Witnesses testify in PeaceHealth contract dispute under new Oregon law

A fight over who staffs PeaceHealth’s emergency rooms in Springfield, Cottage Grove and Florence is now playing out in Eugene federal court, with Lane County physicians arguing the dispute could determine whether patients keep seeing familiar local clinicians or face a new system built around an Atlanta staffing company.

The lawsuit, filed in March by Eugene Emergency Physicians, challenges PeaceHealth Oregon’s plan to replace the local group with ApolloMD. It is the first civil suit filed under Oregon’s 2025 corporate-practice-of-medicine law, Senate Bill 951, which doctors say was written to curb outside management companies from steering medical decisions. Judge Mustafa Kasubhai said the court’s job is to examine what SB 951 means for the case and whether the plaintiffs can identify legal violations, not to force PeaceHealth to keep its contract with Eugene Emergency Physicians.

For families who use the emergency department at PeaceHealth Sacred Heart Medical Center at RiverBend, the stakes are immediate. PeaceHealth has said ApolloMD will begin staffing the emergency departments in June and July. Eugene Emergency Physicians says the move could affect emergency-room staffing, physician coverage, wait times and continuity of care, especially if local doctors who know the system, the patients and Lane County’s referral patterns are pushed out.

The pressure around the change has been unusually public. All 41 doctors and physician assistants in the RiverBend emergency department reportedly pledged not to work with ApolloMD for at least three months. More than 6,800 people signed a petition delivered to PeaceHealth’s board urging the hospital to renew the local doctors’ contract. The Oregon Nurses Association organized that push, while lawmakers held an informational hearing on the staffing change on March 5. Gov. Tina Kotek has also asked for transparency and a 180-day delay in the transition.

The case has also drawn in PeaceHealth’s top Oregon executive. Dr. Jim McGovern, who has led the network since 2024 and was placed on administrative leave in April, has been ordered to testify in the federal case. The lawsuit also names ApolloMD Business Services LLC and Lane Emergency Physicians LLC, which was registered in Oregon on Feb. 9, and includes a recent emergency-department patient and her mother as plaintiffs.

With testimony now underway, the case is testing more than one contract. It is also asking whether emergency medicine in Lane County will stay locally directed or move toward a model that critics say puts corporate control closer to the bedside.