SACRAMENTO, Calif. — Sutter Health today announced that it has entered into an agreement with the federal government and a private plaintiff to resolve a False Claims Act lawsuit filed in 2015 involving Medicare Advantage claims related to its medical foundation operations. The matter was partially resolved in April 2019 for $30 million (a fact not included by the U.S. Department of Justice (DOJ) in its press release regarding the settlement). Under the follow-on agreement announced today, Sutter will pay an additional $60 million (not $90 million) to fully resolve the litigation. The agreement makes clear that Sutter and its medical foundation affiliates admit no liability in agreeing to settle the matter.
As part of this resolution, Sutter has also concurrently entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. The CIA, Sutter’s first, is intended to promote compliance with federal healthcare program requirements over a period of five years and includes specific elements that must be in place and monitored.
Sutter’s Ethics and Compliance Services team is responsible for overseeing Sutter’s compliance with the CIA. Sutter looks forward to collaborating with OIG over the term of the agreement. In 2017, PricewaterhouseCoopers conducted a compliance program assessment finding Sutter’s program to be effective, with several areas identified as leading practices. Sutter has since maintained and enhanced these program elements and is well-prepared to implement the terms of the agreement.
Today’s agreements bring closure to a long-running dispute, allowing Sutter to avoid the uncertainty and further expense of protracted litigation, and enabling a constructive relationship with the government as we work together under the CIA.