# A UK LLC wants to build a rehab facility in Lexington. Its future is uncertain. **Published:** 2026-05-27T09:30:50.000Z **Source:** [Kentucky Lantern](https://kentuckylantern.com/2026/05/27/a-uk-llc-wants-to-build-a-rehab-facility-in-lexington-its-future-is-uncertain/) **Republished from:** [Kentucky Lantern](https://kentuckylantern.com/2026/05/27/a-uk-llc-wants-to-build-a-rehab-facility-in-lexington-its-future-is-uncertain/) (CC BY-NC-ND 4.0) **Canonical:** https://kentuckylantern.com/2026/05/27/a-uk-llc-wants-to-build-a-rehab-facility-in-lexington-its-future-is-uncertain/ By Sarah Ladd, [Kentucky Lantern](https://kentuckylantern.com) · May 27, 2026 ![](https://kentuckylantern.com/wp-content/uploads/2023/07/GettyImages-1267796043-scaled-1-1024x666.jpeg) ((Getty Images)) The University of Kentucky wants to build a physical rehabilitation hospital in Lexington — and while its application for a certificate of need was initially approved by the state, the matter is now under appeal. After more than two years of back and forth in the courts, the project’s future is unclear. According to court documents, UK LLC [Rehab Blue](https://sosbes.sos.ky.gov/BusSearchNProfile/Profile.aspx?ctr=1322714) applied for a Certificate of Need (first in November 2023 and again in July 2024) seeking to construct a 60-bed inpatient rehabilitation facility in Lexington at 2550 Winchester Road. Cardinal Hill, which operates a 158-bed rehabilitation facility in Lexington, also applied to expand by 22 beds. Additionally, Cardinal Hill opposed UK’s certificate of need application, concerned UK would partner with Lifepoint, and that the “private-equity backed healthcare service provider,” which [operates several hospitals](https://www.lifepointhealth.net/locations) in Kentucky, had helped draft the initial application. Lifepoint is owned by Apollo Global Management, a massive private equity company. The initial application was later refiled without Lifepoint’s help, according to court filings, but Cardinal Hill sought documents about the relationship and agreements between the two that weren’t disclosed. Still, even with the refiled application, “the fundamentals of the project had not changed,” Cardinal Hill said in court filings, writing: “UK was still proposing a 60-bed rehabilitation hospital at the same address to be built by and possibly operated by Lifepoint or some other entity. Just as with the First Application, UK proposed in the current application to lease the hospital back from the builder. UK changed the proposed lease term from an initial seven-year term in the First Application to a 20-year term in the current Application, which Lifepoint had initially requested.” The proposed location is the same address on which [UK announced in 2022 it planned to build a medical campus](https://www.kentucky.com/news/local/education/article262621712.html). Cardinal Hill and its lawyers did not immediately respond to Lantern requests for comment. Lawyers for UK deferred to the public relations office. A UK spokeswoman said only that “as the matter is before the Court of Appeals and the subject of continued litigation, we are not able to comment at this time.” #### Certificate of Need Certificate of Need laws are meant to [control health care costs](https://www.ncsl.org/health/certificate-of-need-state-laws) by limiting duplicate services, according to the National Conference of State Legislatures (NCSL). Without CON, hypothetically, a community could have many duplicates of the same service. That could force a facility — such as a hospital — [to raise prices](https://kentuckylantern.com/2023/07/17/kentucky-health-care-providers-defend-certificate-of-need/) to compensate for underutilized services brought on by that competition. [What to know about the certificate of need debate in Kentucky](https://kentuckylantern.com/2024/01/22/what-to-know-about-the-certificate-of-need-debate-in-kentucky/) CON has been the subject of much debate in the Kentucky legislature in recent years with lawmakers [fighting to reform](https://kentuckylantern.com/2026/03/10/no-such-thing-as-a-competitors-veto-and-other-arguments-as-kentucky-con-debate-renews/) the process. According to court documents, both UK and Cardinal Hill have “agreed there is a need for additional inpatient rehabilitation services in Fayette County.” The Cabinet for Health and Family Services approved both CON applications, according to court documents, which would allow for 240 total rehab beds. (Later, in November 2025, Franklin Circuit Court Judge Phillip Shepherd reversed Rehab Blue’s CON and sent the issue back to the Cabinet for Health and Family Services for more review). In a January 2025 complaint and petition for review and appeal, Cardinal Hill