Can an out-of-state hospital system block a new project in Georgia? 

The owners of an aging northwest Georgia hospital want to replace it with a smaller state-of-the-art facility about 5 miles away and closer to I-75.

Under the state’s regulatory certificate-of-need (CON) system, other hospitals can contest CHI Memorial Hospital Georgia’s bid to get state approval for the replacement hospital, which would be located in Ringgold. No Georgia hospital system has objected.

But the road to construction has an unusual obstacle.

The CON for the $130 million project is being opposed by a health system based not in Georgia, but just across the state line in Tennessee. Parkridge Health System, with four hospitals in Chattanooga, is part of HCA Healthcare, a hospital chain.

CHI Memorial also has a hospital in Chattanooga and one in nearby Hixson.

Memorial is part of Chicago-based CommonSpirit Health, created in 2019 when Catholic Health Initiatives and Dignity Health merged.

CHI officials say they believe this is the first time an out-of-state health provider organization has led an opposition effort to a Georgia certificate-of-need application.

“Citizens want this hospital,” said Angie Stiggins, administrator of the nonprofit CHI Memorial Hospital Georgia, currently located in Fort Oglethorpe. “We’re trying to bring citizens a cutting-edge medical facility.’’

It would feature a 24-bed emergency department, expanded surgical services and a new intensive care unit.

The current CHI hospital, built in 1953, has 179 licensed beds. The new hospital would downsize to 64. “We don’t need 179 beds in our community,” Stiggins said.

A spokeswoman for Parkridge told GHN on Wednesday that the health system opposes the move to Ringgold, not the existing Fort Oglethorpe location.

“Parkridge Health System has served the residents of southeastern Chattanooga and North Georgia, including Catoosa County, for decades and is committed to providing high quality health care,” Michelle Hindmon said in a statement. “The proposed relocation will duplicate services in a region that is already well-served while reducing access to care for the patient base historically served by CHI Memorial Hospital Georgia, particularly Walker County residents.

“Parkridge Health supports equitable and sustainable access to health care; however, we do not feel CHI Memorial Hospital Georgia’s relocation supports that position.”

Tennessee also has CON regulations.

Georgia regulators’ decision, pending this month, will come shortly after tensions over the CON program surfaced again in the Georgia Legislature.

CON is a controversial system that governs the construction and expansion of health care facilities and regulates what kinds of services they can offer. A provider must obtain a state certificate of need, or CON, for any major project.

Such laws were adopted by states decades ago to control health care spending. But more than a dozen states have repealed these regulatory set-ups, Florida being one of the recent ones.

Like others before it, the recently concluded session of the Georgia General Assembly included major legislative proposals targeting CON – including one proposal to repeal the entire apparatus. As in past years, the hospital industry successfully lobbied against any changes.

Stan Jones, a longtime health care attorney and CON expert at the Nelson Mullins law firm, said Wednesday that it’s unusual for an out-of-state health system to oppose a hospital project in Georgia. “I don’t recall a situation where it has affected the outcome’’ of a CON decision, Jones added.

The powerful chairman of the Georgia Senate Rules Committee, Jeff Mullis (R-Chickamauga), said in a statement last year that community hospitals “are the lifeblood of the regions they serve, generating jobs and economic impact for local businesses, schools, local government, and residents.”

He added that “companies looking to locate in a new region put health care at the top of their list of requirements for their employees. This new hospital will be a significant boost to our regional economic development.”

Mullis, who is retiring from the Legislature this year, is also CEO and president of the Northwest Georgia Joint Development Authority.

Stiggins noted that U.S. Sen. Jon Ossoff (D-Ga.) has urged the state’s Department of Community Health to approve the replacement hospital.

She said she feels confident that CHI Memorial’s application for a CON will be approved by Georgia regulators.

But she pointed out that Parkridge could appeal that decision. Such appeal battles can take years to resolve.