Eugene Emergency Physicians Sue PeaceHealth, Seek Block on ApolloMD Contract

Eugene Emergency Physicians filed a motion in U.S. District Court on April 8, asking a federal judge to temporarily block PeaceHealth's contract with ApolloMD and halt the staffing transition at PeaceHealth Sacred Heart Medical Center at RiverBend before it takes effect. The motion argues that PeaceHealth's arrangement with the Atlanta-based physician management company violates Oregon statutes prohibiting the corporate practice of medicine, and that proceeding without judicial review would cause irreparable harm to patients and physicians across Lane County.

At the heart of EEP's legal challenge is Oregon's prohibition on corporate ownership and control of physician practices, legislation that bars nonmedical entities from directing hiring, scheduling, and compensation decisions. EEP contends that ApolloMD and PeaceHealth structured their arrangement to circumvent that law through a newly formed entity called Lane Emergency Physicians, LLC. According to court documents, that company was registered with the Oregon Secretary of State under the sole ownership of an Illinois physician, Dr. Johne Philip Chapman, who had not employed a single licensed Oregon physician at the time of the filing.

PeaceHealth ended its 35-year contract with EEP in early 2026, announcing it would hand emergency department staffing to ApolloMD starting June 1 at Peace Harbor Medical Center in Florence and Cottage Grove Community Medical Center, with RiverBend in Springfield to follow on July 1. The hospital system, headquartered in Vancouver, Washington, has publicly maintained that its actions are lawful and driven by a need to stabilize staffing in a stressed emergency department.

All 41 of EEP's providers, 32 physicians and 9 physician assistants, signed a pledge in February refusing to work under ApolloMD for at least 90 days following EEP's contract end date of June 30. ApolloMD, which staffs more than 100 emergency departments nationwide, had no Oregon operations prior to the PeaceHealth agreement.

The dispute has drawn attention from Oregon's highest levels of state government. Governor Tina Kotek sent a letter to PeaceHealth Chief Hospital Executive Jim McGovern asking the hospital to delay the transition by six months to allow regulators to examine whether the ApolloMD arrangement complies with state law. Five Eugene-area lawmakers separately urged PeaceHealth, ApolloMD, and Lane Emergency Physicians to submit voluntarily to an Oregon Health Authority review of the ownership structure.

EEP's injunction motion asks the court to preserve records, schedule an evidentiary hearing, and require PeaceHealth to maintain its existing staffing arrangement while the lawsuit is adjudicated. The filing also lays out the chronology of contract termination, which EEP argues was executed without adequate notice or any defined opportunity to address specific deficiencies. If the court denies injunctive relief, Lane Emergency Physicians would be positioned to assume operational control of three Lane County emergency departments. With EEP's 41 providers having already committed to walking away from RiverBend, that outcome would leave PeaceHealth scrambling to staff emergency rooms that serve Eugene, Springfield, Florence, and Cottage Grove, a coverage gap with no clear local fallback.