Medicare and Medicaid Cases, Sebelius v. Auburn Regional Medical Center, et al, ¶304,205, (Nov. 13, 2012)

KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER v. AUBURN REGIONAL MEDICAL CENTER, ET AL.

U.S. Supreme Court

No. 11-1231

April 13, 2012

On Petition for a Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit.

Petition for a writ of Certiorari.

WILLIAM B. SCHULTZ, Acting General Counsel, KENNETH Y. CHOE, Deputy General Counsel, JANICE L. HOFFMAN, Associate General Counsel, MARK D. POLSTON, Deputy Associate General, Counsel for Litigation, ROBERT W. BALDERSTON, GERARD KEATING, Attorneys Department of Health and Human Services, Washington, D.C.

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, D.C.

QUESTION PRESENTED

Whether the 180-day statutory time limit for filing an appeal with the Provider Reimbursement Review Board from a final Medicare payment determination made by a fiscal intermediary, 42 U.S.C. 1395oo(a)(3), is subject to equitable tolling.

PARTIES TO THE PROCEEDING

Petitioner is Kathleen Sebelius, Secretary, United States Department of Health and Human Services.

Respondents are Auburn Regional Medical Center, Chalmette Regional Medical Center, Doctors Hospital of Staten Island, Edinburg Regional Medical Center, Forest Hills Hospital, Franklin Hospital, Hackensack University Medical Center, Inland Valley Regional Medical Center, Long Island Jewish Medical Center, McAllen Medical Center, Northern Nevada Medical Center, River Parishes Hospital, Southside Hospital, Staten Island University Hospital, UHS of New Orleans, Universal Health Services, Inc., Valley Hospital Medical Center, and Wellington Regional Medical Center.

The Solicitor General, on behalf of Kathleen Sebelius, Secretary of Health and Human Services, respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the District of Columbia Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a-10a) is reported at 642 F.3d 1145. The amended opinion of the district court (App., infra, 11a-50a) is reported at 686 F. Supp. 2d 55. The decision of the Provider Reimbursement Review Board (App., infra, 51a-56a) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on June 24, 2011. Petitions for rehearing were denied on December 20, 2011 (App., infra, 61a-66a). On March 13, 2012, the Chief Justice extended the time within which to file a petition for a writ of certiorari to and including April 13, 2012. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATUTORY AND REGULATORY PROVISIONS INVOLVED

The relevant statutory and regulatory provisions are reproduced in the appendix to this petition. App., infra, 67a-83a.

STATEMENT

1. The Medicare program, established by Title XVIII of the Social Security Act, 42 U.S.C. 1395 et seq. (Medicare statute), pays for certain medical services provided to elderly and disabled patients entitled to benefits under the program. Under the Prospective Payment System (PPS) for reimbursement of providers under Part A of Medicare, hospitals providing inpatient Medicare services are paid prospectively at a fixed amount for each patient discharged, regardless of actual costs incurred. 42 U.S.C. 1395ww(d) (2006 & Supp. IV 2010). Hospitals submit cost reports at the end of each fiscal year to contractors, known during the relevant time period as fiscal intermediaries, which are generally private insurance companies acting on behalf of the Department of Health and Human Services (HHS). See 42 C.F.R. 405.1801(b)(1), 413.24(f) (2011). The intermediary determines the total payment (including any hospital-specific adjustments) and issues a Notice of Program Reimbursement (NPR), informing the provider how much it will be paid for the fiscal year at issue. 42 C.F.R. 405.1803 (2011).

If a provider is dissatisfied with its NPR and meets the amount-in-controversy requirement, it may appeal to the Provider Reimbursement Review Board (PRRB or Board) “if * * * [it] files a request for a hearing within 180 days after notice of the intermediary's final determination.” 42 U.S.C. 1395oo(a)(3). The Board is composed of five members “knowledgeable in the field of payment of providers of services” and appointed by the Secretary of Health and Human Services (Secretary), 42 U.S.C. 1395oo(a) and (h), and it has the authority to affirm, modify, or reverse the final determination of the intermediary, 42 U.S.C. 1395oo(d). The decision of the Board is final unless the Secretary reverses, affirms, or modifies the decision within 60 days. 42 U.S.C. 1395oo(f)(1). [1] A provider may seek judicial review of “any final decision of the Board” by filing suit in federal district court within 60 days. Ibid.

HHS regulations provide the Board with limited discretion to extend the time limit for filing an appeal of the intermediary's final determination, but only in circumscribed instances in which “good cause [is] shown,” and the request is filed within three years after issuance of the NPR. 42 C.F.R. 405.1841(b) (2007). [2] Specifically, during the relevant time period, HHS regulations provided that “[a] request for a Board hearing filed after the [180-day time limit] shall be dismissed by the Board, except that for good cause shown, the time limit may be extended. However, 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.” Ibid. [3]

Apart from the administrative appeal process, a provider may also obtain administrative relief from an intermediary's final reimbursement determination by requesting that the intermediary “reopen” its determination. See 42 C.F.R. 405.1885(a). Such a request, however, “must be made within 3 years of the date of the notice of the intermediary” determination, and “[n]o such determination * * * may be reopened after such 3-year period” absent a specified exception. Ibid. [4] An intermediary's denial of a provider's reopening request is not subject to administrative review by the PRRB or to judicial review. See Your Home Visiting Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 452-457 (1999) ( Your Home).

