Carriage Hill Cabin John, Inc. v. Maryland Health Resources Planning Commission

HOLLANDER, Judge. This appeal arises from a fierce competition that began in 1991, pitting three health care providers in a battle to obtain the requisite Certificate of Need from the Maryland Health Resources Planning Commission (the “Commission”), appellee, ¹⁹¹ for the development of new nursing home beds in Montgomery County (the “County”). The competitors, Carriage Hill-Cabin John, Inc. 1 (“Carriage Hill” or “CHCJ”), appellant, Marriott Retirement Communities, Inc. (“MRCI” or “Marriott”), 2 appellee, and Montgomery InterCare Associates (“In-terCare”), all sought the right to develop a maximum of 84 comprehensive care beds, 3 allocated to the County under the State Health Plan. Ultimately, on November 13, 1995, the Commission issued a Final Decision approving Marriott’s proposals and denying the competing applications submitted by Carriage Hill and Inter-Care.

Thereafter, Carriage Hill and InterCare sought review of the Commission’s decision in the Circuit Court for Montgomery County. In April 1997, following a stipulated remand to the Commission, the Commission issued a lengthy “Final Decision Revised on Remand” (hereinafter, the “Revised Decision”), again approving Marriott’s applications. In a written opinion dated November 17, 1997, the circuit court affirmed. Only Carriage Hill has challenged that decision; 4 InterCare is not a party to the appeal. ¹⁹² Appellant presents the following questions for our review, which we have reformulated slightly: I. Did the circuit court adequately address and resolve all of the potentially dispositive legal issues raised below by Carriage Hill and, if not, should this Court remand the matter to the circuit court to do so?

II

Did the circuit court err in concluding that the Commission complied with the procedural requirements of the Administrative Procedure Act and the Commission’s own procedural regulations?

III

Did the circuit court err in concluding that the Commission’s denial of Carriage Hill’s application was based on the Commission’s valid interpretation and application of its regulations?

IV

Did the circuit court err in concluding that, in approving Marriott’s applications, the Commission complied with its regulations? For the reasons set forth below, we shall affirm. I. Statutory and Regulatory Framework The Maryland Health Planning and Development statute (the “Act”), Md.Code (1982, 1996 Repl.Vol., 1998 Cum.Supp.), 5 §§ 19-101 through 19-123 of the Health-General Article (“H.G.”), was enacted “to promote the development of a health care system that provides, for all citizens, financial and geographic access to quality health care at a reasonable cost.” H.G. § 19-102(a); see Adventist Healthcare Midatlantic, Inc. v. Suburban Hosp., Inc., 350 Md. 104, 106 , 711 A.2d 158 (1998); Catonsville Nursing Home, Inc. v. Loveman, 349 Md. 560, 573-74 , 709 A.2d 749 (1998); Sinai Hosp. v. Maryland Health Resources Planning Comm’n, 306 Md. 472, 473 , 509 A.2d 1202 (1986). To effectuate its goal, the Legislature created the Commission, a State administrative agency, “and ¹⁹³ charged it, among other things, with (1) developing, adopting, and periodically updating a comprehensive State Health Plan, and (2) assisting in the implementation of that plan, in part through the legislatively — established CON program.” Adventist, 350 Md. at 106 , 711 A.2d 158 .

The purpose of the State Health Plan (“SHP”), in turn, “is to establish an integrated system of care that ‘assures geographic and financial access to a range of quality health care services at a reasonable cost for all citizens.’ ” Changing Point, Inc. v. Maryland Health Resources Planning Comm’n, 87 Md.App. 150, 155 , 589 A.2d 502 (1991) (citation omitted). The SHP identifies “unmet needs ... [and] excess services....” Adventist, 350 Md. at 107 , 711 A.2d 158 , and includes projections of need for long term care services, “to guide the Commission’s actions and to foster specific action in the private sector.” Changing Point, 87 Md.App. at 155 , 589 A.2d 502 ; see H.G. §§ 19-114, 19-115, and 19-118; COMAR §§ 10.24.01.07H and 10.24.08 (1992). 6 At least every five years, pursuant to H.G. § 19-114(a), the Commission must adopt a SHP, which takes the form of regulations. Adventist, 350 Md. at 107 , 711 A.2d 158 . The Act and the Code of Maryland Regulations (“CO-MAR”), § 10.24.01.01 et seq.

(1990), require a person or entity to obtain a Certificate of Need (“CON”) from the Commission in order to develop or operate a CCF. See H.G. §§ 19-115 through 19-118. COMAR § 10.24.01.01(A) provides, in part: “A person or health care facility shall have a Certificate of Need issued by the Commission before development, operation, or participation in a health care project....” (Emphasis added). COMAR 10.24.01.07K(1) requires the Commission to act on a CON application “not later than 150 days after the application has been docketed.” 7 ¹⁹⁴ The CON is a vital part of the health care regulatory process, because it functions as the “principal mechanism” for implementing the SHP.

Maryland Gen. Hosp. v. Maryland Health Resources Planning Comm’n, 103 Md.App. 525, 528 , 653 A.2d 1029 , cert. denied, 339 Md. 355 , 663 A.2d 72 (1995). Indeed, the Loveman Court described the CON requirement as the “teeth” of the Act. Loveman, 349 Md. at 575 , 709 A.2d 749 .

Like the SHP, it is meant “to assure an efficient and effective health care system for Maryland____” Maryland Gen. Hosp., 103 Md.App. at 528 , 653 A.2d 1029 ; see United States ex rel. Joslin v. Community Home Health of Maryland, Inc., 984 F.Supp. 374, 381 (D.Md.1997). Pursuant to H.G. § 19-118(c)(l), the decision of the Commission concerning a CON application “shall be consistent with the [SHP] and the standards for review established by the Commission,” unless a public health threat exists.

See Adventist, 350 Md. at 107 , 711 A.2d 158 . The burden to demonstrate such compliance rests on the applicant. COMAR § 10.24.01.07HG). Unlike the development of the SHP, which is a “quasi-legislative function,” Adventist, 350 Md. at 122 , 711 A.2d 158 , the CON process is “quasi-judicial.” Id. at 123 , 711 A.2d 158 .

This is because “individual rights, duties, entitlements, or privileges are at issue.” Id. Accordingly, CON proceedings constitute “a contested case, subject to the procedural protections afforded by title 10, subtitle 2 of the State Government Article----” Id. Therefore, an evidentiary hearing must conform to the contested case procedures of the Administrative Procedure Act. Adventist, 350 Md. at 108 , 711 A.2d 158 .

When, as here, several applicants seek to develop more nursing home beds than are projected as needed by the SHP, the Commission must conduct a comparative review of the competing applications. See COMAR § 10.24.01.07B(2). The comparative review process applies to “two or more applications for similar projects serving the same or overlapping service areas.” Maryland Gen. Hosp., 103 Md.App. at 529 , 653 A.2d 1029 .

It is intended to determine “not simply ¹⁹⁵ whether a particular applicant satisfied the basic criteria for a CON, but which of the applicants best satisfied the criteria.” Id. H.G. § 19-118 is titled “Action on applications.” Under the version of the Act in effect at the outset of this matter, Md.Code (1990 Repl.Vol.), H.G. §§ 19-101 et seq., the Commission was authorized to delegate to a committee “the responsibility for review of [a CON] application, including the holding of an evidentiary hearing.” H.G. § 19-118(d)(2). The Committee would then make a recommendation to the full Commission. H.G. § 19-118(d)(3).

