Sutter Health agreed to pay $575 million in antitrust settlement. Now judge has weighed in
A landmark $575 million settlement by Sutter Health over the Sacramento medical giant’s business practices received a judge’s preliminary approval Tuesday.
A year ago, Sutter agreed to pay $575 million to settle antitrust claims brought by California Attorney General Xavier Becerra. The deal also requires Sutter to change its relationships with insurance companies, employers and other key players in the health care industry, and have its business operations monitored for a decade.
Becerra’s office charged that Sutter used its considerable market muscle — a system with 24 hospitals, 12,000 doctors and 35 outpatient centers — to bend insurance companies and employers to its will. Its practices skewed medical costs throughout Northern California; Becerra cited one study showing that a Cesarean section in Sacramento costs $27,000, nearly double the price in Los Angeles or New York.
The litigation targeted a number of Sutter practices, including contract language forbidding insurers from paying incentives to doctors to steer patients toward providers that were cheaper. Among other things, Sutter agreed to stop bundling its services and forcing insurers and employers to buy more than they really needed.
“This landmark settlement will require Sutter to stop practices that drive patients into more expensive health services and to operate with more transparency,” Becerra said in a prepared statement Tuesday.
The settlement was prompted by a lawsuit initiated by the UFCW & Employers Benefit Trust, an affiliate of the United Food and Commercial Workers union. Becerra’s office later joined in the case.
On Tuesday, the deal got preliminary approval by San Francisco Superior Court Judge Anne-Christine Massullo.
A Sutter spokeswoman said the judge’s ruling “enables the settlement approval process to continue moving toward final approval, which will ultimately help preserve our integrated network of care and is in the best interests of our patients and the communities we serve.”
This story was originally published March 9, 2021 at 5:48 PM.