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Hospitals Must Catch CMS Errors Within 3 Years

By Robyn Hagan Cain on January 22, 2013 3:03 PM

The Supreme Court saved the U.S. government a lot of money this week. A lot. We're talking billions here. (Maybe the politicians didn't have to abandon the debt ceiling after all?)

Tuesday morning, the Court announced that hospitals can't rely on equitable tolling to extend the time limit for appealing Medicare reimbursements.

The Court explained that the reimbursement amount health care providers receive for treating inpatient Medicare beneficiaries is adjusted upward for hospitals that serve a disproportionate share of low-income patients. The adjustment amount is determined in part by the percentage of a hospital's patients who are eligible for Supplemental Security Income (SSI), called the SSI fraction. Each year, the Centers for Medicare & Medicaid Services (CMS) calculates the SSI fraction for an eligible hospital and submits that number to the hospital's "fiscal intermediary," a Department of Health and Human Services (HHS) contractor.

The intermediary computes the reimbursement amount due and then sends the hospital a Notice of Program Reimbursement (NPR). A provider dissatisfied with the determination has a right to appeal to the Provider Reimbursement Review Board (PRRB) within 180 days of receiving the NPR. By regulation, the HHS Secretary authorized the PRRB to extend the 180-day limit, for good cause, up to three years.

Some hospitals, however, challenged the three-year limit, demanding more time to appeal their reimbursements after learning that CMS's methodology resulted in a systematic under-calculation of the disproportionate share adjustment and corresponding underpayments to providers.

While the hospitals acknowledged that their challenges were more than 10 years late, they claimed that equitable tolling of the limitations period was warranted due to CMS's failure to tell them about the computation error.

Tuesday, the Supreme Court disagreed.

In a unanimous decision, the Court held that the statutory 180-day limitation was not "jurisdictional," and that the Secretary reasonably construed the statute to permit a regulation extending the time for a provider's PRRB appeal to three years. The Court also concluded that the presumption in favor of equitable tolling does not apply to administrative appeals like this one.

(Sidebar: In a brief concurring opinion, Justice Sonia Sotomayor added that the majority had not established "that equitable tolling principles are irrelevant to internal administrative deadlines in all, or even most, contexts," Courthouse News Service reports.)

In addition to Medicare reimbursement paperwork, hospitals can look forward to the extra legwork needed to catch the government's errors before the three-year filing limit is up. Those that don't catch mistakes in time are out of luck.

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