JACKSON, Miss. - The Mississippi Supreme Court is ordering the state's Medicaid program to pay back $2 million to 12 hospitals, saying the agency improperly skimped on reimbursement for services.

  

The Thursday decision upholds a suit the hospitals filed saying the state-federal health insurance program had illegally changed its payment formula for radiology and laboratory services.

  

The Clarion Ledger reports the court found Medicaid broke its rules by not paying the actual costs of those services, but instead substituted another formula that cut payments by understating hospital costs.

  

A lower court had ruled for the Division of Medcaid.

  

George Ritter, a lawyer for hospitals, says the ruling shows Medicaid can set its own rules, but then must follow them.

  

The agency says it must still calculate refunds, but will follow the court's decision.