Detroit — Wayne State University gave an ultimatum this week to all 110 pediatricians who work for its medical school and Children's Hospital of Michigan: Join the new WSU pediatrics group or lose your jobs with the university next month.

University officials, who notified the physicians in a letter Monday, claim the move will not affect care to patients at Children's Hospital, risk training to medical students or impact medical school accreditation.

The letter explained the looming termination is because University Pediatricians, the physicians' practice group, has not paid the university the funds it uses to pay the doctors' salaries since February — an amount nearing $18 million.

"We very much regret the necessity of taking this measure, but we are afraid we have no option, due to the failure of University Pediatricians, PC to fulfill its financial obligation on your behalf," reads to the letter, signed by Dr. Herman Gray, chair of WSU's pediatrics department, and Dr. Jack Sobel, dean of the WSU School of Medicine.

The move comes after University Pediatricians, WSU's pediatrician group, left earlier this year to align with Central Michigan University. It has created an unprecedented situation for Wayne State, whose pediatricians have done research, taught and provided specialized care to patients at Children's Hospital.

The move by Wayne State puts immediate pressure on the university's pediatricians, who for years have trained WSU medical students at Children's Hospital, which is owned by the Detroit Medical Center. In a letter to the physicians Tuesday, University Pediatricians pledged to keep their pay and benefits whole, though it's not clear how that would be accomplished.

The move also comes amid significant risks for the WSU School of Medicine. A medical school is required to provide students clinical experience in each phase of the human life cycle, of which pediatrics, or childhood, is considered an essential part, according to the Liaison Committee on Medical Education.

Without pediatricians to train Wayne State medical students, or a hospital to train them in, WSU’s accreditation as a medical school could be in jeopardy.

“That is that is something really important and critical to the school’s well-being," said Gray, a former president and CEO of Children's Hospital. He said the school believes its accreditation from the LCME is not at immediate risk.

“I don’t think at all that the medical school’s accreditation will be threatened,” Gray said. “This is a situation that is fairly unique, not just in Wayne’s medical school but unique in academic medicine for an entire department to be threatened by some kind of business dealing with the practice plan.

He added: "The accrediting body, their interest is to make sure that students are taught well. They don’t have an interest in shutting down a medical school. So they will work with us as we try to work through this difficult period of time.”

Mary Lu Angelilli, president of University Pediatricians, could not be reached Tuesday for comment. But in a letter sent on her behalf to the doctors Tuesday, she called Wayne State's move "disappointing."

"Each of you have given tirelessly over decades serving as their Department of Pediatrics and you certainly did not deserve the lack of care and disrespect that these letters cast upon you," wrote Angelilli. "UP will not allow its membership to suffer as a result of WSU’s reckless actions."

She also said she wanted to reassure the pediatricians that "UP will make each of our physician Members whole on their salaries and each will also be provided with uninterrupted UP benefits."

"UP will insure that its all of its physician membership will continue to receive all salaries, benefits and all necessary support in order to provide needed clinical and teaching services to all those who seek it," wrote Angelilli.

Kim Trent, chairwoman of the Wayne State Board of Governors, said Wayne State needs to rebuild its pediatrics department because it can’t continue to pay the physicians when the practice group has a large debt.

“We recognize how very important it is for us to have a pediatric practice for our medical students and our medical program,” she said. “It is a necessity for our accreditation as a medical school, and it is something we are going to have. It is something we must have, so we will have it. So we will use our creativity, use our resources, use our 151-year history that we have in the city to build a top-notch pediatric practice.”

Besides seeking pediatricians, the medical school also is seeking a hospital in which to train its students in children’s health care.

"We are working with other health care systems, which I can’t really name, to see if they will take Wayne students in pediatrics," Gray said. "Some of them already do. ... There are a lot of things we can do in response to this in the coming weeks. After the kids in the hospital being a priority, the next highest priority for us is for our own medical students, making sure they get a high-quality experience and they graduate."

Wayne State has given University Pediatricians until midnight on Oct. 30 to pay the amount the university says it is owed; otherwise, the school will terminate the pediatricians Nov. 18.

"While your service and contributions to the university’s educational and research programs are held in the highest regard, the university and the School of Medicine cannot sustain this deficit and expense," Gray and Sobel wrote.