2. This case arises against the background of litigation brought by Baystate Medical Center (Baystate), which is not a party to this action. See Baystate Med. Ctr. v. Leavitt, 545 F. Supp. 2d 20, amended in part, 587 F. Supp. 2d 37 (D.D.C. 2008) ( Baystate). Like Baystate this case involves an adjustment to the Medicare payment that is available to hospitals “serv[ing] a significantly disproportionate number of low-income patients,” referred to as a “disproportionate share hospital” or “DSH” adjustment. 42 U.S.C. 1395ww(d)(5)(F)(i)(I). Whether a hospital qualifies for the Medicare DSH adjustment and the amounts of any adjustment depend on the hospital's “disproportionate patient percentage.” 42 U.S.C. 1395ww(d)(5)(F)(v). As defined by statute, the “disproportionate patient percentage” consists of two components, commonly known as the “Medicare/SSI fraction” and the “Medicaid fraction.” See 42 U.S.C. 1395ww(d)(5)(F)(vi). The numerator of the Medicare/SSI fraction, which is at issue here, “is the number of such hospital's patient days for such period which were made up of patients who (for such days) were entitled to benefits under [Medicare Part A]” and who were also entitled to Supplemental Security Income (SSI) benefits; the denominator consists of the number of patient days which were made up of patients who (for such days) were entitled to Medicare Part A benefits. 42 U.S.C. 1395ww(d)(5)(F)(vi)(I); cf. 42 U.S.C. 1381 et seq (establishing national program to provide SSI benefits to aged, blind, or disabled individuals whose income falls below a certain level); Sullivan v. Zebley, 493 U.S. 521, 524 (1990). The Centers for Medicare & Medicaid Services (CMS) determines the Medicare/SSI fraction for each hospital and provides that information to the responsible intermediary. 42 C.F.R. 412.106(b). The intermediary then determines the total payment amount a hospital is due (including any DSH adjustment) and issues an NPR.

Each of the respondent hospitals received an NPR, which included its DSH adjustment determination, for fiscal years 1987 through 1994. Respondents did not appeal those determinations to the Board within 180 days as required by statute. See 42 U.S.C. 1395oo(a)(3); App., infra, 17a. Nor did they seek discretionary relief from the 180-day deadline within three years for “good cause shown,” 42 C.F.R. 405.1841(b), or request “reopening” by the intermediary within three years, 42 C.F.R. 405.1885(a). See App., infra, 18a, 29a & n.9, 45a, 52a, 55a. By contrast, Baystate did timely appeal its DSH adjustment determinations for fiscal years 1993 through 1996, and the Board found that certain errors in CMS' calculation of the Medicare/SSI fraction “tended to deflate the overall DSH payment.” Id. at 17a-18a.

In September 2006, several months after the Board's Baystate decision and more than a decade after the statutory appeal deadlines had expired, respondents attempted to appeal the intermediaries' determinations of their DSH adjustments for fiscal years 1987 through 1994, to the Board. App., infra, 2a, 18a. Respondents acknowledged that their appeals to the Board were untimely, but urged that equitable tolling is appropriate “because the hospitals' failure to file an appeal within 180 days of issuance of the NPRs was the result of CMS's refusal to inform the hospitals that their SSI percentages were incorrectly understated for the fiscal years at issue.” Id. at 18a-19a. In respondents' view, “the appeals were timely [under an equitable tolling theory] because they were filed within 180 days of the Board's Baystate decision.” Id. at 19a.

The Board dismissed respondents' appeals, concluding that it lacked authority to decide them. Relying in part on its earlier decision in Anaheim Memorial Hospital v. Blue Cross & Blue Shield Ass'n, Nos. 93-1920 and 94-0007, 2000 WL 1146514 (July 3, 2000), the Board held that it could not grant “equitable relief” such as “equitable tolling.” App., infra, 55a. The Board explained that it “is an administrative forum and, unlike the courts, [it] does not have general equitable powers but rather only the powers granted to it by statute and regulation.” Ibid. The Secretary declined to review the Board's decision. Id. at 57a-60a.

3. Respondents then filed this action in the District Court for the District of Columbia arguing, among other things, that the Board should have equitably tolled the 180-day time limit. The district court granted the government's motion to dismiss. App., infra, 11a-50a.

