While I agree with you totally, the reality is that the hospital took the right approach. Had they used the above reason, they would probably have been challenged in court successfully. As it is, they will probably be sued anyway, but the defense of protecting the hospital, staff and patients is much easier to fight in court.
They'll continue their internship elsewhere, unless the state of Georgia can/will prosecute. This may well be most telling sentence in the whole article. No consequences.
sighhhhhhhh
That would have been the RIGHT thing to do...unfortunately, the RIGHT thing to do is not necessarily the PC thing to do.