"People could fall through the cracks," said state Sen. Vincent Fort (D-Atlanta), a leader of the group called The Grady Coalition.
He noted that many doctors and medical facilities don't accept Medicaid patients, which could hamper the patients' search.
Peach State Health Plan is one of three insurers hired by the state of Georgia to handle Medicaid claims. The insurer has contracts with numerous health care providers.
These patients may eventually return to Grady. The hospital still has contracts with the two other insurers that handle Medicaid claims for the state -- WellCare and Amerigroup -- and patients can switch to either one. But most of the patients can only do that on their annual renewal date, and months could pass before that date.
Grady and Peach State disagree sharply on how many patients must find new care. Peach State officials have said the change would affect 2,182 patients at Grady, but Grady officials said the number is about 12,000.
Peach State acknowledged it is only accounting for those patients who have doctors who work exclusively at Grady, and are not counting patients with doctors who work at Grady and elsewhere. Peach State officials say the majority of those patients can continue to see their current physician or another physician in the same practice at other locations.
Many patients have been coming to Grady for years and have long relationships with their doctors. Many also have transportation problems, which could limit going elsewhere, said Grady spokesman Matt Gove.
Peach State spokeswoman Debra Peterson-Smith said the company is working hard to make sure patients find new care quickly. She said the company has sent out letters and made phone calls to patients to help them find other health care providers. Peach State is also helping patients obtain transportation to appointments with their new doctors.
"Peach State is working directly with those members to minimize disruption," she said. "Overall the process is running smoothly."
Patients requiring emergency services can still use Grady or any other hospital, she noted. Patients who require ongoing care for chronic conditions can continue to be seen at Grady through Jan. 26, she said.
The Southside Medical Center, which accepts Peach State patients, has already accepted 200 to 300 former Grady patients at its offices in metro Atlanta, said executive director Dr. David Williams.
He said while some patients were initially nervous, the transition has gone smoothly at his clinic. He believes there are enough medical centers and hospitals in the area that accept Peach State, and that the Grady patients will have little trouble finding new care.
Peach State officials announced in November that they would terminate their contract with Grady on Nov. 28, but both parties agreed that Grady would continue to accept the patients through the end of the year.
Peach State complained that Grady had already increased its charges by 50 percent last year and was seeking and additional 25 percent this year.
Grady officials said the hospital was attempting to match its charges to market rates.
Grady's Gove said the loss of patients will not hurt the hospital financially, since they represent only a fraction of its patients. Because they were receiving Medicaid, the government was not paying the full cost of their care, he said.