Medstar Health v. Maryland Health Care Commission

BELL, Chief Judge. The issue to be resolved in this appeal requires this Court to determine the lawfulness of a regulation, COMAR 10.24.17, the appellee, the Maryland Health Care Commission, adopted as an amendment to the State Health Plan (SHP). The appellant, Medstar Health, challenged the regulation, filing a declaratory judgment action in the Circuit Court for Howard County. It alleged that the regulation conflicted with the appellee’s statutory authority, was adopted in a procedurally improper fashion, and violated the Commerce Clause of the United States Constitution.

After limited discovery, the parties filed cross-motions for summary judgment. By written memorandum decision and declaratory judgment, the Circuit Court declared the regulation lawful. The appellant timely noted an appeal to the Court of Special Appeals, and, thereafter, filed a petition for writ of certiorari with this Court. This ³ Court granted that petition prior to any proceedings in the intermediate appellate court.

Medstar v. Maryland Health Care, 369 Md. 659 , 802 A.2d 438 (2002). We shall hold, contrary to the conclusion of the Circuit Court for Howard County, that the regulation is unlawful. I. A. Background In 1975, Congress enacted the National Health Planning and Resources Development Act of 1974 (the “Act”) 1 In order to receive federal funding, pursuant to the Public Health Service Act and other federal programs, states were required to establish more extensive review processes over state health planning. The review process requirement imposed by the Act established what is known as the “Certificate of Need” (“CON”) process.

The CON process requires health service providers (i.e., hospitals, patient treatment centers, etc.) to obtain certification, by state regulatory agencies, before engaging in certain regulated activities (i.e., purchasing major medical equipment, offering institutional health services, and making certain capital expenditures). The CON process, as a planning tool, attempts to identify and encourage the development of needed medical services, while limiting medical services that are determined to be “unneeded.” For many years, the CON process was the paradigm of health planning in this country. The federal government, however, repealed the Act in 1986 and, thus, since that time the determination of what methodology to employ for health planning has rested with the states. Some states have chosen to abrogate their CON programs, while others have chosen to continue following the federal structure or to modify their CON program to fit local needs.

Maryland continues to adhere to a CON model in the planning, development and delivery of health care services in this ⁴ state. The implementation of the CON process utilized in Maryland falls under the regulatory authority of the Maryland Health Care Commission (the “Commission”). Consequently, before a hospital servicing this state may offer any regulated medical services it must apply for, and be granted, a CON from the Commission. 2 B. Statutory Framework in Maryland The Maryland General Assembly established the Commission on October 1, 1999 through legislative enactment, see 1999 Md. Laws, ch. 702; Md.Code (1982, 2000 RepLVol., 2001 Supp.) § 19-103 of the Health General Article, by merging the Health Resources Planning Commission and the Health Care Access and Cost Commission. 3 The Commission, which is an independent commission in the Department of Health and Mental Hygiene, § 19-103(a) and (b), with significant responsibilities for the delivery of health care in Maryland and exercises regulatory authority over several aspects of the health care system in Maryland, is comprised of a thirteen member panel, appointed by the Governor with the advice and consent of the Maryland Senate. § 19-104. ⁵ The purpose of the Commission, as defined by the Legislature, is, in part, to: “Develop health care cost containment strategies to help provide access to appropriate quality health care services for all Marylanders, after consultation with the Health Services Cost Review Commission; “Promote the development of a health regulatory system that provides for all Marylanders, financial and geographical access to quality health care services at a reasonable cost by: “(i) Advocating policies and systems to promote the efficient delivery of and improved access to health care services; and “(ii) Enhancing the strengths of the current health care service delivery and regulatory system.” Section 19-103(c)(l) and (2). Toward that end, the Commission is charged with participating in or performing, periodically, analyses and studies relating to: “(i) Adequacy of services and financial resources to meet the needs of the population; “(ii) Distribution of health care resources; “(in) Allocation of health care resources; “(iv) Costs of health care in relationship to available financial resources; or “(v) Any other appropriate matter.” Section 19-115(a)(2).

The Commission is also required, “[a]t least every 5 years ... [to] adopt a State [H]ealth [P]lan.... ” Section 19-121(a)(1). 4 Section 19-121(a)(2) provides: “(2) The plan shall include: ⁶ “(i) A description of the components that should comprise the health care system; “(ii) The goals and policies for Maryland’s health care system; “(iii) 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.” The Commission uses the State Health Plan as a tool to identify the need for medical services and for evaluating CON applications submitted by health service providers. The Commission’s specific mandate by the Legislature is to review and, where appropriate, issue certificates of need to permit a person to “develop[], operated, or participate[ ]” in certain “health care projects.” § 19-123(e), et seg. A new cardiac surgery service is one such “health care project.” § 19-123(j)(2)(iii)(2). In addition to including methodologies, standards and criteria for CON review in the State Health Plan, the Commission is charged with developing, consistent with the State Health Plan, standards and policies relating to the CON program that “address the availability, accessibility, cost and quality of health care” and reviewing those standards and policies “periodically to reflect new developments in health planning, delivery, and technology.” Section 19-122(e)(l) and (2).

