December 20, 2019

The largest health care system in Northern California has agreed to pay $575 million to settle claims that it used its market power to artificially inflate health care prices in the Bay Area and the Sacramento Valley, Attorney General Xavier Becerra said Friday.

Sutter Health will make the payment to employers, unions and others covered under the class action and to attorneys working on the case. The Sacramento-based health care company will also limit what it charges for out-of-network services, increase price transparency and cooperate with a court-appointed monitor over the next decade, according to terms of the settlement filed in San Francisco Superior Court.

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Becerra was joined in the suit by the United Food and Commercial Workers International Union, the Employers Benefit Trust and individual plaintiffs. In addition to the attorney general’s office, the plaintiffs were represented by lawyers from firms including Pillsbury & Coleman; Farella Braun + Martel; Cohen Milstein Sellers & Toll; Kellogg Hansen Todd Figel & Frederick; and McCracken, Stemerman & Holsberry.

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The plaintiffs originally sued Sutter Health in 2014 claiming the company’s contract practices artificially inflated prices. The California attorney general filed similar claims against Sutter in 2018.

The case appeared headed to a months-long trial until the two sides announced in October they had reached a deal. The agreement is scheduled to go before San Francisco Superior Court Judge Anne-Christine Massullo on Feb. 25.

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