took issue with staff overlap that it said could hurt its practice: “Cardinal Hill and UK have a unique relationship because 21 of the 28 admitting physicians on Cardinal Hill’s medical staff are employed by UK,” that document stated. “It makes sense that UK will take five teams of physicians out of Cardinal Hill to work at its 60-bed hospital because each physician team does not see more than 12 patients, which means that UK will need five teams to operate 60 beds,” that complaint says, adding that “the removal of five teams will devastate Cardinal Hill.” “Losing so many physicians and program directors will require Cardinal Hill to rebuild most of its clinical programs, which will have a negative effect on patients,” the complaint says. “UK’s Application will not achieve comprehensive care, proper utilization of services, and efficient functioning of the health care system. Instead, UK’s proposal will devastate Cardinal Hill just so UK can have its own rehabilitation hospital.” In a February 2025 response, UK’s Rehab Blue pointed out “additional indicators of need” on top of the “consistently growing volume and acuity of acute care discharges projected through 2029.” Those needs, UK wrote, “included the high level of occupancy at Cardinal Hill; the absence of any other high-intensity rehabilitation services in eastern Kentucky; population growth in Fayette County; the need for a facility that accommodates the research mission of UK; the need for UK to increase offerings and competitiveness in health professional education, internships, and residencies; the absence of an IRF that accepts patients regardless of ability to pay; and the absence of rehabilitation services for pediatric patients.” #### The timeline Below is a non-exhaustive timeline of the case, as detailed in court documents: - October 9, 2023: UK files paperwork to establish a for-profit Rehab Blue LLC with the Secretary of State. University of Kentucky general counsel William E. Thro is the registered agent for the LLC. Eric Monday, UK’s executive vice president for finance and administration is the only officer listed. - November 1, 2023: Rehab Blue applies for a certificate of need to build a rehab facility in Lexington. - July 31, 2024: UK files a second application without Lifepoint. - July 31, 2024: Cardinal Hill files an application to add 22 beds to its rehabilitation hospital. - September 19, 2024: Both applications are on public notice. Cardinal Hill requested a public hearing to oppose UK’s application and UK requested a public hearing on Cardinal Hill’s application, but said it would “not oppose the Cardinal Hill application being approved except to the extent that the hearing officer may decide only one of the two applications can be approved.” - November 6-8, 12, 14, and 26, 2024: Public hearings on the applications held. - December 27, 2024: Both applications are approved. - January 24, 2025: Cardinal Hill files a petition for review and appeal, asking a Franklin Circuit Court judge to disapprove UK’s CON. - November 18, 2025: Franklin Circuit Court Judge Phillip Shepherd reverses Rehab Blue’s certificate of need and sent the issue back to the Cabinet for Health and Family Services for more discovery and “to more thoroughly address the impact of the proposed Rehab Blue hospital of UK on interrelationships and linkages with existing health care providers.” Shepherd found that the cabinet hadn’t properly or fully examined all relevant information before approval. - Dec. 17, 2025: Rehab Blue files a notice of appeal. In Shepherd’s November 2025 order, he wrote that the “denial of the discovery requests regarding UK’s contract and planning with LifePoint resulted in a lack of critical information, and it constituted a denial of Cardinal Hill’s right to effectively cross-examine UK’s witnesses. The lack of complete factual record on these issues must result in a finding that the record lacks substantial evidence to support the Final Order,” which refers to the CON application approval. The purpose of CON approval is to ensure that Kentuckians have ‘safe, adequate, and efficient medical care,’ to ‘improve the quality and increase access to health-care facilities, services, and providers,’ and to ‘create a cost-efficient health-care delivery system,’” Shepherd wrote. “This fundamental purpose must guide the Cabinet in its approval of CON applications.” #### Read Shepherd’s order [Shepherd order on Rehab Blue](https://kentuckylantern.com/wp-content/uploads/2026/05/SHepherd-order.pdf) [GET THE MORNING HEADLINES. SUBSCRIBE](https://kentuckylantern.com/subscribe) ## Sources - [Kentucky Lantern](https://kentuckylantern.com/2026/05/27/a-uk-llc-wants-to-build-a-rehab-facility-in-lexington-its-future-is-uncertain/)