Payers, including Blue Shield of California, have been strong-armed to contract with the entire Sutter Health hospital system instead of being able to pick specific facilities to bring into their networks, according to Law360.
Kristen Miranda, a former Blue Shield of California executive and current Aetna senior vice president, testified Feb. 14 in court as part of an ongoing lawsuit between Blue Shield of California and Sutter Health.
The lawsuit accuses Sacramento, Calif.-based Sutter Health of violating antitrust laws by overcharging payers through policies and contracts, resulting in higher premiums for members.
In her testimony, Ms. Miranda said the provider would force payers to contract with its entire system to avoid insurers "cherry picking" facilities, according to Law360. This was done despite the risk of these sweeping contracts driving up costs and premiums.
She said other local providers did not require such stipulations, making negotiating with Sutter Health difficult.
"They made it very clear during this time that the only option for negotiating a contract with Sutter was on a systemwide basis," Ms. Miranda said in court, according to Law360. "I believe that it was to put them in the best possible position to negotiate the most favorable terms for Sutter."
However, Ms. Miranda said that while during her time Blue Shield of California did have some plans that omitted select Sutter Health facilities, the move was something the provider would not allow broadly.