Emergency room doctors from Eugene are calling on lawmakers to consider whether the state should do more to watchdogcorporate takeoversof medicine in light of nonprofit PeaceHealth’scontroversial pushto privatize its emergency room services at three hospitals in Lane County to an Atlanta-based staffing company.

The deal reportedly has been underway since late last year, butsince last monthcontroversy has grown. The agreement would affect services at PeaceHealth Sacred Heart Medical Center in RiverBend, PeaceHealth Cottage Grove Community Medical Center and PeaceHealth Peace Harbor Medical Center.

On Thursday, two doctors with the company Eugene Emergency Physicians, Jeremy Brown and Julie Seo, addressed the Senate Committee on Veterans, Emergency Management, Federal and World Affairs, saying PeaceHealth’s agreement with a company called ApolloMD threatened the quality of care for affected patients as well as the health of the local medical infrastructure.

“Emergency medicine is organized chaos, high-acuity, time-critical, and dependent on trust built over years and decades,” said the doctors’ written testimony. “Just last week, we treated a patient who was critically injured on the job. Because our team has trained and worked together for years, the prehospital EMS, emergency physician, ER nurses and staff, trauma surgeon and anesthesiologist, provided life-saving interventions including blood transfusions, and chest tubes within minutes. The patient was able to walk out of the hospital Monday.”

Replacing their 41-employee company with ApolloMD could lead to temps and lack of experience, posing a threat to care, disaster response and workforce retention, they added.

Several Senators expressed concern about the proposed arrangement.

Committee Chair Sen. James Manning Jr., a Eugene lawmaker, described the situation in catastrophic terms after hearing the presentation from Brown and Seo.

“This presentation is like a nuclear explosion,” Manning said. “I'm seeing a big cloud that has developed.”

Sen. Floyd Prozanski noted that PeaceHealth’s Sacred Heart Medical Center at RiverBend is in his district, which adds to his unease about the company’s decision with ApolloMD.

“We have no hospital in the city of Eugene. We have no emergency department in the city of Eugene,” Prozanski said, critical of PeaceHealth’s past actions in closing the University District Hospital  “We fought and we disagreed with the closure of the University District Hospital, and we had a lot of assurances when that transition was occurring that it would stay open. It doesn't exist today, and I'm very concerned that we're going to see ramifications from this type of operation coming in.”

Sen. Lisa Reynolds, a pediatrician who represents northeast Washington County, said the trend in corporate buyouts of local providers is terrifying.

“I'm in my sixth year in the legislature, and have been obviously watching this train crash happening,” Reynolds said. “And this is the most, I think, egregious thing we've seen in Oregon so far.”

She added, “We absolutely have to fight this. This is terrible care for the community and terrible treatment of professionals who've devoted their life to this important work.”

The agreement had already sparked concerns by several members of the state House, including Majority Leader Ben Bowman of Tigard. And it’s also triggered questions about whether Attorney General Dan Rayfield could step in.

While the Department of Justice Rayfield leads does not work for lawmakers, it does have the authority to enforce laws and conduct investigations. Asked whether the AG and the Oregon Department of Justice are reviewing the situation, a spokesperson responded with a statement that “We’re aware of the situation.  We cannot disclose the status of any investigation or any advice our clients have requested or that DOJ has provided.”

Last year, the OregonLegislature passedSenate Bill 951, ​​which sought to ensure that licensed medical providers, and not corporations, private equity firms or shareholders, are in charge of patient health care and treatment plans. The law barred nonmedical entities or personnel from owning or controlling private medical clinics, including through hiring, setting work hours or determining compensation

The law sought to push back against thenationwide trendof corporations buying up local medical practices, whichresearch indicatescan drive up costs and may hurt care.

On Feb. 24, Bowman, who spearheaded the new law, joined with fellow representatives Lisa Fragala and Nancy Nathanson to send a letter to ApolloMD CEO Yogin Patel and PeaceHealth executive James McGovern, seeking documents related to the deal and other information to help determine whether the new deal violates the new law.Both PeaceHealth and ApolloMD, through spokespeople, told The Lund Report they intended to comply with the lawmakers’ request.

