NC Appeals Court rules against Novant’s long-standing bid to build Holly Springs hospital

jmurawski@newsobserver.comDecember 19, 2013 

The N.C. Court of Appeals has rebuffed a long-standing attempt by a Winston-Salem-based health care company to build a hospital in Wake County.

Novant Health has for years been trying to break into the lucrative Triangle market, but the state appellate court ruled Tuesday that Novant failed to make its case for building a hospital in Holly Springs.

Novant can appeal to the N.C. Supreme Court. Company spokeswoman Caryn Klebba said Novant is evaluating its options.

The company applied to state regulators in 2008 for a permit to build a hospital in Holly Springs and reapplied in 2011, losing both times at the N.C. Department of Health and Human Services.

The N.C. Court of Appeals ruling upholds the state health agency’s September 2012 decision to award the hospital permit to Raleigh-based Rex Healthcare. A Novant decision not to appeal Tuesday’s court ruling would clear the way for Rex to build the 50-bed medical center in Holly Springs.

“We’ve said all along that Rex ultimately will prevail and win approval to build a 50-bed hospital in Holly Springs, despite the long legal process,” said Rex spokesman Alan Wolf. “Rex is eager to provide much-needed medical care and services to the fast-growing region of Holly Springs and surrounding communities.”

Once approval is final, Rex expects to spend 2-1/2 years designing and building the hospital. That process could get underway soon if Novant opts to end appeals.

Holly Springs Mayor Dick Sears said town officials have been lobbying for a hospital for more more than a decade. Holly Springs originally supported Novant’s bid because it was the first to come forward with a proposal to build a hospital there, Sears said.

Rex and WakeMed Health & Hospitals had originally balked when Holly Springs officials urged them to build a hospital in Holly Springs, he said.

Since Rex became interested in the project, Holly Springs is agnostic about which company builds the hospital, Sears said. Holly Springs has a population of about 28,000, but the hospital would serve about 150,000 people in the town and surrounding areas, which include Angier, Apex, Cary and Fuquay-Varina.

“We’ve been waiting for a hospital for a long time,” Sears said.

Novant had argued that its hospital would bring Triangle residents much-needed price competition in a region dominated by Rex, WakeMed and Duke University facilities.

Novant projected the cost of its Holly Springs project at $77.7 million. In its application, Rex officials said building a Holly Springs hospital would cost $126.8 million.

North Carolina limits hospital expansions and other medical projects in an effort to prevent overbuilding and to control health care costs.

The state Department of Health and Human Services ruled last year that Novant didn’t demonstrate it could provide adequate obstetrics services. The agency said Novant didn’t submit a recruitment plan or letters of support from area doctors.

“Novant’s application failed to demonstrate the need for the proposed project,” the agency said in its ruling, which was quoted by the N.C. Court of Appeals.

As part of the same review, Raleigh-based WakeMed also won a permit for a 29-bed expansion in Raleigh and a 22-bed expansion in Cary.

Murawski: 919-829-8932

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