University of Minnesota, Fairview, and M Physicians reach 10-year mediation agreement to benefit patient care, fund Medical School, ensure world-class research and medical education in Minnesota

January 26, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that the University of Minnesota, Fairview Health Services, and University of Minnesota Physicians (M Physicians) have reached a 10-year mediation agreement that builds upon the existing 30-year partnership between the parties. The mediation agreement centers on a shared commitment for improved health for all Minnesotans through access to expert physician care at well-run and efficient Fairview healthcare facilities and sustained medical research and physician training. It provides funding support for the University of Minnesota Medical School, including the training of future physicians and care providers, and support for its acclaimed medical research programs that have made major contributions to the prevention, detection, and treatment of disease, which has led to better health and well-being for millions of people throughout the world. Importantly, the agreement ensures continuity of care between patients and their doctors and care providers and secures and improves patient access to world-class services at Fairview facilities on the University of Minnesota campus and throughout the Twin Cities.

Key features of the 10-year agreement include:

• $1 billion commitment from Fairview to invest in its medical facilities on the University of Minnesota campus over 10 years to help improve services to patients and the practice environment for physicians and other healthcare workers.
  • As part of these investments, the University and Fairview will explore expansion of physical capacity at the Academic Medical Centers and other approaches to enhance care through state-of-the-art facilities.
  • Fairview will assume operations for the Clinics and Surgery Center, and a new lease will be negotiated with the University, to foster integration, delivery, and management of services for patients, physicians, associated care providers, and related staff. Fairview will also forgive the operating debt the CSC owes to Fairview from the existing joint venture and assume all annual operating losses. These steps will support operations at the CSC and preserve patient care at that facility.
• $50 million from Fairview in annual financial support for the Medical School, with the potential for additional funding based on system performance. Fairview also assumes additional financial responsibility for clinic services, bringing its 10-year commitment to the Medical School to approximately $600 million before additional performance-based funding.
• The reaffirmation of the University of Minnesota’s designation of M Physicians, the group representing medical school faculty and affiliated physicians. M Physicians remains the sole faculty practice group, affirming its ability to continue their academic work as they practice in Fairview facilities and advance the University’s commitment to delivery of care, medical education and training, and important medical research.
• 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.
  • Fairview has committed an initial $10 million in funding for this initiative.
• New structures to strengthen the partnerships between the three organizations:
  • The University of Minnesota and Fairview will establish a new Leadership Council, consisting of two members each from University leadership and the Fairview Board of Directors, to discuss important strategic matters and mutual needs and ensure an effective collaboration.
  • The University of Minnesota and M Physicians will establish new collaborative vehicles for achieving their shared land-grant mission of high-quality clinical care, advanced research, teaching, and healthcare workforce development. 

Approximately 1.2 million people a year receive care, often highly specialized, in the Fairview system, which includes 1,500 physicians and 500 advanced practice providers affiliated with M Physicians, along with 1,100 physicians and 400 advanced practice providers affiliated with Fairview and other providers in Fairview clinics. The University of Minnesota Medical School trains approximately 70 percent of all physicians in Minnesota and is a proven hub of global scientific innovation and Minnesota's economic growth.

With the 30-year agreement between the University of Minnesota and Fairview expiring at the end of 2026, Attorney General Ellison first convened the strategic-facilitation process among the parties in March 2025 and in April 2025, named Lois Quam as strategic facilitator. After Fairview and M Physicians reached a bilateral agreement in November 2025, Attorney General Ellison secured all parties’ agreement to return to the negotiating table with a mutually agreed-upon mediator, and in December 2025, announced the mediation team. The goal of mediation was for the University, M Physicians, and Fairview to reach an agreement to address matters involving the University by building upon their partnerships that were set to expire at the end of 2026, and to continue support for the state’s top-tier medical school and its world-class faculty and research.

The parties reached agreement involving the University after approximately seven weeks of mediation that retired judge Thomas Fraser led, with Lois Quam and Dr. William McGuire as co-equal consultants. The mediation team met every single day for more than seven weeks, beginning December 5 until today, with the exception of December 25.

The three-party agreement is signed by University of Minnesota President Rebecca Cunningham, M.D., Fairview President and CEO James Hereford, and M Physicians interim CEO Greg Beilman, M.D. The University of Minnesota Board of Regents, the M Physicians Board, and the Fairview Board of Directors will act on the binding agreement by February 1, 2026. The new 10-year agreement takes effect on January 1, 2027, with some features implemented in 2026.

