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Focus on Regulation

Supreme Court Reverses D.C. Circuit in Medicare Equitable Tolling Case

The Supreme Court issued a unanimous opinion today reversing a D.C. Circuit decision that held that the 180-day statutory deadline for providers to appeal reimbursement determinations to the Provider Reimbursement Review Board (PRRB) is subject to equitable tolling. In this case, the hospitals sought to challenge their disproportionate share hospital (DSH) payments ten years after issuance of Notices of Program Reimbursement (NPRs) by Medicare fiscal intermediaries. By regulation, the Secretary of Health and Human Services (HHS) granted the PRRB discretion to extend the filing deadline to three years “for good cause.” Here, although the hospitals missed both deadlines, they argued that the time limit to file an appeal to the PRRB should have been tolled because HHS failed to disclose that fiscal intermediaries across the country had systematically underpaid hospitals for DSH services. If the time limit were tolled, the hospitals’ claims would have been timely.

The D.C. District Court dismissed the hospitals’ claims because the statute did not suggest that Congress intended to authorize equitable tolling. On appeal, the D.C. Court of Appeals reversed, finding that there is a presumption that equitable tolling is permitted and that there was no indication that Congress intended to disallow tolling in this particular statutory scheme.

In its review, the Supreme Court first considered whether the 180-day statutory time limit for appeal to the PRRB is jurisdictional or whether it “is most sensibly characterized as a nonjurisdictional prescription.” The Court concluded that the filing deadline is not jurisdictional. The Court then held that HHS acted within the scope of its authority when it established a three year “outer limit” for appeals to the PRRB. Finally, the Court reversed the D.C. Circuit on the equitable tolling issue, holding that the presumption of the permissibility of equitable tolling has never been extended to an agency’s internal appeals deadlines and that there was no reason to think that Congress intended for equitable tolling to be allowable in this context.

The Supreme Court heard oral argument in this case on December 4, 2012.