From “Program Enrollment” to “Monthly Cash-Payment Eligibility”: The Supreme Court Adopts a Narrow, Month-By-Month SSI Standard for Medicare DSH Calculations

Introduction

Advocate Christ Medical Center v. Kennedy, 605 U.S. ___ (2025), presented the U.S. Supreme Court with a highly technical but financially potent question: when calculating the “disproportionate share hospital” (DSH) adjustment under Medicare, which patients count as “entitled to [Supplemental Security Income] benefits” for purposes of the Medicare fraction? More than two-hundred hospitals contended that if a patient is enrolled in the SSI program at all, she should be included. The Department of Health and Human Services (HHS) countered that the statute looks only to those patients who were eligible for a cash SSI payment in the same month they were hospitalized.

By a 7–2 vote, the Court endorsed HHS’s narrower, month-by-month interpretation, thereby affirming the D.C. Circuit and cementing a precedent that could substantially reduce DSH payments to safety-net hospitals. Justice Barrett authored the majority opinion; Justice Jackson, joined by Justice Sotomayor, dissented.

Summary of the Judgment

The Medicare statute adds two fractions—the Medicare fraction and the Medicaid fraction—to determine a hospital’s DSH percentage. The numerator of the Medicare fraction is limited to patient days … attributable to patients who … were entitled to benefits under [Medicare] Part A and were entitled to [SSI] benefits under subchapter XVI.

The Court held:

An individual is entitled to [SSI] benefits for DSH purposes only when she qualifies for an SSI cash payment during the month of hospitalization.
SSI “benefits” are exclusively cash payments; non-cash collateral consequences (e.g., vocational rehabilitation, automatic Medicaid eligibility) are not “benefits … under subchapter XVI.”
SSI eligibility is inherently monthly. Therefore, hospitals cannot include patients who were on the SSI rolls but who were ineligible for cash payment in the month in question.
The D.C. Circuit’s judgment was affirmed.

Analysis

Precedents Cited

Becerra v. Empire Health Foundation, 597 U.S. 424 (2022) – Held that “entitled to Medicare Part A benefits” means meeting statutory criteria, not receipt of payment. The majority distinguished Empire Health on programmatic grounds; the dissent argued it should control.
United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (1906) – Cited in the syllabus to remind readers that headnotes are not part of the opinion.
Various Social Security Act provisions: 42 U.S.C. §§1381–1383 (SSI structure), §1320b-19 (Ticket to Work), §1396a (Medicaid linkage).
General statutory-interpretation canons, especially the “presumption of consistent usage.”

Legal Reasoning

Textual focus on “benefits”. The Court read “benefits … under subchapter XVI” to refer to cash payments, because the surrounding SSI provisions repeatedly speak of money “paid,” “payable,” and quantified in dollar amounts.
Temporal structure of SSI. SSI eligibility for cash payments is determined monthly (§1382(c)(1)). Because the statute predicates the Medicare fraction on entitlement for the days in question, entitlement must be re-evaluated each month.
Rejection of non-cash theories. Hospitals’ reliance on vocational rehabilitation services (Ticket to Work) and continued Medicaid coverage (§1382h(b)) failed because those advantages are located in other subchapters or programs, not “under subchapter XVI.”
Differentiating Empire Health. Unlike Part A (automatic, lifetime insurance), SSI demands ongoing financial qualification and can fluctuate. Thus, monthly cash-payment eligibility is integral to the meaning of “entitled” in this context.
Purposivist counter-argument dismissed. The majority acknowledged that its rule may undercount needy patients but insisted that courts must honor the specific mechanism Congress chose, not re-engineer it for broader policy goals.

Impact

The decision crystallises a “Monthly Eligibility Standard” for SSI within the DSH framework. Key consequences include:

Reduced DSH Payments: Hospitals serving transiently ineligible SSI enrollees will see fewer patient days in the numerator, shrinking reimbursements.
Administrative Clarity & Burden: HHS’s long-standing data-matching approach (relying on SSA status codes C01, M01, M02) gains Supreme Court validation, curbing future litigation but requiring hospitals to monitor monthly SSI status more closely.
Potential Congressional Response: The dissent’s policy concerns may galvanise legislative amendments—e.g., redefining “entitled” or adding an enrollment-based fraction—to restore funds to safety-net institutions.
Narrow Reading Trend: The ruling exemplifies the Court’s recent textualism, signalling that hospitals (and other regulated entities) should not expect purposive expansions of statutory reimbursement formulas.

Complex Concepts Simplified

Disproportionate Share Hospital (DSH) Adjustment: An extra payment to hospitals that treat many low-income patients, calculated by adding two fractions (Medicare & Medicaid).
Medicare Fraction: The share of Medicare patients who are also poor. Numerator = Medicare patient days and SSI-qualifying; Denominator = all Medicare patient days.
Supplemental Security Income (SSI): A federal program guaranteeing a minimum annual income to aged, blind, or disabled persons with limited resources. It pays monthly cash benefits when the person’s monthly income falls below a threshold.
Entitlement vs. Eligibility: In Social-Security parlance, “entitled” often means “qualified for” or “eligible for” a benefit. Here, it was limited to eligibility for a cash benefit in the specific month.
Ticket to Work: A vocational assistance program for disabled SSI/SSDI beneficiaries. Not considered an “SSI benefit” for DSH purposes.

Conclusion

Advocate Christ Medical Center v. Kennedy sets a definitive, text-driven rule: for DSH reimbursement, a hospital may count only those Medicare patients who were qualified to receive an SSI cash payment in the hospital month. By anchoring entitlement to monthly cash eligibility, the Court tightened the statutory connection between Medicare and SSI but simultaneously narrowed the pool of countable low-income patients. The outcome aligns with strict textualism, differentiates the DSH scheme from earlier Empire Health precedent, and shifts the financial and policy burden to Congress if broader coverage is desired. Hospitals, regulators, and policymakers must now adapt to a landscape where DSH adjustments hinge on granular, month-specific SSI data rather than broader program enrollment.