Prince George's Doctors' Hospital, Inc. v. Health Services Cost Review Commission

SMITH, Judge. Appellant Prince George’s Doctors’ Hospital, Inc., (the Hospital) is of the view that the Health Services Cost Review Commission (the Commission) was too stingy in its allowance of rates to it. On the other hand, Group Hospitalization, Inc. (Group Hospitalization), Blue Cross for the District of Columbia metropolitan area, believes the Commission was entirely too generous with the Hospital. We think the Commission had it about right.

Hence, we shall affirm in both appeals. I The Hospital is a proprietary (for-profit) 240-bed acute care medical/surgical hospital owned and operated by physicians. As its name indicates, it is located in Prince George’s County. Its principal owners are also principals in Prince George’s Doctors’ Hospital Joint Venture, which owns the hospital building.

On November 7, 1983, the Commission issued its final order in a rate-making proceeding involving the Hospital. Group Hospitalization, which insures approximately 35% of the patients at the Hospital, intervened as an interested party before the Commission. The Hospital had requested rates that would generate in excess of $41.5 million in gross revenue per year. The Commission’s final rate order approved rates for the Hospital that, according to the Commission, would generate $35.1 million in gross revenue.

The Commission found that the Hospital had overcharged its patients by some $16.8 million since September 1982 when it placed its requested rates into effect. We shall develop additional facts as we discuss the various points raised. ¹⁹⁸ The Hospital and Group Hospitalization appealed to the Circuit Court for Baltimore City. That court, in a comprehensive and well-reasoned opinion by Judge Ross, from which we shall quote liberally, affirmed the Commission’s order with certain modifications. The Hospital and Group Hospitalization each appealed to the Court of Special Appeals.

All parties petitioned us to grant a writ of certiorari before the case was heard in the intermediate appellate court. The Hospital asserted that implementation of the Commission’s order as approved by the trial court would place it in financial jeopardy, possibly in bankruptcy. Accordingly, the Hospital requested that we stay the circuit court’s order. We declined the Hospital’s request.

We did grant certiorari in an effort to resolve the matter speedily. II 2 P. Lasky, Hospital Law Manual App. C (1983), lists thirteen states as of December 1983 which have enacted legislation designed to reduce hospital costs by monitoring rates charged. A number of other states have voluntary programs. See Id.

U 3-62; Biles, Schramm, and Atkinson, Hospital Cost Inflation Under State Rate-Setting Programs, 303 New EngJ.Med. 664, 665 (1980); D. Abernethy and D. Pearson, Regulating Hospital Costs: The Development of Public Policy 60 (1983); Schramm, A State-Based Approach to Hospital-Cost Containment, 18 HarvJ. on Leg. 603, 605, n. 12. The Commission is established, its duties spelled out, and the procedures it is to follow are set forth in Maryland Code (1982) §§ 19-201 to -222, Health-General Article. 1 Under our act the Commission is vested with jurisdiction over the ¹⁹⁹ costs and rates of hospitals, health care institutions, and related institutions located in Maryland. There seem to be virtually no cases from without the State which are helpful in resolving the issues here. The Commission’s powers relative to the controversy here before us are found in § 19-216, which provides: 2 “(a) Rate reviewing power.—The Commission may review costs and rates and make any investigation that the Commission considers necessary to assure each purchaser of health care facility services that: “(1) The total costs of the facility are related reasonably to the total services that the facility offers; “(2) The aggregate rates of the facility are related reasonably to the aggregate costs of the facility; and “(3) The rates are set equitably among all purchasers or classes of purchasers without undue discrimination or preference. “(b) Rate approval power.—(1) To carry out its powers under subsection (a) of this section, the Commission may review and approve or disapprove the reasonableness of any rate that a facility sets or requests. “(2) A facility shall charge for services only at a rate set in accordance with this subtitle. “(3) ■ • • “(c) Alternate ratesetting methods.—To promote the most efficient and effective use of health care facility services and, if it is in the public interest and consistent with this subtitle, the Commission may promote and approve alternate methods of rate determination and payment that are of an experimental nature.” Appeals from the Commission, and hence this case, are governed by the Administrative Procedure Act.

