Advocate Christ Medical Center v. Kennedy

Background

A group of more than 200 hospitals sued the federal health agency after it used a monthly SSI rule when calculating a hospital’s disproportionate-share (DSH) Medicare payment. The DSH formula adds a Medicare fraction and a Medicaid fraction to decide extra funding for hospitals that treat many low-income Medicare patients. The hospitals argued the Medicare fraction should count all patients enrolled in the SSI system at the time of hospitalization, not only those eligible for a cash SSI payment that month. Lower tribunals and the D.C. Circuit sided with the agency, and the hospitals appealed to the Court.

Reasoning

The Court held that SSI is a cash benefit and that eligibility for an SSI payment is determined month by month. It treated the word "entitled" as synonymous with being eligible for the program and concluded a patient counts only if eligible for an SSI cash payment during the month of hospitalization. The Court rejected the hospitals’ arguments that noncash services or a longer, continuous enrollment period should count. It explained Congress selected a specific formula and that courts must respect that choice. The D. C. Circuit’s judgment was affirmed.

Real world impact

Hospitals that care for many low-income Medicare patients may see fewer patient days counted in the Medicare fraction if those patients were not eligible for an SSI cash payment in the hospitalization month. That can lower DSH payments and affect safety-net hospitals’ revenue. HHS’s monthly-eligibility method, based on SSA status codes, remains the controlling administrative rule.

Dissents or concurrances

Justice Jackson, joined by Justice Sotomayor, dissented. The dissent argued the majority undercounts needy patients by ignoring Congress’s purpose and urged counting all enrolled SSI patients for fairer hospital funding.