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A new lawsuit accuses Duke University of trying to illegally take over a large independent multi-specialist clinic without paying its fair value.
Anesthesiologist Dr. Eugene Moretti filed a derivative lawsuit on Monday on behalf of his private diagnostic clinic in Durham, North Carolina. Duke University and PDC have signed a 50-year cooperation agreement that allows PDC to remain independent, but a lawsuit filed in the Durham County North Carolina Superior Court this week alleges that Duke University is launching an acquisition plan without the need for PDC Opinions of 1,850 doctor members.
The complaint named Duke University, Duke University Health System and Dr. Anthony Viera as defendants. Viera did not respond to a request for comment. She is the chair of the Duke Family Medicine and Community Health Department, which recently moved from PDC to Duke. PDC also declined to comment on the case.
Moretti’s complaint details several ways in which Duke is alleged to be hiring PDC doctors as part of its clinical staff. All PDC doctors are already teaching at Duke University, where hundreds of people conduct research.
The lawsuit alleges that Duke notified PDC on October 22 that it will terminate the cooperation agreement that will take effect at the end of 2021. The agreement has been in effect since 1972, ensuring the independence of PDC, and it is believed that Duke will not interfere with its operations.
Most importantly, Duke allegedly requires that PDC members conducting research at Duke must withdraw from PDC and take up positions at Duke School of Medicine by July 2022. The complaint alleges that at least 400 PDC members—about 21% of its members—are conducting research at Duke University. The complaint stated that they would be forced to choose between staying at the PDC and losing their research funding or continuing their Duke research but having to withdraw from the PDC to be fully employed by Duke.
“Duke University decided to further destroy the PDC by creating a new mission, that is, doctors conducting research at Duke University must withdraw from the PDC and join (Duke College Practice).”
Duke University spokesman Michael Schoenfeld declined to comment on the termination of the agreement or research authorization, but said in a statement that the lawsuit has no factual or legal basis. He said that Duke University and PDC have had a “fruitful dialogue” for several months around adjusting their respective patient care, teaching, and research tasks.
“Duke University proposes that faculty physicians who have been employed by Duke University for education and research can also become full-time employees of Duke University for clinical practice,” Schoenfeld said. “We believe this will lead to higher operational efficiency, better patient experience, the ability to recruit and retain top talent, and improved community health.”
It’s unclear whether the doctor’s practice location will change if their department is transferred from PDC to Duke, because almost all Practice locations listed on the PDC website It is an affiliate of Duke.
The lawsuit also alleges that Duke University has been pressing PDC’s department chairmen-who are also the heads of Duke’s respective academic departments-to transfer their clinical departments from PDC to Duke University. It said that because each department is in the Duke School of Medicine, the dean felt “grateful” to the dean of the school, Dr. Mary Klotman, who allegedly had been pressing the deans of five departments for a transition. The lawsuit stated that Klotman could hire, fire, demote and promote department heads, and “their careers were promoted by the favor of the dean.”
Erica Harris, partner of Milberg Coleman Bryson Phillips Grossman, who represents Moretti, said: “If these individual PDC members upset Duke, their career Will face tremendous pressure.”
PDC’s relatively small family medicine and community health departments have completed their transformation, but Klotman is said to be working with the heads of five larger departments: medicine, neurology, psychiatry, behavioral sciences, and plastic surgery. Others also indicated that they will switch. If this happens, “PDC will be effectively destroyed,” Harris said.
Harris said that once the department chair decides to make the transition, the department’s doctors will also become Duke’s clinical staff. She said that whether this decision is voluntary depends on your definition of the word.
“If your department head says,’We are moving, if you refuse to move, you won’t find a job next year,’ is this an option?” Harris said.
Moretti’s complaint stated that after explaining his findings to the PDC in a letter to the leadership, it established a committee to investigate the allegations. The complaint stated that a status report dated November 29 stated that the Commission unanimously found these claims to be justified. The lawsuit also cited investigations of PDC members to obtain feedback on Duke’s proposal. It stated that the results “generally opposed the dissolution of PDC” but did not share the digital results.
The committee seems to be still deciding how to proceed, but Moretti complained that he didn’t want to wait any longer. Moretti “decided to file this lawsuit immediately because it is expected that Duke will intensify its efforts to cause irreparable harm to PDC in the new year.”
In November last year, the PDC committee investigating Moretti’s claim shared its recent third-party valuation of PDC obtained from Focal Point Securities. According to the complaint, the company determined that the value of the practice was between US$750 million and US$1.1 billion. The complaint It also stated that the annual revenue of PDC is approximately US$1 billion.
The complaint alleges that PDC’s board of directors hired two law firms to advise the organization on Duke’s acquisition plan. One of them, Epstein Becker & Green, allegedly called the plan “surprising” in an August memo. There is no specific lawyer who wrote this article.
“In my more than 35 years as a health lawyer, I have never seen a doctor’s clinic like PDC transferred to any purchaser at a purchase price of $0,” the memorandum was quoted in the complaint. “In my opinion, Duke University did not make any offer to purchase PDC at a fair market value in recognition of the PDC’s continuing business value. This is the most surprising aspect of Duke’s employment offer.”
In 2018, a former Duke radiologist Allegations against Duke University and the University of North Carolina In an antitrust lawsuit that illegally conspired to avoid poaching the other’s professor.
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