893 A.2d 1099 | Md. | 2006
Lead Opinion
We are faced, for the second time in three years, with a challenge to a part of the State Health Plan (SHP) dealing with cardiac surgery services in the Washington, D.C. metropolitan area. Some of the contextual background to this case was set forth in Medstar v. Maryland Health Care Commission, 376 Md. 1, 827 A.2d 83 (2003) (.Medstar I), which involved an attack on the 2001 SHP. The challenge here is to the 2004 SHP. We need not repeat all that was covered in Medstar I and shall recite only what is particularly relevant to the issues raised here by appellants MedStar Health and Washington Adventist Hospital.
BACKGROUND
In conformance with the National Health Planning and Resources Development Act of 1974 and through the enact
The SHP is in the form of regulations incorporated by reference in COMAR, title 19, subtitle 24, chapters 07 through 18. Chapter 17 deals with Cardiac Surgery and Therapeutic Catheterization Services (SHP-Cardiac Services). In conformance with the legislative finding expressed in § 19-102(a) that the health care regulatory system is “a highly complex structure that needs to be constantly reevaluated and modified in order to better reflect and be more responsive to the ever changing health care environment and needs of the citizens of this State,” the Commission is required to review the SHP annually and update it at least every five years. See § 19-118(a) and (b). In 1999, the Commission decided to revise the cardiac services part of the Plan on a tri-annual basis. In
As noted, the CON program is an allocation and rationing device, designed to assure that health care resources, which are expensive to create and maintain, are sufficient to meet the public need, but not excessive. The law requires a person to obtain a CON issued by the Commission before developing, operating, or participating in the creation or relocation of any health care facility or health care service offered by a health care facility. § 19-120. Section 19-118(a) requires that the SHP include “[t]he methodologies, standards, and criteria for certificate of need review.” Those standards must “address the availability, accessibility, cost, and quality of health care” and are to be “reviewed and revised periodically to reflect new developments in health planning, delivery, and technology.” § 19-118(d). Section 19-120(e) directs the Commission to adopt regulations for “applying for and issuing certificates of need.” See, in general, Adventist v. Suburban, 350 Md. 104, 711 A.2d 158 (1998).
In conformance with the legislative direction, now found in § 19-117(a), to designate health service areas in the State, the Commission, for purposes of SHP-Cardiac Services, has divided the State into four service regions—Western Maryland, Metropolitan Washington, Metropolitan Baltimore, and Eastern Shore. The Metropolitan Washington region comprises five Maryland counties—Calvert, Charles, Montgomery, Prince George’s, and St. Mary’s—and the District of Columbia. It is the only one of the four regions that includes an area outside of Maryland—the District of Columbia—in which the Commission has no jurisdiction but nonetheless considers facilities and resources located there in devising the SHP.
After considerable study, the Commission, several years ago, reached the conclusion that it was generally preferable, as a matter of public policy, to support a small number of high-volume cardiac surgery programs than a large number of lower volume programs. In furtherance of that conclusion, the Commission adopted and maintains, as part of the SHP-
When the Commission’s 2001 SHP-Cardiac Services plan was developed and promulgated, six hospitals in the Metropolitan Washington Region performed open heart procedures. Two of those hospitals were located in Maryland (Washington Adventist in Montgomery County and Prince George’s Hospital Center in Prince George’s County); the other four were in the District of Columbia. The number of procedures performed by those hospitals in the relevant years was as follows:
Hospital 1999 2000 2001 2002 2003
Prince Geo. Hosp. Ctr 120 155 150 159 155
Wash. Advent. Hosp. 817 802 770 739 721
Georgetown Univ. Hosp. 140 122 269 260 92
Geo. Wash. Univ. Hosp. 85 103 177 190 261
Howard Univ. Hosp. 50 45 20 23 16
Wash. Hosp. Ctr. 2,950 2,631 2,324 2,252 2,152
When the Commission undertook to revise the Cardiac Services part of the 1998 State Health Plan, the law required that the SHP include the “[¡Identification of unmet needs, excess services, minimum access criteria, and services to be regionalized.” See former Health-General Article (2000 Repl.Vol.) § 19—121(2)(iii). At the time, there was no actual “unmet need” in the Metropolitan Washington Region. The data showed a projected need in the Region for 4,251 procedures and a capacity, based on the number of procedures actually being performed, of 4,432 cases.
WHC was, and remains, an affiliate of MedStar, and, on behalf of its affiliate, MedStar challenged the new methodology, contending that it was unauthorized, arbitrary, and capricious. That led to Medstar I, in which this Court, sharply divided, agreed that the “objective, hard evidence” showed that there was either “an excess of capacity over demand or a slight deficit, but not enough of a deficit to justify certification of additional open heart surgery capacity.” Medstar I, supra, 376 Md. at 24-25, 827 A.2d at 97-98. The Court concluded that “the Commission adopted a standard that created a need for additional capacity by disregarding that hard, objective evidence” and thus finding a deficit that was contrary to fact. Id. at 25, 827 A.2d at 98. The Court stated that it could discern no reason for the new methodology other than to promote competition and terminate the dominance of WHC, and declared that the methodology ran afoul of the Commissions’s stated policies and commitment to support a small number of higher volume cardiac service programs. On that ground, the Court effectively invalidated that part of the Commission’s 2001 SHP-Cardiac Services.
