Sutter Health agreed to settle a class-action lawsuit alleging the health system inflated healthcare costs by forcing insurers into restrictive contracts.
The Sacramento, California-based nonprofit system reached an agreement on March 2 with individuals and businesses that alleged Sutter used all-or-nothing contract provisions with insurers to monopolize Northern California hospital markets and drive up costs, according to a U.S. District Court for the Northern District of California filing. All-or-nothing contracts require insurers to include all of a health system’s facilities in their networks regardless of cost.
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Terms of the settlement were not disclosed.
Sutter declined to comment.
Plaintiffs will file a motion for preliminary approval of the settlement agreement within 45 days, according to the filing.
Northern California residents and businesses filed the lawsuit in 2012, seeking $1.2 billion in damages. A jury sided with Sutter in 2022, but last year the U.S. Court of Appeals for the Ninth Circuit court found that a lower court judge’s error excluded critical evidence.
Another case, which Sutter settled for $575 million in 2021, also alleged Sutter used all-or-nothing contracts.
