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Mercy hospital project in Crystal Lake receives final blow

Published: Monday, July 14, 2014 5:21 p.m. CDT • Updated: Monday, July 14, 2014 11:35 p.m. CDT

CRYSTAL LAKE – A twice-rejected hospital proposed in Crystal Lake received a final blow Monday, when a state panel overseeing health facilities unanimously accepted an administrative judge’s ruling on the project.

Mercy Health System in October 2012 first asked for the administrative hearing after the Illinois Health Facilities and Services Review Board twice denied Mercy's proposal to build a $115 million, 70-bed hospital in Crystal Lake.

The judge since sided with the board’s original decision made in December 2011 that the project would unnecessarily duplicate existing health care services in the area. The state board during its regular meeting on Monday accepted the judge’s ruling, effectively ending the project at the board level.

“We are disappointed in the judge’s ruling to deny our plans to build a hospital in Crystal Lake,” said Mercy Vice President Barb Bortner. “We continue to believe that the health care needs are not being met in the Crystal Lake area.”

Mercy still could appeal the ruling in circuit court, although Mercy has seen its rival Centegra Health System start constructing a $233 million hospital in Huntley since seeking an administrative hearing.

Mercy officials did not comment Monday on a possible appeal.

Mercy originally envisioned the Crystal Lake hospital with 128 beds but downsized the project to 70 beds after the state board initially rejected the plan in December 2011. Even with the changes, the board upheld its decision the following September.

The board also twice rejected Centegra's hospital plans on the same grounds that it would duplicate services but reversed course and approved the plan in July 2012. A subsequent lawsuit from Centegra's competitors delayed construction until a judge upheld the board's approval last November.

In 2004, Mercy won approval from the state board to build a 70-bed hospital at the same location in Crystal Lake, but the project ultimately was ensnared in a kickback scandal.

Although Mercy officials were never accused of any wrongdoing, the scandal ultimately caused a judge to reverse the board’s approval.

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