IN THE MATTER OF THE CERTIFICATE OF NEED APPLICATION OF CENTRASTATE MEDICAL CENTER, ETC. (NEW JERSEY DEPARTMENT OF HEALTH) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NOS. A-1605-18T3
A-1606-18T3
IN THE MATTER OF THE
CERTIFICATE OF NEED
APPLICATION OF
CENTRASTATE MEDICAL
CENTER TO INITIATE FULL
SERVICE ADULT CARDIAC
CATHETERIZATIONS.
___________________________
IN THE MATTER OF THE
CERTIFICATE OF NEED
APPLICATION OF
CENTRASTATE MEDICAL
CENTER TO OFFER ON-SITE
PRIMARY PERCUTANEOUS
CORONARY INTERVENTION.
____________________________
Argued October 15, 2020 – Decided December 7, 2020
Before Judges Whipple, Rose and Firko.
On appeal from the New Jersey Department of Health,
CN Nos. ER 0801-13-01 and ER 0802-13-01.
James A. Robertson argued the cause for appellant
(Greenbaum Rowe Smith & Davis, LLP, attorneys;
James A. Robertson, of counsel and on the briefs; John
W. Kaveney and Parampreet Singh, on the briefs).
Melissa H. Raksa, Assistant Attorney General, argued
the cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, of counsel; Mark
D. McNally, Deputy Attorney General, on the briefs).
PER CURIAM
In these two appeals we calendared back-to-back and have consolidated
for the purpose of writing one opinion, CentraState Medical Center appeals from
two final agency decisions issued by the Department of Health (DOH): (1)
denying its application for permission to expand its low-risk catheterization
laboratory (low-risk cath lab) to include high-risk cardiac diagnostic services
within a full-service adult diagnostic cardiac catheterization laboratory (full-
service cath lab); and (2) denying its application for permission to expand its
service line by offering on-site primary percutaneous coronary intervention
(PCI) services, as a complement to those already offered in its low-risk cath lab.
The DOH refused to process CentraState's application in both matters
because the hospital failed to meet the threshold eligibility and application
review criteria set forth in the applicable regulations. CentraState appealed the
rejection of both applications, emphasizing that the hospital demonstrated a
special need to provide full-service cardiac care in the region due to its unique
A-1605-18T3
2
location, its service to a predominantly elderly population, and the growth of its
primary service area (PSA). We reject these arguments and affirm both
decisions.
I.
A.
The material facts of each claim are generally undisputed and are gleaned
from the record. In CentraState's matter filed under docket number A-1605-18,
the hospital sought to expand its cardiac program to include a full -service cath
lab. CentraState is a stand-alone community hospital located in Freehold and
primarily serves residents from Monmouth, Middlesex, Mercer, Ocean, and
Burlington Counties, the PSA. According to CentraState's application
describing the PSA, the area recently underwent a transformation from farmland
to residential developments, increasing the area's population, tourism, and need
for modern conveniences.
Currently, CentraState's cardiology services include a cardiac diagnostic
center, which performs electrocardiogram (EKG), echocardiogram, and stress
testing, the low-risk cath lab, cardiac rehabilitation,1 and a women's heart
1
CentraState's cardiac rehabilitation program has been accredited by the
American Association of Cardiovascular and Pulmonary Rehabilitation.
A-1605-18T3
3
program. CentraState has operated its low-risk cath lab since April 20, 2005.
In 2016, CentraState noted 692 patients who received or could have received
low-risk cardiac catheterization services at its facility. 2 CentraState also cites
487 additional patients from its service area who went to other hospitals for
these procedures, which it could have served if it had the proper facilities.
CentraState contends it has an active, award-winning endovascular
program, which performed 4088 procedures at the time of its application. The
program allows CentraState physicians to perform stent procedures "on every
other area of the body except the heart," despite the general use of the same type
of wire and stents and oftentimes, the performance of higher-risk procedures.
Currently, the program has twenty-two physicians credentialed to perform low-
risk catheterizations in CentraState's low-risk cath lab, and a minimum of three
registered nurses or technologists available for each procedure.
According to an Outpatient Press Ganey report, CentraState scored a
ninety-five percent patient satisfaction rating for the period commencing
February 1, 2017 through April 30, 2017. William H. Matthai, Jr., M.D., FACC,
2
This number includes the 205 low-risk catheterizations performed at
CentraState, the 127 patients admitted for these procedures but transferred
elsewhere, and the 360 elective catheterizations that were scheduled by
cardiologists elsewhere due to unavailability of PCI at the hospital.
A-1605-18T3
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FACP, FSCAI, conducted an external review of the low-risk cath lab specifically
and found it to be "outstanding" in accordance with DOH requirements. Dr.
Matthai was impressed that there had never been a procedure-related mortality
in the low-risk cath lab and emphasized its safety initiatives. He concluded that
the quality of care in CentraState's low-risk cath lab was "excellent and decision
making appropriate," with proper patient selection and care, and an experienced
physician and nursing staff.
On August 1, 2017, CentraState submitted a certificate of need (CN)
application to the DOH seeking to expand its cardiac program to include a full-
service cath lab. CentraState sought to expand its low-risk catheterization
program to include invasive cardiac diagnostic services for adult patients within
a full-service facility at the hospital. Doing so would permit CentraState to treat
patients with conditions that are classified as high-risk.3 Because there is no
physical difference between a low-risk cath lab and a full-service cath lab,
CentraState contends the program expansion would not require any construction
3
CentraState provided examples of high-risk conditions including: left main
coronary syndrome, unstable myocardial infarction, acute myocardial infarction
within three days, unstable angina with persistent angina, congestive heart
failure, cardiogenic shock or severe hemodynamic instability, aortic stenosis,
ejection fraction below thirty percent, or concomitant severe medical or vascular
problems.
