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Insurance commissioner joins lawsuit alleging fraudulent billing by Sutter Health

Sacramento Bee, 4/13/11

By Darrell Smith
Sacramento Bee
April 13, 2011

Sutter Health hospitals routinely charged insurers for anesthesia services that were never performed, bogus bills that potentially ran into the hundreds of millions of dollars, the state's insurance commissioner alleged Wednesday in joining a lawsuit against the Sacramento-based health network.

"We believe the amount of the fraudulent charges is in the hundreds of millions of dollars, if not more," Insurance Commissioner Dave Jones said Wednesday in a press release. The motion, known as a complaint in intervention seeks damages including "profits unlawfully acquired" by Sutter and co-defendant Multiplan Inc., an intermediary between health insurers and hospitals; as well as penalties under sections of the state's Insurance Code.

In a statement, Sutter Health said it plans to "vigorously defend this matter."

"We believe this case is without merit. ... Sutter Health is committed to compliant billing and charging practices."

Sacramento-area Sutter hospitals including Sutter Memorial and Sutter General in Sacramento and its facilities in Auburn, Davis, Jackson and Roseville, along with a number of Sutter's Bay area and Central Valley hospitals and medical facilities were named in the complaint filed Monday in Sacramento County Superior Court.

The case, focusing on billings for anesthesia services between 2002 and 2008, was first filed in 2009 by health care auditing firm Rockville Recovery Associates Ltd. Rockville was hired by a private insurer to investigate billings from Sutter Health and other health care providers to the insurer, the commissioner's office said.

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