
391 F.Supp.2d 246 (2005)
B & G INVESTMENT PARTNERS LP CORP., Plaintiff,
v.
Tommy G. THOMPSON, Secretary of the Department of Health and Human Services, Defendant.
Civ.A. No. 03-2469(EGS).
United States District Court, District of Columbia.
September 29, 2005.
*247 Jonathan C. Brumer, U.S. Department of Health & Human Services, Centers for Medicare & Medicaid Services Division, Washington, DC, Peter S. Smith, United States Attorney's Office, Civil Division, for defendant.
Donna Kalani Thiel, Morgan Lewis & Bockius, Washington, DC, for plaintiff.

MEMORANDUM OPINION
SULLIVAN, District Judge.
Plaintiff B & G Investment Partners LP Corporation ("B & G") brings suit pursuant to the Social Security Act, 42 U.S.C. § 1395, et seq. and the Administrative Procedure Act ("APA"), 5 U.S.C. 551, et seq., against defendant, the Secretary of Health and Human Services, claiming that the agency's Provider Reimbursement Review Board's decision denying plaintiff reimbursement for rental and other expenses under Medicare was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law. See 5 U.S.C. § 706(2)(A).
Pending before the Court are cross-motions for summary judgment. Upon careful consideration of the parties' motions, the responses and replies thereto, the relevant statutory and case law, and the entire administrative record, the Court is persuaded that the defendant is entitled to summary judgment and plaintiff's Complaint will be DISMISSED WITH PREJUDICE.
I. Background
A. Statutory Background
Medicare is the nation's federally-funded health insurance program for the elderly and disabled. See 42 U.S.C. § 1395, et seq. Part A of Medicare authorizes payment for certain health care services, including payment to skilled nursing facilities ("SNFs"). Under Part A, service providers enter into a "provider agreement" with the Secretary. 42 U.S.C. §§ 1395cc, x(u). A "fiscal intermediary," generally a private insurance company, reviews claims for reimbursement and administers payment to providers on behalf of the Secretary. 42 U.S.C. §§ 1395h(c)(1), 1395x(u). At the end of each fiscal year, the intermediary reviews each provider's cost report and issues a notice of program reimbursement ("NPR"), stating the amount of Medicare reimbursement owed to the provider. 42 C.F.R. §§ 413.20(a), 413.24(a), (f), 405.1803.
If a provider disagrees with the Secretary's determination, issued by the intermediary, the provider may request a hearing before the Provider Reimbursement Review Board ("PRRB" or "Board"), assuming certain prerequisites are met, such as the amount in controversy. 42 U.S.C. § 1395oo(a); 42 C.F.R. §§ 405.1807, 405.1835. The Board may hold a hearing and issue a decision, which may in turn be reviewed by the Secretary's delegate, the Centers for Medicare and Medicaid Services ("CMS"), formerly HCFA, Administrator. 42 U.S.C. § 1395oo(f)(1); 42 C.F.R. 405.1875. The final decision of the *248 PRRB, or of the Secretary if he chooses to review the decision, may be challenged in a U.S. District Court with venue, pursuant to the APA. 42 U.S.C. § 1395oo(f)(1).
1. Reasonable Cost Reimbursement Under Medicare
According to the defendant, during the time period at issue in this case, Medicare reimbursed providers on a "reasonable cost" basis. 42 U.S.C. § 1395f(b)(1). "Reasonable cost" is defined as "the cost actually incurred, excluding therefrom any part of incurred cost found to be unnecessary in the efficient delivery of needed health services ..." 42 U.S.C. § 1395x(v)(1)(A). The statute goes on to state that "reasonable cost" "shall be determined in accordance with regulations establishing the method or methods to be used, and the items to be included, in determining such costs..." Id. Not surprisingly, there are a host of regulations for determining "reasonable cost." 42 C.F.R. Part 413. Moreover, the Secretary has published interpretations of the laws and regulations in the Provider Reimbursement Manual ("PRM") in order to give providers guidance in how the various regulations are applied.
2. The Related Party Rule
Under Medicare, providers may seek reimbursement for necessary and proper interest on capital indebtedness. 42 C.F.R. § 413.153(a)(1), (b), (c)(1). However, if a provider borrows from an entity related to the provider "through control, ownership, or personal relationship," the interest is not an allowable cost under the statute. Id.
Similarly, "[c]osts applicable to services, facilities, and supplies furnished to ... [a] provider by organizations related to the provider by common ownership or control are includable in the allowable cost of the provider at the cost to the related organization," where "such cost ... [does] not exceed the price of comparable services, facilities, or supplies that could be purchased elsewhere." 42 C.F.R. § 413.17(a); PRM § 1000; see also PRM § 1005 ("[t]he related organization's costs include all reasonable costs, direct and indirect, incurred in the furnishing of services, facilities and supplies to the provider," and stating that "[t]he intent is to treat the costs incurred by the supplier as if they were incurred by the provider itself." Therefore, "if a cost would be unallowable if incurred by the provider itself, it would be similarly unallowable to the related organization.").
The related party rule applies to rental expenses. See PRM § 1011.5 (noting that where "[a] provider ... lease[s] a facility from a related organization," that "the rent paid to the lessor by the provider is not allowable as cost," but "[t]he provider ... would include in its costs the costs of ownership of the facility," including depreciation, interest on the mortgage, real estate, and taxes).
Under the regulations, a provider is "related" to another organization if "the provider to a significant extent is associated or affiliated with or has control of or is controlled by the organization furnishing the services, facilities, or supplies." 42 C.F.R. § 413.17(b)(1); see also PRM § 1002.1. "Control exists [where] an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution." 42 C.F.R. § 413.17(b)(3); see also PRM § 1004.3 ("The term `control' includes any kind of control whether or not it is legally enforceable and however it is exercisable or exercised. It is the reality of control which is decisive, not its form or the mode of its exercise."). The regulations also provide that an immediate family relationship creates *249 " an irrefutable presumption" of relatedness.[1] PRM § 1004.
