Settlement Agreement Reached in Case Involving Anesthesia Billing Methodology

Nov 04, 2013, 16:59 ET from Sutter Health

SACRAMENTO, Calif., Nov. 4, 2013 /PRNewswire/ -- Sutter Health announced today an out-of-court settlement agreement in a case related to how Sutter Health hospitals bill for anesthesia services.

"Sutter Health's method of billing for these services was, and still is, consistent with federal and state laws and regulations. In fact, more than 90 percent of California hospitals, including hospitals operated by the state, bill for anesthesia services in this same manner," said C. Duane Dauner, president and CEO of the California Hospital Association.

Under terms of the agreement, Sutter Health will change from the industry-standard, time-based method of charging for hospital anesthesia services to a flat-rate system. Sutter Health will also proactively educate consumers via its website and other communications about anesthesia services and how patients are billed for them.

As part of the settlement, Sutter Health will pay $46 million. It will be divided among the plaintiffs' lawyers; Rockville Recovery Associates, a medical billing audit firm that filed the lawsuit; and the State General Fund.

"Honesty and integrity are core values of Sutter Health," said Bill Gleeson, Sutter Health spokesperson. "Sutter hospitals consistently followed appropriate regulations and protocols in billing for anesthesia services. Because we followed the law and hospital industry practice, it was difficult to agree to a monetary settlement of any size. We made a tough decision—based on the best interests of our charitable assets—that the certainty and closure of a settlement was preferable to the significant human and financial resources associated with a lengthy trial. As a not-for-profit health system, we're pleased to put this matter behind us and devote our full attention and resources to patient care."

The legal complaint was originally filed in 2009, and the California Insurance Commissioner joined the lawsuit in 2011. A trial in Sacramento Superior Court was scheduled to start this month.

Broadcast clips including Sutter Health spokesperson Karen Garner:
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About Sutter Health
Serving patients and their families in more than 100 Northern California cities and towns, Sutter Health doctors, not-for-profit hospitals and other health care service providers share resources and expertise to advance health care quality and access. The Sutter Medical Network includes many of California's top-performing, highest quality physician organizations as measured annually by the Integrated Healthcare Association. Sutter-affiliated hospitals are regional leaders in cardiac care, women's and children's services, cancer care, orthopedics and advanced patient safety technology.

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SOURCE Sutter Health