The owner of Capitol Hill Hospital, who had planned to convert it by year's end to a facility for long-term care, reopened the hospital's emergency room yesterday morning and announced last night that the hospital will remain open in its present form for at least two months.

But in the meantime, Medlantic Healthcare Group, owner of the hospital at 700 Constitution Ave. NE, said it will challenge a D.C. Superior Court judge's ruling this week requiring Medlantic to get approval from the District's health planning board to close its medical, surgical and emergency room services.

Medlantic's announcement came at the end of a day of abrupt policy shifts. The hospital closed its emergency room to city ambulances at midnight, restored all emergency room services at mid-morning and modified its position further during a well-publicized news conference with Mayor Marion Barry.

The news conference, which also was attended by representatives of the Coalition to Save Capitol Hill Hospital, had seemed to signal a truce in the bitter battle over the facility.

"This is a good news day. We've been able to get people together to work out a very difficult situation," Barry said. "I'm optimistic it's going to work . . . . "

John McDaniel, president of Medlantic, appearing with Barry, declared that his organization is committed to providing health care services in the Capitol Hill area, and blamed current problems on increased numbers of patients who can't pay.

"I echo the need for a cooperative and understanding relationship between all parties involved in trying to maintain that facility as a premium and high-quality provider," McDaniel said.

"We are committed," McDaniel said. "We will work with the coalition and we will work with the city to do what has to be done."

Harold Brazil, who recently was elected to represent Ward 6 on the D.C. Council and who serves as chairman of the coalition, said after the news conference that all parties seemed to have worked out "an agreement in principle" to work toward a solution. At the same time, Brazil admitted the agreement was "fuzzy."

In a statement issued last night, Medlantic spokesman Philip Schneider reiterated the group's earlier decision to fight the court ruling. "Medlantic is disappointed with the court's ruling and believes it to be wrong," the statement said.

D.C. Superior Court Judge Gladys Kessler ruled Tuesday that Medlantic would have to obtain a certificate of need from the District's health planning board to shut down the hospital as an acute care facility.

Medlantic has not yet sought such approval, though it has applied for a certificate to operate Capitol Hill as a long-term care facility.

The planning board has indicated that it will rule on Medlantic's application by late February.

Schneider said that employment for workers scheduled to be laid off has been extended through Feb. 20, and that during the next 60 days Medlantic will seek to obtain supplemental funding to help cover the hospital's operating losses, determine if there is a potential purchaser of the hospital at a fair price, and try to gain approval for the conversion to specialty care uses.

Schneider emphasized that Medlantic will pursue all three options simultaneously and will not delay its push for conversion.