Sebelius v. Auburn Reg'l Med. Ctr.

• Decision Date: 22 January 2013
• Docket Number: No. 11–1231.,11–1231.
• Citation: 184 L.Ed.2d 627,568 U.S. 145,133 S.Ct. 817
• Parties: Kathleen SEBELIUS, Secretary of Health and Human Services, Petitioner v. AUBURN REGIONAL MEDICAL CENTER et al.
• Court: U.S. Supreme Court

568 U.S. 145

133 S.Ct. 817

184 L.Ed.2d 627

Kathleen SEBELIUS, Secretary of Health and Human Services, Petitioner

v.AUBURN REGIONAL MEDICAL CENTER et al.

No. 11–1231.

Supreme Court of the United States

Argued Dec. 4, 2012.

Decided Jan. 22, 2013.

Edwin S. Kneedler, Washington, DC, for Petitioner.

John F. Manning, Cambridge, MA, appointed by this Court as amicus curiae.

Robert L. Roth, Washington, DC, for Respondents.

Patricia A. Millett, Ruthanne M. Deutsch, Akin Gump Strauss Hauer & Feld LLP, Washington, DC, Hyland Hunt, John B. Capehart, Akin Gump Strauss Hauer & Feld LLP, Dallas, TX, Robert L. Roth, Counsel of Record, John R. Hellow, Hooper, Lundy & Bookman, P.C., Washington, DC, Counsel for Respondents.

William B. Schultz, Acting General Counsel, Kenneth Y. Choe, Deputy General Counsel, Janice L. Hoffman, Associate General Counsel, Lawrence J. Harder, Acting Deputy Associate General Counsel for Litigation, Robert W. Balderston, Jocelyn Beer, Gerard Keating, Attorneys, Department of Health and Human Services, Washington, DC, Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, 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, Attorneys, Department of Justice, Washington, DC, for Petitioner.

Justice GINSBURG delivered the opinion of the Court.

This case concerns the time within which health care providers may file an administrative appeal from the initial determination of the reimbursement due them for inpatient services rendered to Medicare beneficiaries. Government contractors, called fiscal intermediaries, receive cost reports annually from care providers and notify them of the reimbursement amount for which they qualify. A provider dissatisfied with the fiscal intermediary's determination may appeal to an administrative body named the Provider Reimbursement Review Board (PRRB or Board). The governing statute, § 602(h)(l )(D), 97 Stat. 165, 42 U.S.C. § 1395oo (a)(3), sets a 180–day limit for filing appeals from the fiscal intermediary to the PRRB. By a regulation promulgated in 1974, the Secretary of the Department of Health and Human Services (HHS) authorized the Board to extend the 180–day limitation, for good cause, up to three years.¹

The providers in this case are hospitals who appealed to the PRRB more than ten years after expiration of the 180–day statutory deadline. They assert that the Secretary's failure to disclose information that made the fiscal intermediary's reimbursement calculation incorrect prevented them from earlier appealing to the Board. Three positions have been briefed and argued regarding the time for providers' appeals to the PRRB. First, a Court-appointed amicus curiae has urged that the 180–day limitation is "jurisdictional," and therefore cannot be enlarged at all by agency or court. Second, the Government maintains that the Secretary has the prerogative to set an outer limit of three years for appeals to the Board. And third, the hospitals argue that the doctrine of equitable tolling applies, stopping the 180–day clock during the time the Secretary concealed the information that made the fiscal intermediary's reimbursement determinations incorrect.

We hold that the statutory 180–day limitation is not "jurisdictional," and that the Secretary reasonably construed the statute to permit a regulation extending the time for a provider's appeal to the PRRB to three years. We further hold that the presumption in favor of equitable tolling does not apply to administrative appeals of the kind here at issue.

I

The Medicare program covers certain inpatient services that hospitals provide to Medicare beneficiaries. Providers are reimbursed at a fixed amount per patient, regardless of the actual operating costs they incur in rendering these services. But the total reimbursement amount is adjusted upward for hospitals that serve a disproportionate share of low-income patients. This adjustment is made because hospitals with an unusually high percentage of low-income patients generally have higher per-patient costs; such hospitals, Congress therefore found, should receive higher reimbursement rates. See H.R.Rep. No. 99–241, pt. 1, p. 16 (1985). The amount of the disproportionate share adjustment is determined in part by the percentage of the patients served by the hospital who are eligible for Supplemental Security Income (SSI) payments, a percentage commonly called the SSI fraction. 42 U.S.C. § 1395ww(d) (2006 ed. and Supp. V).

