Supreme Court to review case challenging HHS' interpretation of DSH formula; American Hospital Association and five others urged review, citing $1 billion annual loss for hospitals.

The Supreme Court June 10 agreed to review a case challenging how the Department of Health and Human Services applies Congress’ formula for calculating Disproportionate Share Hospital payments. In February, the AHA and five other national hospital associations representing hospitals urged the Court to review the case. 

“The AHA is pleased that the Supreme Court agreed to consider this case,” said Chad Golder, AHA general counsel and secretary. “As we explained in our amicus brief urging the Court to grant certiorari, it is critical to hospitals and health systems that HHS interpret the DSH fraction consistently across the statute. The agency’s longstanding failure to do so has cost hospitals more than a billion dollars each year, directly harming the hospitals that serve America’s most vulnerable patients. We look forward to the Supreme Court rectifying this legal error next term.” 

In February’s friend-of-the-court brief, the organizations argued that HHS incorrectly 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 inconsistent with the Court’s reasoning in Becerra v. Empire Health Foundation. 

“This case concerns a question that is critical to calculating the Medicare DSH fraction: When are patients ‘entitled to’ SSI benefits and so counted in the numerator? Is it when they are eligible for SSI benefits, or when they are actually receiving cash SSI benefits,” the organizations wrote. 

“The correct interpretation of the DSH formula is vitally important to America’s hospitals,” the brief adds. “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. What’s more, a hospital’s eligibility for DSH payments affects its entitlement to other federal benefits designed to help hospitals 'provide a wide range of medical services' to vulnerable populations. ... HHS’s error thus has far-reaching implications for hospitals, patients, and the American healthcare system.”