Moreover, “standards regarding cost, efficiency, cost effectiveness or financial feasibility” adopted by the Commission “shall take into account the relevant methodologies of the Health Services Cost Review Commission.” Id., § 19-121(e)(3). And the Commission is required to “adopt rules and regulations that ensure broad public input, public hearings, and consideration of local health plans in development of the State health plan.” Id., § 19 — 121(d). ⁷ C. Adoption of COMAR 10.2k.17 The State Health Plan consists of a series of regulations adopted by the Commission or its predecessors, incorporated by reference, but not in fact, in the appropriate title, subtitle and chapters of The Code of Maryland Regulations, COMAR, here, title 10, subtitle 24, chapters 07 through 17. At issue in this case is an amendment to the regulations applicable to cardiac surgery, which is incorporated at COMAR 10.24.17, in the chapter entitled “Specialized Health Care Services — Cardiac Surgery and therapeutic Catherization Services.” The amendment was to COMAR 10.24.17.04E, Methodology for Projecting Need for Cardiac Surgery, specifically, one of the assumptions underlying that methodology, the one addressing system capacity in the planning regions. 5 As amended, the regulation states: “(i) The capacity of an existing cardiac surgery program is calculated as follows: “(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 subject to a market based constraint; and “(iii) The capacity of any program cannot be greater than the higher of 800 eases or 50 percent of the projected gross need for the planning region.” COMAR 10.24.17.04E (4)(i). Before the amendment, the assumption underlying system capacity was premised on there being performed, in each of the operating rooms dedicated to open heart surgery, 500 operations year, a year being defined as 250 days, it being assumed that the operating rooms.were used at the rate of 2.0 ⁸ cases per day, five days a week, fifty weeks per year. 6 Before and after the amendment, the assumption included “an estimate of the future number of open heart surgery cases based on an analysis of trends in regional, age-specific use rates and changes in the size and composition of the population.” See, Final Report of the Technical Advisory Committee on Cardiovascular Services, December 1999, at 23.

The present plan specifically provides, as to projected adult open heart surgery for Maryland residents, that it “is estimated by trending of the most recent three years of open heart surgery use rates to the target year based on the average annual percentage change in historical open heart surgery use rates for each Regional Service Area, except the Western Maryland Regional Service Area.” COMAR 10.24.17.04E (4)(b) [State Health Plan at 60]. 7 Both before and after the amendment of the regulation at issue, “net need for open heart surgery cases” is determined by “subtracting the total existing capacity from the total projected number of cases.” COMAR 10.24.17.04E (6), “Calculation of the Net Need for Adult Cardiac Surgery Programs.” [State Health Plan at 63]. “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.” Id. Initially, we acknowledge that the amendment of the regulation was properly done procedurally. It must.be noted that the amendment was adopted only after extensive review and ⁹ after receiving considerable input from a Technical Advisory Committee, Commission staff and interested parties. In fact, the process was initiated approximately two years before the amendment was adopted, when the Commission, in December 1998, convened a Technical Advisory Committee, as its predecessor had done in connection with the development of the 1997 State Health Plan.

In addition to a report from that Committee, it consisted of the development of a 40-page White Paper by Commission Staff, solicitation of public comment on that White Paper and subsequent White Papers analyzing the initial comments and setting forth Staff recommendations, a public hearing, the publication of the Commission’s proposed regulation pursuant to the procedure mandated by the Maryland Administrative Procedure Act. Maryland Code (1984, 1999 Replacement Volume, 2000 Suppl.) § 10-112 of the State Government Article, followed by another public hearing. The Technical Advisory Committee questioned the appropriateness of the 1997 State Health Plan’s assumption underlying the system capacity calculation for cardiac surgery services— two cases per dedicated operating room model, — suggesting that it be eliminated, and, that the “measurement of available system capacity be re-defined to incorporate other factors such as monitoring of patient outcomes, assessment of future need, staff availability, access, and cost in determining the need for additional open heart programs in Maryland.” Technical Advisory Committee Final Report, at 26. Thereafter, in June 2000, following staff review of the Technical Advisory Committee’s recommendations, the Commission issued a White Paper: Policy Issues in Planning and Regulating Open Heart Surgery Services in Maryland, which identified issues related to planning for cardiac surgery services and policy options for addressing them.

