Supreme Court Rules Against HHS in Hospital Medicare Reimbursement Case

Author HeadshotBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On June 15, 2022, the U.S. Supreme Court said the federal government improperly cut more than $1 billion a year in Medicare reimbursements to hospitals.  This came in a ruling that limits regulators’ power to control what the program pays for certain drugs.  In this case, the Supreme Court justices sided unanimously with a group of hospitals suing over drug reimbursement rates for facilities that serve low-income communities. In writing for the court, Justice Brett Kavanaugh said the U.S. Department of Health and Human Services (HHS) improperly calculated reimbursement rates using a methodology Congress authorized for use only in limited circumstances.

Were the Reimbursement Cuts Unlawful?

The Supreme Court overturned a lower court’s 2020 decision that HHS had the authority to reduce the yearly Medicare reimbursement rates for a group of hospitals serving low income communities. Click here to view the July 31, 2020 decision.

The high court found the U.S. Court of Appeals for the District of Columbia Circuit erred in 2020 when it allowed the HHS to reduce Medicare payments, by roughly $1.6 billion, for outpatient drugs that had helped subsidize the operations of the hospitals.  The Supreme Court’s decision did not extend so far as to undermine HHS authority, but only stated how the agency acted unlawfully in accordance with its varying rates for hospitals under the 340B Drug Pricing Program.

“In short, the statute allows HHS to set reimbursement rates based on average price and affords the agency discretion to ‘adjust’ the price up or down. But unless HHS conducts a survey of hospitals’ acquisition costs, HHS may not vary the reimbursement rates by hospital group,” Justice Kavanaugh wrote in the ruling.

Regulating Reimbursement Rates Under the 340B Program.

Under Medicare, health care providers get reimbursed by the government for expenses, including medications used in hospital outpatient departments. Previously, hospitals had been getting reimbursed at a rate based on the average price of the drugs. However, in 2018, the HHS, under then-President Donald Trump, cut payments for outpatient drugs by 28.5% to hospitals receiving money under the 340B program.

The department found that reimbursements were too high because these hospitals obtain the drugs from manufacturers at a deep discount, an issue that also resulted in excessive patient co-payments. Additionally, the resulting cut dealt “a crushing blow to providers that were already operating on razor-thin  margins and to the vulnerable populations they serve,” the hospitals told the justices in a court filing.

Justice Brett Kavanaugh wrote for the court that “absent a survey of hospitals’ acquisition costs,” the HHS “may not vary the reimbursement rates for 340B hospitals. The HHS’s 2018 and 2019 reimbursement rates for 340B hospitals were therefore contrary to the statute and unlawful.”

Click here to read the Supreme Court’s Opinion in the case, American Hospital Association v. Becerra, 20-1114.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, Medcaid audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at or call (407) 331-6620 or toll-free at (888) 331-6620.


Stohr, Greg. “Supreme Court Sides With Hospitals on Medicare Reimbursement.” Bloomberg Law. (June 15, 2022). Web.

Chung, Andrew. “U.S. Supreme Court faults Medicare cuts to hospitals for outpatient drugs.” Reuters. (June 15, 2022). Web.

Gresko, Jessica. “High court rules against government on drug reimbursement.” Associated Press. (June 15, 2022). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law is an attorney with The Health Law Firm, which has a national practice. Its main office is in Orlando, Florida, area. The Health Law Firm, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, Florida 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.

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2022-08-24T00:34:03-04:00August 24th, 2022|Categories: Health Facilities Law Blog|Tags: , , , , , , , , , , , , , , , , , , , , , , , , |0 Comments

18 Former NBA Players Indicted For Alleged $4 Million Health Care Fraud Scheme

George Indest HeadshotBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On October 7, 2021, 18 former NBA players were charged in New York federal court for an alleged health insurance fraud scheme to rip off the league’s benefit plan, according to an indictment filed in the Southern District of New York. The defendants allegedly engaged in a scheme from at least 2017 through 2020 which involved the submission of fraudulent claims for reimbursement of medical and dental services that were not provided, prosecutors said. The claims totaled nearly $4 million.

The NBA Players Health and Welfare Benefit Plan provide additional medical coverage on top of existing medical coverage for active and former NBA players and their families. It is primarily funded by contributions from NBA teams.

Their Playbook Included False Claims and Deception.

Allegedly, the defendants provided ‘fake invoices’ for medical and dental services that were never delivered. Each person attempted to claim somewhere between $65,000 and $420,000 in alleged fraudulent claims. When all was said and done, the total ended up being about $3.9 million, from which the defendants got about $2.5 million in illicit proceeds, the indictment alleges.

Flagrant Foul For Violation of Health Care Fraud Laws.

The scheme was discovered partly because of sloppy work by the defendants themselves. Several of the fake invoices and medical forms raised red flags because “they are not on letterhead, they contain unusual formatting, they have grammatical errors,” authorities said. These types of errors are the ones typically seen in the fraudulent e-mails received from Nigerian princes trying to recover their frozen bank accounts and scam e-mails sent to us attorneys trying to phish us into phony attorney’s fees scams.

Additionally, travel records, e-mails, GPS data, and other records showed that the players in question were often nowhere near the location of the health care providers when they claimed to have been treated or used their services, according to the indictment. (I wonder how many Facebook postings also showed this.)

All 19 defendants are charged with conspiracy to commit health care fraud and wire fraud. If convicted, they face up to 20 years in prison. To read the indictment in full, click here.

Read the DOJ’s press release on the case here.

Fraud is Fraud; Dishonesty is Dishonesty.

The problem here is, of course, a lack of integrity. Once you cheat or steal, even if it is just for a small amount of money, you are a thief. These guys sacrificed successful careers, stardom, prestige, and freedom, for a little bit of money.

Contact Health Law Attorneys Experienced with Health Care Fraud, False Claims Act Violations, and Anti-Kickback Statute Violations.

The attorneys of The Health Law Firm represent healthcare providers in cases of accusations of medical billing fraud, health insurance audits, alleged overbilling, Medicare audits, ZPIC audits and RAC audits, False Claims Act cases, and whistleblower/qui tam cases throughout Florida and across the United States. Our attorneys also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals, and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions, and termination from the Medicare or Medicaid Program.

To contact The Health Law Firm, please call (407) 331-6620 or toll-free at (888) 331-6620 and visit our website at


Dienst, Jonathan. “18 former NBA players arrested by federal authorities in alleged health care scam.” NBC News. (October 7, 2021). Web.

Zaggar, Zachary. “18 Ex-NBA Players Indicted For Alleged $4M Health Plan Fraud.” (October 7, 2021). Web.

D’Angelo, Bob. “18 former NBA players charged in $4M insurance fraud scheme.” Kiro7 News. (October 7, 2021). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2021 The Health Law Firm. All rights reserved.


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