Advocate Christ Medical Center v. Xavier Becerra, Secretary, United States Department of Health and Human Services

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 14, 2023 Decided September 1, 2023
No. 22-5214
ADVOCATE C HRIST M EDICAL C ENTER , ET AL.,
APPELLANTS
v.
XAVIER B ECERRA, S ECRETARY, UNITED S TATES D EPARTMENT
OF HEALTH AND HUMAN S ERVICES ,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-1519)
Daniel F. Miller argued the cause for appellants. With him
on the briefs were Sara Jean MacCarthy and Heather D.
Mogden.
Stephanie R. Marcus, Attorney, U.S. Department of
Justice, argued the cause for appellees. With her on the brief
were Mark B. Stern, Attorney, and Brian M. Boynton, Principal
Deputy Assistant Attorney General.

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Before: HENDERSON , K ATSAS , and P AN , Circuit Judges.
Opinion for the Court filed by Circuit Judge KATSAS .
KATSAS , Circuit Judge: Hospitals treating Medicare
beneficiaries receive greater reimbursements to the extent that
the beneficiaries are also entitled to supplemental security
income benefits under Title XVI of the Social Security Act.
The Secretary of Health and Human Services understands this
population to include only patients receiving cash payments
during the month in question. Various hospitals contend that
this population also includes patients receiving a subsidy under
Medicare Part D and vocational training. The district court
disagreed with the hospitals, as do we.
I
A
This case involves benefits under three different titles of
the Social Security Act. Title XVIII of that Act establishes the
Medicare program, which provides health insurance to the
elderly and disabled. Part A of Medicare covers inpatient
hospital services, and Part D affords a prescription-drug
benefit. Title XVI of the Social Security Act provides monthly
cash payments, known as supplemental security income
benefits, to financially needy individuals who are elderly,
disabled, or blind. Title XI, among other things, provides
vocational rehabilitation services for the disabled. In the
United States Code, the Social Security Act is codified as
chapter 7 of Title 42, and its individual titles are codified as
subchapters of chapter 7. The Department of Health and
Human Services administers Medicare, while the Social
Security Administration administers the SSI program and the
vocational rehabilitation services under Title XI.

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Hospitals receive fixed payments for services provided to
Medicare beneficiaries regardless of their actual costs. The
payment formula, which approximates the costs that a well-run
hospital would incur to provide the treatment at issue, seeks to
“encourage efficiency by rewarding cost effective hospital
practices.” Cape Cod Hosp. v. Sebelius, 630 F.3d 203, 205
(D.C. Cir. 2011) (cleaned up). One variable in the formula is a
“disproportionate share hospital” adjustment, which provides
additional compensation to hospitals serving an “unusually
high percentage of low-income patients.” Sebelius v. Auburn
Reg’l Med. Ctr., 568 U.S. 145, 150 (2013). This adjustment
accounts for the fact that low-income patients tend to be in
worse health and therefore costlier to treat. Id.
The DSH adjustment derives from two statutory formulas
known as the Medicare fraction and the Medicaid fraction. The
Medicare fraction represents the percentage of a hospital’s
Medicare patients who are low-income, as measured by their
entitlement to SSI benefits. The Medicaid fraction represents
the percentage of a hospital’s patients who are eligible for
Medicaid, which provides health benefits to a different
population of low-income individuals. The sum of these
fractions, which is called the hospital’s “disproportionate
patient percentage,” reflects all low-income patients served.
See 42 U.S.C. § 1395ww(d)(5)(F)(vi).
This case turns on the Medicare fraction, which consists of
the following:
the fraction (expressed as a percentage), the
numerator of which is the number of such hospital’s
patient days for such period which were made up of
patients who (for such days) were entitled to benefits
under part A of this subchapter and were entitled to
supplementary security income benefits (excluding

