HOLLY SPRINGS — Two regional hospitals have suspended negotiations over a proposed medical facility here.

Rex Healthcare’s and WakeMed Health & Hospitals’ latest debate heated up last September, when Rex won state permission to build a 50-bed hospital in Holly Springs. WakeMed quickly protested Rex’s plans, arguing that the beds assigned to Rex would better serve the WakeMed campus in Raleigh.

The Department of Health and Human Services allows only a fixed number of new hospital rooms to be built each year, with its decisions often causing fierce competition and endless appeals.

The competing hospital systems entered into talks about the Holly Springs hospital sometime after WakeMed filed its appeal with regulators, apparently trying to avoid an extended fight. But those discussions ground to a halt early last month, said Holly Springs Mayor Dick Sears.

“I’m told that Rex went a long way in trying to make a deal with WakeMed, offered a whole bunch of things to do to make this thing work, and WakeMed rejected,” said Sears, who has made many calls for a hospital in Holly Springs.

Alan Wolf, a Rex spokesman, confirmed that WakeMed vetoed a Rex offer last month, but didn’t disclose details of the proposal.

“The talks have been suspended,” he said. With no amicable solution in sight, the decision now falls back to the DHHS, Wolf said.

The DHHS should issue a decision on the appeal sometime this summer, at which point either party could again appeal, Wolf said. WakeMed representatives were not immediately available for comment.

Sears, an outspoken critic of the regulatory process that governs hospital construction in the state, said the end of the talks was another example of a flawed system.

“If you win, it’s appealed, if you lose, you appeal, and it goes on forever,” he said.

Kenney: 919-460-2608 or twitter.com/KenneyOnCary