Thereafter, under H.G. § 19 — 118(d)(4), the Commission was required to “vote to approve, approve with conditions, or deny the [CON] application on the basis of the committee’s recommendation and the whole record before the committee.” Effective June 1, 1995, H.G. § 19-118(d) was substantially revised. H.G. § 19-118(d)(3) now permits the Commission to delegate to a “reviewer” the responsibility to evaluate a CON application. The reviewer may hold evidentiary hearings and prepare a “recommended decision for consideration by the full Commission.” H.G. § 19-118(d)(3)(ii); see H.G. § 19-118(d)(8). Further, the Commission is authorized to designate a “single Commissioner to act as a reviewer” for competing CON applications.

H.G. § 19-118(d)(4). In addition, under H.G. § 19 — 118(d)(7)(i), the staff of the Commission is specifically deemed an interested party. Pursuant to H.G. § 19-118(d)(ll), the Commission is required to “vote to approve, approve with conditions, or deny the [CON] application on the basis of the recommended decision, the record before the staff or the reviewer, and exceptions and arguments, if any, before the Commission.” See Adventist, 350 Md. at 107 , 711 A.2d 158 . In considering CON applications, the Commission is obligated to consider, inter alia, eight criteria set forth in COMAR 10.24.01.07H(2)(a)-(h).

The criteria include, in summary, the following: (a) compatibility with the SHP, including the Long Term Care Services provisions of COMAR 10.24.08.05F and 10.24.08.06A (1992); (b) the “need of the population” served or ¹⁹⁶ to be served; (c) the “less costly or more effective alternatives”; (d) the “financial viability of the proposal”; (e) the extent of a “positive impact on the health care system of the area”; (f) the “availability of non-financial resources”; (g) research needs; and (h) “Compliance with relevant State and federal legal requirements.” COMAR § 10.24.01.07H(1) places the burden of proof on the applicant to establish satisfaction of the review criteria. “[W]hen all of the applicants otherwise would qualify for the CON because they meet all of the other standards and policies,” Maryland Gen. Hosp., 103 Md.App. at 532 , 653 A.2d 1029 , approval policies “come into play----” Id. These “are, in essence, preferences, or tie-breakers.” Id. The Commission’s decision regarding a CON must also satisfy certain requirements.

In accordance with the Commission’s regulations, the decision of the Commission “shall be in writing and based on a written opinion stating the reasons and grounds for the Commission’s decision.” COMAR 10.24.01.07K(5). Additionally, under COMAR 10.24.01.07K(2), the decision shall include findings of fact and conclusions of law based solely on the testimony, the examination and evidence included in the formal project record, on the memoranda filed, if any, on the evidence, incorporated by reference into the record of the proceeding, on information and data in the record of the proceeding, and on matters as to which the Commission has taken official notice, which matters shall be made known to the parties to the proceeding. “The end result [of the CON process] is an adjudication, containing findings of fact, conclusions of law, and an order.” Adventist, 350 Md. at 123 , 711 A.2d 158 .

II

Factual and Procedural Summary 8 In April 1991, CHCJ, Marriott, and InterCare filed competing CON applications, which were docketed in June 1991, ¹⁹⁷ seeking the Commission’s approval to develop up to 84 new nursing home beds authorized by the SHP for the County in 1994. Specifically, appellant sought to develop a new facility in Potomac that would include 84 CCP beds, 56 assisted living apartments, and 6 domiciliary care beds, at a projected cost of $9,069,396.00. 9 Marriott filed two CON applications. In the first, it sought approval to add 16 CCF beds to an existing 43-bed comprehensive care unit, which was part of a continuing care retirement community called Bedford Court. Located in Silver Spring, Bedford Court also had 76 domiciliary care beds and 215 independent living units.

Marriott planned to increase the size of the comprehensive care unit by converting 16 rooms from single to double occupancy, at a projected cost of $108,680. In the other CON application, Marriott sought approval to develop a new facility in North Bethesda called Brighton Gardens, which would include 41 comprehensive care beds and 101 domiciliary care beds, at a projected cost of $13,515,344.00. InterCare sought approval to develop James Creek Nursing Center in Olney, which would include 84 CCF beds and 15 domiciliary care beds, at an estimated cost of $7,603,328.00. Because the combined number of proposed CCF beds requested by the three applicants exceeded the SHP’s projected need of 84 CCF beds for the County in 1994, the Commission undertook a comparative review of the competing applications.

See COMAR 10.24.01.07B(2); the Long Term Care Services Chapter of the SHP, COMAR 10.24.08.05E and .06A; and the review criteria in COMAR 10.24.01.07H(2)(a)-(h). At one time or another in this protracted process, each applicant was recommended for approval by at least one of the reviewing authorities. On June 26, 1991, pursuant to H.G. §§ 19-111 through 19-113 and COMAR 10.24.01.071, the applications were submitted ¹⁹⁸ for review and comment to the Montgomery County Health Department (the “Department”), the local health planning agency. Concluding that the “Carriage Hill — Cabin John proposal offers a project that is ‘ready to go’ and will help to meet [the] outstanding need for [nursing home] beds,” 10 the Department issued a written recommendation to the Commission in August 1991, supporting Carriage Hill’s application.

The Department took into account the success of two other Carriage Hill facilities in the County, the location of the proposed project, and that CHCJ owned the land and had already obtained zoning approval for the project. On January 21,1992, in its first written report, the Commission Staff recommended disapproval of all the projects, based on COMAR 10.24.08.05F(2), which required every nursing home in the County to have at least a 95% occupancy level before approval of additional comprehensive care beds. 11 Thereafter, the parties agreed to limit the first phase of evidentiary hearings, held in April 1992, to the threshold issue of the occupancy rate. On December 16, 1992, Commissioner Mary Etta Mills, acting as the hearing officer, agreed with the Staff and recommended denial of all four applications, based on the occupancy requirement. The Commission rejected that recommendation in February 1993.

It decided, instead, to waive the 95% occupancy requirement, pursuant to COMAR 10.24.08.05F(2)(b). The ¹⁹⁹ Commission was concerned that many area facilities had low occupancy levels because they did not participate in Medicaid. Because those facilities served only a limited portion of the market for long term care services, it concluded that the occupancy rate was not coextensive with the County’s need for CCF beds. Accordingly, the comparative review process proceeded.

The Staff issued a second report in April 1993, again recommending against approval of any of the proposals. As to Carriage Hill, the Staff determined that it had not documented a memorandum of understanding reflecting its commitment to serve the Medicaid population. With respect to InterCare, the Staff found that its project was inconsistent with the “less costly or more effective alternative” criterion, and InterCare failed to explain the reasons for its higher costs. Regarding Marriott’s applications, the Staff indicated that it had not explained how the design features of its facilities satisfied the needs of its patients, nor did it provide documentation showing professional and community support for its proposals.

Thereafter, in late 1993, Commissioner Gregory Hunter held an evidentiary hearing that consumed eight days. Subsequently, in a third report issued by the Staff on March 4,1994, the Staff endorsed Marriott’s projects. The Staff was satisfied that Marriott’s design features would meet the needs of its patient population, and that it demonstrated community and professional support for its projects. Moreover, the Staff found that Marriott’s proposed projects best satisfied the review criteria concerning the “less costly or more effective alternatives.” The Staff also recommended against approval of the projects of CHCJ and InterCare.

Although the Staff concluded that appellant showed a commitment to serving the needs of Medicaid patients, the Staff found that Carriage Hill’s proposal was inconsistent with the less costly or more effective alternative criterion. It also suggested that appellant could endeavor to relocate unused CCF beds from its existing facilities to avoid adding new beds. Concluding that, in certain respects, Intercare’s project was not financially ²⁰⁰ viable and its design was not consistent with the review criteria, the Staff recommended against InterCare. Evidentiary hearings resumed in March 1994 with regard to the Staffs,March 1994 report.

