On appeal from a Final Agency Decision of the Department of Health and Senior Services, Docket No. CN #021205-20-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: October 20, 2010 - Decided: Before Judges Cuff, Sapp-Peterson, and Fasciale.
Trinitas Hospital (Trinitas) responded to a call for new cardiac surgery services in Union and contiguous counties issued by the Department of Health and Senior Services (HSS) in September 2002. On March 11, 2009, the Commissioner of HSS adopted the Initial Decision of an administrative law judge (ALJ), which concluded that the Deputy Commissioner acted reasonably when he denied a Certificate of Need (CN) to Trinitas to initiate adult cardiac surgery.
On appeal, Trinitas argues the CN decision is based on a mathematical error and this error renders the decision arbitrary, capricious, and unreasonable. We affirm.
The issuance of the call for Union and contiguous counties*fn1 represented the culmination of an extensive planning effort prior to promulgation of rule amendments. These amendments were designed to allow a more provider-driven cardiac CN review process with the goal of improving access for minority and medically underserved populations, while maintaining quality of care. See N.J.A.C. 8:33E-2.14(a)4i. To that end, the September 2002 call notice invited existing New Jersey cardiac surgery centers located in Essex, Middlesex, Morris, Somerset, and Union counties to file a written submission as an affected facility with HSS in response to any submitted CN applications deemed complete by HSS. Morristown Memorial Hospital (Morristown) submitted a timely analysis. Robert Wood Johnson University Hospital (RWJUH) submitted an untimely comment, but it was received before a State Health Planning Board (SHPB) meeting on September 11, 2003.
The Trinitas cardiac surgery CN application was one of the first to be evaluated in accordance with newly adopted rule amendments. Muhlenberg Regional Medical Center (Muhlenberg), Somerset Medical Center (Somerset), and Overlook Hospital also sought to provide adult regional cardiac surgery services. All were subject to the newly adopted competitive review criteria. N.J.A.C. 8:33E-2.15. The criteria were informed by HSS experience that showed a strong correlation between the volume of cardiac procedures performed and the quality of care and outcome of the procedure. Although HSS applied new competitive review criteria, the goals of the process remained largely unchanged: improved access to cardiac care for minority and indigent populations; continued viability of existing cardiac surgery services; and high standards of care and good patient outcomes. N.J.A.C. 8:33E-2.15(a), -2.15(b)1, and -2.15(b)5.
The Trinitas CN application argued there was a compelling need for a new cardiac surgery program in Elizabeth and in Union County. It stated that in 2001, 790 Union County residents underwent cardiac surgery in other counties; an additional seventy-five to one hundred residents underwent cardiac surgery in New York. Of those 790, Trinitas suggested that 72% came from its primary service area (PSA). Trinitas provided population figures of African Americans and Hispanics within its PSA from the 2000 U.S. Census, and suggested the majority of the residents in Union County below the poverty level live in its PSA. Trinitas further noted an expected increase in population in its PSA.
Trinitas predicted that in addition to the 900 Union County cardiac patients currently served by out-of-county hospitals, there could be an additional 250 minority cases due to population growth and improved minority access to health care. From that base, Trinitas predicted that in the first year it would capture 200 cases (employing a 20% draw from the county total of 1000). During the second year, it employed a 30% draw to predict 330 cases out of a possible 1100. It applied a 42% draw to project that it would capture 500 of the 1200 cases during the third year, but reduced this number to 432 when it accounted for a 10% reduction due to the use of drug-eluting stents and another reduction due to "deflation."
Trinitas relied on data from a study by Patrice M. Gregory, Ph.D., to suggest that its projections for minorities were conservative. The data Trinitas submitted included the total number of admissions for patients in Union County with a diagnosis of acute myocardial infarction (AMI) who received a coronary artery bypass graft (CABG) or percutaneous transluminal coronary angioplasty (PTCA) as a result. The data was broken down into racial composition. Trinitas concluded that African-American and Hispanic residents had a much lower chance of receiving PTCA or CABG when diagnosed with AMI than white residents.
Trinitas also suggested there was a need for a cardiac surgery center because it was very difficult for residents in its PSA to travel to existing cardiac surgery centers. It argued it takes an average of forty minutes to drive, forty-five minutes to take the bus, and fifty minutes to take the train to get to a cardiac center in Newark.
Trinitas further projected it would draw approximately 350 cases from the other cardiac centers currently in existence, but it stated this draw would not place any particular cardiac center at risk of falling below the minimum required by the state. Trinitas also discussed the cost to institute its new cardiac center and the additional services it would provide. Trinitas also submitted answers to several completeness questions posed by the HSS staff after it received the CN application.
In response to the three CN applications,*fn2 Morristown filed an affected facility submission that argued against the need for additional cardiac centers in the region. With respect to the Trinitas application, Morristown argued that the Trinitas data did not provide "the actual number of patients who do not receive needed interventions . . . ." Morristown then used the Trinitas data to "perform this calculation for the entire Union County population." Morristown used the data Trinitas submitted from the Gregory study. Morristown noted that from 1994 to 1996, there was a total of 6171 AMI diagnoses in Union County: 3892 whites, 732 African Americans, 286 Hispanics, 61 Asian Pacific Islanders, and 1200 unknown or other. Morristown also stated that a total of 370 surgeries resulted: 230 whites,19 African Americans, 19 Hispanics, 4 Asian Pacific Islanders, and 100 unknown or other. Morristown divided the total number of AMI diagnoses by the total number of surgeries to obtain a rate of surgery for each class presented. It found that the surgery rate for whites was 0.06. African Americans had a surgery rate of 0.03, Hispanics at 0.06, 0.06 for Asian Pacific Islanders, and 0.08 for unknown or other. When it compared the surgery rates, Morristown determined that there was an unmet need of 25 surgeries for African Americans (0.06*732 - 19 = 25).
As the data from the study was compiled over a three-year period, Morristown divided this total by three to project that there was an actual unmet need of nine surgeries per year in the Trinitas service area. Thus, Morristown concluded the Trinitas projections were not supported by its own data.*fn3
The HSS staff reviewed all three applications, and recommended SHPB deny each because none demonstrated a need for a new cardiac surgery program. HSS staff first found there was no statewide need for new cardiac programs. They based this determination on the decrease in CABG surgeries between 2000 and 2002, the substitution of PTCA for CABG, and Food and Drug Administration approval of a drug-eluting stent in 2003. They also found research supports the conclusion that cardiac surgery programs with a high volume of cases have a lower mortality rate than those with lower volume.
Nevertheless, HSS staff continued their analysis by determining whether there was a regional need for a new cardiac center. HSS staff found several inconsistencies in their review of the Trinitas CN application. First, although Trinitas asserted that Union County ranked seventh in the number of heart disease deaths per county, they noted that when adjusted for age, the death rates put Union County in nineteenth place. HSS staff also found a train ride to Newark from Elizabeth takes twelve minutes, not fifty as Trinitas ...