Eugene, emergency physicians fend off Atlanta shell corporation

Presenter: Eugene Emergency Physicians fended off PeaceHealth’s attempts to replace them with an Atlanta shell corporation. Marty Wilde recaps the short trial and the important test of a new Oregon law.  Here’s KEPW’s Robin Bloomgarden with the story:

Robin Bloomgarden (reading headlines in Marty Wilde column): A Community Shows Up For Its Physicians.

Fighting a Corporate Takeover of Health Care.

Friday night, a lively crowd of 700 people packed Venue 252 in Eugene. They came to support a group of local emergency physicians locked in a federal lawsuit that has grown far beyond two hospital emergency departments. 

The event, billed as Make Medicine Local Again, was hosted by the American Academy of Emergency Medicine and Eugene Emergency Physicians. It was aimed at covering legal costs in their federal suit against PeaceHealth and ApolloMD. 

The physicians argue the arrangement violates Oregon Senate Bill 951, the corporate practice of medicine law that Gov. Kotek signed on June 9, 2025.

Oregon’s new law is part of a wave of reforms trying to claw back clinical control from private equity-style staffing firms and restoring it where it belongs—with the clinicians. 

Senate Bill 951 prohibits management service organizations known as MSOs from exercising final decision-making authority over physician hiring, work schedules, compensation, billing policy, and payer contracts.

It bars dual ownership between MSOs and the physician practices they manage. It limits noncompete / nondisparagement agreements, and it forbids contractual provisions that amount to de facto control over the clinical or business operations of a physician group. 

In short, it puts physicians, not corporations, in control of the health care you receive.

The plaintiffs argue, ApolloMD has built exactly the kind of arrangement prohibited by Senate Bill 951 and tried to disguise it. They contend ApolloMD created Lane Emergency Physicians as a paper practice owned by a single Illinois doctor financed and managed by ApolloMD Business Services, and that the structure exists to satisfy the form of Oregon law while preserving corporate control of clinical care.

The trial opened on Monday, April 27. Plaintiffs argued that not a single ApolloMD entity can legally provide health care services in Oregon. On day two, plaintiff Dr. Dan McGee testified about working in corporate staffed emergency departments before coming to Eugene, describing them as ‘chaotic and scary,’ with constant turnover.

Pressed by an ApolloMD attorney about whether his refusal to work for the company was creating a staffing crisis, he answered, ‘We are not just doctors, we are members of the community. We live and die in the same hospitals as everybody else. My daughter was at RiverBend with a life-threatening emergency less than two months ago. If it wasn’t for the expert care of my partners, she would’ve died. I do not trust ApolloMD to care for my daughter the way that my partners did.’

ApolloMD CEO Dr. Yogin Patel then took the stand and walked the court through what plaintiffs call a shell game. ApolloMD operates through a stack of layered entities including ApolloMD Business Services, ApolloMD LLC, ApolloMD Holdings, and ApolloMD Partners, Patel testified. He is the CEO of ApolloMD Business Services, but is not employed by it.

He is paid by independent physician resources described as an affiliate. He acknowledged that in states without corporate medicine restrictions, Apollo MD may be involved in clinical decisions. He testified that Apollo MD plans to deploy Clio Health, an artificial intelligence platform that records doctor patient conversations and scores them for visit length, lay language, and patient workup elements.

By Wednesday, April 29, Judge Kasubhai had heard enough vagueness. The defense called Dr. Johne Philip Chapman, the Illinois physician who is the sole owner and member of Lane Emergency Physicians. Chapman testified he has no plans to move to Oregon and has no written contract with PeaceHealth.

Asked about the corporate structure of the entity he supposedly controls, he repeatedly said he did not know and deferred to accountants and attorneys not present. Judge Kasubhai stopped him during the second hour. ‘You own LEP. Why aren’t you demanding?’ he asked.

According to KLCC’s coverage, the idea that Chapman and Patel ‘have no idea how this is set up,’ he said, ‘defies logic and credibility.’ A few minutes later: ‘The plausible deniability is discouraging and disappointing.’

He then turned to the broader pattern. ‘At the end of the day, we have to figure out what the statute means, but I understand what all of you are doing is not helping me understand the actual relationship any better than a shell game. So do better.’

He warned PeaceHealth directly that if its witnesses were similarly evasive on Monday, the hospital ‘may be just as liable if I find there is a violation of 951.’

The Eugene trial is one of the first serious legal tests of Senate Bill 951, which went into effect for new entities on Jan. 1 of this year.

It is also a real-time test of whether private-equity-style emergency medicine staffing models can survive a state law written specifically to dismantle them.

There is recent precedent. In December, 2021, the American Academy of Emergency Medicine Physician Group sued Envision Healthcare in California Superior Court for the same kind of arrangement.

After two years of litigation and discovery Envision withdrew from all operations in California, agreed not to enforce restrictive covenants against its physicians. 

The case ended without a final judgment, but with the corporate operator gone from the state. The Eugene case has the potential to do the same in Oregon and to set a template for the dozen-plus states.

The crowd at Venue 252 reflected something unusual for Eugene: U.S. Rep. Val Hoyle, state Sen. Floyd Prozanski and Oregon House Speaker (Rep.) Julie Fahey sat in the same room as conservative state Rep. Darrin Harbick, Eugene Mayor Kaarin Knudson, Springfield Mayor Sean VanGordon, and Health Care for All Oregon activists.

The keynote was delivered by Dr. Will Flanary, the Portland ophthalmologist who as Dr. Glaucomflecken has built an audience of millions skewering the corporatization of medicine. Many physicians in the room wore bicycle helmets or unicorn horns, a tribute to his characters. 

Seven hundred fired-up people showed up because they understand that the doctor caring for them in the emergency room should answer to the patient on the gurney, not to a corporation in Atlanta.

The next time someone tells you that corporate emergency medicine is just the modern way of doing business, ask them to read Judge Kasubhai’s comments and decide for themselves whether what they see looks like medicine or a shell game.

Presenter:  PeaceHealth and Eugene Emergency Physicians reached an out-of-court settlement May 6 and are currently negotiating a new contract, thanks to a new Oregon law that prevents corporate beancounters and private equity firms from making medical decisions.

You can subscribe to Marty Wilde and his Letters from a Recovering Politician on Substack.

Robin Bloomgarden: Read by Robin Bloomgarden for KEPW Whole Community News.