The two options the White Paper identified for determining system capacity for cardiac surgery services were: Option 1, the existing measure, utilized in the 1997 State Health Plan — the continued use of the dedicated operating room approach, White Paper at 20, — and, Option 2, “capacity based on actual service utilization,” id. at ¹⁰ 22, a measurement based on actual service utilization. Under Option 2, which was employed in the 1990 State Health Plan, the Commission’s White Paper noted, the capacity of existing cardiac OHS programs was defined as follows: “the greater of 350 cases per hospital or the highest actual annual volume ever attained by the hospital in the most recent years of accurate available data; or if the hospital had not performed, for the past three consecutive years, at least 200 cases per year, the capacity of that program was measured by the actual volume of cases performed in that hospital during the base year.” Commission White Paper at 22. The advantage of using Option 2 as the underlying assumption of system capacity, the White Paper argued, was that “actual performance of a program would be more indicative of what volumes are likely to be handled by the program.” Id. The Commission then solicited comment on the White Paper.

Of the responses from organizations and individuals, several took advantage of the debate on system capacity to lobby for increased competition in the Metropolitan Washington planning area. In all, ten individuals or organizations submitting comments on the White Paper did so in support of defining system capacity for cardiac surgery services using either Option 1 or Option 2. The remaining five organizations that submitted comments relating to system capacity suggested using a dedicated operating room approach in conjunction with other factors to measure system capacity. As Anne Arundel Medical Center, one of the organizations advocating an approach other than Options 1 or 2 identified in the White Paper, stated, the combined effect of the CON process and the past, present and proposed methodologies “resulted in open heart surgery services being treated as a franchise, an economic bonanza so valuable that both the ‘haves’ and those that desire it spent enormous and obscene amounts of time and money in the few CON proceedings the Commission’s predecessor held to grant new franchises.” Further, it characterized the CON process as “focus[ed] on' number-driven ‘need’ analysis, limiting the number of hospitals with Open Heart ¹¹ CONs (the ‘haves’),” disagreed with “the concept that CON review — the before-the-fact comparison of competing applicants — is the appropriate method to design an effective system of combating heart disease,” and accused that methodology of insulating those hospitals with the cardiac surgery “franchise” from competition.

Greater Baltimore Medical Center took a similar tack. Acknowledging the intent of the White Paper, it observed, nonetheless, that “from a practical standpoint, the policy alternatives are limited by remaining within the confines of the existing CON framework of analysis. The Commission should replace the rationing of health care represented by the existing plan in favor of adopting a patient centered, quality of care driven plan that would judge each individual hospital’s ability and need to provide cardiac care.” While offering that the Commission’s “policies regarding 0[pen] H[eart] S[urgery] [“OHS”] should reflect a balance between the advantages of size and the advantages of choice,” Holy Cross Hospital stressed that “[t]here is massive evidence that significant competition leads to lower cost and, when the market rewards quality, significant competition can lead to higher quality as well. Additional providers, especially independent providers, almost by definition, increase access.

Thus, by balancing the advantages of size and choice, [the Commission] will balance the interests of quality, cost containment and access.” It also made clear that it did not believe that such a balanced framework currently exists and, in fact, stated that it does not, as “the current situation effectively prohibits new programs in any area which has OHS.” Holy Cross noted, furthermore, its sympathy “to many of the arguments for opening the OHS market to new entrants and then judging after the fact whether they are successful and should be retained (the so-called licensure model). This approach maximizes the opportunity for choice while retaining a state review role, generally, after the fact.” ¹² While praising the “five ‘right-sized’ competitive programs” in Baltimore, Suburban Hospital decried the “dysfunctional Washington market,” with its dominant “single large provider,” the Washington Hospital Center. 8 Suburban advocated a capacity measure that would “permit development of a new OHS program in the D.C. region but not in Baltimore.” It also lamented the assignment to the four low production programs in the region, Georgetown, George Washington, Howard and Prince George’s Hospital Center, of capacity for 3000 cases when, together, during all of 1999, they performed but 395 cardiac surgeries. Suburban Hospital submitted: “if just 200 cardiac surgeries and 200 angioplasties were performed at either Suburban or Holy Cross instead of at the Hospital Center, savings to the Medicare program (and the American people) would be $4 million each year. These savings ... result from the rate offers that an existing Maryland-based program must make in connection with the CON approval process.

This phenomenon, and price reductions in response to the new, lower-priced competition, both generate savings to payers. This is precisely what occurred in the Baltimore market as a result of development of the two new, competitive programs at Sinai and Union Memorial during the last several years. Given this experience and the current situation in the D.C. area, it is difficult to understand why the Commission should continue a policy that: (i) protects a non-Maryland hospital from effective price competition; (ii) denies Maryland consumers meaningful choice; and (iii) causes the Medicare program to pay millions of additional dollars to a non-Maryland hospital for cardiac surgery provided to Maryland residents.” (Emphasis in original). St. Agnes Hospital, having in the past supported legislation that would have replaced CON control of cardiac surgery services with a licensure approach, was clear in advocating for an approach that was more open, more competitive.

