Commonwealth Fund November 23, 2021
Allison K. Hoffman

The Supreme Court is scheduled to hear arguments on November 29 in Becerra v. Empire Health Foundation. In this case, the Empire Health Foundation, created with funds set aside when the nonprofit Valley Hospital Medical Center was sold to a for-profit company, challenged a U.S. Department of Health and Human Services (HHS) rule established in 2004 that reinterpreted how Medicare calculates disproportionate share hospital (DSH) payments. DSH payments increase reimbursement for inpatient care to hospitals that serve a large number of low-income patients.

Medicare paid out more than $4 billion in DSH adjustments in fiscal year 2020. If a hospital qualifies for Medicare DSH payments, it also may have access to the federal uncompensated care pool, worth $8.35 billion in...

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