At the hearing, the parties questioned Barbara Johnson, the Assistant Director of the CON program and principal author of the Staff report, regarding the Staffs recommendation of Marriott. Ms. Johnson explained: “[I]n this case this is a comparative review, not all applicants can be approved, so you have to choose.” With this in mind, Ms. Johnson observed that appellant might encounter zoning problems, while the Marriott projects did not face any concerns regarding zoning. She also observed that the Marriott projects did “not have any community opposition.” In March 1994, InterCare filed a motion entitled “Motion of Montgomery InterCare Associates to Dedocket Applications of Marriott Retirement Communities for Transfer of Projects.” It claimed that the applicant for the two Marriott projects was not the same entity that would actually operate them, in violation of COMAR 10.24.01.06D(1). In addition, InterCare alleged that Marriott’s sale of Bedford Court to an unrelated third party constituted an improper sale of the CON.

Subsequently, in June 1994, pursuant to a motion filed by Marriott, Commissioner Hunter recused himself, for reasons unrelated to this appeal. Consequently, Commissioner Joan Harris was appointed as the hearing officer. In connection with her responsibilities, she made several site visits to the proposed project locations and to the applicants’ existing facilities in the County. 12 On November 2,1994, Marriott filed a “Motion to Dedocket and Cancel the Certificate of Need Applications of Carriage Hill-Cabin John, Inc.,” claiming, inter alia, that CHCJ made material misrepresentations to the Commission and that its zoning status was uncertain due to its modifications to the proposed project. In December 1994, Commissioner Harris ²⁰¹ conducted an evidentiary hearing focusing largely on the rival motions to dedocket.

In April 1995, following a total of twelve days of hearings that began in 1993 and involved three hearing officers, Commissioner Harris issued her recommendation. She urged approval of the InterCare project, as modified, and denial of the proposals submitted by Marriott and Carriage Hill. After comparing the applications in terms of the review standards, rules, and criteria, she concluded that each applicant satisfied COMAR 10.24.07H(2)(a)-(h) and the Long Term Care provisions of the SHP. Commissioner Harris considered as the dispositive issue the need to provide more comprehensive care beds to the Medicaid population and other underserved groups.

The Commissioner acknowledged: “In determining which of the applicants would best serve the low income, underserved population one must wrestle with minuscule differences.” Although each applicant had signed a Memorandum of Understanding committing itself to serve Medicaid patients, Commissioner Harris found that InterCare had the “longest and best track record in accessibility to low-income persons.” Because Marriott was seeking the fewest beds, she reasoned that it would serve fewer Medicaid patients than the other two applicants. As to Carriage Hill, the Commissioner was concerned because its existing facilities did not participate in the Medicaid Assistance Program. Moreover, she believed those facilities contributed to the problem with the occupancy level that nearly prevented any project from receiving a CON. Commissioner Harris reasoned: To award an applicant a CON to fill a perceived need, when that need was in part brought about by the facilities in the jurisdiction that did not participate in the Medicaid Program, of which this applicant operated two such facilities, would defy all logic.

Commissioner Harris also urged the denial of InterCare’s motion to dedocket Marriott’s applications and Marriott’s motion to dedocket the application of CHCJ. Nevertheless, as to the motions to dedocket filed by both Marriott and InterCare, ²⁰² she noted that “some of the information contained in the motions [did] ... cause one to doubt the forthrightness of both Marriott and Carriage Hill.” Commissioner Harris stated, in part: Specifically, as regards the Marriott reorganization, the split of the corporation into two separate corporations, and selling most of the nursing unit facilities to an unrelated entity leaves considerable doubt as to the future involvement of the Marriott organization in the nursing care field despite the 40-year lease agreement. The disclosure of this reorganization came only at the eleventh hour of the review, and quite by accident, when an article appeared in the Washington Post. Because of the article and the concerns it raised, Marriott agreed to make available the Sale Agreement to all the parties in this review.

Perusal of the agreement showed no areas that were questionable from a legal perspective, but it raised considerable concern about Marriott’s commitment in the area of nursing care facilities. Further, the agreement included a statement regarding the Bedford Court facility that would result in a $1,000,000 increase to be paid to Marriott if the CON is granted within two years of the closing of the sale agreement. In addition, as regards CHCJ, the fact that this applicant is providing contradictory statements to two separate governmental agencies regarding the actual building that is to be constructed on its site causes considerable loss of credibility regarding the other statements that it has made during this review. The Hearing Officer is greatly concerned about the statements made by Ms. Luckett regarding the Commission’s practice of routinely allowing an applicant to change its design after the award of a CON.

The Commission may have allowed design changes to a previously approved project, but that is done only when it is absolutely necessary and due to no fault of the applicant. Clearly, such is not the case in the CHCJ project as it is currently constituted. (Footnote omitted). Appellant and Marriott subsequently filed exceptions challenging Commissioner Harris’s proposed decision, arguing ²⁰³ that she ignored evidence in the record indicating that the InterCare proposal was inconsistent with various SHP standards and review criteria, including InterCare’s financial feasibility.

In its exceptions, CHCJ did not assail Commissioner Harris’s conclusion that Marriott Corporation’s reorganization or financial transactions did not preclude the award of the CONs to Marriott. Marriott excepted to the proposed denial of its motion to dedocket appellant’s CON application. Similarly, InterCare excepted to Commissioner Harris’s proposed denial of its motion to dedocket Marriott’s applications. In response to the proposed decision, the Staff filed a document entitled “Staffs Reply to the Exceptions of the Applicants.” It agreed with Commissioner Harris’s “central reasoning in choosing an applicant other than [appellant] for the limited number of beds available in this review.” Observing that the primary reason the Commission waived the 95% occupancy rule was to increase access for Medicaid patients, the Staff noted that Medicaid patients were not accepted at other Carriage Hill facilities.

The Staff thus suggested that “it would be illogical, in the absence of strong reasons, to approve a third Montgomery County facility for Carriage Hill over another qualified applicant to try to solve the Medicaid access problem in Montgomery County.” The Staff also “focus[ed] on those areas where Staff disagreed with the proposed decision.” Because Marriott demonstrated that its proposals were financially viable and because the “Staff ... [did] not believe that InterCare’s psyehogeriatric program should be preferred over Marriott’s,” the Staff supported Marriott. On June 11, 1995, the Commission held an exceptions hearing at which arguments were presented by Commissioner Harris, the Staff, and attorneys for appellant, Marriott, and InterCare. After consideration of the March 1994 Staff Report, Commissioner Harris’s proposed decision in favor of InterCare, and the parties’ arguments, the Commission voted on two motions. The first motion, to adopt Commissioner Harris’s proposed decision, failed by a vote of three to six.

The second motion, to adopt the Staff Report recommending ²⁰⁴ Marriott’s applications, carried by a vote of six to three. For both votes, two commissioners recused themselves and one abstained. Thereafter, on November 13,1995, the Commission issued a lengthy, written Final Decision approving Marriott’s two projects. Although the Commission’s Final Decision acknowledged the filing of Marriott’s motion to dedocket CJCH’s application, the decision did not resolve the exception concerning the proposed denial of that motion.

Appellant and InterCare subsequently sought review of the Commission’s decision in the circuit court. In January 1996, shortly after those challenges were lodged, Marriott sought a limited remand to the Commission for determination of its unresolved motion to dedocket Carriage Hill’s application. Marriott asserted that a limited remand was necessary, because the circuit court could not otherwise consider Marriott’s argument attacking Carriage Hill’s challenge to the Commission’s decision. On April 3, 1996, pursuant to an agreement of the parties, the circuit court entered an order for a stipulated limited remand, in order to obtain a ruling from the Commission with regard to Marriott’s motion to dedocket Carriage Hill’s application.