It commented: ¹³ “St. Agnes in its oral and written comments urges the Commission to replace the existing regional plan with a patient and quality focused plan that promotes a continuum of cardiac care including coronary angiosplasty and open heart surgery in any large community hospital with the patient volumes and size to safely provide the service. The regional plan under review is based on the explicit premise that open heart surgery is an expensive tertiary level service which exhibits a high correlation between volumes and outcomes and is best served by forcing all procedures into a very small number of hospitals. On those rare occasions when new programs have been granted a CON, they have been parceled out one program at a time following protracted and expensive consolidated reviews that have pitted existing providers against all applicants, and all applicants against each other. Despite the enormous time, money, effort and goodwill expended in these past proceedings held by the Commission’s predecessor, one of the only three programs ever CON approved and running has never met even the minimum volume standards adopted by the plan.

A 33% failure rate is unacceptable in the allocation of such a critical resource. We believe it is fair to say that the existing open-heart CON process has lived [past] its usefulness.” Competition, and the need for it, was the theme of the Health Services Cost Review Commission’s comments to the Commission, albeit with a caution. That was true of the comments of Johns Hopkins Hospital, as well, who attributed the more than 70 percent market share enjoyed by the Washington Hospital Center and the failure of four of the Washington Region programs to meet minimum surgical volumes to the lack of competition. Thus, Johns Hopkins advocated eliminating what it termed the “flawed” dedicated operating room methodology, as a measurement of program capacity because of a hospital’s ability to simply add operating rooms and thus unilaterally increase system capacity.

Anne Arundel Medical Center, Greater Baltimore Medical Center, Holy Cross Hospital, Suburban Hospital and St. ¹⁴ Agnes Hospital all supported a capacity measure which was likely to result in competition. The one that they all favored was a cap on capacity. The group favored a cap on capacity because they objected to the assignment of more than 3000 cardiac procedures, as projected capacity in the Metropolitan Washington planning région, when in actuality, on average, more than 2500 of the procedures were performed solely by Washington Hospital Center, with the balance of the region’s capacity divided among four sub-performing hospitals and one hospital performing adequately. The written comments were augmented by oral testimony at a public hearing conducted by the Commission on July 21, 2000.

At that hearing, Dr. Robert Lowery, a cardiac surgeon, employed by Washington Hospital Center, which is owned by the appellant, testified that there was adequate capacity in the Washington Metropolitan region, and no need for additional OHS programs existed in the region. Dr. Eugene Passamani, director of cardiology at Suburban Hospital, testified, consistent with Suburban’s written comments, that the assignment of 3000 cases as a capacity measure did not “represent real capacity” because at least 2500 cases were attributable solely to Washington Hospital Center. On September 15, 2000, the Commission issued its second White Paper, analyzing the public comments and recommendations it had previously solicited on the first White Paper. Noting that both options for measuring system capacity that it had presented in its previous White Paper had significant limitations, the White Paper concluded that the chapter of the State Health Plan dealing with Open Heart Surgery should include a cap on the number of cardiac surgery procedures conducted by any one hospital in a planning region and that future capacity in that planning region be determined and computed by reference to that cap.

The cap, as we have seen, supra at 7-8, provides that the “capacity of any program cannot be greater than the higher of 800 cases or 50% of the projected gross need for the planning region.” Upon release of the second White Paper, the Commission sought additional public comment, whereupon a third White ¹⁵ Paper was issued on October 25, 2000. The staff maintained its support of the amended capacity measurement, ie., the cap, opining that the measurement was “reasonable and appropriately balances public policy concerns,” such as access, cost and equality. Final Staff Analysis at 6. On November 21, 2000, the Commission considered the proposed amendment of the chapter and voted to publish the regulation for public comment.

In compliance with § 10-110(b) of the State Government Article, the proposed regulation was required to be submitted to the General Assembly’s Joint Committee on Administrative, Executive and Legislative Review (“AELR”) at least 15 days before being submitted to the Maryland Register for publication. Thus, on December 13, 2000, the proposed OHS chapter, with its amendment to the definition of system capacity was submitted to the AELR. Thereafter, on January 4, 2001, the proposed chapter was submitted for review to the Governor, as required by § 19-117(c) of the Health-General Article. Prior to publication, the presiding Chairman of the AELR Committee sent a letter to the Governor stating the Committee’s intent to conduct a “more detailed study of [the] proposed regulation.” The Committee also requested that the Commission delay final adoption of the proposed regulation until the Committee completed its review.

