N.J. Admin. Code § 8:33H-1.16

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

Section 8:33H-1.16 - Cost-efficiency and financial feasibility

(a) Applicants for a Certificate of Need shall demonstrate the financial feasibility of their projects. This analysis should be based upon the projection of reasonable private pay and Medicaid charges, expenses of operation, and staffing patterns, relative to other facilities in the planning region in which the proposed project will be located.

(b) Total project cost, construction cost per square foot, and cost per bed shall be taken into consideration in the review of Certificate of Need applications.

(c) Where projected construction and operating costs are considerably lower or higher than the average for the planning region, as determined by the Department, the applicant shall provide an explanation at the request of the Department indicating factors contributing to said projections. This request for an explanation shall not be construed as an opportunity to change cost projections. Information regarding the most recent available facility costs in the health systems areas may be obtained from the Department of Community Affairs' Health Care Plan Review Program.

(d) Applicants shall describe their previous record of implementing Certificate of Need-approved long-term care projects, identifying each case in which a change in cost was requested in order to complete a project. All other things being equal, preference shall be given to approving applicants with a history of realistically projecting construction costs in their Certificate of Need applications, as reflected in the number and magnitude of previous requests for a change in cost.

(e) Applicants shall provide evidence in their financial projections that income generated by operation of the facility will be sufficient to provide care to the percentage of Medicaid-eligible or indigent residents specified in the application, or in accordance with 8:33H-1.15 whichever is greater.

(f) Applicants shall provide verification of the availability of at least 10 percent of the total project cost, including all financing and carrying costs, in the form of equity.

(g) As a condition of approval, applicants shall agree to make reasonable efforts to obtain the least cost financing available.

(h) Applicants proposing to add long-term care beds in an existing facility or to add long-term care beds in the course of replacing an existing facility shall provide documentation that the added beds will improve the efficient operation of the facility, reducing unit costs of care per resident.

N.J. Admin. Code § 8:33H-1.16

Amended by R.2004 d.354, effective 9/20/2004.
See: 36 New Jersey Register 1641(a), 36 New Jersey Register 4306(a).
In (a), substituted "planning region" for "health systems area" following "other facilities in the"; in (c), substituted "planning region" for "health systems area" following "higher than the average for the"; in (e) and (h), substituted "residents" for "patient".