The stipulation stated, in pertinent part: The parties agree that in the event that the [Commission] ... issues a Revised ... Decision that addresses the Marriott Motion, such a Revised ... Decision shall be deemed to be the [Commission’s] ... Final Decision for purposes of this Appeal____ Thereafter, on April 8, 1997, the Commission issued its Revised Decision, consisting of some 94, single-spaced pages of text.

Apart from several paragraphs updating the procedural history of the matter and addressing Marriott’s motion to dedocket the Carriage Hill application, the Revised Decision was identical to the Final Decision issued in November 1995. Like the Final Decision, the Revised Decision reviewed the procedural history and the various recommendations, and it included detailed findings of fact pertaining to the review ²⁰⁵ criteria, along with conclusions of law. It also included the following order: It is, this 13th day of November, 1995, ORDERED by the Maryland Health Resources Planning Commission that[:] The Application of Bedford Court is hereby APPROVED. The Application of Brighton Gardens is hereby APPROVED.

The Application of Carriage Hill Cabin John is hereby DENIED. The Application of James Creek is hereby DENIED. A majority of Commissioners voting and present plus at least two consumer members concurring in the result In the lengthy “Findings of Fact” section of the Revised Decision, the Commission expressly considered each application in light of the plethora of rules, criteria, and standards governing competing CON applications. 13 The Commission determined that none of the applicants was entitled to prefer ²⁰⁶ ence under any SHP standard. Moreover, it concluded that the applicants generally faired equally well with regard to the various standards, rules, and review criteria. 14 With regard to the “more effective alternatives” analysis under COMAR 10.24.01.07H(2)(c), the Commission analyzed seven factors that are not specifically identified in COMAR or the Act, and gave “a preference” to Marriott’s proposals.

In its view, Marriott “offer[ed] the more effective projects in this review.” Further, in analyzing “impact” under COMAR 10.24.01.07H(2)(e), the Commission considered three other factors not specifically identified in COMAR or the Act and concluded that Marriott’s projects “will have the more positive effect on the health care system.” The determinations favoring Marriott over CHCJ with respect to the “more effective alternatives” and “impact” criteria ²⁰⁷ rested on several findings made by the Commission, as follows: (1) the zoning status of appellant’s project was uncertain, because it had obtained a zoning exception in 1986 for a project that differed materially from the one presented to the Commission; (2) appellant’s project was facing some community opposition; (3) even if the community opposition to CHCJ’s application lacked merit, such opposition would inevitably delay implementation of the CHCJ project; (4) Marriott’s projects had a more efficient facility design, because each had the physical therapy room located on the same floor as the nursing unit; (5) and appellant ineffectively used scarce resources, because it voluntarily kept out of service 46 CCF beds in two other facilities in the County at the same time that it sought additional CCF beds in this review. Although the Commission acknowledged that Marriott raised serious concerns about appellant’s ability to secure the necessary zoning approval, it rejected Marriott’s motion to dedocket appellant’s application. Additionally, in a lengthy footnote, the Commission rejected the contention that Marriott was not entitled to the CONs based on violations of COMAR resulting from Marriott Corporation’s reorganization and financial transactions. After the Commission issued its Revised Decision, the circuit court heard oral argument regarding the challenges to that decision. 15 On November 26, 1997, the circuit court filed its five and a half page “Memorandum and Opinion,” affirming the Commission.

Noting that it did “not go into great detail as to the factual background” because that was “not in dispute,” the court concluded that the Commission adhered to the governing statute and regulations, Marriott was the real party in interest, and substantial evidence supported the Commission’s conclusions. The court said, in part: While it was acknowledged that not every issue was documented and established by specific reference to testimony, the [Revised Decision] as a whole touched on all sufficient ²⁰⁸ issues which would have a bearing on the ultimate decision reached. Therefore, the Court feels that the procedures of the Commission were in fact followed and that their decision was reached after a through [sic] and careful view of the evidence and facts presented. The question that the Court must decide is whether or not the testimony presented including Staff recommendations, was sufficient to establish the findings of fact by the Commission.

Then the Court must decide if the final recommendation was legally correct based on the entire procedure. The Court has carefully reviewed the Memoranda of the parties, considered the arguments of counsel and the applicable law in this area and feels that the Commission did in fact reach findings of fact which were substantiated by the evidence presented and ultimately correctly applied the law to the issues presented. We will include additional facts in our discussion of the issues.

III

A Summary of Appellant’s Contentions The prolonged and rather tortured history of this case involves, as appellant notes, “more than eight years of various administrative and judicial procedures____” In its legal memorandum submitted to the circuit court, appellant characterized the case as a “procedural nightmare.” Nevertheless, on appeal, appellant “does not argue that it has not been afforded due process....” Nor does appellant “dispute any of the Commission’s finding of fact as such____” Indeed, appellant acknowledges “that all of the applicants proposed excellent facilities” and “there is adequate evidence in the huge administrative record from which the Commission could have approved any of the applications before it.” It thus concedes that “the ‘substantial evidence’ test for challenging agency fact finding is not implicated in this case.” ²⁰⁹ Both here and below, appellant claims it has focused on “purely legal questions — matters of procedure and the interpretation and application of various Commission regulations.” Appellant contests “the process by which the Commission evaluated [the] evidence.” It complains that, in its Revised Decision, the Commission made “no findings, and offered no reasons” for its decision to approve Marriott’s applications and reject Carriage Hill’s application. Rather, after “years of administrative proceedings,” appellant contends that the agency’s final decision contains “new findings of fact,” not set forth anywhere in the record, and “leaves unclear why and how it chose to approve the Marriott applications.” Indeed, in its legal memorandum submitted below, CHCJ characterized the agency’s decision as “a work of fiction.” In the “Summary of Argument” section of its appellate brief, CHCJ argues that the Commission “violated its own regulations and the Administrative Procedures [sic] Act by taking a vote that rejected, without discussion or explanation, the findings of fact of its own Hearing Officer, and then by issuing a ... Revised Decision ... that contained diametrically opposite findings that the Commission itself never adopted.” In appellant’s view, the agency’s failure to provide a clear rationale for rejecting the recommendations of its own hearing officer and the Department constitutes “procedural sloppiness.” Appellant also challenges the validity of the Commission’s Revised Decision, issued months after the Commission’s vote, claiming it is the work product of the Commission’s Staff, which “provided the entire rationale for the Commission’s final action and the Commission never even purported to adopt that rationale.” Further, CHCJ posits that the decision is defective because the Commission never took the “simple step” of voting to adopt the Staffs draft of the Revised Decision. Appellant argues: The flaw in the Commission’s procedure is highlighted by the fact that Staffs draft of the “Final Decision” not only memorialized the Commission’s vote, but also purported to rehabilitate Staffs recommendation nearly two years earlier ²¹⁰ in favor of Marriott against the Hearing Officer’s contrary findings and conclusions.