As stated by the Committee, the purpose of the delay was to “provide the Committee with an opportunity to more closely examine a number of issues, including whether the statute under which the regulation is adopted authorized the adoption and whether the regulation conforms to the legislative intent of the statute.” The AELR Committee held a hearing and received testimony on the proposed regulation on January 16, 2001. Because no further action was taken by the Committee, the proposed regulation was published in the Maryland Register on January 26, 2001. 28 Md. Reg. 126 -27 (January 26, 2001). The publication of the proposed regulation commenced the 31-day period for the submission of public comments. The proposed regulation, as had been the case with regard to the White ¹⁶ Papers, generated considerable interest and resulted in 47 organizations and individuals submitting written comments.

Additionally, the Commission held yet more public hearings. The appellant used the opportunity, again, to provide testimony and to submit written comments. During the period for public comment, the Commission received a letter, dated March 21, 2001, from the Co-Chairs of the AELR Committee. The letter requested that the Commission modify the proposed regulation. 9 Shortly thereafter, the Commission received a follow-up letter from the Honorable Thomas V. Mike Miller, President of the Maryland Senate, which informed it that the March 21st letter did not “represent the consensus of the members” and was “advisory only,” in light of the fact that the AELR Committee had not met.

Two additional letters, dated April 4 and April 5, signed by the members of the House and Senate delegations to the AELR Committee, were received by the Commission. The letters confirmed Senator Miller’s earlier letter indicating that the March 21st letter did not represent the views of the AELR Committee. More important, the letters requested that the Commission “withdraw the entire regulation and develop new comprehensive regulations consistent with the counsel of the ... [Technical Advisory Committee], especially related to the issue of measuring capacity at existing [OHS] surgery programs.” On April 19, 2001, the Commission, by an 8-1 vote, adopted COMAR 10.24.17 as a final regulation. The Notice of Final Action was published in the May 4, 2001 Maryland Register.

See 28 Md. Reg. 885 (May 4, 2001). Subsequently, on May 14, 2001, the regulation became effective. The regulation, adopted over the objection of the appellant, had the effect of reducing the Washington Metropolitan Planning Region’s cardiac surgery capacity by 824 cases, the ¹⁷ number of cases that Washington Hospital Center performed, but, because of the cap on capacity, was not allowed to count for that purpose. In 1999, that hospital performed 2950 open heart surgeries.

Without the amended regulation, all of those surgeries would have been considered in determining the capacity of the Region. When the surgeries performed by the other hospitals in the Region, totaling 1212 in 1999 or, using 1997-1999 data, as the Commission did, 1482, were counted, the Region’s capacity would have been 4162 or 4432 cases, respectively. The need in the Region was projected to be 4251. Under the amended regulation, because the number of surgeries performed by Washington Hospital center exceeded 50 percent of projected need for the Region, its existing and CON approved capacity was determined to be 2126, half of the projected number of cases, and 824 cases less than its actual production.

Consequently, rather than an excess of capacity over need (using 1997-99 performance figures, as the Commission did, the capacity would exceed demand by 181 cases) or need less than the threshold for consideration of a new program (using 1999 performance figures, need would exceed capacity, but only by 89 cases), see COMAR 10.24.17.04E (6), 10 application of the amended regulation resulted in a deficit of 643 cases, or the need for at least one new program in the Region. Id. The appellant acted without delay in challenging the newly effective regulation, filing its action for declaratory judgment on the date the regulation took effect.

II

In the trial court, the appellant argued that the regulation adopted “dramatically and unlawfully” changed the methodolo ¹⁸ gy for projecting need for cardiac surgery services. Such a change, the appellant argued, was not contemplated, nor authorized, by the Commission’s enabling legislation. Moreover, it maintained that the regulation adopted poses a risk to patient safety. Specifically, citing to § 19-121(2) (currently, § 19-118(2), 2001 Supp.), but relying on other statutory provisions, the appellant argued that the adopted regulation violated the Commission’s statutory mandate requiring it to identify unmet health care needs and to set forth the methodologies for certificate of need review. 11 Citing to the objection of the members of the AELR Committee, the appellant further noted that the regulation had been adopted without the approval of the Governor in violation of .Md.Code (1984, 1999 RepLVol., 2000 Cum.Supp.) § 10-lll.l(b) and (c) of the State Government Article. 12 The Circuit Court for Howard County, acting on cross-motions for summary judgment, entered judgment in favor of ¹⁹ the appellee, declaring that the Commission had acted within its statutory authority in adopting COMAR 10.24.17.

