The medical provider for the Georgia prison system backed out of its contract with the Department of Corrections last year after incurring more than $30 million in unanticipated costs, most due to the rampant violence in the state’s prisons, records obtained by The Atlanta Journal-Constitution show.
Wellpath, based in Nashville, Tenn, provided no clues for its decision when it sent the state a notice of non-renewal in June, just two years into its contract. But emails between Wellpath and GDC officials give a detailed accounting of how the company’s trauma costs in Georgia were more than twice as high as those in the other states where it provides prison healthcare.
The emails, obtained by the AJC from the GDC through a request under the Georgia Open Records Act, offer yet another window into how the violence in the state’s prison system has translated into costs that ultimately will be borne by taxpayers.
In an email to GDC Chief of Staff Alan Watson last September, a Wellpath vice president, Sam Britton, said the company had encountered “unpredictable headwinds” in Georgia.
Specifically, the email said, the company had been forced to absorb excess costs totaling $32 million, of which $15 million was due to “unexpected offsite costs driven by trauma.” In addition, the email said, Wellpath had incurred another $7.1 million in excess costs associated with convincing healthcare workers to take jobs in such an environment.
According to the email, those costs included $2.6 million for traveling nurses, $2.5 million for sign-on and retention bonuses and $2 million for salaries above market value. Traveling nurses require hotel accommodations and other expenses, and they are a necessity when local nurses aren’t available or aren’t willing to work in a prison.
On top of that, the email said, Wellpath incurred another $4.5 million due to “40-year high inflation” driving other unexpected costs.
Britton did not reply to a message from the AJC seeking comment. A corporate spokesperson for Wellpath said the company would not offer any additional information on its decision. “Like all healthcare companies, Wellpath has been grappling with the economic realities, cost increases and nationwide nursing shortages resulting from the COVID-19 pandemic,” the spokesperson, Chris Hartline, wrote in an email.
Georgia is on track for another record year for prison homicides in 2023, with at least 37, up from 31 in 2022. Moreover, incident report data obtained from the GDC show that the prison system experiences more than 1,000 non-fatal assaults a year, with hundreds requiring that prisoners be transported to hospitals for care.
Wellpath was chosen as the GDC’s medical provider in 2021 when the agency decided to privatize its healthcare. A division of Augusta University, Georgia Correctional HealthCare, had been the prison system’s medical provider for the previous 23 years.
The contract between the GDC and Wellpath called for nine one-year options for renewal, with Wellpath able to walk away at any time as long as it gave 364-days notice.
Wellpath gave that notice after months of back and forth with the GDC over the increased costs resulting from the violence, emails show.
“We will need a single digit % increase to the contract value starting in 2024,” Britton wrote in an email last February. “We are a low margin business and inflation pressures have pushed us underwater.”
A month later, in another email, Britton wrote that the company’s calculation of trauma costs in Georgia was more than twice that for state prison healthcare systems the company manages in Pennsylvania, Arkansas, Kentucky, Michigan and Maine.
In that email, Britton also proposed that Wellpath be allowed to put off paying the GDC an unspecified sum in staffing reimbursements. The reimbursements, mandated in the contract if the company failed to meet certain staffing thresholds, were ultimately delayed until this year, the emails show.
GDC Commissioner Tyrone Oliver, speaking at a Feb. 8 hearing of the Senate Appropriations subcommittee on criminal justice and public safety, said the department was seeking an additional $65 million for healthcare for the current year’s budget. That would increase the GDC’s total budget for health care to more than $339 million, according to state budget documents.
Oliver offered several reasons why the additional funding was necessary. They included a surge in “sicker inmates” entering the prison system, the cost of medical staffing and the aging prison population. He didn’t mention violence, but he has cited “trauma” as a factor in rising healthcare costs in other budget presentations.
Questioned at the hearing about Wellpath’s letter of termination, Oliver pointed out that the company was still the department’s healthcare provider until June and was one of two interested in bidding for the new contract. The other, he said, was Centurion Health, the Virginia-based firm that has contracts with the GDC for managing mental health and dental care.
“They’re the only two vendors in the country that can probably handle Georgia as one of the top five (prison systems) as far as population goes,” he told the lawmakers.