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any State supplementation) under subchapter XVI of
this chapter, and the denominator of which is the
number of such hospital’s patient days for such fiscal
year which were made up of patients who (for such
days) were entitled to benefits under part A of this
subchapter ….
42 U.S.C. § 1395ww(d)(5)(F)(vi)(I). In plain English, the
numerator of the Medicare fraction is the number of patient
days attributable to Medicare patients who are entitled to SSI
benefits, while the denominator is the number of patient days
attributable to all Medicare patients.
For our purposes, the key statutory terms are “entitled to
benefits under part A” and “entitled to supplementary security
income benefits … under subchapter XVI.” The Department
of Health and Human Services considers a patient “entitled to
benefits under part A” if he satisfies the threshold requirements
for Part A benefits—i.e., if he is over 65 or suffers a long-term
disability—regardless of whether Medicare pays for the
specific service rendered. See Medicare Program; Changes to
the Hospital Inpatient Prospective Payment Systems and Fiscal
Year 2005 Rates, 69 Fed. Reg. 48,916, 49,098–99, 49,246
(Aug. 11, 2004). The Supreme Court recently endorsed this
interpretation in Becerra v. Empire Health Foundation, 142 S.
Ct. 2354 (2022).
The SSI program provides cash payments to financially
needy individuals who are aged, blind, or disabled. 42 U.S.C.
§ 1382(a). Individuals must apply for this benefit. Id.
§ 1382(c)(7). Eligibility is determined monthly, depending on
a beneficiary’s “income” and “resources” during the month.
Id. § 1382(c)(1). Once an individual qualifies for the cash
payment during a particular month, he remains enrolled in the
SSI program until failing to qualify for the payment for twelve

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consecutive months. See 20 C.F.R. § 416.1335. At that point,
the individual must reapply to receive future payments.
Enrollees in the SSI program may receive two further
benefits beyond the cash payments. First, they become eligible
for a subsidy under Medicare Part D. See 42 U.S.C. § 1395w-
114(a)(3)(B)(v)(I). Each enrollee receives this subsidy for at
least six months regardless of whether he continues to qualify
for the monthly payments. 42 C.F.R. § 423.773(c)(2). Second,
blind or disabled enrollees may access the Ticket to Work and
Self-Sufficiency Program, which provides vocational
rehabilitation services through state agencies or private
employment networks. 42 U.S.C. § 1320b-19. In some
circumstances, SSI enrollees may use these services even after
they fail to qualify for the monthly payments. See 20 C.F.R.
§§ 411.100–660.
For purposes of the Medicare fraction, HHS interprets the
phrase “entitled to supplementary security income benefits …
under subchapter XVI” to denote only those patients who are
entitled to the cash payment during the month in question. In
administering the SSI program, SSA assigns codes to track
monthly (1) whether enrollees qualified for the payment and
(2) the reason why or why not. For example, the code “N01”
indicates that an enrollee failed to receive a payment for a
particular month (“N”) because of excess income during that
month (“01”). After studying the various codes used by SSA,
HHS concluded that codes C01, M01, and M02 capture the
relevant universe of individuals entitled to the monthly
payment. See Medicare Program; Hospital Inpatient
Prospective Payment Systems for Acute Care Hospitals and the
Long-Term Care Hospital Prospective Payment System
Changes and FY 2011 Rates, 75 Fed. Reg. 50,042, 50,281

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(Aug. 16, 2010).1 To help HHS calculate the Medicare fraction
of individual hospitals, SSA gives HHS data in the form of
“monthly indicators,” which denote whether SSI enrollees
were coded as C01, M01, or M02 in any given month. See id.
at 50,276. HHS calculates the Medicare fraction by comparing
this data regarding who qualified for monthly cash payments
against its own data regarding the inpatient admissions of
individuals entitled to Part A benefits. Id. at 50,278.
To provide for a check on HHS’s work, Congress enacted
section 951 of the Medicare Prescription Drug, Improvement,
and Modernization Act (MMA). It requires HHS to give each
hospital “the data necessary” for the hospital “to compute the
number of patient days used in computing the disproportionate
patient percentage … for that hospital.” Pub. L. No. 108-173
§ 951, 117 Stat. 2066, 2427 (2003) (codified at 42 U.S.C.
§ 1395ww note). To comply with the MMA, the agency gives
hospitals data of the “matched patient-specific Medicare Part
A inpatient days/SSI eligibility data on a month-to-month
basis.” Medicare Program; Changes to the Hospital Inpatient
Prospective Payment Systems and Fiscal Year 2006 Rates, 70
Fed. Reg. 47,278, 47,440 (Aug. 12, 2005). This amounts to a
list of inpatient days along with a binary yes-or-no marker
indicating whether the patient for those days was counted as
being entitled to SSI benefits. HHS neither receives from SSA,
nor gives to the hospitals, the individual codes reflecting SSA’s
determination of why specific enrollees were or were not
entitled to SSI benefits month-to-month.
1 Code C01 indicates that an SSI enrollee receives an automated
cash payment. Codes M01 and M02 reflect enrollees whose cash
payments SSA manages manually.

