Federal Jury Sides With Sutter on Antitrust, Pricing Claims

Northern California behemoth Sutter Health defeated an antitrust class action on Friday with jurors siding with the provider over claims it used its market muscle to force insurers to pay more for services.

The U.S. District Court for the Northern District of California jury deliberated Thursday and Friday and rejected claims by four patients and two companies that buy insurance for employees claiming Sutter tied purchasers into all-or-nothing plans and violated the state’s unfair business practices act. The plaintiffs contended Sutter’s practices also violated the federal Sherman antitrust act and California’s antitrust statute.

Anthem Blue Cross, Blue Shield of California, Aetna, United Healthcare, and Health Net covered costs and contracted with Sutter for services for members. The accusers claimed Sutter used its economic power in seven markets to force the health insurance companies to buy Sutter’s medical services in four other markets.

Jurors rejected plaintiffs’ claims that insurers paid higher prices for inpatient hospital services and that the individuals and companies paid higher premiums.

James Conforti, Sutter Health interim president and CEO, in a statement called the decision “important not only for Sutter Health, but for all healthcare providers in California.”

“It validates that healthcare providers, including doctors and hospitals, have a right to evaluate whether to participate in health plan networks and ensure that they don’t interfere with the ability to provide coordinated patient care and will not lead to surprise bills,” Conforti said.

Sutter won summary judgment on claims from the years 2008 to 2010 because the purchasers failed to prove damages, meaning that they failed to establish injury. Sutter also won summary judgment on monopolization and attempted monopolization claims because the individuals and companies didn’t produce evidence backing up their claims.

A San Francisco Superior Court judge last summer approved a $575 million antitrust settlement between Sutter and the United Food and Commercial Workers & Employers Benefit Trust and the state of California over claims Sutter forced illegal insurance contract and payment terms.

The Sacramento, Calif.-based company, which runs 23 acute-care hospitals in the state, has 3 million patients in Northern California.

The case is Sidibe v. Sutter Health, N.D. Cal., No. 3:12-cv-04854, jury verdict 3/11/22.