PeaceHealth ER transition in court: What happened on Day 3 

6:30 p.m.: Wednesday’s court hearing has concluded. This story has been updated with additional testimony from PeaceHealth officials.

Need a primer on this complicated court case? Here’s where to start.

U.S. District Judge Mustafa Kasubhai delivered a warning to defense attorneys Wednesday, April 29, the third day of a U.S. District Court hearing over PeaceHealth’s planned staffing transition at emergency departments in Cottage Grove, Florence and RiverBend in Springfield.

Since Monday, Kasubhai has heard testimony in a case brought by Eugene Emergency Physicians, which is asking him to block the transition until PeaceHealth, incoming Georgia-based ApolloMD, and the emerging doctors group Lane Emergency Physicians can prove they are in compliance with Oregon’s revised corporate medicine law, commonly referred to as Senate Bill 951.

During the last day and a half, defense attorneys called witnesses, including ApolloMD CEO Dr. Yogin Patel and Lane Emergency Physicians owner Dr. Johne Chapman. Cross-examination by plaintiff’s attorney Todd Johnston focused on topics such as corporate structure, the lack of a finalized contract with PeaceHealth, and the recruitment and retention of physicians.

The answers from Patel and Chapman have often been vague, with the witnesses frequently answering “I don’t know” or deferring to accountants or attorneys who were not present in the courtroom.

Into nearly the second hour of Chapman’s testimony, Kasubhai stopped discussions between him and attorneys. Chapman had been explaining he “welcomed” a written contract between stakeholders.

The judge asked, “Why aren’t you demanding, coordinating?” He went on to say the idea that leaders such as Chapman and Patel have “no idea how this is set up defies logic and credibility.”

“(I am) quite frustrated with how this evidence is developing,” Kasubhai said. “The plausible deniability is discouraging and disappointing. At the end of the day, we have to figure out what the statute means, but understand what all you (attorneys and witnesses) are doing is not helping me understand the actual relationship any better than it being a shell game. So, do better. I hope PeaceHealth actually provides some clarity. If they don’t they may be just as liable if I find there is a violation of 951.”

Corporate structure and leadership 

Patel testified about ApolloMD’s corporate structure and “layered entities.” Such entities include ApolloMD Business Services, ApolloMD LLC, ApolloMD Holdings, and ApolloMD Partners, he said.

ApolloMD Business Services is the entity serving as a management service organization, known as an MSO. It is an organization that provides administrative or management services to a medical provider — in this case, Lane Emergency Physicians.

Patel said such MSOs support doctors with administrative tasks so they can focus on their clinical jobs.

“Medicine is incredibly complex as it is. Part of the need for an MSO is (that) physicians groups have challenges managing business and clinical aspects of a practice,” he said. 

Patel said that without the support of an MSO, it would be “challenging” for Chapman to set up Lane Emergency Physicians.

How Patel and Chapman are employed was not clear from Wednesday’s testimony. 

While Patel is the CEO of ApolloMD Business Services, he is not employed by it, he said. He works with Independent Physician Resources, which he describes as an affiliate of ApolloMD. The words “affiliate” and “partners” were used interchangeably by Patel.

Patel also said ApolloMD ”supports” 140 practices across the country, including Riverside Physicians LLC in Kankakee, Illinois. (The term “supports” has not been clearly defined during testimony.)

Chapman works at Riverside Physicians LLC, staffing Riverside Medical Center. He said he is an independent contractor and not employed by ApolloMD.

Riverside Physicians LLC is a practice supported by and at least partially owned by ApolloMD Business Services, he said. 

Retention and quality care 

During testimony earlier Wednesday, Patel reiterated earlier testimony that when ApolloMD enters a new market, physicians typically stay. But the 41 members of Eugene Emergency Physicians signed a statement saying they will not work for ApolloMD for at least 90 days after the transition. Patel said his company, though, has “sourced” about 100 physicians and physician assistants to work at PeaceHealth hospitals in Lane County.

Patel described “sourcing” as one step in the recruitment process. That is typically followed by obtaining an Oregon medical license and hospital credentialing.

Patel did not specify how many of those clinicians are temporary providers, versus how many are based in the Eugene area. Chapman later explained the Lane Emergency Physicians practice needs around 25 full-time-equivalent positions filled.

Kasubhai said he raised questions about recruitment because Senate Bill 951 includes consideration of quality care in the community, and factors such as retention and turnover could affect that. 

Patel said ApolloMD’s use of data tools and technology is part of how it provides quality care.  

“I believe we can improve services by supporting a team that will provide high-quality care. I think we have the resources,” he said, referring largely to data and applications. “(The resources) give the team the best chance possible to provide (high-quality care).” 

Johnston asked Patel about one of those applications: Cleo Health, an AI platform. He described it as an “ambient listening” tool that captures conversations between doctors and patients.

The system tracks and scores factors such as whether providers use clear lay language, the length and flow of visits, and elements of a patient workup. 

Patel said the tool is optional for clinicians and can be used on a smartphone or desktop, with patient awareness. He said recordings are stored temporarily — about 72 hours — and then deleted.

He did not clearly explain what information from those transcriptions is entered into medical charts or shared with ApolloMD before it is deleted.

The request-for-proposal process 

Vinutha Mattigod, system director of physician contracting at PeaceHealth, testified that the data, processes and programs ApolloMD presented during the winter request-for-proposals (RFP) process contributed to scoring it higher than Eugene Emergency Physicians.

Mattigod said she is based in Vancouver, where PeaceHealth’s system office oversees operations across hospitals in Washington, Alaska and Oregon. She said the system reworked how it contracts with physician groups following financial challenges that emerged during and after the COVID-19 pandemic.

She said a review of three physician groups at different hospitals, including Eugene Emergency Physicians, began in early 2025. An RFP process for Lane County emergency departments was later scheduled that year. 

Mattigod said the process was not influenced by former Oregon network Chief Hospital Executive Jim McGovern, who separately faces allegations of attempting to influence patient care without a license. She said those allegations were not disclosed at the time the RFP was issued.

She said she understood at the time that an independent physician group would be created and that PeaceHealth would contract with that group rather than directly with ApolloMD. 

She also said an initial draft agreement included standard terms but lacked some operational details, which she said is not uncommon in the weeks leading up to a planned transition.

Other PeaceHealth leadership, including Kim Ruscher, the chief medical officer for PeaceHealth’s Oregon network, are scheduled to testify Monday, May 4. Closing arguments are expected to follow, though it is unclear whether additional time will be needed.

Essential background

The legal case involving Eugene Emergency Physicians, PeaceHealth and ApolloMD is complicated. Here’s what to know, as days of testimony and arguments play out in the courtroom:

Go back to the beginning of today’s story.