Health Services Cost Review Commission v. Holy Cross Hospital of Silver Spring, Inc.

431 A.2d 641, 290 Md. 508, 1981 Md. LEXIS 213

• Court: Court of Appeals of Maryland
• Decided: April 23, 1981
• Docket: [No. 43, September Term, 1980.]
• Status: Published

Opinions

Smith, J.,

delivered the opinion of the Court on the motion by Blue Cross of Maryland, Inc., for leave to file a motion for reconsideration as amicus curiae at page 548 infra. Davidson, J., dissents.

In this case, which probably will become known as "Holy Cross III,” we shall hold that a trial judge was right for the wrong reason in his determination of an appeal from the Health Services Cost Review Commission (the Commission). We conclude that since the commission failed to establish that the term "total costs of the hospital” at the time of the enactment of the statute creating the Commission in 1971 was "a term 'of art’ in the health care field having a well understood meaning different from its common signification which would include the fees of the physicians here,” the statute provides no authority to the Commission to regulate the professional fees here under consideration.

For a clear understanding of the issue currently before the Court we first refer to Holy Cross Hosp. v. Health Services, 283 Md. 677, 393 A.2d 181 (1978), "Holy Cross I.” ¹ We opened that opinion by saying:

We are here involved as a matter of statutory construction with the question of whether fees charged by physicians in certain medical specialties to hospital patients, which fees are placed on hospital accounts and billed by the hospitals in such amounts to the patients, constitute a part of "the total costs of the hospital” so as to be considered as "reasonably related to the total services offered by the hospital” and thus whether the Maryland Health Services Cost Review Commission (the Commission) is empowered to review and set charges by these physicians in the specialties of cardiology, pathology, and radiology.

The Commission was created by Chapter 627 of the Acts of 1971. Certain revisions have been made since that date. See Maryland Code (1957, 1971 Repl. Vol., 1978 Cum. Supp.) Art. 43, §§ 568H-568Z. [Id. at 679-80.]

After public hearings relative to Holy Cross, the Commission on December 1, 1976, issued a proposed opinion and order in which it found "that the salaries of the radiologists, pathologists and cardiologists [were] subject to [its] review as a part of [the Commission’s] legislative charge to assure the public that total costs are reasonably related to total services provided.” This was subsequently modified "to read 'compensation’ rather than 'salary’ .. ..” Holy Cross sought judicial review in the Circuit Court for Montgomery County. Certain physicians were permitted to intervene. Three issues were addressed by that court, (1) whether the Commission had jurisdiction to determine the rate charged by pathologists, radiologists, and cardiologists for their services rendered to patients of Holy Cross, (2) whether the Commission’s restructuring of the rate schedules was so arbitrary and capricious as to deny the hospital and physicians due process of law, and (3) whether the Commission’s action in excluding patient telephone charges from the basic room rate was arbitrary and capricious. The trial judge found for the Commission on the first and third issues but against it on the second issue. Hence, he reversed the order of the Commission and remanded the case to it for further proceedings. Since the circuit court’s determination on the first issue was adverse to them, Holy Cross and the physicians appealed to the Court of Special Appeals. We granted the writ of certiorari prior to consideration of the case by that court.

In Holy Cross I we pointed out that a number of contentions were made to us by the hospital and the physicians as to why the Commission might not do that which it sought to do. We focused, however, "only on the question of whether the charges by these specialists are a part of 'the total costs of the hospital,’ since if they [were] not there [was] no need to consider the other objections.” Id. 283 Md. 683. We examined the statute in question and reviewed our cases relative to statutory construction. We then pointed out that "for the Commission to have the power it seeks it must be determined that the charges of these physicians constitute a part of 'the total costs of the hospital ....’” Id. 283 Md. at 688. After examination of the definitions of the noun "cost” and the preposition "of’ appearing in Webster’s New International Dictionary of the English Language (2d ed. unabr. 1959) we concluded that" 'total costs of the hospital’ means the Hospital’s expenditures or outlays of money in connection with the operation of the Hospital.” Id. at 689. We then determined:

