Sutter Health destroyed evidence in antitrust case

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A California judge ruled Sacramento-based Sutter Health “intentionally destroyed” 192 boxes of documents which were sought in an antitrust lawsuit against the not-for-profit health system.

Sutter—one of the largest integrated systems in the U.S.—had been sued in 2014 by UFCW & Employers Benefit Trust, a health plan for grocery workers. The plan alleged Sutter violated antitrust laws and abused its market power by including “gag clauses” in its contracts preventing patients from seeing negotiated rates and possibly seeing a cheaper provider, as well as forcing every one of its facilities to be included in insurance networks in an “all or nothing” style deal.

In the Nov. 13 ruling obtained by California Healthline, San Francisco County Superior Court Judge Curtis Karnow said Sutter’s chief contracting officer its managed care department, Melissa Brendt, and assistant general counsel Daniela Almeida, ordered an assistant to destroy 10 years’ worth of documents going back to 1995, even though those files were supposed to be kept for another two decades.

Sutter claimed it was an inadvertent error, but an e-mail to Brendt from the executive assistant, Sina Santagata, suggested this was both planned and out of the ordinary.

“I’ve pushed the button … if someone is in need of a box between March 15, 1995, and Nov. 23, 2005 … I’m running and hiding. … ‘Fingers crossed’ that I haven’t authorized something the FTC (Federal Trade Commission) will hunt me down for,” Santagata wrote.

Judge Karnow said the evidence shows “Sutter’s conduct was more than just an inadvertent error” and that it destroyed documents “knowing that the evidence was relevant to antitrust issues.”

He ordered Sutter to examine backups of emails covering the years 2002 to 2005 to search for documents which may cover the same territory as the destroyed records. While asserting no order could restore what had been destroyed by Sutter, he said he’d consider the plaintiffs’ request for issuing “adverse jury instructions” in light of Sutter’s actions, with a trial scheduled to begin in June 2019.

A study published in 2016 found prices at Sutter were 25 percent higher than other hospitals around California, amounting to a gap of nearly $4,000 per patient admission. It’s been accused of strong-arming companies over its prices before, including requiring self-insured companies to either accept mandatory arbitration, waiving their right to file lawsuits, or else Sutter won’t offer them in-network rates.