Mount Nittany Health on Tuesday, June 30, 2026.
Abby Drey
adrey@centredaily.com
Mount Nittany Medical Center now estimates that losing its sole community hospital designation will cost at least $15.1 million annually — about 67% more than previously thought — as it sues the federal government to have the status restored.
The hospital included the updated figure in a court filing last week, one in which it asked a federal judge to rule in its favor without proceeding to trial. The number was previously estimated at $8.9 million annually.
Across more than 200 pages, the second-largest employer in Centre County painted a bleak outlook if the U.S. Department of Health and Human Services decision is allowed to stand. The hospital said it would damage its ability to invest in its workforce, halt a handful of planned expansions for a growing and aging population in Centre County and degrade its reputation.
Kurt Kissinger, the health system’s chief strategy and system development officer, said in a sworn declaration that Mount Nittany is likely to forgo hiring physicians, nurses and other healthcare professionals at the levels it otherwise would have had the designation not been terminated.
“SCH reimbursement has helped support Mount Nittany Health’s ability to provide high-quality care locally and invest in the services, technology, facilities and providers our community needs,” the health system wrote on its website. “Seeking restoration of the designation is part of our continued commitment to preserving Mount Nittany Health as an independent, community-governed health system, with decisions about healthcare in our region made locally.”
A Mount Nittany spokesperson did not immediately respond Monday to a question about why the estimated financial loss increased since the lawsuit was filed in June. The latest court filing details the estimate came from an analysis prepared by consulting and accounting firm Baker Tilly.
Mount Nittany was designated a sole community hospital in September 2017, a status it enjoyed until it was stripped in April. The intent of the program is to ensure geographically isolated hospitals receive greater reimbursement for care provided to Medicare beneficiaries.
In order for hospitals to qualify, the government looks at criteria such as distance from a similar hospital and percentage of inpatient admissions in a service area. The math, according to the government, changed when Penn Highlands State College opened in 2024 about four miles away.
But Mount Nittany has argued the government improperly amalgamated the inpatient volumes of Penn Highlands State College and the larger and farther away Penn Highlands Huntingdon. By its calculations, Penn Highlands State College accounts for only 5.41% of Mount Nittany’s inpatient volume — falling short of a key 8% threshold.
The hospital’s attorneys described the HHS policy as “substantively and procedurally unlawful.”
The government’s deadline to respond is Oct. 26. There is no timeframe for a decision from U.S. District Judge Matthew Brann, who likely won’t be able to rule on the case until at least Dec. 21.
Centre County and statewide elected officials have expressed support for Mount Nittany in the months since the status was revoked. The county commissioners have said they disagree with the decision, find it to be a serious mistake and penalizes the region for dividing services.
U.S. Sen. Dave McCormick and U.S. Rep. Glenn “GT” Thompson, each Republican, have either urged HHS to reconsider or said they believe federal law favors Mount Nittany.
Centre Daily Times
Bret Pallotto primarily reports on courts and crime for the Centre Daily Times. He was raised in Mifflin County and graduated from Lock Haven University.