Moreover, the trial court determined that the regulation had been validly adopted and did not violate the Commerce Clause of the United States Constitution. The gravamen of the appellant’s complaint is that the Commission’s adoption of COMAR 10.24.17 uses a regulatory created assumption to create unmet need for cardiac surgery services in the Washington Metropolitan planning region. This, the appellant argues, allows for the creation of a new OHS programs in that planning region, despite the fact that the Commission’s own data shows that no real, or actual, need for a new cardiac surgery program exists. Responding, the Commission relies on its broad authority, conferred by the Legislature, to adopt the regulation, asserting that that authority clearly permits it to do what it did.

We disagree with the Commission and the trial court, and shall hold that the adoption of COMAR 10.24.17 exceeded the Commission’s statutory authority. Consequently, we need not, and will not, reach the alternative grounds the appellant proffers for striking the regulation.

III

This Court has stated that “the development, adoption, and updating of the [State Health] plan is a quasi-legislative ²⁰ function.” Adventist v. Suburban, 350 Md. 104, 122 , 711 A.2d 158, 167 (1998); see also, Fogle v. H & G Restaurant, Inc., 337 Md. 441, 453 , 654 A.2d 449, 455 (1995) (“Promulgation of new regulations by agencies is one of these so-called quasi-legislative activities.”); Dep’t of Nat. Res. v. Linchester, 274 Md. 211, 222 , 334 A.2d 514, 522 (1975) (noting “these agencies at times perform some activities which are legislative in nature and thus have been dubbed as quasi-legislative”). We have also made clear that agency regulations must be consistent with the letter and the spirit of the law under which the agency acts. Christ v. Department of Natural Resources, 335 Md. 427, 437 , 644 A.2d 34, 38 (1994); Maryland State Police v. Warwick, 330 Md. 474, 481 , 624 A.2d 1238, 1241 (1993); Ins.

Comm’r v. Bankers Independent Ins. Co., 326 Md. 617, 623 , 606 A.2d 1072, 1075 (1992). Pursuant to State Government Article, § 10-125, 13 regulations promulgated by administrative agencies may be challenged by way of a declaratory judgment action. 14 Our scope ²¹ of review in such actions is “limited to assessing whether the agency was acting within its legal boundaries.” Adventist, supra, 350 Md. at 124 , 711 A.2d at 167 , citing Linchester, supra, 274 Md. at 224 , 334 A.2d at 524 ; See also Judy v. Schaefer, 331 Md. 239, 263-264 , 627 A.2d 1039, 1051-1052 (1993). In Fogle , we noted that courts, when opining upon the validity of actions taken by agencies, should “defer to agencies’ decisions ... because they presumably make rules based upon their expertise in a particular field.” Fogle, supra, 337 Md. at 455 , 654 A.2d at 456 ; see also Ideal Federal v. Murphy, 339 Md. 446, 461 , 663 A.2d 1272, 1279 (1995) (citing Udall v. Tallman, 380 U.S. 1, 16 , 85 S.Ct. 792, 801 , 13 L.Ed.2d 616, 625 (1965) for the proposition that “[w]hen faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration”) and MTA v. King, 369 Md. 274, 288 , 799 A.2d 1246, 1254 (2002).

Pointedly, we added in Fogle that “[t]his is especially true of agencies working in the area of health and safety, which rely extensively on their specialized knowledge of that area in promulgating regulations.” Fogle, supra, 337 Md. at 455 , 654 A.2d at 456 . Moreover, where “the General Assembly has delegated ... broad power to an administrative agency to adopt [legislative rules] or regulations [in a particular area], this Court has upheld the agency’s rule or regulations as long as they did not contradict the language or purpose of the statute.” Christ v. Department of Nat. Res., supra, 335 Md. at 437 , 644 A.2d at 39 ; Lussier v. Maryland Racing Commission, 343 Md. 681, 689 , 684 A.2d 804, 807-808 (1996). In its brief, the appellant challenges the Commission to identify any provision of the statute that grants authority to ²² the Commission “to create a need for an additional open heart surgery program where ... the facts[ ] as found by the Commission show there is no need.” (Appellant’s Brief at 27).

To that challenge, the Commission continues to rely on the deference this Court has extended to the regulations and rules promulgated by an agency, on whom the Legislature has conferred broad statutory authority. Thus, the Commission submits that it need not point to any specific statutory authorization to justify its action, maintaining that “it is sufficient for [it] to show that there is nothing in the Cardiac Surgery Chapter that contradicts either the language or the purpose of the authorizing legislation.” (Appellees Brief at 18). We disagree. While reliance upon the broad statutory authority conferred by the Legislature generally will be sufficient to justify an agency’s regulation/rule making authority, logic compels the self evident conclusion that there is an outer limit to an agency’s authority.

