EUGENE, Ore. — A US District court judge calls into question the legality of PeaceHealth’s planned transition from Eugene Emergency Physicians (EEP) to Georgia Based Apollo MD to staff its Lane County emergency departments.

The judge calling the deal which lacks a contract “A handshake and a wink,” saying that’s not enough according to state law.

This lawsuit from EEP — which staffed PeaceHealth’s Lane County Emergency Departments for the last 35 years — asked for the judge to pause the hospitals transition.

Judge Mustafa Kasubhai said at the end of the court today that ApolloMD lied under oath.

He said without a contract to show, ApolloMD tried to hide they were the directors controlling what Lane Emergency Physicians (LEP) would do.

LEP is the LLC ApolloMD created to be able to operate in Oregon under SB 951 the states corporate practice of medicine law.

The judge said SB 951 surprised ApolloMD saying though they’re good at their sales pitch, in terms of compliance with 951, they fall short.

The judge stated the MSO tried to conform their testimony by trying to shoehorn the idea that the corporate entity set up would be independent but says that was their biggest mistake in this litigation.

Highlighting the definition of Management Service Organization (MSO) according to SB 951 – the judge defined it as an entity that under a written agreement between MSO and professional medical entity — provides management services but there is no written agreement and no contract.

Without a written contract he said either they aren’t subject to the framework of SB 951 which means anyone can operate without written agreement in Oregon or in the absence of written agreement, they may not do business in the state of Oregon.

A federal judge hearing the lawsuit filed by EEP in March to pause the change, PeaceHealth Chief Medical Officer Dr. Kim Ruscher expanded on the hospital’s previous assertion that EEP was unable to scale its ED.

During her testimony Monday, Dr. Ruscher said there had been an ongoing sense of frustration among hospital leadership over problems not being addressed by EEP to improve processes and safety in its Emergency Departments.

A claim EEP previously denied saying they’d never been informed of any problems with their performance by the hospital.

The judge urged transparency saying if there’s to be reconciliation, there needs to be truth telling.

Dr. Ruscher told the judge the deteriorating relationship between EEP and PeaceHealth started with the announcement of the closure of PeaceHealth’s University District Hospital.

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EEP doctors, she said, wanted the hospital to prioritize preparing for an anticipated increased volume at Riverbend, but she said the hospital’s space didn’t meet state fire marshal regulations to implement the desired bed adjustments to the frustration of EEP.

KVAL – 6 p.m. live update

EEP has said the lack of beds at Riverbend following the closure led to doctors seeing patients in closets and hallways, and longer wait times for patients.

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Ruscher said hospital leadership wanted a point person during shifts, there were disagreements on the ED remodel, and it didn’t feel like a strong partnership — going on to say that when she brought concerns to EEP she wasn’t taken seriously, and when EEP brought concerns to leadership, they wouldn’t follow standard processes.

There was what she described as a reluctance on EEP’s part to own practices that could improve safety at safety review meetings.

When asked by the judge if conversations were initiated with EEP to improve the relationship, Ruscher said she didn’t ask for it and she wasn’t asked for it.

The defense introduced a memo dated March 19 as evidence issued by the hospital’s medical executive committee on behalf of medical staff saying they would not move forward with efforts to credential staff until the legality of the ApolloMD contract is determined.

Meanwhile, Ruscher stated recruiting new physicians will be challenging if EEP physicians don’t come back.

She said physician candidates are concerned about coming on because of the rift between the hospital and EEP.

As for the RFP, Ruscher told the judge she expected EEP would have won as incumbent because they have the “home field advantage,” but their presentation wasn’t up to par.

“Looking back on the proposals that we got overall what I saw was a level of maturity a framework of what a bigger group can provide,” Ruscher said. “The maturity of some of the other organizations could provide that next level. They [EEP] didn’t have that next level of saying this is what else we can do; this is how we can grow and mature with you.”

Despite the challenges ahead to staff the hospital, which Ruscher said expects to see over 100,000 patients a year, she’s confident they’ll be ready when the new contracts begin on June 1 and July 1.

U.S. District Judge Mustafa Kasubhai who last week set a goal of Monday for closing arguments said during Monday’s hearing that he is considering the release of PeaceHealth from the lawsuit since they’re not part of the regulatory framework of SB 951 which puts limitation on MSO’s ownership of medical practices in Oregon.

KVAL – 5 p.m. live report

PeaceHealth’s legal team argued though they aren’t to answer for any violation on ApolloMD’s part, they are a necessary party since they’d be bound by a court ordered injunction.

Kasubhai said though he expects to come to a conclusion by Wednesday he stated he would not have enough time to make a written opinion before the transition of Peace Harbor and Cottage Grove’s emergency departments.