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or renovation, or even the acquisition of additional equipment, other than minor
supplies.
In making these applications, CentraState cited a special need for basic,
essential cardiac care among the disproportionately elderly populations living
within its PSA, specifically in Monroe and Jackson Townships. CentraState
emphasized that the hospital's patients are on average sixty-eight years old, and
Monmouth County, in particular, accounts for 7.3% more residents over the age
of sixty-five than the average for the entire State of New Jersey. Truven Health
Analytics projections indicate that the number of people aged sixty-five and
older living within CentraState's PSA would increase 16% by 2021. Further,
CentraState cited that the percentage of Monmouth County residents with some
form of cardiovascular disease was 9% higher than the national average and
were more likely than others in the nation to have at least one cardiovascular
risk factor, like high blood pressure, high cholesterol, or diabetes.
Currently, residents living within CentraState's PSA must travel farther to
receive basic cardiac services than those living within close proximity to other
hospitals that offer those services. Freehold is located within a triangle of
highways, with no fluid access through the middle of Monmouth County. There
is no train service that runs from east to west in Monmouth County, leaving the
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heart of the county unserved by that form of public transportation , and it can
also take up to an hour-and-a-half for a patient to arrive by bus from certain
parts of CentraState's PSA.
Therefore, if a patient who is admitted at CentraState must be transferred
to another hospital to receive services not offered at its hospital, the transfer
could involve up to four patient hand-offs,4 which is inconsistent with
coordinated patient care and patient risk. And, it adds at least an additional hour
of travel time to the small window patients have to receive life-saving cardiac
procedures, which is approximately ninety minutes.
Based on this information, in its application, CentraState asserted a
substantial need for cardiac services in its PSA. While CentraState failed to
meet the DOH's 400-low-risk case volume requirement and precondition for a
full-service cath lab, it argued that the DOH was still required to address this
substantial need and to relax its regulatory requirements.
4
A patient who first appears at CentraState's emergency room is first transferred
to the CentraState cardiac team. If the cardiac services cannot be provided at
CentraState, the patient must be transferred to emergency medical personnel for
transport in an ambulance to another hospital. The emergency transporters then
hand-off the patient to the other hospital's emergency personnel, and finally to
the receiving hospital's catheterization lab staff.
A-1605-18T3
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On November 2, 2018, the DOH Director, Certificate of Need and
Healthcare Facility Licensure Program, issued a written final decision. In his
decision, the Director refused to process CentraState's application to expand its
low-risk cath lab to include high-risk cardiac diagnostic services because it
"failed to document full unconditional compliance with the eligibility and
application review criteria set forth at N.J.S.A. 8:33E-1.3 [to] -1.10." For a low-
risk cath lab to apply for expansion, it must demonstrate compliance with a
minimum annual volume of 400 cases, which CentraState failed to do. Because
of CentraState's inability to meet that requirement for submission of its
application the DOH refused to review the substance of the request.
On appeal, CentraState claims that because the DOH "flatly refused to
process" the application instead of addressing it on the merits, the DOH did not
learn of the special need for services presented by "the uniqueness of
CentraState's geographic location, the extensive population growth across
Monmouth and other surrounding counties, and in particular, the elderly
populations residing in Jackson and Monroe Townships . . . ." Instead of
analyzing the merits of the application, CentraState claims the DOH flatly
refused to process it, and did not properly consider the special needs it identified
in its rejection.
A-1605-18T3
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B.
Turning to CentraState's matter filed under docket number A-1606-18, the
hospital sought to expand its service line by offering on-site PCI services, as a
complement to those already offered in its low-risk cath lab. Primary PCI is a
non-surgical procedure which uses a catheter to place a stent into the heart for
the purpose of opening blood vessels that have been narrowed by plaque
buildup. CentraState intended these expansions to its low-risk catheterization
program to offer a broader range of life-saving cardiac services to adult patients
within a full-service facility at the hospital. Doing so would permit CentraState
to treat patients with conditions that are classified as high-risk.
Because there is no physical difference between a low-risk cath lab and a
full-service cath lab, the program and service expansion would not require
physical construction or renovation, or even the acquisition of additional
equipment, other than minor supplies. Additionally, all of the physicians on
CentraState's medical staff who would be responsible for performing primary
PCI procedures are already qualified to do so, and perform them frequently at
other facilities. The cardiologists and nursing staff also regularly conduct stent
and balloon procedures on every other part of the body in CentraState's
A-1605-18T3
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Endovascular Division. Given this information, CentraState claims to be
staffed, equipped, and prepared to offer primary PCI services.
In making this application, CentraState made the same demographic and
statistical arguments as in the other matter under docket number A-1605-18.
The DOH refused to process CentraState's application for the provision of PCI
services because it must first operate as a full-service adult diagnostic cardiac
catheterization program for a period of six months. Because Centra -State was
not licensed to operate as a full-service cardiac facility at the time it submitted
its application, the DOH refused to consider it.
In a November 2, 2018 letter, the Director denied processing CentraState's
CN application regarding PCI services because the hospital "failed to document
full unconditional compliance with the eligibility and application review criteria
set forth in [the administrative code]." Specifically, CentraState's:
eligibility to initiate primary angioplasty (PCI) without
on-site cardiac surgery backup is limited to any general
hospital having a full[-]service adult diagnostic cardiac
catheterization program that has been licensed for at
least six months . . . prior to the application submission
date and has documented, to the satisfaction of the
[DOH], licensure and full compliance with all cardiac
catherization program and facility utilization for the
most recent four quarters.
