When Cancer Treatment Centers of America dropped its legislative bid earlier this year to ease state restrictions on its Newnan hospital, the company indicated that its quest was not over.

That effort took on a dramatically new shape Thursday, with a controversial proposal that won initial approval from the board of the state Department of Community Health.

The proposal, if it gains a final OK from the board, would allow CTCA to seek a reclassification as a general acute-care hospital. And if the cancer hospital wins a “certificate of need’’ for that change, it could then avoid the current restriction of having no more than 35 percent of its patients come from Georgia.

The CTCA effort undoubtedly will draw fierce opposition from the hospital industry. Officials from the industry were already buzzing about the move before the board voted.

Clyde Reese, the Community Health commissioner, acknowledged Thursday that the CTCA proposal is controversial. “It will be problematic to many hospital competitors’’ of the cancer hospital, he said.

“The proposal would “build a bridge that does not exist today,” Reese added.

During the Georgia General Assembly session, the high-profile hospital chain supported House Bill 482, sponsored by state Rep. Wendell Willard (R-Sandy Springs), which would have eliminated the requirement that 65 percent of the cancer hospital’s patients come from out of state. That rule was imposed by the Legislature in 2008 when it allowed CTCA to build the facility.

Willard’s legislation, which met ferocious opposition, also would have also allowed the cancer hospital to expand its bed capacity.

Georgia’s hospital industry was adamantly against the bill. Industry officials questioned whether CTCA had even adhered to the out-of-state requirement, and they also questioned the Newnan facility’s level of charity care.

CTCA called the critics unfair and self-interested.

This time, the CTCA proposal has switched from the Legislature to an administrative route.

Reese told reporters, “We’re changing the venue of the fight. This issue is not going away.”

CTCA executive David Kent told Georgia Health News last year that due to the 65 percent restriction, the CTCA facility has been forced not to admit some Georgians seeking care. “We started turning Georgia patients away last fall,’’ Kent said.

He said the other hospitals’ opposition to the bill is more about protecting their competitive advantage gained through the state’s certificate of need (CON) program.

CON is the regulatory apparatus in Georgia, as in some other states, that governs the construction and expansion of health care facilities.

Under Georgia law, hospitals are required to obtain CON licenses for major construction projects and service expansions. CON laws are aimed at controlling health care costs, but their detractors claim they are anti-competitive and counterproductive. Many states have repealed such laws.

A for-profit company known for its sophisticated marketing, CTCA also operates cancer hospitals in Philadelphia, Tulsa, Phoenix and Chicago. Its Newnan facility opened in 2012.

CTCA has been politically active with financial contributions. The AJC reported last year that since 2006, the company has contributed about $340,000.

Reese said Thursday that a public hearing on the reclassification issue will be held in October, and that a final board vote will come in November.

He added that if the CTCA proposal passes the board, and if the company wins its CON, it would need a separate CON to expand its bed capacity past its current limit of 50.

CTCA issued a statement Thursday after the Community Health board vote that said, “We look forward to reviewing the proposed rule during the public comment period and determining our response. We remain committed to working with our public officials to increase access to the highest quality cancer care available.”

Georgia Hospital Association’s president and CEO, Earl Rogers, said in a statement that the proposed rule changes “are clearly outside current law as, once again, CTCA seeks special treatment for themselves.  While we will continue to gather input from the entire Georgia hospital community, expect GHA to vigorously oppose this proposal at each step.”