American Academy of Emergency Medicine

EPMG Purchases Meriten Management Assets from Catholic Healthcare West

AAEM Comment
by Robert McNamara, MD FAAEM

The following press release is the EPMG/CHW spin on a momentous event for Emergency Medicine in the West. This will be followed shortly by the spin of AAEM and the doctors who were affected by this matter once things are finalized in print regarding the ACHP lawsuit.

AAEM members and all of EM for that matter should note that this is a major victory for the practicing physicians in California and the surrounding states. CHW had purchased certain assets of EPMG in order to get into the lucrative business of ED practice management. The independent groups working in CHW hospitals correctly deduced that this would spell the end of owning their own practice and that their labors would pay off the $38 million purchase price as well as become an income stream for CHW. Other dangers such as having the hospital control physician fee negotiation were apparent.

Desperate for help the practicing physicians looked to organized EM. First going to ACEP, they were rejected as it was deemed a "private business matter." Turning to AAEM they were quickly supported with a letter to the board of CHW invoking the illegal corporate practice of medicine and prohibited fee-splitting. To their credit the ACHP doctors displayed great courage became organized and culminated their fight with a lawsuit supported by AAEM, CAL/AAEM, the California Medical Association and the other hospital based specialties in California. Despite the release, surely this action played a major role in the decision by CHW to get out of the business of controlling the ED.

AAEM, a relatively new organization, led the charge in defeating the corporate intentions of one of the five largest hospital systems in the US. If we had not been there or lacked the courage to stand up for the practicing doctors the devastation would have been profound. There would have been the loss of these affected groups but even more important this move would have opened the door for HCA, Tenet and every other health system to take over their ED operations and relegate us to mere employees. Instead we have a precedent-setting event that can now be used to reverse the corporate practice of medicine in California and elsewhere. There has been no greater victory in EM in the last 20 years, your support of AAEM has helped immensely.

Excerpt From Press Release Text
ROSEVILLE, Calif.- (BUSINESS WIRE) - Emergency Physicians' Medical Group (EPMG) and two affiliated medical groups in June announced the purchase of selected assets of Meriten Emergency Medicine Management from Catholic Healthcare West (CHW).

Purchased assets include the physician practice management and Billing services and the Center for Emergency Medicine Education, the highly regarded educational arm of Meriten. The two other medical groups involved in the purchase are Emergency Physicians Medical Group - Northwest (EPMG-NW) of Washington State and Sutter Emergency Medical Associates (SEMA), headquartered in Sacramento (California).

Final agreement among the parties regarding the sale was reached on May 31.

The purchased assets will be folded into a new medical management organization to be known as EMSource, LLC. Dr. B. Joshua Rubin, FACEP, will serve as the president and chief executive officer of EMSource. Dr. John R. Bauer will serve as chairman of the EMSource board.

"We are very pleased to be able to purchase the medical group management assets from CHW," Dr. Rubin said. "This will allow us to re-establish a strong, independent, physician-owned and democratically governed Emergency Medicine management organization."

EMSource will provide comprehensive management services to the three purchasing medical groups, according to Dr. Rubin. He said expansion of management services to other medical groups is an important part of EMSource's strategic plan going forward.

According to John Wray, CHW senior vice president for managed care, a change in business strategy prompted CHW to sell Meriten, three years after originally purchasing the management business from EPMG.

When EPMG sold Meriten to CHW, affiliation of medical group Management services with hospital systems was very much the future, Dr. Rubin said. "However," he added, "the last two years have seen significant changes in financial issues for hospital systems and physician groups. What was the right move in 1998 is no longer an appropriate business strategy for either CHW or for our three medical groups."

Dr. Rubin said current Meriten employees will be offered similar positions with EMSource. "Our goal is to make this as seamless as possible for all concerned." Details of the sale are confidential, Dr. Rubin said. EMSource will be located in Roseville (CA) near Sacramento.