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Lawsuit accuses Ga. prison system of violating state law to replace healthcare provider

The Georgia DOC has awarded a $2.4 billion contract for healthcare in the prison system to a new company without the competitive process legally required, a lawsuit alleges

Georgia Department of Corrections

Georgia Department of Corrections

By Carrie Teegardin and Danny Robbins
The Atlanta Journal-Constitution

ATLANTA — The Georgia Department of Corrections has awarded a $2.4 billion contract for healthcare in the prison system to a new company without the competitive process required under state law, the present contractor alleges in a lawsuit.

Wellpath, the Nashville-based company that has provided healthcare for the department since 2021, also asserts that it was blind-sided by the out-of-control violence in Georgia prisons, resulting in trauma costs that far exceeded what the firm has incurred in the other state prison healthcare systems it manages.

The lawsuit adds another wrinkle to the numerous issues confronting the GDC, contending that the agency engaged in conduct that was “truly unprecedented” when it decided in April to award its healthcare contract to Virginia-based Centurion Health.

Wellpath informed the GDC last June that it would opt out of its contract on June 30, 2024, only three years into a nine-year deal. But in the months after the decision, the parties continued to discuss new pricing that would have reset the contract terms until, the suit claims, a deal was abruptly and secretly struck with Centurion.

“There was no public notice. There was no request for proposals. There was no written evaluation criteria. There was no evaluation team. There was no evaluation. There was no statement of the basis on which the decision was based,” Wellpath alleges in its complaint.

Wellpath also asserts that its price was “objectively lower” than the $2.4 billion the GDC has agreed to pay Centurion for a contract of similar length.

The company is arguing that the contract between the GDC and Centurion is unlawful and must be cancelled. It also seeks monetary damages.

The suit, filed May 7 in Fulton County Superior Court, names GDC Commissioner Tyrone Oliver; Jim Barnaby, the deputy commissioner of the Georgia Department of Administrative Services, and Centurion of Georgia as respondents. An additional lawsuit, filed by the company last week, makes similar arguments but names only the State of Georgia for procedural purposes.

GDC spokesperson Lori Benoit, in a statement emailed to The Atlanta Journal-Constitution, said the agency doesn’t comment on pending litigation. “However, we would like to point out that we took the necessary steps to follow all procurement policies and are confident in the decision made,” she wrote.

In a motion seeking the lawsuit’s dismissal, attorneys representing the GDC said Wellpath’s argument has no merit.

“Wellpath terminated its contract in the hope that it could dictate new, higher-priced terms to the GDC,” the motion says. “There’s the rub; like a jilted partner, Wellpath did not want to continue a relationship with the GDC but does not want anyone else to be involved in that relationship with the GDC either.”

With the current contract close to expiring, the GDC went with Centurion “rather than suffer such extortion,” the motion says. Now, by filing a lawsuit that seeks to keep Centurion from taking over, Wellpath “threatens the health and safety of Georgia’s prison inmates,” the motion says.

In retracing the steps that led to Wellpath’s decision last year to opt out and renegotiate, the lawsuit raises a curtain on the bloody violence that has been raging inside Georgia’s prisons for nearly four years.

According to the complaint, the state’s own descriptions of prison conditions in 2021, which bidders used to formulate their proposals, didn’t come close to capturing the reality inside the prison system.

“Due to the pricing (in the contract), which derived directly from the respondent’s provision of inaccurate information to bidders, Wellpath was required to subsidize the GDC’s and the state’s 8th Amendment obligation to provide adequate healthcare (as required by law),” the lawsuit alleges.

The upshot of the additional costs, according to the lawsuit, was that Wellpath had to invest more than $40 million of its own funds to stabilize its Georgia workforce, catch up on an inherited backlog of patient care and improve the GDC’s healthcare system.

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In an affidavit, Sam Britton, Wellpath’s president for state and federal operations, said the levels of inmate-on-inmate assaults in Georgia’s prisons were “exponentially higher” than those in other prisons where Wellpath provides healthcare in the South, Northeast and Midwest.

Britton said that trauma care in 2023 for Georgia’s 38,997 prisoners covered by Wellpath cost $16.4 million. That compares to trauma costs of $9.25 million for 111,403 inmates housed in prisons in eight other state prison systems served by Wellpath, he said in the affidavit.

Britton said Wellpath also had trouble recruiting qualified staff to provide medical care in Georgia’s prisons because of the widespread violence, leading to additional costs to run the healthcare program.

In another affidavit, Gregg Bennett, Wellpath’s vice president of operations for Georgia, said understaffing in Georgia’s prisons was much worse than in other states in which the company operates, leading to an “imbalance” that caused a higher rate of violence. Consequently, he said, the company experienced a 40% annual turnover rate among its employees working in GDC facilities.

Centurion did not immediately respond to requests for comment from the AJC.

The GDC contracted with Wellpath in 2021 when the agency decided to privatize healthcare after 23 years with Georgia Correctional HealthCare, a division of Augusta University. The contract included nine one-year options for renewal, with Wellpath able to opt out at any point as long as it gave 364 days notice.

Centurion was among the bidders seeking to win the healthcare contract that was awarded in 2021. The company has long provided mental health services for the GDC and more recently became the provider of dental care.

In the lawsuit, Wellpath says it performed its duties “skillfully and without any noted deficiencies under incredibly trying conditions that are well known to the GDC” and that the need for a price increase was acknowledged by the agency. But in the midst of negotiations for an amended contract, the GDC “inexplicably” awarded the contract to Centurion outside the bounds of Georgia’s State Purchasing Act, the suit claims.

Wellpath has filed a protest with the Department of Administrative Services, which, according to the company, automatically placed a stay on the contract’s execution. Yet even with the matter under protest, the suit alleges that the GDC and Centurion have moved forward with their deal, unlawfully interfering with Wellpath’s employees and network providers.

The new contract calls for Centurion to take over as the prison healthcare provider on July 1.


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