The Maine Department of Health and Human Services has given the green light for Maine Medical Center to build a 40,000-square-foot outpatient surgery center in Scarborough.

Due to the project’s approximately $25 million cost and size, the state had to review the project and issue a ruling certifying that the state needs the services the building will provide.

Mercy Hospital, which is moving to a new larger building on the Fore River in Portland, contested the expansion in June, claiming that the expansion was unnecessary and would hurt its business.

“Certainly our concerns and perspectives are the same as they have been,” said Tim Prince, vice president of planning at Mercy Hospital.

He would not say what Mercy’s next step will be in the process, although there is an appeal process open to them.

“We are assessing what if any next steps might make sense from our side of things,” he said, adding that the most important thing for Mercy to do is continuing to offer its medical program and continuing its work on constructing its new facility, which is expected to open in early 2008.

The state found there is sufficient need for the expansion and said the new facility will provide improved availability and efficiency for Maine Med ambulatory surgical services, according to its final report.

The project will entail the construction of a 10-operating room ambulatory surgery center and a six-bed overnight stay unit at the hospital’s Scarborough campus on Route 1.

According to Wayne Clark, associate vice president of communications and marketing for Maine Med, the project would likely start in the fall or spring, after the necessary state and local permitting is received.

The project is now in front of the Scarborough Planning Board, which Monday reviewed the plan. Board Chairman Michael Wood does not expect the project will generate much controversy.

“Nothing came up that indicated to us there were going to be any issues,” he said.

Most of the board’s discussion on Monday revolved around internal traffic at the site and possible improvements to better handle the increased traffic associated with the building.

Wood said the proposal was thorough and final approval could come at one of the board’s next two meetings, which will be held within the next five weeks.

Once the permitting is in place, Clark expects the project will take 18 months to be fully operational. It will increase Maine Med’s operating room capacity from 26 to 31 rooms.

In its review of Maine Med’s proposal, the Department of Health and Human Services felt the need for the additional space was necessary based on the increasing need for Maine Med’s surgical facilities.

Between 1996 and 2001, Maine Med’s admissions increased by 13 percent compared to a statewide average of 3 percent. Maine Med’s emergency department visits increased by 26 percent during the same time period, according to the state report.

The use of Maine Med’s surgical centers have seen a similar increase: The hospital has seen a 33 percent increase in surgical cases and a 24 percent increase in surgical housing from 1996 to 2003.

“We started this project because our operating rooms are running at capacity and the need for surgical services at MMC continues to rise with no end in site,” said Maine Med CEO Vincent Conti in a statement. “We are responding to the needs of people who want to have their care here.”

According to the state’s report, the increased surgical capacity will improve the availability of operating room capacity at Maine Med’s main Portland building on Bramhall Hill for complex inpatient, emergency and trauma surgeries.

It also is expected to minimize cancellations and delays at the Bramhall campus when more pressing issues arise. Finally, it will consolidate the majority of Maine Med’s ambulatory surgical services at a single facility in Scarborough, improving efficency, the report said.