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Healthcare Business News

Antritust lawsuit against Sutter revived again

By Joe Carlson
Posted: December 10, 2013 - 3:30 pm ET

Plaintiffs are trying to revive a class-action lawsuit against northern California's Sutter Health that claims the 24-hospital system is violating antitrust laws by forcing insurance companies to cover all Sutter doctors and steer patients to the system.

The federal lawsuit, Djeneba Sidibe v. Sutter Health, alleges that hundreds of thousands of insured Californians are paying higher premiums because Sutter uses its monopoly power to charge higher rates.

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Sutter attorneys have vigorously disputed the substance of the allegations and said they're too vague to support a lawsuit. Lawsuits from the same litigants alleging the same conduct have twice been dismissed by the U.S. District Court in San Francisco since 2012.

“Sutter believes that the third amended complaint fails to state any legal claim and is not materially different from the prior two complaints, both of which the judge dismissed,” a spokeswoman for the system said in an e-mail.

In November, U.S. Magistrate Judge Laurel Beeler dismissed the second complaint (PDF) because it lacked specific evidence defining the products and markets Sutter was monopolizing or the effects of the alleged conduct. But the decision left the door open for the litigants to file an amended case with more evidence to support the allegations.

“I think that the allegations here have been clarified,” said attorney Matthew Cantor, an antitrust attorney with Constantine Cannon that is representing the plaintiffs. “I certainly think that there is substantial specificity in identifying the markets, product and geographic, and the anticompetitive conduct by Sutter.”

The named plaintiffs in the third amended complaint are Djeneba Sidibe and Diane Dewey, both of whom have had commercial insurance policies and say they have paid higher out-of-pocket costs for care at Sutter hospitals because of the alleged monopolistic practices.

The lawsuit seeks to represent a class including anyone in the San Francisco and Sacramento metropolitan statistical areas who had a healthcare plan that included Sutter since 2008—a group that Cantor said was likely to number in the hundreds of thousands.

Follow Joe Carlson on Twitter: @MHJCarlson

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