04/09/19: Pediatrics Department Update

Dear Colleagues:

The conflict that has been raging around the Department of Pediatrics and the University Administration is complex and difficult to understand even for those whose professional lives are deeply involved in it. This morning’s story in the Detroit News is informative, but it is still worthwhile to try to provide some context for these matters for our members whose professional lives are not directly affected by it. The entire University is involved in the problems of our School of Medicine (SOM). Its financial troubles have impacted the economic situation of the entire institution, as University resources have had to be channeled to it to cover budgetary shortfalls. The future of the members of the bargaining unit that our Union represents is bound up in the solution to these issues.

The Controversy over the Medicaid Enhanced Payment Program (MEPP). Medicaid funds are a mix of federal and state monies that fund patient services provided by physicians to lower income persons who qualify. A portion of these funds are provided by the State to WSU, and in turn, it has the responsibility of transmitting the funds on to the participating practicing plans based upon the services their members have provided to Medicaid patients. This MEPP program is part of the Affordable Care Act (ACA), or as commonly termed, Obamacare. Jay Greene, writing in Crains Detroit Business (April 5, 2019), explains this process:

“Under MEPP, which began in 2004 and is intended to pay physicians who treat Medicaid patients a higher rate to encourage their participation, Wayne State administers tens of millions of dollars of federal-state Medicaid money received from the state to pay 23 contracted clinical service groups, including UP [University Pediatricians], and their doctors for Medicaid services. It is unclear how much Wayne State is paid under the program.

Wayne State takes an administrative fee of 6 percent to manage the program, certify that each group receives the correct amount and that each doctor has performed the billed Medicaid service. It then reimburses the physician groups. There can be delays from three to six months from when the Medicaid service was performed until the group is paid, Wayne State officials said.”

The current controversy was exacerbated with the bankruptcy of the largest faculty practice plan, the University Physicians Group (WSUPG). For some unclear reason, the WSUPG administered the MEPP funds that came to the University for redistribution to the 23 contracted clinical service groups, including the University Pediatricians (UP), the pediatricians' practice plan. A review of the WSUPG bankruptcy documents revealed, to the UP leadership, evidence of WSU keeping much more of the MEPP funds than the 6 percent administrative fees referred to by Jay Greene.

After the present controversy over these matters erupted, the Wilson Administration announced, in conjunction with the Henry Ford Health System (HFHS), its intention to establish a new program, the Urban Children’s Health Collaborative (UCHC), whose goal is to address health problems of children in poverty in Detroit in conjunction with a new faculty practice plan, Wayne Pediatrics (WP). It is understood that the funds for this program are to come from the MEPP program retained by WSU as “institutional adjustments.” Jay Greene writes that: “These institutional adjustments, the amounts of which are unclear in court filings, pay for research, training programs and institutional support to increase supply of specialist and subspecialist physicians and the health-related professions; clinics in underserved neighborhoods; and direct support of primary and specialty departments for Medicaid program purposes.”

Questions are unresolved as to the legality of such expenses being charged to funds derived from a program with the goal of the Medicaid Enhanced Payment Program, which was established to provide higher pay to induce physicians to provide medical care for Medicaid recipients. It is difficult to see how the 6 percent administrative fees retained by WSU alone will provide a sufficient amount to fund the Urban Children’s Health project, and the other expenses that includes the payment of over $25 million for a building to house the WP.

The matter of how much of the MEPP funds WSU has withheld, whether those amounts are appropriate, and how they can be legitimately spent has sparked controversy in the discussions of our Board of Governors. As outlined by Jay Greene, the problem has been that the WSU Administration has, thus far, not provided to the WSU Board of Governors or the University associated faculty practice plans, or to the other associated clinical groups, an accounting of the MEPP funds it has received. The question is: Has WSU kept more of the MEPP funds than the small administrative fees over past years, and some amount for “institutional adjustments,” and in the process shortchanged the various WSU faculty practice plans and groups due reimbursements? This is the basis for the court filings by the UP leadership that have been joined by other clinical groups.

Some members of the WSU Board of Governors, concerned with the questions raised here and the University’s possible liabilities, have slowed the establishment of the UCHC with MEPP funding. Jay Greene stated in the commentary section of his Crains article: “WSU has not provided an accounting of how much institutional support it retains for Detroit-based projects [from the MEPP funds]. UP never knew until recently to ask this question, from my reading of the hundreds of pages of bankruptcy documents. This question should be answered.” There is no doubt that this controversy can be clarified by a transparent accounting of what funds were withheld and on what they were spent on the part of the WSU Administration.

All the members of the WSU Board of Governors are presently attempting to support policies that effectively address the problems of our School of Medicine. It is difficult not to see the situation in Pediatrics as being the most pressing problem that shapes this process. Today, the over 100 faculty clinicians in Pediatrics constitute almost 30 percent of all clinicians in the SOM. The 360 or so SOM clinicians are far fewer than the average number of over 1,000 clinicians in comparable medical schools nationally. It will be a much greater crisis if the University loses the clinicians in Pediatrics. The Pediatrics faculty practice plan is presently developing a relationship with the young medical school at Central Michigan University under which it will replace WSU as the intermediary for the MEPP funds. How that will work out is unclear. Presently, the WSU Administration has been reduced to filing a Freedom of Information Act action to find out what the arrangement is between CMU and the UP.

Conclusion. The conflict between President Wilson and members of the WSU Board of Governors is unfortunate and not helpful to the solution of our complex problems. Those members who are reluctant to endorse new Administration initiatives that are based on the use of MEPP funds have understandable reservations. They are concerned about potential legal problems related to the use of the MEPP funds and what liability the University has if they approve the uses recommended by President Wilson. They are asking how programs can be established or a building bought with money from MEPP funds that may be going through CMU in the future. These concerns are unlikely to be alleviated as long as it is unclear how so many of the issues surrounding these funds are to be resolved.

A first step should be a transparent accounting for the funds that have come to the University in the last five years. The Administration should reveal how much has come to the University, how much has been retained by it, and how much has been transferred to the various clinical service groups. Once the facts of this situation are clear, the parties to the various conflicts (the UP, the Wilson Administration and the Board of Governors) may be more able to work out their differences. A School of Medicine with a strong Department of Pediatrics is a goal that all the parties to this controversy say they seek. Why shouldn’t they sit down and talk about how that can be achieved?

In solidarity,

Charlie Parrish


Charles J. ParrishPresident, AAUP-AFT, Local 6075, WSU ChapterVice President-at-Large, AFT MichiganPresident, AAUP Michigan ConferenceMember-at-Large, National Council, AAUP5057 Woodward Avenue, Suite 3301Detroit, MI 48202313-577-1750