The pertinent portion of it is now found in Code (1984) § 10- ²⁰⁰ 215(g), State Government Article, from whence it was moved without substantive change from Code (1957, 1982 Repl.Vol.) Art. .41, § 255(f). Sec. 10-215(g) provides: “(g) Decision.—In a proceeding under this section, the court may: “(1) remand the case for further proceedings; “(2) affirm the decision of the agency; or “(3) reverse or modify the decision if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision of the agency: “(i) is unconstitutional; “(ii) exceeds the statutory authority or jurisdiction of the agency; “(iii) results from an unlawful procedure; “(iv) is affected by any other error of law; “(v) is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or “(vi) is arbitrary or capricious.” In Bulluck v. Pelham Wood Apts., 283 Md. 505 , 390 A.2d 1119 (1978), Judge Eldridge said for the Court, after having quoted the Administrative Procedure Act as it then stood: “ ‘Substantial evidence,’ as the test for reviewing factual findings of administrative agencies, has been defined as ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion,’ Snowden v. Mayor & C.C. of Balto., 224 Md. 443, 448 , 168 A.2d 390 (1961). The scope of review ‘is limited “to whether a reasoning mind reasonably could have reached the factual conclusion the agency reached,” ’ [citing cases within and without the State, treatises, and law journals]. “In applying the substantial evidence test, we have emphasized that a ‘court should [not] substitute its judgment for the expertise of those persons who constitute the administrative agency from which the appeal is taken.’ Bernstein v. Real Estate Comm., 221 Md. 221, 230 , 156 A.2d 657 (1959), appeal dismissed, 363 U.S. 419 , 80 ²⁰¹ S.Ct. 1257 , 4 L.Ed.2d 1515 (1960). We also must review the agency’s decision in the light most favorable to the agency, since ‘decisions of administrative agencies are prima facie correct,’ Hoyt v. Police Comm’r, 279 Md. 74, 88-89 , 367 A.2d 924 (1977), and ‘carry with them the presumption of validity,’ Dickinson-Tidewater, Inc. v. Supervisor, 273 Md. [245,] 246 [, 329 A.2d 18 (1974)]; Heaps v. Cobb, 185 Md. 372, 378 , 45 A.2d 73 (1945).

Furthermore, not only is it the province of the agency to resolve conflicting evidence, but where inconsistent inferences from the same evidence can be drawn, it is for the agency to draw the inferences. Labor Board v. Nevada Consolidated Copper Corp., 316 U.S. 105, 106-107 , 62 S.Ct. 960 [961], 86 L.Ed. 1305 (1942); Board v. Levitt & Sons, 235 Md. 151, 159-160 , 200 A.2d 670 (1964); Snowden v. Mayor & C.C. of Balto., supra, 224 Md. at 448 [ 168 A.2d 390 ].” 283 Md. at 512-13 , 390 A.2d at 1123-24 . (Emphasis in original.) The matter of judicial review of an agency decision was put a slightly different way, but to similar effect, by Chief Judge Hammond for the Court in Insurance Comm’r v. Nat’l Bureau, 248 Md. 292 , 236 A.2d 282 (1967), a case that has been cited and quoted by this Court in a host of cases since then: “Whichever of the recognized tests the court uses— substantiality of the evidence on the record as a whole, clearly erroneous, fairly debatable or against the weight or preponderance of the evidence on the entire record—its appraisal or evaluation must be of the agency’s fact-finding results and not an independent original estimate of or decision on the evidence. The required process is difficult to precisely articulate but it is plain that it requires restrained and disciplined judicial judgment so as not to interfere with the agency’s factual conclusions under any of the tests, all of which are similar.

