Defending the Integrity of Emergency Medicine in California—and Beyond
On 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, in response to its takeover of an emergency department contract at Placentia Linda Hospital (part of the Tenet system). The lawsuit alleged that Envision, a lay entity owned by private equity firm Kohlberg Kravis Roberts (KKR), violated California’s prohibition on the corporate practice of medicine (CPOM), as outlined in Business and Professions Code §§ 2400 and 2052.
AAEM-PG claimed that Envision’s model represented unlawful lay influence over clinical decisions, control over physician billing, use of restrictive covenants, and unfair restraint of professional practice. These practices, AAEM asserted, compromised both the physician-patient relationship and the quality of emergency care.
Major Update: Envision Withdraws from California
In a landmark development, Envision Healthcare has exited all operations in the state of California, effectively ending the AAEM-PG lawsuit. While a formal court ruling was not issued, this outcome represents a decisive victory for physician-led care and validates the concerns AAEM raised about Envision’s business practices.
Key Outcomes:
- Envision will not enforce restrictive covenants in physician contracts.
- Tail insurance coverage will be honored for physicians whose contracts included it.
AAEM believes this result sets a powerful precedent and will deter other private equity-backed lay entities from attempting to control medical practices in violation of California law.
Read the Press ReleaseA Heartfelt Thank You
AAEM extends sincere thanks to:
- Drs. McNamara, Reiter, Wood, Moreno, and Jones
- Legal counsel David Millstein
- All AAEM Foundation donors and supporters
Your tireless work made this David vs. Goliath victory possible.
December 2021
AAEM-PG files suit in California Superior Court, challenging Envision Healthcare’s takeover of an ED contract and alleging CPOM violations.
February 2022
Envision files a motion to dismiss the case.
March 2022
The California Medical Association (CMA) submits Brief of Amicus Curiae in support of the AAEM-PG vs Envision Healthcare Lawsuit.
March 2022
The American College of Emergency Physicians (ACEP) submits Brief of Amicus Curiae in support of the AAEM-PG vs Envision Healthcare Lawsuit.
June 2022
The judge denies Envision’s motion to dismiss, allowing the case to proceed.
May 2023
Envision files for bankruptcy, but the court allows the AAEM-PG lawsuit to continue.
July 2024
Envision agrees to withdraw from all emergency department operations in California, effectively ending the AAEM-PG lawsuit. While no formal court ruling is issued, Envision’s exit affirms AAEM-PG’s claims regarding the corporate practice of medicine. The company also agrees not to enforce restrictive covenants and to honor tail insurance coverage for affected physicians.
Though this case has ended, AAEM’s mission continues. We advocate for:
- Legislation banning the corporate practice of medicine.
- Support for physician-owned and physician-led practice groups.
- Accountability and oversight of corporate actors in healthcare.
- Public education about the risks of non-physician medical control.
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