PeaceHealth has reversed course, announcing Wednesday it now intends to renew its contract with Eugene Emergency Physicians to staff its Lane County emergency departments.

The news came on the same day that an agreement was reached in a lawsuit aimed at preventing PeaceHealth from ditching the group in favor of the management corporation, ApolloMD.

The abrupt shift comes three months after PeaceHealth told the 41-member local group it would be replaced by Atlanta-based ApolloMD — a move that sparked strong backlash from medical staff, community members and elected officials.

PeaceHealth now says it’s negotiating a three-year contract with EEP for the RiverBend and Cottage Grove emergency departments, while direct employment of physicians will continue at its Florence hospital.

The announcement came amid a trial over a lawsuit about whether PeaceHealth’s earlier plan to transition staffing to ApolloMD and the newly formed Lane Emergency Physicians violated Oregon’s corporate practice of medicine law, SB 951.

At the center is the judge

As U.S. District Court Judge Mustafa Kasubhai was preparing to hear oral arguments on the fifth day of hearings on Wednesday, he was told that a settlement had been reached. Attorneys said a written agreement is in place for a contract to move forward, though it may take weeks to hammer out details of the terms and be signed.

Dan McGee is an emergency physician and plaintiff in the case EEP brought against PeaceHealth and ApolloMD. After the settlement agreement was reviewed by the federal judge and court adjourned, McGee considered the implications.

“This is a victory for democratic independent physician groups against powerful corporate interests that threaten our medical care,” he told KLCC. “And this is a model that is not going to be unique to Oregon. This is something that other states are going to take up.”

According to McGee, Kasubhai said he was “grateful” for the agreement but that “this case has opened up quite a few questions and concerns.” McGee said the judge was not satisfied just hearing about the written agreement — he wanted to read it aloud for the public record.

The judge also wanted to know timelines and that there will be no interruption to patient service.

In a letter to hospital employees on Wednesday, Heather Wall, PeaceHealth’s interim chief executive for Oregon, acknowledged there is work to do to rebuild trust with staff.

“I know this has been a difficult and, at times, deeply frustrating period,” Wall wrote. “I understand that for many, this is not just about a contract or a process — it is about trust, how decisions are made, and what is best for not only our workforce, but most importantly, the patients and communities we serve.”

Wall was chosen for her role in April when PeaceHealth’s top Oregon executive, Jim McGovern, was placed on administrative leave amid allegations he violated the scope of his administrative license and attempted to dictate patient care that went against providers’ clinical judgment.

Statewide reactions

News of the pivot back to Eugene Emergency Physicians drew reactions from around the state.

According to a statement from Oregon Gov. Tina Kotek, the governor and Oregon House Speaker Julie Fahey, D-Eugene, recently met with PeaceHealth administrators, asking them to make tangible progress by Friday, May 8.

During that meeting with PeaceHealth CEO Sarah Ness, the leaders expressed their concern regarding the risk of inadequate staffing in Lane County and called on PeaceHealth to reverse this decision and take clear steps to prevent further disruption to the region’s healthcare system, loss of local physician workforce, and lack of transparency around the decision making.

In the statement, Kotek said, “This is an important and necessary step to rebuilding trust. I commend CEO Sarah Ness for reassessing the situation, listening to the community, and exhibiting courageous leadership.”

State House Majority Leader Ben Bowman, D-Tigard, drafted Senate Bill 951, Oregon’s corporate practice of medicine law, passed in 2025. In a statement released Wednesday, he called the news a “watershed moment” for Oregon.

“After a decades-long trend of corporatization of healthcare, we are now moving in the opposite direction — back to physician-directed, patient-centered healthcare. Less than a year after it passed, Oregon’s law worked,” Bowman said.

The Oregon Nurses Association also applauded the turn of events, calling it “a historic victory for all Oregonians” in a news release.

“PeaceHealth’s decision to reverse course is not an act of leadership, it is a retreat,” read the ONA statement. “Health executives were forced to back down thanks to lawsuits, pressure from elected leaders, and an unprecedented show of solidarity from thousands of nurses, doctors, caregivers, and community members who stood together to hold PeaceHealth accountable and stop out-of-state corporations from controlling our care.”

Tiffany Eckert is a reporter with KLCC. This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.

It is part of OPB’s broader effort to ensure that everyone in our region has access to quality journalism that informs, entertains and enriches their lives. To learn more, visit our journalism partnerships page.

News Source : https://www.opb.org/article/2026/05/07/peacehealth-eugene-emergency-physicians-apollomd-contract/