There are differences but they are slight and under any of the standards the judicial review essentially should be limited to whether a reasoning mind reasonably could have reached the ²⁰² factual conclusion the agency reached. This need not and must not be either judicial fact-finding or a substitution of judicial judgment for agency judgment. See 4 Davis, op cit. §§ 29.01, 29.02, 29.08, 29.06, 29.07, 29.10; 2 Cooper, op cit. Ch.

XIX, § 7; 2 Am.Jur.2d Administrative Law §§ 616, 620, 621, 659, 661; the majority and concurring opinions in NLRB v. Southland Mfg. Co., 201 F.2d 244 ; Board v. Oak Hill Farms [, 232 Md. 274 , 192 A.2d 761 (1963),] and Board v. Levitt & Sons, [ 235 Md. 151 , 200 A.2d 670 (1964) ].” 248 Md. at 309-10 , 236 A.2d at 291-92 . In Blue Cross v. Franklin Sq. Hosp., 277 Md. 93, 113 , 352 A.2d 798, 810 (1976), Judge Eldridge said for the Court that the Commission “is empowered to approve that rate structure which it finds to be most reasonable under the circumstances.” . [3] We believe, also, that Judge Lowe correctly stated the law for the Court of Special Appeals in Harford Mem.

Hosp. v. Health Serv., 44 Md.App. 489 , 410 A.2d 22 (1980): “Since it is the Commission that is empowered to approve that rate structure which it finds to be most reasonable under the circumstances, even though the Hospital proposal may be reasonable also, the burden to reverse is not to prove an imbalance of reasonableness on the side of the Hospital proposal but rather to negate the reasonableness of the Commission’s proposal. The statutory standard which the Commission must apply before approval is not only that rates be reasonable in the light of services and costs, but also that rates be set equitably and without undue discrimination.” 44 Md.App. at 498 , 410 A.2d at 28 (emphasis in original). Ill The Hospital first contends that “the Commission exceeded its statutory powers in imposing the guaranteed inpatient revenue system upon the Hospital effective July 1, ²⁰³ 1985.” 3 A definition of such a system was set forth for the Court by Judge Davidson in Health Serv. Cost Rev. v. Lutheran Hosp., 298 Md. 651 , 472 A.2d 55 (1984): “According to the Commission, a guaranteed inpatient revenue system (GIR) is a ‘diagnostic-based rate-setting approach’ ‘that is designed to provide incentives to reduce unnecessary or marginal ancillary testing, to reduce length of stay and to promote pre-admission testing,’ and is ‘Maryland’s most promising inflation control methodology’ as well as ‘the linchpin of the current efforts by the Commission to control hospital costs in Maryland.’ “Before the Commission attempted to impose a GIR, rates for services such as laboratory tests were based upon the price per unit of service.

A GIR, however, establishes an approved rate for the total costs incurred for the treatment of a given patient’s diagnosis regardless of the units of service rendered. If more units of service are provided to a given patient than are covered by the approved rate, the amount of the excess is offset against cases involving similar diagnosis in which fewer services are provided than are covered by the approved rate. At the end of the fiscal year, a hospital will be denied reimbursement for the aggregate amount of charges in excess of the GIR rate for a particular diagnosis.” 298 Md., n. 5, at 659-60, 472 A.2d at 59 . The Hospital contends that the Commission lacks the authority to impose this system because its statutory duty is to determine the reasonableness of costs, not to regulate the quality or quantity of services.

It claims: “The system ... places a cap on revenues by creating an irrebutable presumption that every class above the cap is medically unnecessary and therefore not reimbursable. It places a limit on the amount a Hospital will be allowed per patient stay without regard to reasonableness of the costs for the total services actually provided.” ²⁰⁴ Judge Ross said in the trial court on the issue of the guaranteed inpatient revenue system: “Utilization of the Guaranteed Inpatient Revenue System (GIR) to establish rates is within the power of the Commission. Section 19-216(b)(l) and (c). Harford Memorial Hospital v. Health Services Cost Review Commission, 44 Md.App. 489 [, 410 A.2d 22 ] (1980).

