3 million plaintiffs seek $1.2B from California health firm

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A lawsuit over high health bills filed on behalf of more than 3 million employers and people is seeking as much as $1.2 billion from one of Northern California’s largest health systems.

Plaintiffs in the lawsuit allege in court documents that Sutter Health abused its market power and “caused enormous adverse economic impacts” by discouraging patients from using lower-cost insurance and lower-cost hospitals.

That allowed Sutter to overcharge for its own services, the lawsuit alleged, and caused nearly $400 million in insurance premium overcharges to the plaintiffs between 2011-2017. Five companies provided the health insurance: Anthem Blue Cross, Blue Shield of California, Aetna, United Healthcare, and Health Net.

The plaintiffs’ attorneys estimate that includes 3 million patients and employers. The system operates 24 hospitals with more than 12,000 doctors and 16,000 nurses.

And it increased pricing transparency while limiting what Sutter could charge for out-of-network procedures. Sutter said there is no evidence that it worked to maintain its monopoly power in the seven communities where it dominates. And systemwide volume discounting in turn lowers prices, the company said.

Sutter has argued that insurance companies were to blame for bumping up costs and noted there were no allegations that its contracts affected patient care. Despite the antitrust claims, it said there is plenty of competition.

 

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