Wellstar hit with federal complaints on Atlanta hospital closures

State legislators, Fulton County Commission Chairman Robb Pitts and other local leaders announced Wednesday they are filing two federal complaints against Wellstar Health System, after the organization in 2022 closed Atlanta Medical Center and a sister hospital that disproportionately served needy patients and people of color.

“We are here to announce that we are united in calling for (Wellstar) to take responsibility and be accountable for what they’ve left behind untended-to here in Atlanta and surrounding counties when they shuttered two hospitals,” state Sen. Nan Orrock, D-Atlanta, said.

One complaint asks the Internal Revenue Service to investigate whether Wellstar should maintain its nonprofit status, a charity designation that relieves the hospital system from having to pay federal, state and local taxes. The other document asks the U.S. Department of Health & Human Services’ Office of Civil Rights to investigate whether the closures violate Title VI of the 1964 Civil Rights Act, and if so, to make Wellstar “redress the harm to the community.”

Wellstar, in a written statement Wednesday night, said it had not read the complaints, but “the suggestion that Wellstar Health System in any way discriminated against patients and communities is outrageous and false.”

As a large hospital system, Wellstar is the the largest provider of charity care in the state, the statement noted, treating uninsured and underinsured patients at its other hospitals.

In addition, experts agree it would have taken large sums of money to reconstruct AMC as a modern, highly attractive facility. While public officials said they were taken by surprise at the closings, Wellstar says it searched unsuccessfully for a buyer or partner “to find a sustainable path forward” for AMC, and announced that search publicly three years ago.

“None of these facts were presented or discussed in today’s press conference,” the statement said.

Officials with the Georgia Hospital Association said they had only just learned about the development and could not comment.

One requirement for a nonprofit hospital to maintain its tax-exempt status is a community needs assessment followed by an implementation strategy, according to a Georgia Senate news release. Wellstar conducted the assessment and identified critical needs served by both hospitals, Atlanta Medical Center in downtown and Atlanta Medical Center South in East Point.

“However, instead of planning to meet those needs, Wellstar removed an existing ecosystem of care that had served the community for decades,” the news release says.

The hospitals’ closure has thrown a greater burden on surrounding clinics and hospitals, most of all on Grady Memorial Hospital, an already stretched safety net hospital in downtown Atlanta. The state and county governments have responded by directing more than $100 million toward Grady for new beds and expanded services to partially meet the need. The new resources are not expected to be enough to fully fix the problem created by the closures, however. 

Wellstar maintains that it serves the public good by providing huge amounts of uncompensated care in its hospitals statewide. By federal law, all hospitals must treat and stabilize any patient who walks in the emergency room regardless of their ability to pay.

Wellstar bought Atlanta Medical Center and its associated East Point hospital from Tenet Healthcare in 2016, as part of a $575 million deal that included three other hospitals. A prize in the deal, according to accounts at the time, was a Roswell hospital now known as Wellstar North Fulton, in a wealthier area of the county.

Wellstar has said it closed the AMC hospitals because it was not financially feasible to keep them open, despite millions in improvements.

Wellstar said it had invested more than $350 million in AMC over the years, including spending money required to operate the facility, and making capital improvements. Wellstar also said it lost $107 million on AMC in the previous year, and could not afford to keep running the hospital.

“It was not financially sustainable,” Wellstar’s general counsel, Leo Reichert, told a legislative committee last month. “Unfortunately, we had to make a very tough decision in that one market.”

State Rep. Kim Schofield, D-Atlanta, rejected that assertion at Wednesday’s press conference, alleging that Wellstar had “no authentic plan” to keep the hospitals open. The complaint cites as evidence similar allegations from a 2021 Regional Health Board report.

Fulton County Commission chair Robb Pitts said Wellstar engaged in “healthcare redlining” by closing hospitals in needy communities, leaving behind worried residents who don’t know where they can receive care.

”Wellstar didn’t just close hospitals. Like bandits, they swept up everything that comes with the hospitals: The clinics, primary care doctors, specialists, cardiologists, those who treat diabetes and high blood pressure. They packed them up and took them away,” Pitts said. ”They have literally created a healthcare desert in central and south Fulton County.

“And they’ve done so in a way that appears to be intentionally affecting a community with the highest concentration of Black and brown people.”

Wellstar’s remaining hospitals are almost entirely in majority-White, more affluent areas, he said. South Fulton County, home to the two closed hospitals, is 80% Black with lower median income, Pitts said.

“As we go down the list of Wellstar locations, a clear pattern emerges,” he said, adding people are “scared to death ... and they’re angry. I’m angry.”

The critics also fumed that state lawmakers cleared the way for $105 million in taxpayer spending on a new electronic medical records system for the Medical College of Georgia, which is negotiating a partnership with Wellstar in the Augusta area.

State officials say the upgrades are needed regardless of that deal.
The complaints cited reporting by The Atlanta Journal-Constitution among other documents.

Orrock said Civil Rights Act complaints are not uncommon, and she hoped for thorough federal investigations. She urged Wellstar executives not to wait for those outcomes, but to step forward now to repair the damage done.

AJC Staff Writer Greg Bluestein contributed to this article.
Ariel Hart’s reporting on gaps in medical services in Georgia was undertaken as a USC Annenberg Center for Health Journalism 2022 National Fellowship Grantee.