CHA News Article

Supreme Court Rejects Medicare Disproportionate Share Hospital Cuts
For CEOs, Legal Counsel

The Supreme Court ruled this week that the Department of Health and Human Services (HHS) violated the Medicare Act when, in 2014, it changed the calculation for payments to disproportionate share hospitals (DSH). The 7-1 court ruling could affect billions of dollars in Medicare payments to safety net hospitals.

The Supreme Court heard oral arguments in the case in January, after a D.C. Circuit Court found HHS improperly altered the DSH calculation in a 2014 proposed rule because it did not provide a notice and comment period.

In the majority opinion, Justice Neil Gorsuch wrote, “Because affected members of the public received no advance warning and no chance to comment first, and because the government has not identified a lawful excuse for neglecting its statutory notice-and-comment obligations, we agree with the court of appeals that the new policy cannot stand.” 

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