Supreme Court rules against Obama-era provision on Medicare reimbursements

The Supreme Court on Monday ruled that an Obama-era rule change on how Medicare reimbursements to hospitals are made should be removed because officials did not follow the proper notice and comment regulations in implementing the formula.
 
The court ruled 7-1 to vacate the rule, with Justice Neil GorsuchNeil GorsuchThe Hill's Morning Report - Trump to kick off bid for second term in Florida The Hill's Morning Report - Trump to kick off bid for second term in Florida Supreme Court hands Virginia Democrats a win in gerrymandering case MORE writing the majority opinion. Justice Stephen BreyerStephen BreyerThomas urges Supreme Court to reverse 'demonstrably erroneous decisions' Thomas urges Supreme Court to reverse 'demonstrably erroneous decisions' Supreme Court hands Virginia Democrats a win in gerrymandering case MORE was the sole dissenting member of the court, and Justice Brett KavanaughBrett Michael KavanaughSupreme Court hands Virginia Democrats a win in gerrymandering case Supreme Court hands Virginia Democrats a win in gerrymandering case Supreme Court rules defendants can be tried on state and federal charges, potentially impacting Manafort MORE, the newest member of the court, was not involved in the case.
 
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The highly technical ruling and dispute involves billions of dollars in Medicare payments to hospitals.

The court ruled for hospitals that had sued over the 2014 policy, which reduced their payments for serving low-income patients because of a change to the payment formula.

“In 2014, the government revealed a new policy on its website that dramatically—and retroactively—reduced payments to hospitals serving low-income patients,” Gorsuch wrote.

“Because affected members of the public received no advance warning and no chance to comment first, and because the government has not identified a lawful excuse for neglecting its statutory notice-and-comment obligations, we agree with the court of appeals that the new policy cannot stand,” he continued.

Breyer, however, argued that the type of agency action in question did not require going through the full notice and comment process.

Nicholas Bagley, a law professor at the University of Michigan, warned on Twitter on Monday that the court's ruling imposes new burdens on the federal Medicare agency, known as the Centers for Medicare and Medicaid Services (CMS), that will hinder implementation of the program.

“Bear in mind that CMS is a tiny, beleaguered agency. ... To further encumber it will make Medicare more capricious, not less, as staffers tend to senseless procedures instead of doing their jobs,” Bagley wrote.

Updated at 10:53 a.m.