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Some firms, labor groups accuse Sutter of abusing power

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Some companies and labor groups accuse Sacramento, Calif.-based Sutter Health of abusing its market power by demanding that, in the words of Becker’s Hospital Review, “companies either sign an arbitration agreement to resolve any legal disputes with the health system or pay significantly higher rates for their employees’ medical treatment.”

The accusations are from a March 16 court filing by David Lansky, CEO of the Pacific Business Group on Health, which represents such companies as Wells Fargo Bank and Chevron as well as the California Public Employees’ Retirement System.

Companies that refuse to sign the arbitration agreement must pay 95 percent of Sutter’s full charges for the care employees receive at Sutter’s hospitals, surgery centers and clinics.

Mr. Lansky says that large companies employing people in Northern California must have Sutter in their workers’ insurance networks because of the system’s size. The system includes 24 hospitals and 34 surgery centers.

“Their choice is between two unacceptable alternatives. Pay 95 percent out-of-network pricing for enrollees that access Sutter services, or agree to give up their claims in this litigation.”

Sutter, for its part, denies trying to keep companies from joining the class-action suit, and asserts  that the contract terms, including the arbitration provision, are reasonable.


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