Wayne State University Physician Group’s Bankruptcy Protection Emergence Plan Approved by Court

The U.S. Bankruptcy Court in Detroit confirmed Wayne State University Physician Group’s Chapter 11 plan of reorganization and approved its emergence from bankruptcy protection on Monday.
Detroit skyline at night
Wayne State University Physician Group, which serves many Detroit patients, had its bankruptcy protection emergence plan approved by the U.S. Bankruptcy Court in Detroit. // Stock photo

The U.S. Bankruptcy Court in Detroit confirmed Wayne State University Physician Group’s Chapter 11 plan of reorganization and approved its emergence from bankruptcy protection on Monday.

The group filed for Chapter 11 reorganization in November to stem ongoing financial losses, reorganize, modernize its financial and business operations, and consolidate its expensive and expansive clinical footprint.

“This is tremendous news for our patients, providers, staff, and the Detroit community,” says Dr. Charles Shanley, president and CEO of the group and vice dean of clinical affairs for the WSU School of Medicine. “Emergence from bankruptcy protection is a critical milestone in creating a stable future for the faculty of Wayne State School of Medicine supporting its medical education, research, patient care, and community service missions.

“It allows WSUPG to continue its rebirth as a thriving, multispecialty academic group practice providing high-quality medical care for the Detroit community and a superior educational experience for the next generation of physicians.”

Developed in partnership with turnaround consultant AlixPartners in Southfield, the reorganization plan is expected to move the group from a $8.1 million loss in 2018 to a $3 million profit by 2022 through savings or revenue improvements. Its efforts are supported by WSU through a restructuring support agreement that provides financial assistance to allow the practice plan to resolve past debts with creditors and rebuild for the future.

“Thanks to the collective effort of a number of parties, including the judge and office of the U.S. Trustee, this case moved through the court quickly and effectively,” says Mark Shapiro of Steinberg, Shapiro, and Clark, the firm representing the group in the bankruptcy proceedings. “This was a monumental task, and I could not be happier with the results.”

The group also negotiated a five-year clinical and administrative services agreement with the Detroit Medical Center in September to ensure access to care for the Detroit community and a stable education platform for DMC-based faculty, students, and resident physicians.

“The unwavering support of WSUPG’s board of directors, medical school Dean Jack D. Sobel, University President M. Roy Wilson, and the WSU Board of Governors, as well as our faculty and staff, was instrumental in achieving court confirmation and emergence from bankruptcy in an accelerated time frame of just over six months,” says Shanley.

To implement the reorganization plan, the group’s management and clinical leadership are partnering in six interdisciplinary teams to transform and modernize its core business and financial operations, clinical footprint, revenue cycle, patient access, physician compensation, business relationships, and organizational culture.

The group is partnering with athenahealth Inc. of Massachusetts to implement a cloud-based software platform to modernize financial operations and benchmark its revenue cycle performance with thousands of providers across the country. Caduceus Healthcare of Georgia, athenahealth’s partner, is helping to improve revenue cycle business operations and position the group to succeed in the era of value-based reimbursement. Both efforts are targeted for implementation this fall. The partnership also will offer options to add platforms for a fully integrated electronic health record to facilitate robust quality and outcomes reporting and population health management.

As part of the reorganization, the group has consolidated its network of outpatient locations. It is conducting due diligence on a specialized multidisciplinary ambulatory site, ideally located in Detroit’s Midtown area.

“WSUPG physicians provide primary and specialty care for some of the most medically complex patients and underserved populations in metropolitan Detroit,” says Shanley. “Our future lies in streamlining access for the Detroit community, especially its most vulnerable residents, to high-quality and cost-effective care in collaboration with Detroit’s primary care physicians, federally qualified health centers, the Detroit Medical Center, Barbara Ann Karmanos Cancer Institute, and Henry Ford Health System. We are on a path to be a leading urban academic practice in a thriving city recognized for innovative delivery of high-value care to the most complex and vulnerable members of the community. It’s a new era for WSUPG.”