For decades, Mount Nittany Medical Center has served as one of the primary health care providers for residents of Centre County and the surrounding area.

The College Township medical center is a 260-bed facility offering more than 60 medical specialties and other services. But in 2026, Mount Nittany has found itself at the center of several major developments that could shape the independent health system’s future.

Mount Nittany has been investing heavily in its facilities and services in recent years.

Among its major projects is a new $350 million, 10-story patient tower under construction. The health system has also invested $90 million in a new outpatient center at Toftrees, along with other facilities.

Those investments come as Mount Nittany works to maintain and expand the health care services available to the Centre County community.

The medical center has also emphasized its status as an independent, community-governed nonprofit health system. Officials say that maintaining that independence requires balancing investments in employees with the facilities, equipment, technology, and services needed to provide care.

That growth was accompanied by a months-long labor dispute between Mount Nittany and about 1,000 employees represented by SEIU Healthcare Pennsylvania.

Contract negotiations began April 29, and workers’ previous three-year agreement expired June 30. Employees sought wage increases they said would help with inflation and the rising cost of living in Centre County, as well as additional workplace safety measures.

After negotiations failed to produce an agreement, approximately 1,000 workers went on a five-day strike beginning July 27. It was the first strike at Mount Nittany since 2004.

The striking workers included employees across much of the medical center, including registered nurses, emergency department technicians, laboratory technicians, pharmacists, maintenance workers, radiology technologists, certified nurse aides, environmental services employees, and nutrition workers.

The hospital remained open during the strike, although some laboratory and imaging locations operated with modified hours or were temporarily closed. Mount Nittany used contingency staffing to maintain patient care, reportedly costing them $6.4 million.

After 15 negotiating sessions, the two sides reached a tentative agreement in September. Employees subsequently ratified a three-year contract running through June 30, 2029.

The agreement includes 3% general wage increases in each of the first two years and 2% in the third year. Employees will receive another 1% increase in the third year if Mount Nittany’s Sole Community Hospital designation is permanently restored.

The contract also includes pay grade adjustments for 22 positions, two weeks of fully paid parental leave, increased uniform and shoe allowances, and additional workplace safety measures.

At the same time, Mount Nittany is fighting to regain a federal designation that has provided the hospital with millions of dollars in additional Medicare reimbursements.

Mount Nittany held Sole Community Hospital status beginning in 2017. The designation provides higher Medicare reimbursement rates and other financial protections to hospitals that meet certain criteria, including geographic distance from another “like hospital.”

The designation was revoked in April following the 2024 opening of Penn Highlands State College.

Mount Nittany argues that federal regulators improperly treated Penn Highlands State College and Penn Highlands Huntingdon as a single entity when evaluating whether Mount Nittany still qualifies for the designation.

According to the lawsuit, Penn Highlands State College has 18 advertised inpatient beds, while state records indicate as few as six were staffed and operational. The federal government nevertheless combined its inpatient data with Penn Highlands Huntingdon’s 71 beds, which lay about 33 miles away.

Mount Nittany initially estimated that losing the designation would cost at least $9 million annually in additional traditional Medicare reimbursements, along with several million more from Medicare Advantage plans.

A later federal court filing put the projected annual impact at more than $15 million.

The medical center has sued the federal government, asking a judge to restore its Sole Community Hospital designation or require regulators to reconsider the decision using data from the State College Penn Highlands campus alone.

As of the latest filing, the federal government has until October 26 to respond, and the court has not scheduled a ruling date.

For Mount Nittany, the outcome could have significant implications as the health system continues investing in new facilities, services, and its workforce.