Does UT Tyler Health Science Center’s deal with private equity shield doctors from malpractice suits?

Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.

---

Michael Simington wasn’t one to see a doctor. But when the 67-year-old retired welder started having trouble urinating, he knew something was wrong.

He saw Dr. Ruben Garcia, a urologist in Corsicana in October 2019. A biopsy showed he had prostate cancer. But Garcia didn’t share those results with him for a year and a half, Simington said.

By the time Simington learned of his diagnosis in March 2021, “it done spread,” he said. “They said that usually when it’s gone that far, there ain’t no going back.”

A urologist from the University of California, Los Angeles, hired by Simington’s attorney, reviewed the case and determined that the delayed diagnosis may have cost Simington eight to ten years of his life. To Simington, this seemed like a clear-cut case of medical malpractice, so he sued Garcia.

That’s when Simington fell through a trapdoor in Texas’ medical malpractice system and found himself facing an unexpected adversary: the University of Texas System.

While the clinic where Garcia practices is owned and operated by a for-profit health care system, he is employed by that system’s business partner: the University of Texas at Tyler Health Science Center.

Most people don’t pay much attention to who their doctor works for. But if things go awry, it becomes a distinction with a significant difference. In Texas, doctors employed by a government entity — like a county hospital or state medical school — are generally not subject to medical malpractice suits. Patients can, under narrow circumstances, sue the doctor’s employer, but for far less money than a standard medical malpractice suit.

What began as a case about a delayed diagnosis has spawned something much larger. Simington’s lawyer alleges that UT Tyler Health Science Center is fraudulently hiring doctors like Garcia as medical school professors to shield them from lawsuits, while they perform all of their work for a for-profit, private equity-backed health care system the university has an ownership stake in.

The university declined to comment on the pending litigation, but said in a statement that its health care venture “has been exceptionally successful and significantly enhanced medical education and healthcare for East Texas.”

In March 2023, Simington recorded a statement from his bed in the corner of his son’s living room. The frail, sunken man on camera is virtually unrecognizable from the sturdy, foul-mouthed fisherman featured in photographs around the house. He was in unrelenting, teeth-chattering pain as the cancer essentially starved him to death.

This video affidavit was one of his last acts to allow his children to continue the lawsuit without him. He died at home less than two weeks later.

“Man, they ain’t covered by no government immunity,” he said, his wispy voice gaining steam. “That’s just some type of loophole they found to get their damn foot in the door.”

A health system is born

Tucked “behind the pine curtain,” Northeast Texas reflects the fundamental mismatch of rural health care. While residents in the area are older and sicker than the state at large, they are less likely to have access to nearby medical care. It’s a region that’s been hit hard by hospital closures, physician and nursing shortages and lack of affordable health insurance.

A few years ago, these grim economics seemed to be coming for one of Northeast Texas’ largest health care providers, East Texas Medical Center. The 9-hospital system, with associated physician practices, outpatient clinics, and ambulance services, had been struggling with debt and operational issues for years.

But then, in 2017, ETMC announced it had found a buyer. Two, in fact. Seemingly overnight, a familiar shade of orange unfurled across the region, signaling the dawn of a new health care system: UT Health East Texas.

UT Health East Texas was created in partnership with UT Tyler Health Science Center, the graduate medical education center in the region. But most of the funding for this acquisition came from the university’s for-profit partner: Ardent Health Services. Ardent invested almost $350 million to buy the ETMC properties and promised $125 million in system improvements.

Based in Nashville, Ardent is the fourth largest privately held hospital operator in the country, with hospital systems in six states. It’s owned by Ventas, a real estate investment trust; Pure Health, a health care platform in the United Arab Emirates; and Equity Group Investments, a private equity firm founded by billionaire investor Sam Zell.

Zell, who died in 2023, called himself the “grave dancer” for his success buying and selling moribund companies. He is perhaps best known for his failed turnaround of Tribune Co., which owned the Los Angeles Times and The Chicago Tribune. The “deal from hell,” as he called it, led to the largest media bankruptcy at that point in U.S. history in 2008.

A decade later, Zell’s backing allowed Ardent to move into academic medicine, starting with a University of Kansas hospital in 2017, and soon after, UT Health East Texas.

Despite its affiliation with a public university, UT Health East Texas is a for-profit health care system. Ardent owns 70% of the entity and manages day-to-day operations. The university owns 30%; UT Tyler’s president chairs the corporate board.