Prior to the enactment of ch. 565, the Commission created an Advisory Committee to study and develop recommendations. The Steering Committee of that Advisory Committee presented its recommendations to the Commission in June, 2003. A draft revised plan was submitted for informal comment in July; comments from eighteen organizations and individuals were received and considered; and, in September, 2003, Commission Staff released its analysis of those comments. At its October 20, 2003 meeting, the Commission discussed and adopted the draft Plan and, in conformance with the relevant requirements of the Administrative Procedures Act, caused it to be published in the Maryland Register and submitted for review to the General Assembly’s Joint Committee on Administrative, Executive and Legislative Review. Following the conclusion of the formal comment period, the Commission held two further meetings. On January 8, 2004, it considered written comments from 89 organizations and
As was the case with Medstar I, MedStar let no moss grow on the plan. On the very day it became effective, MedStar filed suit in the Circuit Court for Howard County seeking a declaratory judgment that the plan was invalid. In May, Suburban Hospital, Inc. was allowed to intervene as a defendant and Adventist Healthcare, Inc. (Washington Adventist Hospital) was permitted to intervene as a plaintiff. In March 2005, acting on cross-motions for summary judgment, the court upheld the validity of the 2004 SHP-Cardiac Services, declaring that it was “consistent with the Commission’s statutory authority.” MedStar and Adventist appealed, and we granted certiorari prior to any proceedings in the Court of Special Appeals. We shall affirm the judgment of the Circuit Court.
DISCUSSION
The 2004 SHP-Cardiac Services under attack here maintains its commitment to high volume programs. Policy 1.0 provides that “[tjhere should be a minimum of 200 open heart surgery procedures annually in any institution in which open heart surgery is performed for adult patients.” The minimum for open heart procedures in institutions performing only pediatric open heart surgery is set at 130 annually. See Policy 1.1. Policy 1.5 provides that “[t]he establishment of a new cardiac surgery program should permit existing programs to maintain patient volumes of at least 350 cases or more annually.” The complaint by MedStar and Adventist centers on one provision in the plan dealing with the issuance of a new CON to perform open heart surgery. COMAR 10.24.17.05 B, captioned “Consideration of New Program,” provides, in relevant part:
*436 “The Commission will consider a new program in a Regional Service Area under the following circumstances
(1) One or more existing programs in a Regional Service Area have not met the minimum volume standards for the past two consecutive years.
(2) For the purpose of determining compliance with the minimum volume standards, the Commission will not consider the volumes achieved by a newly-approved program during that program’s first two years of operation.”
The basis for that provision is explained in other parts of the Plan. In the section dealing with “Legal Authority and Overview,” COMAR 10.24.17.02 B, the Plan notes that § 19-103(c)(2) gave the Commission a “broad statutory mandate” to “[p]romote the development of a health care regulatory system that provides for all Marylanders, financial and geographic access to quality health care at a reasonable cost.” To achieve that objective, the plan “stresses the importance of access by Maryland residents to quality cardiac surgery programs at a cost that benefits the entire health care system,” and, in that regard, notes that a policy that results in a populous region “having either a very small number of programs that achieve large volumes or having a number of programs that consistently fail to achieve minimum volumes may reflect a sub-optimal balancing of cost, access, and quality.”
*437 “For this reason, the Chapter provides that the Commission can consider applications for a new cardiac surgery service in a region in which one or more providers have failed to meet the minimum volume requirements. Access to a cardiac services program that consistently fails to meet minimum-volume requirements is not considered access to a high quality cardiac surgery program. In those circumstances, the consideration of a new program that must meet minimum volume requirements is appropriate.”
(Emphasis added).
MedStar views the provision, even with this explanation, as a “fundamental flaw.” Although it seems to have no problem with the policy statements requiring an annual minimum of 200 procedures in hospitals performing adult open heart surgery, and indeed lauded those policies in Medstar I, it now proclaims that “[t]he 200 Surgery Threshold is not among the factors the General Assembly directed the Commission to consider in the CON application process” and that, by adopting under-performance within a Region as an “artificial gatekeeper” for the consideration of any new CON, the Commission has “placed the 200 Surgery Threshold ahead of the statutory factors—availability, accessibility, cost and quality.” Adventist makes a similar argument—that the 2004 plan “ignores hard objective evidence and violates the Commission’s own policies and enabling law by using a meaningless hypothesis that one low volume program in a region equates to a region-wide lack of ‘access’ to quality programs.” In making those
COMAR 10.24.17.05 is, indeed, a gatekeeper, and that is all that it is. With the “unmet need” criterion from the 2001 plan deleted, there is no reason, under the 2004 plan, for the Commission even to consider a new CON in a region if all of the existing programs in that region are performing at least 200 open heart procedures (or 130 procedures in a pediatric program), and that is all that the challenged provision states. Only if there are one or more programs in the region not meeting the minimum requirement—a requirement that finds a wealth of support in the medical literature and in the record in both this case and in Medstar I—will the Commission even consider a new CON application. The COMAR provision neither discards nor denigrates any other criterion or consideration relevant to the approval of a new CON. It does not place the 200-procedure requirement ahead of any other requirement for a CON.
