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Advocate Christ Medical Center v. Becerra, No. 23-715, 2024 WL 2883751 (June 10, 2024).
Decision below: 80 F.4th 346 (D.C. Cir. 2023).
Oral argument is scheduled for November 5, 2024.
Issue: Whether the phrase “entitled ... to benefits,” used twice in the same sentence of the Medicare and Medicaid Act, means the same thing for Medicare Part A and Supplemental Security Income (SSI) benefits, such that it includes all who meet basic program eligibility criteria, whether or not benefits are actually received.
The Medicare and Medicaid Act of 1965 (Medicare Act) authorizes the U.S. Department of Health and Human Services (HHS) to make additional Medicare payments to hospitals that serve a disproportionate number of patients with low incomes. 42 U.S.C. § 1395ww(a)(1)(A)(i), (d)(5)(F)(vi)(I). Known as the Medicare disproportionate share hospital (DSH) adjustment, HHS determines if a hospital qualifies for these payments using a statutory formula. Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145, 149-50 (2013). The DSH adjustment amount is calculated by adding two fractions: the Medicare fraction and the Medicaid fraction.
The case before the high court involves the calculation of the Medicare fraction, which measures the proportion of a hospital’s Medicare patients who have low incomes. Under the Medicare Act, the formula for calculating the Medicare fraction focuses on the number of days the hospital provided care to patients who are simultaneously “entitled” to Medicare insurance benefits because of age or disability and “entitled” to SSI benefits based on income and other factors. 42 U.S.C. § 1395ww(d)(5)(F)(vi)(I). A group of 209 hospitals allege that HHS underpays them millions of dollars each year when it miscalculates the DSH adjustment amounts based on a misinterpretation of the Medicare Act’s phrase, “entitled to [SSI] benefits.”
The Supreme Court addressed the first part of the formula—what it means to be “entitled” to Medicare insurance benefits under the Medicare Act—in 2022 in Becerra v. Empire Health Foundation, 597 U.S. 424, 429-30 (2022). In that case, the Court ruled that “entitled” to Medicare insurance benefits means that the patient qualified for Medicare, regardless of whether the patient received Medicare payments for part or all of a hospital stay. Id at 445. Now, the Court will rule on the latter part of the equation and decide what it means for a patient to be “entitled” to SSI benefits.
The hospitals argue that HHS violates the Medicare Act by interpreting being “entitled” to SSI benefits as requiring that the patient receive an SSI payment during the month of the hospital stay. The hospitals contend that being “entitled” to SSI benefits means that the patient fulfilled baseline eligibility criteria, even if the patient did not actually receive an SSI payment that month. To ensure statutory consistency, HHS should, according to the hospitals, use the same definition of “entitled … to benefits” for both the SSI and Medicare insurance determinations in the Medicare fraction: eligible regardless of whether the patient received the benefit during that hospital stay.
In response, the United States argues that HHS has a good reason for basing whether a patient is “entitled” to SSI benefits on whether the patient received an SSI payment and for treating it differently than entitlement to Medicare insurance benefits. People become eligible for Medicare based on age or disability and thus do not lose their eligibility from month to month. In contrast, people become eligible for SSI based on income, resources, and other factors that can vary from month to month. They also must submit an application to the Social Security Administration, which determines their eligibility. Eligibility can change monthly. Thus, while a patient’s Medicare Part A insurance coverage continues regardless of whether Medicare pays for a hospital stay because it is based on a person’s age or disability, a person’s SSI benefits can change from month to month depending on their income and other factors.
In the case below, the U.S. Court of Appeals for the District of Columbia Circuit agreed with HHS’s interpretation of the statute. Advocate Christ Med. Ctr. v. Becerra, 80 F.4th 346 (D.C. Cir. 2023). The Supreme Court will now decide the issue.
WHAT’S AT STAKE
At stake in this case is whether the government has been underpaying hospitals that treat a high number of patients with low incomes—typically older adults on Medicare or Medicaid. Hospitals and their associations assert that HHS’s interpretation of the DSH adjustment formula has cost them billions of dollars in federal assistance and potentially affected their eligibility for other subsidies, such as 340B Drug Pricing Program. Hospitals are increasingly cash-strapped, especially in rural areas. A ruling in their favor would increase their reimbursement. The government, on the other hand, says its interpretation is consistent with both the intent of the Medicare Act as well as the application of the Medicare program.
This is one of the first Supreme Court cases that will address a federal agency’s interpretation of a statute since the Court decided Loper Bright Enterprises v. Raimondo in June 2024. 144 S. Ct. 2244 (2024). That case overturned Chevron deference, which stated that federal courts should defer to the expertise of agencies when interpreting ambiguous language in laws. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 845 (1984). Under the Chevron standard, even if a court thought another way to read the statute was better, the court would support the agency’s interpretation as long as it was reasonable. Id. The end of Chevron could yield a different result in a case like this one.
Maame Gyamfi, MGyamfi@aarp.org
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