According to the PRM, the purpose of the related party rule is: "(1) to avoid the payment of a profit factor to ... [a] provider through the related organization (whether related by common ownership or control), and (2) to avoid payment of artificially inflated costs which may be generated from less than arm's length bargaining." PRM § 1000.
The regulations provide the following exception to the related party rule:
(d) Exception. (1) An exception is provided to this general principle if the provider demonstrates by convincing evidence to the satisfaction of the fiscal intermediary (or, if the provider has not nominated a fiscal intermediary, CMS) that 
(i) The supplying organization is a bona fide separate organization;
(ii) A substantial part of its business activity of the type carried on with the provider is transacted with others than the provider and organizations related to the supplier by common ownership or control and there is an open, competitive market for the type of services, facilities, or supplies furnished by the organization;
(iii) The services, facilities, or supplies are those that commonly are obtained by institutions such as the provider from other organizations and are not a basic element of patient care ordinarily furnished directly to patients by such institutions; and
(iv) The charge to the provider is in line with the charge for such services, facilities, or supplies in the open market and no more than the charge made under comparable circumstances to others by the organization for such services, facilities, or supplies.
(2) In such cases, the charge by the supplier to the provider for such services, facilities, or supplies is allowable as cost.
42 C.F.R. § 413.17(d); see also PRM § 1010.
B. Factual Background
Plaintiff B & G Partners is the successor to Advisors Nursing Home Group I Corporation, formerly known as Connecticut Subacute Corporation ("CSC"). In addition to CSC, there are several entities and persons relevant to an understanding of the instant case:
1. Continuing Health Properties, created in 1986, managed and operated three nursing homes: Subacute Center of Bristol f/k/a Forestville Health and Rehabilitation Center ("Forestville"), Brook Hollow Health Care Center ("Brook Hollow"), and Cedar Lane Rehabilitation Center ("Cedar Lane") until CSC took over in 1992. Plaintiff's Statement of Facts ("Pl.Facts") ¶¶ 28, 58. Continuing Health Properties was a wholly owned subsidiary of New MediCo Holding Co, Inc. ("New Medico"), a privately-held Massachusetts company, 100 percent of the stock of which was directly owned by Charles Brennick, Gerald Martin's cousin. A.R. 775. Barry *250 Portnoy was an attorney for New Medico. Pl. Facts ¶¶ 28-30.
2. Health and Retirement Properties Trust ("HRPT"), established in 1986, is a publicly traded company formed to invest in real estate, specifically health care facilities. Pl. Facts at ¶¶ 7,9. HRPT was sponsored by New MediCo/Continuing Health Properties, Greenery Rehabilitation, and HRPT Advisors. The Declaration of Trust that governs HRPT requires that a majority of the Board of Trustees be Independent Trustees. Barry Portnoy and Gerald Martin are HRPT Trustees and in addition there are three Independent Trustees. Pl. Facts at ¶¶ 13-18.
3. In 1986, HRPT purchased the three nursing homes from Continuing Health Properties and then leased them back to Continuing Health Properties. Pl. Facts ¶ 35.
4. HRPT Advisors, Inc. does the day-to-day work of HRPT, pursuant to an Advisory Agreement entered into in November of 1986. Pl. Facts at ¶ 11. HRPT Advisors is owned by Barry Portnoy and Gerald Martin. Pl. Facts at ¶¶ 11-12, 22. HRPT Advisors was "compensated at an annual rate equal to.7% of [HRPT's] real estate investments up to $250 million and .5% of such investments thereafter." A.R. 1269, 1304.
5. Beginning in 1992, and during the relevant time period, CSC operated the Forestville, Brook Hollow, and Cedar Lane nursing homes. Pl. Facts at ¶ 2. CSC is a closely-held corporation owned by Barry Portnoy and Gerald Martin. Id. at ¶ 3.
Thus, Messrs. Portnoy and Martin (1) are two of the five managing trustees of HRPT (the lessor), (2) wholly own one of HRPT's sponsors, HRPT Advisors, the organization that "provide[s] management and administrative services with respect to the ownership of health care and related properties" to HRPT, and (3) wholly own CSC (the lessee).[2] Mr. Martin was also the President, CEO, Director, and controlling shareholder of Greenery, another sponsor of HRPT, and he was the Treasurer of HRPT; Mr. Portnoy was also a Director and shareholder of Greenery, and a partner in the law firm of Sullivan & Worcester, counsel to HRPT, HRPT Advisors, Greenery, New MediCo, Continuing Health, Mr. Martin and Charles Brennick, "and certain of their affiliates." A.R. 759, 771, 774. According to HRPT's Prospectus, "Messrs. Martin, Brennick and Portnoy jointly engage and/or have engaged in numerous business and investment transactions in the health care industry and in other businesses." A.R. 775.
The HRPT Declaration of Trust provides that the Trustees have the absolute power over the business of the Trust, but that "Trustees are not and shall not be required personally to conduct the business of the Trust" and that
the Trustees shall have the power to appoint, employ or contract with any Person (including one or more of themselves or any corporation, partnership, or trust in which one or more of them may be directors, officers, stockholders, partners or trustees) as the Trustees may deem necessary or proper for the transaction of the business of the Trust. The Trustees may therefore employ or *251 contract with such Person (herein referred to as [HRPT Advisors]) and, consistent with their ultimate responsibility as set forth in this Section 4.1, the Trustees may grant or delegate such authority to [HRPT Advisors] as the Trustees may in their sole discretion deem necessary or desirable without regard to whether such authority is normally granted or delegated by trustees.
A.R. 716.
