The University of Nebraska’s Board of Regents on Jan. 15 unanimously approved an $800 million plan that would give the university sole ownership of Omaha-based Nebraska Medicine, but the health system’s board of directors have filed a lawsuit to halt the deal from proceeding.
The proposal would have the university pay Omaha-based Clarkson Regional Health Services $500 million for its 50% membership stake in Nebraska Medicine, plus about $300 million for the land and buildings Clarkson acquired when it first partnered with the university in 1997 to govern the system.
Nebraska Medicine said in a Jan. 16 statement shared with Becker’s that its lawsuit is a “necessary but unfortunate step to take, but it is aligned with our commitment to protect the mission of Nebraska Medicine.”
“Out of respect for the judicial process, we will let our complaint explain our serious concerns and requests, and we will not provide further comment,” the statement said.
Nebraska Medicine’s board of directors had previously argued the deal would allow the board of regents to redirect system resources to cover the university’s broader budget gaps. Nebraska Medicine board members also said the proposal was negotiated without their input or approval.
The lawsuit was filed Jan. 16 in the District Court of Douglas County.
The University of Nebraska Board of Regents told Becker’s in a Jan. 16 statement that it is “saddened and puzzled by this unnecessary action.”
“The Board of Regents has stated multiple times, including several times in the recent public board meeting, that we have a sincere desire to work in a collaborative fashion with Nebraska Medicine to grow and strengthen health care,” the statement said. The Board of Regents unanimously approved this transaction, and following that vote we moved immediately to once again extend a warm and personal offer to meet and forge ahead together to build a collegial working relationship consistent with Nebraska values.”
The university said in an FAQ posted on its website that Nebraska Medicine would not become a state entity under the proposal but would remain a separate nonprofit, with the university as its sole member. The system would continue to have its own board of directors, bylaws and budget.
Days before the vote, on Jan. 8, Nebraska Board of Regents Chairman Paul Kenney wrote a letter to the state attorney general alleging that certain Nebraska Medicine officers and board members intended to undermine legislative and philanthropic support for a $2 billion campus redevelopment initiative at the University of Nebraska Medical Center called Project Health. Mr. Kenney alleged the actions were intended to discourage the board of regents from moving forward with the governance change.
Nebraska Medicine said in a statement that the request was an attempt to draw attention away from unanswered questions about the proposed governance change and said the allegations had no merit. Nebraska Medicine also said that it supports Project Health.
The attorney general’s office told Becker’s that it received the letter and was reviewing the allegations. Any investigation will remain confidential.
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