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Supreme Court Limits Medicare Payments to Hospitals in Key Ruling

The 7-2 decision upholds a narrower formula for calculating reimbursements, potentially impacting billions in funding for safety-net hospitals.

Supreme Court Justice Ketanji Brown Jackson at the Library of Congress in Washington, D.C., on Feb. 13, 2025.
Storm clouds hang over the Supreme Court building in Washington.
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Overview

  • The Supreme Court ruled 7-2 in favor of the Department of Health and Human Services, affirming its interpretation of Medicare's disproportionate-share payment formula.
  • The decision restricts reimbursement calculations to patients who received monthly SSI benefits, rather than all SSI-enrolled patients.
  • Justice Amy Coney Barrett authored the majority opinion, emphasizing adherence to the statutory text over broader legislative intent.
  • Justices Ketanji Brown Jackson and Sonia Sotomayor dissented, warning the ruling could deprive hospitals serving low-income communities of critical funding.
  • The ruling affects over $4 billion in payments from 2006–2009 and raises concerns about future funding for hospitals treating disproportionately poor populations.