On appeal from the adoption of N.J.A.C. 8:31A promulgated pursuant to N.J.S.A. 26:2H-18.57 by the Department of Health and Senior Services.
The opinion of the court was delivered by: Lihotz, J.T.C. (temporarily assigned).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff, Lisa and Lihotz.
Appellants own and operate ambulatory care facilities (ACF), not licensed to a hospital, that provide various healthcare services on their premises. Responding to the increased competition between hospitals and ACFs, the Legislature amended N.J.S.A. 26:2H-18.57 on June 29, 2004, to allow the Department of Health and Senior Services (DHSS) to impose an assessment on ACFs that perform the services enumerated in the statute. The assessment calculation is bottomed on an ACF's gross receipts. Ibid. Revenues collected finance hospital charity care through the Healthcare Subsidy Fund, N.J.S.A. 26:2H-18.58.
DHSS proposed regulations to implement the statutory assessment. Appellants challenged the scope and nature of "gross receipts" as interpreted by DHSS to calculate the amount of the assessment. Specifically, appellants sought to exclude from an ACF's annual gross receipts "pass through" payments made to independent contractors and revenue generated from services other than those listed in the statute. Appellants' objections were rejected, after due notice and comment, and the regulations became effective on August 7, 2006. Pursuant to Rule 2:2- 3(a)(2), appellants seek review of the validity of the agency's rule-making action.
Additionally, appellants filed a motion to supplement the record on appeal. R. 2:5-5. Appellants propose to add the certification of Doug Dunn, who denies the availability of alternative business models to avoid receipt of "pass through" revenues due to professional independent contractors, and asserts that these global payments are mandated by third-party payors.
We determine appellants had an opportunity to present for consideration the facts now offered. We deny the motion. Additionally, we conclude the agency's rulemaking falls within the bounds of its statutory authority. We affirm.
In 1971, the Legislature adopted the Health Care Facilities Planning Act (HCFPA), N.J.S.A. 26:2H-1 to -26, in response to a growing concern over the rising costs of hospital care. The "HCFPA is essentially cost-containment legislation focusing on the institutional delivery of health care services." St. Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 5 (2005).
Because AFCs are not required to provide care regardless of a patient's ability to pay, the proposed new rules served to "even the playing field between ambulatory care facilities and hospitals that provide the same services." 37 N.J.R. 2279(a) (July 5, 2005).
The statutory amendment states:
Effective July 1, 2004, the department shall assess each ambulatory care facility that is licensed to provide one or more of the following ambulatory care services: ambulatory surgery, computerized axial tomography, comprehensive outpatient rehabilitation, extracorporeal shock wave lithotripsy, magnetic resonance imaging, megavoltage radiation oncology, positron emission tomography, orthotripsy and sleep disorder services. The Commissioner of Health and Senior Services may, by regulation, add additional categories of ambulatory care services that shall be subject to the assessment if such services are added to the list of services provided in N.J.A.C. 8:43A-2.2(b) after the effective date of P.L. 2004, c. 54.
The assessment established in this subsection shall not apply to an ambulatory care facility that is licensed to a hospital in this State as an ...