The exact terms of the joint venture between Ardent and UT Tyler Health Science Center are detailed in a master services agreement, which the university declined to provide to The Texas Tribune through an open records request, saying it would provide an advantage to marketplace competitors. The Texas attorney general’s office upheld that denial.

Private equity has become an increasingly dominant force in American health care, snapping up physician practices, hospital chains and whole health care systems with the goal of turning a profit for investors. But it’s moved more slowly into academic medicine, which is built on a model of reinvesting at least some of its revenue into less profitable ventures, like education, research and development.

“These partnerships with academic health centers and nonprofits are relatively new, and they’re playing under the radar,” said Eileen O’Grady, healthcare director at Private Equity Stakeholder Project, an industry watchdog. “It allows a private equity firm to penetrate a market that has historically not been available to PE, and to do so with, I would argue, less financial risk.”

Private equity’s rapid acquisitions of hospital systems have raised red flags for researchers, watchdog groups and even a bipartisan group of U.S. senators, who worry about the emphasis on profits over patients and providers. But for rural and community hospitals, struggling with debt and shrinking payer bases, private equity firms may present an option too enticing to turn down.

In East Texas, Ardent was welcomed in with open arms, heralded as a savior for a health care system on the brink.

“The formation of UT Health East Texas is a game changer for our region,” UT System regent Kevin Eltife said in a press release at the time. “With the support of the UT System and Ardent, UT Health East Texas will continue to raise the bar for quality and accessibility of healthcare services while generating significant economic impact for communities throughout East Texas.”

ETMC took the proceeds of the sale and became a private foundation, which then donated $80 million back to UT Tyler to help start the area’s first medical school. The medical school, which admitted its first class this fall, hopes to help rebuild East Texas’ physician pipeline by recruiting students interested in staying in the region after graduation.

For people who’d watched the rise and fall of health care in Northeast Texas, this all seemed like good news. Reid Martin, a longtime medical malpractice attorney, was excited about the investment in the region — as a Tyler resident, as a UT alum and as the proud parent of a medical student.

“I want the medical school here. I want doctors here,” Martin said. “But I want good doctors here.”

A few years later, he took on Michael Simington’s case. And that’s when he started to look more closely at some of the implications of this partnership for medical malpractice lawsuits.

“I didn’t realize until I looked into it,” Martin said. “But the way they’ve set up [UT Health East Texas], there’s no way to hold the doctors working here accountable.”

Governmental immunity?

Since it launched, UT Health East Texas has expanded far beyond ETMC’s original footprint. Originally, there were 52 physician clinics under its name. Today, it has more than 90.

Among the acquisitions were four urology clinics owned by Dr. Ruben Garcia. At the time, a press release assured patients they could see the “same providers in the same locations with the same telephone numbers.” But Garcia and his fellow doctors would become “official members of the UT Health Athens team.”

But Garcia was not actually hired by UT Health East Texas or its subsidiary, UT Health Athens. While UT Health East Texas now owned the equipment, employed the staff, handled the billing and scheduled patients’ appointments, Garcia himself was hired by the University of Texas at Tyler Health Science Center, which paid him an annual salary to serve as a 100% clinical assistant professor of surgery.

Since 2018, more than 200 doctors across East Texas have been hired by the university as professors while practicing at UT Health East Texas.

UT Health East Texas CEO G. Todd Hill said in a 2023 deposition that adding the faculty physicians was part of getting ready to have the medical school in Tyler. The UT Tyler School of Medicine admitted its first class this fall, four years after Garcia first signed on as a professor.

“There is a growth of the [graduate medical education] program throughout East Texas,” Hill said. “And so I think all of this has been preparatory and planned. So having the growth of university physicians throughout makes sense.”

Less than a month after Garcia signed on as a university professor, Simington went to see him for a prostate biopsy. The signage at Garcia’s office, as well as his white coat and his web presence, all branded him as working for UT Health East Texas, a for-profit company. To confuse things further, the forms Simington filled out still bore the name of Garcia’s private practice.

“I just thought I was paying for his new golf cart,” Simington said in his affidavit.

In recent weeks, after the Tribune began asking questions about the partnership, UT Health East Texas updated its website to say that certain providers, including Garcia, are “employed as a clinical faculty physician at the University of Texas Health Science Center at Tyler under the UT Tyler School of Medicine.”

When it comes to medical malpractice cases, which entity has the “right to control” your doctor’s work can mean the difference between getting your day in court — or getting thrown out on a technicality.

