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Fort Mill (S.C.) Medical Center
Artist rendering of Fort Mill (S.C.) Medical Center

Tenet wins contested CON to build new hospital in South Carolina

By Beth Kutscher
Posted: April 1, 2014 - 7:15 pm ET

Tenet Healthcare Corp. on Tuesday won a victory in South Carolina's administrative law court that will allow it to build a 100-bed hospital in the town of Fort Mill.

Four health systems had vied for the 2005 certificate of need to build a new hospital in York County, which is part of the Charlotte, N.C., metropolitan area. Tenet's Piedmont Medical Center in Rock Hill initially won the bid, but after the decision was contested in court, the CON ultimately was granted to Carolinas HealthCare System.

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In a statement, Carolinas HealthCare System said it was “surprised and disappointed” that the court did not affirm its proposal and handed the project back to Piedmont. The Charlotte-based system said it was reviewing the findings and determining what its next steps would be.

Tenet did not disclose a time frame for beginning construction on the medical center, which is projected to cost $119.8 million, plus any financing fees. The facility will serve as a sister hospital to 280-bed Piedmont and CEO Bill Masterton will oversee both campuses.

Piedmont's plans call for a hospital with 64 new acute-care beds, a need for which was identified in the 2004-2005 South Carolina Health Plan, as well as an additional 36 licensed beds transferred from Piedmont's current hospital in Rock Hill.

Carolinas' plan called for a 64-bed, $79.1 million facility.

In his decision, the administrative law judge, Phillip Lenski, said he weighed a number of factors, including how each proposal would affect competition in the region. He also pointed out that Piedmont has a long-standing contract with the county to provide nonhospital services, such as ambulance transport, often at a loss.

Piedmont's market share in the county declined from 64% in 2005 to 55% in 2011, with more than 80% of those patients going to Carolinas HealthCare System, Lenski wrote.

A Carolinas hospital would further funnel patients away from Piedmont, and compromise its financial position, payer mix and ability to recruit physicians, he added. Piedmont's larger hospital also would be more efficient to build and better able to accommodate growth, he wrote.

In addition to Piedmont, Tenet operates three other hospitals in South Carolina as well as 10 outpatient centers.

Carolinas HealthCare has 11 hospitals and contract-manages another 11, all in South Carolina and North Carolina.

Follow Beth Kutscher on Twitter: @MHbkutscher

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