Novant Health, a Winston-Salem hospital chain eager to expand into the Triangle, has suffered a setback in that effort.
Novant last year won permission from state regulators to build a surgery center in Holly Springs, its first major foothold in this region. But Raleigh hospitals WakeMed and Rex Healthcare appealed the decision, contending that Novant used inaccurate information in its application.
An administrative law judge recently agreed. The judge, Donald Overby, recommended that Novant's project should be denied, in part because Novant's "financial projections are not credible, reliable or reasonable."
He also determined that WakeMed's proposal to add operating rooms at its Cary campus was superior and should be approved.
The judge's recommendation sends the case back to the Division of Health Service Regulation, an arm of the N.C. Department of Health and Human Services. The state regulates medical projects using patient volume, projected need and other factors, mostly to control health costs.
"We strongly believe the [division] made the right decision originally for Novant to serve the people of the Holly Springs community," said Novant spokeswoman Kati Everett. "We will appeal this process until we are able to bring operating rooms to Holly Springs."
Rex had also applied to add three operating rooms in Holly Springs, but Overby determined that WakeMed's proposal was better. WakeMed proposed adding three operating rooms in Cary at a cost of about $1.96 million per room, which was cheaper than Rex's bid of $2.91 million per room.
Novant has been trying for several years to build a hospital in Holly Springs. Leaders of the Southwestern Wake County town also have lobbied to get a hospital, which they say is needed to serve Holly Springs' fast-growing population.