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The Basics of Medicare DSH and the Supreme Court Review

Medicare Disproportionate Share Hospital payments, also known as Medicare DSH, are often used to offset the cost a hospital incurs when treating a patient on Medicare. These payments are government subsidies that are provided to hospitals, specifically those in more urban locations that tend to treat a lower-income population. Ideally, these government subsidies allow these hospitals to hire additional translators, social workers, and even security staff, as needed, in order to continue treating the low-income Medicare patients that tend to utilize their facilities.

Medicare DSH Supreme Court Case Background

There has always been a specific formula to determine the amount of money each hospital will receive under the Medicare DSH Program. However, in 2012, the hospital group brought a case to the lower courts, which stated that the formula had been changed (to include Medicare Part C) without moving through the proper channels as placed by the original language of the program.

Furthermore, The U.S. Department of Health and Human Services (HHS), the controlling body that determines where the monies go based on the formulas, did not hold the proper question and answer session to discuss adding Medicare Part C to the formula. The lower court ruled in favor of HHS, and the hospital group petitioned the case to be heard by the Supreme Court.

Medicare DHS Supreme Court Outcome & Appeal

The case was heard by the Supreme Court in October 2018. Judge Brett Kavanaugh handed down the decision. According to Justice Kavanaugh, HHS has violated the Medicare Act by adding the use of Medicare Part C payments into the formula without following the proper steps. This overturned the decision of the lower courts and continued to allow Medicare DSH payments to be distributed to the more urban and lower-income hospitals as in the past.

The Supreme Court further contended that the inclusion of Medicare Part C creates an unfair advantage for HHS. Those who can afford Medicare Part C are typically in a higher income bracket than those who only maintain Medicare Part A. Therefore, the wealthier group would create a skewed result that would take money from of the hospitals where it is truly necessary.

To learn more about the issues surrounding Medicare DSH and the effect of the Supreme Court decision on your Medicare payments and policies, contact the professionals at at (877) 829-1109. Our licensed insurance experts will be happy to answer any questions you have.