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A federal judge said ApolloMD officials were “not representing the truth accurately under oath” in their testimony in a hearing over the planned emergency department transition at RiverBend and in Florence and Cottage Grove.
After four days of testimony, a federal judge told attorneys Monday, May 4 that there is “ample evidence” that the operations of ApolloMD — PeaceHealth’s recently chosen emergency department contractor — are “arguably in violation” of Oregon’s new corporate medicine law.
U.S. District Judge Mustafa Kasubhai is far from issuing a ruling in the case brought by Eugene Emergency Physicians, as closing arguments are scheduled Wednesday in Portland.
The group is asking Kasubhai to grant a preliminary injunction to block PeaceHealth’s transition of emergency department staffing and services to ApolloMD and Lane Emergency Physicians, a new group established to replace Eugene Emergency Physicians, known as EEP.
Lane Emergency Physicians is scheduled to start at PeaceHealth’s Cottage Grove and Florence locations June 1 and Sacred Heart Medical Center at Riverbend in Springfield July 1.
Kasubhai heard extensively from nearly a dozen witnesses, including doctors from EEP and leadership from PeaceHealth, ApolloMD and Lane Emergency Physicians during the past week.
At the end of Monday, he offered observations, saying he believed that ApolloMD CEO Dr. Yogin Patel and Lane Emergency Physicians owner Dr. Johne Philip Chapman “were being dishonest with the court.”
The reason, he said, is technical, to a law so new that it is still referred to as Senate Bill 951.
Signed into law last June, the statute closed a loophole in Oregon’s corporate practice of medicine doctrine that allowed businesses to disguise themselves as physicians groups.
ApolloMD is a management services organization, or MSO, meaning it provides administrative support but cannot deliver clinical care under Oregon law. That role is reserved for a professional medical entity, or PME — a physician-owned practice responsible for patient care. Eugene Emergency Physicians and Lane Emergency Physicians are PMEs.
“ApolloMD purports to be an MSO. Dr. Patel and Dr. Chapman were not representing the truth accurately under oath. It was a problem for them,” Kasubhai said.
The judge said he is trying to make “sense” of ApolloMD’s convoluted corporate structure and determine whether ApolloMD or Lane Emergency Physicians is positioned to have clinical control.
Kasubhai has witness testimonies and at least three large binders of evidence, including emails and other documents. At one point, the judge likened aspects of the case to the movie “The Matrix.”
Earlier in the day, he posed a new question to center discussions around: “Who was in control of the process, ApolloMD and Lane Emergency Physicians, since the very beginning until now?”
PeaceHealth CMO talks about procuring ApolloMD
Dr. Kim Ruscher, chief medical officer of PeaceHealth’s Oregon network, and two other PeaceHealth officials testified Monday about their involvement in a requests-for-proposal process — the procurement method in which leaders at PeaceHealth scored applications for a contractor to manage and staff its Lane County emergency departments.
They described the process as standard and said their voting was not influenced by Dr. Jim McGovern, PeaceHealth’s chief hospital executive for the Oregon network. McGovern is on leave following allegations that he acted outside the scope of his medical license and inserted himself into patient care decisions.
According to earlier testimony from Vinutha Mattigod, a review of expiring contracts — including that of Eugene Emergency Physicians — began in early 2025. The idea of issuing a request for proposals, or RFP, came up during that process, she said.
Monday, Kasubhai asked for clarity on how a contract would be identified as one that would not be renewed, thus forcing an RFP process for a new contract.
Ruscher said she did not know whether the decision came from a contracting committee — which included PeaceHealth’s Executive Vice President and Chief Operating Officer Richard DeCarlo — or whether McGovern directed the committee to move forward with an RFP.
“What initiated the decision to not renew the contract? I don’t have an answer to that yet,” said Kasubhai, who last week warned the defense about vague answers.
Kasubhai went on to ask, “There is some bad blood between PeaceHealth and EEP?”
“It is not a perfect relationship,” Ruscher said.
“When did it go south?”
Ruscher pointed to the 2023 closure of PeaceHealth’s emergency department in Eugene, at the University District location.
“It seemed like both sides talking at each other and not to each other,” she said.
Ruschers’ testimony — alongside Denise Dismuke-Gideon (vice president for planning, design, construction, real estate and operations) and Raleifoot Chisolm (director of nursing at RiverBend) — showed the scoring applications emphasized a group’s ability to recruit and transition.
This led to a lower score for Eugene Emergency Physicians in that category, Chisolm testified, because the group did not need to plan for a transition given its incumbent status.
Ruscher said her higher score for ApolloMD was generally because of its experience and systems approach. She specifically pointed to a “playbook” of options ApolloMD has showcased in hospitals across the country.
‘Just in time’ contracting
The “playbook” raised concerns for Kasubhai about compliance.
“If dealing with a playbook, and Apollo’s playbook, they were the coaches, they were directors controlling what [Lane Emergency Physicians] will do,” he said.
“They are good at their sales pitch, but as far as being obligated under 951 they fell short.”
The judge added that RFP documents could be considered “admissions” of who controls the arrangement.
As surfaced in earlier hearings, Ruscher testified there is not yet a finalized written contract between PeaceHealth, ApolloMD, and/or Lane Emergency Physicians.
She said that is not unusual at this stage, describing it as “just in time” contracting, where details are finalized alongside implementation.
In this case, she said, the focus has been on recruiting for the transition as doctors with EEP plan to leave and not work under the new structure.
But the absence of a written agreement became a focal point late in the day, as Kasubhai interpreted the language of SB 951 and the definition of an MSO means an “entity that under a written agreement.”
It raises questions, he said, about whether the law applies or whether the companies can operate without a written agreement — a matter to be further discussed Wednesday.
“A handshake and a wink doesn’t do it,” Kasubhai said. “We have a handshake and a wink in this case.”
