Plain-English summary
Court says Medicare counts only patients entitled to Part A for certain hospital payment formula
The Supreme Court ruled (6–3) that, when computing the Medicare fraction used to give extra payments to hospitals that serve many low-income patients, hospitals should count only patients who are "entitled to" Medicare Part A benefits, not all patients merely enrolled in Part A. The Court reversed the Ninth Circuit and sent the case back for further proceedings.
Why this matters
The decision affects how Medicare calculates extra payments to hospitals that treat a large share of low-income patients (the disproportionate-share-hospital, or DSH, adjustment). That formula determines significant federal reimbursements to hospitals, especially safety-net hospitals that rely on higher payments to cover care for low-income and uninsured patients. The ruling may reduce some hospitals' DSH payments where they had been counting enrolled-but-not-entitled Part A patients in the Medicare fraction.
Who may feel it
- Hospitals that treat a high share of low-income patients (safety-net hospitals)
- Medicare beneficiaries enrolled in Part A
- State Medicaid programs and low-income patients (indirectly, through hospital finances)
- Medicare program administrators and hospital billing departments
Key questions
- Does "entitled to" Medicare Part A benefits in the Medicare fraction include patients who are merely enrolled in Part A but not entitled to benefits for particular days?