As relevant here, the district court held that the Medicare statute does not authorize equitable tolling of the 180-day administrative appeal period. The court explained that the presumption in favor of equitable tolling recognized in Irwin v. Department of Veterans Affairs, 498 U.S. 89, 95-96 (1990), does not apply to the Medicare limitations period because no sufficiently “similar” private suit had been identified and “the programmatic reimbursement at issue is not familiar to private litigation.” App., infra, 32a. “Based on the statutory language, the regulations granting only limited exceptions to the 180-day limitations period, and the Supreme Court's determination in Your Home that the 180-day limit may not be circumvented by expanding Board (and hence, district court) jurisdiction to review requests to reopen,” the court concluded that “equitable tolling of the 180-day limitations period is not available under 42 U.S.C. §1395oo.” Id. at 38a-39a. That conclusion, the court explained, was “buttressed by the scope and complexity of the Medicare program.” Id. at 40a.

4. The court of appeals reversed. App., infra, 1a-10a. Concluding that the 180-day period for requesting a hearing is subject to equitable tolling, the court of appeals remanded to the district court for “further factual development” to determine whether tolling is “appropriate” in this case. Id. at 10a. [5]

The court of appeals applied a presumption in favor of equitable tolling based, in part, on its conclusion that a claim for Medicare payment is ‘ “familiar to private litigation’ because it is analogous to a contract claim.” App., infra, 5a-6a & n.1. The court then concluded that the presumption had not been rebutted because, in the court's view, the statutory language imposing the time limit for appeal of Medicare payment determinations is “fairly simple,” there are no statutory exceptions, and the timing provision is not itself complex. Id. at 9a-10a. The court recognized that there is a “good cause” exception provided under the Secretary's regulations, but it concluded that such regulatory exceptions are immaterial to the equitable tolling inquiry and, in any event, not sufficiently technical to rebut the presumption. Id. at 9a. The court also concluded that, although the Medicare statute “is quite complex,” it is nevertheless “amenable to tolling” because “its timing scheme is straightforward.” Id. at 10a.

REASONS FOR GRANTING THE PETITION

The court of appeals has held that the 180-day statutory time limit for a provider to file an administrative appeal with the PRRB from a final payment determination by a fiscal intermediary is subject to equitable tolling. That decision is wrong; it is unprecedented in the nearly 40-year existence of the Board; it cannot be reconciled with decisions of other courts of appeals; and it is in considerable tension with this Court's decision in Your Home Visiting Nurse Services, Inc. v. Shalala, 525 U.S. 449 (1999). If allowed to stand, the decision would impose a substantial administrative and financial burden on the Medicare program.

At the outset, the presumption in favor of judicially fashioned principles of equitable tolling of limitations periods for filing a suit in court is inapplicable in the quite distinct context of administrative proceedings for adjudicating claims before a tribunal like the PRRB. The exceedingly complex substantive and procedural framework for resolving Medicare payment claims through an administrative process has no analogue in the filing of a private suit in court, and it is not traditionally governed by general equitable principles that go beyond the specific terms and limitations in the Medicare statute and implementing regulations. Moreover, the mandatory administrative appeal process was enacted by Congress long before this Court applied any presumption in favor of the availability of equitable tolling even in suits against the United States in court.

Assuming arguendo, however, that a presumption in favor of equitable tolling not provided for by statute or regulation is appropriate, any such presumption is rebutted here. Congress affords Medicare providers a right to appeal the intermediary's final determination to the PRRB, but only “if,” among other things, the appeal is filed within 180 days of issuance of the NPR. The statutory language on its face provides no basis for judicially fashioned exceptions. “[T]he tens of thousands of sophisticated Medicare-provider recipients of these NPRs [are] generally capable of identifying an underpayment in [their] own NPR[s] within the 180-day time period specified in 42 U.S.C. §1395oo(a)(3).” Your Home, 525 U.S. at 455-456. And the Secretary, who is charged with administering the Medicare program has, as a matter of “grace,” id. at 454, prescribed only two circumscribed exceptions to that limitation — neither of which is applicable here. See 42 C.F.R. 405.1841(b), 405.1885(a). The court of appeals' imposition of an openended equitable tolling regime on top of this carefully crafted procedural framework established by the Medicare statute and regulations is contrary to basic principles of judicial review of agency action under this Court's decision in Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978) ( Vermont Yankee).

The court of appeals' decision also cannot be reconciled with decisions in the Eighth and Eleventh Circuits, and with this Court's understanding of the Medicare reimbursement regime in Your Home. If allowed to stand, the decision would impose a considerable administrative burden on HHS and would expose the Medicare Trust Fund to substantial and unpredictable liabilities for past cost years that have long since been closed.

Because all Medicare providers may seek judicial review of any final decision of the Board in the District Court for the District of Columbia, the D.C. Circuit's decision in this case, unless reversed by this Court, can be expected to have a broad effect on the nationwide administration of the Medicare program going forward. Review by this Court is warranted.

A. The 180-Day Administrative Appeal Period Is Not Subject To Equitable Tolling

The court of appeals erred by holding that the Medicare statute requires the 180-day period for requesting an administrative appeal to be subject to general principles of equitable tolling, even where the Secretary has not so provided. That holding cannot be squared with this Court's decisions concerning judicial review of agency action, with the factors for determining when equitable tolling is available, with the Medicare provider payment scheme, or with the considered judgment of the expert agency charged with administering the Medicare program.

