Court Opinion

ID: 9857513
Source: CourtListenerOpinion
Date Created: 2023-09-24 14:51:59.298734+00
Date Added: 2024-06-11T09:43:33.499208
License: Public Domain

Justice ZAZZALI,
dissenting.
This appeal requires the Court to decide the validity of regulations promulgated by the New Jersey Department of Health and Senior Services (Department) that require all children’s hospitals to offer a Regional Perinatal Center (RPC) without first obtaining a certificate of need (CN). The Appellate Division held that “the Legislature has clearly expressed its intent that the CN mechanism be retained as an integral part of the process for approving undertakings such as RPCs, and that the challenged regulations are invalid because they contravene that legislative requirement.” *18Saint Peter’s Univ. Hosp. v. Lacy, 372 N.J.Super. 170, 173, 856 A.2d 756 (App.Div.2004). A majority of this Court disagrees with that conclusion and now reverses. Because I believe Judge Kestin’s opinion properly analyzed this matter, I respectfully dissent.
The discussion below first compares the Department’s regulations with the statutory language that establishes the CN requirement. I then consider indications of the Legislature’s intent. Finally, I address the impact of recently enacted legislation regarding children’s hospitals.
I.
A.
The CN statute is straight-forward: “No health care facility shall be constructed or expanded, and no new health care service shall be instituted ... except upon application for and receipt of a certificate of need.” N.J.S.A 26:2H-7 (emphasis added). The statute reflects this State’s expressed public policy that while the “public health” requires medical and hospital services of the “highest quality” that are based on “demonstrated need,” those services must also be “efficiently provided and properly utilized at a reasonable cost.” N.J.S.A. 26:2H-1. The Department carries out that statutory mandate by regulating access to and the availability of certain health care services. It is undisputed that the Legislature did not exempt RPCs from regulation.
The challenged regulations, however, provide that even if a children’s hospital is not currently licensed to operate an RPC, it need “not ... obtain certificate of need approval to establish such a ... center.” N.J.AC. 8:43G-22A.6(e) (emphasis added). Even a cursory comparison of the regulations and the statute reveals their incompatibility. The Department’s regulations direct children’s hospitals to ignore the statutory CN process when establishing RPCs, and, consequently, a children’s hospital will not have to demonstrate any need for the new services. Because a regula*19tion cannot lawfully prohibit that which a statute requires, the Department has acted outside of its authority. See In re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 489, 852 A.2d 1083 (2004) (holding that “if the regulation is plainly at odds with the statute, we must set it aside.”). I cannot fathom why we would allow the Department, “under the guise of interpretation[, to] ... give the statute any greater effect than its language allows.” Ibid. (internal quotation marks and citation omitted).
The majority “pits the certificate of need process ... against that same statute’s later designation of St. Peter’s and [Robert Wood Johnson University Hospital] as specialty acute care children’s hospitals.” Ante at 13-14, 878 A.2d at 837 (emphasis added). Framing the issue as requiring the reconciliation of two statutory provisions does not address the core issue before this Court: whether the regulations purporting to waive the statutory CN requirement are valid. The battle is not between two statutes, but between a regulation and a statute.
Although “[administrative regulations are entitled to a presumption of validity and reasonableness,” St. Peter’s, supra, 372 N.J.Super. at 177, 856 A.2d 756 (App.Div.2004) (citing Bergen Pines County Hosp. v. Dep’t of Human Servs., 96 N.J. 456, 477, 476 A.2d 784 (1984)), “an agency may not arrogate to itself the power to achieve goals not within its legislative charge,” id. at 178, 856 A.2d 756 (citing Freshwater Wetlands, supra, 180 N.J. at 489, 852 A.2d 1083). In my view, the Appellate Division properly applied that standard when it overturned the regulations at issue here.
B.
Apart from the -language of the CN statute itself, the Legislature has indicated its intent that the CN requirement apply to RPCs. The Legislature established the Certificate of Need Study Commission (Study Commission) in 1998 to examine the value of the CN statute in a deregulated health care industry. The Study Commission found that, regarding RPCs,
*20[qjuality and volume are closely interrelated. ... Certificate of need, as opposed to licensing standards, is a tool to prevent quality problems in these areas by promoting expansion of services only when a population-based need can be shown, thus assuring sufficient volume to maintain staff skills and program financial viability.
[St. Peter’s, supra, 372 N.J.Super. at 180, 856 A.2d 756 (citations omitted) (emphasis added).]
Thus, the Study Commission report underscores the value of the CN process and the danger in abandoning its application to RPCs.
