Governor asks PeaceHealth to delay ER transition; lawmakers want more details

March 18, 1:40 p.m.: This story was updated to include a statement from PeaceHealth.

In two letters from state leaders, Gov. Tina Kotek and a group of state lawmakers asked PeaceHealth to delay its emergency department staffing transition to Atlanta-based contractor ApolloMD and to release transaction details to the Oregon Health Authority.

PeaceHealth executives are working with ApolloMD to launch Lane Emergency Physicians, a new practice that will be owned by an Illinois physician, and will staff PeaceHealth’s three emergency departments in Springfield, Cottage Grove and Florence.

The incoming group would replace Eugene Emergency Physicians, whose 35-year contract is set to end in June.

When Lookout Eugene-Springfield first reported the contract change Feb. 6, PeaceHealth leadership said ApolloMD intended to retain many — if not all — of the current clinicians. Soon after, 41 medical professionals — 32 physicians and nine physician assistants — signed a pledge not to work with ApolloMD for at least 90 days. Some have said they do not plan to return, citing concerns about patient care and physician treatment.

In an interview with Lookout Eugene-Springfield on March 1, PeaceHealth Oregon Chief Hospital Executive Jim McGovern said that ApolloMD has “40-plus” doctors and physician assistants in a “credentialing pipeline,” which he said “means they’ve signed contracts and committed to come” work at PeaceHealth.

It is unclear whether those in the hiring queue are temporary physicians, often called locum tenens, or whether their credentials match those of Eugene Emergency Physicians staff. Credentialing for emergency physicians in Oregon typically takes two to three months. 

Kotek wrote to McGovern on Tuesday, March 17, asking PeaceHealth to delay the transition by 180 days beyond the planned July 1 start date.

“I urge PeaceHealth to reconsider the rushed nature of this significant contract change and delay actions to allow for a more thoughtful approach to sustainable staffing that meets your emergency department needs,” she wrote. 

Kotek also asked PeaceHealth to work with Eugene Emergency Physicians to extend its contract to maintain adequate staffing during the delay. She raised concerns about reliance on locum tenens physicians and said she has requested weekly updates from the Oregon Medical Board to track service dates, duration of assignments and new license applications. The goal, she wrote, is to monitor whether PeaceHealth can maintain current physician staffing ratios.

Kotek also wrote about her frustration over lack of transparency about “adequate staffing” and questioning the business transaction at large. She asked that PeaceHealth release its documents from its request-for-proposals process, the procurement process inviting groups to submit bids outlining their service, by Friday. She also asked the hospital to release information of how it would work with other hospitals in this transition by the same date. 

“We can look to a different hospital’s transition to a new anesthesiology firm. Hundreds of planned surgeries were postponed due to the contractor’s inability to serve the hospital’s known volume. This resulted in anger, distrust, and real impact to patients’ lives. In an ED, there is no room for error. Based on the likelihood of an increased incidence of diverted patients, I am requesting that PeaceHealth coordinate with neighboring hospitals now to mitigate impacts across the region,” she wrote. 

On Wednesday, March 18, eight state legislators — including Rep. Lisa Fragala; Rep. Julie Fahey, the speaker of the House; Sen. Floyd Prozanski; and Sen. James Manning, all Democrats from Eugene — sent an another letter to McGovern and ApolloMD CEO Yogin Patel.

They asked the hospital system and the contractor to submit transaction details to the Oregon Health Authority’s Health Care Market Oversight program, which reviews health care deals for public transparency and community impact.

If regulators determine the transaction should have gone through a public notice process, it could face additional review. That could raise questions about compliance with Oregon Senate Bill 951, a law passed and signed last year that sets some of the nation’s strongest limits on corporate control of medical practices. The law closes a loophole that allowed private equity firms and corporations to appear compliant by naming physicians — sometimes with little or no authority — as clinic owners. 

Lookout Eugene-Springfield has asked ApolloMD to clarify its relationship with the private firm ValorBridge and any private equity involvement.

Lookout provided ApolloMD with data from PitchBook, a private market research firm, showing the company raised $11.46 million through private equity growth and expansion deals between 2015 and last year. In response, ApolloMD spokesperson Kimberly Johnson said the company is not backed by private equity.

The company also maintained it is not under private equity ownership or control in an earlier round of lawmaker questioning about entering Oregon’s health care market. 

But questions remained unanswered, lawmakers wrote in their Wednesday letter. 

“Given the potential for this arrangement to affect health care access and delivery in Oregon, we believe it is important that the appropriate review process be followed,” the letter said. 

“This is a request for transparency so that Oregonians can have confidence that this transaction complies with state law, particularly as Senate Bill 951 is implemented.” 

PeaceHealth sent the following statement Wednesday:

“We appreciate Gov. Kotek and other legislators’ engagement and focus on ensuring safe, reliable emergency care for Lane County communities, and we will respond promptly and directly to the questions raised in their letters.”

“We remain committed to transparency and to working collaboratively with the governor’s office, state regulators and community partners. We will continue to share information and provide updates as this transition progresses.”