Good Samaritan Hospital v. Shalala

Summary

The Supreme Court held that clause (ii) of 42 U.S.C. § 1395x(v)(1)(A) — directing 'suitable retroactive corrective adjustments' where aggregate reimbursement proves inadequate or excessive — is ambiguous, and that the Secretary's construction limiting clause (ii) to year-end reconciliation of interim payments with amounts allowed under the regulatory cost-finding methods is a permissible reading deserving Chevron deference. Because the six Nebraska hospitals' demands were, in substance, attacks on the adequacy of the cost-limit methods themselves, the Court affirmed the Eighth Circuit's refusal to order reimbursement of all costs the hospitals showed to be reasonable above the limits. Justice Souter, joined by Justices Stevens and Scalia, dissented, arguing the text unambiguously entitles providers to case-by-case adjustments measured against actual reasonable costs.