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In re Certificate of Need Application of Arnold Walter Nursing Home

Decided: November 23, 1994.

IN RE THE CERTIFICATE OF NEED APPLICATION OF ARNOLD WALTER NURSING HOME; IN RE THE CERTIFICATE OF NEED APPLICATION OF RIVERVIEW HEALTH CARE SERVICES CORPORATION; IN RE THE CERTIFICATE OF NEED APPLICATION OF LAUREL ASSOCIATES, INC.


On appeal from the Commissioner of Health.

Before Judges Gaulkin, Baime and Kestin.

Kestin

[277 NJSuper Page 475] The opinion of the Court was delivered by

KESTIN, J.A.D.

These appeals present challenges to the decisions of the Commissioner of Health (Commissioner) denying the certificate of need application of Arnold Walter Nursing Home (Arnold Walter) and granting the certificate of need applications of Riverview Health Care Services Corporation (Riverview) and Laurel Associates, Inc. (Laurel). Arnold Walter is the appellant in all three cases.

Having appealed as of right from the grant of the Riverview and Laurel applications, Arnold Walter moved for leave to appeal the denial of its application and for consolidation. We granted the motion. The procedure suggested in Nat'l. Nephrology Foundation v. Dougherty, 138 N.J. Super. 470, 478-79, 351 A.2d 392 (App. Div. 1976), has thus been employed. As a result, except for one aspect which need not detain us, the scope of our review in this certificate of need matter is full, a feature lamentably absent in Holy Name Hosp. v. Health Care Admin. Bd., 258 N.J. Super. 411, 417-19, 609 A.2d 1305 (App. Div. 1992) and In re Valley Hosp., 240 N.J. Super. 301, 573 A.2d 203 (App. Div. 1990). See also In re Overlook Hosp., 215 N.J. Super. 401, 417, 521 A.2d 1350 (App. Div. 1987). As for the one unincluded aspect, we are advised that a fourth applicant, Hazlet Manor (Hazlet), whose application in the same batch was also denied by the Commissioner, has elected to pursue its co-existing administrative remedies. A hearing in the Office of Administrative Law is scheduled.

In the process employed by the Commissioner, see N.J.A.C. 8:33-4.1 to -4.16, applications for certificates of need for particular services are not entertained until the Commissioner invites such applications by a general public notice. N.J.A.C. 8:33-4.1(a). In the instance before us, the Commissioner's notice specified a need for ninety-five new long-term care beds in Monmouth County. Four applications were received. Arnold Walter's application sought approval for sixty additional beds by way of expanding an existing facility; Riverview proposed a seventy bed expansion of its existing facility; Laurel sought approval for ninety-five beds in

a new facility to be constructed; and Hazlet proposed converting twelve of its residential care beds to twelve long-term care beds.

N.J.A.C. 8:33H-1.19(a) provides:

In the case where two or more applications propose to meet a limited nursing home bed need in a particular county, these applications shall be reviewed in competition with each other using the prioritization criteria contained herein.

Before the applications could be passed on by the Commissioner, reviews by a local advisory board (LAB), N.J.A.C. 8:33-4.12, and the State Health Planning Board (SHPB), N.J.A.C. 8:33-4.14, were required. Arnold Walter's application received unanimous approval from both bodies, with one abstention in the LAB vote. Riverview received unanimous approval from the LAB, with one abstention due to conflict; and four votes out of seven from the SHPB, with two negative votes and one abstention. Laurel received six approval votes out of eleven at the LAB level, with two negative votes and three abstentions; and was disapproved by the SHPH with three approval votes and four negative votes. Hazlet received ten approval votes and one negative vote from the LAB; and unanimous but conditional approval from the SHPB, with one negative vote on the condition.

After the matters reached the Commissioner, the applications of Riverview and Laurel, totalling 165 beds, were approved. Arnold Walter's application was disapproved, as was that of Hazlet. Arnold Walter's standing to appeal the approvals granted to Riverview and Laurel stems from the competitive nature of this certificate of need procedure. In re Valley Hosp., supra, 240 N.J. Super. at 304-05. N.J.S.A. 26:2H-9, which establishes that grants of such applications by the Commissioner are final, thereby confers the right to appeal. R. 2:2-3(a)(2). According to the statutory provision, denials by the Commissioner are reviewable by the Health Care Administration Board (HCAB); hence, the need for Arnold Walter to seek our leave to appeal the denial of its application. R. 2:2-4. When matters are reviewed by the HCAB, a record is customarily made in a contested case proceeding pursuant to N.J.S.A. 52:14B-9 and 10. See generally Holy Name Hosp. v. Health Care ...


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