Supreme Court Upholds HHS Medicare Payment Calculation for Low-Income Patient Care in 7-2 Ruling

In a 7-2 ruling, the Supreme Court upheld the Department of Health and Human Services’ (HHS) interpretation of how hospitals receive payments for treating low-income patients. The court’s decision resolves a dispute over the calculation of Medicare payments to hospitals that serve a disproportionate share of impoverished individuals. The central issue revolved around how HHS calculates the Medicare “disproportionate share hospital” (DSH) adjustment. This adjustment provides additional payments to hospitals that treat a large number of low-income patients. The Supreme Court’s decision supports HHS’s method for calculating this adjustment, which the agency has consistently applied. The specifics of the disagreement, which prompted the legal challenge, focused on specific calculations that dictate how funding is allocated to hospitals.

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Date: April 29, 2025

Author

Mark Chiang