[O]n the record before üs we are unable to agree with the conclusion of the trial judge or the conclusion of the Commission that the fees charged by these pathologists, radiologists, and cardiologists are a part of the "costs of the hospital,” the term being used here in the sense of cost of operation of a hospital. On the other hand, we do not rule out the possibility that at the time of the enactment of this statute the words "total costs of the hospital” might have been a term "of art” in the health care field having a well understood meaning different from its common signification which would include the fees of the physicians here. Therefore, we think that the ca use of justice would be best served by a remand of this case to the Circuit Court for Montgomery County under Maryland Rule 871 without affirmance or reversal for further proceedings in which the Commission would be afforded an opportunity to present evidence of such an understanding of the meaning of the term within the field of health care at the time this statute was enacted, if such testimony in fact is available. In order that there may be no misunderstanding, we point out that if the services here under consideration were not understood in the health care field as embraced within 'Total costs of the hospital” at the time of the enactment of this statute, the Commission has exceeded the power vested in it by the General Assembly. [Id. at 689-90.]

On the remand the trial judge heard about nine days of testimony and considered numerous exhibits. He issued a comprehensive opinion in which he concluded in part:

2. The words "total costs of the hospital” as contained in the statute enacted in 1971 (Art. 43, § 568 U (a), Ann. Code of Md. 1957 Ed., 1980 Replacement Volume) constitute a term of art which at that time had a well understood meaning within the field of health care different from its common significance, and as such, included the professional fees of hospital based radiologists and pathologists.

He went on, however, to direct the Commission:

[T]o exclude from their cost review determination with respect to Holy Cross Hospital, the professional fees of those radiologists, pathologists and electrocardiologist which are billed to the patients directly by the physicians in question ... and are not carried as allowable costs on reports or the audited financial statement of the hospital for purposes of reimbursement by third-party payors, or for hospital accounting purposes ....

The Commission appealed to the Court of Special Appeals. Prior to hearing in that court the Commission petitioned us for the writ of certiorari. Notwithstanding the provision of Maryland Rule 811 a 3 (d) that a petition for that writ shall contain "[t]he questions presented for review,” the Commission framed no question in its petition. It did "contend[ ] that since the Circuit Court concluded that 'total costs of the hospital’ was a term of art in the health care field at the time the Commission’s statute was enacted which term included the fees of hospital-based radiologists and pathologists, it was error to conclude further that the direct billing of such fees would escape Commission jurisdiction.” It further "contended] that based on the finding of the Circuit Court, the Commission does have the jurisdiction to regulate the fees charged by hospital-based radiologists, pathologists and electrocardiologists to hospital patients, no matter how billed.” The answer to the petition stated that if we determined to issue the writ "the Physician Respondents w[ould] demonstrate that the Circuit Court did not err, as suggested by the Commission, in finding that the fees of the Physician Respondents were not subject to the Commission’s jurisdiction, but rather in finding that the words 'total costs of the hospital’ as contained in the Commission’s enabling statute was a term of art having a well understood meaning.”

In this Court the Commission claims that "[hjaving determined that 'total costs of the hospital’ are subject to Commission jurisdiction, including the professional fees of hospital-based radiologists and pathologists, the lower court erred by concluding that these physicians could escape Commission jurisdiction by contracting with the hospital as to the manner of billing.” Holy Cross and the physicians contend that "[t]he circuit court erred in concluding that the statutory phrase 'total costs of the hospital’ was a term of art in Maryland in 1971.”

The Commission moved to strike that portion of the brief of Holy Cross and the physicians which deals with the latter point. Rule 813 b (1) is applicable. It states:

In cases pending in the Court of Special Appeals where no decision has been rendered by it, if the original petition for certiorari is filed by the appellant, this Court will ordinarily consider only the issues which have been raised in the petition and any cross petition and which have been preserved for appellate review, unless otherwise provided by the order granting the writ of certiorari.

