The plaintiffs argued CMS should include all patients in the SSI system at the time of their hospitalization, even if they were not entitled to SSI payments during the month they were hospitalized. Hospitals argued they lost more than $1.5 billion a year in DSH payments between 2006 and 2009 as a result of the CMS policy.
But the Supreme Court upheld two lower court rulings that SSI should only play a role in DSH calculations when Medicare patients receive cash payments during the same month as their hospital stays. Eligibility for SSI payments varies based on monthly income and assets.
“Recipients must apply for and be deemed eligible for benefits, and recipients can, and do, fluctuate in and out of eligibility depending on their income and resources from one month to the next,” Justice Amy Coney Barrett wrote in the majority opinion.
Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Elena Kagan, Neil Gorsuch and Brett Kavanaugh sided with Barrett. Justice Ketanji Brown Jackson wrote the dissent, joined by Justice Sonia Sotomayor.
In her dissent, Jackson wrote that the CMS ignores the intent of a safety-net program designed to support vulnerable people, whose health status doesn't change month-to-month along with their SSI benefits.
“The majority’s interpretation of Medicare’s disproportionate share formula is based upon a fundamental misunderstanding of how SSI’s cash-benefit program works. And that misunderstanding has led the majority to evaluate the Medicare statute without regard to the function of the formula’s reference to the SSI program, causing it to reach the wrong conclusion.”
The plaintiffs have lost “at every step of this litigation,” Barrett wrote. The U.S. District Court for the District of Columbia ruled for the government in 2022 and the U.S. Court of Appeals for the District of Columbia Circuit upheld that decision last year. The Supreme Court agreed to hear the case last June.
This is the third DSH payments lawsuit the Supreme Court has heard since 2019. Its decision in this case could affect numerous others pending in the lower courts.
"America’s Essential Hospitals is disappointed by the Supreme Court’s decision to allow HHS to undercount the patients for whom essential hospitals receive disproportionate share hospital, or DSH, payments," Beth Feldpush, senior vice president of policy and advocacy at the trade group for safety-net facilities, said in a statement. "DSH payments are key to the financial stability of essential hospitals and help to ensure access and high-quality care for all."
The American Hospital Association declined to comment.