In 1986, when HRPT and HRPT Advisors were created, HRPT purchased Continuing Health Properties for $32 million and then leased the facilities back to Continuing Health at a monthly rate calculated to result in annual net payments equal to 12.62% of the acquisition price of each property. See A.R. 173-74, 188, 756, 760. For the same period, the rent for the nursing homes leased to Greenery was 10% of the acquisition price. Id.
As part of the arrangement between HRPT and its sponsors, Greenery signed a "stand-by" management agreement which provided that if Continuing Health experienced financial problems, Greenery would step in to manage Continuing Health and supply capital to keep it going; HRPT paid a fee to Greenery for this agreement. Pl. Mt. at 8; A.R. 145, 153, 757-58, 767.
In 1992, HRPT's Board voted to end the leases with Continuing Health and to lease the three nursing homes to CSC. A.R. 144, 547, 777, 780, 790, 1124, 1195. CSC, owned by Martin and Portnoy, who also own HRPT Advisors, took over the operations, and the leases, of the nursing homes. HRPT provided CSC with an $8 million line of credit. A.R. 1200-02, 1210-11, 1213-14. All five of the members of HRPT's Board were present at the meeting when HRPT decided to replace Continuing Health with CSC; Martin and Portnoy participated in the discussions regarding how the Trustees should respond to Continuing Health's financial woes. A.R. 777-83, A.R. 145, 164, 172.
C. Procedural History
For fiscal years 1996 and 1997, the Forestville, Brook Hollow and Cedar Lane nursing facilities, owned by CSC, submitted cost reports to the fiscal intermediary, Anthem Blue Cross and Blue Shield of Connecticut ("Intermediary"). A.R. 9, 1422-1490. In a series of decisions, the Intermediary determined that CSC and HRPT were related parties and disallowed capital, interest, and rental expenses. A.R. 1363-67, 1373-74, 1377, 1381-82, 1411-12, 1414-15, 1425, 1498.
1. The Intermediary's Decisions
In its position papers, the Intermediary explained that it had denied Medicare reimbursement for rent expenses for Forestville for FY 1997 and for all three facilities for FY 1996. A.R. 386-93, 490-99. The decisions first set out the relevant definitions under the regulations:
Related to the provider means that the provider to a significant extent is associated or affiliated with, or has control of, or is controlled by, the organization furnishing the services, facilities, or supplies. PMR § 1002.1
Common ownership exists when an individual or individuals possess significant ownership or equity in the provider and the institution or organization serving the provider. PMR § 1002.2
Control exists where an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution. PMR § 1002.3
*252 A.R. 496-97.[3]
The Intermediary then set out the guidelines for determining common ownership or control:
1. In determining whether a provider organization is related to a supplying organization, the tests of common ownership and control are to be applied separately.
2. If the elements of common ownership or control are not present in both organizations, the organizations are deemed not to be related.
3. The existence of an immediate family relationship will create an irrefutable presumption of relatedness through control or attribution of ownership or equity interests.
A.R. 497.
The Intermediary first concluded that there was common ownership between the Provider (CSC) and the supplier (HRPT) because Messrs. Martin and Portnoy collectively own 100% of CSC and, as owners of HRPT Advisors, they had a 4.1% ownership interest in HRPT. A.R. 497. In support of its conclusion, the Intermediary cites PMR section 1004.1, which indicates that even a "substantially low percentage of ownership could still constitute significant ownership." A.R. 498.
The Intermediary also concluded that there was direct and/or indirect control between the parties. A.R. 498. The Intermediary noted Messrs. Portnoy and Martin, owners of CSC, made up 40% of HRPT's Board, and that HRPT's Declaration of Trust does not prohibit transactions between related parties or require that trustees with an interest in the transaction abstain from voting. Id.
As for indirect control, the Intermediary found that Portnoy and Martin had indirect control of HRPT because they own HRPT Advisors, the organization which provides investment, management, and administrative services to HRPT. Id. These advisory services, the Intermediary noted, would include decisions on leasing of HRPT's properties. Id.
Importantly, the Intermediary "concur[red] with the Provider that they should be reimbursed for some costs." Those costs would be limited to the cost of the related organization, i.e., HRPT. A.R. 499. The Intermediary noted, however, that "the Provider was requested to produce a complete analysis with supporting documentation of the actual costs to the related party. To date, this analysis has not been produced. The failure to produce this data, as required by CFR 413.24 ..., resulted in the Intermediary's disallowance of the Providers [sic] costs in total." Id. Finally, the Intermediary concluded, "If the Provider produces a complete analysis with supporting documentation of the actual costs to the related party, we would be willing to adjust the Providers cost reports to reflect those costs." Id. (emphasis added). Thus, even as late as August 2001, plaintiff was given an opportunity to provide documentation of the costs to HRPT of owning the nursing facilities. A.R. 490, 499.
2. The PRRB's Decision
The nursing homes appealed to the Provider Reimbursement Review Board, and the PRRB scheduled a hearing. A.R. 1355, 1369-76, 1377-78, 1414-16. In anticipation of the hearing, the parties filed position papers with the PRRB, laying out *253 their respective positions. A.R. 383-93, 403-23, 490-99, 567-86, 601-02, 635-74.
In a decision dated September 29, 2003, the PRRB found that the Intermediary's disallowance of the rental and capital-related expenses was correct. A.R. 6-15. The PRRB's decision essentially consolidated three appeals: the FY 1996 denial of capital and interest expenses for Forestville, the FY 1996 denial of rent expenses for all three nursing homes, and the FY 1997 denial of rent, capital and interest expenses for Forestville. A.R. 7.