This is clear from other provisions in the 2004 plan that MedStar and Adventist simply ignore. In the “Statement of Principles” section of the Plan (COMAR 10.24.17.03 B(3)), the Commission declared that “[a]ny expansion in the number or distribution of specialized health care services should allow the proposed and existing services within the Region to achieve and sustain the volumes associated with optimal health outcomes and cost-efficiency.” (Emphasis added). It noted that, when an existing program does not meet the required minimum volumes, the Commission was limited in its responses. Obviously, it has no control whatever over programs operating in the District; nor did it have any authority to withdraw a CON for a Maryland-based program that was issued prior to December 1, 1997. Accordingly, it stated, the Commission would use other strategies to balance access, quality, and cost, including “an examination of actual program utilization and distribution of caseload levels at which it would be appropriate to consider the establishment of a new program to enhance access without negatively impacting system quality and cost ...” (Emphasis added).
“(2) Approval of New Program. The Commission will approve the establishment of a new cardiac surgery program in a Regional Service Area projected to have a stable or declining open heart surgery utilization only if the Commission determines that the establishment of a new program will demonstrably benefit the service area population in access, quality, and/or cost effectiveness, and the value of that benefit is greater than any increased cost that may result from distributing the projected open heart surgery cases over a larger number of programs in the Region.
(3) Number of New Programs Allowed. The Commission will approve only one new adult or pediatric cardiac surgery program at a time in each Regional Service Area. After a new program has been approved the Commission will not consider an additional program in that Regional Service Area until the new program has been in operation for at least three years.
(4) Minimum Volume Standards. The Commission will approve a cardiac surgery program only if an applicant demonstrates that the proposed program can retain sufficient patients to meet the minimum start-up volume of 200 cases annually.”
(Emphasis added).
In furtherance of Approval Policy 2, the Certificate of Need Review Standards (COMAR 10.24.17.06 A and B) require that all applicants for the establishment of a cardiac surgery program “must meet all standards set forth in this section.” Two of those standards are particularly relevant. One, Standard (6)(b), requires that, if one or more programs in the Region are not operating above minimum volumes, the applicant “offer evidence as to why an application should be approved, which should include, but not be limited to, issues of quality, need,, and access.” (Emphasis added). Standard
These various provisions demonstrate the limited gatekeeping function of the challenged part of the plan (COMAR 10.24.17.05 B(1)). Unless there is an under-performing program in the Region, no new CON application will be considered; if there is such an under-performing program, the Commission may consider a new application, but may not grant it unless the applicant satisfies the full panoply of requirements, including a demonstration of access, quality, and cost effectiveness. The existence of an under-performing program is in no way a substitute for, or excuses compliance with, the substantive requirements for any new CON. The inclusion of that gatekeeping provision was not haphazardly or capriciously done, but was (1) recommended by the Commission Staff, (2) the subject of comment that was fairly considered by the Commission, and (3) approved for legality by the Attorney General.
The standard for judicial review of administrative agency regulations is both limited and deferential. We have long espoused the view that, in reviewing regulations, the adoption of which is quasi-legislative in nature, “the judiciary’s
MedStar’s and Adventist’s protestations notwithstanding, there is clear legislative authority for the Commission’s regulation. Section 19—118(d)(2) not only authorizes, but mandates, that the Commission adopt standards in the SHP that “address the availability, cost, and quality of health care,” and that is precisely what it has done. See also § 19-103(c)(2). It has determined, based on voluminous medical evidence, that programs consistently performing fewer than 200 open heart procedures a year do not constitute high quality programs, and that, where that deficiency exists, it is empowered to consider whether a new program, capable of performing the minimum number of procedures, should be authorized. As we have indicated, the Commission may not actually authorize a new program unless it is assured from the evidence presented in support of the application that the population in the Region will be benefitted in terms of access, quality, and cost. The regulation is fully consistent with the statutory mandate.
JUDGMENT OF THE CIRCUIT COURT FOR HOWARD COUNTY AFFIRMED, WITH COSTS.
BELL, C.J., CATHELL and BATTAGLIA, JJ., Dissent.
. The SHP itself recognizes its dual purpose: to establish health care policy to guide the actions of the Commission and other health-related public agencies, and to serve as “the legal foundation for the Commission’s decisions in its regulatory programs.” See State Health Plan for Facilities and Services: Specialized Health Care Services—Cardiac Surgery and Percutaneous Coronary Intervention Services, incorporated by reference into COMAR 10.24.17.02 A(2) (March 15, 2004). To achieve the second objective, the SHP "contains policies, standards, and methodologies that the Commission uses in making Certificate of Need decisions. Id.
. As we shall point out later, in 2001, the General Assembly transferred much of the general health planning responsibility to the Department of Health and Mental Hygiene.
. The data for 1999 are taken from the record in Medstar I, supra, 376 Md. at 31-32, 827 A.2d at 102. The data for 2000 through 2003 are in the record in this case. At some point in 2003, Georgetown University Hospital was acquired by MedStar, which took over the cardiac services program there. That program was closed by MedStar in 2003. There are thus now only five hospitals performing open heart surgery in the Metropolitan Washington area, two in Maryland and three in the District.
