Sutter Health agreed to pay $228.5 million to settle a class-action lawsuit that alleges the health system forced insurers into anticompetitive contracts.
Northern California residents and businesses sued Sutter in 2012, alleging the Sacramento, California-based nonprofit health system made insurers include all of Sutter’s facilities in their networks, regardless of cost. The U.S. District Court for the Northern District of California still needs to approve the draft settlement. The court set a hearing for May 22.
Related: Sutter Health agrees to settle antitrust case
The $228.5 million preliminary settlement agreement accounts for 1.3% of Sutter’s 2024 revenue of $18.21 billion. The health system recorded operating income of $142 million in 2024.
“Sutter Health is pleased to resolve this matter, which involved decades-old allegations and a prior unanimous jury verdict in our favor,” a Sutter spokesperson said in a statement.
A jury sided with Sutter in 2022, but the U.S. Court of Appeals for the Ninth Circuit court in 2024 found the lower court judge’s error excluded critical evidence, and the jury's decision was overturned.
Sutter is still managing the repercussions of a prior antitrust lawsuit. That case was settled for $575 million in 2021, and led to a third-party monitor overseeing the organization’s operations. It also required Sutter to stop using anticompetitive contract terms.
