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 five biggest cases awaiting Supreme Court decisions Supreme Court hands win to religious schools Trump's mark on federal courts could last decades MORE writing the majority opinion. Justice Stephen BreyerStephen BreyerHillicon Valley: Facebook takes down 'boogaloo' network after pressure | Election security measure pulled from Senate bill | FCC officially designating Huawei, ZTE as threats Supreme Court rules Booking.com can trademark name On The Money: Governors rethink opening bars, restaurants amid spike in COVID-19 cases | Spiking cases threaten fragile economic recovery | Supreme Court rules consumer bureau director can be fired at will MORE was the sole dissenting member of the court, and Justice Brett KavanaughBrett Michael KavanaughKavanaugh rejects Illinois GOP request to block rule banning large gatherings McGrath fends off Booker to win Kentucky Senate primary Trump's mark on federal courts could last decades 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.