Keywords: Medicare, equitable tolling, provider-reimbursement claims
Today the Supreme Court issued one decision, described below, of interest to the business community.
Medicare—No Equitable Tolling of Provider-Reimbursement Claims
Sebelius v. Auburn Regional Medical Center, No. 11-1231
Under Medicare Part A, a health-care provider submits a cost report at the end of each fiscal year to an intermediary that determines the amount that the provider will receive in reimbursement payments for that year. A provider may obtain a hearing before the Provider Reimbursement Review Board to challenge the amount if the provider "files a request for a hearing within 180 days after notice of the intermediary's final determination." 42 U.S.C.§ 1395oo(a)(3). Today, in a unanimous decision, the Supreme Court held that the 180-day time limit is not jurisdictional. The Court further held that the Secretary of the Department of Health and Human Services reasonably construed § 1395oo(a)(3) in promulgating a regulation (42 C.F.R. § 405.1841(b) (2007)) that extended the 180-day period to three years on a provider's showing of good cause for the delay. Finally, reversing the judgment of the U.S. Court of Appeals for the D.C. Circuit, the Court held that the 180-day time limit is not subject to equitable tolling.
The Court's decision in this case will be important to health-care providers seeking, under this pre-2008 version of the Medicare regulation, review of determinations that are older than three years, because the decision clarifies that providers may not bring such stale appeals. (The Court noted, however, that its opinion does not address the current version of the regulation, 42 C.F.R. § 405.1836(c)(2) (2012), which was enacted in 2008 but retains the strict three-year cutoff for all claims.) Of perhaps greater significance is the Court's conclusion that the equitable-tolling presumption from Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95–96 (1990)—in which the Court held that "the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States"—does not apply to HHS's internal deadline for appeals.
According to the opinion, authored by Justice Ginsburg, the 180-day time limit for an appeal under § 1395oo(a)(3) is not jurisdictional because Congress did not "clearly state[ ]" that it was. Slip op. 6. Instead, the "language Congress used hardly reveals a design to preclude any regulatory extension." Slip op. 7. Nor, the Court reasoned, does the placement of § 1395oo(a)(3) in a section of the statute that also contains jurisdictional requirements (such as an amount-in-controversy requirement) mean that § 1395oo(a)(3) is similarly jurisdictional.
As for whether § 1395oo(a)(3)'s 180-day time limit for an appeal to the Provider Reimbursement Review Board is subject to equitable tolling, the Court determined that allowing for such tolling would "essentially gut" the HHS regulation (42 C.F.R. § 405.1841(b) (2007)), which mandates that an appeal to the Board "shall be dismissed" unless it is filed within 180 days or, if good cause is shown, within three years, after notice of the intermediary's determination. Slip op. 11. The agency's interpretation of the statute is entitled to deference, the Court concluded, because it is not "arbitrary, capricious, or manifestly contrary to the statute." Slip. op 11 (quoting Chevron U.S.A. Inc. v. Natural Res. Def. Counsel, Inc., 467 U.S. 837, 844 (1984)). Finally, the Court held that the equitable-tolling presumption of Irwin does not apply to the statute's 180-day time limit because, whereas Irwin and other cases applying equitable tolling have generally involved time limits for filing suit in federal court, the Court has "never applied the Irwin presumption to an agency's internal appeal deadline[.]" Slip op. 12. The Irwin presumption is inapplicable in the context of administrative appeals under the Medicare Act, the Court explained, because Congress has never amended the 180-day time limit to alter the agency's interpretation, the statute at issue is not remedial, and the rule affects "sophisticated" institutional providers who are "repeat players" in the Medicare system. Slip op. 13.
Justice Sotomayor filed a separate concurrence to note that the Court's decision "does not establish that equitable tolling principles are irrelevant to internal administrative deadlines in all, or even most, contexts." Concurring slip op. 1. She stressed that the question whether a limitations period is subject to equitable tolling in an administrative setting "turns on congressional intent," which is context-sensitive and may involve analyzing the claimant's sophistication, a balance of equities, and the agency's own misfeasance in any particular case. Concurring slip op. 2–4.
Originally published January 22, 2013
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