The argument that the GIR is beyond the authority of the Commission because the nature of the system is to constrain revenues is without merit. The power to approve or disapprove rates is the power to constrain revenues. Nor is the GIR an unlawful interference with hospital management. It is difficult to see how the power to regulate rates can fail to impact on management decisions.

Indeed, the underlying purpose of this regulatory statute would seem to be to require hospital management to become more efficient and to reduce costs. The expert testimony is to the effect that rather than adversely affecting quality GIR not only effectively reduces costs but tends to improve quality. The net of the Hospital’s testimony with respect to GIR is that as a method it has imperfections including imperfections in the DRG’s[ 4 ] upon which the GIR is based. However, there is substantial evidence that this imperfect method works.

Furthermore, the evidence is that the system has been and is being improved. The Hospital’s contention that GIR restricts introduction of new technology is answered by the inclusion of the 1% of gross revenue and the evidence to the effect that in practice the GIR has not restricted the introduction of new technology.” It will be recalled that § 19-216(c) empowers the Commission in an effort “[t]o promote the most efficient and effective use of health care facility services” to “promote and approve alternate methods of rate determination and payment that are of an experimental nature.” We ²⁰⁵ regard the guaranteed inpatient revenue system as falling within that authorization. As Judge Ross indicated, it also falls within the authorization in § 19-216(b)(l) to “review and approve or disapprove the reasonableness of any rate that a facility sets or requests.” Moreover, an affirmance on this issue is consistent with the law we have recited in Part II of this opinion. IV The Hospital next contends that the Commission exceeded its statutory powers “in attempting to regulate rates for ancillary services (principally radiology and pathology) furnished and billed to patients by lessees and never included to any extent among the costs of the Hospital.” The Hospital says, “It is undisputed that since its establishment in 1975, the Hospital has leased the ancillary services such as radiology and pathology to physicians who have assumed and paid all the expenses and directly billed patients for those services____” Fees charged to patients by hospital-based physicians such as radiologists and pathologists were held ultimately not to constitute a part of “the total costs of the Hospital” in Health Services v. Holy Cross Hosp., 290 Md. 508 , 431 A.2d 641 (1981) (Holy Cross III).

As we understand it, what is being done here is to regulate the technical component of those ancillary services, not the physician’s fees. On this issue the trial judge said: “While it is true that the Court of Appeals in Holy Cross Hospital v. Health Services, 283 Md. 677, at p. 689 [ 393 A.2d 181 ] (Holy Cross I) held that ‘ “total costs of the hospital” means the Hospital’s expenditures or outlays of money in connection with the operation of the Hospital’ it immediately followed the statement of that holding with the statement ‘[s]ome expenses of a patient’s hospital stay traditionally have been included in the bill submitted to the patient by a hospital. For that reason, these expenses would come within the term “total costs of the hospital” as those words are commonly understood, ²⁰⁶ even if there were to be an attempt on the part of any hospital to enter into an independent contract for those services to be supplied through such hospital to its patients.’ There is substantial evidence to support the Commission’s finding that the technical component of ancillary services has been ‘traditionally ... included in the bill submitted to the patient by a hospital.’ Thus, ‘these expenses ... come within the term “total costs of the hospital” ’ even though through its arrangements with the physicians rendering the ancillary services these costs have been physically removed from the Hospital’s books. Health Services v. Harford Memorial Hospital, 296 Md. 17 , [ 459 A.2d 192 (1983),] does not undermine the rule laid down in Holy Cross I. It held that if a hospital incurs as a cost of operating the hospital an expenditure which had not previously been a traditional cost that cost is thus brought within the jurisdiction of the Commission.

