N.J. Admin. Code § 8:33F-2.3

Current through Register Vol. 56, No. 11, June 3, 2024

Section 8:33F-2.3 - Requirements for expansion and new construction

(a) Certificate of need applications for new long-term acute care hospitals or for bed additions to long-term acute care hospitals shall be filed for expedited review with the Department in accordance with the provisions of N.J.A.C. 8:33, Certificate of Need: Application and Review Process. The Department shall accept applications for long-term acute care hospitals under the expedited review process from all qualified interested parties upon the publication in the New Jersey Register of a call for applications.

(b) The Department shall publish a long-term acute care Statewide and hospital-specific bed need prior to accepting any expedited review certificate of need applications. The estimated bed need is calculated as follows:

1. New long-term acute care beds shall be approved only where there is a documented bed need identified by the Department.

i. Applicants shall submit as part of their certificate of need application written agreements with general hospitals located within one hour (non-peak) travel time of the LTAC that assign part or all of their LTAC bed need, as published by the Department.

(c) The Statewide and hospital-specific need for LTAC beds shall be calculated by the Department in the following manner:

1. Step 1: In order to calculate the Statewide average length of stay (ALOS), compute the length of stay (LOS) measured in days for each hospital discharge, excluding all neonatal cases;

2. Step 2: To calculate all potential discharges to LTACs, select those cases with LOS greater than the ALOS (as published by the Department) plus 15 days for the 26 DRG codes most frequently used by LTACs, selected from the DRG codes identified in the annual notice published in the Federal Register by the Centers for Medicare & Medicaid Services pursuant to 42 CFR 412.535;

3. Step 3: For those potential discharges to LTACs, compute the number of potential LTAC days by subtracting the LOS (for the patients selected in Step 2 above) from the ALOS; and

4. Step 4: Compute the bed need by dividing the number of potential LTAC days by 365 days, and then dividing this figure by the average target hospital occupancy rate of 80 percent.

(d) Applicants applying for certificate of need approval to establish a long-term acute care facility shall demonstrate the ability to attain and maintain a minimum target occupancy rate of 80 percent. In attaining and maintaining such a rate, consideration of the following factors will be given:

1. Each applicant shall provide written patient referral/transfer agreements from hospitals that agree to transfer patients eligible for LTAC. These agreements shall demonstrate the minimum target occupancy rate of 80 percent will be achieved based on the proposed bed complement of the applicant's long-term acute care hospital.

2. Hospitals referring patients to the applicant shall be located within a one-hour travel time which shall be computed on an off-peak basis.

3. Patient choice shall not be limited by the terms of any patient referral/transfer agreement between a hospital and long-term acute care facility.

(e) When at least 75 percent of the total certificates of need awarded in response to applications submitted in response to the call have been implemented by licensing approval for occupancy, the Department shall accept applications according to the following standards:

1. An applicant proposing a bed addition at an existing long-term acute care facility shall provide evidence that the average occupancy rate for the existing licensed long-term acute care beds for the six most recent quarters prior to submission of the certificate of need application exceeds 85 percent. All data upon which these occupancy rates are based shall be consistent with the hospital statistics as reported to the Department's Office of Hospital Finance and Charity Care pursuant to N.J.A.C. 8:31B, unless the applicant can demonstrate to the Department with verifiable evidence that there are inaccuracies in the statistical information that was reported. An existing LTAC shall be permitted to submit a certificate of need application to add the number of additional beds necessary to achieve the minimum target occupancy rate of 80 percent. The formula is as follows:

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where "AVG" is the "average quarterly occupancy rate for the six most recent quarters."

(f) A certificate of need awarded to provide LTAC services shall remain valid two years from its issuance.

1. The Commissioner may consider a longer time period for certificates of need that require new construction to implement their project.

N.J. Admin. Code § 8:33F-2.3

Amended by 47 N.J.R. 3111(a), effective 12/21/2015