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News: AAEM sues Envision for practice of medicine in business : Emergency Medicine News


AAEM, Envision, company medicine

When Placentia-Linda Hospital, a Tenet-owned facility in Placentia, California, awarded a contract to manage and staff its emergency department to Glass Beach Medical Services, a company controlled by Envision Physician Services , Placentia Linda Emergency Physicians (PLEP) and the American Academy of Emergency Medicine Physicians Group, Inc., (AAEM-PG), which provided practice management services to the emergency department, lost their contract.

That loss, however, prompted AAEM-PG to sue Envision, alleging the private equity firm violated California’s ban on the practice of corporate medicine. “After acquiring a practice and at all other times, Envision exercises profound and pervasive direct and indirect control and/or influence over physicians’ practice of medicine,” the lawsuit, filed Dec. 20, said.

It also noted, “California is the state in which defendants violated the California prohibition on practicing medicine in business, offered illegal bribes in exchange for patient referrals, employed physicians on the condition that they are performing illegal covenants and have committed unfair business practices, including false advertising. . The plaintiff was injured by conduct that occurred and emanated from California. »

Robert McNamara, MD, AAEM-PG’s chief medical officer and founder and former president of AAEM, said the group is seeking to file those actions. “In most cases, it’s up to the aggrieved physicians to step in and file a complaint,” he said. “In today’s medical environment, they’re afraid they’ll be blacklisted if they do.”

No pecuniary damage

The Placentia-Linda Hospital Emergency Department was part of the AAEM-PG, giving it standing to sue, Dr. McNamara said, but the AAEM-PG is not seeking damages. “We want to establish the principle that secular businesses cannot operate like a professional medical institution,” he said. “AAEM, to its credit, has voted to fully support this effort, to expend the resources and reserves necessary to bring it to its final conclusion.”

The AAEM-PG was created to encourage independent practice by providing administrative and business services to groups of emergency physicians who staff emergency departments. They don’t influence how medicine is practiced in departments, Dr. McNamara said, but compete with larger contract management groups. “The key issue here is secular control over the practice of medicine. This is in the interests of patients,” he said.

California, like many other states, prohibits secular entities from owning physician groups, and the lawsuit says Envision’s business model and practice is to purchase, control, and create a separate legal entity for each physician practice. hospital emergency or group of practices that it controls. “Subsidiaries are managed and operated by individuals who are employed or directly related to the parent company, Envision,” according to the lawsuit. “A medical director of the medical entity is appointed, and the choice is made by Envision. Decisions are not made by medical directors.

One such group controlled by Envision is Glass Beach Medical Services, formed in 2016 by a physician practicing in Hawaii, according to the lawsuit, which said none of the company executives listed in the 2019 information statement of Envision is only licensed to practice medicine. It was the group that won the contract on AAEM-PG, according to the lawsuit.

“Envision exercises deep and pervasive direct and indirect control over physicians’ practice of medicine,” the suit states. “Such control diminishes physicians’ independence and freedom from commercial interests, in violation of California practice of prohibition of medicine.”

The lawsuit noted that Envision decides how many and which physicians will be hired, their compensation and work schedules, as well as setting terms and conditions of employment, hours worked, staffing levels, number encounters with patients and working conditions. The decision to terminate doctors’ contracts rests with Envision, and doctors are denied the right to appeal those decisions, the lawsuit said, adding that Envision negotiates payer contracts with health insurers, but doctors do not. unaware of the terms of the contracts and must assign Envision the rights to the medical billing proceeds.

Anesthesia services

David Millstein, JD, the attorney for the AAEM-PG, said Envision infringes on doctors’ independence by controlling every aspect of it – billing, hours, pressure to practice through benchmarking or d other supposedly evaluative systems. “It also involves acquiring hospital contracts through cross-subsidies,” he said. “In our case, the hospital gave Placentia-Linda the contract for the emergency department at Glass Beach, while Envision agreed to provide a Tenet hospital with anesthesia services without stipend.

“Contracts are supposed to be awarded to a group that does the best job, not just the one that helps the hospital with the costs,” Millstein said, noting that the lawsuit also challenges the restrictive covenant in the Envision contract that limits the ability of outgoing physicians to bid for a one-year contract with Envision. “That year can be crucial for their ability to earn a living or stay in the same locality,” he said.

Dr McNamara said it was particularly worrying that Envision had been taken over by private equity firm Kohlberg Kravis Roberts, known as KKR. “It’s clear that for private equity to get a 20% return on investment, it has to maximize its profits,” he said. “To make a lot of money in emergency medicine, you have to acquire more contracts. Additionally, doctors may find themselves making less money and giving the private equity firm one shift a week.

Mr. Millstein said the suit seeks a judicial declaration that the Envision model is inconsistent with California law and cannot operate in this manner now or in the future. “We hope this sets a legal precedent in California that other states will pay attention to,” he said, noting that several states have laws against practicing medicine in the workplace, but in most cases, state attorneys general are unwilling to prosecute such cases. .

A spokesperson for Envision Healthcare said, “The company does not comment on pending litigation.” Its web pages make no mention of corporate medical practice or the practice groups that occupy emergency departments. “The health care delivery system is changing,” it says on its webpage. “We know better than anyone because we are on the front lines of this change. As a partner that helps navigate the ever-changing landscape of healthcare delivery, we are vigilant in working with you to identify opportunities to better serve our communities.

The website continues: “Envision Physician Services is a problem-solving organization that understands how to improve quality while improving operational efficiency and managing costs. Our expertise enables our teams to meet the needs of our hospital partners and the healthcare system. Our solutions can be adapted to any community and any challenge. In this way, we have become the preferred national medical group for clinicians and the health solutions partner for hospitals and health systems. (

Ms. SoRellehas been a medical and science writer for over 40 years, formerly at the University of Texas MD Anderson Cancer CenterThe Houston Chronicle, and Baylor College of Medicine. She has received more than 60 awards, including the Texas Human Rights Foundation Award. She contributed to REM For more than 20 years.