies into using its hospitals and physicians.
Insurers were forced into higher-cost contracts even when less expensive options were available, according to the class action lawsuit filed in 2012.
In Djeneba Sidibe v. Sutter Health, the jury found Sutter not guilty in the United States District Court in the Northern District of California.
WHY THIS MATTERS
The Sacramento-based health system was accused of using anticompetitive business practices that inflated the cost of healthcare for patients across Northern California.
"After hearing many hours of testimony from witnesses, insurance plan representatives, provider organizations and experts, the jury found that Sutter Health did not engage in anticompetitive conduct and did not cause consumers to pay higher prices or premiums as plaintiffs alleged," said James Conforti, interim Sutter Health president and CEO. "In particular, the jury's decision reached the substance of the claims, finding squarely that Sutter Health did not tie together its hospital services, did not force insurance companies to agree to contracts that prevented insurance companies from introducing networks, and did not restrain competition."
This decision is important for all healthcare providers in California, Conforti said, as it validates that healthcare providers, including doctors and hospitals, have a right to evaluate whether to participate in health plan networks and to ensure that they don't interfere with the ability to provide coordinated patient care and will not lead to surprise bills.
THE LARGER TREND
The case is separate from another anticompetitive accusation against Sutter Health brought in 2014, in which a federal judge approved a $575 million settlement.
The class action suit was brought by the United Food and Commercial Workers and Employers Benefit Trust. It was later joined by then California Attorney General Xavier Becerra on behalf of the people of California.
It alleged that Sutter Health had imposed price secrecy, all-or-nothing and anti-tiering provisions in its contracts with the health plans that led them to pay more than necessary for healthcare services and products.
In October 2019, one day before the case was set to go to trial, Sutter Health agreed to settle the case. The terms of the settlement were announced that December.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
