This rural NY hospital is trying to reopen after six years

It’s no secret that rural hospitals are struggling. With over 700 hospitals at risk of closing, 77% of rural counties considered care deserts, and looming cuts to Medicaid, you rarely hear of facilities reopening after a closure.

A group in upstate New York is trying to change this course, however, as it works to reopen TLC-Lakeshore Hospital in Irving and turn it into a New York Medical Center facility for behavioral health and substance use disorder treatment.

“If the hospital closes, usually it just stays closed and it doesn’t get to be repurposed,” Ray Manning, CEO of New York Medical Center, which is also referred to as NE Med, told us. “But we have that unique option right now, being able to open it as a behavioral health facility.”

Investing in Irving. Before shuttering in 2020 after a 2019 $7.1 million deficit following a Chapter 11 bankruptcy and subsequent reorganization from 2013–2017, 45-bed TLC-Lakeshore was the only hospital in the area that offered behavioral health and substance use disorder specialty treatment.

But TLC’s mental health units were not enough to support the rest of the hospital’s operations. “Even though those units may have been making money, there was too much space and not enough capital,” Manning said.

“Once [the specialty services] left, they never came back,” Wendy Luce, licensed health executive, told us, adding that it’s a 60-minute drive to the next closest mental health hospitals in larger cities like Buffalo or Jamestown.

In Chautauqua County, where the hospital is based, behavioral health hospitalizations average 88.4 per 10,000 people compared to 60.6 in the state at large, according to 2019 data from the county’s Department of Health and Human Services. The county reported in 2022 that the opioid overdose death rate was 20.2% per 100,000 people, higher than the state rate of 14.9%. There’s also a mental health crisis among young people, with youth behavioral health hospitalizations at 70 per 100,000, compared to 25.5 at the state level.

The new facility will have 25 inpatient substance use treatment beds and 25 women-and-child residential beds, both with detox capabilities, Manning said. It will also have 40 geratric psych beds, 40 beds for adult psychiatric care, 20 adolescent psych beds, and 12 pediatric psych beds.

“Prior, we only had adult psych at this facility,” Manning said. “We’re looking to expand it based on the needs of the community.”

The current goal is to have the first 25 beds open in May or June, Manning said.

When asked for comment, the American Hospital Association directed Healthcare Brew to statements from 2024, including one in which Sean Fadale, president and CEO of Nathan Littauer Hospital and Nursing Home in the rural Gloversville, New York, said: “From the beginning of my healthcare career through the present day, there has been one constant challenge that my organizations have had to deal with: access to consistent and quality behavioral health services.”

Financing and paperwork. The rebuild is propped up by $40 million in investments through an EB-5 Immigrant Investor Program, Manning said, which allows foreign nationals who invest in local enterprises to apply for permanent residency in the US.

“There are a lot of renovations that have to be put in place to make sure that it’s safe for the patients with behavioral health [concerns],” Manning said, like ligature-free safety products, which are designed to provide extra security.

And just like everything else in healthcare, opening a new hospital requires a lot of paperwork. (Becker’s highlighted six other hospitals around the country trying to make the same thing happen as of last March.)

The team started applying for licensure with the state on Aug. 8 , meeting with the county since early 2025 and, to meet larger state requirements, is currently working through acquiring a certification of need, which hospitals apply for to demonstrate that their expansion or construction project will provide services needed in the community. This process includes sharing financial, staffing, and patient-related information.

On Feb. 26, the team will attend a Behavioral Health Services Advisory Council meeting where it will present the organization for licensure for the first 25 beds. If approved, the hospital is likely to stay on track for a spring or early summer open, Manning said.

“We want to become a hub for behavioral health and substance use treatment,” he said.