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SCOTUS Equitable Tolling Ruling Means More Work for GCs

By Robyn Hagan Cain on January 24, 2013 | Last updated on March 21, 2019

There is a limit to the government's patience after all.

Tuesday, the Supreme Court announced in Sebelius v. Auburn Regional Medical that hospitals can't rely on equitable tolling to extend the time limit for appealing Medicare reimbursements. Instead, they must discover and appeal federal underpayments within three years of receiving a Notice of Program Reimbursement (NPR).

In a unanimous decision, the Court held that the Secretary of the Department of Health and Human Services (HHS) could limit the time for a Provider Reimbursement Review Board (PRRB) appeal to three years. The Court also concluded that the presumption in favor of equitable tolling does not apply to administrative appeals of the kind here at issue.

That means that in house counsel for Medicare providers must act quickly to correct the government's errors.

The reimbursement amount health care providers receive for treating inpatient Medicare beneficiaries is adjusted upward for hospitals that serve a disproportionate share of low-income patients. The adjustment amount is determined in part by the percentage of a hospital's patients who are eligible for Supplemental Security Income (SSI), called the SSI fraction.

Each year, the Centers for Medicare & Medicaid Services (CMS) calculates the SSI fraction for an eligible hospital and submits that number to the hospital's "fiscal intermediary," an HHS contractor. The intermediary computes the reimbursement amount due and then sends the hospital an NPR. A provider dissatisfied with the determination has a statutory right of appeal to the PRRB within 180 days of receiving the NPR. By regulation, the HHS Secretary authorized the PRRB to extend the 180-day limit, for good cause, up to three years.

Several hospitals challenged the three-year limit, demanding more time to appeal their reimbursements after learning that CMS's methodology resulted in a systematic under-calculation of the disproportionate share adjustment and corresponding underpayments to providers.

While the hospitals acknowledged that their challenges were filed after the statutory and regulatory deadlines, they claimed that equitable tolling of the limitations period was warranted due to CMS's failure to tell them about the computation error.

The Supreme Court, however, rejected that argument.

Without the benefit of equitable tolling, providers' lawyers will be scrambling to catch the government's errors within the three-year period. But will the same reasoning apply to all administrative filings?

Not necessarily.

In a brief concurring opinion, Justice Sonia Sotomayor added that the majority had not established "that equitable tolling principles are irrelevant to internal administrative deadlines in all, or even most, contexts," Courthouse News Service reports.

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