The Supreme Court ruled in HHS’ favor April 29 in a case challenging how the department calculates disproportionate share hospital payments for Supplemental Security Income benefits.
The case, Advocate Christ Medical Center v. Kennedy, centered on how hospitals calculate the Medicare fraction used in determining DSH adjustments. Hospitals has argued that more patients should be included in the Medicare fraction based on their enrollment in SSI, regardless of whether a cash benefit was paid during the month of treatment.
In a 7-2 decision, the Supreme Court rejected the hospitals’ argument, holding that patients are entitled to SSI benefits for DSH calculation purposes only if they were eligible to receive a cash SSI payment during the month they were hospitalized.
The case dates back to 2017 when more than 200 hospitals sued HHS over its formula for calculating DSH payments. In June 2022, a U.S. district court dismissed the hospitals’ arguments, ruling 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.
In February 2024, six national hospital groups urged the Supreme Court to review the decision. The court agreed in June to review the case and hear arguments in November. The groups estimated that the ruling could affect at least $1 billion in federal funding each year for hospitals.
Beth Feldpush, DrPH, senior vice president of policy and advocacy at America’s Essential Hospitals said in a statement that group is “disappointed by the Supreme Court’s decision to allow HHS to undercount the patients for whom essential hospitals receive DSH payments.”
“DSH payments are key to the financial stability of essential hospitals and help to ensure access and high-quality care for all,” she said. “We will continue to advocate for adequate payment to support our nation’s essential hospitals.”
The American Hospital Association declined to comment on the ruling.
