Supreme Court Opinion in Sebelius v. Auburn Regional Medical Center Rejects a Challenge by Hospitals to Medicare's SSI Fraction Calculation


A unanimous Supreme Court has issued its opinion in Sebelius v. Auburn Regional Medical Center, No. 11-1231 (Jan. 22, 2013), rejecting a challenge by hospitals to Medicare's Supplemental Security Income ("SSI") fraction calculation, which affects the reimbursement amount health care providers receive for inpatient services rendered to Medicare beneficiaries and any upward payment adjustment for serving a disproportionate number of low-income patients. In doing so, the Court reversed the judgment of the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") allowing an administrative appeal made 10 years after the initial reimbursement determination.

While the Supreme Court held that the 180-day limitation in section 42 U.S.C. § 1395oo(a)(3) is not jurisdictional, it also held that the U.S. Department of Health and Human Services ("DHHS") Secretary reasonably construed the statute to permit a regulation extending the time for a provider's appeal to the Provider Reimbursement Review Board ("PRRB") to three years, but that any larger presumption in favor of equitable tolling does not apply to administrative appeals like this one. In so holding, the Court has given approval to an inequality between providers that are limited to three years' time to uncover and seek to recoup underpayments, and the government, that may reopen an intermediary's reimbursement determination "at any time" if it is alleged that an overpayment had been procured by fraud or the fault of the provider.

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