Staff, in effect, drafted as the Commission’s “findings” what amounted to a rebuttal of the cross-examination its witness had suffered, and a defense of not only the result it had recommended, but also its own rationale that the Hearing Officer had rejected. Further, appellant asserts that the Revised Decision “purported to deny the CHCJ application — and to approve the Marriott applications — on the basis of plainly erroneous interpretation and application of the Commission’s regulations.” Appellant states: [ T]he Commission’s denial of CHCJ’s application was based only upon an interpretation and application of the “most effective alternative” review criterion that was beyond the Commission’s authority ...; the Commission failed to follow its regulations which require appropriate consideration of the recommendation of the designated local health planning agency which had recommended approval of the CHCJ application ...; the Commission purported to make findings regarding the status of CHCJ’s zoning that were beyond the evidence or the Commission’s expertise and authority ...; and the Commission improperly interpreted and applied its regulations to allow Marriott to sell a CON in connection with the refinancing of one of the applicant facilities. Finally, appellant’s brief is replete with criticisms concerning the circuit court’s allegedly deficient review of the Commission’s decision. CHCJ repeatedly complains that the “Circuit Court simply failed to address [CHCJ’s] legal and procedural critiques of the Commission’s ultimate decision-making [sic] process.” In the end, according to appellant, the lower court improperly “blessed” a “sloppy decision by the Commission.” Because the circuit court failed to address and resolve all of the issues that appellant raised, CHCJ urges that “the appropriate remedy is to remand the matter to the trial court to do so.” ²¹¹ IV.

Standard of Review The principles that govern judicial review of an administrative agency’s decision are well established. We reiterate them here because, in large measure, they undergird our resolution of this case. Appellant urges us to remand to the circuit court so it may consider the many issues that it failed to resolve. That request overlooks our role, which requires us to review the agency’s decision.

Ahalt v. Montgomery County, 113 Md.App. 14, 20 , 686 A.2d 683 (1996). Indeed, our function “in reviewing an administrative decision is precisely the same as that of the circuit court.” Department of Health & Mental Hygiene v. Shrieves, 100 Md.App. 283, 303-04 , 641 A.2d 899 (1994); see Maryland State Board of Soc. Work Exam’rs v. Chertkov, 121 Md.App. 574, 583 , 710 A.2d 391 (1998); Wisniewski v. Department of Labor, Licensing and Regulation, 117 Md.App. 506, 515 , 700 A.2d 860 (1997); Moseman v. County Council, 99 Md.App. 258, 262 , 636 A.2d 499 , cert. denied, 335 Md. 229 , 643 A.2d 383 (1994); Maisel v. Montgomery County, 94 Md.App. 31, 34 , 614 A.2d 1333 (1992); Mortimer v. Howard Research & Dev. Corp., 83 Md.App. 432, 442 , 575 A.2d 750 , cert. denied, 321 Md. 164 , 582 A.2d 499 (1990). 16 In Insurance Comm’r for the State v. Engelman, 345 Md. 402 , 692 A.2d 474 (1997), the Court of Appeals explained that judicial review of an administrative agency’s decision is both narrow and expansive.

It is narrow to the extent that reviewing courts, out of deference to agency expertise, are required to affirm an agency’s findings of fact, as well as its application of law to those facts, if reasonably supported by the administrative record, viewed as a whole. The standard is equally broad to the extent that reviewing courts are ²¹² under no constraint to affirm an agency decision premised solely upon an erroneous conclusion of law. Id. at 411 , 692 A.2d 474 (internal citations omitted); see Adventist, supra, 350 Md. at 120 , 711 A.2d 158 ; United Parcel Serv. v. People’s Counsel for Baltimore County, 336 Md. 569, 576 , 650 A.2d 226 (1994) (recognizing that “[j]udicial review of administrative agency action is narrow.”); CBS Inc. v. Comptroller of the Treasury, 319 Md. 687, 697-98 , 575 A.2d 324 (1990). An agency’s decision must be affirmed when the agency’s factual findings are supported by substantial evidence in the record and the decision is legally correct.

United Parcel Serv., 336 Md. at 577 , 650 A.2d 226 ; CBS, 319 Md. at 697-98 , 575 A.2d 324 ; Mortimer, 83 Md.App. at 441 , 575 A.2d 750 . Substantial evidence has been defined as more than a scintilla of evidence. Montgomery County v. Greater Colesville Citizens Ass’n, Inc., 70 Md.App. 374, 382 , 521 A.2d 770 (1987). “In this context, ‘ “[s]ubstantial evidence,” ... has been defined as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion^]” ’ ” Loveman, 349 Md. at 569 , 709 A.2d 749 (citations omitted). Moreover, an appellate court must “review the agency’s decision in the light most favorable to the agency, since decisions of administrative agencies are prima facie correct and carry with them the presumption of validity.” Baltimore Lutheran High School Ass’n, Inc. v. Employment Security Admin., 302 Md. 649, 662-63 , 490 A.2d 701 (1985); see Loveman, 349 Md. at 569 , 709 A.2d 749 ; Anderson v. Department of Pub.

Safety & Correctional Servs., 330 Md. 187, 213 , 623 A.2d 198 (1993); Giant Food, Inc. v. Department of Labor, Licensing and Regulation, 124 Md.App. 357, 401 , 722 A.2d 398 (1999); Maisel, 94 Md.App. at 34 , 614 A.2d 1333 ; Cox v. Prince George’s County, 86 Md.App. 179, 187 , 586 A.2d 43 (1991) . In reviewing the agency’s decision, we must not engage in judicial fact-finding, Anderson, 330 Md. at 212 , 623 A.2d 198 ; Board of County Comm’rs v. Holbrook, 314 Md. 210, 218 , 550 A.2d 664 (1988), nor may we supply factual ²¹³ findings that were not made by the agency. Ocean Hideaway Condo. Ass'n v. Boardwalk Plaza Venture, 68 Md.App. 650, 662 , 515 A.2d 485 (1986).

Further, the inferences reasonably to be drawn from the facts are left to the agency. Holbrook, 314 Md. at 218 , 550 A.2d 664 ; see Moseman, 99 Md.App. at 265 , 636 A.2d 499 . Thus, a reviewing court may not “substitute its judgment on the question whether the inference drawn [from the facts] is the right one or whether a different inference would be better supported. The test is reasonableness, not rightness.” Snowden v. Mayor and City Council of Baltimore, 224 Md. 443, 448 , 168 A.2d 390 (1961) (citations omitted); see People’s Counsel for Baltimore County v. Man-gione, 85 Md.App. 738, 751 , 584 A.2d 1318 (1991).

In addition, a reviewing court may not search the record for a basis to support an agency’s conclusions. Instead, we may only uphold an agency’s decision if “it is sustainable on the agency’s findings and for the reasons stated by the agency.” United Steelworkers of Am. v. Bethlehem Steel Corp., 298 Md. 665, 679 , 472 A.2d 62 (1984) (citations omitted); see also United Parcel Serv., Inc., 336 Md. at 577 , 650 A.2d 226 ; Harford County v. Earl E. Preston, Jr., Inc., 322 Md. 493, 505 , 588 A.2d 772 (1991); Rouse-Fairwood Ltd. Partnership v. Supervisor of Assessments of Prince George’s County, 120 Md.App. 667, 686 , 708 A.2d 19 (1998). Accordingly, “Our review of the ... [Commission’s] factual findings entails only an appraisal and evaluation of the ... [Commission’s] fact finding and not an independent decision on the evidence.” Loveman, 349 Md. at 569 , 709 A.2d 749 (citation omitted). In other words, we shall affirm the Commission’s ruling if “ ‘a reasoning mind reasonably could have reached the factual conclusions the ... [Commission] reached.’ ” Changing Point, 87 Md.App. at 162 , 589 A.2d 502 (quoting Bulluck v. Pelham Wood Apartments, 283 Md. 505, 512 , 390 A.2d 1119 (1978)).

In contrast to the deferential review accorded to an agency’s factual findings, questions of law receive no deference on review; we are not bound by an agency’s interpreta ²¹⁴ tion of law. Caucus Distributors v. Maryland Sec. Comm’r, 320 Md. 313, 324 , 577 A.2d 783 (1990); State Admin. Bd. of Election Laws v. Billhimer, 314 Md. 46, 59 , 548 A.2d 819 (1988), cert. denied, 490 U.S. 1007 , 109 S.Ct. 1644 , 104 L.Ed.2d 159 (1989). Indeed, “a reviewing court is under no constraints in reversing an administrative decision which is premised solely upon an erroneous conclusion of law.” People’s Counsel for Baltimore County v. Maryland Marine Mfg.