The PRRB set out the relevant framework in this manner:
Under Medicare regulations, a provider is entitled to claim costs applicable to services, facilities, and supplies furnished to the provider by organizations related to the provider by common ownership or control at the cost to the related organization as long as the cost does not exceed the price of services or supplies that could be purchased elsewhere. The regulation at 42 C.F.R. § 413.17. However, there is an exception to this rule. 42 C.F.R. § 413.17(d)(1) provides that the charge made by the related supplier to the provider is allowable as "cost" provided the following criteria are met:
(i) The supplying organization is a bona fide separate organization;
(ii) A substantial part of its business activity is transacted with others than the provider and organizations related to the supplier and there is an open competitive market for the type of services furnished by the organization;
(iii) The services are those that commonly are obtained by institutions such as the provider from other organizations and are not a basic element of direct patient care;
(iv) The charge to the provider is in line with the charge of services in the open market by the supplier to the provider.
A.R. 8.
Next, the PRRB decision discussed the Providers' arguments as to why the Intermediary's decisions should be reversed. A.R. 10. First, the Providers argued that CSC and HRPT are not related parties because the regulations require a "significant" relationship between the parties in order for the rule to apply, and that in this case there was no showing of a "significant" relationship. Id. The Providers insisted with regard to common ownership that Martin and Portnoy's ownership interest in HRPT, 4.1%, was insufficient to meet the standard for common ownership. As for common control, the Providers maintained that HRPT was governed by its Board of Trustees  a majority of which had to be independent trustees  and that the Declaration of Trust explicitly provides that the transactions between the Trust and interested parties must be approved by a majority of the Trustees not so interested. Id.
Second, the Providers alleged that even if the PRRB was to find that CSC and HRPT were related, the leases were actually negotiated in 1986 between unrelated parties  Continuing Health and HRPT  and thus, because CSC effectively assumed the leases on the same terms as had been negotiated between Continuing Health and HRPT, they were not related party leases. A.R. 11.
Third, the Providers submitted that even if CSC and HRPT were found to be related parties, the exception should be applied because (a) the parties are bona fide separate organizations; (b) a substantial part of HRPT's business activity at all relevant times, 1986, 1992, and 1996 when it was audited, was conducted with organizations *254 with which it was not related, and, moreover, in 1986, when the lease was negotiated, Continuing Health would have had alternatives for obtaining financing; (c) that it is common for providers to lease, rather than own, health care facilities; and (d) charges to the Providers were "in line" with the charges for services, facilities or supplies on the open market. A.R. 11-12.
After a summary of the Intermediary's findings, the PRRB found that the Providers and HRPT were related parties for purposes of the regulations. A.R. 13. The decision cited the relevant definitions:
(b) Definitions. (1) Related to the provider. Related to the provider means that the provider to a significant extent is associated or affiliated with or has control of or is controlled by the organization furnishing the services, facilities, or supplies.
(2) Common Ownership. Common ownership exists if an individual or individuals possess significant ownership or equity in the provider and the institution or organization serving the provider.
(3) Control. Control exists if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution.
A.R. 13-14 (emphasis added).
First, the PRRB reversed the Intermediary's finding of significant common ownership. Id. With regard to control, however, the Board did conclude that the Providers and HRPT were related parties. A.R. 14-15. Noting at the outset that "it can not look at the audited years, December 31, 1996 and 1997, in isolation[,]" the PRRB found the following factors to be relevant:
(1) In 1986, when HRPT was created, it initially conducted business with its three sponsors (HRPT Advisors, Inc., Greenery and New MediCo [/Continuing Health]), all of which were owned by the Provider's shareholders and a relative who owned New MediCo. HRPT (through HRPT Advisors) created a stand-by management agreement whereby Greenery would be called on to manage Continuing Health (successor to New MediCo). Although never implemented, this agreement imposing an obligation is indicative of control.
(2) The prospectus for HRPT indicates that substantially all of the Company's (HRPT's) operations will be conducted by HRPT Advisors (owned by the Provider's shareholders). Furthermore, the prospectus at Intermediary Exhibit 1, page 18, states that HRPT will be subject to various conflicts of interest arising out of its relationships with its sponsors and their affiliates.
(3) The prospectus indicates that to the extent that the terms of the mortgage-financing, acquisition and lease of the Properties have been negotiated among related parties, they have not been determined on an arms-length basis.
(4) The financial statements of HRPT indicate that HRPT Advisors, Inc. is considered to be affiliated with the Providers based on common ownership.
A.R. 14.
The Board explicitly rejected the Providers' argument that CSC had merely taken over the leases which were negotiated by unrelated parties. Id. The Board found that
the principals of HRPT Advisors, Inc. (who are the Providers' shareholders) were in the position of dealing with themselves as owners of [CSC]. Specifically, the Providers' shareholders have indirect control of HRPT since they are also the owners of HRPT Advisors, Inc., which provides management and administrative services to HRPT. This makes *255 them responsible for providing advisory services to HRPT that would include decisions on the leasing of HRPT properties. The Board finds that a related party relationship existed between HRPT and its various affiliates at the time the original leases were signed and extended to the years at issue.
A.R. 14-15 (emphasis added).
The Board went on to find that the Providers were not qualified for the exception to the related party rule. A.R. 15. First, the PRRB found no evidence in the record to support the Providers' contention that a significant portion of their business activities were conducted with unrelated entities. Id. Moreover, the Board cited the Intermediary's survey, which disclosed that rental charges for the Forestville facility were far in excess of the average rental expenses for other skilled nursing facilities in Connecticut. A.R. 15; see also A.R. 476-77 (Intermediary's 1998 letter to Providers' counsel stating that it had "surveyed all of the [SNFs] which this office serves as the Fiscal Intermediary in the Hartford, Connecticut MSA and have found that the capital per diem average for FY 1996 is $13.78 and the average cost per square foot is $15.87 compared to the capital per diem of $38.24 and cost per square foot of $65.13 for Forestville Health for the same fiscal year"). Even recognizing that a rehabilitation facility might require a higher rental rate, the Board found that the Providers had not submitted any evidence to refute the finding that their rent was out of line with similar providers. A.R. 15.
