Eugene Emergency Physicians (EEP) v. PeaceHealth, ApolloMD et al. was a landmark 2026 federal lawsuit in Oregon testing the state’s strict new corporate practice of medicine law.

In February 2026, PeaceHealth notified EEP—a locally owned independent group of 41 emergency physicians that had exclusively staffed its Lane County emergency departments (Sacred Heart Medical Center at RiverBend, Cottage Grove Community Medical Center, and PeaceHealth Peace Harbor in Florence) for over 35 years—that it would not renew their contract. PeaceHealth instead selected Atlanta-based ApolloMD, a national physician staffing and management services organization. ApolloMD created a new shell entity, Lane Emergency Physicians (LEP), nominally physician-owned by Dr. Johne Chapman, to serve as the contracting entity.

EEP filed suit on March 20, 2026, in U.S. District Court for the District of Oregon (Case No. 6:26-cv-00684-MTK), seeking a preliminary injunction. The complaint alleged the arrangement violated Oregon Senate Bill 951 (signed June 2025), which prohibits non-physician entities and management services organizations (MSOs) from owning, controlling, or interfering with medical practices, including decisions on staffing, hiring, compensation, and clinical operations. EEP argued ApolloMD exerted de facto control over LEP despite the nominal structure.

Evidentiary hearings occurred April 27–May 4, 2026, before U.S. District Judge Mustafa Kasubhai. Testimony revealed no formal written contract between ApolloMD/its Business Services LLC and LEP—described by the judge as “a handshake and a wink.” Judge Kasubhai repeatedly questioned the arrangement’s legality under SB 951 and found ApolloMD CEO Dr. Yogin Patel and Dr. Chapman dishonest under oath regarding control and the RFP process. He expressed skepticism that the setup complied with the law’s prohibitions on corporate interference.

On May 6, 2026—before closing arguments—PeaceHealth announced it was dropping ApolloMD and LEP entirely. It entered a memorandum of agreement with EEP for a multi-year contract (at least three years at RiverBend and Cottage Grove; Florence remained directly employed). The settlement removed all ApolloMD involvement. Court proceedings were paused to finalize terms.

The outcome was hailed as a major victory for physician autonomy and the first significant enforcement of SB 951, amid national trends of corporate consolidation in healthcare. It sparked widespread support from medical groups like AAEM, community members, lawmakers, and Oregon Gov. Tina Kotek. No final judicial ruling issued due to the settlement, but the case demonstrated the law’s teeth against MSO-PC arrangements.

Works Cited

- OPB.org articles (May 6–8, 2026) on hearings and settlement.  

- STAT News: “PeaceHealth drops plan to outsource Oregon ER physicians” (May 6, 2026).  

- MedPage Today: “Oregon Emergency Physicians Claim Win” (May 11, 2026).  

- OregonLive: “Oregon’s landmark corporate medicine law forces retreat” (May 2026).  

- Register-Guard, KLCC, KVAL, and Becker’s Hospital Review coverage (April–May 2026).  

- Court documents and plaintiff motion for preliminary injunction.