Sebelius v. Auburn Regional Medical Center

Background

This case involves hospitals challenging how Medicare contractors calculated payments known as disproportionate share adjustments. Fiscal intermediaries mailed Notices of Program Reimbursement after CMS computed an SSI fraction; the statute gave providers 180 days to ask the Provider Reimbursement Review Board (PRRB) for a hearing. In 1974 the Secretary adopted a regulation allowing the PRRB to extend that 180‑day period for good cause up to three years. After a 2006 Board decision revealed systematic calculation errors, several hospitals filed challenges more than a decade late and sought equitable tolling.

Reasoning

The Court addressed three questions: whether the 180‑day limit is a strict jurisdictional bar, whether the Secretary could lawfully allow a three‑year extension, and whether the usual presumption favoring equitable tolling applies. The Justices concluded the 180‑day deadline is not jurisdictional, that the Secretary’s regulation permitting a limited three‑year good‑cause extension is a permissible interpretation of the statute, and that the Irwin presumption of equitable tolling for court suits does not automatically apply to these PRRB administrative appeals.

Real world impact

The decision means Medicare hospitals and other institutional providers generally cannot bypass the Secretary’s procedural limits by asking courts to toll the 180‑day period beyond the agency’s three‑year cap. The ruling preserves administrative finality and the Secretary’s control over appeal timing in the Medicare reimbursement system. The Supreme Court reversed the D.C. Circuit and sent the case back for further proceedings consistent with its opinion.

Dissents or concurrances

Justice Sotomayor joined the opinion but noted that equitable tolling might be relevant in other administrative contexts, especially where claimants are unsophisticated or the agency’s own misconduct caused delay.