This rule was extensively discussed in Offutt v. Montgomery Co. Bd. of Ed., 285 Md. 557, 563-64, 404 A.2d 281 (1979), Robeson v. State, 285 Md. 498, 501-04, 403 A.2d 1221 (1979), and State v. Raithel, 285 Md. 478, 482,404 A.2d 264 (1979). We consider the contention of the Hospital and the physicians here to have been embraced within that portion of the Commission’s petition which claimed "that based on the finding of the Circuit Court, the Commission does have the jurisdiction to regulate the fees charged by hospital-based radiologists, pathologists and electrocardiologists to hospital patients, no matter how billed.” (Emphasis added.) Moreover, as long as there is compliance with Rule 813 a, an appellee, without taking a cross-appeal, is entitled to argue as a ground for affirmance of a trial court judgment a matter that was resolved against the appellee at trial. Offutt n. 4 at 564, St. Comm’n on Human Rel. v. Amecom Div., 278 Md. 120, 123, n. 2, 360 A.2d 1 (1976), and Capron v. Mandel, 250 Md. 255, 259, 241 A.2d 892 (1968). Hence, the motion to strike certain portions of the brief is denied.

Since in our view the trial court erred in determining that the statutory phrase "total costs of the hospital” was a term of art in Maryland in 1971, we need not address the Commission’s contention that the trial judged erred by directing the Commission "to exclude from their cost review determination with respect to Holy Cross Hospital, the professional fees of those radiologists, pathologists and electrocardiologist which are billed to the patients directly by the physicians in question ... and are not carried as allowable costs on reports or the audited financial statement of the hospital for purposes of reimbursement by third-party payors, or for hospital accounting purposes ...

The term "words of art” is defined in Black’s Law Dictionary 1439 (5th ed. 1979) as:

The vocabulary or terminology of a particular art or science, and especially those expressions which are idiomatic or peculiar to it.

Further light is shed by 2A Sutherland, Statutory Construction § 47.31 (4th ed. C. Sands, 1973) which states:

Although questions of statutory interpretation are questions of law which are decided by the judge instead of a jury and concerning which a court is not bound by the testimony of witnesses, the trade or commercial meaning of a term is treated as a fact to be proved in each case. Until such fact is proved, an alleged commercial or trade meaning of a common term is presumed to be the same as the common meaning. Futhermore, in order that an alleged trade or commerical meaning of a term shall prevail, it must appear that such commercial meaning is the result of established usage in commerce and trade, and that, at the time of the passage of the act, such usage was definite, uniform, and general, and not partial, local, or personal. There is no presumption that the trade or commercial meaning once established, continues. [Id. at 156.]

An example of a word as a term of art is found in an earlier generation when the word "telephone” had only recently appeared on the American scene and it was held in Hockett v. State, 105 Ind. 250, 263, 5 N.E. 178 (1886), to be one of art.

On the remand the Commission presented no evidence that the term "total costs of the hospital” was one of art. It did produce numerous witnesses to testify that the phrase "total costs of hospital services” was a term of art.² At a pretrial conference counsel for Holy Cross and the physicians suggested the proper question to be decided but the Commission succeeded in persuading the trial judge to the contrary. Later in the trial, however, he did correctly focus on the issue, stating, "I am dealing with a very narrow issue which has been sent back to me by the Court of Appeals and it revolves around this concept of cost of the hospital and not the philosophical decisions as between a physician and someone else.” (Emphasis added.)

Numerous witnesses produced by Holy Cross and the physicians testified that the term "total costs of the hospital” was not a word of art within the health care field at the time the statute was enacted.