A-1605-18T3
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On appeal in this matter, CentraState argues: (1) the DOH's failure to
accept CentraState's CN application for processing and grant a CN to provide
primary PCI services violates our holding in Irvington General Hosp. v.
Department of Health;5 (2) the DOH's regulation imposing a requirement that
CentraState operate a full service diagnostic catheterization laboratory for six
months as a precondition to applying for a CN to offer primary PCI services is
arbitrary and inconsistent with the 400-case volume requirement regulation,
which is undermined by modern science; and (3) the DOH failed to make any
findings of fact or conclusions of law as to CentraState's contention that special
need for cardiac services exists among the over sixty-five populations in Monroe
and Jackson townships warranting a remand.
II.
Our review of an agency's decision is limited. In re Stallworth, 208 N.J.
182, 194 (2011) (citing Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)).
A reviewing court "should not disturb an administrative agency's determinations
or findings unless there is a clear showing that (1) the agency did not follow the
law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the
decision was not supported by substantial evidence." In re Virtua-West Jersey
5
149 N.J. Super. 461 (App. Div. 1977).
A-1605-18T3
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Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008) (citing In re
Herrmann, 192 N.J. 19, 28 (2007)); see also Bergen Pines Cty. Hosp. v. N.J.
Dep't of Human Servs., 96 N.J. 456, 477 (1984).
CentraState argues that the DOH improperly disqualified the hospital's
CN application for a full-service cath lab on the grounds that CentraState has
not demonstrated compliance with the minimum annual facility volume
requirement of 400 cases. CentraState contends the decision ignored the factors
enumerated in the CN statute, as well as the clear mandate of Irvington General,
149 N.J. Super. at 461.
Establishment of health care facilities in New Jersey is governed by the
Health Care Facilities Planning Act (HCFPA), N.J.S.A. 26:2H-1 to -26, which
allows the State to supervise changes in the statewide delivery of health care.
In re Virtua-West, 194 N.J. at 416. The government oversight includes the
construction, expansion, modernization, and addition of health care facilities,
services, and plans. Desai v. St. Barnabas Med. Ctr., 103 N.J. 79, 88-89 (1986).
The legislative intent of the HCFPA is "to provide state residents with high
quality health care services at a contained cost." In re Virtua-West, 194 N.J. at423 (citing N.J.S.A. 26:2H-1).
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In furtherance of that objective, the HCFPA implemented the CN process,
which requires health care providers to submit proposals to the DOH before any
new health care facility is constructed or expanded. N.J.S.A. 26:2H-7. The
HCFPA dictates that no CN shall be issued unless the action proposed in the
application is
necessary to provide required health care in the area to
be served, can be economically accomplished and
maintained, will not have an adverse economic or
financial impact on the delivery of health care services
in the region or Statewide, and will contribute to the
orderly development of adequate and effective health
care services.
[N.J.S.A. 26:2H-8.]
Specifically, in assessing a CN, the Commissioner of Health must consider:
(a) the availability of facilities or services which may serve
as alternatives or substitutes,
(b) the need for special equipment and services in the area,
(c) the possible economies and improvement in services to
be anticipated from the operation of joint central services,
(d) the adequacy of financial resources and sources of
present and future revenues,
(e) the availability of sufficient manpower in the several
professional disciplines, and
(f) such other factors as may be established by regulation.
A-1605-18T3
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The State Health Plan may also be considered in
determining whether to approve a certificate of need
application.
[N.J.S.A. 26:2H-8.]
The DOH is required to consider this criterion in determining whether to grant a CN.
The process may be done on an "expedited" basis, which dispenses with the
otherwise necessary secondary review by the State Health Planning Board and
leaves it entirely in the hands of the DOH. N.J.A.C. 8:33-4.1(b).
Regulations adopted under the HCFPA "establish standards and general
criteria for the planning of cardiac diagnostic facilities and for the preparation
of an application for a [CN] for such a facility." N.J.A.C. 8:33E-1.1(a). Invasive
cardiac diagnostic facilities must meet the minimum standards and criteria set
forth in N.J.A.C. 8:33E-1.1(d). Because "[t]he American College of
Cardiology/American Heart Association Task Force supports the position that
the safety and efficacy of laboratory performance requires a caseload of
adequate size to maintain the skills and efficacy of the staff[,]" N.J.A.C. 8:33E -
1.1(c), "[u]tilization criteria for all invasive cardiac diagnostic facilities are
based on the number of patients upon whom invasive cardiac diagnostic
procedures . . . are performed." N.J.A.C. 8:33E-1.4(a).
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Specifically, all facilities licensed to provide invasive cardiac diagnostic
services pursuant to low-risk catheterization facility standards must maintain a
minimum of 200 adult cardiac catheterization patients per year. N.J.A.C. 8:33E-
1.4(c)(1). All facilities licensed to provide full-service invasive cardiac
diagnostic services must maintain a minimum of 400 adult cardiac
catheterization patients per year. N.J.A.C. 8:33E-1.4(b)(1). The volume
requirements are calculated based on the last four quarters of operation prior to
the facility's licensure anniversary date. N.J.A.C. 8:33E-1.4(b)(1). Applications
to provide new full-service invasive cardiac diagnostic services are limited to
[l]icensed providers of low-risk cardiac catheterization
services that have demonstrated full unconditional
compliance with State licensure requirements that
includes . . . compliance with the minimum annual
facility volume requirement for full[-]service cardiac
catheterization (that is, 400 cases) . . . throughout their
. . . most recent four quarters of operation . . . .
[N.J.A.C. 8:33E-1.15(a)(1).]
