Satellite altimetry has become an important data source for discharge estimation. Stage-fall-discharge (SFQ) rating curves are necessary for discharge estimation at backwater-affected river reaches because of non-uniqueness of stage-discharge (SQ) relationships. We used a hydrodynamic model to simulate stage, water surface fall, and discharge at six backwater-affected reaches and generated SQ/SFQ rating curves everywhere along the river. The simulated SQ rating curves showed that the uncertainties of the estimated discharge were on the order of 150%. The uncertainties were reduced to less than 35% when using SFQ rating curves in rivers with significant falls. We used ICESat-2 laser altimetry, which synchronously measures stage and fall, to estimate discharge with the simulated SFQ rating curves in the Missouri River. The study highlights the importance of backwater effects for discharge estimation, particularly for VS located upstream of major tributary junctions, and showcases the possibilities of ICESat-2 laser altimetry for EO-based discharge estimation.