On June 25, 2012, the Supreme Court granted a petition for writ of certiorari filed by the government in the case of Sebelius v. Auburn Regional Medical Center, No. 11-1231.  At issue in the case is whether the 180-day deadline for filing an appeal with the Provider Reimbursement Review Board (PRRB) following a fiscal intermediary’s final Medicare payment determination is subject to equitable tolling, i.e., whether the deadline can be extended when the hospitals did not know that they had been underpaid. 

42 U.S.C. § 1395oo(a)(3) requires that a provider appeal a fiscal intermediary’s final determination to the PRRB within 180 days.  Nonetheless, a group of hospitals that receive disproportionate share hospital (DSH) payments filed an appeal with the PRRB in 2006 alleging that they had been underpaid DSH payments from fiscal years 1987 through 1994.  The hospital plaintiffs acknowledged that their appeal was outside of the 180-day time limit, but they argued that the deadline should be equitably tolled because the hospitals did not know that they had been underpaid until Baystate Medical Center’s lawsuit, which led to the D.C. Circuit Court of Appeal’s decision in Baystate Med. Ctr. V. Leavitt, 545 F. Supp. 2d 20, amended in part, 587 F. Supp. 2d 37 (D.D.C. 2008).  They alleged that CMS had known but failed to disclose to providers that its DSH payments had been too low. 

The PRRB found that it lacked jurisdiction to hear the hospitals’ appeal because it did not have the authority to toll the 180-day deadline and the hospitals’ appeal was untimely.  The District Court held that it did not have jurisdiction to hear the case because the PRRB’s decision was not a “final decision” and that the statutory deadline could not be equitably tolled.  The D.C. Circuit reversed the District Court’s decision on June 24, 2011, holding that the PRRB’s decision constitutes a “final decision” that is subject to appeal and finding that the statutory deadline may be equitably tolled.  The D.C. Circuit remanded the case to the District Court to determine whether the facts support equitable tolling of the 180-day deadline in the case at issue.  The Supreme Court will hear the case during its next term beginning in October 2012.

A copy of the Secretary’s petition for a writ of certiorari is available by clicking here and the Supreme Court’s order granting certiorari is available by clicking here.

Reporter, Kate Stern, Atlanta, +1 404 572 4661, kstern@kslaw.com.