"Pursuant to the Planning Act, and specifically N.J.S.A. 26:2H-7, no
health care facility, including a hospital, may construct new facilities, expand
existing ones, or initiate a new health care service, unless a CN has been applied
for by the facility and granted by the Commissioner." In re Certificate of Need
for the Mem. Hosp. of Salem Cnty., 464 N.J. Super. 236, 247 (App. Div. 2020).
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"The ultimate policy goals of the Planning act are to 'protect and promote the
health of the inhabitants of the State' and to 'guard against the closing of
important institutions and the transfer of services from facilities in a manner that
is harmful to the public interest.'" Id. at 247-48 (quoting N.J.A.C. 8:33-1.1(a)).
Further, the Planning Act states that the Commissioner shall not grant a CN
unless the proposal:
is necessary to provide required health care in the area
to be served, can be economically accomplished and
maintained, will not have an adverse economic or
financial impact on the delivery of health care services
in the region or [s]tatewide, and will contribute to the
orderly development of adequate and effective health
care services.
[N.J.S.A. 26:2H-8.]
In determining whether to grant a CN, the Commissioner shall consider:
(a) the availability of facilities or services which may
serve as alternatives or substitutes, (b) the need for
special equipment and services in the area; (c) the
possible economies and improvement in services to be
anticipated from the operation of joint central services,
(d) the adequacy of financial resources and sources of
present and future revenues (e) the availability of
sufficient manpower in the several professional
disciplines, and (f) such other factors as may be
established by regulation.
[Ibid.; see also N.J.A.C. 8:33-4.9(a)(1)-(5); N.J.A.C.
8:33-4.10(b).]
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The application and review process regarding CNs is further outlined in
N.J.A.C. 8:33-1.1 to -6.2. In this regard, the applicable regulations provide for
either a full or expedited review of a CN application. N.J.A.C. 8:33-4.1(a) to
(b). As defined by N.J.A.C. 8:33-1.3, a full review includes "the review of an
application by the . . . Planning Board, as well as the Department," while an
expedited review "means the review by the Department of a [CN] application
meeting certain specified criteria" without a Planning Board review.
On November 2, 2018, the DOH refused to accept CentraState's CN
application for processing because the department found "the [a]pplicant failed
to document full unconditional compliance with the eligibility and appl ication
review criteria set forth in [the regulations]." Specifically, the DOH explained:
In accordance with N.J.A.C. 8:33E1.15(a)[(1)]
eligibility to initiate full[-]service cardiac
catheterization services is limited to licensed providers
of low[-]risk cardiac catherization services that have
demonstrated full unconditional compliance with state
licensure requirements that includes, but is not limited
to, compliance with the minimum annual facility
volume requirement for full[-]service cardiac
catheterization of 400 cases with the most recent data
available to the [DOH]. The [a]pplicant has not met the
eligibility criteria in that the most recent licensure of its
low[-]risk cardiac catheterization program is
conditional (effective May 1, 2018) and the
[a]pplicant's low[-]risk cardiac catheterization program
performed only 154 adult diagnostic cardiac
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catheterization cases for the four quarters ended March
31, 2018.
The DOH refused to process the application because CentraState did not meet
the threshold eligibility criteria. CentraState's licensure of its low-risk cath lab
was conditional, effective May 1, 2018, and it performed only 154 adult
diagnostic cardiac catheterization cases for the four quarters ending March 31,
2018, making it ineligible to apply for a full-service cath lab. See N.J.A.C.
8:33E-1.15(a)(1) (limiting applications for new full-service cath labs to
"[l]icensed providers of low-risk cardiac catheterization services that have
demonstrated full unconditional compliance with State licensure requirements
[including], . . . compliance with the minimum annual facility volume
requirement" of 400 cases).
CentraState does not contend that the DOH should have considered its
application because it met the regulatory requirements, but instead, that those
requirements should be disregarded. CentraState cites Irvington General for the
principle that the DOH erroneously relied on the case volume requirement in its
refusal to process the application and it should have instead relaxed its standards
in order to ensure the special need cited in its application was met.
In Irvington General, the hospital submitted an application for a CN
seeking to construct an addition to its building and to add two surgical beds, six
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intensive care units, and seventeen intermediate care beds, which are essentially
the equivalent of surgical beds. 149 N.J. Super. at 464. While the application
was pending, the Health Care Administration Board reclassified 150 long-term
care beds at another hospital to surgical beds, thereby creating an excess of the
type in Essex County. Id. at 465. The hearing officer then recommended the
application be denied solely on that ground. Ibid.On appeal, we held that while the hearing officer "was permitted to
consider the latest statistics on bed need at the time of the remand hearing[,]" it
did not mean "those figures [could] be the sole determinative factor." Id. at 466.
We cited N.J.S.A. 26:2H-8, emphasizing that certificates are issued upon a
showing that the action "is necessary to provide required health care in the area
to be served, can be economically accomplished and maintained, and will
contribute to the orderly development of adequate and effective health care
services[,]" taking into account the several enumerated factors. Ibid.In that case, we concluded the hearing officer erroneously rejected the
application as not "necessary" to provide health care services to the area, only
citing "the availability of facilities or services which may serve as alternatives
or substitutes" as a factor in the decision, without reference to the others. Id. at
467 (citing N.J.S.A. 26:2H-8). We remanded for consideration of all the factors
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set out in N.J.S.A. 26:2H-8, specifically, "the need for special . . . services in
the area" for the Township of Irvington's large density of citizens over the age
of sixty-five. Id. at 467-68.
CentraState argues the holding in Irvington General requires this court to
reverse the DOH decision in this case because the DOH wrongly relied
exclusively on the 400-case volume requirement to the exclusion of other CN
factors and because the DOH failed to recognize the special need for full
services among the residents aged sixty-five and older living within the
hospital's PSA.