. The concern about the effect on accessibility and cost of having only a “very small number" of programs in a populous area is well illustrated by the data for the Washington Metropolitan Region. For the two most recent years considered by the Commission in the development of the 2004 plan (2001 and 2002), only three hospitals in that Region, which contains almost half the population of the State, had met the minimum number of procedures in both years—Adventist located in Maryland and WHC and Georgetown located in the District, and the Commission was aware that MedStar had terminated the Georgetown program, leaving only two hospitals that would likely maintain the minimum volume. The data for 2003 confirms that prospect. None of the other four hospitals then performing adult open heart surgery in the Region had performed 200 or more procedures in both years. Taking the two years together, that left the entire Region with access to only two “high quality cardiac surgery programfs]."
. That point is made as well in the section of the plan dealing with Issues and Policies (COMAR 10.24.17.04). As an introduction to the minimum procedure Policies (Policies 1.0 through 1.5), the Commission notes:
"The relationship between volume and quality is a key consideration in planning for specialized cardiac care services. For this reason, the Chapter provides that the Commission can consider applications for new cardiac surgery service in a Region in which one or more providers have failed to meet minimum volume requirements. Access to a cardiac service program that consistently fails to meet minimum volume requirements is not considered access to a high quality cardiac surgery program.”
. On December 12, 2003, Assistant Attorney General Kathryn M. Rowe advised a member of the General Assembly that what was then the proposed revision was lawful and not contrary to Medstar I. The views expressed in Ms. Rowe's letter opinion were confirmed in an Opinion of Attorney General J. Joseph Curran and his Chief Counsel for Opinions and Advice, Robert N. McDonald, on January 21, 2004.
Dissenting Opinion
Dissenting Opinion by BELL, C.J., which CATHELL and BATTAGLIA, JJ., join.
The majority is correct, we are faced for the second time in three years with a challenge to the State Health Plan (“SHP”)
Today, we are presented with virtually the same issue, although today, it is presented in a different statutory and regulatory context. Unlike the 2001 SHP, the 2004 SHP, the Plan in effect now, does not require the SHP to identify “unmet needs, excess services, minimum access criteria and services to be regionalized.” See Maryland Code (1982, 2000 Replacement Volume) § 19—121 (a)(2) (iii) of the Health General Article. That requirement was amended out of the enabling statute. Thus, the majority, in analyzing the 2004 SHP, is now convinced that the present SHP satisfies, and is consistent with, the Commission’s stated, and unchanged, policy favoring sustaining a small number of high-volume cardiac surgery programs as opposed to a large number of lower volume programs. 391 Md. 427, 441, 893 A.2d 1099, 1107 (2006). I am baffled as to how this can be so. At issue is the issuance of a Certificate of Need (“CON”). At bottom, a certification, or determination, of need is necessary for the issuance of a CON, notwithstanding the deletion of an explicit reference to that requirement. This new plan, moreover, does nothing to sustain currently existing high-volume cardiac surgery programs, or to eliminate underachieving ones. Its purpose seems to be, as it was in Medstar I, simply to create a need for a new cardiac surgery program, even if doing so is anti-factual, so that a new cardiac surgery program can be
A.
Ultimately, this case involves the granting of a CON to Suburban Hospital, which is located in Montgomery County, to establish another cardiac surgery program within a region, designated by the SHP as the Metropolitan Washington region,
At the time Medstar I was argued, the Commission was required to adopt an SHP every five years. § 19—121(a)(1). Section 19-121(a)(2) prescribed the contents of the SHP. It provided:
“(2) The plan shall include:
“(i) A description of the components that should comprise the health care system;
“(ii) The goals and policies for Maryland’s health care system;
“(in) Identification of unmet needs, excess services, minimum access criteria, and services to be regionalized;
“(iv) An assessment of the financial resources required and available for the health care system; ■
“(v) The methodologies, standards, and criteria for certificate of need review; and
“(vi) Priority for conversion of acute capacity to alternative uses where appropriate.”
Pursuant to that statute, the Commission developed the 2001 SHP, and consistently, amended the COMAR 10.24.17.04, the section that outlined how a CON application would be evaluated. Under the 2001 SHP, CON approval required the calculation of need within a region pursuant to formulae prescribed in the SHP. COMAR 10.24.17.04C (3)(a). The applicable formulae related both to the “capacity” of the region’s hospitals and the region’s “need” for cardiac surgerical services. They were, respectively:
“(i) The capacity of an existing cardiac surgery program is calculated as follows:
*445 “(i) For new programs, capacity is defined as the greater of 350 cases or the actual number of cases during the first three years of a program’s existence;
“(ii) For programs older than three years, capacity is defined as the highest actual annual volume attained and reported by that program over the last three years sub-, ject to a market based constraint; and
“(iii) The capacity of any program cannot be greater than the higher of 800 cases or 50 percent of the projected gross need for the planning region.”
COMAR 10.24.17.04E (4)(i).
“Calculation of the Net Need for Adult Cardiac Surgery Programs
“(a) For each Regional Service Area, calculate the net need for open heart surgery cases by subtracting the total existing capacity from the total projected number of cases.
“(b) Need for an additional cardiac surgery program exists if the net need for open heart surgery cases in a Regional Service Area is at least 200 cases.”
COMAR 10.24.17.04E (6).
