Something like this?
SELECT first_letter,
individual_id,
mail_name,
first_name,
middle_name,
last_name,
name_suffix,
degrees,
clinical_specialty service_name,
um_department,
fellow_name_flag
FROM
(SELECT DISTINCT
UPPER(SUBSTR(last_name, 1, 1)) AS first_letter,
ind.individual_id,
mail_name,
first_name,
middle_name,
last_name,
name_suffix,
degrees,
clinical_specialty service_name,
facdept.um_department,
fellow_name_flag
FROM MS.INDIVIDUAL ind,
MS.provider prov,
pcd.clinical_faculty clinfac,
pcd.view_guide_faculty_department facdept
where ind.individual_id = prov.individual_id
AND ind.individual_id = clinfac.individual_id
AND clinfac.individual_id = facdept.individual_id
AND show_on_pcd_flag = 'YES'
AND facdept.um_department='#searchphys_department#'
AND clinical_specialty is not null
UNION
SELECT DISTINCT
UPPER(SUBSTR(last_name, 1, 1)) AS first_letter,
ind.individual_id,
mail_name,
first_name,
middle_name,
last_name,
name_suffix,
degrees,
prov.planning_specialty service_name,
facdept.um_department,
fellow_name_flag
FROM MS.INDIVIDUAL ind,
MS.provider prov,
pcd.clinical_faculty clinfac,
pcd.view_guide_faculty_department facdept
where ind.individual_id = prov.individual_id
AND ind.individual_id = clinfac.individual_id
AND clinfac.individual_id = facdept.individual_id
AND show_on_pcd_flag = 'YES'
AND facdept.um_department='#searchphys_department#'
AND clinical_specialty is null)
ORDER BY first_letter, last_name, first_name, middle_name
Phil