Supreme Court Nixes "Equitable Tolling" for Hospitals Seeking to File Late Appeals of Medicare Underpayments
In Sebelius v. Auburn Regional Medical Center, the Supreme Court on January 22nd, 2013 rejected hospital arguments and found that equitable tolling did not extend the deadline for hospitals to appeal within HHS a government decision on their reimbursement under the Medicare program. The Court also found, though, that the underlying statute setting a 180 day limit for filing appeals was not "jurisdictional" in nature so that the Secretary of HHS had acted lawfully in adopting by regulation a "good cause" exception permitting an appeal within 3 years. In this case, appeals were filed only after 10 years or more, but the hospitals claimed that the Secretary had prevented a timely appeal by suppressing the information the hospitals would have needed in order to know they had a basis for appeal. The Court noted that the parties involved were "'sophisticated' institutional providers" who are "repeat players" in the Medicare system, while noting that equitable tolling may well be appropriate in other contexts involving government programs. The Court's ruling was 9-0 to reverse a lower court ruling in the hospitals' favor. The decision appears to confirm a general administrative law principle that, where consistent with congressional intent, courts should grant deference to an agency rule extending an agency filing deadline to a non-arbitrary time certain, and should not then undermine the agency rule by judicially imposing equitable tolling that might better fit a court's sense of reasonableness.
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