Thus, while in effect the Commission’s jurisdiction can be expanded by placing non-traditional costs on the hospital’s books, it cannot be contracted by removing traditional costs.” In Holy Cross Hosp. v. Health Services, 283 Md. 677 , 393 A.2d 181 (1978) (Holy Cross I), immediately after that part of our opinion quoted by Judge Ross, we explained relative to costs traditionally regarded as a part of the “total costs of the hospital”: “For instance, it is known that some hospitals today contract with independent catering firms to supply meal services to hospital patients. We do not think for one instant that it would be possible to remove meal costs from ‘total costs of the hospital’ so that hospitals might bill patients separately for meals, based upon charges to them of the caterer, and thus to remove such costs from the control of the Commission.” 283 Md. at 689, 393 A.2d at 187 . Moreover, in this case there was evidence before the Commission from which it could and did find that the Hospital is the only hospital in the State that leases out its ancillary ²⁰⁷ departments. Given the bases for review set forth in Part II, we perceive no error.

V The Hospital next attacks the application of the Commission’s “market basket” methodology. It claims that the rate set on that basis should be reversed “because (A) the ‘market basket’ methodology was not prima facie validated, was vitiated by its demonstrated flaws and was arbitrary and capricious; (B) the ‘market basket’ was illegally used as an absolute rule; (C) the ‘market basket’ was used to impermissibly regulate the quality and quantity of services; (D) the Commission illegally and arbitrarily ignored uncontradicted evidence, treated as ‘irrelevant’ probative evidence it was required to consider, and made findings with no evidence at all to support them; and (E) the Commission’s decision was made upon unlawful procedure, in violation of constitutional provisions and is otherwise affected by error of law.” In Lutheran Hosp., n. 2, 298 Md. at 657 , 472 A.2d at 58 , Judge Davidson defined the term “market basket” for the Court, saying that it “consists of a group of hospitals considered by the Commission to be comparable to the hospital whose rates are being reviewed. The costs of that hospital are compared to the average costs of the market basket.” Two market baskets were used in this case. The Hospital was found wanting when compared to each.

The first market basket consisted of a group of hospitals throughout the State selected on the basis of size and scope of services similar to that of the Hospital. The number of beds in those hospitals ranged from a low of 173 to a high of 317. It will be recalled that the Hospital has 240 beds. Only one, Montgomery General, was located in the District of Columbia metropolitan area.

One was located in a distinctly rural area. A second market basket was constructed in an effort to meet the objections of the Hospital. All hospitals in the group were located in the same general area as the Hospi ²⁰⁸ tal. They ranged in size from a low of 128 beds to a high of 655 beds at Prince George’s General.

Despite the Hospital’s attempt to cull five or six distinct issues from the Commission’s use of the market basket methodology, there is really only one question here: Is use of the methodology within the Commission’s power under § 19-216(c)? It will be recalled, once again, that “to promote the most efficient and effective use of health care facility services” the Commission is authorized to “promote and approve alternate methods of rate determination and payment that are of an experimental nature.” Judge Ross said relative to the Hospital’s contention: “There is nothing inherently illegal, capricious or arbitrary about the Market Basket methodology per se. It is a form of peer group comparison. There is expert testimony that peer group comparison is an established and proper tool for hospital rate setting.

Also see Matter of William B. Kessler Memorial Hospital, [ 78 N.J. 564 ,] 397 A.2d 656 (1979). Neither Judge Kaplan nor the Court of Appeals reached this issue in the Lutheran case. Use of such a methodology is clearly within the power of the Commission. Section 19-216(c); Blue Cross v. Franklin Square Hospital, 277 Md. 93 [ 352 A.2d 798 ] (1976); Health Services Cost Review Commission v. Franklin Square, 280 Md. 233 [ 372 A.2d 1051 ] (1977); Harford Memorial Hospital v. Health Services Cost Review Commission, 44 Md.App. 489 [ 410 A.2d 22 ] (1980).

There is also substantial evidence to support (1) the Commission’s decision that the two market baskets selected by Staff were appropriate and (2) the Commission’s actual use of those market baskets in determining rates for the Hospital. Credibility of witnesses and the weight to be given their testimony are matters for the Commission. “The Hospital’s myriad objections regarding the Market Basket methodology and its application in this case (which are hopelessly intertwined in its brief) considered singly and together are not persuasive that the Commission’s determinations were arbitrary or capricious. ²⁰⁹ “It is argued the selection of component hospitals is subjective and subject to manipulation to achieve a predetermined result. The evidence is that selection was based on objectively demonstrable similarities. There was no showing that there existed any other group which was composed of hospitals that were more similar or, more importantly, which produced averages which tended to support the Hospital’s requested rates.