Moreover, the Board noted that the Providers had not submitted any evidence that they had negotiated with any other Real Estate Investment Trusts ("REITs") to find alternative financing or capital. Id.
Finally, the Board concluded that the Providers had failed to provide any documentation of ownership costs, which would entitle them to some reimbursement, and thus, the Board was "precluded" from allowing any costs because the Providers had not complied with the regulations' record-keeping provisions, 42 C.F.R. §§ 413.20(a) and 413.24(a). A.R. 15.
On November 24, 2003, the Administrator for the Centers for Medicare and Medicaid Services (formerly HCFA), declined to review the PRRB decision. A.R. 2. This lawsuit followed.
II. Standard of Review
Summary judgment is granted pursuant to Fed.R.Civ.P. 56 only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court views the evidence in the light most favorable to the nonmoving party, according the party the benefit of all reasonable inferences. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, in ruling on cross motions for summary judgment, the Court will grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not in dispute. See Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir.1975).
In a review of agency action pursuant to the APA, the Court must determine whether the challenged decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). In reviewing an agency's action, the Court must engage in a "thorough, probing, in-depth review" to determine "whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415-16, *256 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). However, while the Court's inquiry must be "searching and careful," the standard of review is also a highly deferential one; the agency's actions are "entitled to a presumption of regularity," and the Court cannot "substitute its judgment for that of the agency." Id. at 415-16, 91 S.Ct. 814.
III. Discussion
In this suit, plaintiff again argues that (1) the related party rule should not have been applied in this case; (2) if the related party rule applied, CSC should have qualified for the exception; and (3) even if the rule applied and the criteria for the exception were not met, the nursing homes should at least have been reimbursed for some reasonable rental, capital and interest expenses. These arguments will be discussed in turn.
A. Whether the PRRB Correctly Applied the Related Party Rule
Plaintiff maintains that there is no showing of significant control in this case.[4] Pl. Mot. at 18. Plaintiff contends that when the original leases were negotiated in 1986, Continuing Health and HRPT were not related, and thus, because CSC took over the same leases in 1992, there cannot be a finding of control. Id. They note that Continuing Health was a wholly owned subsidiary of New MediCo, which was owned by Charles Brennick, that neither Martin or Portnoy owned any portion of New MediCo, that neither Martin or Portnoy or any of HRPT's trustees were officers or directors of New MediCo or Continuing Health, and that none of New MediCo or Continuing Health's officers or directors held any positions with HRPT. Id. at 19.
Plaintiff principally looks to Biloxi Reg'l Med. Ctr. v. Bowen, 835 F.2d 345 (D.C.Cir.1987), for support. In Biloxi, the U.S. Court of Appeals for this circuit considered a challenge to the PRRB's determination that the parties were related for purposes of Medicare reimbursement. Id. The district court granted summary judgment for the Secretary, but the appellate court reversed. Id. at 348-51. Plaintiff Biloxi Regional Medical Center ("Center") entered an agreement with the city and several other entities, including the American Medical Management Hospital Group ("AMM"), to assume operation of a hospital. Id. at 347. As part of the agreement, plaintiff took over a lease, with certain revisions, with the city which had provided the former hospital with a rent-free term of twenty-five years. Id. The agreement also designated AMM as the Center's management group and guarantor. Id. One revision to the lease required that the Center pay rent to the city at an amount established by an independent appraiser. Id. at 347-48.
The Center did pay rent, at the rate established by the appraiser, and thereafter submitted a Medicare cost report to its fiscal intermediary. Id. at 348. The intermediary denied the rental costs on the grounds that the Center and the City were related by common control. Id. The PRRB affirmed, in part because the agreement provided that when the lease expired, the Center's proceeds would revert to the city. Id. The Board also noted that the mayor had the power to approve or reject candidates selected by AMM for *257 positions on the Center's Board of Directors, the city had agreed to assist the Center through bonds with financing a new facility, the agreement provided that the city would take title to all the Center's assets at the end of the lease, a statement in the agreement noted that it would be in the best interests of the city to leave the hospital to the new hospital (another signatory of the agreement), and the city's extension of the deadline by which the Center was to complete the new facility. Id.
The district court found the fact that the city's mayor could approve or reject four members of the Center's Board as determinative on the issue of relatedness and granted summary judgment. Id. The Court of Appeals reversed, noting
Our examination of the mayor's power convinces us that the City was willing to accept a very modest role, however. Although not dispositive, we note that the `control' envisioned by the District Court remained entirely potential; affidavits by the current and former mayors of the City indicate that they approved all the candidates selected by AMM without any independent investigation of their background.
Id. at 351. Moreover, the court found that the mayor's power was limited to vetoing candidates for a minority number of the board's seats. Id. The court also found it "extremely unlikely" that any directors would seek to curry favor with the city in order to retain their positions, and noted that the intermediary's decision had relied on a regional office's determination that "any approval of Board Members by the Mayor of Biloxi is a mere formality as AMM does the actual selections." Id. at 351-52. The Court of Appeals went on to discuss the other factors relied upon by the PRRB and found them not probative of control. Id. at 352-53. The Biloxi court did state, however, "[w]e realize, of course, that the District Court was properly concerned not with the actual but with the potential ability of the City to influence the Center." Id. at 352 (emphasis added).
In the instant case, the Court is convinced that the PRRB's decision is supported by sufficient evidence of control, as distinguished from the vague and remote elements of potential control found in the Biloxi case. Messrs. Portnoy and Martin had concrete opportunities to influence HRPT's decisions based on their ownership of HRPT Advisors, they had financial stakes in the agreements between HRPT and the Providers both as owners of CSC and as owners of HRPT Advisors, which, under the agreement with HRPT, was remunerated based on HRPT's profits, and they themselves were two of the five members of HRPT's Board of Directors. These factors fully support a conclusion that Portnoy and Martin had the "potential ability ... to influence" CSC and stand in stark contrast to the "mere formality" in Biloxi whereby the mayor could approve or reject a minority of board members suggested by the managing facility. See id. at 351-52.
