The U.S. Supreme Court has agreed to review a case challenging how the Department of Health and Human Services applies Congress’ formula for calculating disproportionate share hospital payments.
The suit, Advocate Christ Medical Center v. Becerra, was originally filed in 2017 by a group of more than 200 hospitals over the agency’s formula used to calculate outlays. They argued the method did not fully account for care provided to patients eligible for Supplemental Security Income (SSI) patients.
HHS makes DSH payments to hospitals that serve a high number of low-income patients. The payments are calculated based on two factors: the hospital’s Medicare patients with low incomes and those with low incomes but not on Medicare.
Six hospital groups, including the American Hospital Association, previously urged the Supreme Court to review the 2022 ruling on the case, which sided with HHS. They argued that HHS has adopted the view that a patient is entitled to SSI benefits only if they get cash SSI payments during a hospital stay.
The hospital groups claimed this approach was inconsistent with the Supreme Court’s previous ruling in Becerra v. Empire Health Foundation, which held that individuals entitled to Medicare part A benefits include all those qualifying for Medicare, whether or not Medicare pays for their hospital stay.
As such, the organizations argued that there are SSI-eligible patients who are excluded under HHS’ approach, estimating a loss of more than a billion dollars annually. They also argued their eligibility for DSH payments affects their entitlement to other benefits programs, like 340B.
“HHS’s error thus has far-reaching implications for hospitals, patients and the American healthcare system,” the hospital organizations wrote in an amicus brief in February. They added the burden would fall most on America’s rural and safety-net hospitals, “many of which are already in extreme financial distress.”
In a statement, the American Hospital Association cheered SCOTUS' decision to review the lower court's ruling.
“As we explained in our amicus brief urging the Court to grant certiorari, it is critical to hospitals and health systems that HHS interpret the DSH fraction consistently across the statute. The agency’s longstanding failure to do so has cost hospitals more than a billion dollars each year, directly harming the hospitals that serve America’s most vulnerable patients. We look forward to the Supreme Court rectifying this legal error next term," said Chad Golder, AHA general counsel and secretary, in the statement.