University’s right to sell hospital is questioned

Joel Sawyer

The leadership of over 1000 embattled American Federation of State, County and Municipal Employees at the University Hospital delivered what they hope will be a blow to the merger between University Hospital and Fairview Health System on Tuesday.
Pete Benner, Director of AFSCME Council 6, sent a letter to State Attorney General Skip Humphrey asking him to review certain legal issues surrounding the merger of University Hospital and Fairview Health System before the agreement can be finalized. The tentative date for the signing of the agreement is Oct. 1.
“We’re trying to delay the merger until issues are resolved satisfactorily,” said AFSCME Legislative Director Tom Beer.
Two of the issues in question are the University’s legal right to sell its property without state approval, and possible antitrust violations by the University and Fairview.
The letter also asks the Attorney General to examine the possible loss of Medicare funds by the University after the merger is complete, and to investigate certain legal details surrounding the transfer of the Hospital to Fairview through the Hospital’s holding and management company.
In response to the AFSCME letter, Mark Rotenberg, General Counsel for the University, issued a statement Tuesday attempting to discount two of the issues raised by AFSCME.
Rotenberg said that the Board of Regents has the legal authority to sell University property. “It has done so hundreds of times over many decades,” he said.
Rotenberg also said that the University has been in regular contact with the Attorney General’s Office regarding antitrust issues relating to the merger. Rotenberg added that the Attorney General’s Office expressed no concerns over antitrust issues to University representatives.
All AFSCME is trying to do, Beer said, is to slow down the merger so that the Attorney General can perform an independent evaluation of the agreement to determine if it complies with state law.
Beer also added that he hoped the letter would raise awareness of the plight of AFSCME workers who face the loss of their union status as well as the possibility of layoffs, pay decreases and reductions in benefits if Fairview takes control of the proposed Fairview-University Medical Center.
The Board of Regents agreed in July to sell the Hospital and its assets, valued at $150.3 million, to Fairview for $87.5 million. University administrators say the sale is necessary to preserve the education and research mission of the University’s Academic Health Center.
Joe Loveland, communications director for the Attorney General’s Office, said the AFSCME letter had yet to be reviewed, and would be looked at later in the week. Loveland also confirmed that the Attorney General’s office was investigating whether the University and Fairview were in antitrust compliance, but said he could not comment about the review.