There was no showing of manipulation. “The fact that the Commission’s peer group comparison methodology has been refined from the Market Basket method used in this case to the Inter-Hospital Comparison Group now in use is evidence that the Commission is continuing to improve its methodology. It does not follow that the methodology used in this case is therefore defective. “It seems clear that with respect to the issue of data error the Commission based its finding on the expert opinion that random errors in large bodies of data do not have a significant impact on averages. The Hospital’s expression of indignation with respect to the Commission’s reference in its decision to Suburban Hospital is misplaced. The data reporting problem at Suburban related to allocation of charges to particular charge buckets.

The testimony was that the total financial data on which the Commission’s comparison was based was accurate. “The Commission did not totally ignore the ‘actual costs of the Hospital’. It compared them to the market basket averages and gave the Hospital the opportunity to demonstrate that its higher costs were warranted. The Hospital chose to justify its costs by showing they had been actually incurred and attempting to show all were reasonable and necessary. The net effect was to pit the cost based reimbursement method championed by the Hospital against the disparate peer comparison method uniformly applied by the Commission with the predictable result that the Hospital in large measure failed to explain ²¹⁰ by credible evidence why the costs it had actually incurred and anticipated it would incur were so far out of line with those of its peers.

There is substantial evidence that the cost based reimbursement method has been discredited and has been displaced by peer comparison which is now widely accepted. The Commission did not arbitrarily apply the Market Basket as an absolute rule but used it as a basis for comparison. It found that the evidence did in part support the Hospital’s principal contention that its greater intensity accounted for its higher costs and made adjustments accordingly in establishing the rates.” We agree with Judge Ross that “[tjhere is nothing inherently illegal, capricious or arbitrary about the Market Basket methodology per se.” It simply sets up an average for purposes of comparison. It is similar to the matterof appraisal of real property.

We have said many times that valuation of land is not an exact science. See, e.g., Mont. Co. Bd. of Realtors v. Mont. Co., 287 Md. 101, 110 , 411 A.2d 97, 102 (1980); Supervisor v. Southgate Harbor, 279 Md. 586, 593 , 369 A.2d 1053, 1057 (1977), and Fairchild Hiller v. Supervisor, 267 Md. 519, 521 , 298 A.2d 148, 149 (1973).

Variables are involved. Judgment comes into play. We reject the contention that the Commission arbitrarily applied the market basket averages as an absolute rule and thus violated the requirement of Franklin Sq., 280 Md. 233 , 372 A.2d 1051 . What the Hospital seizes upon is the statement in that case, “Absolute rules concerning cost factors, applicable to all hospitals under all circumstances, as found in the modified order, are therefore inappropriate.” 280 Md. at 241 , 372 A.2d at 1055 .

The market basket methodology imposes no absolute rules concerning cost factors. It is simply a method of comparison. We find Judge Ross to have correctly applied the law to the facts of this case. VI The Hospital asserts, “The Commission’s decision disallowing reasonable fair market rental value of the Hospital ²¹¹ building as a cost was arbitrary and capricious, in violation of the Commission’s own regulations and guidelines and beyond the Commission’s statutory power.” As we have indicated, the joint venture owns the hospital building which it leased to the Hospital in 1975.

