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Finance and Administration Committee - X. Designation of UT Methodist Physicians, LLC, as a Faculty Practice Plan for the College of Medicine in Memphis - ActionUT-Methodist Physicians, LLC (UTMP)BOT Finance &AdministrationCommitteeFebruary 28, 2012DESIGNATION OF UT METHODIST PHYSICIANS, LLCas a FACULTY PRACTICE PLAN for theCOLLEGE OF MEDICINE IN MEMPHISINTRODUCTION8In September of 2008, the Board of Trustees, through the Audit Committee, initiated a review of therelationship between The University of Tennessee Health Science Center (UTHSC) and the UT MedicalGroup, Inc. The review was conducted by ECG Management Consultants. One of the ECG’srecommendations was to “Engage in joint program planning with affiliated hospitals, including coinvestmentstrategies.”The Health Science Center has a long established relationship with the Methodist Le Bonheur Healthcare(Methodist). In an effort to further develop the clinical education, clinical research and patient careprograms in a financially sound manner supportive to faculty and staff and to maintain and improve thequality of clinical services for the benefit of the citizens of the State of Tennessee, Memphis, and thenation, UTHSC proposes to enter into an arrangement with Methodist for a jointly managed faculty practiceplan to be known as UT Methodist Physicians, Inc. (UTMP), a not-for-profit limited liability company.PROCESS TO DATEPlanning and discussions for the creation of an adult multi-specialty faculty group practice between UTHSCand Methodist have been underway for several months. During this time, various plans and models for aneffective practice plan have been reviewed and discussed. Currently, a two-phased approach is beingdeveloped and moving forward.Like many hospitals locally and nationally, Methodist has begun directly employing private physiciangroups. Doing so eliminates much of the risk associated with running and managing private practices.However, as an academic medical center without the ownership of a hospital, this presents a majorchallenge for the College of Medicine in having sufficient physician involvement in the operations of thehospital.Therefore, while a larger plan is developed and negotiated with Methodist for a relationship with theCollege’s adult multi-specialty physician services, the first phase is to develop a plan where new physicianspotentially considering employment directly with Methodist would instead join a new practice plan, UTMethodist Physicians, LLC. This arrangement is intended to be a short-term one with significantinvolvement by Executive Dean Stern and would set the stage for the second phase, which would be agreater integration of current College of Medicine faculty.1194
Finance and Administration Committee - X. Designation of UT Methodist Physicians, LLC, as a Faculty Practice Plan for the College of Medicine in Memphis - ActionUT-Methodist Physicians, LLC (UTMP)BOT Finance &AdministrationCommitteeFebruary 28, 2012OVERVIEW OF UTMP STRUCTURETaking into account the two-phased approach to a stronger hospital partnership for adult specialty care inMemphis, the following points describe the major elements of the proposed UTMP:‣ UTMP will be a not-for-profit limited liability company whose sole member will be MethodistHealthcare-Memphis Hospitals with certain powers listed in the proposed Operating Agreement,which follows this summary.‣ UT will have no financial risk for the practice plan.‣ All physician members of the group will hold faculty appointments in the College of Medicine,Memphis, initially as 0% clinical faculty, meaning they are essentially volunteers with limitededucational responsibilities and no compensation from the University.‣ The Board of Directors of UTMP will be comprised of a minimum of nine (9) members as describedbelow.Three Methodist Directors appointed by the Methodist CEO:• At least two must be Senior Vice Presidents or higherThree UT Directors appointed by the UTHSC Chancellor:• COM Executive Dean and two othersThree Physician Directors appointed by the UTMP Board:• Must be practicing physicians employed by UTMP.‣ The College of Medicine Executive Dean will serve as the Chairman of the Board.‣ All major actions by the Board of Directors will require an affirmative vote of a majority of both theMethodist Directors and the UT Directors.‣ If Methodist were to determine to transfer all or a portion of its membership interest in thecompany, UT has the right of first refusal to purchase that interest at fair market value as defined inthe Operating Agreement.8NEXT STEPSAfter consultation with the General Counsel and Chief Financial Officer, the President approved use of theUniversity’s name in connection with the new entity, and Methodist then moved forward to file the Articlesof Organization (equivalent of a charter for a corporation) to create UT Methodist Physicians, LLC. AnOperating Agreement (equivalent of bylaws for a corporation) has been executed by the University, afterreview by the General Counsel and Chief Financial Officer. With authorization by the Board of Trustees,and following all required or appropriate University and state approvals, the Health Science Center wouldmove to execute the following documents required to make UTMP active and to serve as a faculty practiceplan for the Health Science Center campus in Memphis:21. Amendment to the Master Affiliation Agreement with Methodist Healthcare-Memphis Hospitals; and2. Affiliation Agreement between UT and UTMP.195
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