The 2001 regulations had the effect of creating an artificial “need” in the region where none existed. Washington Hospital Center performed 2950 surgeries in 1999. Once the projected need for the region was determined to be 4251 surgeries, the Commission capped Washington Hospital Center’s surgery capacity at 2126, or one-half of the projected gross need for the region, as COMAR 10.24.17.04E (4)(i) required. The Commission thus determined, pursuant to the capacity regulation, that the other hospitals in the region were able to provide a total of 1482 surgeries. Cumulating these numbers, the Commission established that the region’s hospitals were able to perform only 3608 surgeries, 643 fewer cases than the region’s projected capacity, and found, therefore, sufficient “need” to grant a CON to at least one new program in the region. The Commission, through the promulgation of COMAR 10.24.17.04E (4)(i), was thus enabled to ignore that, by accounting for Washington Hospital Center’s full performance
Nevertheless, pursuant to this data, the Commission granted Suburban Hospital a CON. MedStar Health (“MedStar”), appellant in both Medstar I and in this case, owner of the Washington Hospital Center and other hospitals in Maryland and the District of Columbia, filed suit immediately, challenging amended COMAR 10.24.17.04E. The majority opinion in Medstar I was the result of that challenge.
We held that the amended regulation was anti-factual, and, thus, inconsistent with the policy basis for the 2001 SHP. We explained:
“[T]he Commission’s adoption of COMAR 10.24.17 is not consistent with the underlying policy assumption of the State Health Plan and is not supported by the factual analysis developed by the Commission’s Technical Advisory Committee.
“The proof of the adopted regulation’s inconsistency with the underlying policy assumption of the plan is evidenced by contrasting certain policy determinations pertinent to, and underlying, the Certificate of Need process in its present form with the policy determinations underlying the amended regulation.... [T]he former policy determinations remained unchanged after adoption of the amended regulation and, thus continue to guide the CON process, of which the amended regulation is, in reality, a critical part. Not least among them is the Commission’s conclusion, repeated at length in the State Health Plan, and incorporated in its first Policy statement, that there is an ‘inverse relationship between volume of cardiac procedures and outcome as measured by mortality and/or complications.’ ... While it acknowledges the conflicting evidence on the subject, the Commission accepted the advice ... ‘minimum caseloads play a critical role in promoting quality of care for specialized cardiac care services,’ ... and concluded, ‘it is preferable for public policy to support a small number of higher volume cardiac surgery programs rather than a large num*447 ber of programs performing at minimum or lower volumes.’ ”
376 Md. at 22-23, 827 A.2d at 96-97 (citations omitted). Further, we held that “these policy statements implement the Commission’s vision of the cardiac surgery world, one in which existing programs are required to perform well above the minimum utilization level before new programs are considered.” 376 Md. at 24, 827 A.2d at 97. Accordingly, we concluded that the Commission’s tactic of creating an artificial need when there was, in fact, a negative net need, and granting a CON to a new cardiac surgery program in a region where, in fact, one was unnecessary, flew in the face of the established policy, and was implemented for no reason other “than to promote competition and, perhaps, thereby terminate the dominance of the Washington Health Center.” 376 Md. at 25, 827 A.2d at 98.
Since the decision in Medstar I, pursuant to 2001 Md. laws, ch. 565, effective July 1, 2001, § 19-121 was amended and redesignated as § 19-118. The pertinent provision of the successor statute, § 19-118(a)(2) now provides:
“(2) The plan shall include:
“(i) The methodologies, standards, and criteria for certificate of need review; and
“(ii) Priority for conversion of acute capacity to alternative uses where appropriate.”
As presently formulated, therefore, the pertinent section of § 19-118 does not contain the requirement that the Commission identify unmet needs. That means, according to the appellees, apparently confirmed by the majority, 391 Md. at 437-38, 893 A.2d at 1105, that the Commission no longer is required to look for “unmet need,” and, thus, is no longer bound by any “legislative directive regarding the optimal number of cardiac surgery programs.” This is supported, they submit, by the fact that COMAR 10.24.17 was amended pursuant to this new statute, and the challenged provisions in
Under the 2004 SHP, a different CON evaluation process is articulated. It is prescribed in COMAR 10.24.17.05B
Pursuant to these new provisions, the Commission considered Suburban Hospital’s CON application. Noting that, in the Metropolitan Washington region as designated in the SHP, of the five cardiac surgery programs in that region, only two, Washington Hospital Center and Washington Adventist Hospital, consistently performed above the 200 case threshold, while three of the five performed consistently below the 200 surgery minimum required by the regulations, and, as such, a
B.
The problem, once again, is that the Commission has ignored the actual needs of the region for another cardiac surgery program. Instead, it relies on a formula in which the factual basis for the CON decision is secondary and, in fact, may even be presaged or rendered irrelevant by the formula itself. The Commission argues, essentially adopted by the majority, 391 Md. at 437-38, 893 A.2d at 1105, that the appellants fail to recognize that the changes to the SHP have eliminated the “unmet needs” language, and thus, because the 2004 SHP does not contain “the only provision of the Commission’s enabling statute that was cited by [the] Court as a basis for invalidating the 2001 Plan Chapter in Medstar I” it is not subject to invalidation. The appellees, and the majority, however, ignore that the rationale for Medstar I was primarily that the formula for assessing need adopted by the 2001 SHP and reflected in the COMAR regulations was anti-factual. In that case, we held that the Commission used “regulatory sleight of hand” in order to grant a CON to Suburban where a CON was unnecessary. It was this action that ultimately ran afoul of the Commission’s policy and commitment to supporting a small number of higher volume cardiac surgery programs rather than a large number of programs performing at minimum or lower volumes, and that I believe has recurred in this case, albeit using a different, but no less inappropriate, “regulatory sleight of hand.”
