Vancouver, Wash.-based PeaceHealth’s plan to replace emergency services contracts at three Oregon locations has raised questions as to whether the move violated the state’s new corporate healthcare transaction law, according to a March 10 article in The Lund Report.
PeaceHealth announced that it would not renew contracts with Eugene (Ore.) Emergency Physicians Feb. 6. Less than a week later, the Oregon Nurses Association submitted a petition arguing against the move. In the following days, medical staff at PeaceHealth Sacred Heart Medical Center at RiverBend in Springfield, Ore., would formally vote “no confidence” in two PeaceHealth Oregon leaders over their role in the decision.
Last year, Oregon’s Governor Tina Kotek signed a bill enacting the strictest regulations on corporate entities in healthcare in the nation. Broadly speaking, the law seeks to redefine the list of entities allowed to engage in the practice of medicine and medical decision-making — including hiring, setting work hours and determining compensation either directly or indirectly — through management services agreements.
A spokesperson for House Majority Leader Ben Bowman, one of the law’s primary advocates, told Lund that “all the information we have so far indicates that the structure that Apollo is using is typical of … the type of model our bill was designed to prevent.”
Specifically, lawmakers take issue with a company set up by ApolloMD representatives in Oregon called Lane Emergency Physicians. While ApolloMD was the company who responded to PeaceHealth’s proposal to contract out its ER services, officials said it would actually be the new Oregon firm, a subsidiary of ApolloMD, that would provide them.
A legal observer told Lund that the arrangement “may have already violated the law,” with lawmakers already requesting that state Attorney General Dan Rayfield place a hold on the transaction. The Oregon Department of Justice’s authority to enforce the new law had been included in an earlier version of the legislation, but was removed from the final version before passage last year, indicating that enforcement responsibilities may fall to the Oregon Health Authority.
In an email, an agency spokesperson wrote Lund, “While Senate Bill 951 did not provide OHA with additional enforcement or regulatory authority, OHA is analyzing whether its other authorities, under [the Health Care Market Oversight program] and more generally, relate to Senate Bill 951 conditions. OHA is currently assessing potential next steps or actions that may fall within the law.”
The law also dictates that any medical practice must be majority owned by licensed physicians. A spokesperson for the Oregon Medical Board told the publication that it was aware of the situation and was in active review of its statutes, not commenting further.
In a March 6 letter obtained by Lund ApolloMD CEO Yogin Patel, MD, responded to questions raised by state representatives regarding the deal’s legality, claiming that ApolloMD Business Services, an affiliate of ApolloMD, will operate as an MSO to Lane, providing nonclinical administrative and operational support.
“All clinical judgment, patient care decisions, medical direction and professional responsibilities will remain exclusively with Lane’s licensed Oregon physician owner and its clinicians, in full compliance with Oregon law, including Senate Bill 951,” Dr. Patel stated in the letter, according to the report.
