SACRAMENTO, Calif. (KCRA) —
California’s attorney general announced his department filed a lawsuit against health care giant Sutter Health.
Attorney General Xavier Becerra announced the suit at a news conference at his office Friday. The suit was filed Thursday in San Francisco County Superior Court.
Becerra’s office claims Sutter Health engaged in anti-competitive business practices, which led to illegal price hikes for Californians, especially in Northern California.
The complaint alleges that Sutter Health maintained power to control prices and prevent any kind of competition, chose not to disclose competitive prices by others in the industry and enabled itself to create higher prices for health care services that it ultimately wouldn’t have been able to charge in an open market.
“We intend to protect competition in the health care market here in California and to protect patients from artificially high prices for the health care for their family,” Becerra said. “The consequences of these practices for Northern California families are and have been real. The consequences for our economy are and have been real.”
Moreover, the AG’s office said Sutter Health was able to raise prices by forcing insurance companies into an “all or nothing” system. The system forced insurance companies to only work within Sutter Health entities and prevented those companies from offering patients more low-cost health plan options.
Also, the suit claims Sutter Health set rates that were too high for out-of-network doctors and lacked transparency by not publishing what it charges for health care.
“The practices that Sutter has been able to insist upon have sapped the Northern California market of the competition that should be there,” said Kathleen Foote, senior assistant attorney general.
Becerra cited a UC Berkeley report that found Northern California’s consolidated market means consumers are paying far higher prices for the average hospital inpatient procedure than their Southern California counterparts.
For Northern California residents, that cost was about $223,000. For those in Southern California, the cost was about $131,000.
Karen Garner, a spokesperson for Sutter Health, said the company is aware of the complaint but could not comment on the specific allegations because the company has not reviewed them. She released the following statement:
Sutter Health is proud to save patients, government payers and health plans hundreds of millions of dollars each year by providing more efficient and integrated care. It’s important to note that publicly available data (from the OSHPD) show that on average, total charges for an inpatient stay in a Sutter hospital are lower than what other Northern CA hospitals charge.
Further, Sutter Health has held average overall rate increases to health plans to the low single digits since 2012 in spite of our actual expenses for labor, facilities and technology increasing more than 37 percent during the same time period. We don’t know why some health plans have increased their rates to consumers as much as 20 percent annually.
It’s also important to note that healthy competition and choice exists across Northern California. There are 15 major hospital systems and 142 hospitals in Northern California, including Kaiser Permanente, Dignity, Adventist, Tenet, UC and more. And health plans can elect to include or exclude parts of the Sutter Health system from their networks, and health plans have been doing so for many years.
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Article source: http://www.kcra.com/article/california-ag-sues-sutter-health-says-company-illegally-raised-prices/19646579