After the biopsy, Simington said he never heard from Garcia. His medical records show a follow-up appointment was scheduled for two weeks later, but Simington said he was never told about this, and there wasn’t a “no show” noted in his file, according to the report from the UCLA expert.

Simington called Garcia’s office several times, and his primary care provider twice requested the results on his behalf, but got no response, according to the lawsuit.

“He’s from the generation of no news is good news,” Rodney Simington, his son, said. “Nobody called him. Nobody sent him letters. He doesn’t do email or anything like that, so he didn’t hear anything.”

In March 2021, with his symptoms worsening, Simington’s primary care provider urged him to go see Garcia again. Finally, 18 months after the biopsy, Garcia gave Simington the results.

It was cancer. And it appeared to be stage 4.

“I wanted to knock him out of that chair, is what I wanted to do, but I kind of held my temper a little bit,” Simington said. “That’s when I started getting in contact with all my kids and stuff and giving him a hard time not having me an oncologist onboard.”

When an oncologist did a bone scan, “his whole body just lit up,” Rodney said. “It was in his hips, his knees, ankles, back, neck, shoulders. It metastasized into the bones.”

Garcia declined to comment through his lawyer. But in a legal filing, he denied wrongdoing and said Simington’s damages were a result of “unavoidable occurrence” and “pre-existing and/or subsequently occurring conditions and disabilities and/or unrelated treatment of the decedent.”

Rodney Simington, a detective with the Tyler Police Department, and his wife, Michelle, a nurse, moved into a single-story house so they could care for Rodney’s dad in his final months. In the beginning, he stood around “supervising” Rodney’s renovations. But pretty quickly, he was in too much pain to do much more than sit in his recliner and shuffle outside for a cigarette.

“We did all the appointments, anything you could think of, even to the point of … doing radiation,” Rodney said. “It was painful for him. He’d be sick for days afterwards. But he was fighting, tooth and nail.”

Just shy of two years after his initial biopsy, Simington filed a lawsuit against Garcia and UT Health East Texas, which he believed to be Garcia’s employer. Martin, his lawyer, thought it was a pretty open-and-shut medical malpractice case against a private health care provider.

“Normally, we wouldn’t take a misdiagnosis or delayed diagnosis, because they get to them timely enough to where it didn’t really change the outcome,” Martin said. “But here, 18 months, with no treatment and not telling him and allowing it to spread throughout his body in such an aggressive manner, it’s inexcusable.”

That’s when the question of who Garcia worked for suddenly became very, very important.

If Garcia is employed by UT Health East Texas, a private, for-profit company, Simington could have sued under the typical medical malpractice statute. Under Texas’ 2003 tort reform law, a plaintiff can win up to $250,000 in non-economic damages against a doctor, among the lowest damage caps in the nation. But there’s no limit on economic damages — things like medical expenses and lost wages — so a plaintiff can sometimes win significantly more in the end. In 2018, Martin won a $43 million judgment against ETMC on behalf of a patient who ended up in an induced coma for a month after he was treated by a doctor who was on probation; the hospital system settled for $9 million.

But Garcia’s lawyers say he is employed by UT Tyler Health Science Center, a state agency, a distinction that could protect him from most medical malpractice suits.

Instead of suing Garcia directly, Simington would have to sue the university under a much narrower statute with lower potential winnings. He would have had to have notified the state of his intent to sue within six months, and he would have to prove that the incident involved “tangible personal property.” For medical malpractice, that usually means something like a knick with a scalpel or a sponge left inside a patient. Non-treatment or a missed diagnosis rarely qualifies.

Even if Simington’s case met these very narrow qualifications, which it likely doesn’t, the most he could win is $250,000 — economic and non-economic damages combined. It’s difficult to find a lawyer in Texas willing to take on these cases for so small a payout.

This is the two-tiered system of medical malpractice liability in Texas: Doctors employed by private health care systems can be held liable for malpractice; doctors employed by government medical facilities, like county hospitals and academic health centers, generally cannot.

“I don’t agree with the limitations of [the law], but I’ve learned to work within its confines,” Martin said. “I’ve made a practice out of it. But now, they’re saying that’s not enough for them, they want to stretch this even further.”

In his lawsuit, Martin argues that the partnership between Ardent and UT Tyler Health Science Center is an attempt to pull the shroud of governmental immunity over doctors who actually work for a private health care facility.