The majority maintains that COMAR 10.24.17.05 is merely a gatekeeper and nothing more, and that “[i]t does not place the 200-procedure requirement ahead of any other requirement for a CON.” 391 Md. at 438, 893 A.2d at 1105. Moreover, it asserts, the 2004 SHP is faithful to, and honors, its commitment to high volume programs. 391 Md. at 435, 893 A.2d at 1103-04. To support this conclusion, the majority cites to
“This Chapter stresses the importance of access by Maryland residents to quality cardiac surgery programs at a cost that benefits the entire health care system. The Chapter addresses the importance of properly balancing these considerations, noting that a policy that results in a populous region having either a very small number of programs that achieve large volumes or having a number of programs that consistently fail to achieve minimum volumes may reflect a sub-optimal balancing of costs, access, and quality. For this reason, the Chapter provides that the Commission can consider applications for a new cardiac surgery service in a region in which one or more providers have failed to meet the minimum volume requirements. Access to a cardiac services program that consistently fails to meet minimum-volume requirements is not considered access to a high quality cardiac surgery program. In those circumstances, the consideration of a new program that must meet minimum volume requirements is appropriate.”
The majority perceives COMAR 10.24.17.04A (3) to be consistent, rationalizing a SHP that accounts for, and addresses, “a policy that results in a populous region ‘having either a very small number of programs that achieve large volumes or having a number of programs that consistently fail to achieve minimum volumes,’ ” as such policy “ ‘may reflect a suboptimal balancing of cost, access, and quality.’ ” 391 Md. at
“Unless there is an underperforming program in the Region, no new CON application will be considered; if there is such an under-performing program, the Commission may consider a new application, but may not grant it unless the applicant satisfies the full panoply of requirements, including a demonstration of access, quality and cost effectiveness.”
391 Md. at 440, 893 A.2d at 1106.
The majority concludes its defense of the judgment below by asserting that the Commission’s promulgation of the critical COMAR regulations was within its authority. And they are justified, it says, because the Commission “has determined, based on voluminous medical evidence, that programs consistently performing fewer than 200 open heart procedures a year do not constitute high quality programs, and that, where that deficiency exists, it is empowered to consider whether a new program, capable of performing the minimum number of procedures, should be authorized.” 391 Md. at 441, 893 A.2d at 1107.
C.
I disagree. First, the formula developed in this case and its application process is as much anti-factual as the formula and implementation in Medstar I; the use of the 200 case threshold as a gatekeeper suffers from the same flaw as the “capacity/need” formula utilized in Medstar I. As in that case, the
The majority, like the appellees, counters this challenge by emphasizing, first, that the striking of the “unmet needs” portion of the enabling statute allows the Commission more discretion in establishing the SHP, and second, that the use of a 200-procedure standard as a minimum threshold is valid, based on substantial factual evidence that a program unable to sustain 200 procedures is “low quality.” In addition to rejecting both premises, I respond, neither of these arguments overcomes the anti-factual foundation on which the new CON process is based: that the under-performance of one hospital in a Region somehow equates to a Region-wide “lack of access.”
The purpose of a SHP is implicit; it necessarily exists to guide the Commission in addressing the needs of the citizens of Maryland. Medstar I, 376 Md. at 28, 827 A.2d at 100. Section 19-102 of the Maryland Health-General Code, captioned General Assembly findings; purpose of subtitle, states:
“(a) The General Assembly finds that the health care regulatory system in this State is a highly complex structure that needs to be constantly reevaluated and modified in order to better reflect and be more responsive to the ever*455 changing health care environment and the needs of the citizens of this State.
“(b) The purpose of this subtitle is to establish a streamlined health care regulatory system in this State in a manner such that a single State health policy can be better articulated, coordinated, and implemented in order to better serve the citizens of this State.”
(Emphasis added).
The CON process itself is a gatekeeper. It exists in order to permit the Commission to determine factually the existence of, and then supplement, any deficiency of service in Maryland. The appellees, and the majority, are trying to circumvent the previous express mandate to identify “unmet needs” and the continuing policy of supporting “a small number of high volume programs” by stating that their new policy goal is to address a Region’s “access” problems. Indeed, the new COMAR regulations state:
“[I]t is preferable for public policy to support high-volume cardiac surgery programs rather than programs performing at minimum or lower volumes. At the same time, it would not be appropriate to concentrate volumes in a manner that would inappropriately restrict access.”
COMAR 10.24.17.04A (3). Striking the provision specifying the “identification of unmet needs” from the Commission’s enabling statute and altering the language of the SHP to include other policy factors in the consideration of a CON, however, does not, in any way, change the inherent responsibility of the Commission to address the “need.” Nor does it insulate the CON application review process from critical review or the formula triggering CON review immune from challenge.
The Commission argues that under the 2004 SHP, “the Commission can consider applications for a new cardiac surgery service in a region in which one or more providers have failed to meet the minimum volume requirements,” because “[ajccess to a cardiac services program that consistently fails to meet minimum-volume requirements is not considered ac
The Commission, aware that the CON process necessarily must address need, attempts to circumvent Medstar I and to avoid addressing need by focusing on “access,” a subset of need. It suggests that its primary goal is to provide for areas which have a “lack of access.” “Lack of access,” to the Commission, is the result whenever, by using a minimum case-quality threshold as its standard, a hospital-any hospital-with an existing cardiac surgery program in a region fails to achieve the minimum number of procedures. The majority accepts these conclusions. 391 Md. at 437, 893 A.2d at 1104.
