New Jersey Certificate of Need (CON) Program

New Jersey Certificate of Need (CON) Introduction

Like many other states, New Jersey has an extensive CON process in place for healthcare services and facilities. Winning approval for a CON application is often a time consuming and difficult undertaking. Working with RPC provides clients with a team of consultants with experience working with CON projects.

When working on a CON project, RPC can prepare the entire CON application or sections of the application as the client prefers. When the client is defining the project and deciding whether to file an application, RPC can help assess the market and regulatory situation to determine the relative likelihood of success for a project. RPC not only works to create a thorough market, need and financial analysis, but also works seamlessly with the client’s staff, architects, engineers, and other outside consultants to create a solid CON application.

RPC is led by Ron Luke, JD, PhD, who has prepared CON applications and presented testimony in CON hearings since 1981 in more than 20 states.  RPC’s work on CON projects includes the opening of new acute care hospitals, hospices, physical rehabilitation and psychiatric specialty hospitals, ambulatory surgery centers and nursing homes, the relocation and addition of beds, and the acquisition of major medical equipment. Working with RPC during the CON process gives the applicant the advantage of a skilled expert team that can provide expert advice and produce an effective CON application.

State Agencies

New Jersey Department of Health and Senior Services, Division of Health Facilities Evaluation and Licensing 
The staff of this office provides support for the CON program.

New Jersey Department of Health
Division of Health Facilities Evaluation and Licensing CN and Healthcare Facility Licensure
P. O. Box 360
Trenton, NJ 08625-0360
(609) 292-7228

State Commissioner of Health and Senior Services
The Commissioner has the power to render final decisions on CON applications by reviewing recommendations of the Board and the hearing officer.

State Health Planning Board 
The Board conducts certificate of need review activities by reviewing applications and making recommendations to the Commissioner.

Services that Require CON

Licensure by the New Jersey Department of Health and Senior Services, Certificate of Need and Acute Care Licensure Program is mandatory prior to commencement of new or expanded services. The CON program is structured by the Health Care Facilities Planning Act (1971), the Health Care Cost Reduction Act (1991), the Health Care Reform Act (1992), and the Certificate of Need Reform Act (1998).

CON Projects include:

• Initiation of a health care service
• Termination/discontinuance of a service or facility and/or reduction of licensed bed capacity
• Transfer of a health care service/facility
• Changes in licensed beds and/or services
• Buildings
• Major moveable equipment

Health care facilities could include:

• general hospital
• special hospital
• mental hospital
• public health center
• diagnostic center, treatment center
• rehabilitation center
• extended care facility
• skilled nursing home
• intermediate care facility
• assisted living residence
• comprehensive personal care facility
• tuberculosis hospital
• chronic disease hospital
• maternity hospital
• outpatient clinic
• dispensary
• home health care agency
• residential health care facility
• bioanalytical laboratories

Health care services could include:

• nursing service
• home care nursing service
• paramedical service
• ambulance service
• service provided by an intern, resident in training, or physician whose compensation is provided through agreement with a health care facility
• laboratory service
• medical social service
• drugs
• biologicals
• supplies
• appliances
• equipment
• bed and board

Certificate of Need Process Milestones

There are two types of review: full review and expedited review.

The expedited review process involves review of a CN application by the Department, but not by the state health Planning Board. The expedited review process applies to: establishment of a facility or service, new assisted living facilities, change in capacity of an existing facility or service, acquisition or replacement of major moveable equipment, transfer of ownership of a general hospital, and the change in scope, location, or cost of an unimplemented CN as well as an extension of time for an unimplemented CN.

The full review process involves the State Health Planning Board and the Department reviewing the application. Projects subject to full review include  long term care projects, rehabilitation beds, maternal and child health projects, pediatric intensive care, children’s hospitals, psychiatric beds, transplantation services, mobile intensive care units, trauma units, home health, burn centers and programs, new general hospitals and capacity changes to hospital sub-acute care units.

1. Publication of Anticipated Schedule for CN Receipt
   In February of each year, the Commissioner publishes a notice in the New Jersey Register containing an anticipated schedule for receipt of CN applications subject to full review, for a two-year period. The notification will contain the needed service(s) and geographic area(s). The notification will also include the date(s) by which applications must be submitted. The administrative code requires there be a minimum of 90 days between publication of the notice and the submission deadline of the CN application, whenever possible.
2. Application Submission
   Before filing an application, applicants are encouraged to discuss their proposed project with the Department. The full review process for non-batched applications includes twelve review cycles, each beginning on the first business day of the month. Batched applications have submission deadlines while non-batched applications do not. The application must identify all ownership details and principal owners. The following project types are subject to batching cycles:
   • Long term care projects, including general long-term care, ventilators and pediatric long-term care
   • Rehabilitation beds
   • Maternal and child health projects
   • Pediatric intensive care
   • Children’s hospitals
   • Psychiatric beds
   • Transplantation services
   • Mobile ICU
   • Trauma units
   • Home health
   • Burn centers and programs
   • New general hospitals
3. Review for Completeness
   The Department makes the determination of the completeness of an application, after the applicant has been given the opportunity to supplement the application. Once complete, the application (if subject to full review) is sent to the State Health Planning Board for review and the review cycle officially begins.
4. State Health Planning Board Review
   For applications subject to full review, the State Health Planning Board sends written decisions to the Commissioner with explicit basis for its recommendations. These recommendations are sent to the Commissioner within 90 days after the application is deemed complete.
5. Commissioner’s Final Decision
   The Commissioner may approve, deny, or place conditions on an application. The decision is sent to the applicant and to the State Health Planning Board. For applications subject to expedited review, the Commissioner renders a decision no later than 90 days afer the first day of the review cycle.
6. Reconsideration Hearing
   A request for a hearing must be made within 30 days of receiving the Commissioner’s decision. The Department arranges a hearing within 60 days of request. After the hearing, the Commissioner sends the hearing officer’s recommendations to the applicant. Within 30 days of receiving all hearing records, the Commissioner makes his new final decision.

What criteria are used to review a CON?

All CON projects must:

• be necessary in providing required health care in the service area
• be financially accomplished and licensed in accordance with applicable licensure regulations
• not have an adverse impact on access to health care services in the region or State
• contribute to the orderly development of adequate and effective health care services

In making such determinations there shall be taken into consideration the following general criteria:

• availability of facilities or services which serve as alternatives or substitutes
• need for special equipment and services in the area
• adequacy of financial resources and sources of present/ future revenues
• availability of sufficient manpower in professional disciplines

Additionally, there are specific review criteria based on type of service and type of application.

Certificate of Need Application Filing Fee

The application fee is a standard $9,500.

Activity	Application Fee
Establishment of a facility, change in capacity and acquisition of major equipment, with a total project cost of less than $1,000,000	$7,500
Establishment of a facility, change in capacity and acquisition of major equipment, with a total project cost of more than $1,000,000 or transfer of ownership	$7,500 + (0.25% of total project costs)
Change in scope or extension of time on a CN	$7,500
Change in cost for $1,000,000 or more	$7,500 + (0.25% of total project costs)

Additional Sources

(links good as of January 2019)

New Jersey Department of Health
http://www.nj.gov/health/

New Jersey Certificate of Need and Facility Licensing

https://www.state.nj.us/health/healthfacilities/certificate-need/

CON Application and Review Process Rules
http://www.nj.gov/health/healthfacilities/rules.shtml

CON Application Forms and Publications

https://healthapps.state.nj.us/forms/subforms.aspx?pro=healthfacilities