What to know about the ‘secret’ deal between Fairview and U doctors

University of Minnesota officials are upset that doctors who work for its health care enterprise are striking what several U regents called a “secret” new deal with Fairview Health Services.

These doctors work in the hospitals and medical offices branded as M Health Fairview, one of the largest health care providers in the state. It’s a joint operation between the U and Minneapolis-based Fairview.

Three members of the U’s regents, who act as a kind of board of directors for the university, sent a letter recently expressing outrage that the health system didn’t involve university administrators in a deal negotiated with physicians at the U.

The doctors work in a group called University of Minnesota Physicians (UMP), and the regents asserted the U has “a number of available remedies if UMP persists in its quest for independence from its obligations as a designated practice plan of the University.”

The U has been trying over the past year to negotiate its own new deal with Fairview for extending their M Health Fairview partnership and/or revamping it through a new arrangement with Duluth-based Essentia Health.

Here’s what to know.

Fairview leaders and the top doctor at UMP say there will be no harm to patients.

Fairview CEO James Hereford wrote in a Wednesday note to employees: “Patients will continue to see the same trusted physicians and care teams they do today.”

U doctors treat patients in clinics and hospitals that carry the brand M Health Fairview, but this is simply a name for a business — it’s not a legal entity. While it’s not clear whether the brand survives, there will be no disruption, either way, in contracts between the health care providers and patient health insurers.

Top leaders at the University of Minnesota say the deal would have a “profoundly negative” impact on the U’s medical school, although they did not elaborate.

The U says its leadership was not part of the process for developing the agreement. And they say it wrongly prioritizes the interests of Fairview.

In their letter, the three regents said the deal “represents a historic, dramatic change in the mission and character of UMP.”

Beilman did not disclose how many board members voted in favor or against the idea. The regents in their letter noted that the dean of the U Medical School, who is an ex officio chair of UMP, voted against the deal.

Minnesota Attorney General Keith Ellison, who supports the new agreement, released a Sept. 12 letter — sent exactly two months before Wednesday’s news — telling the U’s president and board of regents: “I am instructing Fairview and the University of Minnesota Physicians to meet to discuss ways they can protect the [health systems’] continuity and stability.”

Fairview and UMP say they have a “binding agreement” that includes a detailed term sheet. They expect to complete a definitive agreement by the end of 2025

The deal continues the total annual financial commitment from Fairview at about $100 million, although the structure is meaningfully different. While there’s $50 million in fixed annual funding, there’s an additional variable component tied to shared performance goals across the health system.