The US Supreme Court Friday released its opinion in Becerra v. Empire Health Foundation, a case relating to Medicare reimbursement. The court held that “calculating the Medicare fraction, individuals ‘entitled to [Medicare Part A]  benefits’ are all those qualifying for the program, regardless of whether they receive Medicare payments for part or all of a hospital stay.”

In the case, Empire Health Foundation brought a claim challenging the US Department of Health and Human Services’ (HHS) calculation of its 2008 reimbursement. Under HHS regulation an annual supplement payment known as “disproportionate share hospital” is calculated by finding the sum of two percentages: the Medicare fraction and Medicaid fraction. The trial court found in favor of Empire, granting partial summary judgment. The trial court held that HHS did not follow the Administrative Procedure Act (APA). The US Court of Appeals for the Ninth Circuit affirmed but held that while HHS followed the APA, the rule conflicted with Ninth Circuit precedent.

Justice Elena Kagan wrote for the majority in the 5-4 decision. Kagan stated that the term “entitled” had the same meaning throughout the statute, “best implement[ing] the statute’s bifurcated framework by capturing low-income individuals in each of two distinct populations a hospital serves.”

Justice Brett Kavanaugh wrote the dissent joined by Justice Samuel Alito and Justice Neil Gorsuch. Kavanaugh wrote that “HHS’s misreading of the statute has significant real-world effects: It financially harms hospitals that serve low-income patients, thereby hamstringing those hospitals’ ability to provide needed care to low-income communities.”