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Cooper University Hospital v. Heather Howard

April 11, 2011


On appeal from the New Jersey Department of Health and Senior Services.

Per curiam.


Argued March 2, 2011


Before Judges R. B. Coleman, Lihotz, and J. N. Harris.

Cooper University Hospital (Cooper) appeals from the December 2008 grant by the Commissioner of the Department of Health and Senior Services (the Commissioner and the Department, respectively) of a Certificate of Need (CN) to Virtua West Jersey Hospital-Marlton (Virtua) to provide elective percutaneous coronary interventions (PCI).*fn1 We affirm.


There is an extensive administrative and appellate history that undergirds this matter, which we will not repeat at length.*fn2

Its genesis is found in the Department's November 2004 call for applications from qualifying hospitals for CNs to participate in a multi-state demonstration project*fn3 intended to assess the safety and efficacy of allowing community hospitals without on-site cardiac surgical services to provide elective PCI to their patients. Such elective PCIs were not permitted at such hospitals prior to the initiation of the demonstration project.

N.J.A.C. 8:33E-2.3(d)(3). At issue in this stage of the parties' dispute is the second CN granted to Virtua, which followed the remand in Cooper I and Cooper II.

Virtua is one of four hospitals operated by Virtua Health, a non-profit health care organization. It is located in Marlton and primarily serves a three-county area including Camden, Burlington, and Gloucester counties. In 2005, it was the only applicant for a CN that was located within the seven southernmost counties of the State.

Pursuant to its prior participation in the demonstration project commencing in 2006, and its separate license to perform emergency PCIs, forty-nine elective and forty-seven emergency PCI procedures were performed at Virtua in 2006. Seventy-eight elective, and thirty-five emergency PCI procedures were performed in 2007, while 125 elective and forty-five emergency procedures were done in 2008. In its post-remand application to the Department, Virtua had projected volumes of 171 elective and sixty-six emergency PCIs for 2008, and 178 elective and sixty-six emergency PCIs for 2009.

Because Virtua's projected PCI volumes were below the threshold required by the Department's rules, N.J.A.C. 8:33-3.11(e)(6)(v), it was required to submit a plan of correction. Virtua responded with a "detailed action plan" in which it explained that in 2007 and early 2008, it had only four interventional cardiologists on staff who could perform elective PCIs. In May 2008, however, Virtua added six additional cardiologists to participate in the demonstration project, resulting in a potential increase in patients that would allow it to meet the volume requirements imposed by the Department.

Department staff reviewed Virtua's CN application, noting that by virtue of its earlier participation in the demonstration project, Virtua remained the only provider of elective PCI procedures without on-site cardiac surgery backup in its service area. The application was then forwarded to the State Health Planning Board (the SHPB), for consideration at its July 10, 2008 meeting. Cooper filed objections to Virtua's CN application and its continued participation in the demonstration project. Nevertheless, the SHPB approved the application, along with several others, which left the final determination in the hands of the Commissioner.

The Commissioner issued a detailed, sixty-one-page final decision on November 10, 2008. She granted a CN to Virtua (and to eleven other similarly-situated facilities*fn4 ) to engage in the demonstration project. She described the purposes behind the project, the litigation preceding this appeal, the staff summaries and recommendations regarding the aggregate twenty-two CN applications, and the pertinent regulatory framework that applied to the applications before her.

The Commissioner also made a series of "General Findings" pertaining to the application and the approval process. First, she reiterated that the State's continuing participation in the demonstration project remained "valid and reasonable" and that it was "appropriate to approve [twelve] . . . CN applica[tions]," even though staff had recommended the approval of only nine. She did so in order to obtain the participation of more patients and to ensure that a sufficient number of patients remained if one or more of the demonstration project hospitals dropped out. The approval of twelve applications would also "improve access to minority and medically underserved populations, with a minimal impact on the existing providers." The impact on existing providers would be minimal because the demonstration project was of limited duration and the statistically-observed decrease in elective angioplasty in New Jersey demonstrated "signs of recovering from a brief one-year decline." Moreover, all of the approved applications demonstrated compliance with the rigorous review criteria, the demonstration project was approved by the Johns Hopkins University's Institutional Review Board, and each hospital's participation would have to be approved by that facility's Institutional Review Board.

The Commissioner then described the general regulatory criteria relevant to a hospital's participation in the demonstration project and noted that each approved applicant had met them. She specifically found that the approved applications would offer high-quality programs that adequately represented the State's diverse regions and hospital market areas, that the demonstration project would increase access to PCIs for underserved and minority populations, and that projected elective PCI volumes would meet required levels.

Further, the Commissioner reiterated that no hospital already providing cardiac surgery would be financially harmed by the Project; rather, such hospitals would more likely experience a decline in their PCI volumes because of the "declining use of cardiac surgery generally and the increasing safety of the angioplasty procedures that substitute for certain cardiac surgery procedures." Opposition from existing cardiac providers on that basis was "not well founded," because (1) a sharp decline in PCI procedures in 2007 appeared to be "leveling off" based on more recent data, and (2) not every patient would agree to participate in the demonstration project, and because "competition, particularly . . . based on studied clinical evidence and quality of care, can be a positive force to expanding access and enhancing services to patients." Finally, the Commissioner noted that in the 2007 calendar year, 1,201 patients enrolled in the demonstration project, and the "900 elective angioplasty cases performed at the nine demonstration project hospitals amounted to only 3.9 percent of the State's elective angioplasty cases" that year.

The Commissioner also made specific findings regarding each individual hospital's CN application. Virtua's application was found to meet all of the regulatory criteria, including the projected volumes of 100 procedures in year one and 200 in years two and three. Virtua had been licensed to provide emergency PCIs since 2004, was a participant in the demonstration project since 2006, and had "provided the sixth largest volume of diagnostic cardiac catheterization cases of the demonstration applicants during" the last three years. Furthermore, Virtua was the only applicant within "the seven southernmost counties" in the State, and there was only one other licensed elective PCI provider in Burlington County. The Commissioner found that approval of the application would have a minimal impact on existing providers such as Deborah Heart and Lung Center (Deborah) and Our Lady of Lourdes Medical Center (Lourdes), which was projected to experience, at most, a loss of 194 cases, or 8.3 percent of its PCI volume. In short, approval of Virtua's application "would not significantly impact access or volume in the Camden hospital market area."

Virtua was found in compliance with all licensing requirements for the cardiac services it provided, except that only thirty-five emergency angioplasties were performed there in 2007, one less than required. Moreover, access to medically underserved and minority populations would improve with the application's approval.

In her conclusion, the Commissioner conditionally approved Virtua's CN application. Specifically, its CN would be for no more than three years and ...

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