On Thursday, asked about the hearing, a PeaceHealth spokesperson sent an email stating that ApolloMD had indicated that it “could comply” with the law before PeaceHealth agreed to work with the company.

“​​All organizations participating in the RFP process confirmed to PeaceHealth, before submitting proposals, that they could comply with SB951 requirements,” the PeaceHealth statement said. “One organization withdrew from the process after determining it could not meet those requirements. PeaceHealth appreciates the engagement of our local and state legislators and will continue working with ApolloMD to provide thorough responses and all requested information.”

On Thursday, Brown and Seo took the concerns further, citing the findings of a peer-reviewed study that appeared in the Journal of Emergency Medicine in 2016, studying the trend of corporate “profiteering” by operating emergency rooms.

“Potential downsides of this trend include unfair or unlawful termination of emergency physicians, restrictive covenants, quotas for productivity, admissions, testing, patient satisfaction, and the rising cost of health care,” according to the study.

Adding to the intrigue swirling around the deal is the question of whether ApolloMD’s attempt to comply with Oregon’s law actually will meet its requirements.

A spokesperson for ApolloMD sent The Lund Report a statement saying that “Lane Emergency Physicians, LLC, a physician-owned entity, will be the practice group contracted with PeaceHealth Sacred Heart Medical Center, PeaceHealth Cottage Grove Community Medical Center and PeaceHealth Peace Harbor Medical Center to provide clinical services. ApolloMD Business Services, LLC will support the practice and serve as the management services organization, in compliance with SB 951.”

In anessay on Substackby former Eugene state lawmaker Marty Wilde, he noted the new Lane County firm was actually formed by ApolloMD officials using the company’s Atlanta address

“There is nothing local about Lane Emergency Physicians,” Wilde wrote. “It is structured as a ‘manager-managed’ LLC, a legal form that places control with designated managers rather than physician-members, a structure commonly used in the industry to give a management company effective operational control while maintaining the appearance of physician ownership. This is precisely the arrangement Oregon’s SB 951 was designed to scrutinize.”

PeaceHealth’s decision to end its35-year relationshipwith the Eugene physicians group and go with ApolloMD sparked a backlash from local physicians whoraised concernsabout patient care under an out-of-state staffing agency.

Last week, as reported by KLCC, Peacehealth medical staff overwhelmingly approved a vote of“no confidence”in their hospital leadership: Chief Hospital Executive Jim McGovern and Chief Medical Officer Kim Ruschera. They also voted in support of removing out-of-state ApolloMD and restoring Eugene Emergency Physicians as the provider group.

The American Academy of Emergency Medicine and the Oregon Chapter of Emergency Physicians have sent letters of support for the Eugene doctors’ cause, expressing concern over Peacehealth’s actions. The Academy urged lawmakers to look into ApolloMD’s ownership structure.

The letter from the American College of Emergency Physicians said employment agencies like ApolloMD “are often used by hospital systems in an effort to save money, but the resulting instability can raise overall costs for the health care system.”

Afactsheetposted on the PeaceHealth website said the new arrangement was not about cost-cutting, saying it instead was”part of a broader effort to expand capacity, improve patient flow and strengthen emergency care across Lane County.” The statement said it had added “23 new beds” and “27 new nursing positions” for emergency operations.

In his op-ed, which was published by theEugene Lookout Localwebsite, the ApolloMD CEO, Patel, promoted the company as clinician-owned.

The people making decisions are doctors who still work shifts in emergency departments across the country,” he wrote. “In Lane County, our role is to support a new local practice called Lane Emergency Physicians. The goal is simple: keep care local, while strengthening the support system behind it.”

But critics of the deal, like Wilde, point to a lawsuit filed against ApolloMD by a former employee.

In 2017, the False Claims Act lawsuit alleged, among other things, that the company falsified records on medical charts to claim higher reimbursements through Medicaid and Medicare. It also claimed the company paid kickbacks to contracted physicians and mid-level providers to induce them into ordering nonexistent and/or medically unnecessary emergency department services and procedures.

ApolloMD denied any wrongdoing and paid a reported $19.5 million settlement to resolve the case.