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B
The plaintiffs in this case are more than 200 different
hospitals seeking additional Medicare reimbursement for fiscal
years 2006 to 2009. The hospitals dispute HHS’s calculation
of their respective Medicare fractions for those years. They
contend that the phrase “entitled to supplementary security
income benefits” includes all patients enrolled in the SSI
program at the time of hospitalization, even if they did not then
qualify for the monthly cash payment. The Provider
Reimbursement Review Board, a tribunal within HHS, denied
relief to the hospitals. So did the Centers for Medicare and
Medicaid Services, which administers Medicare for the
Secretary. Consistent with the Secretary’s longstanding view,
CMS reasoned that “[b]ecause SSI is a cash benefit, only a
person who is actually paid these benefits can be considered
‘entitled’ to these benefits.” J.A. 568.
The hospitals sought review of the reimbursement
decisions in the district court. They continued to argue that
HHS has misconstrued the Medicare Act. Alternatively, they
claimed that the HHS matching process is arbitrary even under
HHS’s construction. Finally, through a claim for mandamus,
the hospitals sought an order directing HHS to provide them
with the SSI payment codes for their respective patients. The
district court rejected these claims and granted summary
judgment to HHS. Advoc. Christ Med. Ctr. v. Azar, No. 17-cv-
1519, 2022 WL 2064830 (D.D.C. June 8, 2022).
II
We review the grant of summary judgment de novo.
Gentiva Health Servs., Inc. v. Becerra, 31 F.4th 766, 775 (D.C.
Cir. 2022). Like the district court, we apply the arbitrary-and-
capricious standard from the Administrative Procedure Act.
See 5 U.S.C. § 706(2)(A); 42 U.S.C. § 1395oo(f)(1). Under

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that deferential standard, an agency decision need only be
“reasonable and reasonably explained.” FCC v. Prometheus
Radio Project, 141 S. Ct. 1150, 1155 (2021).
We have also deferentially reviewed HHS interpretations
of the Medicare Act under Chevron U.S.A. Inc. v. NRDC, 467
U.S. 837 (1984). See Gentiva, 31 F.4th at 775. However, we
need not apply the Chevron framework if we conclude that the
agency has correctly construed the governing statute. See
Empire, 142 S. Ct. at 2362.
III
We begin with the dispute over the phrase “entitled to
supplementary security income benefits … under subchapter
XVI.” 42 U.S.C. § 1395ww(d)(5)(F)(vi)(I). HHS reads it to
cover only Medicare beneficiaries who are entitled to SSI cash
payments at the time of their hospitalization. The hospitals
read it to cover Medicare beneficiaries who are enrolled in the
SSI program at the time of their hospitalization, regardless of
whether they receive a cash payment at that time. To justify
their position, the hospitals contend that SSI benefits under
subchapter XVI include not only cash payments but also the
Medicare Part D subsidy and vocational rehabilitation services.
The hospitals are mistaken. At every turn, subchapter XVI
is about cash payments for needy individuals who are aged,
blind, or disabled. Its title promises “supplemental security
income” for those individuals. 42 U.S.C. ch. 7, subch. XVI.
Its statement of purpose is “to provide supplemental security
income” to those individuals. Id. § 1381. Its “[b]asic
entitlement to benefits” is that aged, blind, or disabled
individuals, once determined not to have income or resources
above the statutory cutoffs, “shall, in accordance with and
subject to the provisions of this subchapter, be paid benefits.”
Id. § 1381a. Section 1382 sets forth “[t]he benefit under this

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subchapter”—not simply “a” benefit—in specific dollar
amounts. Id. § 1382(b). Scores of later provisions elaborate
on when and how this cash benefit is to be paid out.2
Section 1320b-19 of Title 42 confirms this point. Housed
in subchapter XI, it requires SSA to establish the Ticket to
Work program, which provides vocational rehabilitation
services to blind or disabled individuals who are “eligible for
supplemental security income benefits under subchapter XVI.”
42 U.S.C. § 1320b-19(k)(4). For purposes of this program,
section 1320b-19 states expressly that “[t]he term
‘supplemental security income benefit under subchapter XVI’
means a cash benefit under section 1382 or 1382h(a) of this
title.” Id. § 1320b-19(k)(5). As noted above, section 1382 sets
forth “[t]he” monthly cash benefit under subchapter XVI, id.
§ 1382(b), and section 1382h(a) sets forth a substitute monthly
cash benefit for certain individuals who qualify under section
2 See, e.g., 42 U.S.C. § 1382(e)(1)(B) (setting forth “the benefit
under this subchapter,” in dollars, for certain individuals in treatment
facilities); id. § 1382(h) (rules for “determining eligibility for, and
the amount of, benefits payable under this section”); id.
§ 1382b(c)(1)(A)(iv) (rules for determining “the amount of the
maximum monthly benefit payable under section 1382(b)”); id.
§ 1382c(f)(1) (rules for “determining eligibility for and the amount
of benefits for” certain married individuals); id. § 1382d(a)(2)
(treatment of minors “with respect to whom benefits are paid under
this subchapter”); id. § 1382e(d)(5)(C) (permissible use of funds
“appropriated for payment of benefits under this subchapter”); id.
§ 1382f (“Cost-of-living adjustments in benefits”); id.
§ 1382h(b)(1)(D) (assessment whether certain “earnings” provide a
“reasonable equivalent of the benefits under this subchapter”); id.
§ 1382i(b)(2) (certain “payments” qualify as “supplemental security
income benefits” for certain purposes); id. § 1382j(a) (rules for
determining “the amount of benefits under this subchapter” for
aliens); id. § 1383 (“Procedure for payment of benefits … under this
subchapter”).

