High Court Agrees to Revisit 2022 Medicare Payment Ruling

The US Supreme Court announced Monday it will accept a case that asks for greater clarity on the justices’ 2022 ruling that upheld the way Medicare calculates payments for certain hospitals.

The case, Advocate Christ Medical Center v. Becerra, revolves around the meaning of the phrase “entitled to benefits” and it involves two separate lawsuits.

In Becerra v. Empire Health Foundation, the high court in June 2022 upheld a 2005 rule that decreased the amount of extra Medicare payments hospitals receive for serving a larger share of poor patients. The decision meant some providers might not be able to recoup the higher costs they say they spend treating low-income patients. In the decision, the justices agreed with the Department of Health Human Services 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.”

The Medicare statute maps out how the HHS should calculate these annual supplemental payments, known as disproportionate share hospital (DSH) adjustments.

But in July 2017, Advocate Christ Medical Center in Oak Lawn, Ill., and more than 200 hospitals, had already sued the HHS over the department’s method of determining DSH payments. The hospitals claimed the formula didn’t fully account for care provided to patients eligible for Supplemental Security Income benefits, which is used by the HHS as a proxy for care provided to low-income patients.

But the US District Court for the District of Columbia rejected the hospitals’ arguments and granted summary judgment to the HHS in a June 2022 ruling that the disputed funding formula was consistent with the statute and reasonable. The court also denied the hospitals’ claim for recalculation of their compensation for fiscal years 2006-2009.

Question Left Open

In December 2023, attorneys for the unsuccessful plaintiff hospitals petitioned the US Supreme Court to revisit its June 2022 decision in Becerra v. Empire Health Foundation.

They claimed the decision “expressly left open the question of whether ‘entitled to [SSI] benefits’ likewise includes all those who qualify for the SSI program,” said the plaintiff’s petition to the high court. The federal SSI program provides monthly payments to low-income people with limited resources, including disabled children, disabled adults, and people 65 years and older.

While the HHS “insists, contrary to its Medicare interpretation, that only patients who received an SSI cash payment for the month of their hospital stay are ‘entitled to benefits.’ This case thus presents Empire’s open question: Does the phrase ‘entitled to benefits,’ used twice in the same sentence of the Medicare Act, mean the same thing for Medicare Part A and SSI, such that it includes all who meet basic program eligibility criteria, whether or not benefits are actually received,” the petition asked of the high court.

“The Court should seize this opportunity to review this question of pressing importance, which affects the survival of safety net hospitals across the country and the health of the Nation’s most vulnerable communities,” the petition declares.

In a brief opposing the petition request, Justice Department attorneys argued “there is no circuit conflict for which this Court’s review might arguably be warranted.” They said petitioners “appear to assume—incorrectly—that the D.C. Circuit’s decision will govern all hospital DSH payments nationwide.”

“But the D.C. Circuit’s decision constitutes binding precedent only in cases in which a hospital chooses to seek judicial review of its DSH payment (as part of its annual payment from the Medicare Program) in the District Court for the District of Columbia,” the government brief said. “A hospital also has the option to seek review “in the district court for the judicial district in which the [hospital] is located.”

Counsel for the petitioning hospitals include: Daniel F. Miller, Sara J. MacCarthy, Heather D. Mogden, of Hall, Render, Killian, Heath & Lyman; and Hyland Hunt and Ruthanne M. Deutsch, of Deutsch Hunt PLLC.

The case is Advocate Christ Med. Ctr. v. Becerra, U.S., No. 23-715, petition granted 6/10/24.