Envision Lawsuit

May 15, 2023

Today’s news that private equity-backed, physician-staffing company Envision Healthcare initiated a Chapter 11 bankruptcy filing underscores the risks of Contract Management Group (CMG) influence in emergency departments.

Envision’s bankruptcy filing does not, however, change the status of our lawsuit against the company looking to prohibit it from taking over the emergency department contract at Placentia Linda Hospital, part of the Tenet system, in California.

Here’s why.

Bankruptcy would not mean Envision would go away. More likely, it means the company would be restructured. The hospital, its contracts, independent contractors and practice model would continue to exist.

We are suing for a declaration that the Envision model of practice is illegal under California Corporate Practice of Medicine laws. To be clear, we are not suing for monetary damages.

The members of our Academy work in a difficult profession in consistently high stress situations. They are charged with treating vulnerable patients in need of emergency care. Patients that put complete trust in the physicians treating them.

It is our view that CMGs compromise the care of those patients and the well-being of our doctors by exploiting the process. Doctors are pressured to put dollars ahead of medicine. They are required to work longer hours and handle higher patient volumes. Some are pushed to upsell services. Doctors burn out under these conditions. Consequently, they eventually leave the emergency room. As a result, we lose the best doctors where we arguably need them most.

This, of course, leads to an even more adverse effect on our patients. Board certified physicians are replaced by some less qualified. Decisions can be made more in the interest of the corporation than the patient. Treatment is compromised. The quality of healthcare suffers.

This is a consequence we simply cannot tolerate. This is why we must continue our pursuit of this action regardless of Envision’s impending bankruptcy filing.

We must continue our course so medical professionals maintain an adequate stake in emergency room practices. So, they have complete control in how they treat patients. So patients receive the highest quality care possible.

We are the American Academy of Emergency Medicine. We represent 8,000 physicians around the world. But we represent so much more. We represent the idea that a physician’s primary duty is to the patient not profit. That the integrity of the doctor-patient relationship requires control of their own practice free of outside interference. We aspire to a future in which all patients have access to high quality care from board certified emergency physicians.

If we do not pursue this cause who will? We are the AAEM. We are the conscience of emergency medicine. It is our duty to champion the rights of patients and the doctors who care for them.

We are “all in” for this fight. A fight for our patients. A fight for our doctors and ultimately a fight to determine who is going to control the practice of medicine – physicians or corporations. 

We will continue to keep you informed of any developments. In the meantime, please reach out to us with any questions.

May 31, 2022

In January, Envision filed a motion to dismiss the complaint. On May 20, 2022, the Court met to hear the argument. We are excited to update you that the judge denied their motion to dismiss.

This decision means that the Court has held that the allegations we make, if proven, are sufficient to sustain a violation of California law.

It demonstrates our theory of the case is sound. The judge sustained the entire complaint with its many components, which you can read below.

Know that this doesn’t mean we’ve won, and it doesn’t mean we will. This is however, the first step we needed to move forward to stop Envision’s corporate practice of medicine.

March 25, 2022

The American College of Emergency Physicians (ACEP) submits Brief of Amicus Curiae in support of the AAEM-PG vs Envision Healthcare Lawsuit.

March 25, 2022

The California Medical Association (CMA) submits Brief of Amicus Curiae in support of the AAEM-PG vs Envision Healthcare Lawsuit.

March 4, 2022

Envision Healthcare responded to the lawsuit by filing a motion to dismiss.

December 20, 2021

The American Academy of Emergency Medicine Physician Group (AAEM-PG) filed suit in the Superior Court of California against Envision Healthcare Corporation. AAEM-PG is responding to the takeover of an emergency department contract at Placentia Linda Hospital, part of the Tenet system.

AAEM-PG alleges that Envision, as a lay entity owned by the private equity firm Kravis, Kohlberg and Roberts, is in violation of the CA prohibitions on lay ownership of medical practices as embodied in the Business and Professions Code §§ 2400 and 2052.

Issues at stake include lay influence over the patient-physician relationship, as well as control of the fees charged, prohibited remuneration for referrals, and unfair restraint of the practice of a profession. AAEM-PG and its parent organization, the American Academy of Emergency Medicine, believes this arrangement is not in the public interest.

AAEM advocates that physician groups comprised of local physician owners provide the highest level of care and are most invested in the long-term success of their hospital partners and community.

“A physician’s first duty is to the patient,” says AAEM-PG Chief Medical Officer, Robert McNamara, MD. “This duty is heightened in the emergency department where physicians care for society’s most vulnerable patients. Corporations who owe their first duty to the investors have no place at the bedside. Doctors must be free to treat each patient without the pressure to maximize profits.”

AAEM Immediate Past President Lisa A. Moreno, MD MS MSCR FAAEM FIFEM adds: “Emergency department patients are the most vulnerable patients. Either they are experiencing the sudden onset of frightening symptoms and present with an as yet undiagnosed illness, or they are presenting with exacerbation of known illness secondary to lack of access to primary care, inability to afford medications, lack of insurance or lower health literacy. Such patients deserve treatment by a board certified emergency physician whose fiduciary duty is to place the patient’s medical needs above all else, and not by a private equity or lay corporation whose fiduciary duty is to place profit before the patient. The AAEM Mission Statement clearly defines the right of every patient with an emergency condition to be treated by a board certified emergency physician and further endorses the fact that every medical team must be led by a board certified physician and not by a private equity or lay corporation. These entities have no role in the care of the emergency patient, nor do they have the right to intrude upon the sanctity of the physician-patient relationship. For them to do so is unjust and unsafe for the patient population.”

San Francisco lawyer David Millstein, who represents AAEM-PG in the suit, said: “This suit seeks to end Envision’s illegal corporate practice of Medicine in the State of California. It requests the Court to prevent Envision from using captive medical groups, restrictive covenants in physician contracts, payment of consideration to acquire ED contracts, control over staffing, billing and payor contracts and similar practices which violate California’s Corporate Practice of Medicine prohibition as well as other laws.”