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Marsh v. Finley

Decided: June 15, 1978.

ALBERT P. MARSH, M.D. AND MARSH RADIOLOGY PROFESSIONAL ASSOCIATION, APPELLANTS, AND THE MEDICAL SOCIETY OF NEW JERSEY, INTERVENOR,
v.
JOANNE E. FINLEY, MD., M.P.H., COMMISSIONER OF HEALTH OF THE STATE OF NEW JERSEY, RESPONDENT, AND STANLEY C. VAN NESS, PUBLIC ADVOCATE, STATE OF NEW JERSEY, INTERVENOR



Lynch, Bischoff and Kole.

Per Curiam

Plaintiff Albert P. Marsh, a licensed physician specializing in radiology and conducting his business under the name of Marsh Radiology Professional Association (both hereafter called "plaintiff"), appeals from a ruling of defendant Joanne E. Finley, M.D., Commissioner of Health of New Jersey, which determined that plaintiff's impending purchase of Computerized Axial Tomography (C.A.T.) equipment for his private office constituted "the operation of a health care facility subject to the certificate of need requirement of the Health Care Facilities Planning Act."

Plaintiff's complaint filed in the Chancery Division which challenged said ruling was transferred to this court on the ground that plaintiff sought a review of the action of a state administrative officer. R. 2:2-3(a) (2). The Medical Society of New Jersey has intervened as a party-plaintiff and the Public Advocate has intervened as a party-respondent.

In her letter of May 21, 1976 announcing her ruling the Commissioner stated:

The cost of acquiring such units ranges from $350,000 to $550,000 and, after site preparation, from $400,000 to $600,000. In addition, operational costs, depending upon the number of procedures performed range from $290,000 to $301,500 per year. This includes extensive technical and professional staff necessary to operate the equipment and perform the diagnostic procedures associated with this equipment.

Because of the large expense associated with purchasing and operating a computerized axial tomography equipment and extensive staffing necessary to conduct the diagnostic procedures for which this equipment is used, I conclude that the acquisition of such equipment constitutes the construction of a health care facility within the meaning of the Health Care Facilities Planning Act. Accordingly, I hereby conclude that prior to obtaining this equipment you must obtain a certificate of need as provided under N.J.S.A. 26:2H-7.

While this appeal was pending the matter was remanded to the Commissioner for consideration of newly adopted regulations purporting to set forth criteria for determining whether a particular modality of health care delivery is a health care facility within the meaning of the Health Care Facilities Planning Act (hereafter the "Act"). N.J.S.A. 26:2H-1 et seq. Jurisdiction was retained. The Commissioner requested certain information from plaintiff's attorney concerning his proposed use of the C.A.T. scanner. The Commissioner received no response and subsequently filed her findings and conclusions wherein she iterated her conclusion that plaintiffs proposed project constituted the operation of a health care facility subject to the certificate of need requirements of the act.

On appeal Marsh contends that the Commissioner's authority to issue a certificate of need does not extend to a physician's private practice. More specifically, he contends that the act applies only to institutional facilities and does not authorize the Commissioner to regulate the services provided by a physician in his private practice such as plaintiff herein. We agree and reverse.

N.J.S.A. 26:2H-2(a) broadly defines a "health care facility" as follows:

"Health care facility" means the facility or institution whether public or private, engaged principally in providing services for health maintenance organizations, diagnosis or treatment of human disease, pain, injury, deformity or physical condition, including, but not limited to, a general hospital, special hospital, mental hospital, public health center, diagnostic center, treatment center, rehabilitation center, extended care facility, skilled nursing home, nursing home, intermediate care facility, tuberculosis hospital, chronic disease hospital, maternity hospital, outpatient clinic, dispensary, home health care agency, boarding home or other home for the sheltered care of adult persons and bioanalytical laboratory or central services facility serving one or more such institutions but excluding institutions that provide healing solely by prayer.

On February 23, 1977 the State Department of Health promulgated a regulation, codified as ...


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