Becerra v. Empire Health Foundation

STATUTORY INTERPRETATION OF ENTITLEMENT

Petitioner Becerra asserts that courts should follow the definition of “entitled” as specified by the statute, even if the meaning of the term has diverged from the term’s ordinary meaning. Brief for the Petitioner, Xavier Becerra, Secretary of Health and Human Services, Petitioner at 27. Becerra contends that the text of the Medicare Act defines “entitlement” of a beneficiary as a legal status, and any individual who meets the necessary requirements outlined by the Act bears the status of entitlement to the Medicare Part A program regardless of any limitations that restrict an individual’s access to certain benefits. Id. at 27. In support of a status-based approach to interpreting “entitlement,” Becerra points to the statutory phrasing in Section 426 of the Social Security Act, and contends that an individual’s status as a Medicare beneficiary is not contingent on the Medicare program’s actual compensation for a specific service, including cases where Medicare is unavailable for a particular service. Id. at 30. Additionally, Becerra argues that, even if the Medicare program does not cover a specific service, or if the individual has exhausted all the available benefits, the individual still holds the status of an entitled beneficiary. Id. at 35. Considering this reading of “entitlement” by both statutory provisions and the language dictating the Medicare fraction, Becerra posits that the Medicare statute does not show concern for whether the Medicare program paid for a particular patient day and does not require the Secretary to exclude patient days for which the Medicare program did not cover. Id. at 30. Becerra additionally contends that the parenthetical “(for such days)” in 42 U.S.C. § 1395ww(d)(5)(F)(vi) of the Medicare Act should be understood to confirm that, for calculation purposes, the individual should be entitled to Medicare Part A on the patient days in the reporting period. Id. at 33. Becerra highlights this clarification from the statutory text because a patient may no longer fulfill the statutory requirements to be entitled to Medicare Part A during their stay in the hospital. Id. at 33­–34.

Respondent Empire counters that, because the statute forbids equating “eligible” with “entitled,” it likewise does not allow the converse, therefore precluding HHS’s rule at issue. Brief for the Respondent, Empire Health Foundation, for Valley Hospital Medical Center, Respondent at 29. Empire points out that four other circuit courts have already rejected similar arguments for equating the two terms based on the established precedent of statutory construction that different language used in different parts of a statute intends different meanings. Id. at 36. Empire asserts that HHS wrongly relies on statutory provisions outside of the Medicare statute, especially considering that provisions within the actual statute directly link “entitlement” to payment made on behalf of the patient. Id. at 37. Empire stresses that Congress intentionally chose the words of “entitled” and “eligible” to have different meanings because Congress refers to “SSI eligibility” in 42 U.S.C. Section 1396, while also referencing “SSI entitlement” in the DSH status. Id at 40. Because Congress inserted both “entitled” and “eligible” in the same provision, Empire argues that Congress intentionally wanted the two terms to bear different meanings. Id. at 40–41. Additionally, Empire argues that HHS’s interpretation of “entitled” as meaning the “absolute right to receive SSI payments” is completely inconsistent with its rejection of any consideration of whether a patient is entitled to payment under Medicare Part A when determining who is “entitled to benefits under Part A.” Id. at 42–43. Empire further contends that the parenthetical “for such days” is critical to understanding the meaning of “entitled” in the DSH statute’s context and how the statute is distinguished from other provisions. Id. at 38–39. The use of the parenthetical, Empire emphasizes, demonstrates Congress’s intentional clarification that “entitlement” is not a static characteristic, where an individual is always entitled to Medicare Part A benefits. Id. at 31. Empire argues that the parenthetical necessitates a day-by-day analysis for calculation, where some days of a patient’s stay may be excluded because Medicare did not cover those days. Id. at 37.

STATUTORY PURPOSE OF DSH

Becerra argues that the fundamental structure and overarching purpose of the disproportionate-share-hospital (“DSH”) adjustment policy supports the 2005 Rule. Brief for the Petitioner at 37. Congress carefully chose the hybrid approach, Becerra asserts, of combining the Medicare and Medicaid fractions as a compromise and incorporating the essential elements of proposals from both the House and Senate. Id. at 38. Becerra concludes that because Congress intended to measure the two categories of low-income Medicare patients and low-income non-Medicare patients separately in calculating the DSH adjustment, the Secretary’s status-based approach to interpreting “entitlement” is the correct approach. Id. at 39–40. Thus, Becerra urges the court to defer to the intended compromise embodied by the hybrid approach. Id.

Empire responds that the 2005 Rule is a complete reversal of HHS’s previous DSH policy. Brief for the Respondent at 48. Empire argues that the prior policy explicitly excluded patients who were not entitled to Medicare Part A benefits—including individuals who had exhausted their Medicare Part A benefits—from the Medicare fraction. Id. at 48–49. Thus, Empire contends that the 2005 Rule reflects a complete divergence with HHS’s prior approach to DSH calculations and therefore does not codify a longstanding policy as argued by HHS. Id. at 50. Of even greater concern, Empire emphasizes, is the exclusion of the “poorest of the poor” patients from the DSH calculation. Id. at 51. Empire points out that the most egregious conflict with the statute is that the HHS policy allows for the entire exclusion of low-income patients who are both eligible for Medicaid and entitled to SSI if those patients did not actually receive the SSI benefits to which they were entitled. Id. Empire stresses that such exclusion of these indigent patients is not only against the plain language of the text but also in opposition to Congress’s intent for the DSH statute. Id. at 22.

AGENCY DEFERENCE

Becerra argues that the Secretary’s approach is a reasonable construction of the statute, and the Medicare statute does not contain any explicit Congressional foreclosure of the Secretary’s status-based approach, the agency’s interpretation of the statute, should be extended deference. Brief for the Petitioner at 42–43. Even if the congressional intent indicated that “entitlement” should be tied to whether Medicare pays for that certain increment of care, Becerra contends that such intent is still compatible with the Secretary’s status-based approach and allows the Secretary to use his interpretive judgment and discretion, as he did when adopting the 2005 Rule. Id. at 43.

Empire contends that Congress purposefully set forth defined calculations for DSH payments to limit HHS’s discretion as the agency continued to defy Congress’s intent. Brief for the Respondent at 24–25. Empire asserts that the legislative record shows that Congress explicitly provided the equation due to HHS’s defiance of previous instruction to properly implement DSH payments to hospitals. Id. By misstating its current and proposed policies, Empire argues that HSS failed to properly follow notice-and-comment procedures and took no steps to correct its errors in time, thereby further demonstrating HSS’s inability to properly carry out Congress’s intent. Id. at 26. Moreover, Empire asserts that HHS failed to provide any substantial explanation why the 2005 Rule served the DHS provision’s purposes better than other probable alternatives or any economic data of the impact of the 2005 Rule, which goes against the provision’s whole purpose of providing compensation. Id. at 28. Therefore, HHS should not be extended deference, Empire concludes, as the agency has improperly handled its responsibility to implement Congress’s will. Id.