First, CentraState argues that the DOH's sole reliance on the 400-case
volume requirement is the equivalent of its erroneous reliance on bed statistics
in Irvington General because the decision similarly ignores the remaining CN
statutory factors. CentraState contends the DOH reached its decision by only
considering the sixth statutory factor, "such other factors as may be established
by regulation[,]" to the exclusion of the others, including "the need for special
equipment and services in the area" when it refused to process the application
citing N.J.A.C. 8:33E-1.15(a)(1). And, CentraState claims the DOH's neglect
of the remaining factors was at odds with the statute and the holding of Irvington
General, and therefore, constituted improper ultra vires action.
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CentraState cites the 487 patients from its PSA who had to inconveniently
undergo low-risk cardiac catheterizations at other hospitals because of
CentraState's limited services, as well as the rapidly growing elderly population
in the area, as support for its argument that the CN is "necessary to provide
required health care in the area to be served." N.J.S.A. 26:2H-8. CentraState
also emphasizes that it requires no additional construction or improvement to its
facilities if the CN is granted, showing that the action can easily be
"economically accomplished and maintained." Ibid.CentraState additionally notes that there is no indication there will be "an
adverse economic or financial impact on the delivery of health care services in
the region or Statewide" if the CN is granted and argues that its history of highly-
rated service will translate to the "orderly development of adequate and effective
health care services" in the full-service cath lab. Ibid. CentraState maintains
that the DOH erroneously ignored its satisfaction of all of the elements of
N.J.S.A. 26:2H-8 and relied solely on the outdated case volume requirement to
deny its application.
Whether CentraState made a showing under the statutory factors is
irrelevant and the holding of Irvington General is inapplicable here.
CentraState's argument focuses on N.J.S.A. 26:2H-8, and emphasizes that it has
A-1605-18T3
21
met the requirements for a CN to be issued by the DOH. Even if that is true,
however, CentraState failed to meet N.J.A.C. 8:33E-1.15(a)(1), which outlines
the requirements to submit a CN application in the first place.
The regulatory requirements were intended to "establish standards and
general criteria for the planning of cardiac diagnostic facilities and for the
preparation of an application for a [CN] for such a facility." N.J.A.C. 8:33E -
1.1(a). The requirement for submission of a CN application to provide full-
service invasive cardiac diagnostic services, relevant to the issue in this case,
includes the applicant be a "[l]icensed provider[] of low-risk cardiac
catheterization services" that has complied with the State's licensure
requirements, including "with the minimum annual facility volume requirement
for full[-]service cardiac catheterization (that is, 400 cases) as set forth at
N.J.A.C. 8:33E-1.4(b)(1) . . . ." N.J.A.C. 8:33E-1.15(a)(1). The reason this
requirement is important is because "the safety and efficacy of laboratory
performance requires a caseload of adequate size to maintain the skills and
efficiency of the staff." N.J.A.C. 8:33E-1.1(c).
Here, the record is clear that CentraState's low-risk cardiac catheterization
program was conditional, effective May 1, 2018, and performed only 154 adult
diagnostic cardiac catheterization cases in the relevant period, plainly failing to
A-1605-18T3
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satisfy the 400-case requirement. Because CentraState did not meet the
"[e]ligibility for submission of [CN] applications[,]" the content of its
application was immaterial. The question of whether a CN should be granted
only arises when an application is properly submitted. See N.J.A.C. 8:33E-
1.15(a)(1). Therefore, whether CentraState met the statutory factors of N.J.S.A.
26:2H-8 is not germane to our analysis.
In Irvington General, the hospital's application was submitted to the
DOH and accepted for consideration. See id. at 464-65. Upon evaluation of the
application, the hearing officer recommended the request be denied and the
Board agreed based on the bed statistics in the county. Id. at 465. We remanded
the matter because the DOH focused entirely on "the availability of facilities
. . . which . . . serve[d] as alternatives or substitutes" in the area, and ignored the
remaining factors of N.J.S.A. 26:2H-8, including "the need for special
equipment and services in the area." Id. at 468.
The holding of Irvington General is inapplicable here because, in that
case, the application was properly before the DOH and the issue centered on
whether the DOH should have issued the CN, not on whether the application
should have been submitted at all. Because the application was accepted for
processing, it presumably met the threshold requirements that CentraState failed
A-1605-18T3
23
to overcome here, inviting argument on the N.J.S.A. 26:2H-8 factors. Therefore,
Irvington General simply does not and cannot stand for the principle that the
DOH has an obligation to address the statutory factors, including a special need
for services, when the applicant has not demonstrated a threshold eligibility to
apply.
Because the volume requirement is not one of the factors the DOH must
consider when issuing a CN, but instead, a threshold consideration for
submission of the application, the DOH did not wrongly rely on it to the
exclusion of any N.J.S.A. 26:2H-8 factors. Instead, the DOH's refusal to process
CentraState's CN application was consistent with the regulatory requirements
adopted under the HCFPA and the principles articulated in Irvington General.
CentraState also argues that, like in Irvington General, the DOH failed to
adequately consider the CN factors, including "the need for special . . . services
in the area." N.J.S.A. 26:2H-8(b). It argues that the DOH in this case similarly
ignored the large density of elderly citizens in the area and the lack of adequate
transportation to other hospitals in the county. Because the DOH failed to
account for the special unmet need for cardiac services in its PSA, CentraState
contends the DOH refusal of its application was in error.
