Supreme Court to hear case on DSH payment calculations next week

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The U.S. Supreme Court is slated to hear a case Nov. 29 that challenges a change made to the way Medicare calculates disproportionate share hospital payments, according to the CommonWealth Fund. DSH payments are given to hospitals that serve a large number of low-income patients. 

The case, Becerra v. Empire Health Foundation, centers on a rule established by CMS in 2004 that changed how days of inpatient care are counted for a Medicare beneficiary who has exhausted all inpatient days Medicare will cover. Before the 2004 rule, these inpatient days were not included in the calculation. Instead, prior to the rule, only patient days covered by Medicare Part A were included in it. This change altered the denominator in the fraction to calculate DSH payments, which resulted in lower DSH payments for many hospitals. 

The Empire Health Foundation in Spokane, Wash., challenged the changed formula, arguing it resulted in the company getting lower DSH payments in 2008.

An appeals court ruled in favor of Empire Health Foundation last year, but the Justice Department asked the Supreme Court to hear the case.

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