On January 22, 2013, the United States Supreme Court unanimously upheld the Secretary of HHS’s regulation establishing an absolute three-year limit for taking an appeal from a Notice of Provider Reimbursement (“NPR”). In Sebelius v. Auburn Regional Medical Center, No. 11-1231, several hospitals had argued that the limitations period should be equitably tolled because the agency had withheld the very information that gave rise to their appeals. But the Court rejected the hospitals’ argument. The Court agreed with both the Secretary and hospitals that the 180-day statutory limitation for health care providers to appeal an NPR to the Provider Reimbursement Review Board (“PRRB”) was not jurisdictional. It was permissible, therefore, for the Secretary, by regulation, to extend the 180-day limitation for up to three years for good cause. The Court rejected, however, the hospitals’ argument that the limitations period is also subject to principles of equitable tolling, which would have allowed the hospitals to appeal within 180 days from the date on which they became aware of the withheld information.
The hospitals’ underlying appeal concerned the adjustments to which they were entitled as disproportionate share hospitals (“DSH”). The DSH adjustment is determined in part by the percentage of patients served by the hospital who are eligible for Supplemental Security Income (“SSI”) payments. This percentage is commonly known as the SSI fraction. In March of 2006, the PRRB held in Baystate Medical Center, PRRB Dec. No. 2006-D20, Mar. 17, 2006), that the Centers for Medicare and Medicaid Services (“CMS”) had knowingly miscalculated the SSI fractions for the years 1993-1996 and failed to disclose its errors to interested hospitals, notwithstanding that hospitals were reliant on CMS’s SSI data because they lacked the data necessary to make their own computations. The PRRB further determined that CMS’s conduct resulted in a systematic understatement of hospitals’ DSH adjustments and considerable underpayments to those hospitals. Within 180 days of the decision’s publication, the hospitals filed appeals from their NPRs for the period 1987 through 1994, even though more than a decade had passed. The hospitals argued that it was appropriate to equitably toll the limitations period because CMS had withheld information necessary for the hospitals to take the appeal.
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