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                   APPROVAL OF THE APPELLATE DIVISION
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                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-1666-15T2


IN THE MATTER OF
ST. MARY'S GENERAL HOSPITAL
SFY 2016 CHARITY CARE SUBSIDY APPEAL.


           Argued May 16, 2017 – Decided June 9, 2017

           Before Judges Reisner and Mayer.

           On appeal from the New Jersey Department of
           Health.

           Steven D. Gorelick argued the cause for
           appellant   St.  Mary's   General  Hospital
           (Garfunkel Wild, P.C., attorneys; Marc A.
           Sittenrich and Mr. Gorelick, of counsel and
           on the briefs).

           Francesco Ferrantelli, Jr., Deputy Attorney
           General, argued the cause for respondent
           Department of Health (Christopher S. Porrino,
           Attorney General, attorney; Melissa H. Raksa,
           Assistant Attorney General, of counsel; Mr.
           Ferrantelli, on the brief).

PER CURIAM

     Appellant St. Mary's General Hospital (Hospital) appeals from

a final agency decision of the New Jersey Department of Health

(Department) denying the Hospital's administrative appeal of the
Department's State Fiscal Year (SFY) 2016 charity care subsidy

allocation.    We affirm.

       The Hospital alleged that the Department's determination of

its charity care subsidy for SFY 2016 failed to use "the most

recent census data" as required by statute.              N.J.S.A. 26:2H-

18.59i(b)(3).1      Specifically,       the   Hospital   challenged    the

Department's use of the 2000 United States decennial census to

calculate the SFY 2016 charity care subsidy.             According to the

Hospital, using the 2000 decennial census data rather than "the

most recent census data," deprived the Hospital of additional



1
    This section provides:

            b.   Beginning July 1, 2004 and each year
            thereafter, the charity care subsidy shall be
            determined   according   to   the   following
            methodology:
                              . . .

                 (3)   Notwithstanding the provisions of
            paragraph (2) of this subsection to the
            contrary, each of the hospitals located in the
            10 municipalities in the State with the lowest
            median annual household income according to
            the most recent census data, shall be ranked
            from the hospital with the highest hospital-
            specific reimbursed documented charity care to
            the hospital with the lowest hospital-specific
            reimbursed documented charity care.        The
            hospital in each of the 10 municipalities, if
            any, with the highest documented hospital-
            specific charity care shall receive a charity
            care payment equal to 96% of its hospital-
            specific reimbursed documented charity care.

                                    2                             A-1666-15T2
charity care subsidies accorded to the ten municipalities in New

Jersey with the lowest median annual household income.               N.J.S.A.

26:2H-18.59i(b)(3).

       The New Jersey Health Care Cost Reduction Act (Act), N.J.S.A.

26:2H-18.51 to -18.69, established a Health Care Subsidy Fund,

from which charity care subsidies are disbursed.          N.J.S.A. 26:2H-

18.58.    Each year, the Legislature appropriates an amount for

charity care subsidies. The Department then determines the subsidy

that   each     eligible   hospital   will    receive,   using   a   formula

prescribed by law. N.J.S.A. 26:2H-18.59i. However, in some fiscal

years,    the     Legislature   issues       the   Department    additional

instructions in the Appropriations Act.

       In the 2016 Appropriations Act, the Legislature instructed

the Department to use the "source data for the most recent census

data as used in the State fiscal year 2015" to calculated the SFY

2016 charity care subsidy.       See L. 2015, c. 63, p. 88, approved

June 26, 2015.     Accordingly, in SFY 2016, the Department used the

same data used to calculate the SFY 2015 charity care subsidy

allocations.     Applying the formula, the Department determined that

the City of Passaic, where the Hospital is located, was not among

the ten municipalities with the lowest incomes.            The Department

allocated approximately $4.4 million to the Hospital for its SFY



                                      3                               A-1666-15T2
2016 charity care subsidy.      The Hospital pursued an administrative

appeal, as permitted by N.J.A.C. 10:52-13.4(a).

      In its administrative appeal, the Hospital asserted that the

Department failed to use "the most recent census data" in the form

of the 2010 five-year American Community Survey (ACS) census

report.    The Hospital argued it was deprived its proper charity

care subsidy allocation for SFY 2016 as a result.

