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Supreme Court reverses decision in Medicare DSH case

January 22, 2013

In a unanimous opinion today, the U.S. Supreme Court reversed and remanded a Circuit Court ruling that hospitals could appeal Provider Reimbursement Review Board decisions beyond the usual time limit. Hospitals had urged the Court to uphold the court of appeal's decision that the time period should be "tolled" in extraordinary circumstances. Delivering the opinion for the Court, Justice Ginsburg said "that the presumption in favor of equitable tolling does not apply to administrative appeals of the kind here at issue." The Court also held that the Secretary reasonably construed the statute to permit a regulation extending the time for a provider's appeal to the PRRB from 180 days to three years for good cause. In a separate concurring opinion, Justice Sotomayor said, "I write separately to note that the Court's decision in this case does not establish that equitable tolling principles are irrelevant to internal administrative deadlines in all, or even most, contexts." Noting that the decision addressed the 1974 version of the regulation and not the 2008 version that placed limits on good cause, Justice Sotomayor wrote, "We would face a different case if the Secretary's regulation did not recognize an exception for good cause or defined good cause so narrowly as to exclude cases of fraudulent concealment and equitable estoppel." Hospitals in the case challenged their Medicare disproportionate share adjustments for 1987 through 1994 after the PRRB found in 2006 that errors in CMS' methodology resulted in a systematic under-calculation of the DSH adjustment and corresponding underpayments to providers. In a friend-of-the-court brief filed in the case, AHA said that hospitals should be able to appeal PRRB decisions beyond the usual time limit in extraordinary circumstances.