Court proceedings are underway in the first lawsuit involving Oregon’s new healthcare consolidation law. The case is related to a staffing contract switch involving Vancouver, Wash.-based PeaceHealth, Eugene (Ore.) Emergency Physicians and Atlanta-based ApolloMD, Lookout Eugene-Springfield reported April 27.
Eugene Emergency Physicians, an emergency medicine group with about 41 providers in Lane County, is suing to block PeaceHealth from partnering with ApolloMd, a national physician staffing company. The lawsuit, filed March 20 in an Oregon state circuit court, claims the partnership violates the state’s corporate practice of medicine laws, including restrictions on management services organizations.
PeaceHealth said in February it would not renew its 35-year contract with Eugene Emergency Physicians, instead opting to partner with ApolloMD to staff emergency departments at PeaceHealth Cottage Grove (Ore.) Community Medical Center, PeaceHealth Peace Harbor Medical Center and PeaceHealth Sacred Heart Medical Center at RiverBend.
According to the complaint, the arrangement involves a newly formed Oregon entity, Lane Emergency Physicians, which would hold the staffing contract while ApolloMD provides administrative support. The plaintiffs allege ApolloMD would retain significant control over staffing, hiring and other operations.
Here are updates from the case’s first three days of court proceedings, according to Lookout:
1. Since April 27, witnesses have been called to testify by the plaintiffs, Eugene Emergency Physicians, including physicians, a nurse and a parent. On April 29, the third day of the case, defense attorneys called witnesses, including ApolloMD CEO Yogin Patel, MD, and Lane Emergency Physicians owner Johne Chapman, MD. Discussion surrounded topics such as corporate structure, the lack of a finalized contract between PeaceHealth and ApolloMD, and the recruitment and retention of physicians.
2. The lack of a finalized contract between the health system and the staffing company has been central to Eugene Emergency Physicians’ case, the Lookout previously reported.
Judge Mustafa Kasubhai said the idea that leaders such as Dr. Chapman and Dr. Patel have “no idea how this is set up defies logic and credibility.”
“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 [SB] 951,” he said, according to the Lookout.
3. During discussions around physician recruitment and retention, Dr. Patel said when ApolloMD enters a new market, physicians typically remain in their roles. In this case, the 41 employees of Eugene Emergency Physicians signed a statement stating they would not work for ApolloMD for at least 90 days after the transition — though Dr. Patel said his company had “sourced” about 100 physicians and physician assistants to work at PeaceHealth hospitals in the surrounding county.
4. Vinutha Mattigod, system director of physician contracting at PeaceHealth, testified that the data and processes presented by ApolloMD during the request-for-proposals process led to it scoring higher than Eugene Emergency Physicians. She testified that the process was not influenced by former Oregon network CEO 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.
5. Testimony from Kim Ruscher, MD, chief medical officer for PeaceHealth’s Oregon network, is scheduled for May 4. Closing arguments are expected to follow.
6. The first two days of the case focused on testimony surrounding the risks associated with rapid transfers of care and the details of management services organizations, according to the Lookout. Dan McGee, MD, a plaintiff and member of Eugene Emergency Physicians, testified that his organization would likely dissolve when its contract ends this summer as a result of the transition.
“There are many lenses, which in this case, this relationship can and appropriately looked at, look through,” Mr. Kasubhai said April 27. “There’s some community concern, interest. There’s the concern of business entities to be able to really engage in relationships with one another. All of that is certainly bearing and intense and weighty within our community.”
ApolloMD declined to provide comments related to ongoing litigation.
In a statement shared with Becker’s a spokesperson from PeaceHealth said the claims in this case lack merit.
“As outlined in filings with the court, PeaceHealth conducted a structured and objective [request-for-proposal] process to evaluate a number of emergency department physician services partners, given the pending conclusion of the existing contract,” the statement said. “Our focus was on identifying the partner best positioned to uphold safe patient care, recruit and retain quality staff, provide quality improvement programs and transition readiness. The incumbent provider participated in that process, along with other organizations. At the conclusion of this process, PeaceHealth selected a new partner to deliver safe, reliable, continuous emergency care.”
The system also noted that it is planning for the transition in a way that will ensure no disruptions to patient care.
In an email shared with Becker’s, a spokesperson for Eugene Emergency Physicians said the “court process has made even more clear the violations of Oregon law and the degradation to patient care that [PeaceHealth]and Apollo are ushering in.”
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