      In its November 6, 2015 decision denying the appeal, the

Department reasoned that its use of the 2000 decennial census data

was   proper     because   N.J.S.A.    26:2H-18.59i(b)(3)     must   be   read

together with the Appropriations Act to effectuate legislative

intent    in    calculating   the    SFY   2016   charity   care   subsidies.

According to the Department, "the Appropriations Act modified the

provisions of N.J.S.A. 26:2H-18.59i(b)(3)" in defining the term

"most recent census data."          The Appropriations Act provides:

               Notwithstanding the provisions of section 3
               of P.L. 2004, c. 113 (C.26:2H-18.59i) or any
               law or regulation to the contrary, the
               appropriation for Health Care Subsidy Fund
               Payments   is   subject  to   the   following
               condition: the distribution of Charity Care
               funding shall be calculated using source data
               for the most recent census data as used in
               State fiscal year 2015.

               [L. 2015, c. 63, p. 88, approved June 26,
               2015.]




                                       4                              A-1666-15T2
In accordance with the above provision, the Department used the

same data used in SFY 2015 to calculate the SFY 2016 charity care

allocations.2

       On this appeal, the Hospital once again alleges that the

Department failed to use annual household income data collected

and reported by the United States Census Bureau (Bureau) through

the ACS.     The Hospital contends that, by using the 2000 census

data, the Department deprived it of an enhanced charity care

subsidy for SFY 2016 resulting in a loss of $1.4 million.

       A brief review of the Appropriations Act addressing the

calculation of charity care subsidies is instructive.               For SFY

2015, the Legislature changed the formula for calculating charity

care subsidies.    The changed formula eliminated enhanced charity

care   subsidies   for    hospitals   in   the   State's   lowest    income

municipalities but still relied on census data from calendar years

2010 through 2014.       See L. 2014, c. 14.

       In SFY 2016, the Legislature returned to the original formula

for calculating charity care subsidies.          However, the Legislature

specified that the SFY 2016 calculation was subject to a specific

condition.    That condition required "the distribution of Charity


2
  While census data was not used to calculate charity care in SFY
2015, the Department used historical information from the 2000
census data to calculate charity care subsidies from SFY 2010
through SFY 2015.

                                      5                             A-1666-15T2
Care funding . . . be calculated using source data for the most

recent census data as used in State fiscal year 2015."                   L. 2015,

c. 63, p. 88, approved June 26, 2015.

      The Hospital contends that the Department should have used

the ACS data as the "most recent census data" for calculating SFY

2016 charity care subsidies.          According to the Hospital, if the

Department used the ACS five-year estimates for 2010 in allocating

the 2016 SFY charity care subsidies, Passaic would have ranked

seventh poorest in the State, based upon median annual household

income, and would have received an enhanced charity care subsidy.

      Our     review    of      appeals       from    administrative       agency

determinations is limited to three inquires:

             (1) whether the agency's action violates
             express or implied legislative policies, that
             is, did the agency follow the law; (2) whether
             the record contains substantial evidence to
             support the findings on which the agency based
             its action; and (3) whether in applying the
             legislative policies to the facts, the agency
             clearly erred in reaching a conclusion that
             could not reasonably have been made on a
             showing of the relevant factors.

             [In re Herrmann, 192 N.J. 19, 28 (2007)
             (quoting Mazza v. Bd. of Trustees, 143 N.J.
             22, 25 (1995)).]


If   the    three   inquiries   are   met,     the   agency   decision    is   not

arbitrary, capricious or unreasonable and we "owe substantial

deference to the agency's expertise and superior knowledge of a

                                          6                               A-1666-15T2
particular    field."      Ibid.    (citations       omitted).    The    strong

presumption accorded to an agency's action is "even greater" when

the challenged action involves "specialized and technical matters"

within an agency's expertise.            Ibid.    We also owe some deference

to an agency's reasonable interpretation of its enabling statues.

See New Jersey Tpk. Authority v. AFSCME Council 73, 150 N.J., 331,

351 (1997).

