N.J. Admin. Code § 8:33-4.10

Current through Register Vol. 56, No. 21, November 4, 2024

Section 8:33-4.10 - Specific criteria for review

(a) Each applicant for a certificate of need shall show how the proposed project shall promote access to low income persons, racial and ethnic minorities, women, disabled persons, the elderly, and persons with HIV infections and other persons who are unable to obtain care. In determining the extent to which the proposed service promotes access and availability to the aforementioned populations, the applicant, where appropriate, shall address in writing the following:

1. The contribution of the proposed service in meeting the health related needs of members of medically underserved groups as may be identified in the applicant's service area;

2. The extent to which medically underserved populations currently use the applicant's service or similar services in comparison to the percentage of the population in the applicant's service area which is medically underserved, and the extent to which medically underserved populations are expected to use the proposed services if approved;

3. The performance of the applicant in meeting its obligation, if any, under any applicable State and Federal regulations requiring provision of uncompensated care, community services, or access by minorities and handicapped persons to programs receiving Federal financial assistance (including the existence of any civil rights access complaints against the applicant);

4. How and to what extent the applicant will provide services to the medically indigent, Medicare recipients, Medicaid recipients and members of medically underserved groups;

5. The extent to which the applicant offers a range of means by which its service (for example, outpatient services, admission by house staff, admission by personal physician) will be accessible and available to a person;

6. The amount of charity care, both free and below cost service, that will be provided by the applicant;

7. Access by public or private transportation to the proposed project, including applicant-sponsored transportation services;

8. As applicable, means of assuring effective communication between the staff of the proposed project and non-English speaking people and those with speech, hearing, or visual handicaps must be documented; and

9. Where applicable, the extent to which the project will eliminate architectural barriers to care for handicapped individuals.

(b) Each applicant for certificate of need shall demonstrate that the proposed project will maintain or enhance quality of care, can be financially accomplished and maintained, and licensed in accordance with applicable licensure regulations; how it shall address otherwise unmet needs in the planning region; that it shall not have an adverse impact on access to health care services; and that projected volume is reasonable. Evaluation of the applications shall include a review of:

1. Demographics of the area, particularly as related to the populations affected by the proposed project;

2. Economic status of the service area, particularly as related to special health service needs of the population; and future facility cash flow;

3. Physician and professional staffing issues;

4. Availability of similar services at other institutions in or near the service area;

5. Provider's historical and projected market shares;

6. The immediate and long term financial impact on the institution. This review shall assess:

i. Whether the method of financing identified is accurately calculated and economically feasible, and is the least cost method available;

ii. Impact of the proposed project on capital cost, operating cost, projected revenues, and charges for the year prior to the application and the two years following project completion;

iii. Impact of the proposed project on the provider's financial condition, as measured by financial statements, including balance sheets, income statements and cash-flow statements;

7. Whether the applicant has demonstrated the ability to obtain the necessary capital funds;

8. Each applicant for certificate of need shall demonstrate how the proposed project shall comply with applicable rules and regulations governing the construction, modernization or renovation of the project. The applicant shall address the following:

i. A cost estimate of the project stated in those dollars which would be needed to complete the project over the anticipated period of construction, assuming that construction was to begin at the time of the certificate of need submission; and

ii. A detailed description of the project including square footage, construction type, current and proposed use of areas proposed for renovations, anticipated construction related circumstances, impact of asbestos abatement, accounting of all displaced department services areas, relocations and vacated areas.

(c) The Commissioner may request any additional information deemed necessary to establish that the proposed project will not adversely affect the State's health care system.

(d) Each applicant for certificate of need shall demonstrate character and competence, quality of care, and an acceptable track record of past and current compliance with State licensure requirements, applicable Federal requirements, and State certificate of need requirements, including, but not limited to, the following:

1. The performance of the applicant in meeting its obligation under any previously approved certificate of need including full compliance with the cost and scope as approved, as well as all conditions of approval;

2. Applicants shall demonstrate the capacity to provide a quality of care which meets or surpasses the requirements contained in the applicable licensing standards for the facility. Evidence of the capacity to provide high quality care shall include (d)2i below and may, if applicable, also include (d)2ii through iv below:

i. A satisfactory record of compliance with licensure standards in existing health care facilities that are owned, operated, or managed, in whole or part, by the applicant. This may include reports issued by licensing agencies from other states, as well as from the Department. Applicants shall document their requests to licensing agencies in other states, where applicable, as well as the responses from those agencies. Applicants shall not be penalized for the failure of licensing agencies in other states to respond to their requests unless they failed to make the requests in a timely manner. In the event that an applicant is unable to obtain a written report from a licensing agency in another state, the applicant may submit, in lieu of the written report, an attestation that its compliance record in that state does not contain any violations of (d)3 through 5 below along with documentation of its efforts to obtain a written report;

ii. Narrative descriptions or listings within the application of services, staffing patterns, policies and protocols addressing delivery of nursing, medical, pharmacy, dietary, and other services affecting residents' quality of care;

iii. Documentation of compliance with the standards of accreditation of nationally-recognized professional bodies; and

iv. Where applicable, a recommendation by the State Department of Human Services' Division of Medical Assistance and Health Services and Division of Mental Health Services regarding the quality of and access to services provided by the applicant to Medicaid patients and patients who have been discharged from State and county psychiatric hospitals;