A-1605-18T3
24
While in the Irvington General matter we faulted the DOH for relying
solely on bed need statistics and not the special need articulated in the hospital 's
application when evaluating its expansion request, the DOH in the matter under
review was not required to consider the substance of the application because the
requirements for submitting the application were not met. While CentraState
argues the DOH overlooked its articulated "special need," which it identifies as
a large density of elderly persons within its PSA and lack of public
transportation to and from the area, the DOH had no obligation to consider that
factor or any other in its determination of whether CentraState could submit a
CN application at all.
Moreover, the facility volume requirement for submission of a CN
application in N.J.A.C. 8:33E-1.15 is clearly a threshold issue in respect of the
DOH's consideration of whether to issue the requested relief in that application.
Accordingly, the DOH did not improperly ignore the special need asserted by
CentraState, but instead, properly refused to process its application for a
different reason entirely – that the hospital failed to maintain a caseload of
adequate size to demonstrate the skills and efficiency of its staff, necessary to
sustain a full-service cath lab. We conclude that the DOH complied with express
A-1605-18T3
25
legislative policies and did not act in an arbitrary, capricious, or unreasonable
manner. In re Herrmann, 192 N.J. 19, 27-28 (2007).
CentraState next contends that the applicable DOH regulations impose
two different, incongruent volume requirements and are therefore, internally
inconsistent. Further, CentraState claims that those same regulations are
contrary to law and modern science and should not be arbitrarily used to
summarily reject its application. Specifically, CentraState challenges the DOH's
interpretation of the regulation, calling it unreasonable and unsupported by the
record, because it: (1) creates volume prerequisites for CN applicants that
newly-licensed full-service cath labs do not need to demonstrate until their
second year of operations; (2) doubles the number of annual low-risk cases a
low-risk cath lab must perform; and (3) ignores modern science, including DOH
expert recommendations.
CentraState identifies the interplay between N.J.A.C. 8:33E-1.15 and
N.J.A.C. 8:33E-1.4 as problematic. The former sets forth the prerequisites for
the DOH to consider a CN application by a low-risk cath lab seeking to operate
as a full-service cath lab. The relevant language of N.J.A.C. 8:33E-1.15
includes:
Eligibility for the submission of such applications will
be limited to the following:
A-1605-18T3
26
Licensed providers of low-risk cardiac catheterization
services that have demonstrated full unconditional
compliance with State licensure requirements that
includes, but is not limited to, compliance with the
minimum annual facility volume requirement for
full[-]service cardiac catheterization (that is, 400 cases)
as set forth at N.J.A.C. 8:33E-1.4(b)[(1)] throughout
their second year of operation or their most recent four
quarters of operation, whichever is later . . . .
The latter regulation, incorporated by N.J.A.C. 8:33E-1.15(a)(1), more
thoroughly outlines the existing volume requirement:
[F]acilities licensed to provide full[-]service invasive
cardiac diagnostic services shall, as a condition of
continued licensure, be required to maintain the
following basic utilization criteria:
. . . The minimum acceptable number of adult cardiac
catheterization patients per full[-]service cardiac
laboratory is 400 per year. New full[-]service providers
(those previously operating as low[-]risk cardiac
catheterization laboratories) must provide
documentation of full compliance with the minimum
utilization level during their second year of operation
or their most recent four quarters of operation,
whichever is later and fully documented by the
Department using audited data. Existing full[-]service
invasive cardiac diagnostic providers (with or without
cardiac surgery on site) must achieve minimum
utilization levels each year. Compliance with minimum
annual facility volume requirements will be calculated
on the basis of the last four quarters of operation prior
to the facility's licensure anniversary date.
[N.J.A.C. 8:33E-1.4(b)(1).]
A-1605-18T3
27
CentraState contends that when both regulations are considered together,
they require only that CentraState demonstrate at the time it applies for a CN,
compliance with a 200-case volume and the ability to comply with a 400-case
volume by its second year of operation as a new full-service cath lab.
CentraState supports that position by arguing that a regulation requiring a new
facility to artificially meet the 400-case requirement of only low-risk
catheterizations is arbitrary and capricious, serving no logical objective.
Because CentraState identified over 400 patients it served or would have served
if it had the capacity of a full-service cath lab, CentraState claims to have met
the proper interpretation of the requirement.
We interpret regulations de novo. US Bank, N.A. v. Hough, 210 N.J. 187,
198-99 (2012) (citing Bedford v. Riello, 195 N.J. 210, 221-22 (2008)). In doing
so, we review the intent of the drafter as the paramount goal, which is generally
"found in the actual language of the enactment." Id. at 199. It is not the court's
function to "rewrite a plainly-written enactment" or "presume that the drafter
intended a meaning other than the one 'expressed by way of the plain language.'"
Ibid. (quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005)). We simply
construe the regulation as written. Ibid.A-1605-18T3
28
N.J.A.C. 8:33E-1.4(c)(1) is clear, and CentraState agrees, that all low-risk
catheterization facilities are required to meet the acceptable volume number of
200 cases per year. CentraState also concedes that it is evident from the
regulation's language that a full-service cath lab is required to maintain a volume
of 400 cases per year under N.J.A.C. 8:33E-1.4(b)(1). However, CentraState
contends the error in the DOH interpretation was that new full-service providers
are not required to maintain a 400-case volume before applying for a CN like
already operating full-service cath labs, but must alternatively show a
compliance with the 200-case volume requirement and an ability to comply with
the 400-case volume requirement by the second year of operation. We disagree.
