It didn’t take long for hospitals to bring the Supreme Court’s dismantling of the Chevron deference into their crusade against the formula for disproportionate share hospital (DSH) payments.
In a complaint filed Friday in the District Court for the District of Columbia, New Jersey-based Hackensack Meridian Health asked the court—not the Centers for Medicare & Medicaid Services’ (CMS’) technical experts—to weigh in on Congress’ intent when calculating enhanced rates for hospitals caring for more low-income patients.
Similar to a broader, industry-backed case recently taken up by the top court, HMH is seeking a ruling on CMS’ “irrational and unlawful interpretation” of a key metric in the formula that serves as a proxy for low-income patients: supplemental security income (SSI) fraction. For the SSI fraction’s numerator, CMS interprets a phrase in the Medicare statute, “entitled … to benefits,” to include those who received SSI payments during the same month as their inpatient stay at a hospital.
This interpretation is narrow, HMH wrote, and lowers DSH payments. Further, as argued in the case heading to the top court, CMS’ approach contrasts a more inclusive reading of the same phrase that the agency as well as the Supreme Court already affirmed for Medicare Part A.
HMH said that Friday’s SCOTUS ruling to overturn the Chevron deference—which broadly stripped federal agencies’ power to interpret ambiguous statute—tilts the issue in hospitals’ favor.
“In this new paradigm, more than ever, the Secretary’s actions at issue here must fall, and the Hospitals are entitled to the relief they seek,” the 18-hospital system wrote in its complaint.
HMH’s complaint also asks the court to increase CMS’ patient-level transparency regarding which patients are or aren’t meeting the bar for SSI eligibility.
HMH said hospitals need these data— obtained by CMS from the Social Security Administration—to appeal final determinations of their total Medicare reimbursement for a given year, which they are permitted to do under the Medicare statute.
“Without access to the patient-level SSI data that CMS refuses to share, this appeal right amounts to nothing more than a meaningless charade,” HMH wrote. "[The data] are crucial for hospitals to access if they are to have any hope of computing their own SSI fractions and checking CMS’ work."
As a result, the health system said it has turned to state-level data on patients eligible for SSI as a “surrogate” to the missing data. With these, HMH said it has face-level evidence that CMS “significantly undercounted” in its SSI calculation for fiscal year 2016 and is asking the court to make CMS prove its case.
HMH filed its complaint almost immediately after the top court overturned Chevron. Though that ruling didn’t immediately invalidate decades of judicial decisions on regulatory authority, legal experts have warned that a slew of challenges to agency statute interpretations are on the horizon.
That said, it’s yet to be seen whether HMH’s focus on Chevron will make a dent in the battle over the SSI fraction. The industry’s case being considered by SCOTUS in its next term was already twice foiled by district and appellate judges. In the written order for the latter handed down last spring, the District of Columbia Circuit specified that it agreed with the administration’s interpretation of the SSI fraction and, therefore, “need not apply the Chevron framework” to the issue.