1. In Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990), this Court held 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 95-96. The court of appeals held that such a presumption is applicable to the time limit in 42 U.S.C. 1395oo(a)(3) because a provider's Medicare claim for additional payment is “analogous to a contract claim.” App., infra, 6a n.1. That conclusion is fundamentally mistaken.

a. As an initial matter, the presumption in favor of judicially fashioned principles of equitable tolling of limitations periods for filing a suit in court is inapplicable in the quite distinct context of a statutory and regulatory framework for adjudicating claims before an administrative tribunal such as the PRRB. When a statutory provision like 42 U.S.C. 1395oo(a)(3) speaks to substantive or procedural matters to be resolved by an administrative agency, the interpretation and implementation of that provision are presumptively entrusted to that agency in the first instance, not to the courts. Here, the statutory and regulatory review scheme limits the Board's authority to hear appeals from final determinations of the fiscal intermediary to those appeals filed within 180 days of the NPR, or three years from that date if the provider is able to demonstrate “good cause.” See 42 U.S.C. 1395oo(a)(3); 42 C.F.R. 405.1841(b); App., infra, 55a-56a. That carefully calibrated administrative appeal process should not be set aside (or modified by court-imposed equitable principles) unless a court concludes that the limits imposed by the Secretary on any extension of the 180-day deadline are arbitrary and capricious. See Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 418-419 (1993). There is no basis for any such conclusion.

The Medicare statute confers broad authority on the Secretary to “prescribe such regulations as may be necessary to carry out the administration of the insurance programs” under the statute. 42 U.S.C. 1395hh(a)(1); accord 42 U.S.C. 405(a), 1302(a). The Secretary's rulemaking authority encompasses the authority to prescribe regulations governing the timeliness of provider appeals to the Board. See 73 Fed. Reg. 30,206 (May 23, 2008); cf. Weinberger v. Salfi, 422 U.S. 749, 766 (1975) (noting Secretary's rulemaking authority to define agency's “final decision” triggering right of judicial review under 42 U.S.C. 405(g)). [6]

In 1974 and 2008, the Secretary engaged in noticeand-comment rulemaking implementing the statutory administrative review provisions, including the 180-day appeal deadline. See 39 Fed. Reg. 34,517 (Sept. 26, 1974); 73 Fed. Reg. at 30,191 (discussing history of regulations). As the Secretary explained in the preamble to the 2008 revisions to the “good cause” regulation, the agency's “longstanding policy has permitted extensions of the timeframe for requesting hearings only in limited circumstances.” Id. at 30,206. [7] Through those regulations, the Secretary has consistently prohibited the Board from entertaining an untimely appeal unless (1) the provider demonstrates “good cause,” and (2) the request is made no more than three years after the NPR. See 39 Fed. Reg. at 34,517. The limitation on that narrow exception to the 180-day appeal period is emphatic:

A request for a Board hearing filed after the [180-day time limit] shall be dismissed by the Board, except that for good cause shown, the time limit may be extended. However, no such extension shall begranted 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.

42 C.F.R. 405.1841(b) (emphases added); cf. Kontrick v. Ryan, 540 U.S. 443, 458 (2004) (relevant question for nonjurisdictional time limit in procedural rule is “whether the time restrictions in th[e] Rules are in such emphatic form as to preclude equitable exceptions”) (internal quotation marks omitted; brackets in original).

In Your Home, this Court recognized that “[t]he right of a provider to seek reopening exists only by grace of the Secretary, and the statutory purpose of imposing a 180-day limit on the right to seek Board review of NPRs, see 42 U.S.C. §1395oo(a)(3), would be frustrated by permitting requests to reopen to be reviewed indefinitely.” 525 U.S. at 454. The same is true of the regulatory “good cause” exception to the 180-day deadline for administrative appeals. That exception exists solely “by grace of the Secretary,” and the Secretary reasonably concluded that allowing administrative appeals to be filed in an open-ended manner, more than three years after issuance of an NPR, would frustrate “the statutory purpose of imposing a 180-day limit on the right to seek Board review.” Ibid.

The “good cause” regulation reflects the Secretary's “belie[f that] it is fair and appropriate that, absent extraordinary circumstances, providers should be expected to file their appeals within the 180-day period,” and should not be permitted to “depend on a right to file late if there is a favorable change in the law at some point after the 180-day appeal period.” 73 Fed. Reg. at 30,206. The Secretary has broad authority to administer the Medicare program. Her considered judgment as to whether and when the 180-day administrative appeal deadline should be extended, which was rendered through notice-and-comment rulemaking, is entitled to substantial deference. See Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 21 (2000); see also Good Samaritan Hosp., 508 U.S. at 417-418 (noting that the Court “should be especially reluctant to reject the agency's” interpretation when it “so closely fits the design of the statute as a whole,” as well as “its object and policy”) (internal quotation marks and citations omitted); Methodist Hosp. v. Shalala, 38 F.3d 1225, 1235 (D.C. Cir. 1994) (upholding as reasonable Secretary's decision “that the interests in finality and administrative efficiency outweighed the value of increased accuracy”). By engrafting a judge-made equitable tolling requirement onto the 180-day administrative appeal period, the court of appeals has effectively created a “good cause” exception of its own without any temporal limit and governed by judicially fashioned equitable tolling principles, rather than the standards in the Secretary's “good cause” regulation. The court of appeals' decision thus is contrary to “the very basic tenet of administrative law that agencies should be free to fashion their own rules of procedure.” Vermont Yankee, 435 U.S. at 543-544. [8]

b. Even if the factors considered by the Court in cases concerning equitable tolling of limitations periods for judicial actions did have some application here, a presumption in favor of equitable tolling would be inappropriate.

