Updated May 6
A legal feud between PeaceHealth and a local physician group over the nonprofit system's decision to outsource emergency room staffing to ApolloMD appears to be nearing an end, with the parties announcing they have "agreed to reset" their talks on the issue.
A brief joint statement released by PeaceHealth Wednesday said the system and Eugene Emergency Physicians, the physician group, have "reengaged in constructive discussions and are working jointly to define a path forward that best supports high-quality, reliable care for patients across Lane County."
The 41-physician group had filed its lawsuit in Oregon county court back in March, which drew national attention as an early test of an updated state law strengthening restrictions against the practice of corporate medicine. PeaceHealth and ApolloMD had worked to skirt the law by establishing a new physician group based in the state, the suit alleged.
According to local media reports, the case's judge told attorneys this week there is "ample evidence" that the system and the staffing firm are "arguably in violation" of the law.
"Our shared priority is clear: ensuring well-staffed emergency departments that deliver safe, timely care for every patient," Wednesday's joint statement reads. "To that end, we are focused on strengthening our working relationship, improving emergency department performance and patient flow, and engaging community partners—including first responders and local leaders—to support sustainable, long-term solutions."
The parties said they will announce a joint press conference when their discussions conclude "in the days ahead."
March 24
PeaceHealth sued over plans to tap out-of-state staffer ApolloMD for Oregon EDs
PeaceHealth’s decision to tap clinician staffing firm ApolloMD for some of its emergency departments goes against a recently enacted Oregon law restricting out-of-state, corporate ownership of medical practices and should be blocked, a local physician group argued in a recently filed lawsuit.
The legal complaint, filed Friday in an Oregon county court, is an escalation of the disagreement between Eugene Emergency Physicians (EEP), a group of 41 providers, and the nine-hospital nonprofit system. It’s also an early legal test of the enhanced statute against corporate medicine that has become a model for other state legislatures.
The pair has held a contract in which EEP provides emergency medical physicians for a 384-bed medical center and two critical access hospitals in Oregon’s Lane County. Last month, PeaceHealth told EEP it would be allowing the contract to expire in favor of a new deal with ApolloMD, according to court documents. The switchover would take place July 1.
In 2025, Oregon passed a bill to strengthen its existing requirement that a professional corporation organized for medical practice be owned and governed by state-licensed physicians. The update sought to crack down on a loophole in which an organization taps a single licensed physician to run such an organization on its behalf (referred to as a “friendly physician”) by prohibiting a managed services organization or a physician directly compensated by it from possessing a majority ownership in a medical practice or from exercising “de facto control” over a practice.
EEP wrote in its complaint that ApolloMD, which is based in Atlanta, initially contracted with PeaceHealth directly and then set up a structure in which a friendly physician “was purportedly installed” to serve as the sole owner of another defendant entity, Lane Emergency Physicians, that would contract with ApolloMD’s managed services organization.
“This is exactly the business model that Oregon’s corporate practice of medicine laws prohibit,” EEP wrote in the complaint. The group has asked the court to prohibit ApolloMD and its affiliated groups from conducting business in the state, to dissolve Lane Emergency Physicians and to at least temporarily prohibit the termination of EEP’s emergency care services with PeaceHealth.
PeaceHealth, in a statement, declined to comment on the pending litigation but said “as always, our focus is ensuring continuity of emergency services and a commitment to providing compassionate, high-quality care for local patients and families.”
ApolloMD did not immediately respond to a request for comment but has similarly declined press requests to comment on the litigation.
EEP has been sounding the alarm about PeaceHealth’s decision to contract ApolloMD for the past few weeks and has gained some support from state leaders. This past week, Gov. Tina Kotek wrote to PeaceHealth in separate letters asking the system to push back its planned transition over patient safety and transparency concerns. In response, the system reportedly told Kotek it would be moving forward but could provide regular updates on various safety and staffing metrics for the community amid the transition.
A separate letter from eight lawmakers to PeaceHealth and ApolloMD called for the organizations to submit their contract to a state regulator for review.
Oregon’s updated law against out-of-state corporate ownership or influence is mirrored by statute passed in California last year. Similar bills have also been introduced by state lawmakers in Washington, Vermont, Maine and New Mexico.