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1382 in some months but not others, id. § 1382h(a)(1).
Because “identical words used in different parts of the same act
are intended to have the same meaning,” Gustafson v. Alloyd
Co., 513 U.S. 561, 570 (1995) (cleaned up), the phrase
“supplemental security income benefits under subchapter
XVI” (or its equivalent “supplementary security income
benefits … under subchapter XVI”) bears the same meaning in
calculating the Medicare fraction in subchapter XVIII that it
bears (1) throughout subchapter XVI and (2) in determining
eligibility for the Ticket to Work program in subchapter XI.
The hospitals respond that the word “benefits” can include
cash or non-cash benefits, tangible or intangible. True enough,
but the question here turns on what counts as “income” benefits
“under subchapter XVI.” Neither of the two benefits that the
hospitals cite fits that description. Medicare Part D benefits are
housed in subchapter XVIII. So too is the provision making
individuals “who are recipients of supplemental security
income benefits” also eligible for a prescription-drug subsidy.
42 U.S.C. § 1395w-114(a)(3)(B)(v)(I). The prescription-drug
subsidy is thus a non-cash benefit provided under subchapter
XVIII, not the monthly cash benefit provided under subchapter
XVI. Likewise, the Ticket to Work benefits cited by the
hospitals are provided under subchapter XI, which requires
SSA to establish that program for blind and disabled
individuals “to obtain employment services, vocational
rehabilitation services, or other support services from an
employment network.” Id. § 1320b-19(a). Subchapter XI sets
forth the metes and bounds of that program, which SSA may
run through state agencies that choose to administer approved
plans, see id. § 1320b-19(c)(1), or through private employment
networks selected by SSA, see id. § 1320b-19(d)(4).
Subchapter XVI merely provides that, if a state chooses to
participate in the Ticket to Work program, SSA may reimburse
the state for the cost of providing covered vocational benefits
to SSI enrollees. Id. § 1382d(d). That simply provides a

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funding mechanism for a subchapter XI benefit—and one that
expressly defines the term “supplemental security income
benefits under subchapter XVI” as “a cash benefit under
section 1382 or 1382h(a).” Id. § 1320b-19(k)(5).
The hospitals further argue that Empire compels their
construction of the phrase “entitled to supplementary security
income benefits.” Empire held that the phrase “entitled to
benefits under part A,” as used to determine the Medicare
fraction, covers patients who meet Part A’s requirement of
being elderly or disabled, even if Medicare does not pay for
specific treatments because of coverage limitations, alternative
insurance, or the like. 142 S. Ct. at 2364. The hospitals reason
that if the phrase “entitled to benefits under part A” covers
patients who meet basic eligibility requirements without regard
to specific payment decisions, then so too must the adjacent
phrase “entitled to [SSI] benefits.”
This argument misses key distinctions between the Part A
and SSI schemes. First, Part A benefits extend well beyond
payment for specific services at specific times. As Empire
explained, a beneficiary who reaches a Part A coverage limit
for eye care still has coverage for a knee replacement, so he
remains “entitled to benefits under part A” even if Medicare
does not pay for his current medical needs. 142 S. Ct. at 2363.
There is no comparable parallel in the SSI context because, as
shown above, the phrase “[SSI] benefits … under subchapter
XVI” means only cash payments. Moreover, age or chronic
disability makes a person eligible for Part A benefits “without
an application or anything more,” and individuals rarely if ever
lose this eligibility over time. Id. at 2363–64. The same does
not hold true for SSI, where individuals routinely ping-pong in
and out of “eligibility” depending on fluctuations in their
income or wealth from one month to another. 42 U.S.C.
§ 1382(a), (c). Given this structure, it makes little sense to say

