Sacramento, Calif.-based Sutter Health has defeated a $411 million class-action lawsuit alleging that it used its market power to negotiate restrictive contracts with major insurers and overcharge millions of premium-paying patients, according to Law360.
The case, Sidibe v. Sutter Health, was initially filed in 2012. The lawsuit centered on Sutter Health's "all-or-nothing" contracts with five major health insurers — Anthem Blue Cross, Blue Shield, Aetna, Health Net and UnitedHealthcare.
The lawsuit alleged that Sutter used its market power to force payers to contract with its entire system to avoid insurers "cherry picking" facilities. This practice allegedly resulted in higher premiums for members. The lawsuit claimed that regardless of whether the members received care at a Sutter Health facility, they suffered from increased premiums due to the higher costs to insurers. The lawsuit had a certified class of around 3 million members who purchased health policies from the five major insurers since 2011.
A lawyer representing the plaintiffs argued during opening statements on Feb. 10 that Sutter "gouged" class members with its contracting practices. Sutter's lawyers argued that the nonprofit health system doesn't have the market power alleged in the lawsuit because it competes heavily with Oakland, Calif.-based Kaiser Permanente.
A California federal jury sided with Sutter Health on March 11 after eight hours of deliberations over a two-day span, according to Law360.
James Conforti, the interim president and CEO of Sutter Health, told the Sacramento Bee that the health system was "extremely pleased with the verdict."
"After hearing many hours of testimony from witnesses, insurance plan representatives, provider organizations and experts, the jury found that Sutter Health did not engage in anti-competitive conduct and did not cause consumers to pay higher prices or premiums as plaintiffs alleged," Mr. Conforti told the Sacramento Bee.
In August 2021, Sutter Health settled a separate antitrust lawsuit for $575 million. The lawsuit alleged the provider used its Northern California market dominance to overcharge patients and payers.