Common Sense

You Are the Plaintiff

Issue: March/April 2022

Author: Andy Mayer, MD FAAEM
Editor-in-Chief, Common Sense

The above may sound like an odd statement but it relates to a recent lawsuit filed by the AAEM Physician Group (AAEM-PG) against Envision. A copy of this suit was printed in the last issue of Common Sense with an introduction by Dr. Robert McNamara. I would encourage you to read it despite the legal jargon and try and understand some of the issues involved. This lawsuit, if successfully litigated, could eventually benefit every emergency physician in America. The prospect of turning back corporate management groups (CMGs) including the negative role played by private equity in the business of emergency medicine could receive a significant boost by this lawsuit. This is a case which I think is vital for you to know about and advocate for in as many ways as possible. The expanding role of CMGs in our financial and professional future aided by private equity groups affects each and every emergency physician in America. This includes everyone even if you are academic, military, VA, private, democratic, CMG, or whatever type of practice environment in which you work. AAEM has been seeking the right case for many years and this one, hopefully, is the “One.”

An AAEM press release announcing this suit states:

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 has helped members and non-members alike through the years in many types of legal cases. AAEM has provided advice, letters of support, amicus briefs, and financial support in legal cases involving issues with CMGs, due process, and unlawful termination. AAEM has helped gain some significant success in many of these cases but has of yet been unable to find a case which could set precedent on the issue of the corporate practice of medicine because many of these suits are settled without a ruling on the core issues involved. CMGs have huge teams of very smart and well paid lawyers who are willing to use their seemingly bottomless resources to thwart any effort to limit the CMGs ability to make money. They are smart and are willing to back down and settle when they are clearly in the wrong. The CMGs do not want the real issues like the corporate practice of medicine to actually be litigated. The CMG will settle with the individual emergency physician or group which we are helping as long as an ironclad non-disclosure agreement is in place. These types of settlement help right the wrongs done to the individual emergency physician and AAEM is willing and able to help but no legal precedent is set and no definitive ruling on the real issues are obtained. Other emergency medicine organizations have refused to become involved in many of these matters for unclear reasons. These issues cut to the essence of the struggle faced by every emergency physician in practice today and which every current or future emergency medicine resident will have to face as they enter their careers. AAEM certainly does not agree with sitting on the sidelines and believes strongly that we all need to work together to fight for our specialty even if it includes dealing with lawyers and the courts.

The settlement issue in these cases has typically been that the individual emergency physician or group are involved in a dispute which directly and immediately impacts their lives. They are fighting for their careers and ability to support their families. The prospect of a lengthy and very expensive legal process is daunting, at best, and can very easily be seen as insurmountable. The obvious smart move for them as individuals is to take a favorable settlement even if it includes a non-disclosure clause. This helps them financially and personally but does not settle the bigger legal issues which need clarification and definitive legal rulings.

AAEM has been looking for the right case which could actually affect real change for emergency medicine. This new case by the AAEM-PG looks like it could be the one we were seeking. This hope is based on several factors. First, AAEM believes that they are correct that Envision is violating the corporate practice of medicine statutes in California and therefore should win. Winning a case in as large a state as California would set a huge precedent that other physicians could use in their own fight in other states against the CMGs and hopefully throughout the rest of the country.

Second, this suit was brought directly by the AAEM-PG against Envision. There is no individual physician or group as the plaintiff. Having the AAEM-PG as the plaintiff means that no one will settle the suit when someone dangles cash with a non-disclosure. AAEM has no interest in settling and actually wants this suit to litigate itself until completion. This fact alone should scare Envision and the other CMGs to their core. This is a long and expensive process but a trial and a ruling are what is necessary to win on the merits of the case.

Third, the suit does not seek a penny in damages. The AAEM-PG simply wants a ruling on the merits of the case. This fact should startle and impress the court. There will be no pretrial settlement talks. This seems to be an ingenious legal strategy and reveals that the motives of AAEM are to help emergency physicians and our patients.

Finally, CMGS are moving into several other medical specialties including anesthesia, hospital medicine, radiology, critical care, and others. Their appetite for expansion and profit should be alarming to all physicians and medical specialties. Everyone should have an interest in this case and support should be enthusiastic. Hopefully, many other specialty societies will join us in this fight with amicus briefs and even financial support.

News about this suit is appearing in many general media sources and is also gaining significant interest in health care circles. Imagine as this suit proceeds, how private equity will view the security of the billions of dollars which they have invested in CMGs. Will they consider their investments to still be sound? Will these same corporate executives at private equity firms realize what their billions have actually purchased? Are their large and valuable assets in CMGs which could be sold off to salvage their investments? Where are the factories and inventories or valuable intellectual property usually associated with multibillion dollar companies? In the end, CMGs only actually own the ability to take money from the physician fees of those physicians who are directly dealing face to face with Covid, staffing shortages, boarding, and burnout while the shareholders are home safe and warm in their beds.

Imagine if the CMGs no longer had a right to take away the income of individual emergency physicians to generate profits for their shareholders. The CMGs could simply disappear along with the billions of dollars which private equity groups have invested in them. This legal action as it moves forward could cause financial panic in these private equity circles.

The fight to win this lawsuit will not be quick, easy or cheap. Envision will hire swarms of expensive lawyers who will try to throw up roadblocks to delay or prevent a trial. One can only guess the number of depositions, briefs, and motions which will be used to drive up the expensive of litigating this to a favorable conclusion. Remember that every year they can delay a ruling is more time the CMGs can make money from the labor of emergency physicians. The very reality of the difficulty of this effort is precisely why AAEM is perfectly suited to play the role of the plaintiff in this case. AAEM has always been the champion of the practicing emergency physician and has always been willing to stand up for you as an emergency physician. AAEM is committed to this fight and knows that this fight represents an existential threat for our organization. Envision could attempt to bankrupt the organization by trying to outspend our ability to pay legal bills. They have very deep pockets. This cannot be allowed to happen. AAEM needs the support of everyone who agrees with the goal of this suit. The time to unite around a just and essential cause is NOW. This suit should UNITE our specialty no matter if you belong to AAEM, ACEP, CORD SAEM, or even none of these organizations. It does not matter if you agree or disagree with AAEM on any other issue. Every emergency medicine organization should rally their members and resources behind this effort. This is not a “private business matter” but a winnable legal action which could help our specialty prosper and benefit every emergency physician by helping put physicians back in charge of their business.

I ask each of you to consider what your role will be in this fight. You could just sit back with a fatalistic attitude and think it is not your fight or that you will just wait and see what happens. Please chose a different path. I ask each of you to do three things in this cause. First, I ask each one of you to consider making a real financial investment in this effort. AAEM will need a war chest to display to Envision so they clearly understand emergency medicine’s commitment to improving their own future. Show them that you will no longer be passive victims of CMGs. Second, please speak to or email every emergency physician you know and discuss this case. Make sure everyone knows about it and understands what a victory could mean for our specialty. This is not a time to be divided or territorial. All emergency physicians need to unite. Lastly, speak to your colleagues from other specialties who are also being targeted by private equity and make sure they know about this and ask them to get their specialty societies involved now so that we can show the CMGs that physicians have decided to UNITE and fight back. Please consider that this is the hill to fight on and join the effort now! Remember that you really are the plaintiff in this case and if the AAEM-PG wins then you win.

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