Tuesday’s settlement offers a mixed bag to health researchers at the University. Weary after the protracted battle against the Department of Justice, administrators find the conclusion a welcome relief.
But the details of the agreement leave a major issue unsettled for University researchers.
The deal concluded years of lawsuits, audits, public and private censure, and administrative upheaval in the University’s health sciences, stemming from financial mismanagement within the Medical School.
But omitted from the settlement is any reference to the National Institutes of Health’s ongoing probationary status for University scientists, which was punishment for the school’s poor financial oversight.
Regent William Peterson announced Tuesday that the University will pay the Justice Department $32 million to settle the government’s lawsuit for misuse of federal funds in the University’s Department of Surgery.
Lawyers initially included the NIH sanctions in their negotiations, but the item fell on the cutting room floor as the talks progressed, said University general counsel Mark Rotenberg.
“You have to go with what you get,” Rotenberg said. “The Academic Health Center should know we tried to settle on the most favorable terms possible.”
As the surgery department’s numerous violations came to light in the 1990s, the NIH placed the University on probation, labeling all research grants “exceptional” in August 1995.
The rare designation subjects University scientists to extra inspection from the federal agencies.
Only a handful of institutions in the nation bear the pejorative tag. The label potentially jeopardizes researchers’ ability to win funds from the NIH, which is the largest single source of federal funding for health science research.
But University lawyers’ inability to erase the probationary label wasn’t disappointing, said Dr. Frank Cerra, senior vice president of the Academic Health Center.
“I didn’t expect the two to be tied,” he said.
Cerra said members of the Academic Health Center have been working independently of lawyers to remove the sanctions. In July, Cerra flew to Washington, D.C., to update NIH officials on the University’s improvements.
The settlement also cemented an agreement between the two parties that will prevent the University departments from missing out on future grants because of the poor track record; no evidence exists showing the scandal omitted University scientists from grant competition in past years, Cerra said. University researchers received $125 million in NIH grants in 1997.
As a member of the surgery department and former dean of the Medical School, Cerra said Tuesday’s settlement was a relief.
Fallout from the abuses turned the Medical School’s highest appointments into revolving doors, as four administrators resigned or were fired after being implicated or indicted in connection with the mismanagement.
“We’re ready to move on,” Cerra said. “This is behind us. It’s closed. It’s done. What’s past is past.”