Virginia Health Commissioner James B. Kenley has rejected a proposal by the Fairfax Hospital Association to close Commonwealth Hospital and build a new facility in western Fairfax.

The rejection, which was mailed to the hospital association Monday, casts considerable doubt over whether a hospital will be built in that region in the next few years.

According to Kenley, the Fairfax Hospital Association failed to demonstrate that patients who would be served by the proposed Fair Oaks area hospital "do not currently enjoy reasonable access" to other hospital facilities.

He also said that the move would "add significant costs to the health care system," costs which would have to be borne by patients and taxpayers. He noted that both the Health Systems Agency of Northern Virginia and the Statewide Health Coordinating Council had recommended denial of the application.

Hospital association spokesman Peggy Pond said yesterday that the group would appeal the decision, but declined further comment because she said the association had not yet received Kenley's letter.

This week's decision marks the second time in as many cases that Kenley has rejected recent attempts by hospital groups to gain a foothold in the potentially lucrative, fast-growing area of western Fairfax County.

Last year, Kenley turned down a request by Humana Inc., to build a 200-bed hospital in the Reston-Herndon area. Humana appealed the decision, and a hearing before the State Corporation Commission has been scheduled for May 12.

The Hospital Corporation of America had also indicated an interest in western Fairfax, near the intersection of I-66 and Rte. 50, not far from the site eyed by the Fairfax Hospital Association. But in a surprise move last month, Hospital Corporation withdrew its application about a week before public hearings were scheduled to start.

Hospital Corporation said at the time that it wanted to examine other areas in Fairfax before proceeding with the $36.6 million project. Health observers speculated that the company might just drop the plan altogether, although the company insisted it was still interested in the region. Hospital Corporation spokesman Milt Capps said yesterday that the group has not yet reached any decision, however.

In his letter to the Fairfax Hospital Association, Kenley said that although its plan would not increase the number of licensed beds in Northern Virginia, it would increase the number of beds actually available for use. That's because Commonwealth is licensed to use 160 beds but actually uses only 138, or 22 beds less than its licensed total. State health planners believe that the region already has too many beds in operation.

He also said that the proposal to move some beds from Mount Vernon Hospital to a new facility will not cut fixed costs at Mount Vernon and thus will not cut the rise in costs associated with empty beds.