Cape Fear Valley Health System has apparently broken the confidentiality of mediation by telling The Fayetteville Observer that FirstHealth rejected its proposal for a two-hospital solution in Hoke County.

The state has approved plans by each health system to build hospitals near Raeford, and both have used legal appeals to block the other from starting construction.

The Fayetteville Observer reported last Friday that Cape Fear Valley offered to withdraw its appeal if FirstHealth of the Carolinas agreed to move its hospital from its proposed location on U.S. 401 east of Raeford to a site in western Hoke County.

The current location is about 2.5 miles west of Cape Fear's proposed location near the Hoke-Cumberland County line.

Cape Fear's offer came during a mediation session last Thursday that lasted 10 hours with no conclusions.

"We have always supported a two-hospital solution. After months of urging Cape Fear, we are pleased Cape Fear finally sees the merit of our solution," Gretchen Kelly, director of public relations for FirstHealth, said in a statement to the newspaper. "Once Cape Fear notifies us that it is dropping its appeal, we will do the same and start construction of a hospital in Hoke County. We assume Cape Fear would do the same."

Kelly declined to comment further until the mediation process is complete.

"Unfortunately, Cape Fear prematurely abandoned the mediation process by speaking to the media," she said in the statement. "Mediation is ongoing and importantly is confidential. It would be inappropriate for First-Health to speak further on the details of the negotiations."

Kelly said FirstHealth is currently waiting for a date from the mediator to resume negotiations.

"The process is not over," she said. "The details and specific negotiations during mediation are confidential. While Cape Fear breached those terms, we will not."

On June 15, FirstHealth submitted a new application for a certificate of need that would allow it to build a 65-bed hospital, a $100 million project that would supersede previous plans. FirstHealth initially proposed building an eight-bed hospital at a projected cost of $34.1 million.

Either project would be constructed on a 30-acre site on U.S. 401 about halfway between Raeford and the Cumberland County line.

Cape Fear Valley has proposed a $92 million, 41-bed hospital on 60 acres of land it has purchased off U.S. 401 closer to the Hoke-Cumberland line.

Contact Ted M. Natt Jr. at tnatt@thepilot.com.