UPDATE 1-Sutter Health agrees to pay $575 mln settlement with California

(Adds details on settlement, background on dispute)

WASHINGTON, Dec 20 (Reuters) - Sutter Health, which runs hospitals and clinics in northern California, has agreed to pay $575 million to settle allegations that it engaged in anticompetitive practices, the California attorney general’s office said on Friday.

The payment will go to employers, unions, and others in a class action and to pay legal fees and other costs, the statement said.

As part of the settlement, Sutter agreed to limit some out-of-insurance-network charges to prevent big, surprise bills, provide more access to pricing information, and make other changes to business practices, the attorney general’s office said in a statement.

Sacramento-based Sutter Health said in a statement that it admitted no wrongdoing.

“We were able to resolve this matter in a way that enables Sutter Health to maintain our integrated network and ability to provide patients with access to affordable, high-quality care,” the company said.

The two sides had announced a settlement in October as they were about to go to trial but gave no details at that time. The case began as a class action lawsuit brought by employers and unions that was later joined by California’s Attorney General Xavier Becerra.

“When one healthcare provider can dominate the market, those who shoulder the cost of care — patients, employers, insurers — are the biggest losers,” Becerra said.

“This first-in-the-nation comprehensive settlement should send a clear message to the markets: if you’re looking to consolidate for any reason other than efficiency that delivers better quality for a lower price, think again,” he said.

Reporting by Diane Bartz; editing by Diane Craft and Rosalba O’Brien