N.J.A.C. 8:33E-1.15(a)(1) clearly requires that low-risk cath labs seeking
to submit a CN application to become full-service cath labs must demonstrate a
compliance with all State licensure requirements including "compliance with the
minimum annual facility volume requirement for full-service cardiac
catheterization (that is, 400 cases)" as set forth at N.J.A.C. 8:33E-1.4(b)(1). The
language clearly indicates that for a low-risk cath lab to become a full-service
cath lab, the low-risk cath lab must not simply show that it can comply with the
minimum annual facility volume requirement for a full-service cath lab, but
A-1605-18T3
29
actually comply with that requirement. To hold otherwise would ignore the
plain language of the regulation.
Instead, when read in conjunction with other regulatory provisions, it is
apparent the regulation's intent was to impose a more stringent standard on low-
risk cath labs seeking to provide full cardiac catheterization services, as opposed
to low-risk cath labs simply seeking to comply with their current 200-case
minimum to maintain low-risk licensure. See N.J.A.C. 8:33E-1.1(c) ("[T]he
safety and efficacy of laboratory performance requires a caseload of adequate
size to maintain the skills and efficiency of the staff."); N.J.A.C. 8:33E-1.4(a)
("Utilization criteria for all invasive cardiac diagnostic facilities are based on
the number of patients upon whom invasive cardiac diagnostic procedures
(cardiac catheterization) are performed."). CentraState's proposed interpretation
of the regulation is inconsistent with the statute's clear language and common
sense.
It is beyond cavil that a reading of the two regulatory requirements makes
clear CentraState had to maintain a 400-case volume throughout its second year
of operation or its most recent four quarters of operation, whichever was later,
in order to meet the requirements for submission of the CN application for a
full-service cath lab. The low-risk lab was required to demonstrate an ability of
A-1605-18T3
30
its staff and facilities to meet and maintain a 400-case volume, which would
become its new minimum if approved for full-service, before requesting that the
DOH consider making that number permanent. Therefore, we reject
CentraState's statutory argument to the contrary as it is unsupported by the
statute's language and clear intent to test the efficacy of the lab's performance
before considering its application for expansion.
CentraState also challenges the notion that the 400-case volume
requirement serves as a necessary means of maintaining quality of full-service
cath labs, calling it contrary to undisputed scientific evidence. In support of this
argument, CentraState points to the Cardiovascular Health Advisory Panel
(CHAP), a group created by N.J.A.C. 8:33E-1.14 to provide the Commissioner
with expert clinical and technical advice related to cardiovascular health policy,
which opined against the volume requirement in favor of more relaxed standards
to increase cardiac care providers in 2011. Specifically, CentraState highlights
CHAP's recommendations to abandon low-risk cath lab designations altogether,
to require low-risk facilities transitioning to full-service cath labs to perform a
minimum of 250 cases in the second year after transition to the new level of
service, and to permit the Commissioner to waive annual volume requirements
under certain circumstances.
A-1605-18T3
31
More recently, CentraState highlights the current legislative undertakings
to update the medical regulatory standards. CentraState contends pending
legislation focuses on eliminating distinctions between low-risk and full-service
cath labs, reducing the 400-case volume requirement to 250 cases, providing a
two-year transition periods for new full-service cath labs to meet volume
requirements, and codifying the Commissioner's waiver authority. See S.
2427/A. 3769 (2018). However, CentraState explains that, after a decade of
governmental inaction and the stall of the relevant bill before the July 2019
recess, it has no confidence a legislative solution is forthcoming and requests a
favorable decision by this court. CentraState contends that the CHAP
recommendations and pending bill reflect the scientific advancements in
cardiovascular services, lessening the need for strict regulatory oversight.
Saliently, CHAP's 2011 recommendations have not been implemented and
the pending legislation has not been signed into law. Therefore, the adopted
regulations remain unchanged and serve as the governing law in this case. See
Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 389 (2016) (alterations in
original) (quoting James v. N.J. Mfrs. Ins. Co, 216 N.J. 552, 573 (2014)) ("For
example, a party may not rely on pending legislation because '[t]he possibility
that a bill might become law is an expectation built on uncertainty until it
A-1605-18T3
32
happens.'"); Cty. of Hudson v. Dep't of Corr., 152 N.J. 60, 71 (1997)
("[A]lthough an administrative agency may change its regulations, so long as
they are in force the agency is bound by them."). Because the regulations are
clear and consistent, and it is not the court's function to "rewrite a plainly-written
enactment," Hough, 210 N.J. at 199, we see no basis to reverse the DOH denial
of CentraState's CN application.
CentraState next argues that the DOH failed to properly assess and
acknowledge all the CN factors as required, and instead, mechanically applied
the regulatory standard. CentraState contends the DOH was responsible for
considering its "special need" argument on the merits, and since the DOH chose
to reject the application, it was responsible for providing a reasoned explanation
for why the DOH believed that need was not established. In the alternative to
granting a full-service cath lab, CentraState seeks to have the matter remanded
to the DOH with instructions that it: (1) accept the application for processing;
(2) review the evidence within the application regarding the articulated need;
(3) grant or deny the CN based on those facts; and (4) issue findings and
conclusions of law on the merits. CentraState further requests that the DOH
complete its review within thirty days of remand. We reject CentraState's
arguments.
A-1605-18T3
33
Here, the DOH was not obligated to address CentraState's "special need"
argument on the merits because the CN application was not accepted for
processing for failing to satisfy the eligibility and application review criteria of
the regulations. The application did not even make it to the point of the process
where the DOH was supposed to review its substance. Without that review,
there can be no findings.
A CN application will only be accepted for review when a "[l]icensed
provider[] of low-risk cardiac catheterization services . . . ha[s] demonstrated
full unconditional compliance with State licensure requirements that includes
. . . compliance with the minimum annual facility volume requirement for
full[-]service cardiac catheterization (that is, 400 cases) . . . " at the designated
time. N.J.A.C. 8:33E-1.15(a)(1). Here, CentraState's most recent licensure was
conditional, effective May 1, 2018, and the low-risk cath lab only performed
154 adult diagnostic cardiac catheterizations for the most recent four quarters
ending March 31, 2018.