The pediatricians covered by Wayne State's termination notice could still practice and be paid for working at Children's Hospital, but they will not have an affiliation with Wayne State if they stay with University Pediatricians instead of switching to Wayne Pediatrics, WSU's new pediatrician group.

"We are pleased to tell you that since faculty who join Wayne Pediatrics will not initially be paid under a salary reimbursement agreement, their status as School of Medicine employees will remain unchanged," Gray and Sobel wrote.

Pediatricians who remain with University Pediatricians will be affiliated with Central Michigan, which, unlike Wayne State, is not a research institution.

In a statement, Dr. George Kikano, dean of CMU's College of Medicine, referred to the state's approval of the pediatrician group's move from Wayne State to the Mount Pleasant school.

"The agreement signed this summer between University Pediatricians and the State of Michigan related to Medicaid funding strictly deals with management of Medicaid funding provided by the state and has nothing to do with paid faculty appointments, yet it certainly opens the door for an enhanced relationship between University Pediatricians and Central," he said.

Though the letter from Gray and Sobel does not state this, the pediatrics group stopped paying Wayne State for the pediatricians’ salaries when the practice switched its affiliation from WSU to Central Michigan. Both WSU and the physicians group have filed lawsuits related to the issue.

Wayne State pediatricians have at least two sources of income — for their work at the university and for their services at Children's Hospital, which is owned by the Detroit Medical Center.

The DMC said it will stand by the University Pediatricians group, though a spokesman for the hospital system did not offer specifics.

"Children’s Hospital of Michigan has had a long standing and valued relationship with University Pediatricians," DMC spokesman Brian Taylor said in a statement. "We look forward to continuing to work together as we seek to provide the highest quality and most compassionate care to children all across Michigan and beyond.”

Gray said the dispute between Wayne State and the University Pediatricians group has been ongoing for at least three years.

"The university has been pretty patient in trying to work through this," Gray said. "They want to keep all of their faculty members, but there comes a point when you just say the distraction is not worth it.

"It’s just too hard to focus on why we are actually here: to advance knowledge, to teach the next generation of physicians and to care for people who need our care."

Gray said the faculty members are being given a choice.

"If they want to keep their Wayne State part of their employment, and join Wayne Pediatrics, which is a new practice plan that the university was forced to create because University Pediatricians has not been cooperative in the past few years, they can keep their university faculty appointment and they don’t lose their faculty jobs,” he said.

Gray said the dispute is costing the university millions of dollars, not only in the funds that the University Pediatricians group is failing to pay, but also for costs to start a new practice plan and find a building to renovate so it's suitable for patient care.

Wayne State's move comes as the university has been paying for a subsidy that historically has come from University Pediatricians from revenue generated by physicians treating patients. It is a payment to help cover the salaries of physicians.

Gray called the situation, "heartbreaking."

"All the faculty of Wayne State have always historically worked in Children’s Hospital," he said. "These are two critical institutions to the city of Detroit and the state of Michigan. I don’t want to see either of them harmed."

Gray added that care to children would not be impacted.

"No child at Children's Hospital of Michigan will be harmed or be placed in jeopardy because of this," he said. "No child will go untreated."

He also added that medical students have to have a rotation in pediatrics, and there has to be a pediatrics department.

In the short term, Gray said some faculty, if they chose not to be with Wayne Pediatrics, could be voluntary faculty and continue to teach students in the hospital. There is an increasing emphasis on training patients in more outpatient settings than in a hospital setting because that is where future doctors will likely work, so Wayne State is recruiting additional private pediatrician offices for students to get experience taking care of children in private practices.

Charles Parrish, president of the university faculty union, called Monday's letter "a sad moment in Wayne State University’s history."

"The conflict between the University Pediatricians (UP), the former practice plan for the department and the university administration has been long term and very contentious," Parrish said.

"There have been failures on both sides in terms of honest bargaining. ... Among the losers are the faculty members being fired, the medical students they will not be teaching, the research relationships that exist with faculty of other departments in the WSU School of Medicine, and the community that benefited from the services of these clinicians."

Parrish added that the union is exploring what alternatives might exist to mitigate the impact of the administration's decision.

kkozlowski@detroitnews.com