Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/529bv.pdf
Page Number: 758.0

529US3

Unit: $U55

[09-26-01 13:01:09] PAGES PGT: OPIN

Cite as: 529 U. S. 667 (2000)

683

Thomas, J., dissenting

Therefore, the Court acknowledges, an organization “re-
ceives . . . beneﬁts” within the meaning of § 666(b) only if
the federal funds are designed to guard, aid, or promote the
well-being of the organization, to provide useful aid to the
organization, or to give the organization ﬁnancial help in
In my view, payments made by the Federal
time of trouble.
Government to a Medicare health care provider as part of a
market transaction are not “beneﬁts.” 1

The statutory and regulatory scheme governing Medicare
reimbursements leaves no doubt that hospitals do not receive
“beneﬁts” from the Federal Government within this meaning
of the term, but merely receive payments for costs pursuant
to a market transaction. Although the Medicare reimburse-
ment scheme is quite complex, it sufﬁces to point out a few
critical components.2

Under the “reasonable cost” reimbursement provisions re-
lied on by the Court, ante, at 673–675, the Federal Govern-
ment reimburses providers for “the cost actually incurred,
excluding therefrom any part of incurred cost found to be
unnecessary in the efﬁcient delivery of needed health serv-

1 Even if I thought that, under a reading of § 666(b) standing alone, a
market exchange of payment for services might amount to “beneﬁts,”
§ 666(c) would eliminate that doubt. Section 666(c) makes clear that “bona
ﬁde . . . expenses paid or reimbursed, in the usual course of business,” are
not covered by the statute. As discussed below, Medicare payments to
health care providers are precisely this type of payment.

2 In 1993, the year relevant to the instant case, Medicare consisted of
two separate programs, Parts A and B. Part A provides insurance for
certain elderly or disabled persons to cover the costs of inpatient hospital
care, nursing facility care, home health services, and hospice care. See
generally 42 U. S. C. §§ 1395c to 1395i–4. Part B is a voluntary program
that provides supplemental beneﬁts to elderly or disabled Medicare partic-
ipants to cover the costs of, among other things, physician services, labora-
tory and diagnostic tests, ambulance services, and prescription drugs.
See generally §§ 1395j to 1395w–4. The Government did not present evi-
dence at petitioner’s trial regarding which provisions of Medicare ac-
counted for the payments made to the West Volusia Hospital Authority
in 1993.