Although a “precise private analogue” is not required in order to invoke the Irwin presumption, Scarborough v. Principi, 541 U.S. 401, 422 (2004), the court of appeals erred in holding that a Medicare provider's administrative appeal seeking payment is sufficiently analogous to a private contract action to trigger a presumption in favor of equitable tolling. Medicare provider payments depend on the statute and regulations, not on independent contractual terms. Respondents' claim that the Secretary should recalculate their Medicare payments under complex statutory and administrative standards is “so peculiarly governmental that there is no basis for assuming [that the] customary ground rules apply.” Chung v. United States Dep't of Justice, 333 F.3d 273, 277 (D.C. Cir. 2003).

But even if respondents' Medicare reimbursement claims were deemed similar in some respects to a private suit in court for breach of contract, any presumption in favor of equitable tolling would nonetheless be misplaced in this context. In Holland v. Florida, 130 S. Ct. 2549 (2010), which involved the statute of limitations for filing habeas corpus petitions, this Court explained that the presumption in favor of equitable tolling was “reinforced” and “strength[ened]” by two factors: (1) “the fact that equitable principles have traditionally governed the substantive law of habeas corpus,” and (2) “the fact that Congress enacted [the Antiterrorism and Effective Death Penalty Act (AEDPA)] after the Court decided Irwin and therefore was likely aware that courts, when interpreting AEDPA's timing provisions, would apply the presumption.” Id. at 2560-2561 (internal quotation marks and citations omitted). Similarly, in Young v. United States, 535 U.S. 43 (2002), which involved the “three-year lookback period” in the Bankruptcy Code, the Court noted that the Irwin presumption is appropriate “when [Congress] is enacting limitations periods to be applied by bankruptcy courts, which are courts of equity and apply the principles and rules of equity jurisprudence.” Id. at 50 (internal quotation marks and citations omitted; brackets omitted).

Neither factor is present here. Unlike habeas corpus and bankruptcy litigation, and the Title VII discrimination claim presented in Irwin, general “equitable principles,” unrooted in statutory or regulatory text, have not “traditionally governed” the “substantive law” of Medicare provider payment, let alone the administrative appeal process. Cf. United States v. Brockamp, 519 U.S. 347, 352 (1997) (noting that tax law “is not normally characterized by case-specific exceptions reflecting individualized equities”). The Board has thus concluded that it has no residual equitable powers with respect to the 180-day deadline unless provided by the Medicare statute or an implementing regulation. See App., infra, 55a-56a; Anaheim, Mem'l Hosp. v. Blue Cross & Blue Shield Ass'n, No. 93-1920 and 94-0007, 2000 WL 1146514 (P.R.R.B. July 3, 2000) ( Anaheim). And the 180-day administrative appeal period was first enacted in 1972, Social Security Amendments of 1972, Pub. L. No. 92-603, §243(a), 86 Stat. 1420 — many years before this Court decided Irwin. Accordingly, Congress plainly was not “aware that courts, when interpreting” even federal statutes governing the filing of a suit against the United States in court, much less the Medicare statute's administrative-appeal “timing provisions, would apply the presumption.” Holland, 130 S. Ct. at 2561. [9]

2. Even if a presumption in favor of equitable tolling were to apply in some way in this very different context, the relevant inquiry under Irwin would be whether “there [is] good reason to believe that Congress did not want the equitable tolling doctrine to apply.” Brockamp, 519 U.S. at 350. Here, there is more than ample reason.

a. Section 1395oo(a)(3) establishes an administrative appeal deadline in unambiguous terms. A provider may appeal an intermediary's reimbursement determination to the Board only

if — * * * (3) such provider files a request for a hearing within 180 days after notice of the intermediary's final determination under paragraph (1)(A)(i), or with respect to appeals under paragraph (1)(A)(ii), 180 days after notice of the Secretary's final determination, or with respect to appeals pursuant to paragraph (1)(B) or (C), within 180 days after notice of such determination would have been received if such determination had been made on a timely basis.

