In the case of National Gerimedical Hospital and Gerontology Center v. Blue Cross of Kansas City et al., 1980, the Supreme Court dealt with a dispute over Medicare reimbursement rates for hospitals. The National Gerimedical Hospital and Gerontology Center (NGH) argued that Blue Cross of Kansas City had incorrectly calculated its reimbursement rate under Medicare Part A by including costs associated with a research program in their calculations. NGH claimed this was inappropriate because it did not directly benefit patient care, thus should not be included in cost reports submitted to determine Medicare payments. The court ruled against NGH stating that even though some expenses may seem indirectly related to patient care, they can still be considered reasonable costs if they contribute beneficially to the overall operation of the hospital or are necessary for efficient management. Therefore, these costs could indeed factor into determining appropriate reimbursements from Medicare.

In the dissenting opinion for National Gerimedical Hospital and Gerontology Center v. Blue Cross of Kansas City, the justice argued that the majority's decision to uphold a lower court ruling in favor of Blue Cross was incorrect because it failed to properly interpret federal law regarding Medicare reimbursement rates. The justice contended that Congress intended for hospitals serving large numbers of Medicare patients to be reimbursed at higher rates than those serving fewer such patients, as part of an effort to ensure these facilities could continue providing necessary care. By allowing Blue Cross' interpretation - which resulted in lower reimbursements - the majority undermined this intent and potentially jeopardized patient access to care. Furthermore, they believed that deference should not have been given by courts towards interpretations made by private entities like insurance companies over public agencies tasked with implementing laws.