Family Health Centers of S.D. v. State Dept. of Health Care Services

Summary

The court held that the Department improperly treated an FQHC's outreach and education costs as categorically nonreimbursable merely because those activities could increase patient utilization. Under the governing Medicaid and reasonable-cost principles, such costs may be reimbursable when they are reasonable, related to beneficiary care, necessary and proper, and common and accepted among FQHCs. The court reversed and remanded for the Department to reconsider the costs under the correct legal framework.