This Court’s attempt to demarcate the outer limits of an administrative agency’s authority has focused on whether the regulations and rules promulgated by the agency are consistent with the statutory scheme under which the agency operates. So, too, with the Commission, the question is whether the regulation at issue is consistent with the underlying policy assumptions permeating the State Health Plan and the Commission’s own factual analysis undertaken with the purpose of defining unmet need for cardiac surgery services. Undertaking this analysis leads us to the conclusion that the 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.

Significantly, the former policy determinations re ²³ mained 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.” See COMAR 10.24.17.04B (1) [Amended State Health Plan at 20]. While it acknowledges the conflicting evidence on the subject, the Commission accepted the advice of its Technical Advisory Committee that “minimum caseloads play a critical role in promoting quality of care for specialized cardiac care services,” id. at ,04B (l)(c) [id. at 28], and concluded, “it is preferable for public policy to support a small number of higher volume cardiac surgery programs rather than a large number of programs performing at minimum or lower volumes.” Id [at 24]. It explained: “In many ways, recommended volume numbers are a surrogate measure for quality of care.

The research conducted to date on the relationship between volume and outcome in many ways suggests the need for additional study of the factors involved in the process of care that contribute to improved outcomes. Although the relationship between minimum volume guidelines and risk-adjusted mortality for CABG surgery is a critical measure of quality, it is likely that volumes also relate to other dimensions of cardiac surgical program quality that are more difficult to measure. As noted in the previous report of the Technical Advisory Committee, these factors include the value of promoting higher volume angioplasty programs, the need to promote efficient utilization of the complex and limited resources required to provide high quality cardiac surgical care, and the need to encourage research and innovation in the treatment of coronary heart disease.” Id [at 23]. Thus, the Commission established policies governing minimum utilization levels for adult and pediatric cardiac surgery programs, including: ²⁴ “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 institution 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 is performed.” Id. [at 23].

In addition, and consistently, to promote a system of higher volume cardiac surgery programs, the Commission established Policy 1.5: “The establishment of a new adult cardiac surgery program should permit existing programs to maintain patient volumes of at least 350 cases annually.” Id. [at 25]. Together, 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. When its view of the relationship between volume and outcomes is considered, it is clear that that vision is based on, and looks to, quality concerns. At bottom, the issue to be addressed in this case is whether there is unmet need for cardiac surgery services in the Metropolitan Region.

To be sure, it is being addressed from the perspective of a regulation concerning the criteria to be applied in assessing the system capacity to handle the number of cases projected to enter the system, and, thus, may be argued, or appear, to be only indirectly in dispute. Under the circumstances here extant, that is not at all true. There is no dispute as to what the objective, hard evidence reveals about capacity. Nor is there any dispute as to what it shows as to demand.

Based on the actual performance of the hospitals authorized to perform cardiac surgery in the Region, whether using a three year or a one year period, and extrapolating from that performance, there either is an excess of capacity over demand or a slight deficit, but not enough of a deficit to ²⁵ justify certification of additional open heart surgery capacity. The Commission’s data clearly, and expressly, reflects this fact. Its data also reflects that the demand in the Washington Region is flat, increasing by only 1.5 percent or less. Despite this hard, objective evidence and, it appears, based primarily on the comments of those few hospitals who sought increased competition and complained about the dysfunctionality in the Washington Region due to the dominance of a single hospital, the Commission adopted a standard that created a need for additional capacity by disregarding that hard, objective evidence.

The appellant has it right when it points out: “By erasing 824 of Washington Hospital Center’s cases (2,950 minus 2,126), the Commission succeeded, solely by operation of its irrebutable regulatory ‘assumption,’ in creating a ‘net need’ of 643 cases.... Having thus created this ‘net need’ of 643 cases, the Commission can now conclude that a ‘need’ exists for an additional open heart surgery program in the Washington Region because this regulation-manufactured ‘deficit’ of 643 cases is more than the required safe minimum of 200 cases.....The Commission reached its ‘need conclusion’ notwithstanding the undisputed fact that the actual, as distinguished from the regulation-manufactured, net need in the Washington Region is at most 89 cases and, if one applies the Commission’s methodology, there is a negative net need — that is, capacity exceeds projected need — by 181 cases. In either case, there is, as a matter of fact, a plainly insufficient number of cases to warrant a new program.” This Court can discern no other reason for the regulation than to promote competition and, perhaps, thereby terminate the dominance of the Washington Hospital Center. The placement of a cap on the number of open heart operations that a hospital performs and, thus, for which it is given credit for having performed, does not change the fact that those operations, in fact, were performed.

