University Times

Compensation figures reported on IRS form 990 for highly paid officials at UPMC were released last week for the fiscal year that ended June 30, 2006.

Leading the compensation pack for fiscal year 2006 was Jeffrey R. Romoff, UPMC president and CEO, whose pay was $3.3 million (a 17 percent raise over FY 2005) including $2.34 million in incentive pay.

Romoff earned $958,482 in compensation; $32,915 in benefits, and $36,995 in an expense account and other allowances.

This is the first year Romoff’s compensation was specified in the IRS filing; in the past, his salary and those of certain other executives were included in, but not broken out, under a group listing for a company called Managed Care Advisory Services, Inc. of Pittsburgh, one of UPMC’s independent professional services contractors.

The five highest-paid UPMC employees (other than officers, directors and trustees) were:

• James D. Luketich, professor of thoracic surgery, who earned $1,416,653 in compensation and $20,186 in benefits.

• Ronald J. Forsythe, former vice president of facilities and support services, $1,214,432 in compensation (including contractually required severance pay) and $17,363 in benefits.

• Amin Bardai Kassam, chair of neurological surgery, $1,074,532 in compensation and $17,916 in benefits.

• Michael B. Horowitz, director of the Center for Endovascular and Exovascular Therapy, $1,073,232 in compensation and $17,910 in benefits.

• James Dong-Jin Kang, an orthopaedic spine surgeon, $1,034,476 in compensation and $20,036 in benefits.

UPMC also paid 9,405 other unspecified employees more than $50,000, according to the UPMC 990 form.

System-wide, UPMC is a $6 billion organization that has 43,000 employees, 19 hospitals, 400 outpatient sites and doctors’ offices, a 1-million-member health insurance division and commercial and international ventures.

IRS form 990 requires tax-exempt corporations such as UPMC and Pitt to file compensation figures for their five top-earning, non-officer employees as well as for officers, directors and trustees by May 15 of the following year.

(For figures on the University’s IRS form 990 filings, see the May 17 University Times.)

This year, UPMC filed a consolidated form 990; in the past the health center filed separate forms for each entity.

According to a statement from the UPMC/Health Sciences News Bureau, the consolidated form was chosen “to provide greater transparency and clarity [and] to improve understanding of UPMC’s operations and the relationship among its various entities.”

Due to the large number of UPMC employees across the health center’s entities that are listed in the 990 form, the University Times chose to focus on UPMC Presbyterian Shadyside, UPMC’s largest unit, and on the University of Pittsburgh physicians practice plan (UPP), a group of more than 1,200 physicians who are Pitt School of Medicine faculty.

According to UPMC’s 990 tax form, the compensation amounts listed represent the full compensation packages paid to the individuals for performing their assigned duties at UPMC and not for service as board members. A portion of the disclosed compensation may be deferred compensation. A portion of the reported benefits also may be earned but unpaid.

UPMC Presbyterian Shadyside

UPMC Presbyterian Shadyside organizationally includes employees of Western Psychiatric Institute and Clinic and the Hillman Cancer Center, as well as Presbyterian, Shadyside, Montefiore and Eye and Ear hospitals.

Officers, directors and trustees who were compensated by UPMC Presbyterian Shadyside according to the 990 forms include Romoff and the following:

• Paul Castillo, UPMC Presbyterian chief financial officer ($229,766 in compensation and $23,934 in benefits);

• Robert J. Cindrich, UPMC chief legal officer ($740,972 in compensation and $107,991 in benefits);

• Elizabeth Concordia, UPMC senior vice president for academic and community hospitals ($1,079,021 in compensation and $112,478 in benefits);

• Robert DeMichiei, UPMC chief financial officer ($611,314 in compensation and $83,445 in benefits);

• C. Talbot Heppenstall Jr., UPMC treasurer ($405,117 in compensation and $57,665 in benefits);

• John Innocenti, UPMC senior vice president and chief operating officer ($556,533 in compensation and $43,626 in benefits);

• Michele P. Jegasothy, UPMC corporate secretary ($182,997 in compensation and $19,596 in benefits);

• Edward T. Karlovich, chief financial officer for academic and community hospitals ($554,312 in compensation and $39,235 in benefits).

UPP

The University of Pittsburgh physicians practice plan was formed in 1999 by uniting clinical practices representing 17 departments in Pitt’s School of Medicine.