Co., Inc., 316 Md. 491, 497 , 560 A.2d 32 (1989) (citations omitted); see Department of Assessments & Taxation v. Consumer Programs, Inc., 331 Md. 68, 72 , 626 A.2d 360 (1993); Liberty Nursing Ctr., Inc. v. Department of Health & Mental Hygiene, 330 Md. 433, 443 , 624 A.2d 941 (1993); Ahalt, 113 Md.App. at 22 , 686 A.2d 683 ; Department of Health and Mental Hygiene v. Riverview Nursing Ctr., Inc., 104 Md.App. 593, 602 , 657 A.2d 372 , cert. denied, 340 Md. 215 , 665 A.2d 1058 (1995); Department of Health & Mental Hygiene v. Reeders Memorial Home, Inc., 86 Md.App. 447, 452 , 586 A.2d 1295 (1991). To the contrary, the reviewing court “must substitute its judgment for that of the agency if ... [its] interpretation of the applicable legal principles is different” from that of the agency. Perini Services, Inc. v. Maryland Health Resources Planning Comm’n, 67 Md.App. 189, 201 , 506 A.2d 1207 , cert. denied, 307 Md. 261 , 513 A.2d 314 (1986); see, e.g., Roach v. Comptroller of the Treasury, 327 Md. 438 , 610 A.2d 754 (1992); Friends School v. Supervisor of Assessments, 314 Md. 194 , 550 A.2d 657 (1988). When an agency’s interpretation of a statute or regulation is at issue, the substituted judgment standard applies.

Rossville Vending Machine Corp. v. Comptroller, 97 Md.App. 305, 311-12 , 629 A.2d 1283 , cert. denied, 333 Md. 201 , 634 A.2d 62 (1993); see also People’s Counsel, 316 Md. at 497 , 560 A.2d 32 . Accordingly, “[t]he substituted judgment test is the analysis employed when we interpret the requirements of the SHP ... and COMAR.” Perini, 67 Md.App. at 201 , 506 A.2d 1207 . Finally, we observe that a decision is “not in accordance with law” when it is ²¹⁵ arbitrary, illegal or capricious. In making a determination of whether the [agency’s] decision is arbitrary, illegal or capricious, the reviewing court must decide whether the question before the agency was fairly debatable.

An issue is fairly debatable if reasonable persons could have reached a different conclusion on the evidence and, if so, a reviewing court may not substitute its judgment for that of the administrative agency. The fairly debatable test is analogous to the clearly erroneous standard under Rule 8-131(c) and a decision is fairly debatable if it is supported by substantial evidence on the record taken as a whole. Mortimer, 83 Md.App. at 441 , 575 A.2d 750 (internal citations omitted.) With these well-honed principles in mind, we turn to consider appellant’s contentions. V. Discussion — The Revised Decision A. The Circuit Court’s Ruling Appellant’s first argument is captioned: “The Circuit Court Failed To Address And Resolve All of the Potentially Disposi-tive Issues [Appellant] Raised Below.” CHCJ argues that the circuit court erred because it failed to address the many legal issues that appellant raised, including issues concerning flaws in the Revised Decision due to its “eonclusory determinations” and lack of “specific findings of fact----” In particular, appellant complains that the circuit court did not resolve its contentions that the Commission erred by failing to provide adequate reasons in its opinion for its rejection of the hearing officer’s recommendation, by failing to explain its rejection of the local Department’s recommendation, and by failing to explain adequately the reasons for its approval of the Staffs position.

Further, CHCJ claims that the circuit court never addressed the allegedly defective process by which the Commission arrived at its decision. Rather, Carriage Hill characterizes the circuit court order as a “blanket rejection” of its arguments, and maintains that such “general findings and conclusions do not permit adequate appellate review.” ²¹⁶ By failing to resolve all of the issues raised by Carriage Hill, appellant urges that the court did not comply with Md.Code (1984, 1995 RepLVol.), § 10-222(h) of the State Government Article (“S.G.”). 17 Consequently, appellant seeks a remand to the circuit court for resolution of the issues it raised in its attack upon the agency’s decision. We are unpersuaded by these contentions. Our resolution of this matter is tied directly to the standard of review that we previously outlined.

Appellant’s underlying contention is flawed because it is premised largely on the mistaken perception that our task involves review of the decision of the circuit court. “[T]he Court of Appeals repeatedly has proceeded directly to the review of the administrative decision itself.” Shrieves, 100 Md.App. at 303 , 641 A.2d 899 (citing Maryland State Police v. Lindsey, 318 Md. 325, 334-36 , 568 A.2d 29 (1990) and Motor Vehicle Admin. v. Lindsay, 309 Md. 557, 563-64 , 525 A.2d 1051 (1987)). Consistent with the principles of judicial review of an agency’s decision, H.G. § 19-120(b)(l) expressly provides: “A decision of the Commission shall be the final decision for purposes of judicial review.” The authorities on which appellant relies to support its request for remand are inapposite. For example, contrary to appellant’s assertion, Lampton v. LaHood, 94 Md.App. 461 , 617 A.2d 1142 (1993), is not “virtually on all fours with the ²¹⁷ present ease.” La/mpton did not involve an administrative agency review, id. at 466-67 , 617 A.2d 1142 , and we did not order a remand because of the Orphan’s Court’s failure to reach all the legal issues before it. Rather, we remanded because the record was unclear as to certain critical facts that pertained to the creditor’s claim, and because we could not determine from review of the record what impact a conflict of interest had on the lower court proceeding.

Id. at 484-85 , 617 A.2d 1142 . Similarly, Forman v. Motor Vehicle Admin., 332 Md. 201 , 630 A.2d 753 (1993), is readily distinguishable from this case. There, an administrative law judge suspended the appellant’s driver’s license because the appellant failed to take a breathlyzer test. Id. at 205-06 , 630 A.2d 753 .

The Court remanded to the agency because the agency, not the circuit court, failed to address an important legal issue. B. The Commission’s Vote, the Role of Staff, and the Hearing Officer’s Recommendation Appellant argues, inter alia, that the Revised Decision is defective because the Commission rejected, “without discussion or explanation,” the recommendation of the hearing officer, never provided the rationale for its vote, and never “purported to adopt the staffs draft Final Decision.” These claims lack merit. As we noted earlier, the Commission may delegate to a single Commissioner the responsibility for reviewing an application, conducting evidentiary hearings, and preparing a proposed decision. H.G. § 19 — 118(d)(3).

The Staffs role in a CON review proceeding is outlined in COMAR 10.24.01.07o(l), which provides, inter alia: “The Staff shall issue its report ... in the form of Proposed Findings of Fact, Conclusions of Law and Recommendations.... ” Here, the Staff reviewed the applicable rules, standards, and criteria and issued an 85 page report. Nevertheless, under H.G. § 19-118(d), the Commission alone has the “final nondelegable authority to act upon” a CON application. Moreover, COMAR 10.24.01.07K(2) requires a written decision that includes findings of fact. ²¹⁸ At the hearing held by the Commission on June 13, 1995, 18 representatives of the parties and Staff presented oral argument and were questioned by the commissioners concerning a variety of issues. The commissioners also had before them the proposed decision of Commissioner Harris favoring Inter-Care, the parties’ exceptions to that recommendation, the March 1994 Staff report approving Marriott, and a detailed chronology of the procedural history prepared by the Staff.

