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December 4, 1997

Senate committee questions practice plan transfer to UPMC

Under orders from the federal Office of the Inspector General, UPMC Health System — like other academic medical centers around the country — is doing a self-audit for possible improper billing by resident physicians.

Should the self-audit (or a possible followup investigation by the Inspector General's office itself) produce evidence of fraud by the Pitt School of Medicine's faculty practice plans, they could be forced to pay tens of millions of dollars to the feds, as the University of Pennsylvania did in a celebrated recent case.

Despite denials by UPMC Health System officials, some medical professors say UPMC is pressuring the Pitt practice plans to reach a $20 million-to-$25 million settlement with the government, with UPMC to provide the settlement money.

Is it just a coincidence, a University Senate group wants to know, that the heads of the 18 Pitt practice plans voted last summer to merge into a single, Unified Practice Plan? The plan will be moved, along with its approximately $250 million in annual clinical revenues, from Pitt's jurisdiction to that of UPMC.

That is one of the questions to which the Senate's compatibility committee is seeking answers.

The committee, chaired by Senate Vice President Nathan Hershey, is studying whether Pitt's academic mission is compatible with the business goals of UPMC Health System, a separate corporation.

At the Dec. 2 Faculty Assembly meeting, Hershey said: "There is concern that the Unified Practice Plan emerged from the desire of the leaders of the individual practice plans to avoid getting stuck financially, so therefore they accepted the idea of becoming a subsidiary [of UPMC], and that this may in retrospect have been a short-sighted decision." UPMC Health System spokesperson Jane Duffield yesterday dismissed the conspiracy theory, saying the self-audit is ongoing and that details of a settlement, if any, would remain to be negotiated.

She added: "Unified practice plans are commonplace around the country. With all of the economic changes occurring in the health care industry, unified plans are becoming the norm rather than individual practice plans for each specialty area." Hershey, in summarizing a preliminary version of his committee's latest report, said: "It is not clear that the University is necessarily going to reserve a degree of control sufficient to prevent the Unified Practice Plan from sacrificing the legitimate interests of the medical school faculty, as employees of the University." Some medical school professors have told the committee they're concerned that, once the unified plan is transferred to UPMC, Pitt will lack sufficient control over distribution of practice plan revenues, Hershey said.

He also noted the following concerns: * "The committee has become aware that a number of medical school faculty fear reprisals if they would speak out publicly about matters of governance within the School of Medicine, particularly about the arrangements and relationships being developed between the medical school and the UPMC Health System that affect them as faculty members." Some medical professors say it would be "career suicide" for them to publicly criticize the medical school's relationship with UPMC, he said.

"The committee believes the presence of such fear indicates that the situation is one that deserves the attention of the chancellor," Hershey said.

* Whether they are just gathering relevant information (as Chancellor Mark Nordenberg has described the process) or formally negotiating, officials from Pitt, UPMC and the soon-to-be-unified faculty practice plan are working on a plan to restructure the way the three organizations do business with one another. However, Hershey said, "no medical faculty are represented on the team that is negotiating on behalf of the University and the School of Medicine." * According to some professors, Hershey said, the search for the newly combined position of senior vice chancellor for Health Sciences/medical dean is "handicapped" by a failure to finalize the restructuring of the Pitt-UPMC Health System relationship — particularly the degree to which UPMC will financially support the medical school and, to a lesser extent, Pitt's five other Health Sciences schools.

* "Strict attention" must be given to avoid undermining the educational missions of the Health Sciences schools as a result of the new Pitt-UPMC relationship, Hershey said.

The committee will finish its report next term and submit copies to Senate President Gordon MacLeod and Chancellor Nordenberg, he said.

In the meantime, Hershey complained, the committee is still waiting for Nordenberg to respond to an Oct. 17 letter requesting materials on Pitt and UMPC Health System: information on medical faculty turnover; copies of contracts between UPMC and its hospitals relating to faculty appointments; hospital bylaws; memberships of corporate boards, and other data.

"I've often said to clients and my students, 'There's no law that says any phone call has to be returned, or any letter answered.' And it appears that the management of this University follows that piece of advice," said Hershey, adding that he plans to remind Nordenberg of the committee's request on Dec. 8, either at the 3 p.m. Senate Council meeting or during the pre-meeting luncheon for Senate leaders and Pitt administrators.

Senate President MacLeod commented, "I can certainly see someone responding by saying that this information is going to take several months to collect. But to have no response…" Hershey said the delay in acquiring the Pitt-UMPC data is especially frustrating because his committee is investigating allegations, not taking sides. In fact, he suggested, the committee could help to dispel rumors.

"You hear remarks such as, 'There has been a tremendous number of very good faculty who have left the University to go to AGH [Allegheny General Hospital] or go out of town or wherever it is. We're losing all of these people.' Well, I don't know [if that is true]," Hershey explained. "So we've requested information on medical school turnover during the last year or so, to compare that with previous times and see if there has been a dramatic difference in turnover. If so, it becomes a concern to the medical school and to the whole University."

— Bruce Steele

Filed under: Feature,Volume 30 Issue 8

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