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Prof. Allison Hoffman explains the potential impact of SCOTUS decision in Becerra v. Empire Health Foundation

November 24, 2021

At issue in the case is how extra Medicare payments to hospitals for treating low-income patients are calculated.

On November 29, the Supreme Court will hear oral arguments in Becerra v. Empire Health Foundation to decide whether the Department of Human Services followed the correct procedures and the language of the Medicare statute when it promulgated a rule that changes how it calculates extra Medicare payments to hospitals for treating low-income patients.

Here, Professor of Law Allison K. Hoffman, an expert on health care law and policy, shares her insights on the case.

“Hospitals that serve a disproportionate number of low-income patients get paid additional compensation called a disproportionate share hospital (DSH) adjustment. Whether and how much a hospital gets is based on a calculation of what share of its patients are low-income Medicare and Medicaid patients. The precise way this calculation is done is highly contentious because billions of dollars of payments are on the line, much of which goes to hospitals that barely make ends meet. In 2004, the Centers for Medicare and Medicaid Services (CMS) changed its interpretation of how it would calculate days when a hospital cares for Medicare patients who have used up the total number of inpatient care days that the program will cover in a year.

Empire Health (a foundation that acquired the assets of Valley Hospital Medical Center for a year when this rule was in effect) claimed it was harmed by CMS’s 2004 rule and challenged it. In this case, the Supreme Court is asked to consider the Medicare statute’s language on how to calculate DSH payments and, specifically, the meaning of ‘entitled to’ versus ‘eligible’ in the statute to determine if CMS’s interpretation of the former was reasonable.

Like AHA v. Becerra, the overall health policy impact will likely be modest, but the questions of administrative authority and deference could be quite significant.”

Hoffman expounds upon her insights in this case in “Supreme Court Will Decide How Medicare’s Extra Payments to Hospitals Treating Low-Income Patients Are Calculated,” published by The Commonwealth Fund.

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