Wake County's largest hospital has won approval from state regulators to expand its rehabilitation facility.

The $2.4 million project will allow WakeMed to renovate existing space and add 14 rehab beds at its flagship campus in Raleigh. That will give WakeMed 98 rehab beds, allowing it to treat more patients and provide more specialized care.

Rehab services include helping patients recover after a stroke, traumatic injury or major surgery. Demand is surging, driven by this region's growing and aging population.

State regulators this week approved WakeMed's proposal and rejected bids from Duke Raleigh Hospital, UNC Hospitals in Chapel Hill and Johnston Memorial Hospital in Smithfield. At least one of those rival hospitals are likely to appeal, and a legal fight could at least delay when WakeMed starts its project.

The Triangle's three largest health systems have appealed a decision by state regulators that would allow a Winston-Salem chain to establish a foothold in Wake County's fast-growing medical market.

In July, regulators approved a plan by Novant Health to build a surgery center in Holly Springs with three operating rooms. Regulators also rejected applications by WakeMed, Rex Healthcare and Duke Raleigh Hospital to add the ORs at their facilities.

By appealing the ruling, the Raleigh hospitals are setting up a long legal fight that will postpone a final decision until at least next year.

The county's established health providers don't want to face a powerful new competitor on their home turf. Novant owns hospitals in the Triad and Charlotte markets, and has made it clear it wants to expand into this region.

Last week's decision by state regulators to award Novant Health three operating rooms for a new surgery center in Holly Springs is not sitting well with two hospital systems that submitted competing proposals.

Both WakeMed and Rex Healthcare say they are baffled by the decision to award the ORs to Novant.

WakeMed and Rex applied for all three of the ORs, while Duke Raleigh Hospital applied for two of the three.

"I think we had a better application and a better project at a lower capital cost than Novant, so we are very surprised by this decision," said Stan Taylor, WakeMed's vice president of corporate planning.

"We feel fairly strongly that this is not the right decision and that we have a high likelihood of being successful in appealing this decision if we choose to go that route."

WakeMed applied to have the operating rooms at its Cary hospital at the corner of Kildaire Farm and Tryon roads. The hospital currently has nine operating rooms at that location.

Rex applied to have two ORs at its new urgent care center in Holly Springs and one at its Raleigh campus.

State regulators have approved Rex Healthcare's plan to build a $60.1 million cancer center at its main campus in Raleigh.

The five-story addition is part of a bigger expansion planned at Rex's campus. It's also the latest in a series of major medical projects underway or planned across the Triangle.

The N.C. Cancer Hospital at Rex will coordinate patient care with the $207 million N.C. Cancer Hospital in Chapel Hill, which the UNC Health Care System opened last fall. UNC bought Rex 10 years ago.

Rex, which is Wake County's second-largest hospital after WakeMed, is expanding its cancer services to handle increasing demand from this region's aging and growing population.

"This is exciting news for all of us, and especially for the many cancer patients who we serve," Rex CEO David Strong wrote in an e-mail to hospital employees today.

State regulators say that Wake County needs more than 100 new hospital beds, setting up a brawl among this region's largest medical providers.

To control health costs, the state puts limits on how many hospital beds are allocated by county each year, based on patient volume, projected population growth and other factors.

The proposed N.C. State Medical Facilities Plan includes 102 additional beds that will be needed in Wake County by 2013. The state's largest metropolitan area, Charlotte's Mecklenburg County, will need 101 beds, the plan states.

Wake's existing hospitals WakeMed, Rex and Duke Raleigh will apply to add the new beds on their campuses or to build new facilities. And outside providers that want to establish a foothold in the fast-growing market also will likely be contenders.

Let the latest fight over new medical expansion in the Triangle begin.

This round will feature this region's health providers sparring over three operating rooms that state regulators have ruled will be needed in Wake County.

WakeMed, Rex Healthcare and Duke Raleigh Hospital all submitted applications Monday with the N.C. Certificate of Need office to meet a state deadline. Other bids are likely to filed by later today.

Every year, regulators review projected demand in each county and determine whether there will be a need for additional hospital beds, ORs and more. Then the state accepts bids, reviews applications and determines which project makes the best case based on need, cost and other factors.

Duke Raleigh Hospital plans to move its cramped wellness and fitness center to a much larger facility in an upscale retirement community at the nearby North Hills development.

The existing wellness facility is about 7,500 square feet in one of oldest buildings on the hospital’s campus. A new, 20,000 square-foot facility will be part of The Cardinal at North Hills, left, a $150 million retirement community that’s expected to open in 2011.

The new facility will aim to attract older customers interested in medically focused fitness, said Duke Raleigh spokeswoman Carla Parker Hollis. That’s a fast-growing market as Wake County’s senior population continues to surge.

“The market is pretty competitive when it comes to wellness,” Hollis said.