At the end of the hearing, the Commission specifically considered two motions. The first, articulately and rather passionately presented by Commissioner Harris, urged the award of the CON to InterCare, to ensure “a willing and compassionate provider of nursing home services” and to relieve “a serious access problem” for the “low income under-served population....” That motion was defeated. Thereafter, a motion was made to “support the staffs recommendations” in favor of Marriott. After that motion was seconded, the Chair said: “The motion to accept the recommendation of the staff that is favoring Marriott is now on the floor.” When the question was called, the Chair said: “All those in favor, please raise your hand.” By a vote of six to three, the Chair declared: “The motion is carried.” After verifying that the requisite number of consumer members of the Commission supported the motion, the Chair said: “[A]t this time ...

Marriott has been awarded the application.” The foregoing establishes that the Commission specifically voted to approve Marriott’s projects, based on the Staff’s recommendation. COMAR 10.24.01.07K(4) states: “A decision of the Commission shall be by a majority of the quorum present and voting, except that no project may be approved without the affirmative vote of at least two consumer members of the Commission.” Appellant does not claim that the Commission acted without a quorum or that the vote lacked the approval of two consumer members. We are satisfied that the ²¹⁹ Commission complied with COMAR when it issued the Revised Decision, incorporating the findings and conclusions of the March 1994 Staff report, in accordance with the Commission’s vote. Appellant has not referred us to any authority that mandates a second vote by the Commission to approve the actual text of either the Final Decision or the Revised Decision, and we can find none.

Nor do we perceive any merit to the assertion that “the Commission never even purported to adopt” the Staffs rationale. That the Commission’s Revised Decision was issued after its vote does not mean that it was not the Commission’s ruling or that the process was flawed. Certainly, the Staff had no authority to issue a final opinion in the name of the Commission. To the contrary, the Final Decision and the Revised Decision carried with them the imprimatur of the Commission; they were both issued by order of the Commission.

We are also unable to assign error even if the Revised Decision was drafted by the Staff. CHCJ’s contention in this regard is undercut by its concession below, recognizing “that agencies cannot be expected to draft every word in their orders; that is what Staff is for.” Although appellant speculates that some of the commissioners may have had concerns about the Staffs final product, there is no evidence to support such a suggestion. A “Commission member who does not agree with the decision or any part of it reached by the majority of the Commission may file a written dissenting opinion....” COMAR 10.24.01.07K(8). None was filed.

In its quarrel, appellant also seems to suggest that, because the Commission disagreed with the hearing officer’s recommendation endorsing InterCare, more was required of the Commission by way of explanation than if the Commission had adopted that recommendation. CHCJ points out that the Revised Decision omits specific reference to the hearing officer’s objections to appellant’s application. Absent those objections, appellant asserts that its application should have been approved. CHCJ also contends that the Revised Decision ²²⁰ failed to address the hearing officer’s objections to Marriott’s applications or the reasons favoring InterCare.

Again, these contentions do not carry the day. Merely because the Commission delegated to a hearing officer the responsibility to hold hearings and prepare a proposed decision, it does not follow that the Commission was obligated to adopt the hearing officer’s proposal or satisfy a higher standard in order for a disagreement with a hearing officer to withstand appellate scrutiny. Moreover, we are unaware of any requirement imposing on the Commission the burden of addressing, line by line, the content of a hearing officer’s recommendation. See H.G. § 19-118(d)(ll).

In this regard, Shrieves, supra, 100 Md.App. 283 , 641 A.2d 899 , is instructive. The Shrieves Court explained the relationship between an agency and a hearing officer and the deference, if any, that the agency owes to the hearing officer. To be sure, an agency is required to consider the findings of a hearing officer, and the hearing officer’s credibility determinations are entitled to special deference. Id. at 298-99 , 641 A.2d 899 .

But, “it is the final order of the administrative agency that is subjected to deferential judicial review.” Id. at 296 , 641 A.2d 899 (citing Anderson, 330 Md. at 215 , 623 A.2d 198 ). When we compare the Commission’s decision to Commissioner Harris’s recommendation, it is evident to us that the Commission considered Commissioner Harris’s proposed findings and recommendation. Moreover, the Commission adequately addressed, directly and indirectly, those matters with which it disagreed. For example, in its consideration of the “need” criterion under COMAR 10.24.01.07H(2)(b), the Commission pointed out that the hearing officer “erroneously interpreted the Commission’s previous decision to waive the 95% [occupancy] rule.” It said: “One of the concerns guiding the Commission ... was that the 95% rule not be used to block new competitors in favor of existing nursing homes that do not accept Medicaid recipients____ It does not follow from this that the applicant proposing the largest number of Medic ²²¹ aid beds lie., InterCare, which was recommended by the hearing officer] should be approved.... ” The Commission also specifically “disagreed] with the Proposed Decision’s conclusion that Marriott has contributed to a Medicaid access problem in Montgomery County.” Further, it adequately provided its reasons for favoring Marriott’s projects over the proposal of CHCJ.

Therefore, we perceive no legal error with regard to the process that culminated in the Revised Decision. C. The Review Criteria: The Most Effective Alternatives, Need, and Impact CHCJ contends that the Commission’s decision was arbitrary and capricious, because it improperly considered matters that exceeded the scope of its authority with respect to the more effective alternatives review criteria under COMAR 10.24.01.07H(2)(c). CHCJ avoids casting its complaint as a challenge to the factual findings of the Commission. It argues, instead, that the Commission erred as a matter of law by considering issues such as use of currently available resources and zoning.

In this regard, CHCJ contends that the Commission improperly “created new ‘effectiveness’ standards dealing with the use of ‘existing resources’ ... and ‘questions about zoning’ ... to determine that [appellant] was not as ‘effective’ an alternative as Marriott.” Appellant avers that the Commission found CHCJ’s application “consistent with every review criterion except one,” i.e., the “most effective alternatives” criterion. In particular, CHCJ focuses on the Commission’s allegedly improper interpretation of the “most effective alternatives” review criterion, which included a “scarce resources” analysis. Appellant suggests that this analysis was the “sole basis” for the denial of its application. Preliminarily, we reject appellant’s assertion that the Commission found CHCJ’s application consistent with all review criteria except the “more effective alternatives” criterion.

As we see it, the Commission made several other key findings that culminated in the decision to favor Marriott over CHCJ. ²²² For example, in its analysis of the “impact” criterion under COMAR 10.24.01.07H(2)(e), which appellant does not address, the Commission specifically concluded that Marriott would have a more positive effect on the health care system. Interestingly, although Marriott notes the Commission’s favorable finding as to “impact,” appellees have not challenged appellant’s erroneous assertion that the Commission favored Marriott solely because of the more effective alternatives criterion. It would seem to us, however, that because appellant has not challenged the Commission’s conclusion with respect to the impact criterion, it has waived any complaints as to that conclusion. See Maryland Comm’n on Human Relations v. Downey Communications, Inc., 110 Md.App. 493, 519 , 678 A.2d 55 (1996); Harrison v. Harrison, 109 Md.App. 652, 673-74 , 675 A.2d 1003 , cert. denied, 343 Md. 564 , 683 A.2d 177 (1996).

Consequently, its complaints as to the more effective alternative analysis are really of no moment. In any event, in reaching its decision as to “impact,” the Commission considered some of the same factors that it considered regarding the “more effective alternatives” criterion. Therefore, we shall discuss both the impact and more effective alternatives criteria together. As to the criterion of “less costly or more effective alternatives,” COMAR 10.24.01.07H(2)(c) provides: The availability of less costly or more effective alternatives for addressing the unmet needs identified by the applicant---- [Tjhe Commission shall take into account the cost effectiveness of construction plans and may consider the cost effectiveness of providing that proposed service at the applicant facility versus alternative facilities which are existing and providing the proposed service or alternative facilities which have submitted a competitive application as part of a comparative review.

