Supreme Court Hears Argument in Sebelius v. Auburn Regional Medical

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On December 4, 2012, the Supreme Court heard oral argument in Sebelius v. Auburn Regional Medical Center (Docket No. 11-1231), a case which presents the question whether the Medicare statute’s 180-day time limit for filing cost report appeals before the Provider Reimbursement Review Board may be equitably tolled.  The Auburn hospitals filed appeals alleging that CMS had failed to use the best available data to calculate their SSI ratios and, as a result, they were underpaid Medicare DSH payments dating back to 1987.  The plaintiffs’ claims are similar to the claims successfully appealed in Baystate Medical Center v. Leavitt, 545 F.Supp.2d 20 (D.D.C. 2008).  But unlike the Baystate plaintiff, the Auburn plaintiffs did not file their appeal within either the statutory 180-day time limit or the regulatory three-year extension of the time limit for good cause.  The Auburn plaintiffs requested that the Board equitably toll the 180-day time period, arguing that they could not have filed a timely appeal because the government had concealed its failure to use the best available data.  The Board dismissed the appeal, holding that it did not have the power to toll the 180-day limit. 

The government petitioned the Supreme Court to review the case following a D.C. Circuit decision which reversed the Board, citing to Supreme Court case law which holds that when Congress allows for claims against the government, there is a presumption that Congress also intends the time limits for filing those claims to be equitably tolled unless there is clear evidence in the language of the statute to the contrary.  The D.C. Circuit found none in the Medicare statute.  Complicating the government’s argument was the fact that the agency itself had promulgated a regulation that allows for a three-year extension of the 180-day time limit if a provider can show “good cause.”

The Supreme Court heard argument not only from the government and Auburn’s counsel, but also from a third party, appointed by the Court as amicus curiae to present the argument that the 180-day time limit is strictly jurisdictional and allows for no extensions at all and, therefore, the Secretary’s good cause regulation is invalid.  Two federal courts of appeal had earlier split on this issue, and several questions from the Court focused on this point.  Some justices, particularly Justice Sotomayor, pressed the Deputy Solicitor General as to why the presumption for equitable tolling did not apply in this case and questioned how the agency could reasonably read the statute to allow for good cause extensions but not allow for equitable tolling.  Justice Sotomayor challenged government’s counsel as to whether the statute could not be tolled even, hypothetically, in the face of clear government misconduct.  Justice Breyer pressed Auburn’s counsel on the flip side of this argument, asking counsel to define the point in time at which it would be reasonable for the government to cut off such claims and why three years was not sufficient.  The Court took the case under advisement.  The Court will almost certainly announce its decision before the end of June, 2013, and likely well before then. 

Access important documents related to this case, including briefs and oral argument transcripts, here

Reporter, Mark Polston, Washington, D.C., +1 202 626 5540, mpolston@kslaw.com.