1. The Stand-By Management Agreement
Next, plaintiff contests each of the factors relied upon by the PRRB in its finding of control. Pl. Mot. at 22-32. For example, plaintiff insists that the stand-by management agreement between Greenery, HRPT, and Continuing Health was never implemented and was simply something required by HRPT's underwriters because New MediCo had emerged from bankruptcy several years prior. Id. at 22.
The regulations provide, however, that control exists "if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or *258 institution." PRM § 1002.3; see also Biloxi, 835 F.2d at 352 (stating that it is not the "actual" but rather the "potential" ability to influence that is the issue). The stand-by agreement that Greenery  where Martin and Portnoy were directors  would take over for Continuing Health if necessary, combined with Martin and Portnoy's roles at HRPT Advisors  who would presumably be the ones to "advise" HRPT to end its contract with Continuing Health and allow Greenery to take over  provides substantial evidence of at least the "potential" for significant influence. See id.
Finally, while the familial relationship of cousin does not establish the "irrefutable presumption" of relatedness for purposes of the regulations, the Medicare regulations clearly recognize that familial relationships in supplier-provider transactions create at least the opportunity for influence. See PMR § 1004. Thus, it was not inappropriate for the PRRB to consider Brennick's ownership of New MediCo and Continuing Health and his role in the 1986 transaction with HRPT, given the fact that Martin and Brennick were cousins. This factor is all the more significant in light of HRPT's candid acknowledgment that "Messrs. Martin, Brennick and Portnoy jointly engage and/or have engaged in numerous business and investment transactions in the health care industry and in other businesses." A.R. 775.
2. The HRPT Prospectus
Plaintiff submits that the PRRB incorrectly relied on HRPT's Prospectus and numerous statements in that document, such as "to the extent that the terms of the mortgage-financing, acquisition and lease of the Properties have been negotiated among related parties, they have not been determined on an arms-length basis." A.R. 14. Plaintiff argues that this is not an admission that the parties to the 1986 agreements were related, and, "most significantly," that because the Prospectus was prepared pursuant to the securities laws, not the Medicare reimbursement laws, the statements should not have been relied upon by PRRB. Pl. Mot. at 24-26.
Plaintiff does not cite a single case or regulation, however, to support the notion that the PRRB cannot consider disclosures made for purposes of the securities laws as evidence of relatedness and control. It is clear from the Board's decision that it did not simply take HRPT's Prospectus as conclusive evidence or admission of relatedness for purposes of applying the related party rule, but instead considered the statements in the Prospectus in the context of the other evidence in the record, such as the Advisory Agreement, the lease agreement, and the financial data, to reach its conclusion that HRPT and CSC are related parties for purposes of the Medicare reimbursement laws. The Court finds that the Board's consideration and interpretation of the Prospectus is reasonable and supported by the record. See Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966)(stating Supreme Court's holding that the APA gives a reviewing court the authority to set aside an agency's ruling only if it is found to be arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence); see also Universal Camera Corp. v. Nat'l Labor Relations Bd., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).
3. Indirect Control Through HRPT Advisors
Plaintiff argues that the Declaration of Trust, declaring that the trustees have the ultimate control over the Trust and all transactions with an interested party must be approved by a majority of non-interested trustees, refute the PRRB's conclusion *259 that Portnoy and Martin had indirect control over HRPT. Pl. Mot. at 31-33.
Reliance on the Declaration of Trust is a double-edged sword for plaintiff. That document also provides that "Trustees are not and shall not be required personally to conduct the business of the Trust" and that they may therefore "grant or delegate such authority to [HRPT Advisors] as the Trustees in their sole discretion deem necessary or desirable without regard to whether such authority is normally granted or delegated by Trustees." A.R. 716. The Declaration of Trust also explicitly provides that HRPT Advisors does not have to present any particular investment opportunities and even protects HRPT Advisors from taking advantage of such opportunities itself. A.R. 717. Thus, this is not a document that strictly protected HRPT from any self-dealing. Moreover, HRPT Advisors was remunerated through a formula that was based on HRPT's investments, providing an incentive to Martin and Portnoy to find high-paying rental investments. H.R. 773. Thus, they were potentially in the position of dealing with themselves and "essentially negotiating on both sides of the transaction." See Kidney Ctr. of Hollywood v. Shalala, 133 F.3d 78 (D.C.Cir.1998).
In Kidney Center, the Court of Appeals reviewed a challenge to a determination by the HCFA Administrator, on behalf of the Secretary, that plaintiff health care provider was not entitled to reimbursement for certain costs under the related party regulation. After a series of transactions between a number of corporations, Management Investors and Grace corporations could each choose four of the eight directors of a third corporation, NMC Holding. Id. at 83. A number of officers and directors of the former corporation held the same positions with NMC Holding. Id. In its review, the court first noted the Secretary's guidelines in PMR § 1004.3, "[t]he term `control' includes any kind of control, whether or not it is legally enforceable and however it is exercisable or exercised. It is the reality of the control which is decisive, not its form or the mode of its exercise."
The appellate court went on to find that there was
certainly substantial evidence in the record supporting the Secretary's anterior determination that the Management Investors had the power significantly to influence the actions of both Old NMC and NMC Holding. That finding is itself sufficient to support the Secretary's conclusion that the firms were related by control. Because the Management Investors held key positions on the board and in the management of Old NMC, they were clearly in a position to influence the board to recommend, and the shareholders of Old NMC to approve, the transaction.