Missing from the analysis is some consideration or proof of whether the under-performance of one hospital truly results in a region-wide lack of access. As I see it, under the logic of Medstar I, it is quite clear that equating, without some kind of factual analysis into whether, or not, there is an actual “lack of access,” one hospital’s under-performance with a region-wide lack of access without accounting for the strong performance of other hospitals in the region is not appropriately done.
The majority makes the point that, when a program fails to meet minimum requirements, the Commission has limited
Moreover, because all available evidence supports a declining need for cardiac surgery services in the region, the redistribution of cases that naturally will result from the addition of a new program in the region may well decrease the number of procedures performed at regional hospitals, risking thereby the decrease in the quality of service each of these hospitals offers and the impairment of access to high quality programs overall.
The majority also ignores the argument that under the current system of CON application review, the historically low volume program at Howard University becomes a “furnace” for the region, permitting, more likely ensuring, a CON review will occur every year when review is permitted under the
Finally, any argument that adding a new program will increase geographic access undermines the purpose of having a regionalized system to begin with. By dividing Maryland into four separate Regional Service Areas, the SHP is already accommodating for any potential pitfalls in geographic access. As COMAR 10.24.17.04I puts it:
“The Commission, in establishing the following regionaliztion policies, allocates the need for cardiac surgery to achieve a balance between considerations of patient access and the need to maintain program caseloads.”
Moreover,
“Analysis of travel time data to existing cardiac surgery programs indicates that virtually all Maryland residents are within a two-hour, one-way driving time to at least one hospital that provides adult cardiac surgery services. Almost 90 percent of the pediatric population is also within a two-hour, one-way driving time of a facility offering pediatric cardiac surgery services. The overwhelming majority of Maryland residents of Maryland residents have access within reasonable driving times to more than one hospital that offers cardiac surgery services.”
Id.
The 2004 SHP provides no analysis as to whether the under-performing hospitals, in fact, suffer from low quality, and, as the appellants state, “ignores hard objective evidence and violates the Commission’s own policies and enabling law by using a meaningless hypothesis that one low volume program in a region equates to a region-wide lack of ‘access’ to quality programs.” Assuming that what the 2004 SHP does is simply to move the need-generating regulation one step away from the actual approval of a CON, as in Medstar I, to a
D.
I stated in Medstar I that “[i]t is undisputed that this Court has the right to determine for itself whether an administrative regulation exceeds the power of the agency.” 376 Md. at 26, 827 A.2d at 98, see also Maryland Code (1984, 1999 Replacement Volume) § 10-125 of the State Government Article.
This Court held in State Department of Health v. Walker, 238 Md. 512, 523, 209 A.2d 555, 561 (1965), that a state agency’s ad hoc rejection of sewage disposal systems applications was illegal where it was unable to prove using legally admissible evidence that the systems did not meet the standards imposed. Decisions made by agencies that are unsupported by substantial evidence are not within the exercise of sound administrative discretion, and are arbitrary and illegal
As in Medstar I, the Commission’s adoption of the new COMAR regulations under the 2004 SHP was not the exercise of any expertise to which this Court is required to defer, and, instead, was an arbitrary determination which does not take account of, or relate, to any actual facts. 376 Md. at 26, 827 A.2d at 98. Because the new COMAR regulations are inherently arbitrary, they are an abuse of administrative discretion. The Commission clearly ignores the actual evidence that the need for cardiac services in the region is declining. Further:
“While actual experience may not be 100 percent determinative as to future capacity, it certainly comes a lot closer than an untested assumption, based on absolutely nothing, but the general desire to have the CON process opened up to greater accessibility and the cardiac surgery field subject to more competition.... [I]t is one thing to assume something and quite another to refuse to recognize what the data that the agency collects, or requires to be collected, clearly shows.”
376 Md. at 27, 827 A.2d at 99.
Judge CATHELL and Judge BATTAGLIA join in this dissenting opinion.
. COMAR 10.24.17.041, as relevant, provides now, as it did when Medstar v. Maryland Health Care Commission, 376 Md. 1, 827 A.2d 83 (2003) was decided:
"Because cardiac surgery is a specialized health service appropriate for regional planning, the Commission allocates cardiac surgery programs on a regional basis. Regional Service Areas are established after considering optimal patient migration patterns on reasonable travel times, and adequate population size in each Region necessary to sustain a cardiac surgery program.
"Four Regional Service Areas are designated for the planning of adult cardiac surgery services:
“Eastern Shore Region: Cecil, Kent, Queen Anne's, Caroline, Talbot, Dorchester, Wicomico, Worcester, and Somerset Counties. “Metropolitan Baltimore Region: Baltimore City and Carroll, Harford, Baltimore, Howard, and Anne Arundel Counties.
“Metropolitan Washington Region: Washington, D.C. and Montgomery, Prince George’s, Calvert, Charles, and St. Mary's Counties in Maryland.
“Western Maryland Region: Garrett, Allegany, Washington, and Frederick Counties.”
