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In re Certificate of Need Applications of Valley Hospital

Decided: April 20, 1990.


On appeal from Final Administrative Decisions of the State Commissioner of Health.

Antell, Bilder and Ashbey. The opinion of the court was delivered by Antell, P.J.A.D.


[240 NJSuper Page 303] After considering batched applications, N.J.A.C. 8:33-2.8, on December 7, 1987, the State Commissioner of Health (Commissioner) granted Hackensack Medical Center (Hackensack) a certificate of need, pursuant to The Health Care Facilities Planning Act, N.J.S.A. 26:2H-8, which authorizes the expansion of existing cardiac surgery facilities and programs. She granted a like certificate to St. Joseph's Hospital and Medical Center (St. Joseph's) on December 8, 1987. On January 6, 1988, she granted Valley Hospital (Valley) a certificate of need to establish a new cardiac surgery facility. The application of Englewood Hospital (Englewood) for a certificate of need to establish a new cardiac surgery facility was denied December 7, 1987.

The application process involves three tiers of review: 1) by the health systems agency serving the area, in this case the Northern New Jersey Health Planning Council, which covers the counties of Bergen, Hudson and Passaic; 2) the Statewide Health Coordinating Council; 3) the State Commissioner of Health. N.J.S.A. 26:2H-3, 4; N.J.A.C. 8:33-1.3(i), (k). The Commissioner's decision to grant a certificate of need is final. The decision to deny one must be approved by the Health Care Administration Board following the grant of a hearing to the rejected applicant. N.J.S.A. 26:2H-9; Application of Overlook Hospital, 215 N.J. Super. 401, 409, 521 A.2d 1350 (App.Div.1987).

Englewood did not appeal from the denial of its application. However, as an "affected person," N.J.A.C. 8:33-1.6, it appealed the granting of a certificate to Hackensack and St. Joseph's. Hackensack, St. Joseph's and Englewood appealed from the certificate granted to Valley. The General Hospital Center at Passaic (Passaic), which already has a cardiac surgery facility in operation, appealed the certificate granted to Valley on the ground that as an affected person it was not accorded a fair hearing when it appeared through its president as an objector before the project review committee of the regional health systems agency (Northern New Jersey Health Planning Council) in September 1987 to speak against the Valley application. By letter dated October 25, 1989, Englewood's appeals were withdrawn and are now hereby dismissed. We are therefore left to consider the appeals of Hackensack, St. Joseph's and Passaic from the certificate of need granted to Valley which, for purposes of review, we hereby consolidate.

At the outset, we reject the State's contention that Hackensack, St. Joseph's and Passaic lack standing to appeal the grant of a certificate of need to Valley. "[In] cases involving substantial public interest, the courts have held that 'but slight private interest, added to and harmonizing with the public interest' is sufficient to give standing." Elizabeth Federal

S. & L. Assn. v. Howell, 24 N.J. 488, 499, 132 A.2d 779 (1957). We find applicable herein the following statement made in the foregoing opinion by Chief Justice Vanderbilt:

Competing banking institutions may be the only persons with sufficient private interest in harmony with the public concern for the safety of savings and bank deposits to bring the attention of the courts to errors of law in an administrative action granting a license to establish a branch contrary to the standards set by the statute delegating authority to so act. If such banking institutions do not have the necessary standing, who then is there who can or will challenge an administrative decision favorable to the applicant? Without standing in the appellants to invoke the power of judicial review, the Commissioner's action favorable to Colonial, right or wrong, proper or arbitrary, takes on a conclusive character to the possible great detriment of the people as a whole. [ Id. at 501-502, 132 A.2d 779].

Since the focus of these appeals is upon the adequacy of the Commissioner's findings as they appear in her January 6, 1988, letter approving the Valley application, we set forth those findings in their entirety:

My decision to approve your application is based on an evaluation of the factors cited in N.J.S.A. 26:2H-8 and N.J.A.C. 8:33E-2.1 et seq. as follows:

1. The introduction of Valley Hospital as a new cardiac surgery provider in the health service area would improve access to these services for area residents, particularly with respect to percutaneous transluminal coronary angioplasty (PTCA), and would contribute to the orderly development of cardiac care services in the region.

2. Approval of a new cardiac surgery service would not negatively impact the quality of care provided at the three existing adult cardiac surgery centers in the region: General Hospital Center at Passaic, Hackensack Medical Center, and St. Joseph's Hospital and Medical Center.

3. The applicant has documented a sufficient number of referrals for cardiac surgery and PTCA to meet the minimum utilization requirements contained at N.J.A.C. 8:33E-2.3(a) 1 and N.J.A.C. 8:33E-2.3(d)1.

Our role as an appellate court sitting in review of administrative determinations is to decide "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record,' considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility. . . ." Close v. Kordulak Bros., 44 N.J. 589, 599, 210 A.2d 753 (1965). See also Mayflower Securities v. Bureau of Securities, 64 N.J. 85, 92-93, 312 A.2d 497 (1973). In Application of Howard Savings

Institution of Newark, 32 N.J. 29, 52, 159 A.2d 113 (1960) the ...

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