The Management Investors also had the ability significantly to influence NMC Holding....

* * * * * *
In addition, the chief negotiator for Old NMC (Dr. Hampers) was also one of the Management Investors in NMC Holding. He was essentially negotiating on both sides of the transaction.
Id. at 85. The instant case regarding the transactions between HRPT, HRPT Advisors, HRPT's sponsors, and CSC, is analogous to the circumstances in Kidney Center. Here, like the Court of Appeals in that case, the Secretary's "reasonable interpretation is entitled to our deference." Id. (citation omitted).
B. The Exception to the Related Party Rule
Plaintiff contends that the PRRB erred in its conclusion that, even if HRPT *260 and CSC are related parties, the criteria for the exception found in 42 C.F.R. § 413.17(d) were not met.
The first of the four criteria for qualifying for the exception, that the supplying organization is a bona fide organization, is not disputed. A.R. 15; Def. Mot. at 37.
As to the second criterion, however, whether a substantial part of the supplying organization's business of the type carried on with the Provider is with unrelated organizations and there is an open, competitive market for the type of service supplied, plaintiff notes that the PRRB focused on the wrong analysis. Pl. Reply at 34-35. The PRRB concluded that "the Providers assert that a significant portion of their business activities were transacted with unrelated organizations. However, the Board finds that the record contained no evidence to support the Providers' assertions." A.R. 15 (emphasis added). Plaintiff maintains that it is HRPT's business activities, not CSC's, that should have been the focus of the analysis. The defendant appears to concede plaintiff's point. Def. Mot. at 37 ("To the extent that the PRRB focused on whether CSC transacted a substantial part of their business with unrelated organizations in resolving this issue, the Board arguably focused on an extraneous issue.").
Nevertheless, the record appears to support a finding that plaintiff did not satisfy its burden to show by "convincing evidence to the satisfaction of the fiscal intermediary" that HRPT did a significant portion of its business with unrelated organizations and that there is an open and competitive market for the type of services provided by HRPT. 42 C.F.R. § 413.17(d)(1),(d)(1)(ii). The Intermediary concluded that in 1986, when the lease was negotiated, HRPT did not do a substantial part of its business with unrelated parties. A.R. 193. Moreover, the Intermediary found that there is not an open, competitive market for leasing nursing home facilities. See A.R. 193-94, 477 (Intermediary's experience that most skilled nursing facilities are owned, not leased.). Finally, the PRRB concluded that CSC had not submitted any evidence to show that they tried to negotiate with any unrelated REITs for financing or capital alternatives. A.R. 15.
Finally, as to the fourth prong of the exception analysis, whether the charges to the Provider were "in line" with charges for those services on the open market, the PRRB cited a letter from the Intermediary citing the former Intermediary's survey that charges for the Forestville facility were several times higher than charges for comparable SNF facilities in the Hartford, Connecticut area. A.R. 15, 477. Plaintiff argues that this survey should be given no weight because it was not offered into evidence or produced or explained as part of the administrative proceedings. Pl. Mot. at 37. The regulations afford the plaintiff the opportunity to discover the underlying methodology or other information about the Intermediary's evidence. 42 C.F.R. § 405.1853(b). However, plaintiff does not submit evidence that they did so under the regulations.
Plaintiff also maintains that it introduced "substantial evidence" that the rent under the leases to Continuing Health was at the market rate. Pl. Mot. at 36. But the evidence plaintiff cites is HRPT's own annual report, which is hardly objective evidence of open market rates. A.R. 1269. In fact, that document states
[HRPT] has an agreement with [HRPT Advisors] whereby [HRPT Advisors] provides investment, management and administrative services to [HRPT]. [HRPT Advisors] is owned by Gerard M. Martin and Barry M. Portnoy, who also serve as Managing Trustees of the *261 Company. Messrs. Martin and Portnoy are principal shareholders of [CSC], Connecticut Subacute Corporation II, New Hampshire Subacute Corporation and Vermont Subacute Corporation (collectively the `Subacute Entities') and were formerly directors of Horizon/CMS Healthcare Corporation (`Horizon') and Greenery Rehabilitation Group, Inc. (`Greenery'), which merged with Horizon in 1994. Horizon and the Subacute Entities are lessees of [HRPT]. [HRPT] has extended a [$4 million] line of credit to CSC until June 30, 1997. At December 31, 1996, there was [$2,365,000] outstanding under this agreement. The lease and mortgage transactions with the Subacute Entities and Horizon are based on market terms and are generally similar to [HRPT's] lease and mortgage agreements with unaffiliated companies. The former president of [HRPT] is the president of the Subacute Entities. Mr. Portnoy is a partner in the law firm which provides legal services to [HRPT]. [HRPT Advisors] is the general partner of M & P, which provides management services for some of the [HRPT's] recently acquired medical office buildings. The property management fees paid to M & P are generally equal to three percent of gross rents from the managed properties.
A.R. 1269. Under the regulations, it is plaintiff's burden to show convincing evidence that each of the four criterion are satisfied. The Court is unpersuaded by this evidence that the PRRB was erroneous in concluding that the plaintiff had not satisfied the fourth prong of the regulation that would have entitled it to be excepted from the related party rule. 42 C.F.R. § 413.17(d).
While portions of the PRRB's analysis of the related party rule's exception under 42 C.F.R. § 413.17(d) may have been flawed, this Court does not need to reverse its decision if the record otherwise supports the conclusion and the outcome would not be different if the correct analysis had been applied. See, e.g., DSE, Inc. v. United States, 169 F.3d 21, 31 (holding that under the APA, agency decisions will not be set aside unless the plaintiff can demonstrate that it was prejudiced and that to do otherwise would be "empty formality"); Salt River Project Agric. Improvement and Power Dist. v. United States, 762 F.2d 1053, 1060-61 n. 8 (D.C.Cir.1985)(holding that "[w]hen an agency relies on a number of findings, one or more of which are erroneous, we must reverse and remand only when there is a significant chance that but for the errors the agency might have reached a different result" and that "[w]hen it is clear that based on the valid findings the agency would have reached the same ultimate result, we do not improperly invade the administrative province by affirming."). Here, particularly where plaintiff must satisfy all four criteria to meet the related party rules exception, the record supports the PRRB's conclusion and there is no reason to think that a different result would have been reached but for any errors cited by plaintiff.
