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U.S.: Supreme Court grants motion for court appointed amicus curiae to determine whether the 180-day limit for filing a PRRB appeal is subject to equitable tolling

By Susan L. Smith, JD, MA

On November 13, 2012, the U.S. Supreme Court granted a motion for a court appointed individual (amicus curiae) for divided argument to offer information to assist the Court in deciding whether the 180-day statutory time limit for filing an appeal with the Provider Reimbursement Review Board (PRRB) from a final Medicare payment determination by a fiscal intermediary is subject to equitable tolling (Sebelius v Auburn Regional Medical Center, April 13, 2012). When the court grants divided argument more than one party may argue an issue. "In cases of special importance and complexity involving a number of parties with different interests who desire to present different arguments and issues, the Court has, on rare occasions, allowed several lawyers to argue on each side," as explained in the Supreme Court Practice, Ninth Edition. The Secretary of Health and Human Services (HHS), Kathleen Sebelius, petitioned the Court to review the U.S. Court of Appeals for the District of Columbia Circuit's holding that the 180-day period to file a request for a PRRB hearing is subject to equitable tolling. The Court granted certiaori on June 25, 2012.

Statutory and regulatory background. HHS regulations provide the PRRB with limited discretion to extend the time limit for filing an appeal of an intermediary's final determination when good cause is shown and the request is filed within three years after the Notice of Program Reimbursement (NPR) is issued.

Underlying litigation. The case involves an adjustment to Medicare payment available to hospitals serving a significantly disproportionate share of low-income patients, referred to as disproportionate share hospitals (DSH). Whether a hospital qualifies for the Medicare DSH adjustment depends on the hospital's disproportionate patient percentage, which consists of two components, the Medicare/Social Security Income (SSI) fraction (numerator) and the Medicaid fraction (denominator). CMS determines the Medicare/SSI fraction for each hospital and provides the information for the intermediary to determine the total payment amount, including DSH, due to the hospital. The respondent hospitals received an NPR, including the DSH adjustment for fiscal years (FYs) 1987 through 1994, but did not appeal those determinations within 180 days as required by statute or within three years for good cause.

In September 2006, more than a decade after the statutory deadlines expired, the respondents appealed the intermediaries' determination of their DSH adjustments for FYs 1987 through 1984 to the PRRB. The respondents argued that equitable tolling was appropriate because their failure to file an appeal within 180 days of issuance of the NPRs was the result of CMS' refusal to inform the hospitals that their SSI percentages were incorrectly understated for the fiscal years at issue. The PRRB dismissed the appeals concluding that it lacked authority to decide them. Respondents then filed an action in the District Court for the District of Columbia, arguing that the PRRB should have equitably tolled the 180-day time limit. The district court granted the government's motion to dismiss holding that the Medicare statute does not authorize equitable tolling of the 180 day administrative appeal period. The court of appeals reversed the district court's holding concluding that the 180-day period to file a request for a PRRB hearing is subject to equitable tolling and remanding the case to the district court for further factual finding as to whether equitable tolling is appropriate in this case. The appellate court found that the regulatory good cause exceptions are immaterial to the equitable tolling inquiry and not sufficiently technical to rebut a presumption in favor of equitable tolling based, in part, on its conclusion that a claim for Medicare payment is familiar to private litigation because it is analogous to a contract claim.

Secretary's argument for review. The Secretary argued that the appellate court's decision is wrong and unprecedented in the nearly 40 year existence of the PRRB, and it can't be reconciled with decisions of the Eight and Eleventh Circuits, which concluded that the 180-day administrative appeal period is "jurisdictional" in nature and admits of no exceptions and, on that basis, declared invalid the agency's regulation permitting extension of the 180-day period for "good cause;" and the Supreme Court's decision in Your Home Visiting Nurse Services, Inc. v. Shalala, 525 U.S. 449 (1999), holding that the petitioner was not entitled to judicial review of an intermediary's refusal to reopen a reimbursement determination. She also contended that if allowed to stand, the decision would impose a substantial administrative and financial burden on the Medicare program and expose the Medicare Trust Fund to substantial and unpredictable liabilities for past cost years that have long been closed. In addition, the presumption in favor of equitable tolling of limitation periods for filing a suit in court is inapplicable to administrative proceedings for adjudicating Medicare claims, which are "not traditionally governed by general equitable principles that go beyond the specific terms and limitations in the Medicare statute and implementing regulations." Moreover, the statutory language on its face provides no basis for judicially fashioned exceptions. Further, "because all Medicare providers may seek judicial review of any final decision of the PRRB in the . . . D.C. Circuit," the decision could be expected to have a broad effect on the nationwide administration of the Medicare program.

The case number is 11-1231.

Donald B. Verrieli, Jr., Solicitor General Counsel of Record; William B. Schultz, Acting General Counsel; Kenneth Y. Choe, Deputy General Counsel; Janice L. Hoffman, Associate General Counsel; Mark D. Polston, Deputy Associate General Counsel for "Litigation; Robert W. Balderston, Gerard Keating (Department of Health and Human Services); Stuart F. Delery, Acting Assistant Attorney General; Edwin S. Kneedler, Deputy Solicitor General; Melissa Arbus Sherry, Assistant to the Solicitor General; Mark B. Stern, Stephanie R. Marcus (Department of Justice) for Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services, Petitioner. Auburn Regional Medical Center, Chalmette Regional Medical Center, Doctors Hospital of Staten Island, Edinburg Regional Medical Center, Forest Hills Hospital, Franklin Hospital, Hackensack University Medical Center, Inland Valley Regional Medical Center, Long Island Jewish Medical Center, McAllen Medical Center, Northern Nevada Medical Center, River Parishes Hospital, Southside Hospital, Staten Island University Hospital, UHS of New Orleans, Universal Health Services, Inc. Valley Hospital Medical Center, and Wellington Regional Medical Center, Hospitals, Respondents.

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