The legal struggle to open a for-profit rehabilitation center in Johnston continues.

Encompass Health has appealed a decision by a state hearing officer that rejected a Department of Health-issued Certificate of Need (CON) for the facility.

The case now goes to Superior Court.

“Nobody likes competition I guess,” Johnston Mayor Joseph M. Polisena said shortly after the hearing officer’s report was released. “I would have trusted the director of public health to make the decision.”

Polisena has long been a proponent of the planned hospital, proposed for Hartford Avenue, just past the Interstate 295 overpass, near the site of the proposed Amazon distribution facility.

“Encompass has filed an appeal,” Rhode Island Department of Health Public Information Officer

Joseph Wendelken said last week. “It will be taken to superior court.”

Department of Health Director Dr. Nicole Alexander-Scott approved the initial application for the $42 million, 50-bed inpatient rehab facility in 2020.

“Encompass Health looks forward to building a rehabilitation hospital in Johnston,” according to a statement from Alabama-based Encompass Health Corp., provided Tuesday by the company’s senior manager of public relations, Danielle Hall. “There is a significant need for inpatient rehabilitation services in Rhode Island.”

An argument over the state’s “need” for the facility has been at the center of debates connected to the hospital, between the town, the state and health care advocates on both sides of the issue.

“The Executive Director of the state’s Certificate of Need (CON) agency recommended that Encompass Health receive a CON to proceed with the construction of a 50-bed rehabilitation hospital,” according to the statement from Encompass. “Unfortunately, an administrative law judge reviewing the decision disagreed with the state’s health planning agency.”

Last month, hearing officer Catherine R. Warren released a 21-page decision finding that Encompass had not proven the need for the facility.

“How can some so-called hearing officer roll this thing back and reverse this decision?” Polisena asked this week. “What was it based on? I’m cynical.”

Polisena said the hospital is expected to provide around 100 local jobs.

Encompass had 30 days to file an appeal, and the company filed its appeal last week.

“On (Sept. 3) Encompass Health appealed the administrative judge’s opinion and is requesting the Superior Court of Rhode Island to reinstate the Executive Director’s decision and grant Encompass Health a CON,” according to the statement from Encompass. “The proposed Encompass Health hospital will provide access to high-quality inpatient rehabilitation services for individuals recovering from a debilitating injury or illness, including stroke, traumatic brain injury, spinal cord injuries, and other complex neurological and orthopedic conditions. We still believe the residents of Rhode Island deserve access to these specialty post-acute rehabilitation services close to home.”

Encompass Health first proposed the facility prior to the start of the COVID-19 pandemic.

The Johnston Town Council sent the matter through to the state Health Services Council, which held several meetings examining the state’s need for another rehab hospital.

Ultimately, after testimony, the council reached a 3-2 decision to send the application to the desk of Alexander-Scott.

“The decision was based on specific criteria,” Wendelken said in an email in 2020. “After careful consideration, Dr. Alexander-Scott determined that the proposal met the requirements, including those related to public need and affordability.”

The proposal also has industry opponents, and several offered testimony while the application process was pending.

Hospital Association of Rhode Island President Teresa Paiva Weed and Rhode Island Health Care Association President and CEO Scott Fraser both spoke out against the need for another inpatient rehab hospital.

Both argued that current facilities across the state are more than sufficient for Rhode Island’s needs, and building a new Encompass facility would hurt other hospitals in Rhode Island.

“The Hospital Association of RI is disappointed in and disagrees with the decision,” Paiva Weed said in a 2020 statement. “We are very concerned about the potential impact it will have on our existing rehabilitation facilities and our employees.”

In 2020, Fraser said that construction of the Johnston facility “will have a detrimental effect on our state’s nursing homes.”

“A lot of these facilities don’t like competition,” Polisena said.

Johnston’s mayor promises the hospital will be a boon to the local tax base.

“‘For-profit’ means they pay taxes,” Polisena said. “This would not be a free ride. The taxpayers would benefit from this.”