The Legislature accepted the Study Commission’s recommendation and twice declined to exempt RPCs from the CN process, although it exempted other health services. In so doing, “[t]he Legislature has stated its intendment with clarity. In general, CNs are required for all health care facilities unless specifically exempted by statute. RPCs are not among the statutory exemptions.” Id. at 182, 856 A.2d 756 (citation omitted). As the Appellate Division emphasized, “we have the benefit of unmistakably plain legislative expressions regarding the continuing viability of the CN system for” RPCs. Ibid.
Despite the conclusions of the Study Commission and the Legislature, the Department determined that children’s hospitals do not have to obtain a CN to establish an RPC. However, as noted above, the agency not only lacked the authority to waive the CN requirement, its decision contravened the very public policy that it is charged with implementing. St. Peter’s argues that, under the new regulations, “patient volume will be significantly diluted [such] that no RPC in the New Brunswick area will have the opportunity to treat the necessary critical mass of patients.” If that claim has merit, the regulation hinders both the proficiency of health care service providers and the efficiency of medical institutions. But the fears of St. Peter’s will neither be vindicated nor repudiated because no CN review process will take place to determine whether the population base can support an additional RPC at Robert Wood Johnson University Hospital within one mile of the existing RPC at St. Peter’s.
*21To be sure, the Department attempted to advance a seemingly logical goal: “to provide a smooth continuum of necessary services” for pregnant women, neonates, and pediatric patients. 34 N.J.R. 3638 (October 21, 2002). That objective may be laudable, but we are not in a position to decide whether the Department’s determination is preferable to the Legislature’s overarching view—and overriding mandate—concerning health care services. See Saint Peter’s, supra, 372 N.J.Super. at 183, 856 A.2d 756. Respectfully, the majority opinion subordinates the “unmistakably plain legislative expressions regarding the continuing viability of the CN system,” id. at 182, 856 A.2d 756, to the Department’s “purpose” of the new regulation.
In sum, the statutory intent to uphold the CN statute’s applicability to RPCs is clear based on the results of the Study Commission and the fact that the Legislature did not exempt RPCs from the CN requirement.
C.
I recognize that the Legislature recently amended a statute that addresses the requirements that specific health care facilities must satisfy in order to be classified as children’s hospitals. L. 2005, c. 116, § 1. Although the majority opinion correctly asserts that “ ‘subsequent legislation may be used by a court as an extrinsic aid when seeking to discern earlier legislative intent,’ ” ante at 16, 878 A.2d at 839 (quoting Varsolona v. Breen Capital Servs. Corp., 180 N.J. 605, 623, 853 A.2d 865 (2004)), I have a different view of the amended statute.
The new legislation designates the Jersey Shore University Medical Center and the Monmouth Medical Center as “acute care children’s hospitals ... subject to the commissioner’s determination that each hospital meets all of the licensure criteria that apply to a children’s hospital and has met and complied with all of the requirements to obtain State authorization to offer the component services that constitute a children’s hospital.” L. 2005, c. 116, § 1 (emphasis added). A prior version of the law, passed by the *22Assembly but modified by the Senate, specifically required the hospitals’ compliance with “all the appropriate certificate of need and licensure requirements.” Assemb. B. No. 2884[1R] (March 1, 2005) (emphasis added). According to the majority, by removing the words “certificate of need” from the proposed version, the Legislature evinced an intent to “obviate[ ] the certificate of need process once a statutory designation as a children’s hospital is made.” Ante at 17, 878 A.2d at 839.
I disagree. Had the Legislature intended to waive the CN prerequisite for RPCs, it could have expressly done so. Instead, the statute subjects children’s hospitals to “all requirements to obtain State authorization.” L. 2005, c. 116, § 1 (emphasis added). By definition, “all” requirements includes those set forth in the CN statute, which the Legislature left unchanged. See N.J.S.A 26:2H-7 (“[N]o new health care service shall be instituted ... except upon application for and receipt of a certificate of need.”). Thus, as St. Peter’s observes, the newly enacted language is “broader, not narrower” than the wording that the Legislature rejected. Accordingly, I would conclude that the Legislature intended simply to designate two additional children’s hospitals as such, not to eliminate the CN requirement.
II.
The Department’s regulations violated plain statutory language and frustrated—rather than furthered—the legislative intent and public policy. Accordingly, I would affirm the decision of the Appellate Division.
Justice WALLACE joins in this opinion.
For reversal—Chief Justice PORITZ, Justices LaVECCHIA, ALBIN, and RIVERA-SOTO—4.
For affirmance—Justices ZAZZALI and WALLACE—2.