4.5.2018 The State AG Report Weekly Update

2018 AG Elections

Democrat Constance Anastopoulo Declares Candidacy for South Carolina Attorney General


California Attorney General Sues Hospital System Over Allegedly Anticompetitive Practices

  • California AG Xavier Becerra filed a lawsuit against Sutter Health, a hospital system in Northern California, for allegedly engaging in anticompetitive practices in violation of state unfair competition and antitrust laws.
  • According to the complaint, Sutter Health allegedly controlled prices and excluded competition by preventing insurance companies from negotiating contract terms or providing low-cost care alternatives to patients, setting excessively high out-of-network rates, and restricting publication of provider cost information, among other things, all of which led to higher consumer costs.
  • The complaint seeks an injunction requiring Sutter Health to cease engaging in anticompetitive behavior, take affirmative acts to restore competition, and disgorge overcharges to self-funded payors arising from anticompetitive acts.

Consumer Protection

Georgia Attorney General Settles with Debt Collector Over Alleged Consumer Harassment and Deception

  • Georgia AG Chris Carr settled with debt collection company National Check Resolution, Inc. (“NCR”) over alleged violations of the state Fair Business Practices Act and federal Fair Debt Collection Practices Act.
  • According to the AG’s office, NCR and its management allegedly threatened consumers with arrest or imprisonment for unpaid debt; failed to disclose that they were debt collectors and falsely represented themselves as attorneys, legal couriers, or government entities; inappropriately contacted third parties and divulged debtor information; and attempted to collect debts from payday loans that were unenforceable under state law.
  • According to the terms of the settlement as provided by the AG’s office, NCR must cease collections on 11,980 accounts, representing $8.5 million in purported consumer debts; pay a $20,000 civil penalty; and pay an additional $240,000 civil penalty if NCR fails to comply with state and federal debt collection laws during a three-year monitoring period.

Health Care

Washington Attorney General Settles with Health Care Providers Over Alleged Consumer Protection Violations

  • Washington AG Bob Ferguson settled with health care providers Providence Health & Services–Washington, Swedish Health Services, and Swedish Edmonds (collectively, “Providence & Swedish”) over alleged consumer protection violations.
  • According to the AG’s complaint, Providence & Swedish allegedly failed to disclose to consumers that the pathology provider exclusively used by Providence & Swedish was out-of-network for consumers with certain health insurance, causing those consumers to be billed at full retail rates without prior notice in violation of the state Consumer Protection Act.
  • Under the terms of the consent decree, Providence & Swedish will pay $1.4 million, including $385,000 in restitution to consumers.

Bipartisan Coalition of 49 Attorneys General Pens Letter to Congress Supporting Legislation Expanding State Medicaid Fraud Investigation and Prosecution Authority

  • 49 AGs sent a letter to U.S. House of Representatives leadership in support of a bill, R. 3891, that the AGs state would expand state authority to “detect, investigate, and prosecute Medicaid patient abuse in non-institutional settings.”
  • As previously reported, a bipartisan coalition of 38 AGs previously urged the U.S. Department of Health and Human Services to change federal limitations on states’ ability to use federal funds to investigate Medicaid abuse and neglect cases; according to the AGs, H.R. 3891 reflects those recommendations.
  • The legislation is currently pending before the Health Subcommittee of the House Energy and Commerce Committee.

State v. Federal

Attorneys General Divide Along Party Lines Over Proposed Rule Allowing Denial of Health Care on Religious Grounds

  • A coalition of 19 Democratic AGs, led by New York AG Eric Schneiderman, and a coalition of 17 Republican AGs, led by Texas AG Ken Paxton and Arizona AG Mark Brnovich, filed comments with the U.S. Department of Health and Human Services (“HHS”) taking opposing positions on the agency’s proposed rulemaking titled “Protecting Statutory Conscience Rights in Health Care; Delegations of Authority,” 83 Fed. Reg. 3880 (Jan. 26, 2018) (“Proposed Rule”).
  • The Proposed Rule seeks to provide greater protections for health care workers who decline to participate in medical procedures on religious or moral grounds, imposes requirements on health care employers to ensure that these protections are implemented, and ties employers’ compliance to federal funding.
  • The Democratic AGs’ comments urge HHS to withdraw the proposed rule as it “would allow individuals and entire institutions to deny lawful and medically necessary care to patients,” while the Republican AGs’ comments support the Proposed Rule as it protects the “religious liberty and freedom of conscience” of health care workers.