Nor does it reduce that hospital’s capacity to perform that number of operations, and more; it simply permits another hospital or hospitals to benefit from a deemed excess capacity, to use the capacity ²⁶ that continues to exist, but, because of the regulation, is not allowed to be counted by the hospital that retains it. This “regulatory slight of hand” runs afoul of the Commission’s own policies, see Policy 1.0; Policy 1.5, and of its 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.” COMAE. 10.24.17.04B (l)(c)[State Health Plan at 24]. It certainly is anti-factual. It is undisputed that this Court has the right to determine for itself whether an administrative regulation exceeds the power of the agency.

See § 10-125 of the State Government Article. It is also true that, in most cases where an agency promulgates new regulations, we defer to the agency’s decisions “... because they presumably make rules based upon their expertise in a particular field.” Fogle v. H & G Restaurant, supra, 337 Md. at 455 , 654 A.2d at 456 . In the case of the Commission’s adoption of COMAR 10.24.17, however, there is nothing to which to defer. The operative word in Fogle is “presumably.” Here, what the Commission did required no expertise on its part; it simply made a determination that changed or, in effect, failed to give effect to an historical fact.

To be sure, the fact that the Washington Hospital Center performed a specific number of procedures in a particular year does not mean that it could do so in future years. While that is, of course, true, it is simply common sense that what one has done in a prior year forms a logical basis from which to deduce what will, or can be done, in a subsequent year. Making an assumption that Washington Hospital Center will not, or can not, perform the same number of, or more, procedures, solely because of the desire to create a need not supported by the data on which the Commission has relied, and continues to rely, has much less force and is, therefore, much less reliable. To be sure, the Commission has experimented with several different approaches to the measurement of net need in its 1990, 1997, and current Plans.

It may be argued, as the ²⁷ appellee does, that these alternative approaches are no more arbitrary and artificial, having no more relevance to need, than does the approach adopted by the Commission in this case. That is not a satisfactory answer. Certainly, a wrong that goes unchallenged cannot save from challenge and relief a subsequent wrong that is challenged. 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.

In any event, in none of the prior alternatives were the facts disregarded; it 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. What speaks loudest is that the Commission maintained the same basic framework for CON reviews and, to achieve a result, increased competition in the Washington Region, that, at the least, is not totally consistent with the State Health Plan, simply adopted an assumption, which because it was made after the facts had been established, was a palpable fiction. JUDGMENT OF THE CIRCUIT COURT FOR HOWARD COUNTY REVERSED; CASE REMANDED TO THAT COURT WITH DIRECTIONS TO ENTER JUDGMENT CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY THE APPELLEE.

Dissenting Opinion by WILNER, J., in which RAKER, J., and HARRELL, J., join The Court reverses a determination by the Maryland Health Care Commission (MHCC) that the public health needs of the more than two million Marylanders who live in the Metropolitan Washington Region would best be served by allowing one additional hospital in that region to offer cardiac surgery services, because the Court believes that those needs are already being adequately served. With respect, I dissent. ²⁸ The Court seems transfixed with the fact that, because Washington Hospital Center (WHC), which is located in the District of Columbia and thus is entirely immune from any regulation by the State of Maryland, is already performing 2,950 adult cardiac surgeries each year — more than 70% of the total number of such surgeries in the entire region — there is no need for any new program. As that hospital may expand its cardiac unit at will, without any control by the MHCC, it can, under the Court’s view, not only maintain its dominance but effectively preclude any new program in the Metropolitan Washington Region of Maryland. That concerned the Commission, and it should concern the Court.

The issues raised by MedStar in this case cannot be viewed in isolation, but only in the context of the extensive set of laws and regulations governing health care policy in Maryland. In conformance with the National Health Planning and Resources Development Act of 1974, the General Assembly, through the enactment of what now appears as title 19, subtitle 1 of the Health General Article, created and has periodically revised a comprehensive and structured regime for health care planning in Maryland. That regime is anchored in an express legislative finding, articulated in § 19-102, 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 the needs of the citizens of this State.” Subject, of course, to the continuing jurisdiction and oversight of the Legislature, control over health care policy and planning is centered, at least in part, in MHCC, a unit within the Department of Health and Mental Hygiene and a successor agency to several previous commissions. There are two major components to the regulatory system — the State Health Plan, which identifies both broadly and with particularity the health needs and resources throughout the State, and a Certificate of Need (CON) program, which allocates and rations health care resources in conformance with the State Health Plan to assure that the resources are ²⁹ adequate to meet the identified needs but are not excessive.

The CON program, set forth in § 19-120 of the Health-General Article, requires a hospital to obtain a Certificate of Need from MHCC before it may commence certain new services, including any new cardiac surgery service. The Plan thus serves two functions: it establishes health care policy to guide the activities of MHCC and other health-related public agencies, and it serves as the legal foundation for