3. The Department shall examine and evaluate the licensing track record of each applicant for the period beginning 12 months preceding submission of the application and extending to the date on which the Commissioner renders a decision with respect to the application, for the purpose of determining the capacity of an applicant to operate a health care facility in a safe and effective manner in accordance with State and Federal requirements. A certificate of need application may be denied where an applicant has not demonstrated such capacity, as evidenced by continuing violations or a pattern of violations of State licensure standards or Federal certification standards or by existence of a criminal conviction or a plea of guilty to a charge of fraud, patient or resident abuse or neglect, or crime of violence or moral turpitude. An application also may be denied where an applicant has violated any State licensing or Federal certification standards in connection with an inappropriate discharge or denial of admission. An applicant, for purposes of this rule, includes any person who was or is an owner or principal of a licensed health care facility, or who has managed, operated, or owned in whole or in part any health care facility, excluding individuals or entities who are limited partners with no managerial control or authority over the operation of the facility and who have an ownership interest of 10 percent or less in a corporation which is the applicant and who also do not serve as officers or directors of the applicant corporation;

4. A certificate of need application submitted by an applicant who was cited for any State licensing or Federal certification deficiency during the period identified in (d)3 above, which presented a serious risk to the life, safety, or quality of care of the facility's patients or residents, shall be denied, except in cases where the applicant has owned/operated the facility for less than 12 months and the deficiencies occurred during the tenure of the previous owner/operator. In any facility, the existence of a track record violation during the period identified in (d)3 above shall create a rebuttable presumption, which may be overcome as set forth below, that the applicant is unable to meet or surpass licensing standards of the State of New Jersey. Those applicants with track record violations which would result in denial of the application shall submit with their application any evidence tending to show that the track record violations do not presage operational difficulties and quality of care violations at the facility which is the subject of the application or in any other licensed long-term care category facility in New Jersey, which is operated or managed by the applicant. If, after review of the application and the evidence submitted to rebut a negative track record, the Commissioner denies the application, the applicant may request a hearing which will be held in accordance with the Administrative Procedure Act, 52:14B-1 et seq., and 52:14F-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1. At the Commissioner's discretion, the hearing shall be conducted by the Commissioner or transferred to the Office of Administrative Law. The purpose of the hearing is to provide the applicant with the opportunity to present additional evidence in conjunction with evidence already included with the initial application, for the purpose of demonstrating the applicant's operational history and capacity to delivery quality of care to patients or residents which meets or surpasses licensing standards of the State of New Jersey to the satisfaction of the Commissioner or his or her designee. The conclusion of that process with either a decision by the Commissioner or the Commissioner's acceptance or denial of an initial decision by an administrative law judge shall constitute a final agency decision. A serious risk to life, safety, or quality of care of patients or residents includes, but is not limited to, any deficiency in State licensure or Federal certification requirements ( 42 C.F.R. 488.400 et seq.) resulting in:

i. An action by a State or Federal agency to ban, curtail or temporarily suspend admissions to a facility or to suspend or revoke a facility's license;

ii. A decertification, termination, or exclusion from Medicaid or Medicare participation, including denial of payment for new admissions, imposed by the Department or by the Health Care Financing Administration, as a result of noncompliance with Medicaid or Medicare conditions of participation.

5. In addition to the conditions specified at (d)4 above, an application for a long-term care category service, including, but not limited to, a long-term care facility, assisted living residence, assisted living program or comprehensive personal care home, shall be denied upon a finding that any long-term care facility or hospital-based subacute care unit in New Jersey operated or managed by the applicant has, within the 12 months preceding submission of the application and extending to the date on which the Commissioner renders a decision with respect to the application, been the subject of one or more of the following:

i. A citation of any deficiency posing immediate jeopardy at a pattern or widespread scope level, or any deficiency causing actual harm at a widespread scope level, as described at 42 C.F.R. 488;

ii. A determination that the provider is a "poor performer," on the basis of a finding of substandard quality of care or immediate jeopardy, as described at 42 C.F.R. 488, on the current survey and on a survey during one of the two preceding years. For the purposes of this subchapter, "substandard quality of care" means one or more deficiencies related to participation requirements under 42 C.F.R. 483.13, Resident behavior and facility practices, 42 C.F.R. 483.15, Quality of life, or 42 C.F.R. 483.25, Quality of care, which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm;

iii. A citation of a deficiency based on a finding of substandard quality of care in two different areas on the same survey. Such facilities will be afforded an opportunity to correct the deficiencies by a date specified in the Departmental notice accompanying the statement of deficiencies. If substantial compliance is achieved in all areas, the waiting period, as that term is defined in (d)10 above, shall terminate with the next standard survey of the facility, if that survey indicates substantial compliance. The Department shall conduct another full survey within approximately nine months of the date of the previous full survey during which the deficiencies were cited. If the deficiencies have not been corrected by the date specified in the Departmental notice accompanying the statement of deficiency, the 12-month waiting period shall commence on the date on which the deficiencies are corrected and compliance is achieved;

iv. A determination that the facility has failed to correct deficiencies which have been cited, and where this has resulted in a denial by the Health Care Financing Administration of payment for new admissions or a requirement by the Department to curtail admission.

