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9 N.J.A.R. 1

Hazelwood Manor, In the Matter of
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Citation: 9 N.J.A.R. 1
Decision Date: 1985
Synopsis: This matter arose out of the Commissioner of Health's denial of an application for a Certificate of Need to construct a 180-bed long- term nursing facility in Ocean County. After a hearing before and the issuance of an initial decision by an administrative law judge, the Health Care Administration Board ordered that the matter be remanded for the receipt of additional information and the clarification of certain issues. The administrative law judge then filed a supplemental decision which concluded that petitioner should be granted a Certificate of Need. Upon review, the Board rejected that decision and ordered that the application of a Certificate of Need should be denied. The administrative law judge had found that the methodology for determining bed need set forth in N.J.A.C. 8:33H-3.10(a)(l) was used by the Commissioner in reviewing petitioner's applications and all other applications in the July 15, 1983 batching cycle. Applying this methodology to 1985 projected population data and to the count of facilities existing and approved as of July 1983, led to a showing of a need for 651 long-term care beds in Ocean County and an excess of 440 beds in Monmouth County. The administrative law judge ruled that it was valid and proper to use 1985 projected population statistics, as they were the latest data available at the time the application was undergoing review. The administrative law judge found that the purposes of the batching regulation, N.J.A.C. 8:33-2.2, called for the freezing of statistical data as of the time of the review cycle for the batch. The administrative law judge further ruled that it was ap- prophate to offset the statistical bed need showings of Monmouth and Ocean counties because these counties were contiguous and served a common area for long-term care services. After offsetting the need for 651 beds in Ocean County against the excess of 440 beds in Monmouth County, there was a net need of 211 long-term care beds In Re: Hazelwood Manor in Ocean County at the time of the July 1983 review cycle for the batch. When the Commissioner acted on the application in petitioner's batch, he approved other applications for the total addition of 240 long-term care beds in Ocean County, thereby filling the net bed need of 211 beds for the area. The administrative law judge ruled that the Commissioner's approval of these other applications could be re- viewed only by the judiciary and that the 240 beds approved for the area in the July 1983 cycle must be accepted as being finally resolved. The judge rejected the view that the approval of these 240 beds obviated the need for petitioner's proposal, concluding that the bed need methodology contained in N.J.A.C. 8:33H-3.10(a)(l) was not a measure of objective need. The judge reasoned that because nursing home beds in Monmouth County were being occupied at a rate of more than 90 percent, they could not be available to address the needs of elderly Ocean County residents. Finding that the concept of bed need provided by the methodology to be illusory, the judge determined that petitioner should be granted a Certificate of Need. The Board specifically rejected reliance upon current occupancy levels as being determinative of bed need, since such levels do not reflect the number of 'paper beds', i.e., beds which have already been approved, are in various stages of construction and are likely to be available in the future to meet the demand for nursing beds. In addition, the Board noted that the approval of petitioner's appli- cation would do nothing to satisfy present needs because of the period of lead time for new construction. The Board noted that if the number of 'paper beds' is not carefully monitored at the same time beds are initially approved, the end result over time would be to have more beds constructed than the population needs or can support. The Board observed that a primary purpose of the planning process is to reverse that type of maldistribution. The Board specifically rejected the judge's conclusion that the meth- odology incorporated in regulation for projecting long-term care bed needs fails to be a proper measure of objective need, finding that no reason had been offered to depart from the standard methodology. The Board did concur with the judge bed need should ordinarily be frozen in time since it would be unfair to treat any one or several of the batch in a wholly isolated manner. Thus in reviewing a certificate application, certificates already approved by the Com- missioner must be regarded as conclusive. State of New Jersey 3 In Re: Hazelwood Manor Therefore, since petitiondr showed no special need or special under- served section of the public, its application was denied. Richard D. McLaughlin, Esq., for petitioner (Schepisi and McLaughlin, attorneys) Michael J. Haas, Deputy Attorney General for respondent (Irwin I. Kimmelman, Attorney General of New Jersey, attorney) Initial Decision
Citation Tracker rejected-Dept. of Health; affirmed -App. Div., A-213-85, 4/20/87 (unreported) [Updated through 1991]