42 U.S.C. 1395oo(a)(3); [10] see H.R. Rep. No. 231, 92d Cong., 1st Sess. 108 (1971) (“The appeal must be filed within 180 days after notice of the fiscal intermediary's final determination.”) (emphasis added). The 180-day appeal period is reiterated three times in this provision, and the time deadline is just one of three mandatory preconditions to invoking administrative review. See 42 U.S.C. 1395oo(a). Neither of the other two preconditions — provider dissatisfaction and a $10,000 amount-incontroversy requirement — is readily amenable to equitable exceptions. See 42 U.S.C. 1395oo(a)(1) and (2); Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399, 404 (1988) (“[A] provider's dissatisfaction with the amount of its total reimbursement is a condition to the Board's jurisdiction.”); cf. Hallstrom v. Tillamook County, 493 U.S. 20, 31 (1989) (identifying “mandatory conditions precedent to commencing suit” that the “district court may not disregard * * * at its discretion”). [11]

b. The court of appeals failed to appreciate the significance of the fact that Section 1395oo(a)(3) prescribes a time deadline for filing an administrative appeal with the PRRB, not a statute of limitations for filing suit in federal court. Unlike a court, the PRRB is “established by the Secretary” and is “composed of five members appointed by the Secretary,” two of whom “shall be representative of providers of services,” “at least one” of whom “shall be a certified public accountant,” and all of whom must be “knowledgeable in the field of payment of providers of services.” 42 U.S.C. 1395oo(a) and (h). Whereas the providers and the intermediary are parties to the proceedings before the Board, 42 C.F.R. 405.1843(a) (2011), HHS itself cannot be a party, 42 C.F.R. 405.1843(b) (2011). In short, the PRRB and its procedures were not established and are not suited for the adjudication of the sort of fact-specific equitable tolling claims that would now routinely be asserted as a result of the D.C. Circuit's decision.

c. Finally, and significantly, “the statute at issue * * * relate[s] to an ‘underlying subject matter[]’ * * * with respect to which the practical consequences of permitting tolling would [be] substantial.” Holland, 130 S. Ct. at 2561. The court of appeals readily conceded that “the Medicare statute * * * is quite complex,” App., infra, 10a, and “that the complex Medicare reimbursement scheme will be more difficult to administer with equitable tolling available to claimants,” id. at 66a (Griffith and Williams, JJ., concurring in the denial of rehearing en banc). Yet the court of appeals rejected the Secretary's reliance on this Court's discussion of similar considerations in United States v. Brockamp, supra, which held that the time limit for seeking a tax refund under the Internal Revenue Code was not subject to equitable tolling. The court of appeals reasoned that Brockamp was focused not on “the complexity of tax law per se, but rather the complexity of the provisions governing whether and when a claim could be filed.” App., infra, 9a. The court misread Brockamp and this Court's equitable tolling cases.

In Brockamp, the Court defined the “underlying subject matter” as “tax collection” and focused on the number of tax returns filed each year and the number of refunds issued. 519 U.S. at 352-353. In United States v. Beggerly, 524 U.S. 38 (1998), the Court held that the statutory time limit in the Quiet Title Act could not be equitably tolled because, among other things, “the underlying claim ‘deal[t] with ownership of land’ and thereby implicated landowners' need to ‘know with certainty what their rights are, and the period during which those rights may be subject to challenge.’ ” Holland, 130 S. Ct. at 2561 (quoting Beggerly, 524 U.S. at 48-49). And, in Holland, the Court broadly described the relevant subject matter in Brockamp as “tax collection” and in Beggerly as “land claims.” Ibid. As the Court emphasized in Holland in allowing equitable tolling under AEPDA, “unlike the subject matters at issue” in Brockamp and Beggerly, “AEDPA's subject matter, habeas corpus, pertains to an area of the law where equity finds a comfortable home.” Ibid.; cf. id. at 2562 (considering whether equitable tolling would “undermine[]” statute's “basic purposes”).

The Medicare statute is far more analogous to the subject matter in Brockamp (tax collection) and Beggerly (land claims), than to the subject matter in Holland (habeas corpus) or Irwin (Title VII). The Medicare system is one of the most detailed and complex federal administrative programs ever created. See Illinois Council on Long Term Care, 529 U.S. at 13; Methodist Hosp., 38 F.3d at 1229. It is akin to tax collection in terms of its sheer size and complexity. Medicare contractors annually process claims for approximately 6000 hospitals, 15,000 skilled nursing facilities, and other providers of care under Medicare Part A, resulting in annual expenditures of approximately $250 billion. HHS, 2011 CMS Statistics, Tbls. II.1, II.3, III.5, June 2011, https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ResearchGenInfo/CMSStatistics.html (last visited Apr. 13, 2012) ( 2011 Stats); cf. Brockamp, 519 U.S. at 352 (“The IRS processes more than 200 million tax returns each year” and “issues more than 90 million refunds.”). More than $139 billion in Medicare Part A benefit payments are made annually for inpatient hospital services alone. 2011 Stats, Tbl. III.6.