When costs fall within a reasonable range, cost comparisons are not relevant to this criterion, and projects may be found consistent even if one applicant’s costs exceeds that of another’s in a comparative review. ²²³ This criterion is composed of two prongs: the “less costly” component and the “more effective” component. Because the Commission could not award more than 84 CCF beds, and all of the applicants were generally qualified, the more effective alternatives criterion became a critical consideration. Appellant has acknowledged that the more effective alternatives element is somewhat subjective, particularly when, as here, more than one contestant meets the minimal standards. In analyzing the “more effective” prong, the Commission articulated seven additional factors that it deemed relevant to its analysis: community-based services for which the SHP finds need; service to underserved populations; community and professional support/opposition; site control; zoning; facility design as it relates to patient privacy and efficient operation; and use of currently available resources.

At the outset, we reject appellant’s claim that these factors were not properly part of the “more effective alternatives” analysis. Appellant’s view of this standard is too restrictive. Neither the Commission’s interpretation nor its application of the more effective alternatives criterion conflicted with the plain language of the regulation. Moreover, it is the agency that “is best able to discern its intent in promulgating a regulation.” Changing Point, 87 Md.App. at 160 , 589 A.2d 502 (citing Maryland Comm’n on Human Relations v. Bethlehem Steel Corp., 295 Md. 586, 593 , 457 A.2d 1146 (1983)). “Thus, an agency’s interpretation of the meaning and intent of its own regulation is entitled to deference.” Id.

(citing Maryland Comm’n, 295 Md. at 593 , 457 A.2d 1146 ). The Commission’s conclusion in favor of Marriott as the applicant with the most effective alternative rested on four of the seven factors. The Commission determined that: (1) appellant ineffectively used currently available resources, because it intentionally took 46 CCF beds out of service in its two other facilities in the County, notwithstanding its effort to obtain additional beds for the pending project; (2) Carriage Hill’s zoning was uncertain; (3) appellant faced community opposition to its project; (4) the community opposition would ²²⁴ inevitably result in the delay of implementation of the project; and (5) Marriott’s facility designs were more efficient, because its physical therapy rooms were planned for the same floors as the nursing units. The Commission also considered the impact criterion, pursuant to COMAR 10.24.01.07H(2)(e).

It provides: Having a positive impact on the existing health care system of the area. For purposes of determining consistency, the Commission may judge the effects of the proposal on existing facilities, beds, services, or equipment and any excesses or deficits identified in the State Health Plan, as applicable, and whether proposals to expand existing capacity shift services, beds, and dollars to areas of unmet need from areas of identified excess. In its consideration of the impact criterion, the Commission considered three other factors: 19 need; service to the under-served; and respite and domiciliary care. As to the need factor, it stated that it was “not convinced” that the award of the maximum of 84 CCF beds “will have the most positive effect on the system.” This is noteworthy, because only Marriott sought less than 84 CCF beds.

It reiterated that appellant faces “community opposition and may be opposed in future zoning actions, if such are required.” Moreover, “regardless of the merits of the opposition,” the Commission was concerned that “implementation of the [CHCJ] project may be delayed.” Were that to occur, the Commission recognized ²²⁵ that CHCJ’s “services may not be brought on line in a timely manner.” Further, because of CHCJ’s “unused beds at its other facilities,” the Commission expressly said that it had “no reason to believe that ... [CHCJ] would not also voluntarily restrict beds” again. Thus, the Commission concluded that Marriott’s projects would have the more positive impact on the health care system. In the “Summary” section of its analysis of the “Less Costly or More Effective Alternatives” criterion, the Commission emphasized the more effective prong. In concluding that Marriott’s proposals were more effective, the Commission reiterated that “[zjoning is not an issue” for Marriott, its projects have “appropriate zoning” and thus they could quickly “be implemented without further zoning action.” On the other hand, it said that CHCJ’s zoning was “unclear,” and it faced community opposition to future zoning approvals.

Further, the Commission concluded that Marriott’s proposed facilities had a better design than CHCJ’s proposed project, based on the location of the physical therapy rooms. Thus, the Commission indicated that CHCJ’s design was “less efficient” than Marriott’s, “due to the necessity to transport the patients off the comprehensive care unit for therapy.” Further, the Commission reiterated that it did not consider CHCJ’s voluntary restriction of beds at its two existing facilities “an effective use of scarce resources.” After consideration of the discernable differences that the Commission believed would have an impact upon the effective deployment of health care resources, it selected Marriott’s project. As we explain below, we perceive no error. (1) <Jse of Currently Available Resources Appellant complains that the Commission improperly penalized CHCJ because, at two other Carriage Hill facilities in the County, Carriage Hill voluntarily removed many CCF beds from service.

It urges that it was improper for the Commission to consider unused beds at related facilities. 20 ²²⁶ Flora Luckett, CHCJ’s Chief Executive Officer, admitted under cross-examination that Carriage Hill operates two other comprehensive care facilities in the County, and they both had CCF beds that were “not in service.” Luckett offered reasons for that situation, which are not relevant to the issue here. She also acknowledged that, as of the date of her testimony (i.e., November 19, 1993), the Carriage Hill facility in Silver Spring was licensed for 113 CCF beds, with a voluntary restriction to 100 beds, and only 98 of those beds were operating. At the Carriage Hill facility in Bethesda, which was licensed for 89 CCF beds, only 75 were operating. After reviewing files for the other Carriage Hill facilities, the Staff noted that Carriage Hill’s Silver Spring facility had recently increased its licensed capacity from 113 to 122 CCF beds, and the Bethesda facility had requested an increase of nine beds.

Yet the Silver Spring facility’s voluntary restriction to 100 beds remained in effect, and the Bethesda facility had a voluntary restriction of 74 beds. Accordingly, the Commission determined that the two other Carriage Hill facilities had a total of 37 unused CCF beds, which would increase to 46 when the Bethesda facility was licensed for the additional nine CCF beds. Thus, the Commission said: “In ²²⁷ short, up to 46 beds which could be available for patient use in Montgomery County are controlled by Carriage Hill and kept out of service. This is not an effective use of scarce resources.” Appellant insists that the Commission had no authority to deny Carriage Hill’s CON application solely because the other Carriage Hill facilities had 46 licensed but unused CCF beds.

Further, CHCJ argues that the Commission erred as a matter of law in concluding that appellant did not “appropriately” or “effectively” use its “resources”, and by finding that such conduct was “not an effective use of scare resources.” In addition, CHCJ contends that the Commission erred as a matter of law in stating that appellant “could accomplish much of its goal to construct a facility at the Carriage Hill Cabin John site through relocation of unused comprehensive care beds from its existing facilities.” 21 In this regard, appellant posits that the Commission lacks the authority to relocate existing beds or to require a facility to do so. To the contrary, it notes that Carnage Hill could not relocate existing CCF beds without CON approval. Therefore, it urges that the Commission erred because it denied a meritorious application based on “some impressionistic determination that the applicant has a possible opportunity to obtain its beds in another way.” Under the circumstances attendant here, we believe it was reasonable for the Commission to consider that CHCJ’s related facilities had licensed CCF beds that were voluntarily removed from service. Maryland Gen.

Hosp. v. Maryland Health Resources Planning Comm’n, supra, 103 Md.App. 525 , 653 A.2d 1029 , is useful to our analysis. There, three Baltimore area hospitals were competing for a CON to establish an Open Heart Surgery/Percutaneous Transluminal Coronary Angiography Unit. ²²⁸ After the Commission awarded the CON to Union Memorial Hospital, Maryland General