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Sutter Health has agreed to a $575 million settlement resolving claims it violated competition law.
UFCW & Employers Benefit Trust filed a class action lawsuit in 2014, alleging Sutter Health had “imposed price secrecy, all-or-nothing, and anti-tiering provisions” in its health plan contracts and that the company’s restrictive conduct violated both the Cartwright Act and Unfair Competition Law.
The People of the State of California filed a second lawsuit in March 2018, and the Court consolidated the cases in May 2018.
Class Members will receive pro rata shares of the settlement fund.
Payments will be weighted based on the hospital to which the Class Members made payments, in order to account for pricing variances between the hospitals.
Payments will also be weighted based on time period to account for pricing changes over time.
The Class is made up of all self-funded payors that are citizens of California for purposes of 28 U.S.C. § 1332(d) or arms of the state of California and compensated Sutter Health for general acute care hospital services or ancillary products:
- For services between Jan. 1, 2003, and July 25, 2016, at prices set by contracts between Sutter and Aetna
- For services between Jan. 1, 2003, and Dec. 31, 2016, at prices set by contracts between Sutter and Anthem
- At any time between Jan. 1, 2003, and June 25, 2016, at prices set by contracts between Sutter and Blue Shield
- For services between Jan. 1, 2003, and April 30, 2016, at prices set by contracts between Sutter and Cigna
- At any time between Jan. 1, 2003, and June 30, 2016, at prices set by contracts between Sutter and United Healthcare/PacifiCare
Self-funded payors are entities — such as employers, union benefit trusts, or school districts — that fund a health plan for their members or employees.
Self-funded payors are considered as such regardless of whether the health plan is administred by a health insurance company or a third-party administrator, and regardless of whether they offer a fully insured health plan in addition to a self-funded plan.
Businesses are citizens of California if they are organized under California laws or if their principal place of business is in California. To be part of the Class, claimants must have been a California citizen on April 7, 2014.
Arms of the state of California are any governmental entities, such as school districts, fire protection districts, or public universities, within the state.
And entities are considered to have compensated Sutter Health for general acute care hospital services or ancillary products if they paid the company for health care provided to their plan’s members or enrollees by a Sutter general acute care hospital.
Those who were contractually obligated to pay Sutter Health for these services, either directly or through an insurance company or other third party, are considered to have compensated Sutter Health, even if another entity paid on their behalf.
In addition to monetary relief, Sutter Health also will be prohibited from engaging in the alleged contracting practices and similar future conduct.
Class Members will have until May 28 to file a claim or, alternatively, object to the Sutter Health settlement.
Online claim filing will be available after March 29, 2021.
For more information, visit the settlement website.
Did you pay Sutter Health for health services or products? Let us know what you think of the settlement in the comment section below.
The plaintiffs are represented by Richard L. Grossman and Philip L. Pillsbury Jr. of Pillsbury & Coleman LLP; Daniel A. Small of Cohen Milstein Sellers & Toll PLLC; Christopher C. Wheeler of Farella Braun + Martel LLP; Daniel G. Bird of Kellogg, Hansen, Todd, Figel & Frederick PLLC; and Steven L. Stemerman and Sarah Grossman-Swenson of McCracken, Stemerman & Holsberry LLP.
The Sutter Health Class Action Lawsuit is UFCW & Employers Benefit Trust, et al. v. Sutter Health, et al., Case No. CGC 14-538451, consolidated with People of the State of California, ex. Rel. Xavier Becerra v. Sutter Health, Case No. CGC-18-565398, in the Superior Court of the State of California, County of San Francisco.
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