After years of public disputes and failed proposals, and recent mediation sessions, the University of Minnesota, Fairview Health Services, and M Physicians (UMP) have reached a set of detailed agreements that will govern their relationships for the next 10 years.

The final deals, announced Tuesday by Minnesota Attorney General Keith Ellison, represent the culmination of a complex negotiation process. An operating agreement between the University of Minnesota and Fairview was set to expire at the end of 2026, but a new pact proved elusive.

So Ellison brought in a strategic facilitator to work with the parties in early 2025. Several months later, Ellison appointed a three-person mediation team led by retired Judge Thomas Fraser. In January, the U of M, Fairview, and M Physicians reached a mediated framework, which resolved major negotiation issues.

The longstanding talks and major shifts in approaches taken by the University of Minnesota made this saga challenging to follow for many Minnesotans.

However, at the conclusion of the talks, the U of M didn’t buy back University of Minnesota Medical Center buildings. Instead, Fairview retains ownership.

Fairview had been providing the U of M about $100 million a year for the Medical School, and argued that wasn’t sustainable. In the final agreements, Fairview will provide at least $50 million a year in support.

While these major issues were resolved by January, the parties still needed mediation help to achieve detailed bilateral agreements, such as one that governs the relationship between the University of Minnesota and Fairview.

By finally reaching compromises on the two-party agreements among the three parties—the U of M, Fairview, and M Physicians—the attorney general said they now could operationalize the breakthrough framework that was negotiated in January.

On Tuesday, Ellison’s news release highlighted major aspects of the 10-year partnership that takes effect on Jan. 1. In the coming days, the U of M Board of Regents and the Fairview and UMP boards will vote on the final agreements.

A major element of the new overarching agreement is that Fairview will invest $1 billion in the U of M’s Medical Center over 10 years. Fairview has owned the Medical Center buildings since 1997.

For doctors and patients, the agreement provides continuity. There was a reaffirmation of the U of M’s designation of UMP (M Physicians) as the clinical practice for Medical School faculty and affiliated physicians.

“This is a great day for the University of Minnesota, for the state, and for health care,” University of Minnesota president Rebecca Cunningham said in a Tuesday interview with Twin Cities Business. “We are very excited to celebrate this agreement which is a win-win-win and secures academic health research and training.”

Carol Bradford, executive vice president for health affairs and interim Medical School dean, told TCB, this step “was about securing agreements” that affect the education of Medical School students as well as residencies.

Bradford added it was critically important that U of M physicians have certainty about where they will care for patients and conduct clinical trials.

The parties emphasized Tuesday that the mediated agreements build upon a 30-year partnership focused on a shared commitment for improved health for all Minnesotans through access to expert physician care at Fairview facilities and sustained medical research and physician training at the University of Minnesota Medical School.

Years of ups and downs

Tuesday’s announcement is a milestone in a turbulent chapter for three organizations that are in the center of Minnesota’s academic health system.

In late 2023, Fairview notified the U of M it would not renew its existing arrangement, citing concerns that “the current level of Fairview’s financial support to the University of Minnesota threatens the sustainability of our health delivery system.”

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In recent years, the U of M administration tried various strategies to transform its academic health system. In January 2025, the University of Minnesota and Duluth-based Essentia Health unveiled a plan to create a new health system. The proposal unraveled within months.

As negotiations among the U of M, Fairview, and UMP stalled, Ellison became increasingly concerned because the lack of a final agreement created uncertainty for patients and risked heavy attrition of physicians.

A.G.’s facilitator and mediation team

In April 2025, the attorney general appointed former UnitedHealth Group executive Lois Quam to help facilitate discussions. In November, Cunningham and the Board of Regents vociferously objected to a deal between Fairview and UMP that was supported by Ellison. The president and regents criticized the two parties for reaching a substantive deal without the administration’s involvement.

To tamp down emotions and focus on constructive three-party negotiations, Ellison decided to appoint a three-person mediation team. In December, he brought in retired Judge Fraser, an experienced and well-regarded mediator, and asked Quam and Dr. Bill McGuire, a former UnitedHealth Group CEO, to serve as “coequal consultants” in the mediation process.

Mediation talks were rigorous and frequent, and led to a framework agreement that Ellison’s office announced on Jan. 26. But that wasn’t the end of work for the three parties or the mediation team.

The parties still needed to reach detailed bilateral agreements, which was announced Tuesday.

Additional elements of the deals

Fairview operates the Clinical and Surgery Center on the university campus, where M Physicians care for patients, and Fairview and the university, as the building owner, have concluded a lease agreement, with mutually agreed-upon binding arbitration on the final terms to be reached shortly, according to the attorney general’s news release.

“In the last six months, there are a number of aspects of finances that have been clarified that give us a better financial situation than [it would have] last fall,” Cunningham told TCB. “[We are] very confident we will have sustained support to support our goal for the state and priority for the state as an academic health force that provides life saving research.”

UMP will remain the sole faculty practice group for the Medical School, and M Physicians cares for patients from all 87 counties in Minnesota.

Fairview and the U of M reached an academic affiliation agreement. It means that Medical School faculty, students, residents, and fellows will conduct teaching and research in the Fairview health care facilities.

Tuesday’s announcement also included “exploration of an innovative new program to support local physicians in increasing the likelihood that patients in Greater Minnesota receive timely diagnosis, appropriate treatment, and necessary care for complex medical conditions, regardless of their geographic location or circumstance.”

The U’s Board of Regents has multiple meetings this week. The regents are expected to consider an agreement regarding Fairview’s lease of the U of M-owned Clinics and Surgery Center; a new academic affiliation agreement between Fairview and the U of M; and a new master agreement between the U of M and M Physicians.

Three-party perspectives

On Tuesday, Ellison credited all three parties for reaching compromises after difficult negotiations.

“These three organizations—the University of Minnesota, M Physicians, and Fairview—and their leaders have demonstrated remarkable commitment to ensuring Minnesota remains a world-class place for caring for patients, training the next generation of doctors and medical professionals, and building a career as a physician and researcher,” Ellison said in a statement.

He also praised Fraser, Quam, and McGuire for bringing the parties together during months of mediation talks.

Fairview President and CEO James Hereford said the agreements create stability while allowing the organizations to focus on broader health care challenges.

“By resolving these foundational issues, we can turn our full attention to serving patients, supporting health care professionals, and addressing the significant issues that face health care delivery in Minnesota,” Hereford said in the news release.

M Physicians CEO Dr. Greg Beilman described the agreement as the result of sustained collaboration among the parties. He added in a statement: “Important work like this takes collaboration, relationships and continued prioritization of the people in our care—whether they are patients, clinicians, learners or community members—to do it well.”

The University of Minnesota Medical School trains approximately 70% of all physicians in Minnesota.

“As we think of our relationship to the business community, we need to have the right infrastructure in place,” Cunningham tells TCB. “The university receives hundreds of millions of federal dollars to put toward the Medical School, which the university spins back out into our state economy.”