CalPERS Will Review Billing by Sutter Health

CalPERS, the nation’s biggest pension fund, will review allegations of possible overcharging at Sutter Health hospitals after the Northern California chain acknowledged it could face a federal probe for its Medicare billing practices, a CalPERS spokesman said Wednesday.

The California Public Employees’ Retirement System will take a look at so-called outlier payments that are designed to compensate hospitals for costly patient care above and beyond what Medicare would normally reimburse for the sickest patients.

These type of payments already have landed Santa Barbara-based Tenet Healthcare Corp. in the middle of investigations by federal officials and CalPERS.

The review comes after a health-care union requested a probe and presented CalPERS with data it said showed possible overpricing at some Sutter facilities by as much as 53% compared with other hospitals.

Bill Gleeson, spokesman for the Sacramento-based, not-for-profit hospital chain, said Sutter Health told potential bond investors five of its facilities could face a federal probe for allegedly overbilling Medicare.

“According to our own calculations, some facilities might fall within the parameters of a Medicare review,” Gleeson said.

Gleeson disputed the labor union’s report as a misrepresentation of the data and said the chain’s own analysis showed that charges were in line with its competitors in Northern California.

CalPERS spokesman Clark McKinley said the $131-billion pension fund has no timetable for the review. He said the review was similar to one CalPERS has undertaken concerning pricing and medical practices at Tenet.

In that case, CalPERS asked its health-care plan administrator, Blue Cross of California, for more information about a union’s allegations of inflated premiums and quality of care at Tenet’s California hospitals.