The following UPP figures, including those for board members, do not include professors’ Pitt compensation or benefits.

UPP’s 990 form included 2005-06 compensation figures for UPP President Marshall Webster ($571,976 in compensation and $50,329 in benefits), secretary Loren H. Roth ($702,952 in compensation and $78,110 in benefits) and treasurer Joel B. Nelson ($508,796 in compensation and $16,571 in benefits), as well as for 27 UPP board members who are paid by UPP for their clinical or administrative duties.

UPP board members compensated in FY06 were:

Critical care medicine chair Mitchell P. Fink ($318,997 in compensation and $17,608 in benefits); anesthesiology chair John P. Williams ($325,166 in compensation and $20,619 in benefits); family medicine chair Jeannette E. South-Paul ($138,574 in compensation and $6,706 in benefits); orthopaedics chair Freddie H. Fu ($649,011 in compensation and $21,182 in benefits); medicine chair Wishwa Kapoor ($199,398 in compensation and $15,015 in benefits);

Psychiatry chair David J. Kupfer ($370,873 in compensation and $19,995 in benefits); radiation oncology chair Joel S. Greenberger ($398,997 in compensation and $19,904 in benefits); physical medicine and rehabilitation chair Ross D. Zafonte ($153,999 in compensation and $10,177 in benefits); neurology chair Steven T. DeKosky ($162,749 in compensation and $14,475 in benefits); emergency medicine chair Paul M. Paris ($198,698 in compensation and $17,688 in benefits);

Dermatology chair Louis D. Falo Jr. ($163,999 in compensation and $12,873 in benefits); otolaryngology chair Jonas T. Johnson ($358,694 in compensation and $23,497 in benefits); pediatrics chair David H. Perlmutter ($293,999 in compensation and $17,826 in benefits);

Ophthalmology chair Joel S. Schuman ($273,411 in compensation and $14,799 in benefits); obstetrics/gynecology chair W. Allen Hogge ($320,696 in compensation and $17,800 in benefits); neurosurgery chair L. Dade Lunsford ($881,409 in compensation and $21,909 in benefits); pathology chair George K. Michalopoulos ($251,999 in compensation and $18,943 in benefits); surgery chair Timothy R. Billiar ($502,696 in compensation and $19,383 in benefits); radiology chair Scott A. Mirowitz ($532,446 in compensation and $21,267 in benefits);

Cardiovascular Institute administrative director Barry London ($268,997 in compensation and $17,977 in benefits); associate professor of surgery Kenneth K.W. Lee ($179,677 in compensation and $13,406 in benefits); pediatrics associate professor Pamela J. Murray ($96,899 in compensation and $7,568 in benefits); professor of medicine Beth Piraino ($129,302 in compensation and $10,237); obstetrics and gynecology professor Frederick S. Sherman ($152,575 in compensation and $13,502 in benefits);

Emergency medicine professor and vice chair Donald M. Yealy ($253,889 in compensation and $17,767 in benefits); senior vice president for finance and CFO Mark Benninghoff ($348,686 in compensation and $24,556 in benefits), and senior vice president for administration and operations Alan R. Green ($355,759 in compensation and $24,919 in benefits).

The IRS form 990 also requires the filing of compensation figures for the five highest-paid independent professional services contractors during the 2005-06 fiscal year.

UPMC contracted with the following five firms:

• Marsh USA, Inc., of Pittsburgh — $16,897,313 for insurance services.

• LD Astorino & Associates, Ltd., of Pittsburgh — $15,928,205 for architect fees.

• Center for Organ Recovery and Education of Pittsburgh —$15,433,222 for organ recovery services.

• Center for Rehab Services of McKeesport — $9,259,738 for physical and occupational therapy services.

• ITXM Clinical Services of Pittsburgh — $6,779,802 for transfusion services.

UPMC also paid 205 unspecified contractors more than $50,000 each, according to the IRS form.

UPMC’s IRS 990 filing, which includes compensation and benefits for UPMC-wide officers, directors and trustees, as well as UPP and UPMC Presbyterian Shadyside affiliates not listed here whose compensation is provided by related organizations, can be accessed at www.upmc.com by clicking the link “About UPMC,” followed by “Financial Information” and then “IRS Filings.”

—Peter Hart