Physician group sues Envision Healthcare over corporate practice of medicine laws

Physicians and consumer advocates are monitoring a California lawsuit against Envision Healthcare, which alleges that Envision uses shell business structures to retain de facto ownership of emergency room staffing groups and asks the court to declare these structures illegal, Kaiser Health News reported Dec. 22.

Milwaukee-based American Academy of Emergency Medicine Physician Group, the plaintiff in the case set to start in January 2024, said a victory would result in prohibition of the practice across California in emergency rooms as well as anesthesiology and hospital medicine. 

"We're not asking them to pay money, and we will not accept being paid to drop the case," David Millstein, lead attorney for the plaintiff, told Kaiser Health News. "We are simply asking the court to ban this practice model."

The California Medical Association, which supports the lawsuit, said it "will shape the boundaries of California's prohibition on the corporate practice of medicine."

If successful, the case could spur regulators and prosecutors in other states to take corporate medicine prohibitions more seriously. Thirty-three states and Washington, D.C., have rules against corporate practice of medicine. Many companies, however, have sidestepped bans on owning medical practices by buying or establishing staffing groups that are nominally owned by physicians and restricting physicians' authority, preventing them from having direct control, according to the report. 

Corporate practice of medicine laws, first enacted almost a century ago, were meant to fight the commercialization of medicine, maintain independence of physicians and prioritize physician-patient relationships over the interests of investors and shareholders, Kaiser Health News said.

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