Lawsuits Against Wellstar Allege Hospital “Red-lining”
Last year Wellstar Health System closed its 450 bed Atlanta Medical Center, one of only two Level 1 trauma centers in metro Atlanta. A Level 1 Trauma Center provides the highest of trauma care to critically ill or injured patients and can provide complete care for every aspect of an injury through to rehabilitation. Wellstar also announced the closing of Atlanta Medical Center South in East Point. AMC was considered a vital health care provider for many low-income residents. Wellstar blamed the closure on decreasing revenue and inflated costs.
Wellstar claimed to have invested $350 million since 2016, yet cited losses of $107 million in a 12 month period. Still, Wellstar had $5.7 billion in assets and announced construction plans to expand Kennestone Hospital in Marietta, Georgia. Wellstar subsequently entered into negotiations with Augusta University Hospital System to purchase two hospitals there.
Last week Georgia Democratic lawmakers, Fulton County officials and the Atlanta NAACP filed complaints with the Department of Health and Human Services, the Department of Justice and the IRS alleging violations of its tax-exempt status and civil rights violations for closing a hospital in communities of color. Wellstar receives a significant amount of income from federally funded Medicare and Medicaid programs. Both complaints concern Wellstar’s funding and status as a non-profit hospital that receives federal funds.
The complaints allege that Wellstar should have developed a plan to meet community needs rather than closing two Atlanta hospitals. The IRS requires tax-exempt hospitals to assess community needs every three years and implement a strategy to address those needs. The complaint to Health and Human Services alleges that Wellstar violated federal law by closing two hospitals that primarily serve Black populations while continuing to operate, expand and purchase hospitals that serve richer and whiter neighborhoods.
Fulton County Commissioner Robb Pitts noted that Wellstar not only closed two hospitals but closed or relocated physician offices as well creating a health care desert in central and south Fulton County. This announcement follows a pattern of hospital closures nationwide, most of which disproportionately affect lower-income communities of color. Boston University professor Alan Sager has tracked hospital closures in nearly every major U.S. city for the past 12 years and calls this phenomenon “survival of the fattest”