6. The criteria for denial of an application specified in (d)4 and 5 above shall also result in denial of the application if the criteria are found to have been true of any number of out-of-State facilities operated or managed by the applicant, within the 12 months preceding submission of the application and extending to the date on which the Commissioner renders a decision with respect to the application and with respect to any service which is similar or related to the proposed service, constituting at least five percent of all facilities operated or managed by the applicant or five facilities in total, whichever is less.

7. In addition to the provisions of (d)1 through 6 above, and notwithstanding any express or implied limitations contained therein, the Commissioner may deny any application where he or she determines that the actions of the applicant at any facility operated or managed by the applicant constitute a threat to the life, safety, or quality of care of the patients or residents. In exercising his or her discretion under this rule, the Commissioner shall consider the following:

i. The scope and severity of the threat;

ii. The frequency of occurrence;

iii. The presence or absence of attempts at remedial action by the applicant;

iv. The existence of any citations, penalties, warnings, or other enforcement actions by any governmental entity pertinent to the condition giving rise to the threat;

v. The similarity between the service within which the threat arose and the service which is the subject of the application; and

vi. Any other factor which the Commissioner deems to be relevant to assessment of risk presented to patients or residents.

8. For the purposes of this section, similarity or relatedness of any two services is determined by the inclusion of the two services together in one of the following categories:

i. The long-term care category, which includes but is not limited to long-term care facility, hospital-based subacute care unit, residential health care facility, alternate family care program, pediatric or adult day health care program, or assisted living provided through an assisted living residence, assisted living program or comprehensive personal care home.

ii. The general or special hospital category, which includes hospital services such as medical/surgical, pediatric, obstetric, cardiac, psychiatric, and intensive care/critical care, comprehensive rehabilitation, long term acute care, surgical services, magnetic resonance imaging and computerized tomography, extracorporeal shock wave lithotripsy, renal dialysis, positron emission tomography scanner, gamma knife, hyperbaric chamber, and birth centers.

iii. The ambulatory care and other category, which includes primary care, home health care, family planning, drug counseling, termination of pregnancy, birth centers, renal dialysis, magnetic resonance imaging, computerized axial tomography, extracorporeal shock wave lithotripsy, hyperbaric chamber, hospice, ambulatory surgery, and outpatient rehabilitation.

iv. The substance abuse treatment category, which includes residential alcohol treatment, residential drug treatment, and outpatient drug treatment.

9. In evaluating track records pursuant to (d)3 through 8 above, the Department may consider any evidence of noncompliance with applicable licensure requirements provided by an official state licensing agency in any state other than New Jersey, or any official records from any agency of the State of New Jersey indicating the applicant's noncompliance with the agency's licensure or certification requirements in a facility the applicant owned, operated, or managed in whole or in part.

10. Any person with a history of noncompliance with statutory or regulatory requirements which, as determined by the Department, threaten the life, safety or quality of care of patients shall be ineligible to file a certificate of need application until a waiting period of at least one year has elapsed, except as specified at (d)5iii above, during which time the person must have demonstrated a record of substantial compliance with licensing or regulatory standards. The one-year period shall be measured from the time of the last licensure or certification action indicating full compliance with regulatory standards.

11. No certificate of need application will be approved for any applicant with existing non-waiverable violations of licensure standards at the time of filing, or before final disposition of the application or for an applicant with a history of noncompliance with licensing, statutory or regulatory standards which, as determined by the Department, threaten the life, safety or quality of care of patients. An exception shall be made in the case of applications submitted for the purpose of correcting recognized major licensure deficiencies. An exception to this provision may also be granted for applications submitted for the closure of a general hospital.

N.J. Admin. Code § 8:33-4.10

Amended by R.1993 d.442, effective 9/7/1993.
See: 25 N.J.R. 2171(a), 25 N.J.R. 4129(a).
Amended by R.1996 d.101, effective 2/20/1996.
See: 27 N.J.R. 4179(a), 28 N.J.R. 1228(a).
Amended by R.2002 d.243, effective 8/5/2002.
See: 34 N.J.R. 458(a), 34 N.J.R. 2814(a).
Rewrote the section.
Petition for Rulemaking.
See: 34 N.J.R. 3652(b), 34 N.J.R. 4475(b).
Petition for Rulemaking.
See: 35 N.J.R. 2751(c), 5621(b).
Petition for Rulemaking.
See: 36 N.J.R. 223(b).