. COMAR 10.24.17.04E now only contains two provisions, neither of which involves need assessments. Instead, the section, entitled "On-Site Cardiac Surgical Backup in Hospitals Performing Percutaneous Coronary Intervention,” now merely describes two procedures, Primary Percutaneous Coronary Intervention and Elective Percutaneous Coronary Intervention, and the contexts that provide for their safe implementation.
. COMAR 10.24.17.05B provides, as relevant:
"B. Consideration of New Program. The Commissioner will consider a new program in a Regional Service Area under the following circumstances
"(1) One or more existing programs in a Regional Service Area have not met the minimum volume standards for the past two consecutive years.
"(2) For the purpose of determining compliance with the minimum volume standards, the Commission will not consider the volumes achieved by a newly-approved program during that program’s first two years of operation.”
. COMAR 10.24.17.05C provides, as relevant:
******
"(2) Approval of New Program. The Commission will approve the establishment of a new cardiac surgery program in a Regional Service Area projected to have stable or declining open heart surgery utilization only if the Commission determines that the establishment of the new program will demonstrably benefit the service area population in access, quality, and/or cost effectiveness, and the value of that benefit is greater than any increased cost that may result from distributing the projected open heart surgery cases over a larger number of programs in the Region.
"(3) Number of New Programs Allowed. The Commission will approve only one new adult or pediatric surgery program at a time in each Regional Service Area. After the new program has been approved the Commission will not consider an additional program in that Regional Service Area until the new program has been in operation for at least three years.
“(4) Minimum Volume Standards. The Commission will approve a cardiac surgery program only if an applicant demonstrates that the proposed program can retain sufficient patients to meet the minimum start-up volume of 200 cases annually.”
. The policies governing minimum volume standards for cardiac surgery programs are set out in COMAR 10.24.17.04A (3):
"Policy 1.0 There should be a minimum of 200 open heart surgery procedures annually in any institution in which open heart surgery is performed for adult patients.
"Policy 1.1 There should be a minimum of 130 cardiac surgery procedures annually in any institutions in which cardiac surgery is performed for only pediatric patients.
"Policy 1.2 There should be a minimum of 200 adult open heart surgery procedures and a minimum of 50 pediatric cardiac surgery procedures annually in any institution in which both adult and pediatric cardiac surgery procedures is performed.
"Policy 1.3 A Certificate of Need issued by the Commission for the establishment of a new cardiac surgery program will require as a condition of issuance that the program achieve minimum volume standards within 24-months of beginning operation and maintain the minimum utilization level in each subsequent year of operation.
"Policy 1.4 There should be a minimum of 200 per cutaneous coronary intervention procedures performed annually in any institution in which elective angioplasty procedures are performed.
"Policy 1.5 The establishment of a new adult cardiac surgery program should permit existing programs operating at volumes of at least 350 cases or more annually to maintain patient volumes of at least 350 cases annually.”
The language of these policies, generally, is identical to its 2001 counterpart.
. In this COMAR section, the commission acknowledges that the "relationship between minimum volume guidelines and risk-adjusted mortality for CABG surgery is a critical measure of quality” and states its preference "for public policy to support higher-volume cardiac surgery programs rather than programs performing at minimum or lower volumes.” Nevertheless, it baldly states: "At the same time, it would not be appropriate to concentrate volumes in a manner that would inappropriately restrict access,” followed by the example offered in COMAR 10.24.17.02B, but with no further explanation.
Further, the majority, in referencing this COMAR section, skips from the Commission's finding that "having either a very small number of programs that achievefs] large volumes or having a number of programs that consistently failfs] to achieve minimum volumes may reflect sub-optimal balancing of cost, access, and quality,” directly to a block quote seemingly justifying the Commission’s power to grant a CON based solely on these considerations.
The majority, however, glosses over a significant portion of COMAR 10.24.17.04A (3) that survived the SHP revision. The portion unmentioned, which we referred to in MedSsar I. 376 Md. at 23, 827 A.2d at 96-97, details the substance and importance of the theory relating to program volume and quality. The majority specifically ignores the Commission’s explicit finding that ‘‘[wjhile these considerations must be balanced with the need to provide appropriate access to both interventional cardiology and cardiac surgery systems, a system of higher volumes programs is preferable to a system where all hospitals perfonn at only the minimum volume." COMAR 10.24.17.04A (3) (emphasis added). Not only does the omitted section stress the fact that the "small number of larger volume programs” theory is still a significant consideration, but it also undermines the majority’s and the appellees’ attempt to present the ’’lack of access” as the primary goal in CON authorization, when, in fact, it is not.
. I am aware that, pursuant to COMAR 10.24.17.04A (3), policy 1.5, the establishment of a new program should allow programs performing at 350 cases or better to maintain at least the 350 case level. There is no evidence, so far as I am aware, on the issue and, in any event, it is difficult to conceive how that policy can, or will, be enforced.
. Since a new proposal is three years to achieve the standard, and only one program can be added at a time, reviews would be automatic every three years.
. Md.Code (1984, 1999 Repl.Vol.) § 10-125 of the Slate Government Article provides in relevant part:
“(d) Subject to § 10-128 of this subtitle, the court shall declare a provision of a regulation invalid if the court finds that:
“(1) the provision violates any provision of the United States or Maryland Constitution;
“(2) the provision exceeds the statutory authority of the unit; or
“(3) the unit failed to comply with statutory requirements for adoption of the provision.”