A state senator has asked state Auditor Crit Luallen to review the governance of the University of Louisville Medical Center and other medical organizations affiliated with the university to "improve oversight, transparency and accountability" of funds.
Sen. Tim Shaughnessy, a Louisville Democrat, dispatched a letter to Luallen last week that specifically questioned the monitoring of transactions made by the medical center and University Health Care, which provides insurance and Medicaid coverage for poor and disabled people in Louisville.
U of L employees hold 11 of the 17 medical center board positions and eight of the 17 University Health Care board spots. Both boards, in the last few years, have approved distributing money back to the university.
Shaughnessy said he isn't alleging wrongdoing. Instead, he wants Luallen to untangle the intertwined finances and board structures to make sure proper checks and balances are in place and that the university isn't ultimately on the hook for the financial viability of those organizations.
"It has gotten so complicated that if you're not an investigative reporter or a CPA, you cannot follow what's happening at the U of L," he said. "And that's unacceptable."
The state auditor's office is still reviewing Shaughnessy's request and supporting documents, said Terry Sebastian, Luallen's spokesman.
The University of Louisville issued a statement Monday through its medical college — The U of L Health Sciences Center — saying representatives from the university, the medical center and University Health Care, which is more commonly known as Passport Health Plans, met with Shaughnessy "to try to explain the relationship among these entities."
"Governance and financing for health care continues to grow in complexity ... We will continue to work with Senator Shaughnessy to further his understanding and with the state auditors if they have questions," said the statement issued by Gary Mans, director of communications and marketing for U of L Health Sciences Center.
While Shaughnessy's request singled out the medical organizations, he said they are "an example of a systemic issue" of unclear chains of command and accountability with U of L's network of offshoot non-profits, including the U of L Foundation that manages the university's endowment and private donations.
"It's out of control," Shaughnessy said. "At the end of the day, this is the taxpayers' money, and the taxpayers deserve to know how the money is being spent and who's spending it. And it's very confusing and difficult to follow that through the University of Louisville."
On the U of L-affiliated medical organizations, Shaughnessy said he wanted more details about a $10 million transfer from the Medical Center to U of L in 2006. In addition, he questioned the oversight of the redistribution of $18.6 million from Passport to U of L entities over the last two years.
Passport withdrew that money from its reserves with the approval of Passport's board and its regulators at the Department of Insurance. In addition to U of L, Passport's other two founders, Norton Healthcare and Jewish Hospital received similar payments, some of which were grants to cover indigent patient care, said Shannon R. Turner, Passport's executive vice president.
Shaughnessy is a vice president at Jewish Hospital and serves as executive director of the University of Louisville and Jewish Hospital's Cardiovascular Innovations Institute. But he said he raised the questions with the state auditor in his capacity as state senator.
U of L President James R. Ramsey sent the Legislative Research Commission's director a terse letter on Jan. 13 calling Shaughnessy's inquiries a "witch hunt."
Ramsey was frustrated at the time that Shaughnessy didn't come directly to him to ask the questions and sent the letter to try to get a meeting with the senator, which did happen last month, said university spokesman Mark Hebert.
