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A lawsuit filed by a Duke doctor claims the university and its healthcare system are undermining the Private Diagnostic Clinic, a private company with 1,850 doctors who work at Duke.

2013 News & Observer file photo

Months of tension between Duke University, Duke University Health System and a private group of doctors who work in the two have surfaced in a lawsuit.

The lawsuit claims that Duke University and Duke Health conspired to undermine the medical group and force or coerce its members to work for Duke. He says Duke is essentially trying to acquire the private 90-year-old company, made up of 1,850 doctors, without paying for it.

The result of becoming employees of Duke, according to the lawsuit, is that the doctors would lose their independence and would likely be paid less for more work in the future.

A spokesperson for Duke said the lawsuit “has no basis in fact or in law” and that Duke will fight it vigorously.

The lawsuit was filed Monday evening in County Durham Superior Court by Dr. Eugene Moretti, anesthesiologist and intensive care specialist, on behalf of the Private Diagnostic Clinic. Founded in 1931, PDC is a for-profit company that employs physicians who work, teach, and research at Duke University and its medical facilities.

The lawsuit says Duke tried for years to take control of the PDC, but the two sides couldn’t agree on the terms. He says Duke has now changed his strategy and started “pursuing illegal means of destroying the PDC to resume its business and its goodwill.”

Last winter, Dr. Mary E. Klotman, Dean of Duke Faculty of Medicine, announced the formation of Duke Faculty Practice, an alternative to the Duke-controlled PDC. The transition to the new practice was optional, Klotman wrote in a note to faculty, except for those in clinical departments who do research. They have until July 2022 to join.

“This is consistent with the organizational model used by our counterpart institutions across the country and matches our need to simplify the management of relationships with major research funding bodies,” Klotman wrote.

The change would mean that the PDC would lose 400 doctors, according to the lawsuit, threatening its existence “by emptying the group of doctors of its most important asset: its members”.

But Michael Schoenfeld, Duke’s communications director, said Duke and the PDC are in talks on how to work better together and align their missions. Schoenfeld said Duke simply proposed that faculty physicians who are already employed by Duke for teaching and research also become full-time employees of Duke for their clinical practice.

“We believe this will lead to greater operational efficiency, a better patient experience, the ability to recruit and retain top talent and improvements in community health,” he wrote in an email. “The lawsuit brought by Dr. Moretti, who is not a representative of the PDC leadership, is an attempt to hamper these alignment discussions and hamper Duke’s ability to deliver health services from the PDC. highest quality to our patients. “

To complicate the relationship between the PDC and Duke, PDC leaders occupy similar positions in medical school. The president of the school’s psychiatry department, for example, heads the same department at the PDC and sits on its board.

The lawsuit claims that despite serving on the PDC board of directors, five doctors planned to move their medical school departments from the PDC to the new group of doctors formed by Duke. He says one of them, Dr Anthony Joseph Viera, followed through, moving the family medicine and community health department from the PDC to Duke last summer, in violation, according to the lawsuit, of his fiduciary duties to the group of physicians.

What is the group of private doctors worth?

The lawsuit says the PDC board as a whole failed to look after the interests of its members. He says the board hired two law firms to advise him on the attempted takeover of Duke, and then tried to avoid sharing the findings of one of those firms with members of the PDC. .

A note from the company was leaked to a PDC bulletin board, according to the lawsuit. The lawsuit cites an anonymous lawyer for New York law firm Epstein Becker & Green who said it appeared Duke was pressuring some members of the PDC board to disband the practice, against the best interests of the group.

He said that by attracting or forcing doctors to join his medical practice, Duke was essentially trying to acquire the PDC.

“It seems clear that one of Duke’s overarching goals here is to end PDC by taking over virtually all of PDC’s assets and operations,” the lawsuit quotes in the memo. “From this perspective, Duke’s job offers – if accepted by all or almost all of the physicians at PDC – would amount to the acquisition of PDC by Duke for a purchase price of $ 0. “

The lawsuit says the PDC hired three companies to determine the value of the private doctor pool, and one of them found it to be between $ 750 million and $ 1.1 billion.

Finally, the lawsuit says Duke undermined the PDC again in October when Dr Eugene Washington, Chancellor of Health Affairs and Chief Executive Officer of the Health System, terminated the deal under which Duke and the PDC were operating. since 1972.

The agreement, which has been renewed annually since 1976, includes a clause that says Duke “recognizes the separate and independent status of the PDC and undertakes not to interfere in its organization and operations as long as that organization and these operations are linked to private practice. of medicine.

In its termination letter, Washington said threats of prosecution over Duke’s relationship with the PDC were based on “an unfortunate misinterpretation” of that clause, according to the lawsuit.

The letter also stated that Duke had “no intention of taking any action to undermine the PDC or jeopardize its existence.” The lawsuit argues that requiring doctors who research Duke to leave the group does just that.

More doctors could join the lawsuit

Moretti is suing Duke on his own but on behalf of the company. At the end of August, his lawyer, Erica Harris, wrote to the PDC board urging them to file a complaint to protect the interests of the group.

In an interview Tuesday, Harris, who is based in Houston, said a committee struck by the board agreed Moretti’s claims were valid but had yet to decide whether to prosecute. She said he decided to go ahead on his own.

“It looks like the rest of the PDC are concerned about their careers,” Harris said. “Dr. Moretti is an older man who is passionate about what he has dedicated his life and much of his career to, and he’s ready to stand up against Duke.

Other doctors or the PDC itself could join or intervene in the lawsuit, Harris said. “We are just the first to file,” she said.

Harris said Moretti was not seeking any direct compensation for himself, other than attorney fees. The lawsuit seeks unspecified damages for the PDC.

It’s unclear how the outcome of this battle between Duke and a large private group of doctors would affect patients. Harris said maintaining the independence of the PDC would prevent further consolidation in the healthcare industry, which could potentially lead to less choice and higher prices.

Also, a lot of people would hear about a former institution that worked independently and worked to build Duke, then Duke turns around and when they can’t buy it or agree to trade terms to merge with it, Duke is using his power to essentially force disband the entity or destroy it, “she said.” I think it’s a compelling story that people might care about even if it doesn’t affect their wallets. . “

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Richard Stradling covers transportation for The News & Observer. Planes, trains and automobiles, as well as ferries, bicycles, scooters and quite simply on foot. Also, hospitals during the coronavirus epidemic. He has been a journalist or editor for 34 years, the last 22 of which at The N&O. 919-829-4739, [email protected]