Sutter Health drew almost $400 million in net income in the first quarter of 2019, more than quadruple the prior-year period.
The $394 million in net income attributable to the Sacramento, Calif.-based health system for the quarter ended March 31 was up significantly from $86 million in the prior-year period, the . The change was mostly due to unrealized investment gains, following a particularly rocky end to 2018 that brought steep investment losses.
Not-for-profit Sutter collected $3.3 billion in revenue in the first quarter, up 6% from $3 billion in the prior-year period. Expenses grew 6% as well, to just under $3.3 billion. It drew $38 million in operating income in the recently-ended quarter, up 8.6% from the prior-year period.
The high-profile trial over Sutter's prices and contracting practices is scheduled to begin Aug. 12. California's Attorney General, Xavier Becerra, filed a lawsuit against Sutter in March 2018 accusing the system of violating the state's antitrust law by using "all or nothing" contracting practices with health insurers. The suit also accused Sutter of setting excessively high out-of-network prices and restricting transparency around cost information. Becerra's lawsuit was consolidated with an ongoing class-action lawsuit filed in 2014 by UFCW & Employers Benefit Trust.
Sutter wrote that it believes its contracting practices are in compliance with industry standards and all applicable laws and regulations.
Sutter is also responding to Department of Justice inquiries about a lab outreach program that's the subject of dispute with commercial health insurers. Sutter wrote that it has settled a number of payment inquiries and is close to settling the rest.