A group of Oregon ED physicians that fought a move to be replaced by a large staffing firm scored a victory last week that will allow them to keep their jobs.
PeaceHealth earlier this year announced plans to replace Eugene Emergency Physicians with physicians from the national staffing firm ApolloMD at three of its hospitals. The local 41-member emergency medicine group has worked at PeaceHealth hospitals for 35 years.
After most of the ED physicians turned down offers to work for ApolloMD at the three hospitals, the group sued PeaceHealth. And after a rough week in court, the health system agreed to retain the local physician group for at least three years.
The physician group fought PeaceHealth’s plans to replace it by invoking Oregon’s 2025 corporate medicine law, which aims to keep corporations and private equity firms from controlling medical practices. Oregon now requires that medical groups be owned and governed by physicians who are licensed in the state.
ApolloMD said that a local emergency physician owned the group that would take over at the three PeaceHealth hospitals and that the corporate entity would handle “nonclinical support.” But a judge last week questioned whether that arrangement would meet the state law.
The judge questioned whether officials from ApolloMD were being honest with the court, according to reporting from Oregon Public Broadcasting. Critics had pointed out that the ED group that was going to work at the three PeaceHealth hospitals was registered in Oregon in February of this year. They also noted that the ED physician who would have been overseen the group was from Illinois and got his Oregon medical license only in March of this year.
In court last week, the judge said that it appeared that ApolloMD planned to use the local company to control its liability in Oregon, not to actually run the practice and make clinical decisions. The judge also said that a lack of written contracts between ApolloMD and the local emergency group would allow ApolloMD to conceal any control it would exercise over the local emergency medicine group.
MedPage Today reported that the judge ultimately concluded that officials from ApolloMD lied under oath about who would run the new group in Oregon.
In its lawsuit, the ED group argued that the model being used by Apollo “is exactly the business model that Oregon’s corporate practice of medicine laws prohibit.” Critics said that ApolloMD was using the “friendly physician” model in which a physician is named as owner of a practice, but control ultimately rests with a corporate entity, to get around the new Oregon law.
Before any ruling in the case was reached, PeaceHealth announced that it was backing away from its plans to work with ApolloMD and would keep the local ED group for at least three years. Analysts had been following the case closely because Oregon has one of the most aggressive laws banning corporate control of medical groups.
While the legal challenge ended without a ruling from the judge, analysts told MedPage Today that the PeaceHealth case may be a sign that the friendly physician model used by staffing firms is ripe for challenges in Oregon and other states.