       The Department correctly calculated the SFY 2016 charity care

subsidies using "the most recent census data as used in State

fiscal year 2015."      Contrary to the Hospital's argument, while the

Department did not calculate an enhanced charity care subsidy in

SFY 2015, the charity care subsidies that it calculated for that

year incorporated the past years' charity care allocations (SFY

2010, SFY 2011, SFY 2012, SFY 2013, SFY 2014) which were based,

in part, on the 2000 decennial census data.                    The Department

complied with the language of the SFY 2016 Appropriations Act by

using the 2000 decennial census data as the most recent census

data.    The Department historically relied upon the 2000 decennial

census data to calculate charity care subsidies and did so for SFY

2010    through   SFY   2015.      The       Legislature   intended   that   the

Department continue to use that data for calculating the SFY 2016

charity care subsidies according to the express language of the

statute.     See Finkel v. Twp. Comm. of Twp. of Hopewell, 434 N.J.

                                         7                              A-1666-15T2
Super. 303, 319 (App. Div. 2013)(reviewing court should give effect

to every word of a statute rather than render a part of the statute

superfluous); see also In re Attorney General's "Directive on Exit

Polling: Media & Non-Partisan Public Interest Groups", 200 N.J.

283, 297-98 (2009)(citation omitted)(reviewing court "must presume

that every word in a statute has meaning and is not mere surplusage

and . . .     must give those words effect and not render them a

nullity.").

     The Hospital argues that the Department and the Legislature

now use the ACS five-year estimate as the "most recent census

data" for calculating charity care subsidies.                    However, that

argument is based on an Appropriations Act adopted in 2016, in

which the Legislature required use of the 2013 ACS five-year

estimate to calculate the SFY 2017 charity care subsidy.              We agree

with the Department that the agency is not free to select any ACS

five-year    estimate   for   its   charity   care     subsidy    calculation.

Rather, the Department must follow the Legislature's direction as

to the use of a specific ACS five-year estimate.                 In this case,

the Legislature instructed the Department to use the 2013 ACS

five-year    estimate   to    calculate   the    SFY    2017     charity   care

subsidies.    See L. 2016, c. 10, p. 92.        It did not issue a similar

instruction for the SFY 2016 subsidy.



                                      8                                A-1666-15T2
     The Hospital presents a policy argument that the use of

outdated census data unfairly limits charity care subsidies to

hospitals   in   the     municipalities    with   the   lowest   incomes,

precluding residents in those municipalities from receiving access

to free or discounted hospital care.          However, the Legislature

implements policy through its passage of statutes.          As a court,

we cannot make legislative policy. See Gately v. Hamilton Memorial

Home, Inc., 442 N.J. Super. 542, 559 (App. Div. 2015)("we defer

to the democratic authority of the Legislature, as well as the

administrative expertise of the [Department], to consider the

wisdom of amending the statutes and regulations . . . .")              See

also Lourdes Medical Center of Burlington County v. Bd. of Review,

197 N.J. 339, 366 (2009)("We cannot interfere with the policy

choices made by the Legislature.          If the Legislature wishes to

enact a different standard . . . it is free to do so.")(citation

omitted).

     We are required to interpret legislative intent from the

unambiguous language of the statute.       DiProspero v. Penn, 183 N.J.

477, 492 (2005).       In 2016, the Department was required to apply

the most recent census data containing median annual household

income to calculate charity care subsidies as was used to calculate

the SFY 2015 charity care subsidies.        Because the Department used

2000 decennial census data for calculating SFY 2010, SFY 2011, SFY

                                    9                             A-1666-15T2
2012, SFY 2013 and SFY 2014 charity care subsidies, the Department

used that historical data to calculate SFY 2015 charity care

subsidies.   Since it used 2000 decennial census data historically

to calculate charity care for SFY 2010 through SFY 2015, the

Department properly used the 2000 census data to calculate the SFY

2016 charity care subsidies.

     The Hospital contends it was "legislative oversight" to refer

to "the most recent census data as used in State fiscal year 2015"

for calculation of the SFY 2016 charity care subsidies.   We cannot

agree.   The Legislature clearly expressed its intent to return to

the previous formula for calculating charity care subsidies, and

specifically conditioned the return to that formula on "recent

census data as used in State fiscal year 2015."

     In light of the foregoing, the Department's determination was

not arbitrary, capricious or unreasonable, because it was based

on a reasonable interpretation of its enabling legislation.

     Affirmed.




                                10                          A-1666-15T2
