Hospitals Settle Suit Over Conditions Imposed in Affiliation Plan

LOS ANGELES (CNS) - Huntington Hospital, Cedars-Sinai Medical Center and the state reached a settlement of the hospitals' lawsuit challenging conditions for their affiliation that they alleged would inhibit their ability to provide specialized health care at lower costs, according to court papers filed today.

The proposed amalgamation of the two hospitals was announced in March 2020, a move that will help facilities such as Huntington Hospital avoid significant obstacles to serving the community longterm, according to the hospitals' Los Angeles Superior Court lawsuit filed March 30.

The attorney general approved Huntington's affiliation with Cedars-Sinai in December, but only if the two hospitals accepted competitive conditions the plaintiffs maintained would put Huntington Hospital and its patients at a distinct disadvantage compared to any other hospital in the region, according to the suit.

One of the conditions objected to by the plaintiffs put price caps on Huntington's rates to insurance companies for at least 10 years, without any requirement that the insurance companies pass their savings on to consumers, according to the suit. Another condition forced Huntington Hospital and Cedars-Sinai to submit to insurance companies' demands for winner-take-all arbitration in contract negotiations, a requirement facing no other hospital in the state, according to the suit.

But the issues were resolved in the settlement reached Sunday, according to the court papers filed Monday by the Attorney General's Office.

Attorneys will appear before Judge James C. Chalfant on Tuesday to ask that trial scheduled for July 29 be canceled and that the existing conditions of the affiliation be replaced with the revised ones.

Emilio Varanini, a supervising deputy attorney general in the competition unit of the healthcare rights and access section of the Attorney General's Office, said in a sworn declaration that settlement talks began in May.

"The parties exchanged multiple settlement offers and I engaged in discussions with (the hospitals') counsel regarding those offers," Varanini said.

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