Physicians Sue PeaceHealth Over Emergency Department Staffing Deal

A group of physicians in Lane County, Oregon, has filed a lawsuit challenging nonprofit PeaceHealth’s decision to switch emergency department staffing to an out-of-state management company, ApolloMD. The lawsuit, filed on March 21, 2026, marks the first civil suit brought under a 2023 Oregon law designed to protect physician autonomy and patient care from corporate influence in medical practices.

Background: Oregon’s Corporate Practice of Medicine Law

Oregon lawmakers enacted the 2023 law to prevent larger corporations and private equity firms from acquiring independent clinics and practices. The law requires that physicians licensed in Oregon maintain majority control over medical practices. Corporations already established in Oregon have until 2029 to comply, while newly formed corporations must adhere to the law immediately.

PeaceHealth’s Contract with ApolloMD

PeaceHealth Oregon announced it would not renew its long-standing contract with Eugene Emergency Physicians, which has staffed emergency departments in Springfield, Cottage Grove, and Florence since 1991. Instead, the hospital system selected Atlanta-based ApolloMD to take over staffing duties beginning in June and July. PeaceHealth maintains that ApolloMD won the contract through a fair and competitive process.

The Lawsuit’s Allegations

The lawsuit, filed in Lane County circuit court, names PeaceHealth and its business partners – ApolloMD INC, ApolloMD Business Services LLC, and Lane Emergency Physicians LLC – as defendants. The plaintiffs, including physicians, a recent emergency department patient, and her mother, allege that ApolloMD is employing a “friendly physician” model to circumvent Oregon’s corporate practice of medicine laws.

This model, according to the lawsuit, involves a management services company exerting control over a medical practice while ostensibly providing only administrative support. The lawsuit claims that ApolloMD is exercising “de facto” control over operations in Oregon, violating state restrictions.

ApolloMD’s Response

ApolloMD CEO Yogin Patel has stated the company is committed to complying with Oregon law. He explained that a newly formed local corporation, Lane Emergency Physicians LLC, holds the emergency department staffing contract with PeaceHealth. This LLC is fully owned by Dr. Johne Philip Chapman, who Patel says will be responsible for clinical decisions. ApolloMD will provide “non-clinical administrative support” such as billing, HR, and data analysis.

However, the lawsuit alleges that Dr. Chapman, a resident of Illinois who recently obtained an Oregon medical license on March 17, is not genuinely in control, and that ApolloMD is actively recruiting and hiring physicians in Lane County.

Physician Opposition

The deal has faced significant opposition from local physicians. All 41 doctors and physician assistants at PeaceHealth Sacred Heart Medical Center in Springfield have pledged not to work with ApolloMD for at least three months.

PeaceHealth’s Statement

A PeaceHealth spokesperson stated the health system had not yet received the lawsuit and declined to comment. Dr. Chapman also indicated he was not ready to comment, and ApolloMD did not immediately respond to a request for comment.

Looking Ahead

The lawsuit seeks to void the deal between PeaceHealth and ApolloMD and prevent the company from operating in Oregon. It also requests that the court allow the current contract with Eugene Emergency Physicians to remain in place during the litigation. The outcome of this case could have significant implications for the future of healthcare staffing and corporate influence in Oregon’s medical practices.