Settlement announced in Sutter Health antitrust case

Sutter Health today announced terms of a settlement agreement to resolve an antitrust lawsuit with the United Food and Commercial Workers & Employers Benefit Trust (UEBT) on behalf of a class of California Self-Funded Payers and the California Attorney General. The settlement agreement was submitted to the San Francisco Superior Court for preliminary approval today.

“The parties are pleased to have reached an agreement to resolve this lawsuit and believe a long and costly trial that could be tied up in the courts for years is not in anyone’s best interest,” Sutter Health and UEBT said today in a joint statement. “There is no admission of wrongdoing on the part of Sutter Health.”

In a statement, AHA General Counsel Melinda Hatton said, “Today’s announcement of a settlement that benefits the commercial health insurance industry is concerning. Unfortunately, it will be several dominant commercial health insurance companies — not consumers — that will benefit from terms that will allow those insurers to cherry-pick the hospitals with which they contract, as well as eliminate incentives for them to work with hospitals to develop and sustain value-based care. Consumers in rural or vulnerable communities are most likely to be disadvantaged by the settlement.  

“The settlement will also increase the cost of health care, making contracting with dominant insurers more expensive on top of the costs hospitals already bear from excessive inappropriate denials of claims for payment and other tactics that generate revenue for insurers while delaying payments for care to both hospitals and patients. It will also divert resources that hospitals, like Sutter, use to provide benefits to their communities. For the hospital field, those benefits totaled $95 billion in 2016.”

For more on the settlement, see Sutter Health’s statement.