Sebelius v. Auburn Regional Medical Center

Because the 180-day period within which a healthcare provider must appeal a fiscal intermediary’s initial decision on the amount for which the provider is to be reimbursed for inpatient services rendered to Medicare beneficiaries under 42 U. S. C. §1395oo(a)(3) is not “jurisdictional” it was permissible for the Secretary of Health and Human Services to allow a regulation extending the time for a provider’s appeal to three years and the presumption in favor of equitable tolling is not applicable.

In 1983, Medicare began using a “prospective payment system to reimburse hospitals for operating costs based on nationally applicable rates, subject to rate adjustments.” The disproportionate share hospital (DSH) payment allows for additional compensation to hospitals serving large numbers of low-income patients. In 2006 Respondents filed claims with the Provider Reimbursement Review Board (PRRB) seeking full reimbursement for the period of 1987-1994.

Respondents conceded that their claim was outside of the relevant statute of limitations, but argued that the limitation period should be equitably tolled to allow their claim. The PRRB held that it lacked jurisdiction to decide Respondents’ appeal. The District Court held that the Medicare statute does not authorize equitable tolling. The Court of Appeals for the District of Columbia Circuit reversed, and held that the 180 day period for requesting an appeal is subject to equitable tolling.

The Supreme Court emphasized a bright line rule in deciding jurisdiction, deferring to whether Congress has “clearly stated” that the rule is jurisdictional. Absent such clear intent, limitations such as the 180 day appeal restriction are treated as non-jurisdictional. Thus, the Secretary’s three year extension for good cause was appropriate. The Court also stated that the Secretary’s action is entitled to Chevron deference when it is not “arbitrary, capricious, or manifestly contrary to the statute” and held that equitable tolling is inapplicable when the appeals period fell within the scope of deference announced.