Docket 23-715
Advocate Christ Medical Center v. Kennedy
DecidedApr 29, 2025
7-2decision
Source: CourtListener.
Court rules hospitals get less Medicare funding by limiting which patients count as low-income
What it does
The Court ruled that a hospital patient counts as "entitled to SSI benefits" for purposes of the Medicare disproportionate share hospital (DSH) payment formula only if that patient was eligible to receive an SSI cash payment during the specific month they were hospitalized. Patients who are enrolled in the SSI program but whose income was too high to receive a cash payment in that particular month are not counted. This narrows the group of patients that hospitals can use to qualify for — and increase — their DSH bonus payments.
Who benefits
The federal government (Department of Health and Human Services), which pays out less in enhanced Medicare reimbursements to hospitals under this narrower counting rule.
Who is affected
Hospitals that treat a high share of low-income Medicare patients — particularly safety-net hospitals — who receive smaller DSH bonus payments because fewer of their patients are counted as low-income under this formula. SSI-enrolled patients who are hospitalized in a month when their income temporarily exceeds the cash-payment threshold are also excluded from the count.
Practical impact
Hospitals that serve large numbers of low-income Medicare patients will receive lower DSH bonus payments than they would under the broader counting rule the hospitals sought, because fewer patients will be included in the numerator of the Medicare fraction. The more than 200 hospitals that brought this case will not receive the additional reimbursements they claimed were owed for fiscal years 2006–2009. Going forward, HHS's existing method of counting only patients with active SSI cash-payment eligibility in the month of hospitalization is confirmed as the legally correct approach.
Majority reasoning
The majority held that SSI benefits are, by definition, cash benefits — the statute repeatedly describes them in terms of dollar amounts paid to recipients — and that eligibility for those cash benefits is determined month by month based on a person's income and resources in that specific month. The Court reasoned that because the statute directs eligibility decisions to be made "for a month" based on conditions "in such month," a person is only "entitled to" SSI benefits when she qualifies for a payment in the month in question. The majority rejected the hospitals' argument that SSI enrollment creates a broader, ongoing entitlement, noting that the reapplication requirement (triggered after 12 consecutive months of ineligibility) does not mean a person remains eligible during those months — it simply means a formerly eligible person must reapply after that period. The Court also distinguished its prior ruling in Empire Health, which held that Medicare Part A entitlement persists even when no payment is made, explaining that Medicare Part A is automatic, ongoing health insurance that "never goes away," whereas SSI eligibility fluctuates month to month based on income. Finally, the majority acknowledged Congress's goal of funding hospitals that serve low-income patients, but said courts must respect the specific formula Congress chose, even if another formula might better serve that goal.
Dissent reasoning
The dissent argued that the majority fundamentally misunderstands what the SSI program provides and why Congress referenced it in the Medicare formula. In Justice Jackson's view, the true "benefit" of SSI is not the monthly check itself, but the guaranteed safety net — the promise that if an enrolled person's income drops below the federal minimum in any given month, the government will make up the difference. Under this reading, anyone enrolled in the SSI program is "entitled to" its benefits, whether or not they happen to receive a payment in a particular month. The dissent contended that the majority's interpretation produces arbitrary and irrational results: a low-income patient who picks up a few extra shifts in January and misses the cash-payment threshold would not be counted in the hospital's low-income tally if hospitalized that month, even though her underlying poverty and associated healthcare costs are identical to any other month. The dissent further argued that the majority's reading conflicts with the Court's own reasoning in Empire Health, which held that entitlement to Medicare Part A benefits does not require actual receipt of a payment — a principle the dissent said applies equally to SSI. In the dissent's view, the statute's structure — including annual income eligibility criteria, automatic monitoring of enrollees' finances, and the ability to defer or suspend (rather than terminate) benefits — shows that SSI entitlement extends beyond any single month, and the majority's contrary reading will deprive safety-net hospitals of critical federal funds Congress intended them to receive.
Constitutional question
When calculating the Medicare "disproportionate share hospital" payment adjustment, which patients count as "entitled to supplementary security income (SSI) benefits"—only those eligible for an SSI cash payment during the month of their hospitalization, or all patients enrolled in the SSI program at the time of their hospitalization?
Precedent changed
The ruling affirms and applies Becerra v. Empire Health Foundation (2022) but distinguishes it, holding that Empire Health's broad reading of "entitlement" was specific to Medicare Part A's features and does not extend to SSI benefits under subchapter XVI.