Supreme Court Upholds HHS Medicare Payment Method

The U.S. Supreme Court ruled 7-2 in Advocate Christ Medical Center v. Kennedy, upholding the Department of Health and Human Services' (HHS) method for calculating Medicare disproportionate share hospital (DSH) payments. Only patients who actually received Supplemental Security Income (SSI) cash payments during their month of hospitalization may be counted for DSH payment purposes, rejecting hospitals' arguments to include all SSI enrollees. Over 200 hospitals argued this interpretation led to underpayments exceeding $1 billion annually and threatened financial stability, particularly for essential and rural hospitals. Justice Amy Coney Barrett, writing for the majority, found HHS’s approach consistent with congressional intent. Dissenting justices contended the ruling ignores the broader benefits of SSI enrollment and undermines the safety-net program’s goals. Hospital advocacy groups expressed disappointment and pledged ongoing efforts to secure increased support for essential care providers.