“I’d never seen anything like this in my 32 years practicing,” he said.

Hill, the UT Health East Texas CEO, said in his deposition that the partnership was intended to address health care shortages and expand medical education in East Texas, not close off a group of doctors from medical malpractice liability.

Martin asked Hill if he would characterize it as an “unintended consequence.”

“It’s not the purpose of it. I’m not going to characterize it,” Hill said. “But certainly sitting in my chair…it’s not even on the top 10 list of what I’m — why I’m here and what we’re focused on.”

Medical malpractice attorneys on both sides have spent years trying to figure out just how far this veil of protection extends, litigating cases involving Parkland Health in Dallas, University Hospital in San Antonio, UT Southwestern, M.D. Anderson and other county and state entities.

Texas courts have tended to rule that doctors can carry their immunity with them, even when practicing at a non-governmental medical facility, as long as the government agency still retains the “right to control” the doctor’s work.

In an affidavit, Garcia said his employment was entirely directed and controlled by the university, “such as the schedule that I worked, the facility where I worked, the type of patients I cared for … and the type of medical services I was authorized to render.”

The original memorandum of appointment that Garcia signed in 2019, which governed the period when he treated Simington, said he was being paid a university salary “solely for clinical and administrative services provided on behalf of UT Health East Texas.” Future versions of the contract added that his work was provided on behalf of the university, at UT Health East Texas facilities.

The contracts say Garcia may be responsible for research and educational activities; in his deposition, he said he did not teach a class or supervise a resident during the period he was treating Simington. The contracts are signed by Garcia, representatives from the university, and the president of UT Health East Texas.

Further details about the partnership and terms of Garcia’s employment are contained in nearly 900 pages of documents filed with the court under a protective order. Martin twice had to ask the judge to intervene to get UT Health East Texas to hand over records he was due as part of the standard discovery process. He has, unsuccessfully, petitioned the court to unseal the records.

Martin believes he can prove in court that the university is not actually controlling Garcia’s work, and that this partnership involves doctors “pretending” to be state employees to get medical malpractice protections.

“They’re purchasing all these clinics, and doctors are signing these MOAs in East Texas from Carthage to Canton,” he said. “If we don’t fight, we’re going to have an area in the state of Texas where the patient is going to lose their rights.”

The case continues

On March 6, 2023, less than a month before Simington died, lawyers gathered in a conference room to depose Garcia.

On one side was Martin, representing Simington.

On the other side were two private attorneys from Dallas medical malpractice defense firms; two lawyers from the University of Texas system; and an assistant attorney general.

A case that started out about a delayed diagnosis is now focused entirely on the details of this partnership between the university and a for-profit health care system. Both sides have filed motions for summary judgment, asking the judge to resolve the central questions in this case. The court has not set a hearing date.

Martin is hoping the judge will rule that Garcia is not a state doctor. That would allow Martin to sue him as an individual for his treatment of Simington, as well as pursue his claims that the university and UT Health East Texas engaged in fraud by hiring these doctors as professors.

Garcia’s attorneys are asking the judge to remove him from the case and substitute the university, essentially validating the structure of the partnership between Ardent and the university. Simington’s case would likely then be thrown out since it was reported more than six months after the incident and didn’t involve the tangible use of personal property.

Either ruling will likely result in an appeal. Martin said he is willing to litigate this all the way to the Texas Supreme Court if necessary, and Simington’s children say they’re not planning to quit anytime soon.

“I miss him everyday, but I’m more angry than anything,” Rodney Simington said. “They don’t care. To them, it’s an issue of shoving the blame somewhere else …. I’m not going to let this go. They picked the wrong person.”

Martin ended Garcia’s deposition with a question: “Do you think it’s fair to the patients in East Texas to have doctors providing medical care on behalf of a for-profit health care corporation while claiming to be protected by governmental immunity?”

“I believe that East Texas has been an underserved community,” Garcia replied, “and that the University of Texas Health Science Center is providing opportunities for health care that have not been available prior to this.”

“Objection, nonresponsive,” Martin responded. “But we’ll leave it at that.”

Disclosure: The University of Texas System has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

---

We can’t wait to welcome you to downtown Austin Sept. 5-7 for the 2024 Texas Tribune Festival! Join us at Texas’ breakout politics and policy event as we dig into the 2024 elections, state and national politics, the state of democracy, and so much more. When tickets go on sale this spring, Tribune members will save big. Donate to join or renew today.