An antitrust class-action lawsuit that could potentially cover more than three million plaintiffs has been filed against a Northern California Health System, Sutter Health.
Four people and two companies are named as plaintiffs in the class-action suit. According to the complaint, Sutter Health violated antitrust laws after it charged high health bills in regions of Northern California where it was the only hospital in the mostly rural area of the state.
The lawsuit explains that Sutter Health abused its market power and in doing so “caused enormous adverse economic impacts” because it discouraged individuals from using insurance that was less costly in receiving services from hospitals that charged lower rates. By inadvertently funneling patients to their own facilities, Sutter Health overcharged for the services they rendered and between 2011-2017, they were the cause for over $400 million in insurance premium charges to patients.
Sutter Health operates 24 hospitals with over 12,000 doctors and 16,000 nurses. The attorneys for the plaintiffs estimate that class action could cover over three million employers and patients. With these numbers alongside the state law which would allow for triple damages if plaintiffs win, potential payout estimates could top as much as $1.2 billion.
In a statement shared Wednesday, Sutter Health denied accusations of anti-competitive practices. Their statement detailed that they looked forward to “demonstrating that in Northern California’s highly competitive market, Sutter’s integrated healthcare network provides high-quality care that creates efficiencies, drives down total cost of care and benefits the diverse communities we serve.”
A similar lawsuit was filed against the health system in 2019. In that case, Sutter Health agreed to pay different plaintiffs $575 million to settle allegations that they used anti-competitive practices that led to increased costs for patients. In a separate settlement, Sutter Health agreed to a 10-year monitoring period which was approved by the court. The monitoring period was meant to ensure that Sutter Health no longer increased patient costs through the insurance companies.
In the pending case against Sutter Health, San Francisco U.S. Magistrate Judge Laurel Beeler shared her favor of the case going to trial. Jury selection for the trial is set to take place this week with estimates of a trial lasting answer from four to six weeks.
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