Cite as: 514 U. S. 87 (1995)
Opinion of the Court
ever she disagreed with any anouncements or changes in GAAP and wished to depart from them. Pp. 100-102. (a) GAAP does not necessarily reflect economic reality, and its conservative orientation in guiding judgments and estimates ill serves Medicare reimbursement and its mandate to avoid cross-subsidization. Pp. 100-101. (b) GAAP is not a lucid or encyclopedic set of pre-existing rules. It encompasses the conventions, rules, and procedures that define accepted accounting practice at a particular point in time, and changes over time. Even at any one point, GAAP consists of multiple sources, any number of which might present conflicting treatments of a particular accounting question. Pp. 101-102.
996 F. 2d 830, reversed.
Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Ginsburg, and Breyer, JJ., joined. O'Connor, J., filed a dissenting opinion, in which Scalia, Souter, and Thomas, JJ., joined, post, p. 102.
Kent L. Jones argued the cause for petitioner. With him on the briefs were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Kneedler, Anthony J. Steinmeyer, and John P. Schnitker.
Scott W. Taebel argued the cause for respondent. With him on the brief was Diane M. Signoracci.*
Justice Kennedy delivered the opinion of the Court.
In this case a health care provider challenges a Medicare reimbursement determination by the Secretary of Health and Human Services. What begins as a rather conventional accounting problem raises significant questions respecting the interpretation of the Secretary's regulations and her authority to resolve certain reimbursement issues by adju-*Briefs of amici curiae urging affirmance were filed for the American Hospital Association et al. by Robert A. Klein and Charles W. Bailey; for the hospitals participating in St. John Hospital v. Shalala by William G. Christopher, Chris Rossman, and Kenneth R. Marcus; and for the Mother Frances Hospital et al. by Dan M. Peterson.
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