Supreme Court: HHS DSH policy change violates Medicare Act

The U.S. Supreme Court today affirmed a D.C. Circuit Court decision that the Department of Health and Human Services violated the Medicare Act when it changed Medicare’s reimbursement adjustment formula for disproportionate share hospitals without providing notice and opportunity to comment. “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,” Justice Neil Gorsuch wrote in the opinion for the majority. 

AHA General Counsel Melinda Hatton said, “America’s hospitals and health systems applaud today’s Supreme Court decision finding that the Department of Health and Human Services violated the Medicare Act when it changed Medicare's reimbursement formula for disproportionate share hospitals without providing notice and opportunity to comment. By evading the notice-and-comment process, HHS failed to consider the real-world impact of its changes, leading to policies that may adversely affect patients as well as providers. As we stated in our amicus brief, more public participation in policymaking, including by hospitals and health systems, leads to better-thought-out policies with a deeper understanding of their direct impact on health care providers and those they serve.”