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Irvington General Hospital v. Department of Health

Decided: May 2, 1977.

IRVINGTON GENERAL HOSPITAL, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
DEPARTMENT OF HEALTH OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT. IRVINGTON GENERAL HOSPITAL, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, JOANNE E. FINLEY, M.D., STATE COMMISSIONER OF HEALTH, STATE DEPARTMENT OF HEALTH, HEALTH CARE ADMINISTRATION BOARD, WILLIAM F. HYLAND, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



Matthews, Seidman and Horn.

Per Curiam

The first of these consolidated appeals is from the denial of a certificate of need by the Health Care Administration Board in the Department of Health. The second is from the dismissal of a proceeding in lieu of prerogative writs instituted by Irvington General Hospital against the Governor, the Commissioner of Health, the Attorney General, the Department of Health and the Health Care Administration Board.

Irvington General Hospital submitted an application for a certificate of need in November 1973. It sought permission to construct an addition to the hospital and to add two medical/surgical beds, six intensive care/cardiac care unit beds, and 17 beds which it classified as "intermediate care" beds. Although "intermediate care" beds are used to provide a higher level of care than other medical/surgical beds, it is undisputed that within the classifications set by the Department of Health, such beds are considered medical/surgical. Hence the certificate of need application in effect sought an increase of 19 medical/surgical beds.

After several delays attributable both to the Department and the applicant, hearings were held in September and October 1975. The hearing officer recommended that the application be approved, thereby disagreeing with the prior recommendation of the Commissioner that it be denied.

Between the time of the hearing and the time when the Health Care Administration Board considered the hearing officer's recommendation, the Board reclassified 150 long-term care beds at Clara Maas Hospital as medical/surgical beds, thereby creating an excess of medical/surgical beds in Essex County, the county in which Irvington General Hospital is located. Accordingly, on May 6, 1976 the Board remanded this application to the hearing officer, instructing him to make additional findings of fact "particularly pertinent to the current effect of the reclassification of the beds in the area."

The remand hearing was held, and thereafter the hearing officer recommended that the application be denied solely on the ground that the Department of Health statistics now showed an excess of medical/surgical beds in the county so that there was no need for the 19 beds sought by the applicant.

The second appeal, as noted, is from the denial of relief sought by Irvington General by means of a complaint in lieu of prerogative writs. By the time of the hearing on that complaint the application for a certificate of need had been denied. The trial judge therefore ruled that at least some of the relief sought in that complaint was moot: demand for an order compelling the board to render its decision, for the Attorney General to remove from the case his Deputy who was in charge of the proceedings, and an order that the Attorney General desist from any further dilatory tactics. Plaintiff also sought as additional relief the removal, either by the court or the Governor, of the Commissioner of Health and of all members of the Health Care Administration Board. The hospital also demanded punitive damages from the Commissioner and the members of the Board.

We consider first the appeal from the denial of the certificate of need. We agree with plaintiff's contention that the Board erred in giving conclusive weight to the Department of Health statistics which showed an excess of

medical/surgical beds in Essex County at the time of the remand hearing. Undoubtedly, the hearing officer was permitted to consider the latest statistics on bed need at the time of the remand hearing. Merry Heart Nurs. & Conv. Home v. Dougherty , 131 N.J. Super. 412, 418-419 (App. Div. 1974). But that did not mean that he and the Board could permit those figures to be the sole determinative factor.

N.J.S.A. 26:2H-1 provides that it is the public policy of this State that hospital services "of the highest quality, of demonstrated need, efficiently provided and properly utilized at a reasonable cost are of vital concern to the public health." The Department of Health has a mandate to provide central comprehensive planning in the development and administration of health care services throughout the State. N.J.S.A. 26:2H-1.

No new health care service may be instituted unless a certificate of need has first been issued by the Department. N.J.S.A. 26:2H-7. No such certificate may be issued unless the applicant proves that the action proposed "is necessary to provide required health care in the area to be served, can be economically accomplished and maintained, and will contribute ...


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