Wednesday was the third day of testimony in U.S. District Court over PeaceHealth’s plans to transition emergency staffing from Eugene Emergency Physicians to one created by Georgia-based ApolloMD. During testimony from the defense, there were some tensions in the courtroom.
All eyes were on PeaceHealth witness Dr. Johne Philip Chapman —the sole owner and member of Lane Emergency Physicians or LEP. Despite having no written contract with PeaceHealth, he’s expected to take over emergency departments in Cottage Grove, Florence and Springfield in the coming months.
Chapman lives in Illinois, works as a medical director at an ApolloMD-affiliated hospital outside of Chicago and said on the stand that he has no plans to move to Oregon.
When asked about the corporate structure of LEP and ApolloMD, Chapman often had no answers and deferred to accountants or lawyers not present.
Chapman currently works at Riverside Physicians LLC, staffing emergency services at Riverside Medical Center in Kankakee, IL, and said he’s an independent contractor. When asked if he works for ApolloMD, Chapman said “no.” However, he told the court, Riverside Physicians LLC is a practice at least partially owned by ApolloMD Business Services.
Words from the bench
This prompted U.S. District Court Judge Mustafa Kasubhai, who has heard witness testimony since Monday, to state that the concept that leaders such as Chapman “have no idea how this is set up— defies logic and credibility.”
Kasubhai also said, “the plausible deniability is discouraging and disappointing.”
During his testimony, Chapman stated there are currently no written contracts between PeaceHealth, ApolloMD or the Lane Emergency Physicians, LLC, which he now owns. When Chapman said a written contract between stakeholders “would be welcomed,” Kasubhai replied, “You own LEP. Why aren’t you demanding?”
In earlier testimony, ApolloMD CEO Dr. Yorgin Patel talked about the corporate structure of ApolloMD and its "layered entities," which include ApolloMD Business Services, ApolloMD Partners, ApolloMD LLC and ApolloMD Holdings. He told the court, ApolloMD Business Services would serve as the management service organization, or MSO, for Chapman's LEP. An MSO provides administrative, non-clinical services to a healthcare provider. Patel is the CEO of ApolloMD Business Services but he told the judge he is not employed by it. He said he is paid by Independent Physician Resources, an "affiliate" of ApolloMD.
Kasubhai expressed frustration with how evidence in the case was developing. “At the end of the day, we have to figure out what the statute means,” he said, referring to Senate Bill 951, “but understand what all of you are doing is not helping me understand the actual relationship any better than a shell game. So do better."
“I hope PeaceHealth actually provides some clarity,” he added. “If they don’t — they may be just as liable if I find there is a violation of 951.”
Oregon's CPOM law
SB 951 is a 2025 Oregon law that restricts management services organizations, or MSOs, and private equity from owning or controlling physician practices, aiming to preserve clinical independence and limit corporate influence in healthcare.
The lawsuit brought in March by EEP and two other plaintiffs alleges the emergency medical services partnership between PeaceHealth and ApolloMD, ApolloMD Business Services and Lane Emergency Physicians, violates corporate practice of medicine laws in Oregon.
Witness testimonies are expected to conclude Thursday. Oral arguments will begin on Monday.
