Page:Azar v. Allina Health Services, 587 U.S. (2019) (slip opinion).pdf/1

(Slip Opinion)

The Medicare program offers additional payments to institutions that serve a “disproportionate number” of low-income patients. 42 U. S. C. §§1395ww(d)(5)(F)(i)(I). These payments are calculated in part using what is called a hospital’s “Medicare fraction.” The fraction’s denominator is the time the hospital spent caring for patients who were “entitled to benefits under” Medicare Part A, while the numerator is the time the hospital spent caring for Part-A-entitled patients who were also entitled to income support payments under the Social Security Act. §1395ww(d)(5)(F)(vi)(I). Congress created Medicare Part C in 1997, leading to the question whether Part C enrollees should be counted as “entitled to benefits under” Part A when calculating a hospital’s Medicare fraction. Respondents claim that, because Part C enrollees tend to be wealthier than Part A enrollees, counting them makes the fraction smaller and reduces hospitals’ payments considerably. In 2004, the agency overseeing Medicare issued a final rule declaring that it would count Part C patients, but that rule was later vacated after hospitals filed legal challenges. In 2013, it issued a new rule prospectively readopting the policy of counting Part C patients. In 2014, unable to rely on either the vacated 2004 rule or the prospective 2013 rule, the agency posted on its website the Medicare fractions for fiscal year 2012, noting that they included Part C patients. A group of hospitals, respondents here, sued. They claimed, among other things, that the government had violated the Medicare Act’s requirement to provide public notice and a 60-day comment period for any “rule, requirement, or other statement of policy. . . that establishes or changes a substantive legal standard governing. . . the payment for services,” §1395hh(a)(2). The