California AG Opposes Healthcare System’s Pandemic-Prompted Proposal to Delay Settlement

In response to Sutter Health’s motion for a continuance, California Attorney General Xavier Becerra requested that a San Francisco state court move forward with a preliminary approval hearing of its $575 million antitrust settlement with the healthcare system that includes not only monetary compensation but also an injunction prohibiting Sutter from entering into certain types of exclusive deals, steering customers away from lower-cost healthcare options, has increased transparency requirements, and a court-appointed monitor to ensure compliance. The State contended that the injunction contains a “‘Changed Circumstances’ provision that fully addresses Sutter’s concerns,” and urged the court not to deprive Californians and class members of “the expeditious relief for which they bargained and for which they gave up the opportunity to pursue their claims of anticompetitive conduct at trial.”

Sutter sought not only to continue the preliminary approval hearing, but also suggested that it “might try to modify the settlement even before approval,” according to the State’s opposition. Sutter argued that the consequences of responding to the pandemic “have been severe and have already put Sutter in a drastically different position than when the parties agreed to settle this matter in December.” Among other issues, Sutter cited COVID-19-caused “devastating declines in patient volume,” due to the restriction on elective treatments, triggering organizational and financial chaos.

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