Bipartisan Effort Paves Way for Reviving Closed Hospitals in Ga.

ATLANTA — At the shuttered Atlanta Medical Center, a “Stronger Together” mural sends a hopeful message near a summer spray of hydrangeas. The campus was mostly quiet on a recent weekend, since AMC closed almost two years ago. A lone security vehicle sat behind a chain-link fence, and pedestrians passed by without even a glance.

In the town of Cuthbert, some 160 miles away, the Southwest Georgia Regional Medical Center also remains shut after closing four years ago, another Southern hospital casualty in a region dotted with them. Even a smaller facility replacing the former Cuthbert hospital “would be tremendous for the county,” said Steve Whatley, chair of the Randolph County Hospital Authority.

The two hospitals — one inner-city, the other rural — faced some of the same financial pressures, including not having enough patients with private insurance.

This year, they also shared the attention of some of Georgia’s most powerful lawmakers. Legislation signed in April by Gov. Brian Kemp, a Republican, included a provision pushed by U.S. Sen. Jon Ossoff, a Democrat.

The law amends the state’s “certificate of need” system, which allows existing hospitals and other health facilities to block would-be competitors’ plans to expand by arguing there’s insufficient need for their services.

Certificate of need laws exist in 35 states and Washington D.C., according to the National Conference of State Legislatures. The hospital industry, especially nonprofit facilities, generally support the rules, and have argued they reduce health care costs and preserve access to quality medical services. Under CON requirements, health providers must obtain approval from the state before offering some new services or before building or expanding facilities.

Whether the laws improve care or reduce costs is questionable, researchers have found, and critics say more competition would decrease spending by insurers and consumers. In 2018, the Trump administration issued a report recommending that states repeal or revise their certificate of need requirements, arguing they increase health care costs.

“The evidence is pretty darn overwhelming that CON laws don’t achieve the initially stated goals of increasing access, lowering costs, and improving quality,” said Matthew Mitchell, a senior research fellow at West Virginia University.

Dan Sullivan, a Georgia-based consultant who often helps hospitals and other medical providers in their effort to preserve the laws, said that by limiting the number of providers offering very specialized health services, such as organ transplants, states can better maintain high quality of care.

Certificate of need laws can reduce fraud, Sullivan said. Florida repealed its certificate of need requirements for hospitals and many other health providers following the Trump administration’s recommendation. Fraud accelerated in the state after regulations were phased out, he said.

“At least when you file a CON, there’s at least a minimum of investigation,” Sullivan said.

He argued another benefit of the laws is that they frequently mandate a baseline level of charity care.

Other Southern states recently peeled back their certificate of need laws. Tennessee’s legislature passed a bill this year exempting more medical providers from needing to apply for a certificate. North Carolina rolled back some restrictions in an overhaul that paved the way for Medicaid expansion last year. South Carolina made a significant change to its rules last year.

Easing the rules

This year, Republicans in Georgia’s legislature attempted to repeal the state’s certificate of need rules. The effort fell short in the face of fervent hospital opposition.

The narrower legislation that Kemp signed would instead ease the rules for building rural hospitals and exempts a potential new hospital that would partner with Morehouse School of Medicine, one of the country’s few historically Black medical schools.

That could potentially fill much of the gap left by Atlanta Medical Center’s closing.

Hospital industry officials said Morehouse would probably need a well-heeled partner, and Atrium Health, part of Charlotte, North Carolina-based Advocate Health, may be a logical match. The growth-oriented nonprofit health system has partnered with Morehouse Healthcare to run a clinic in East Point, south of Atlanta, and has a growing presence in the state. Both Morehouse and Atrium declined to discuss a potential hospital partnership with KFF Health News.

The shuttered AMC main campus, meanwhile, is ensnared in a moratorium the city imposed on redeveloping the site — a response to the jolting decision by its owner, Wellstar Health System, to close the hospital.

In 2022, Mayor Andre Dickens issued an executive order temporarily halting any new development on the site. He has criticized the “unusually abrupt closure of one of Atlanta’s most important medical centers.”

Atlanta’s city council extended the ban another 120 days in June.

A new inner-city hospital “would be a heavy lift financially,” said Josh Berlin, CEO of rule of three, an Atlanta-based health care consulting firm. That’s because it would draw largely from the area’s high level of uninsured and Medicaid patients. Georgia is one of 10 states that have not fully expanded Medicaid, and thus has a high rate of uninsured patients.

“You’ve got a community that is struggling to find care in the wake of the Atlanta Medical Center closure,” he said.

Grady Memorial Hospital and other Atlanta facilities have seen a bump in patient volume since the closure of AMC. Grady is regularly deemed “dangerously overcrowded” in one state dashboard.

The need to handle additional patients has sped up expansion plans for Grady, including adding more than 150 beds, said its chief strategy officer, Shannon Sale. “We knew that was going to be needed over time. The Atlanta Medical Center closure sped up that process,” she said.

In southwestern Georgia, plans are more modest.

Community leaders, including Whatley, are awaiting the results of a feasibility study that is expected to propose a downsized “rural emergency hospital,” a new federal designation that directs extra funding to eligible facilities.

The program guarantees hospitals in rural communities extra Medicare payments and an additional payment of about $3.2 million a year if they close costly inpatient services and offer only emergency and outpatient care.

Ossoff won almost $12 million in three different appropriations bills to support a rural emergency hospital in Cuthbert. He said he met with state leaders to secure the provision in the Georgia certificate of need bill that would allow it to reopen. Southwest Georgia Regional Medical Center would also have to get an exemption from federal officials to qualify for a rural emergency hospital because of its closing date.

“This is a very challenging thing to do, and we’ve still got significant hurdles to clear,” Ossoff told KFF Health News.

Even if it reopens, the Cuthbert facility will face the same pressures that led to its shuttering in the first place — what Ossoff called “failures of state policy.” At the time, he cited Georgia’s decision not to fully expand Medicaid in the wake of the closure.

Brenda Clark, who works in a wellness center across the street from the closed Cuthbert hospital, said some locals are skeptical about the facility reopening.

“It’s much needed. People are hoping and praying we get it back,” she said. But “there are some people who say, ‘We’ll believe it when we see it.’”