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Cooper River Convalescent Center Inc. v. Dougherty

Decided: March 19, 1975.

COOPER RIVER CONVALESCENT CENTER, INC., APPELLANT,
v.
WILLIAM J. DOUGHERTY, ACTING COMMISSIONER, N.J. STATE DEPARTMENT OF HEALTH, HEALTH CARE ADMINISTRATION BOARD OF THE DEPARTMENT OF HEALTH, STATE OF NEW JERSEY, RESPONDENTS



Leonard, Seidman and Bischoff. The opinion of the court was delivered by Bischoff, J.A.D.

Bischoff

This is an appeal from a decision of the Health Care Administration Board (HCAB) denying an application for a certificate of need (pursuant to N.J.S.A. 26:2H-1 et seq.) to enable appellant to construct 66 skilled or intermediate nursing home beds. The following abbreviated procedural history is sufficient for purposes of this appeal.

Appellant submitted its application on July 26, 1972, for a certificate of need to construct 66 skilled care nursing home beds, thereby expanding its 108-bed facility to 174 beds. This application was amended to include an alternative request for the issuance of a certificate of need for construction of 66 intermediate care beds, should there be no

need for skilled beds in the area. Appellant's application was forwarded to the Review Committee of the State Health Planning Council (SHPC), the coordinating agency which considers applications for certificates of need under the act (N.J.S.A. 26:2H-3). This Review Committee recommended to the SHPC that appellant's application be denied because the 1971 State Plan indicated that the region where appellant's facility is located was overbuilt by 203 beds, and the inventory for the 1972 State Plan, not yet adopted, also indicated that the region was overbuilt by approximately 200 beds. The SHPC on October 27, 1972 adopted the recommendations of the Review Committee and appellant was informed on November 15, 1972 that the Department of Health was recommending to the HCAB that appellant's application for a certificate of need for "the addition of 66 ECF [extended care facility] beds to the existing 108 bed nursing home facility" be denied. By letter dated March 16, 1973 the Commissioner of Health explained to appellant that the denial was intended to apply to its application for both skilled care beds and intermediate care beds, saying:

We digress to point out that the distinction between a skilled care facility (ECF) and an intermediate care facility (ICF) is in the level of nursing care provided. The required hours of skilled nursing services are not as high for intermediate care as for skilled care. The amount of time required in attendance in each category is established by regulations developed by federal agencies in connection with the Hill-Burton Program, 42 U.S.C.A. ยง 291 et seq.

The 1971 State Plan did not include an inventory of need for intermediate care because the federal requirements for

intermediate care had not then been established. However, an inventory of need for intermediate care was included in the 1973 State Plan for purposes of advance planning. On June 7, 1973 the 1973 State Plan became effective and indicated a need for 383 intermediate care beds and an excess of skilled care beds in a newly defined area which included appellant's facility. However, this same 1973 State Plan imposed a moratorium on the issuance of certificates of need for the construction of intermediate care facilities. The expressed theory was to fill intermediate care requirements by encouraging licensed skilled care facilities to become intermediate care facilities and thus attempt to reach a balance between requirements and available facilities of all types. This limited moratorium expired June 30, 1973, and was replaced by an expanded moratorium on the issuance of certificates of need for all facilities effective August 31, 1973. This moratorium, extended several times, expired January 31, 1975, about which more will be said later.

Plaintiff requested a hearing, pursuant to N.J.S.A. 26:2H-9, which was held July 18 and September 12, 1973, at the conclusion of which the hearing officer made the following pertinent findings:

(1) plaintiff's application was to be judged by the 1971 State Plan, in effect when the application was filed;

(2) the 1971 State Plan did not make a determination of the need for intermediate care facilities. Such a determination is required by N.J.S.A. 26:2H-8;

(3) appellant never received a proper decision on his alternative application for a certificate of need for ...


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