In a unanimous opinion delivered by Justice Brett Kavanaugh on June 15, the U.S. Supreme Court sided with hospitals and held that Medicaid funding was unlawfully cut to certain hospital groups. In the American Hospital Association v. Becerra holding, the Supreme Court has made it clear that the cuts in 2018 and 2019 to only one group of hospitals is contrary to the associated reimbursement statute and unlawful.

In 2018 and 2019 the U.S. Department of Health and Human Services (HHS) changed the Medicare reimbursement approach for a certain group of hospitals titled "340B" hospitals. The hospitals in this group fall under Section 340B of the Public Health Service Act. These types of hospitals include many health organizations that care for uninsured and low-income patients. The range of organizations are anything from rural referral centers, to critical access hospitals. To understand the June 15 ruling it is necessary to have a clear understanding of the details of the two complex health services that are at play.