As previously indicated, in Holy Cross I we pointed out that since the term " 'total costs of the hospital’ means the Hospital’s expenditures or outlays of money in connection with the operation of the Hospital,” the Commission exceeded its power in attempting to control the fees or charges here and there involved unless "the words 'total costs of the hospital’ might have been a term 'of art’ in the health care field having a well understood meaning different from its common signification which would include the fees of the physicians here.” It was for that reason and that reason only that in the interest of justice we invoked Maryland Rule 871 and remanded the case to the trial court without affirmance or reversal in order that the Commission might be afforded an opportunity to present evidence of such an understanding of the meaning of the term within the health care field at the time the statute was enacted "if such testimony in fact is available.” To avoid any possible misunderstanding we then went on to indicate that unless such fact were proven "the Commission has exceeded the power vested in it by the General Assembly.” It follows that under the terms of the remand that the extensive testimony adduced about "total costs of hospital services” as a term of art, various federal statutes concerning health care, methods used relative to reimbursement by insurers, the understanding by some people in the health care field of what the statute was intended to mean and the like were irrelevant and immaterial to the issues before the trial court.

Since the Commission failed to prove that the words "total costs of the hospital” were a term of art so as to cause them to have a meaning in the statute different from the common, ordinary signification of the term, it follows that the Health Services Cost Review Commission exceeded its authority in the case at bar and its order must be reversed.³

The General Assembly is presumed to be fully familiar with the holdings of this Court. Bingman v. State, 285 Md. 59, 65, 400 A.2d 765 (1979), and cases there cited. There have been two sessions of the General Assembly since our opinion was filed in Holy Cross I. Nevertheless, the General Assembly has not seen fit to change the statute. If it intends a different interpretation, it no doubt will say so by amending the law relative to the Commission’s powers.

Judgment reversing the order of the Health Services Cost Review Commission modified to eliminate so much thereof as approved the Commission’s regulation of the charges here before the Court, and, as modified, judgment affirmed; appellant to pay the costs.

1 . Holy Cross II was Maryland Radiological v. Health Serv., 285 Md. 383, 402 A.2d 907 (1979). It concerned the attempt of Maryland Radiological Society and others to intervene after our remand in Holy Cross I.

2 . The concluding portion of the opinion as originally filed in Holy Cross I referred to "total costs of hospital services” rather than to "total costs of the hospital,” the term appearing in the statute and which appeared elsewhere in the opinion. The error was detected and sixteen days after filing of the opinion, which was prior to the issuance of the mandate, correction slips were issued.

In Holy Cross II the assistant Attorney General who tried this case on the remand and who argued Holy Cross I appeared on behalf of the Commission. The Court quoted, 285 Md. at 386, from the corrected version of Holy Cross I. As previously indicated, Holy Cross II concerned the attempt of Maryland Radiological Society and others to intervene after our remand in Holy Cross I. It was decided prior to the trial of the issues now before us. Thus, there is no reason for the Commission to have been misled in any way as to the terms of the remand.

3 . Cognizance is taken of the dissent. We shall not prolong this opinion by writing a rebuttal to each and every proposition advanced by the dissent. We make but two comments.

The dissent would lead one to believe that it was not until "7 January 1980, [that] the Commission, at long last, became aware .of the existence and full impact of the corrected opinion.” We have already pointed out in the text of this opinion, "At a pretrial conference counsel for Holy Cross and the physicians suggested the proper question to be decided but the Commission succeeded in persuading the trial judge to the contrary.” As a matter of fact, the attorney for one of the intervening physicians called to the attention of the trial judge at that time that the word "services” was not in the statute in question and that this was the reason for the correction. The assistant Attorney General who was present representing the Commission acknowledged his cognizance of the corrected version which had been quoted in Holy Cross II. Had anyone been willing to pull from the shelf the appropriate volume of the Maryland Reports or the Atlantic Reporter the opinion in its proper form would have readily appeared, even had one looked at an "advance sheet.” This conference took place on October 5,1979. The dissent quotes, adding emphasis, the statement of the trial judge on December 18,1979, to the effect that he did not know by which opinion he was bound, the published, corrected opinion or the original one. Why, may one ask, would the Court have distributed corrected versions of the opinion if it were not that this corrected version was to bind the parties? Indeed, just what does the word "correction” mean? In common parlance the issuance of the correction slip would mean that the Court had detected an error.

Despite the purpose of the remand the Commission simply elected to question its experts relative to "total cost of hospital services” as a term of art in the health care field, not "total costs of the hospital.”