Supreme Court Grants Review of Part A Appeal

Last week, the Supreme Court granted CMS’​s request for review of the Ninth Circuit Court of Appeals’ decision in Empire Health v. Azar (Case 18-35845), a ruling issued in favor of providers relating to the government’s inclusion of non-covered Medicare Part A days (such as exhausted benefit days and Medicare Secondary Payer days) in the SSI Ratio of the Medicare DSH payment calculation. 

 

In May 2020, the Ninth Circuit Court ruled in Providers’ favor, holding that the 2005 Rule promulgated by the Secretary of Health and Human Services be vacated on the grounds that the rule is “substantively invalid.” This ruling, which constituted a departure from rulings on the same issue in the D.C. Circuit and Sixth Circuit Court of Appeals, was issued on the grounds that HHS arbitrarily included non-covered Medicare Part A days in its calculation of the SSI Fraction, in direct conflict with the Ninth Circuit’s longstanding interpretation of the meaning of “entitled to [Medicare].” (Legacy Emmanuel Hospital and Health Center v. Shalala, 97 F. 3d 1261, 1265-66 (9th Cir. 1996)).

 

According to the Court, “entitled” means the patient has an “absolute right . . . to payment,” whereas the word “eligible” means the patient “simply meets the Medicaid statutory criteria,” and HHS’s decision to treat the words “entitled” and “eligible” synonymously is contrary to the statute. 

 

Toyon Associates, Inc. has been helping Providers appeal the agency’s implementation of the 2005 Rule relating to non-covered Part A days. Providers’ position has been consistent non-covered Part A days should be excluded from the SSI Fraction and included only in the numerator of the Medicaid fraction.

 

As the Empire decision constitutes a “circuit split,” Toyon anticipated the Supreme Court’s decision to grant review and is working proactively with our attorney who prevailed in the Empire case to best position our clients’ appeals in court as we head into the next phase of litigation. 

 

We will need to wait to see how the Supreme Court rules on this appeal. We anticipate oral arguments will be heard by year-end, with a decision forthcoming in Summer 2022. There is also speculation that this pending Supreme Court decision in the Empire case could bear some implications on the Part C Days litigation, another appeal issue Toyon is actively pursuing for our clients. Toyon will be contacting affected hospitals in the coming weeks as necessary, as more details become available on this issue.

 

Please contact Karen S. Kim at (925) 685-9312 or karen.kim@toyonassociates.com if you have any questions or concerns.