We reiterate that CentraState failed to meet the eligibility criteria to even
apply for the full-service cath lab, which was the basis of the DOH's rejection.
The DOH explained in its rejection letter:
Please be advised that the above-referenced [CN]
application to initiate full[-]service adult cardiac
A-1605-18T3
34
catheterization, submitted for consideration on August
1, 2017, cannot be accepted for processing . . . . The
[DOH] approved [CentraState's] requested six-month
deferral of the above noted CN application . . . effective
January 8, 2018 through July 8, 2018. Upon the
[a]pplicant's decision to reactivate the CN application,
the [DOH] finds the [a]pplicant has failed to document
full unconditional compliance with the eligibility and
application review criteria set forth at N.J.A.C. 8:33E-
1.3 through 1.10.
In accordance with N.J.A.C. 8:33E-1.15(a)[(1)]
eligibility to initiate full[-]service cardiac catherization
services is limited to licensed providers of low[-]risk
cardiac catheterization services that have demonstrated
full unconditional compliance with state licensure
requirements that includes, but is not limited to,
compliance with the minimum annual facility volume
requirement for full[-]service cardiac catherization of
400 cases with the most recent data available to the
[DOH]. The [a]pplicant has not met the eligibility
criteria in that the most recent licensure of its low[-]risk
cardiac catheterization program is conditional
(effective May 1, 2018) and the [a]pplicant's low[-]risk
cardiac catheterization program performed only 154
adult diagnostic cardiac catheterization cases for the
four quarters ended March 31, 2018.
We are satisfied the DOH provided a reasoned explanation for its rejection
of the application according to the regulatory guidelines and was not required to
address the substance of the application at that time. The findings of fact and
conclusions of law on the "special need" issue were irrelevant to the DOH's
A-1605-18T3
35
decision at this point, and not required in its initial rejection of the CN
application.
III.
Applying the same considerations to the matter under docket number A-
1606-18, we similarly reject CentraState's argument that the DOH improvidently
disqualified its application for primary PCI services summarily because the
hospital did not operate a full-service adult diagnostic cardiac cath lab for at
least six months. Again, we conclude that the DOH properly refused to process
CentraState's application because it did not meet the threshold eligibility
criteria.
On November 2, 2018, the DOH refused to accept CentraState's CN
application for processing because the department found "the [a]pplicant failed
to document full unconditional compliance with the eligibility and application
review criteria set forth in N.J.A.C. 8:33E-2.16." Specifically, the DOH
explained:
In accordance with N.J.A.C. 8:33E-2.16(a)[(1)]
eligibility to initiate primary angioplasty (PCI) without
on-site cardiac surgery backup is limited to any general
hospital having a full[-]service adult diagnostic cardiac
catheterization program that has been licensed for at
least six months as a full[-]service adult diagnostic
cardiac catheterization program prior to the application
submission date and has documented, to the satisfaction
A-1605-18T3
36
of the [DOH], licensure and full compliance with all
cardiac catheterization program and facility utilization
for the more recent four quarters. The [a]pplicant has
not met this eligibility criteria in that it is not currently
licensed as a full[-]service adult diagnostic cardiac
catheterization program.
At the time of its application for primary PCI services, CentraState only
operated a low-risk cath lab, and therefore, could not have operated a full-
service cath lab for the requisite six-month period. We agree with the DOH that
CentraState's application was not subject to consideration on that ground. It is
undisputed that at the time it submitted its CN application to provide primary
PCI services, CentraState did not operate as a full-service adult diagnostic
cardiac catheterization program. Indeed, CentraState submitted a simultaneous
application on the same date to become a full-service facility. We are
unpersuaded by the timing of the applications. Again, because CentraState did
not meet the threshold requirement to submit its CN application, the content of
its application was immaterial. And, whether CentraState met the statutory
factors of N.J.S.A. 26:2H-8 is unavailing.
In DOH's rejection letter relative to PCI services, it aptly stated:
Please be advised that the above-referenced [CN]
application to initiate primary angioplasty (PCI)
without on-site cardiac surgery backup, submitted for
consideration on August 1, 2017, cannot be accepted
for processing . . . . The [DOH] approved
A-1605-18T3
37
[CentraState's] requested six-month deferral of the
above noted CN application . . . effective January 8,
2018 through July 8, 2018. Upon the [a]pplicant's
decision to reactivate the CN application, the [DOH]
finds the [a]pplicant has failed to document full
unconditional compliance with the eligibility and
application review criteria set forth at N.J.A.C. 8:33E-
2.16.
In accordance with N.J.A.C. 8:33E-2.16(a)[(1)]
eligibility to initiate primary angioplasty (PCI) without
on-site cardiac surgery backup is limited to any general
hospital having a full[-]service adult diagnostic cardiac
catheterization program that has been licensed for at
least six months as a full[-]service adult diagnostic
cardiac catheterization program prior to the application
submission date and has documented, to the satisfaction
of the [DOH], licensure and full compliance with all
cardiac catheterization program and facility utilization
for the more recent four quarters. The [a]pplicant has
not met this eligibility criteria in that it is not currently
licensed as a full[-]service adult diagnostic cardiac
catheterization program.
We are not persuaded by CentraState's argument that the DOH wrongfully
failed to process its application for permission to expand its service line to
include PCI services. CentraState's remaining arguments are without sufficient
merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(D).
Affirmed.
A-1605-18T3
38