At the end of each year, providers participating in Medicare submit cost reports to contractors acting on behalf of HHS known as fiscal intermediaries. Also at year end, the Centers for Medicare & Medicaid Services (CMS) calculates the SSI fraction for each eligible hospital and submits that number to the intermediary for that hospital. Using these numbers to determine the total payment due, the intermediary issues a Notice of Program Reimbursement (NPR) informing the provider how much it will be paid for the year.

If a provider is dissatisfied with the intermediary's reimbursement determination, the statute gives it the right to file a request for a hearing before the PRRB within 180 days of receiving the NPR. § 1395oo (a)(3) (2006 ed.) In 1974, the Secretary promulgated a regulation, after notice and comment rulemaking, permitting the Board to extend the 180–day time limit upon a showing of good cause; the regulation further provides that "no such extension shall be granted by the Board if such request is filed more than 3 years after the date the notice of the intermediary's determination is mailed to the provider." 39 Fed.Reg. 34517 (1974) (codified in 42 CFR § 405.1841(b) (2007) ).²

For many years, CMS released only the results of its SSI fraction calculations and not the underlying data.³ The Baystate Medical Center—a hospital not party to this case—timely appealed the calculation of its SSI fraction for each year from 1993 through 1996. Eventually, the PRRB determined that CMS had omitted several categories of SSI data from its calculations and was using a flawed process to determine the number of low-income beneficiaries treated by hospitals. These errors caused a systematic undercalculation of the disproportionate share adjustment, resulting in underpayments to the providers. Baystate Medical Center v. Leavitt, 545 F.Supp.2d 20, 26–30 (D.D.C.2008) ; see id., at 57–58 (concluding that CMS failed to use "the best available data").

The methodological errors revealed by the Board's Baystate decision would have yielded similarly reduced payments to all providers for which CMS had calculated an SSI fraction. In March 2006, the Board's decision in the Baystate case was made public. Within 180 days, the hospitals in this case filed a complaint with the Board seeking to challenge their disproportionate share adjustments for the years 1987 through 1994. The hospitals acknowledged that their challenges, unlike Baystate's timely contest, were more than a decade out of time. But equitable tolling of the limitations period was in order, they urged, due to CMS's failure to inform the hospitals that their SSI fractions had been based on faulty data.

The PRRB held that it lacked jurisdiction over the hospitals' complaint, reasoning that it had no equitable powers save those legislation or regulation might confer, and that the Secretary's regulation permitted it to excuse late appeals only for good cause, with three years as the outer limit. On judicial review, the District Court dismissed the hospitals' claims for relief, holding that nothing in the statute suggests that " Congress intended to authorize equitable tolling." 686 F.Supp.2d 55, 70 (D.D.C.2010).

The Court of Appeals reversed. 642 F.3d 1145 (C.A.D.C.2011). It relied on the presumption that statutory limitations periods are generally subject to equitable tolling and reasoned that " ‘the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States.’ " Id., at 1148 (quoting Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95–96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990) ). The presumption applies to the 180–day time limit for provider appeals from reimbursement determinations, the Court of Appeals held, finding nothing in the statutory provision for PRRB review indicating that Congress intended to disallow equitable tolling. 642 F.3d, at 1149–1151.

We granted the Secretary's petition for certiorari, 567 U.S. ––––, 133 S.Ct. 30, 183 L.Ed.2d 674 (2012), to resolve a conflict among the Courts of Appeals over whether the 180–day time limit in 42 U.S.C. § 1395oo (a)(3) constricts the Board's jurisdiction. Compare 642 F.3d 1145 (case below); Western Medical Enterprises, Inc. v. Heckler, 783 F.2d 1376, 1379–1380 (C.A.9 1986) (180–day limit is not jurisdictional and the Secretary may extend it for good cause), with Alacare Home Health Servs., Inc. v. Sullivan, 891 F.2d 850, 855–856 (C.A.11 1990) (statute of limitations is jurisdictional and the Secretary lacked authority to promulgate good-cause exception); St. Joseph's Hospital of Kansas City v. Heckler, 786 F.2d 848, 852–853 (C.A.8 1986) (same). Beyond the jurisdictional inquiry,⁴ the Secretary asked us to determine whether the Court of Appeals erred in concluding that equitable tolling applies to providers' Medicare reimbursement appeals to the PRRB, notwithstanding the Secretary's regulation barring such appeals after three years.

II

A

Characterizing a rule as jurisdictional renders it unique in our adversarial system. Objections to a tribunal's jurisdiction can be raised at any time, even by a party that once conceded the tribunal's subject-matter jurisdiction over the controversy. Tardy jurisdictional objections can therefore result in a waste of adjudicatory resources and can disturbingly disarm litigants. See Henderson v. Shinseki, 562 U.S. ––––, ––––,...