Cone says Duke/Novant application has “fundamental inconsistencies”
In written comments it has filed with the state about a competitor’s proposal to build a hospital in Mebane, Cone Health contends that a Certificate of Need application filed by Duke Novant “contains fundamental inconsistencies” (see related story, this edition).
Cone Health says the application should be rejected as “non-conforming” to the state’s Certificate of Need (CON) requirements due to ambiguity over the identity of the “applicant entity” and a purported lack of clarity about whether the Durham-based Duke University Health System or Novant Health in Winston-Salem would own and operate the proposed hospital in Mebane.
Duke Health and Novant Health described the proposed Duke Novant Mebane Hospital as a joint venture between the two systems in the CON application they filed on April 15, 2025.
“The Duke Novant application lacks substantive details regarding how the proposed new joint venture hospital would be operationalized and managed,” Cone Health states in the written comments about its competitor’s proposal. “This approach stands in stark contrast to the comprehensive, thoughtfully planned full-service hospital proposal submitted by Cone Health.”
Cone Health notes that the CON application filed for Duke Novant Mebane Hospital lists three different applicant names: Alamance Health Company, LLC; Duke Novant Mebane Hospital; and Alamance Health LLC.
“Beyond these inconsistencies, the application critically fails to provide any discussion of the intended management or operations of the proposed hospital,” Cone Health stated in its comments about the application its competitor filed to build a hospital in Mebane. “The North Carolina Certificate of Need statute and regulations require clear identification of the applicant entity to ensure proper accountability, evaluate financial capability, and assess qualifications to provide the proposed services.”
‘Lack of sufficient planning’
Other statements in Duke Novant’s CON application regarding support services – such as which healthcare system and/or contract vendors would be responsible for patient accounting, information technology, janitorial, laundry, linen, and security services – suggest “a lack of sufficient planning and clear understanding of how the hospital will be operationalized, as these are all critical administrative, support, and ancillary services of any acute care hospital,” Cone Health states in its comments about the proposed Duke Novant Mebane Hospital.
The county’s incumbent hospital provider also contended that ambiguity surrounding “critical administrative, support, and ancillary services” also raises questions regarding the financial projections such as operating costs outlined in Duke Novant’s application. Cone also contends that Duke Novant “inappropriately relies on Duke Raleigh Hospital and Duke Regional Hospital” in projecting patient volume for outpatient surgical services, diagnostic imaging, and other services at its proposed hospital in Mebane.
“Beyond population differences, the dynamics of the Wake and Durham healthcare markets bear no resemblance to Alamance County’s healthcare landscape,” Cone Health states in its written comments about the proposed Duke Novant Mebane Hospital. “Adding to these discrepancies, the application projects that 90 percent of Duke Novant Mebane Hospital patients will originate from Alamance County, indicating a highly localized service area… Duke Raleigh Hospital and Duke Regional Hospital draw patients from a much broader geographic area, with only 62.93 percent of Duke Raleigh Hospital patients and 53.61 percent of Duke Regional Hospital patients originating from their respective home counties.”
Cone Health insists that “there is clear regulatory precedent” for rejecting a CON application that relies on “inappropriate facility comparisons” in projecting patient utilization. According to Cone’s written comments on its competitor’s proposal, a CON application that Novant had filed in Buncombe County in 2022 was deemed “non-conforming for similar methodological flaws.”
Elsewhere in its written comments about the proposed Duke Novant Mebane Hospital, Cone Health notes, “Alamance Regional Medical Center [which is part of Cone Health] has demonstrated strong historical utilization and created the need for 46 additional acute care beds in Alamance County. In contrast, Duke Novant has no existing acute care beds in Alamance County and thus no historical utilization to demonstrate.”
“Duke Novant similarly relies on facilities from large urban counties with different competitive dynamics, populations, and healthcare infrastructure to project utilization in a county that is partially rural,” according to the written comments that Cone Health submitted to the CON section within DHHS last month.
Cone also takes issue with projections for the first three years of overhead expenses (such as salaries, medical supplies, taxes, training, and equipment) that Duke Novant outlined in its CON application – and suggests that the proposed Duke Novant Mebane Hospital would eventually be running a deficit.
“Without sufficient documentation demonstrating the long-term financial feasibility of a facility projected to operate at a loss, the application fails to conform…and should not be approved,” Cone Health states in the written comments about its competitor’s proposal that were submitted to the CON section last month.
A decision by the Healthcare Planning and Certificate of Need Section is expected later this year, according to the CON applications that have been filed by Cone Health and Duke Novant.
Both Cone and Duke Novant have given a general timeframe for opening a hospital in Mebane as the first half of 2029, based on the application materials the two hospital systems filed with the state on April 15.