At that time the rental was set at $1.4 million. The Hospital says this was “on the basis of an arm’s length fair rental value determination made by ... a real estate firm in Washington, D.C.” It further states that the “lease provides for a Consumer Price Index escalation clause as was usual in 1975 for arm’s length leases.” The actual rental under the lease at the time of the hearing, according to the Hospital, was $3,055,-700 which together with $173,600 in real estate taxes amounted to a total of $3,229,300 payable under the lease. The Hospital concedes that the “escalation clause turned out to overcompensate for inflation.” It says that an independent appraiser who testified for the Hospital appraised the fair market rental value as of April 1982 at $2.33 million “with a tolerance of not more than 20%.” The trial judge said on this issue: “The decision of the Commission to allow actual depreciation, actual mortgage interest and actual taxes incurred for the annual cost of the physical plant is neither arbitrary nor prevented by law. There is substantial evidence that this is an appropriate method for hospital rate setting.

It is used for Medicare reimbursement and has been used consistently by the Commission in setting rates for other hospitals. Even if it were assumed that the Hospital’s proposed method of using actual costs of the lease was a reasonable one, the Commission is not required to accept it. Harford Memorial Hospital, supra. The Commission did not arbitrarily apply the methodology to the Hospital but considered the evidence submitted by the Hospital and the arguments made on behalf of the Hospital.

Although the Commission referred to the Medicare waiver, it based its decision on its consideration of all of the evidence on the issue.” ²¹² In support of its position the Commission points to Potomac Edison Co, v. PSC, 279 Md. 573, 580 , 369 A.2d 1035, 1040 (1977), where this Court stated that it “is appropriate to consider the underlying capital structure of the system in any parent-subsidiary situation.” In that case, Potomac Edison had recommended a rate of return on investment of 9.9%; People’s Counsel countered with a recommendation of 8.5%. The Public Service Commission adopted the hearing examiner’s finding that 8.6% would be a fair rate of return. We said, “Our inquiry ... is limited to a determination of whether there was illegality or unreasonableness in the commission’s action; when that inquiry is finished, judicial scrutiny ends and the judicial function in the rate making process is over.” 279 Md. at 582, 369 A.2d at 1041. That the adopted rate of return was closer to one party’s recommendation than to the other’s “does not remove the commission result from the zone of reasonableness.

What matters above all else is that there was substantial evidence to support it.” 279 Md. at 583, 369 A.2d at 1042. See our discussion in Part II of this opinion. The Hospital argues that real estate taxes of $194,-052, which seem somehow to have been overlooked in calculations, should be added and that this is cause for remand. It must be borne in mind that the Hospital requested a rate which would generate in excess of $41.5 million in gross revenue and that the final rate allowed would generate $35.1 million in gross revenue.

We regard this error as de minimis, particularly, as set forth in Part XI of this opinion, when one considers that the total sum of overcharges and interest is $15,541 million. We see no ground for reversal on this point even when considered with the $98,700 discussed in Part IX. YII The Hospital claims that the “Commissions disallowance of lease payments on equipment leased from third party lessors and straight line depreciation on owned equip ²¹³ ment (Issue No. 6 [in the trial court]) and the Commission’s disallowance of depreciation on capital intensive equipment (Issue No. 9) should be reversed for the same reasons set forth in [Part V pertaining to market baskets] and the requested depreciation and lease payments should be allowed as costs to the hospital.” It explains: “Issue No. 6 involves the Hospital’s request to include in its rates lease payments to third party lessors ... and straight line depreciation on owned equipment____ Issue No. 9 involves depreciation on capital intensive equipment. In each case the Commission rejected as irrelevant the actual lease payments ... and the evidence as to their reasonableness ... and also rejected as irrelevant the evidence of reasonableness of requested straight line depreciation based upon cost and useful life.

Instead it determined the amount allowable on the basis of market basket averages for equipment costs and depreciation____ The market basket average was measured in terms of $905.00 per average occupied bed and this average was multiplied by the average occupied beds of the Hospital. “The Hospital’s evidence, rejected as irrelevant, included testimony that all leases except those entered into in 1980-1981 were reviewed in 1975, 1976 and 1977 by Medicare and after extensive analysis Medicare approved leases because, in Medicare’s judgment, the lease expense was equivalent to depreciation that would have been allowable if the Hospital had been the owner____ The Commission stated ... that Medicare approval of the leases does not constitute approval of the amount of