C. Whether CSC was Entitled to Some Reimbursement for Reasonable Costs After Application of the Related Party Rule
Finally, plaintiff insists that even if the related party rule was correctly applied and it failed to qualify for the exception, CSC was still entitled to some reimbursement for costs. Apparently, the Intermediary and the Board both agreed that even after application of the related party rule, Providers can recover certain costs, such as costs to the related party. A.R. 15. According to the PRRB, the reason plaintiff was unable to recover any *262 costs is its failure "to submit any documentation of ownership costs," required under the Medicare regulations, 42 C.F.R. §§ 413.20(a) and 413.24(a). A.R. 15.
The regulations provide that
The provider must make available to the intermediary when requested adequate documentation to support the costs incurred by the related organization, including, when required, access to the related organization's books and records, attributable to supplies and services furnished to the provider. Such documentation must include an identification of the organization's total costs, the basis of allocation of direct and indirect costs to the provider, and other entities served.
PMR § 1005. The record reflects that the Intermediary requested such documentation at least once and gave the Providers ample opportunity to provide that information. See, e.g., A.R. 476-77 (Letter dated August 19, 1998) ("Lastly, both of the Audited Financial Statements for Connecticut Subacute and for HRPT indicate that the rental arrangement is through a related party. With this information, please submit an analysis of the actual cost to the related party for depreciation on capital items. We will adjust to bring the rent expense onto Worksheet A-8-1 column 4 and the actual cost on column 5.").
Plaintiff cites Richlands Med. Ass'n v. Harris, 651 F.2d 931 (4th Cir.1981) and submit that they are entitled to reimbursement rate at the level of the market rate in 1986, plus interest. This argument is unavailing for several reasons. First, as defendant persuasively argues, Richlands applied the incorrect standard of deference, may not be good law in the 4th Circuit, and is inconsistent with this Circuit's caselaw, such as Kidney Center, 133 F.3d at 86. See Def. Reply at 18-21 (citing numerous cases issued by the Supreme Court and the 4th Circuit Court of Appeals since Richlands that undermine Richland's holding).
Perhaps more importantly, the PRRB's decision that plaintiff would recover no costs was based on plaintiff's failure to submit documentation of those costs and failure to comply with the record keeping provisions, not a disagreement that plaintiff would be entitled to cost reimbursement had it documented those costs. Plaintiff maintains that it submitted documentation of the Trust's depreciation of the facilities, and cites to a letter counsel sent to the Intermediary, attaching HRPT's financial information. Pl. Reply at 20 (citing A.R. 260-306). A reading of the letter, however, indicates that this documentation was only submitted for purposes of showing that the related party rule did not apply or, without admitting relatedness, to address why the exception of PMR § 1010 should apply. A.R. 260-262. Thus, it is perhaps not surprising that the Intermediary acknowledged receipt of that information, but again requested an analysis of the actual costs. A.R. 501, 564-65. In sum, the record supports the PRRB's conclusion that plaintiff had not complied with its duty to provide documentation necessary to support reimbursement.
IV. Conclusion
As this Court has said,
"It is well settled ... that the Secretary's decisions interpreting the Medicare Act are entitled to `great deference.'" See Sentara-Hampton General Hosp. v. Sullivan, 980 F.2d 749, 755 (D.C.Cir.1992) (citation omitted). "Our limited role is to ensure that the Secretary's regulations are consistent with the statute, reasonably interpreted and consistently applied ... [and] to ensure that the findings in particular cases are not *263 arbitrary and capricious and are supported by substantial evidence." Villa View Community Hospital, Inc. v. Heckler, 728 F.2d 539, 543 (D.C.Cir.1984). We are not permitted to substitute our judgment for that of the agency. Lloyd Noland Hosp. and Clinic v. Heckler, 762 F.2d 1561, 1565 (11th Cir.1985).
Nat'l Med. Enter., Inc. v. Shalala, 826 F.Supp. 558, 560-561 (D.D.C.1993). Nothing in the record persuades this Court that the Secretary acted arbitrarily or capriciously or that his decision was not supported by substantial evidence in concluding that CSC was not entitled to reimbursement. Therefore, defendant's motion is GRANTED and plaintiff's cross motion is DENIED and this case is DISMISSED WITH PREJUDICE. An appropriate Order accompanies this Memorandum Opinion.
NOTES
[1]  For purposes of the regulations, "immediate family" means (1) husband and wife, (2) natural parent, child and sibling, (3) adopted child and adoptive parent, (4) step-parent, step-child, step-sister, and step-brother, (5) father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, and daughter-in-law, (6) grandparent or grandchild. PRM § 1004.
[2]  See A.R. 1300; see also A.R. 762 (HRPT Prospectus states "[s]ubstantially all of [HRPT's] operations, except investment decisions, will be conducted by [HRPT Advisors]").
[3]  The Intermediary's position papers are substantially identical in their format and findings  one for FY 1996 dealing with one nursing home and the other for FY 1997 dealing with three nursing homes. Thus, for convenience, the Court will cite to the latter.
[4]  Plaintiff's motion also makes arguments related to common ownership. Because the PRRB expressly found that there was insufficient evidence to support a finding of common ownership, and thus only the issue of control is before the Court, this opinion will focus on whether the Board correctly determined that there was significant control between the Providers and the supplier.
