Statement on California AG-Announced Settlement Undermining Value-Based Care

Melinda Hatton
General Counsel
American Hospital Association

December 20, 2019 

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.

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Contact: Colin Milligan, (202) 638-5491, cmilligan@aha.org
               Marie Johnson, (202) 626-2351, mjohnson@aha.org