Supreme Court to review DSH pay formula

The U.S. Supreme Court on June 10 agreed to review a court ruling that sides with HHS on how the agency calculates disproportionate share hospital payments for Supplemental Security Income benefits. 

Six things to know: 

1. The case revolves around the interpretation of the phrase "entitled to benefits" in two lawsuits: Advocate Christ Medical Center v. Becerra and Becerra v. Empire Health Foundation.

2. In Becerra v. Empire, the high court in June 2022 upheld a rule that reduced the amount of extra Medicare payments hospitals get for serving a larger share of low-income patients. The court agreed with HHS in the decision, arguing that "individuals 'entitled to [Medicare Part A] benefits' are all those qualifying for the program, regardless of whether they are receiving Medicare payments for part or all of a hospital stay," according to Bloomberg

3. However, in July 2017, more than 200 hospitals had already sued HHS over its formula for calculating DSH payments, which are required payments intended to offset hospitals' uncompensated care costs. The hospitals argued that the method did not fully account for care provided to patients eligible for SSI benefits, which HHS uses as a proxy for care provided to low-income patients. 

4. In June 2022, a U.S. district court dismissed the hospitals' arguments, ruled that HHS' formula for calculating DSH payments was consistent with the statute and denied the hospitals' claim for recalculation of their compensation for 2006 through 2009, according to the report. 

5. Six national hospital groups, including the American Hospital Association, in February urged the Supreme Court to review the decision. They allege that HHS "adopted the view that a patient is entitled to Supplemental Security Income benefits only if the patient actually received cash SSI payments during a hospital stay, an interpretation that is inconsistent with the Supreme Court's reasoning in Becerra v. Empire Health Foundation." 

6. "Although HHS has refused to share the data that would allow hospitals to accurately count the SSI-eligible patients whom the agency's approach excludes, the available estimates suggest that hospitals will lose more than a billion dollars each year in DSH funds," the hospital groups argued in a friend-of-the-court brief. "What's more, a hospital's eligibility for DSH payments affects its entitlement to other federal benefits designed to help hospitals 'stretch scarce federal resources,' including the 340B Drug Discount Program."

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