Sacramento Business Journal by Kathy Robertson –
June 6, 2013:
A San Francisco District Court judge has dismissed allegations that Sutter Health practiced anti-competitive conduct in Northern California that violates antitrust laws, but gave plaintiffs time to amend their complaint.
The ruling on Monday came in an antitrust class action filed in September 2012 by Djeneba Sidibe and Diane Dewey, two Northern California residents enrolled in health plans that had contractual relationships with Sutter for health care services.
The plaintiffs’ allege they and others of the class have been injured by Sutter’s alleged anti-competitive conduct by paying at least several thousand dollars more per year for health services than they would otherwise.
U.S. Magistrate Laurel Beeler didn’t see enough proof to back the claim. She dismissed the lawsuit, but gave plaintiffs 28 days to file an amended complaint.
“We’re pleased with the court’s decision,” Sutter spokesman Bill Gleeson said in a statement.
Plaintiffs’ attorney Azra Mehdi in San Francisco said the judge missed the point of the lawsuit, but offered an opportunity to amend the complaint.
“We’ll fix what we can,” Mehdi said. “Courts make demands that you argue the whole case before discovery. That’s why big organizations like Sutter Health beat out the little guy. If they toss it out again, we’ll go the Ninth Circuit to see if they see something.”
The lawsuit alleges Sutter conspired to impose contract arrangements that require health plans to use Sutter providers or affiliated doctors — even if there are lower-priced alternatives — or be denied access to any of them. Plaintiffs also allege Sutter’s contracts require health plans to incentivize use of Sutter services and penalize plan members who fail to use them.
These actions allow Sutter to impose high prices and maintain monopoly power in Northern California, the lawsuit concludes.