‘Micro-hospital’ draws suit from a full-sized rival

The Crystal Lake, Ill.-based Centegra Health System has filed a lawsuit against Mercy Health System and the Illinois Facilities and Services Review Board, alleging that the agency’s approval of a new Mercyhealth “micro-hospital” violates the board’s own standards, is out of its jurisdiction and creates an oversupply of hospital beds in the area.

“The board’s approval of the application was arbitrary and capricious, and an abuse of discretion,” according to a complaint filed July 25 in the McHenry County Circuit Court. “Its explanation for approving the project ran counter to the evidence and was implausible.”

Rockford-based Mercyhealth, a five-hospital system in Wisconsin and Illinois, received nearly unanimous approval from the Illinois Health Facilities Review Board in late June to construct a 13-bed “micro-hospital” in Crystal Lake. Six of the seven Board members voted to approve the facility. The Health Facilities & Services Review Board, which decides the fate of health care projects to prevent duplicating services, twice rejected Mercyhealth’s previous hospital proposals in 2011 and 2012.

Mercyhealth has said the new $81.7 million hospital would not add any patient beds to the area, a crucial point, because many medical centers statewide are saddled with vacant beds. Instead, Mercy plans to shift 11 medical-surgical beds (the most common in a hospital) and two intensive care unit beds from its hospital in Harvard to the one proposed in Crystal Lake.

In its January application to state regulators, Mercyhealth says it’s targeting those who need outpatient care, Medicaid patients and a growing baby-boomer population that now leaves the area to find doctors.

But neighboring rival Centegra says the project isn’t needed and puts patients at risk if they’re seriously injured and don’t realize that a micro-hospital doesn’t have the capabilities to treat them, according to the complaint.

Centegra argues that, although the new “micro-hospital” would not add beds to the…

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