Advocate Christ Medical Center v. Kennedy
The Supreme Court ruled that when the federal government calculates extra Medicare funding for hospitals that treat large numbers of low-income patients, it should count only those patients who were actually eligible for a Supplemental Security Income cash payment during the specific month they were hospitalized.
The decision keeps in place the government's narrower counting method, meaning some safety-net hospitals will receive less bonus funding than they would under the broader approach the hospitals sought.
How it got here: The hospitals lost before an HHS tribunal, then before the agency on the merits, then in federal district court, and then before the D.C. Circuit; the Supreme Court agreed to hear the case.
The Case in Depth
What happened
More than 200 hospitals sued the Department of Health and Human Services, claiming it had underpaid them from 2006 to 2009 through a funding formula called the disproportionate share hospital (DSH) adjustment. That adjustment gives extra Medicare money to hospitals treating an unusually high share of low-income patients. A key part of the formula counts how many Medicare patients were also enrolled in the Supplemental Security Income program, which provides cash assistance to low-income elderly, blind, and disabled people. HHS counted only patients eligible for an SSI cash payment in the month they were hospitalized; the hospitals wanted a broader count that included all patients enrolled in the SSI program at the time.
The question before the Court
Should hospitals get credit — toward a federal bonus payment for serving many low-income patients — for Medicare patients enrolled in the SSI poverty-assistance program even in months when those patients did not qualify for an SSI cash payment?
The Court's answer
No — the hospitals do not get credit for SSI-enrolled patients who were not eligible for an SSI cash payment during the month of hospitalization. The Court held that SSI benefits are, at their core, monthly cash payments — not a broader basket of services or a standing program enrollment. Because the SSI statute determines eligibility on a month-by-month basis (turning on a person's income and resources in that specific month), a patient is "entitled to SSI benefits" only in months when she actually qualifies for a payment.
The Court rejected the hospitals' argument that SSI works like ongoing insurance, under which a patient remains "entitled" throughout her enrollment even in months she earns too much for a check. Unlike Medicare Part A — which provides automatic, continuous health-insurance coverage that never lapses absent a change in disability — SSI benefits can and do fluctuate month to month depending on a recipient's income. Applying the same benefit-focused method used in the prior Medicare case, the Court said those structural differences control the outcome here.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Hospitals that serve disproportionately poor communities depend on the DSH bonus payment to offset higher treatment costs. Under this ruling, their funding formula counts fewer low-income patients — specifically excluding SSI enrollees who happen to earn slightly too much in a given month — which can translate directly into smaller federal checks for already financially strained safety-net hospitals.
What changes now
The D.C. Circuit's ruling for HHS is affirmed, so the hospitals will not receive the additional DSH reimbursements they sought for fiscal years 2006 to 2009. HHS's method of counting SSI-eligible patients in the Medicare fraction stands as valid. The Court expressly declined to address whether HHS correctly limits its count to three specific SSI status codes, leaving that narrower question open for future litigation if properly raised. Congress could amend the DSH formula if it believes the current approach undercounts low-income patients.
What this does not decide
The Court did not decide whether HHS correctly includes only three specific SSI status codes (C01, M01, M02) in its calculation, declining to reach that argument because the hospitals raised it too late in the lower court proceedings. The ruling also does not address any fiscal years other than 2006–2009.
Concurrences and dissents
Dissent — Justice Jackson
Justice Jackson argued that the majority fundamentally misunderstands SSI: the real benefit it provides is not a monthly check, but enrollment in a safety-net program that guarantees income support whenever a recipient's earnings fall short — a form of income insurance. Under that view, any patient enrolled in SSI at the time of hospitalization is 'entitled to' SSI benefits, regardless of whether she received a payment that month. Jackson would have applied Empire Health's logic directly, counting SSI enrollees the same way the Court counted Medicare Part A enrollees — by program participation, not by actual payment — and ruled for the hospitals.
How the Court got there
The legal reasoning, step by step
- The Court began by identifying what SSI benefits actually are, because the Medicare fraction counts patients 'entitled to' SSI benefits and the meaning of that phrase depends on what the benefit consists of. Looking at the text of the SSI statute (Subchapter XVI), the Court found the answer unmistakable: SSI provides cash payments. The statute says eligible individuals 'shall be paid benefits,' specifies those benefits 'shall be payable at the rate of' specific dollar amounts, and describes its purpose as providing 'supplemental security income' — each of these phrasings points to money, not services.
- The Court next determined how often SSI eligibility is measured. Section 1382(c)(1) of the SSI statute states that eligibility 'for a month shall be determined' based on income and resources 'in such month.' Multiple other provisions also tie eligibility to individual months — for example, provisions disqualifying inmates or fugitives 'with respect to any month' they meet those conditions. The Court concluded that SSI eligibility is a month-to-month inquiry, not a standing status.
- Following its approach in the prior case Empire Health — which interpreted another part of the same Medicare formula — the Court treated 'entitled to' SSI benefits as synonymous with 'eligible for' SSI benefits. Because eligibility is monthly, a Medicare patient counts for the formula's numerator only if she was eligible for an SSI cash payment during the specific month she was hospitalized.
- The hospitals argued that SSI benefits are broader than cash payments, pointing to vocational rehabilitation services and continued Medicaid coverage for people who lose SSI eligibility. The Court rejected both: vocational rehabilitation programs are housed in different parts of federal law, not 'under Subchapter XVI,' and the Medicaid-continuation provision expressly says it exists 'for purposes of' the Medicaid subchapter — it does not create an SSI benefit.
- The hospitals and dissent argued that once a person enrolls in SSI, she remains 'entitled' until she has been ineligible for 12 consecutive months — at which point she must reapply. The Court read that reapplication requirement differently: the statute says a person who 'was an eligible individual' must reapply after 12 months of ineligibility — language that describes someone who is not currently eligible, not someone who remains so. It does not extend entitlement through periods of ineligibility.
- The hospitals urged that Empire Health — which held that Medicare Part A patients need not actually receive a payment to be 'entitled to' Part A benefits for the formula — compels the same result here. The Court distinguished the two programs: Medicare Part A is automatic and ongoing health insurance that 'never goes away' absent a change in disability, while SSI eligibility fluctuates month to month with a person's income. Applying the same benefit-focused analysis used in Empire Health, the Court said those structural differences required a different answer for SSI.
Doctrinal impact
Cases affected by this decision
Distinguishes Becerra v. Empire Health Foundation (597 U.S. 424)
Empire Health governed Medicare Part A's ongoing insurance; SSI's month-to-month cash eligibility makes this case different.