Wellstar faces federal complaints after Atlanta Medical Center closure

ATLANTA - A group of elected officials are asking for a federal investigation following the closing of two hospitals in metro Atlanta.

The lawmakers accused the hospitals' parent company of discriminating against communities of color, while expanding operations in predominately white communities.

Atlanta Medical Center was one of only two Level 1 trauma centers in the region. Last year, Wellstar Health System announced it was closing the 450-bed AMC in the heart of Atlanta and Atlanta Medical Center South in East Point due to a decline in revenue, a move that also resulted in the closure or relocation of several doctors' offices in Atlanta and the south metro area. Both were considered a vital health care provider for many low-income residents.

Wellstar Atlanta Medical Center Downtown in Atlanta (FOX 5).

"The closure of the two Wellstar hospitals in central and south Fulton County over the last eight months have had a tremendous negative impact on our residents," Fulton County Commission Chairman Robb Pitts said.

Wellstar had operated both hospitals since 2016 after buying them and others from for-profit operator Tenet Healthcare Corp.

On Wednesday, state and local elected officials called on the U.S. Department of Health and Human Services Office for Civil Rights and the IRS to investigate.

"Wellstar thought they could get away with this scot-free," said Pitts. "But it's not going to happen."

The group accuses Wellstar of health care redlining, of expanding operations in predominately white areas, while abandoning minority communities.

Barricades block the former entrance to the now closed Atlanta Medical Center on March 8, 2023. (FOX 5)

Officials have filed two complaints with the federal agencies. They maintain that by shuttering the medical facilities the non-profit hospital system has failed to comply with the requirements to maintain their tax-exempt status.

The complaint to the HHS alleges Wellstar broke federal law by closing two hospitals that served primarily Black populations while continuing to operate hospitals that served richer, whiter people. They also allege Wellstar has violated Title VI of the 1964 Civil Rights Act which prohibits discrimination on the basis of race, color, or national origin in any program or activity that receives federal funds.

"Upon closure, they imposed great harm, and that harm continues today as we speak," said state Sen. Nan Orrock, D-Atlanta, said.

State Sen. Nan Orrock, D-Atlanta (FOX 5)

The complaint to the IRS also charges while Wellstar performed a required community health-needs study under rules for nonprofit hospitals, it failed to implement a strategy to address those needs. Sen. Orrock and others cite a 2021 letter from the Atlanta Medical Center’s advisory board saying management proposed and discarded a series of "opaque" and "vague" plans to improve operations and finances, showing a "long-term lack of vision and clear direction."

"WellStar should be held to account. Wellstar should be required to repair the damage that it’s caused to this long-established system of care for the individuals formerly served by these facilities," Sen. Orrack said.

A leasing sign is outside the former site of Atlanta Medical Center on March 8, 2023 (FOX 5)

In a statement to FOX 5 Thursday, Wellstar said the accusations of discrimination were "outrageous and false."

"Since February 2020, when Wellstar publicly announced a formal search for a partner or buyer to find a sustainable path forward, we have been open, honest and transparent about the challenges we faced. They were multi-faceted and included the age of AMC’s buildings, the fact that utilization was less than half of the bed capacity and a lack of public and private support," a spokesperson said in a statement.  "We connected with healthcare organizations locally, regionally and across the country. Potential partners expressed interest, but ultimately none were interested. None of these facts were presented or discussed in today’s press conference. We are focused and committed to continue serving diverse communities throughout the region and providing them the specialized programs and resources they need."

Previously, the Marietta-based health care system has stated it had spent more than $350 million to cover losses and make improvements at Atlanta Medical Center, losing $100 million in the year before closing. Wellstar said then that it tried and fail to find governments or others to help with sustainable solutions.

Several elected officials at the time, including Atlanta Mayor Andre Dickens, responded that Wellstar gave them no notice or chance to help.

Grady Memorial Hospital Emergency Room sign.

State and county officials have since pumped money into Grady Memorial Hospital — a publicly owned safety net hospital blocks away from Atlanta Medical Center — to try to take up the slack. The medical center’s closure meant the loss of the city’s only other emergency room besides Grady with a highest-level trauma designation and an obstetrics department where many babies were born.

Opponents also target Wellstar’s negotiations to buy the Augusta University Health System, which operates two hospitals in Augusta. They particularly criticized Wellstar’s acquisition of the rights to build a hospital in Augusta’s mostly white Columbia County suburbs, and the $105 million that the state is providing to buy a new electronic medical records system for the university’s Medical College of Georgia, from which Wellstar would benefit.

"You don’t walk away, get yourself in the budget for a hospital over in Columbia County, and turn your backs," Orrock said.

Since AMC’s closure, Piedmont Henry Hospital in Stockbridge has earned a Level 3 trauma center rating while Northeast Georgia Medical Center in Gainesville was upgraded to a Level 1 certification.

The Associated Press contributed to this report