Dive Brief:
- Sutter Health recently asked employers, via insurances administrators, to waive their rights to sue and to agree to arbitration, according to a KQED News report.
- Employers who fail to agree to the new legal agreement will lose access to discounted in-network prices, the report says.
- The request comes shortly after a federal appellate court ruled employers and health plans can seek class-action status in a lawsuit against Sutter Health for overcharging for services.
Dive Insight:
Many employers in the San Francisco Bay area were recently asked to agree to a new arbitration policy with Sutter Health. The request has reignited claims that Sutter Health is leveraging its power to maintain control over healthcare prices.
Employers in this position face a difficult decision: Lose their right to sue or lose access to in-network prices. Sutter Health holds more than 45% of the healthcare market share in six Northern California counties. This means failure to agree with their request would have negative consequences for numerous employees who use Sutter Health.
KQED News noted self-insured companies like San Francisco-based technology company Castlight Health believe Sutter Health sent them the letter as a result of a class-action lawsuit UFCW & Employers Benefit Trust filed against the insurer in 2014. UFCW alleged Sutter Health's anticompetitive practices have led to inflated prices.
Staying with Sutter Health and paying out-of-network prices may prove too much to bear for many. Prices at Sutter Health hospitals are approximately 25% higher than at other hospitals in California, according to a University of Southern California analysis.