(Crain's Detroit Business) Detroit Medical Center has informed Wayne State University that about 25 pediatricians affiliated with its new academic pediatric group, Wayne Pediatrics, will no longer be welcome to admit or treat patients at Children's Hospital of Michigan after July 1.
Dr. M. Roy Wilson, president of Wayne State University, told Crain's that the decision, if allowed to stand, could result in a disruption of pediatric care for dozens of Detroit children and force the university to possibly take unspecified retaliatory action against DMC.
Wayne State and DMC, a for-profit health system owned by Dallas-based Tenet Healthcare Corp., have had a tumultuous relationship the past decade, especially since DMC became a for-profit in 2011. Last year, Wayne State sought to make Henry Ford Health System its primary affiliate, but infighting on the WSU board of governors scuttled the negotiations.
Wilson also said he consulted Monday with Wayne State's health affairs committee about DMC's plan. He said the board expressed concern and supported efforts to prevent DMC from blocking WSU pediatricians from Children's Hospital.
"We're in the midst of a global pandemic and to say that 25 (pediatricians) who are a part of Wayne Pediatrics cannot admit their patients to Children's Hospital defies logic, both from a legal standpoint and even more, an ethical one," Wilson said.
Wilson said he has discussed the issue with legal counsel and was told removing physicians from hospital medical staffs for economic reasons or barring credentialed doctors from admitting patients violates a number of state and federal antitrust laws.
Dr. Mark Schweitzer, the new dean of the Wayne State University School of Medicine, said he has been president of medical staffs at several hospitals and served on more than 20 different medical staffs.
"One principle of medical boards is that they are relatively autonomous from hospital administration by design so that they can deal with quality and patient safety without having to be concerned about the hospital's bottom line," Schweitzer said, adding that administrators should not be dictating to medical staffs who should be able to admit patients.
University Pediatricians is a nonprofit practice plan that includes nearly 250 physicians that have provide health care services at the DMC Children's Hospital of Michigan for decades.
Normally, University Pediatricians does not address matters of pending litigation, but we are compelled to address the mischaracterization of our practice and portrayal of recent events in: "Memo - Wayne State Pediatricians banned from DMC Children's Hospital."
The claim is blatantly false. A very small number of disgruntled pediatricians have decided to terminate their relationship with University Pediatricians and forgo the benefits of our longstanding relationship with the DMC Children's Hospital.
The DMC did not impose a blanket ban of "Wayne State Pediatricians" from Children's Hospital. Indeed, it is ridiculous that Wayne State University would claim to have been banned from the DMC Children's Hospital when just weeks ago Wayne State terminated its contracts with almost all of the very same physicians who are members of University Pediatricians and who steadfastly care for their young patients at the DMC Children's Hospital.
University Pediatricians maintains its strong commitment to serve the DMC Children's Hospital by providing exceptional health care to countless poor and underserved children and families in the surrounding region. Nothing will change our commitment to the community we serve. University Pediatricians is thrilled to have recently renewed its partnership with the DMC Children's Hospital and its physicians will continue to serve the children of Detroit for years to come. Together with its new academic partner, Central Michigan University College of Medicine, University Pediatricians will continue to provide excellent health care for children, conduct research, and train the doctors of tomorrow for our community.
Wayne Pediatrics was formed last year by Wayne State's medical school after University Pediatricians, once a clinical partner of Wayne State, chose to leave the university early in 2019 and affiliate with Central Michigan University.
The dispute between University Pediatricians, a 220-member group affiliated with DMC Children's Hospital, and Wayne State University School of Medicine goes back years.
In mid-March, Wayne State sent faculty termination letters to more than 115 members of University Pediatricians, giving them 30 days to decide if they want to join Wayne Pediatrics. The termination decision was delayed from last October to give UP doctors more time to consider their options.
At the time, UP management owed Wayne State $13 million based on a salary reimbursement agreement that UP was not paying the university. In July, WSU sued UP for the owed funding. The owned money is now up to more than $26.1 million, an amount a top WSU official called "staggering" and "unsustainable."
UP last made an salary reimbursement agreement payment in February 2019. The salary reimbursement agreement with UP allowed Wayne State to cut a single check to faculty members that paid pediatrician compensation upfront, including faculty salaries and benefits.
Crain's has reached out to Tenet, DMC and Jones Day law firm in Detroit for comment.
On Wednesday morning, University Pediatricians issued a statement to Crain's denying WSU have been banned from DMC Children's Hospital. The statement didn't directly address whether the 25 pediatricians now part of Wayne Pediatrics would be able to admit patients to DMC Children's Hospital after July 1.
"A very small number of disgruntled pediatricians have decided to terminate their relationship with University Pediatricians and forgo the benefits of our longstanding relationship with the DMC Children's Hospital," the statement said. "The DMC did not impose a blanket ban of "Wayne State Pediatricians" from Children's Hospital."
DMC said in a statement that exclusive arrangements are intended to ensure high-quality patient care.
"Hospitals commonly enter into exclusive contracts so that they can assure high quality coverage of critical patient care and teaching services," the statement said. "Children's Hospital of Michigan has had an exclusive arrangement in place with University Pediatricians for many years. University Pediatricians reputation in the community for primary and specialty care pediatrics is broadly recognized.