As explained in detail below (see Part B.3, infra), an equitable tolling regime would place substantial additional burdens on the agency, on its contractors, and on the Medicare Trust Fund that Congress did not envision and could not have intended. Thus, just as “read[ing] an ‘equitable tolling’ exception into §6511 [of the Internal Revenue Code] could create serious administrative problems by forcing the IRS to respond to, and perhaps litigate, large numbers of late claims, accompanied by requests for ‘equitable tolling’ which, upon close inspection, might turn out to lack sufficient equitable justification,” Brockamp, 519 U.S. at 352, a requirement that equitable tolling be imposed on the Medicare program could create similar administrative problems for HHS. Just as in Brockamp, “Congress would likely have wanted to decide explicitly whether, or just where and when, to expand the statute's limitations period, rather than delegate to the courts a generalized power to do so wherever a court concludes that equity so requires,” id. at 353 — or to impose that task on a five-person administrative review body (the PRRB) created for its expertise in resolving technical hospital cost and reimbursement issues. In the end, the “nature and potential magnitude of the administrative problem suggest that Congress decided to pay the price of occasional unfairness in individual cases * * * in order to maintain a more workable” payment system. Id. at 352-353.

B. The Court Of Appeals' Decision Warrants This Court's Review

1. The court of appeals' decision cannot be reconciled with the Eleventh Circuit's decision in Alacare Home Health Services, Inc. v. Sullivan, 891 F.2d 850 (1990) ( Alacare Home Servs.), or the Eighth Circuit's decision in St. Joseph's Hospital v. Heckler, 786 F.2d 848 (1986). In both cases, the courts of appeals concluded that the 180-day administrative appeal period set forth in 42 U.S.C. 1395oo(a)(3) is “jurisdictional” in nature and admits of no exceptions, and on that basis declared invalid the agency's regulation permitting extension of the 180-day period for “good cause.” See Alacare Home Servs., 891 F.2d at 855-856 (concluding that the Secretary was not authorized to create exceptions to the mandatory 180-day time limit); St. Joseph's Hosp., 786 F.2d at 852-853 (concluding that “the 180 day time period for filing claims with the Board is a jurisdictional prerequisite to the Board's authority to review a claim,” and that the agency therefore lacked authority to extend the time limit). But see Western Med. Enters., Inc. v. Heckler, 783 F.2d 1376, 1379-1380 (9th Cir. 1986) (upholding “good cause” regulation). The issue presented in the Eighth and Eleventh Circuit cases was whether the agency properly concluded that the provider had failed to demonstrate “good cause” and, accordingly, neither court specifically considered the question of equitable tolling. Nevertheless, the courts' conclusion that the time limit is jurisdictional, and their rejection of even the Secretary's own “good cause” regulation allowing a limited extension, necessarily preclude recognition of an equitable tolling exception in those circuits. See Bowles v. Russell, 551 U.S. 205, 214 (2007) (court “has no authority to create equitable exceptions to jurisdictional requirements”).

Thus, after the D.C. Circuit's decision, there are now three different (and irreconcilable) regimes governing the time limits on administrative appeals: (1) the 180-day statutory time limit is jurisdictional and administrative appeals filed after 180 days are categorically barred, regardless of the reason for the delay and the Secretary's “good cause” regulation (Eighth and Eleventh Circuits); (2) the 180-day statutory time limit governs unless the provider seeks an extension within three years and can demonstrate “good cause” as defined by regulation (HHS); and (3) the 180-day statutory time limit is subject to open-ended equitable tolling as defined by the courts (D.C. Circuit). [12] Medicare is a nationwide program and it should be governed by a uniform rule. At the same time, because any provider may seek judicial review of any final decision of the Board in the District Court for the District of Columbia, see 42 U.S.C. 1395oo(f)(1), the D.C. Circuit's decision in this case, if allowed to stand, would in itself have a broadly disruptive impact on the nationwide administration of the program. Cf. Vermont Yankee, 435 U.S. at 537 n.14 (noting that, because “the vast majority of challenges to administrative agency action are brought to the Court of Appeals for the District of Columbia Circuit, the decision[s of that court] serve as a precedent for many more proceedings for judicial review of agency actions than would the decision of another Court of Appeals”). [13]

2. The court of appeals' decision is also in considerable tension with this Court's understanding and approval of the circumscribed reopening regime for Medicare providers as set forth in Your Home. In that case, the Court held that reopening is discretionary when sought by the provider under 42 C.F.R. 405.1885 (1997), and that “[t]he right of a provider to seek reopening exists only by grace of the Secretary.” Your Home, 525 U.S. at 454. “[G]iven the administrative realities,” the Court explained that it “would not be shocked by a system in which underpayments could never be the basis for reopening.” Id. at 455. Indeed, the Court noted, “[t]he few dozen fiscal intermediaries often need three years within which to discover overpayments in the tens of thousands of NPRs that they issue, while each of the tens of thousands of sophisticated Medicare-provider recipients of these NPRs is generally capable of identifying an underpayment in its own NPR within the 180-day time period specified in 42 U.S.C. §1395oo(a)(3).” Id. at 455-456.