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that individuals are “entitled” to the benefit in months when
they are not even eligible for it.
Because we agree that the Secretary offered the correct
interpretation of the Medicare fraction, we adopt it without
considering any question of Chevron deference.
IV
The hospitals next argue that even under HHS’s own
construction of the Medicare Act, its matching process was
arbitrary and capricious. We disagree.
First, the hospitals contend that HHS arbitrarily excluded
patients whose SSI benefits were withheld under the so-called
“cross-program recovery” scheme. When an SSI beneficiary
receives an overpayment from another SSA program, SSA may
correct the mistake by reducing SSI benefits correspondingly.
42 U.S.C. § 1320b–17. The hospitals assert that SSA assigns
to individuals whose benefits are so withheld the E01 code,
which indicates a loss of SSI eligibility, even though these
individuals receive an SSI benefit that cancels another
monetary liability. This assertion is mistaken. As the
government explained at oral argument, individuals whose SSI
benefits are clawed back under the cross-program recovery
scheme still are assigned the C01, M01, or M02 codes, and
therefore remain “entitled to [SSI] benefits” in the agency’s
calculation of the Medicare fraction.
Second, the hospitals contend that HHS unreasonably
focused on whether patients receive SSI payments when
hospitalized because the payments depend on income and
resource levels from earlier months. But “eligibility” for the
SSI benefit “for a month” depends on the individual’s income,
resources, and other characteristics “in such month.” 42 U.S.C.
§ 1382(c)(1). Thus, if an individual satisfies these criteria
during one month yet does not receive the payment until a later

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month, HHS still counts the individual as “entitled to [SSI]
benefits” during the first month.
Third, the hospitals contend that HHS unreasonably
excluded from the Medicare fraction individuals assigned
codes “S” and “E02.” Because the hospitals first raised this
argument in their reply brief, we do not consider it. See
Abdullah v. Obama, 753 F.3d 193, 199 (D.C. Cir. 2014).
V
Invoking the Mandamus Act, 28 U.S.C. § 1361, the
hospitals seek an order compelling HHS to provide them with
the payment codes assigned by SSA to their respective patients.
The hospitals want this data to verify or challenge CMS’s
calculation of their respective Medicare fractions.
Mandamus against an executive official is a drastic
remedy to be “invoked only in extraordinary circumstances.”
Fornaro v. James, 416 F.3d 63, 69 (D.C. Cir. 2005) (cleaned
up). The plaintiff must show (1) a clear and indisputable right
to the relief sought; (2) the violation of a clear legal duty; and
(3) the absence of an adequate alternate remedy. See Am. Hosp.
Ass’n v. Burwell, 812 F.3d 183, 189 (D.C. Cir. 2016). Even if
these requirements are met, the plaintiff must also show
“compelling equitable grounds” for relief. Id.
To establish the necessary rights and duties, the hospitals
invoke section 951 of the MMA. It requires HHS to give each
hospital the “data necessary” for the hospital “to compute the
number of patient days used in computing [its] disproportionate
patient percentage.” 117 Stat. at 2427. The hospitals have
received the matched data that HHS itself uses to calculate this
percentage. But the hospitals want more than simply a binary
code reflecting whether specific patient days were attributed to
individuals coded by SSA as C01, M01, or M02. Instead, the

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hospitals want, for all patient days attributed to SSI enrollees,
the specific codes used by SSA to track why those individuals
did or did not qualify for the monthly cash payment.
Section 951 does not unambiguously compel release of
this data. According to the hospitals, section 951 requires HHS
to disclose what they describe as “input data” to help them re-
do the entire determination of the Medicare and Medicaid
fractions from start to finish. On the other hand, section 951
could simply mean that HHS must provide wholesale data that
it uses for the actual computation. We are tempted to say that
this ambiguity alone is enough to doom the claim, for
mandamus is unavailable when the alleged duty depends on a
statutory construction that is “not free from doubt.” Power v.
Barnhart, 292 F.3d 781, 786 (D.C. Cir. 2002) (cleaned up).
But there is a simpler ground of decision: What section 951
cannot mean is that HHS must give hospitals data that it never
received from SSA in the first place. And SSA does not
provide HHS with the specific codes assigned to individual
patients. See 75 Fed. Reg. at 50,276.
VI
The district court correctly granted summary judgment to
the Secretary of Health and Human Services.
Affirmed.

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