The mediation agreement provides the framework for three distinct definitive agreements: (1) an academic affiliation agreement between the University of Minnesota and Fairview; (2) a master agreement between M Physicians and the University of Minnesota; and (3) an amendment to the Fairview/M Physicians stability agreement agreed upon last November. The parties have agreed to work with the current mediation team as they complete the definitive agreements.

In response to this accomplishment, Attorney General Ellison released the following statement:

“I’m gratified that after much hard work, the University of Minnesota, Fairview Health System, and M Physicians have reached an agreement that will ensure that 1.2 million Minnesotans a year will continue to receive world-class patient care in our state, that Minnesota will remain a place where world-class physicians, specialists, and researchers seek to treat patients and build successful careers, and that secure, stable funding for the University of Minnesota Medical Center that trains 70 percent of Minnesota doctors will continue for the next generation.

I heartily congratulate all the parties and their leadership teams for doing the hard work of reaching this agreement. I commend them all for choosing to stick with this process through thick and thin, for recognizing that despite differences they had, they shared the overriding goal of strengthening the health and prosperity of our entire state and its flagship university. I particularly appreciate and wish to thank leadership from the Board of Regents and the M Physicians board in early discussions about mediation, the Fairview board and leadership for their consistent focus on getting to an agreement, and the efforts of our mediator Judge Thomas Fraser and strategic facilitators Dr. William McGuire and Lois Quam. Ms. Quam deserves special recognition for seeing this process through from beginning to end. I know all Minnesotans join me in thanking everyone that contributed to getting us to this point: it is a significant and positive development for all of us and the state we love.”

Rebecca Cunningham, president of the University of Minnesota, said:

“This agreement is an important milestone that brings clarity to the relationship between the University, M Physicians, and Fairview Health Services for the next 10 years. We are pleased to be able to continue this long-term partnership, which has played a vital role in caring for Minnesotans, training much of the state’s healthcare workforce and advancing lifesaving medical research. It represents meaningful progress toward our goal of building a world-class healthcare solution that serves all of Minnesota. We are grateful to the Attorney General, the mediator, and the facilitators for their leadership in this mediation process.”

James Hereford, President and CEO of Fairview Health Services, said:

Positioning our care-delivery system to deliver excellent care for our patients and providing an environment in which our physicians, and our employees can deliver that care has always been our top priority, and this agreement supports that. Healthcare delivery in Minnesota and across the country is in crisis, and meeting the needs of patients in this environment requires constant innovation, improvement, and a willingness to change how we provide care-delivery services to meet the needs of our patients. This mediation process created the space for all parties to focus on what matters most: continuity of care, a strong academic partnership, and a sustainable future for healthcare in our state. We are deeply grateful to Attorney General Ellison for his leadership, to the mediation team and facilitators for their tireless work, and to Dr. Greg Beilman for his steady partnership throughout this process. Together, we now have a durable path forward that strengthens patient care, medical education, and research for Minnesota for the next decade.

Dr. Greg Beilman, interim chief executive officer of M Physicians, said:

This agreement establishes a clear and durable foundation for M Physicians and all parties to deliver world-class care and education for our patients, learners, and community.

M Physicians is proud to reaffirm our status as the University’s singular, premier physician practice and further solidify the harmony and partnership in our clinical and academic missions. Concurrently, we are pleased to strengthen our partnership with Fairview Health Services and are grateful for their significant investment in academic medicine – reflecting the largest investment in the University of Minnesota Medical School from an outside health system.

We are prepared to work closely with our University and Fairview partners to deliver on these commitments for Minnesota’s patients, the University of Minnesota Medical School, M Physicians faculty and community staff physicians, advanced practice providers, learners, researchers, and our teams over the next decade.

We are grateful to our mediation team, Judge Tom Fraser, Dr. Bill McGuire and Lois Quam, for their facilitation throughout this process. We also thank Attorney General Keith Ellison for his leadership and ongoing commitment to upholding Minnesota’s healthcare future.

The Minnesota Attorney General reviews healthcare transactions under Minn. Stat. § 145D.01, which authorizes the Attorney General to consider whether a healthcare transaction is in the public interest and seek court intervention if the Attorney General finds that it is not. The Attorney General also has authority over these matters as the primary regulator of Minnesota charities and to enforce the federal and state antitrust laws on behalf of the State of Minnesota and its residents. The Attorney General will have authority to review some aspects of the definitive agreements between the parties, once concluded.