"DMC regrets that Wayne State chose to develop a competing pediatric group which has resulted in a potential separation in the pediatric community that has been a hallmark of excellence in Detroit and at Children's Hospital of Michigan for decades. Physicians who left to join Wayne Pediatrics will remain members of the Detroit Medical Center medical staff. Wayne Pediatrics physicians can care for patients at Children's Hospital of Michigan for specialty services which are not part of the exclusive contract with University Pediatricians, and can care for their patients at all other DMC facilities."
Last week, in an email to Wayne State's attorney, David French of Hall Render, Arthur O'Reilly of Jones Day said all correspondence from Wayne State to DMC should be directed to Jones Day.
"We have been retained to address the issues raised in your April 29, 2020 letter to Audrey Gregory (CEO of DMC)," O'Reilly wrote. "Please direct all future correspondence regarding this matter to me. With respect to your letter, we will respond as appropriate after we have had the opportunity to review the issues you raise therein."
In an April 29 letter to Gregory, French asked her to clarify whether the new policy covers physicians in other private medical groups from obtaining privileges at DMC. He said going forward with the policy would have serious legal implications that include violating federal and state antitrust laws.
"A decision to close the pediatrics department to practitioners who do not maintain an affiliation with University Pediatricians would not only have serious and unacceptable consequences for the health of children in the city of Detroit and its environs, but would likewise have the same consequences for the education of medical students in the city," French said.
Dr. Herman Gray, chair of the pediatrics department at WSU's medical school, said the university was informed of Tenet DMC's decision by Dr. Eric McGrath, a faculty pediatrician specializing in infectious disease who recently joined Wayne Pediatrics.
McGrath asked Gregory in an email for clarification on whether he could continue to admit and see patients at Children's Hospital after July 1 even though he joined Wayne Pediatrics. He also asked Gregory if DMC continues to support the open medical staff model that has always been the policy of the seven-hospital system.
Initially, on April 21, Gregory replied to McGrath that DMC Children's "has an open medical staff. While you would not be working in the clinic, as the clinic is a hospital-based clinic that is contracted with UP for physician staffing, you would be able to attend to your patients who are admitted."
But on April 27, McGrath received another email from Gregory that informed him that she was incorrect in her earlier email.
"I have reviewed the agreement and contractual obligations and received additional legal opinion," Gregory said. "As it stands, the agreement that CHM has for coverage is an exclusive agreement. Consequently, you will not be able to admit and/or consult on patients at CHM. I apologize for my initial incorrect guidance."
Another former pediatrician affiliated with University Pediatricians said UP and Tenet recently signed a new professional services agreement. The pediatrician, who asked to remain anonymous, said it is possible the new PSA gives exclusive coverage rights to UP.
French asked DMC to provide copies of each "agreement and contractual obligation" referred to in Gregory's email. He also asked for an explanation for how those agreements and contractual obligations "limit the right of a pediatrician to admit and/or consult patients" at Children's Hospital and "how they provide for exclusive coverage."
It is unclear whether DMC's policy barring Wayne Pediatricians from the medical staff at Children's violates the 2010 sales and purchase agreement between DMC and Vanguard Health Systems, which Tenet assumed when it acquired Vanguard in 2013.
However, there is language in the agreement that appears to prohibit the action.
"Vanguard (Tenet) will permit all members of the hospitals' medical staffs to retain their current medical staff appointments until the expiration of the current appointments," according to one section of the agreement.
Officials for Legacy DMC, the nonprofit board that monitors compliance with DMC's agreement for 10 years, were unavailable for comment. Section 12.6 of the post-closing covenants of the buyer requires DMC to follow medical staff bylaws.
Gray, who previously was CEO of Children's Hospital and on the medical staff, said he doesn't believe DMC has changed its medical staff bylaws to create exclusive arrangements between doctors or private medical groups.
Dr. John Haapaniemi, president of the more than 2,000-member combined medical staff, was unavailable for comment.
"It's in direct contradiction of their bylaws. I have seen no evidence (the medical staff) voted on changes," he said. "It's a crass financial move by DMC."
The way Schweitzer views it, DMC's decision to bar Wayne Pediatrics was done for nothing other than a profit motive.
"It is so disturbing to the marrow," Schweitzer said. "I came here not experiencing for-profit medicine firsthand. Obviously hospitals need margin. (But doctors and hospitals also) have obligation to the community."
Last month, Schweitzer replaced Dr. Jack Sobel, as the dean of WSU medical school. He formerly was chair of radiology at Stony Brook University School of Medicine in New York.
Wilson said it is clear to him that DMC's decision to prohibit Wayne Pediatrics-affiliated doctors from treating patients at Children's Hospital is an effort to "break the back of Wayne Pediatrics."
"The reason we (want to buy) 400 W. Mack Ave (building) is to have a location so close to the hospital," Wilson said. Wayne Pediatrics is leasing space at the former Hospice of Michigan building along with University Physician Group, a multi-specialty academic practice plan also affiliated with Wayne State.
Wayne Pediatrics and UPG expects to complete renovation to their new clinic and headquarters in mid-June and start seeing patients in July.
Gray said he is contact with more than a dozen pediatricians who recently left University Pediatricians for Wayne Pediatrics.
"They are worried. Whenever your livelihood is threatened. They are highly trained. They don't know how this will end up," Gray said. "They steadfastly want to be academic physicians. They feel they have been harmed, been wronged. But no one is talking about leaving."