In re Certificate of Need Application of CentraState Med. Ctr. to Initiate Full Serv. Adult Cardiac Catheterizations

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.

DOCKET NO. A-1605-18T3

DOCKET NO. A-1606-18T3

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Argued October 15, 2020

December 7, 2020

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.

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 uniquelocation, 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 heartprogram. 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,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 constructionor 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 theheart 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.

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.

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...