THE OUTLOOK FOR HEALTH CARE IN 2023:

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June 17, 2022

Around the nation: SCOTUS rules in favor of HHS in DSH payment case

Daily Briefing

    The Supreme Court in a 5-4 vote ruled that HHS did not violate Medicare law when it changed the formula for calculating disproportionate share hospital (DSH) payments, in today's bite-sized hospital and health industry news from Arkansas, California, and the District of Columbia.

    • Arkansas: Walmart last week announced that it is expanding health care benefits for employees who want to hire a doula, as part of the company's commitment to address racial inequities in maternal and infant health care. Last year, the retailer offered coverage of up to $1,000 for doula services for its Georgia-based employees. Now the same benefit will be available to employees in Louisiana, Indiana, and Illinois. The benefit is part of the company's Life with Baby program, which is offered to associates who are enrolled in a Walmart medical plan. The program provides no-cost access to a variety of resources, including one-on-one coaching from a nurse, tools to help track daily progress, articles from leading experts, and special baby gifts. According to the company, the goal of the program "is to help make the process of welcoming a new child easier, safer and less stressful." (Woods/Moore, Walmart release, 6/22; D'Innocenzio, Associated Press, 6/22)
    • California: Gov. Gavin Newsom (D) on Sunday announced that California will become the first state to offer health coverage to all undocumented residents through a Medi-Cal expansion that is expected to cost $2.6 billion annually. The program, which will launch no later than Jan. 1, 2024, is expected to provide full coverage to roughly 700,000 undocumented Californians ages 26 to 49, spurring the largest drop in the rate of uninsured residents in a decade. "This budget investment reflects California's values of inclusion and fairness and should be a model for the rest of the nation," said Sarah Dar, director of health and public benefits policy at the California Immigrant Policy Center. "All Californians, regardless of their age or where they were born, should have access to basic necessities like food and fair, steady wages." (Miranda, Sacramento Bee, 6/27)
    • District of Columbia: In a 5-4 vote, the Supreme Court on Friday ruled that HHS did not violate Medicare law when it changed the formula for calculating DSH payments in 2005—ending a years-long fight between HHS and the hospital industry. While hospitals will not lose money from the ruling, Allison Hoffman, a law professor at the University of Pennsylvania, noted that they also will not receive the additional funds they argued they were owed. The court's ruling, written by Justice Elena Kagan, overturned a decision from the U.S. Court of Appeals for the 9th Circuit. "HHS's regulation correctly construes the statutory language at issue. The ordinary meaning of the fraction descriptions, as is obvious to any ordinary reader, does not exactly leap off the page … The text and context support the agency's reading: HHS has interpreted the words in those provisions to mean just what they mean throughout the Medicare statute," Kagan wrote. "[T]he point of the statute is not to pay hospitals the most money possible; it is to compensate them for serving a disproportionate share of low-income patients." (Goldman, Modern Healthcare, 6/24)

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