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Local doctors group Eugene Emergency Physicians and other plaintiffs filed the lawsuit Friday saying the health care network’s switch to a Georgia-based company to staff emergency departments is illegal.
Eugene Emergency Physicians is suing PeaceHealth and ApolloMD, alleging that their business model violates the Oregon law that regulates the corporate practice of medicine.
The Friday filing in Lane County Circuit Court marks the latest development in nearly six weeks of fallout between PeaceHealth and Eugene Emergency Physicians, or EEP, a local group that has provided emergency care at the hospital for nearly 35 years.
PeaceHealth executives are working with ApolloMD to launch Lane Emergency Physicians, a new practice that will be owned by an Illinois physician, Dr. Johne Philip Chapman, and will staff PeaceHealth’s three emergency departments — in Springfield, Cottage Grove and Florence.
EEP filed a complaint in Lane County Circuit Court alongside two other plaintiffs: parent Karen Stapleton whose child may use local emergency rooms in the near future and a Lane County doctor Dan McGee concerned about disruptions to their own practice and patients.
The plaintiffs argue that Lane Emergency Physicians’ structure — and ApolloMD’s involvement in hiring and clinical operations — violate Oregon Senate Bill 951, a law passed last year that sets strict limits on corporate control of medical practices.
The law closes a loophole that allows private equity firms and corporations to appear compliant by naming physicians — sometimes with little or no authority — as practice owners. Meanwhile, those corporations still had control behind the scenes.
Senate Bill 951 stems in part from the primary care crisis in Eugene and Springfield after the 2020 corporate acquisition of Oregon Medical Group by Optum, a national health care company and a division of UnitedHealth Group. The takeover led to a turnover in physicians.
The plaintiffs argue that the defendants’ actions follow the very model that SB 951 was designed to prevent. They highlight that Lane Emergency Physicians shares the same principal place of business as ApolloMD, and that the sole owner of the new group, Chapman, has worked for ApolloMD locations in other parts of the country.
The complaint also alleges ApolloMD is “soliciting headhunter employment services” in an effort to fill the voice left by EEP’s outgoing 41 doctors and physician assistants. The plaintiffs argue this violates SB 951, because it prohibits companies like ApolloMD from controlling hiring, firing, scheduling or compensation for licensed medical providers.
The plaintiffs ask the court to void the agreements, shut down Lane Emergency Physicians in Oregon, block the defendants’ hiring practices, pause the transition from EEP until adequate care is in place, and bar ApolloMD and related entities from operating in the state.
EEP said it could not comment on the litigation. Neither PeaceHealth nor ApolloMD immediately responded to requests for comment.
“In an effort to circumvent Oregon law and trade upon the goodwill that EEP has built over decades, Defendant ApolloMD registered an illegal entity with the Oregon Secretary of State called Lane Emergency Physicians, LLC. As of the date of registration and the date of this filing, Defendant LEP does not have a single licensed Oregon physician,” the complaint reads.
Earlier this week, Gov. Tina Kotek sent a letter to Chief Hospital Executive Jim McGovern, who was among those who selected ApolloMD, asking him to delay the transition by 180 days beyond the planned July 1 start date, citing concerns about staffing.
Also citing SB 951, Kotek supported having the Oregon Health Authority’s Health Care Market Oversight program reviewing the deal. If officials determine the transaction should have gone through a public notice process, it could face additional review.
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