The court of appeals' ruling now allows those “tens of thousands of sophisticated Medicare-provider recipients” to evade the carefully circumscribed and clear limits of the reopening regulation, as well as the “good cause” regulation. The court's decision thus transforms a provider's ability to seek reopening (and “good cause” extensions) from a time-limited right existing solely by grace of the Secretary into an indefinite tolling regime defined by the courts under general principles of equity. The same “administrative realities” that caused this Court in Your Home to envision a Medicare payment scheme without any opportunity for reopening render the court of appeals' equitable tolling rule contrary to the statutory and regulatory scheme, as well as disruptive and highly burdensome. Cf. Heckler v. Ringer, 466 U.S. 602, 627 (1984) (“Congress must have felt that cases of individual hardship resulting from delays in the administrative process had to be balanced against the potential for overly casual or premature judicial intervention in an administrative system that processes literally millions of claims every year.”).

3. The court of appeals' decision, if allowed to stand, will have substantial adverse effects on the orderly review of Medicare claims for payment.

For nearly 40 years, providers and the Medicare program have been operating under a statutory and regulatory scheme that required an appeal to the PRRB to be filed within 180 days of issuance of an NPR — or within three years if good cause is shown. The D.C. Circuit's decision now upends that regime and supplements it with an open-ended, judicially imposed equitable tolling exception that allows sophisticated providers to raise stale claims that could conceivably date back to the very inception of the Medicare program.

Respondents' claims alone cover cost years as far back as 1987. See p. 6, supra. And this is just the first of more than a dozen post-Baystate lawsuits in the District Court for the District of Columbia filed on behalf of hundreds of hospitals — all relying on equitable tolling and seeking recalculation of payment determinations made many years (and, oftentimes, a decade or more) ago. See App., infra, lla-12a; Forsyth Med. Ctr. v. Sebelius, No. 10-1038 (D.D.C. filed June 17, 2010); Bon Secours Health Sys., Inc. v. Sebelius, No. 10-1406 (D.D.C. filed Aug. 20, 2010). Most of the other cases have been stayed pending the outcome of this case. See, e.g., 5/21/10 Minute Order, Aurora Sinai Med. Cntr. Inc v. Sebelius, No. 09-0823 (D.D.C.). In addition, HHS has informed this Office that still more providers are now seeking equitable tolling before the PRRB on the Baystate issue with respect to Medicare cost reporting years long closed, and that since the court of appeals' decision issued, providers have filed numerous new and untimely appeals with the PRRB relating to other payment issues and relying on equitable tolling. [14] This is not surprising because health care consulting firms and providers have every incentive to scour old cost reports looking for asserted reimbursement errors that, in the aggregate, could lead to claims for billions of dollars. The statute and regulations permit health care consulting firms to bring group appeals on behalf of large numbers of providers, see 42 U.S.C. 1395oo(b); 42 C.F.R. 405.1837, 405.1881 (2011), making the expenditure of resources a cost-effective private enterprise.

Even if provider appeals to equity ultimately fall short in particular cases, substantial resources would have to be devoted to adjudicating (at the Board level) and litigating (at the court level) untimely claims. See Credit Suisse Sec. v. Simmonds, No. 10-1261 (Mar. 26, 2012), slip op. 5, 7 (explaining that equitable tolling involves “fact-intensive disputes” about whether a litigant has diligently pursued his rights and whether “some extraordinary circumstance stood in his way”). [15] As the Secretary explained in revising and refining the “good cause” regulation, “[w]hen the Board finds good cause to extend the 180-day period for requesting a hearing, another case is added to the backlog” and “the lengthy 3-year period for requesting a good cause extension makes increases in the backlog more likely.” 69 Fed. Reg. 35,725 (June 25, 2004); see 73 Fed. Reg. at 30,192 (backlog of approximately 6800 cases). The D.C. Circuit's decision, which extends well beyond the “lengthy 3-year period” and is considerably broader in scope than the “good cause” exception, would only further exacerbate the Board's backlog. An equitable tolling regime would thus take time and resources away from processing claims and appeals filed in compliance with the statutory and regulatory requirements, to the detriment of other Medicare providers.

By the same token, if the Board (or a court) were to determine that equitable tolling is appropriate in a particular case by virtue of the court of appeals' decision, intermediaries and the Board would then have to devote substantial additional resources to recalculating payment determinations for cost reporting periods that have long been closed. There are approximately 30,000 institutional providers participating in the Medicare program, including more than 6100 hospitals, see 2011 Stats, Tbl. II.3, and each of those providers must file an annual cost report, see 42 C.F.R. 413.20(b), 413.24(f) (2011). A hospital cost report is complex, consisting of a variety of statistical schedules, numerous different worksheets, and detailed assembly instructions. See CMS, The Provider Reimbursement Manual, Pt. 2, ch. 36, 2011, http://cms.hhs.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021935.html (last visited Apr. 13, 2012). Any errors in calculations under the statutorily prescribed formula to determine the prospective rates could impact other providers subject to those rates. Payment calculations (and DSH payments in particular) are exceedingly complex, and intermediaries should not have to divert their limited and valuable auditing resources to reviewing and recalculating stale claims relating to NPRs from which the providers never bothered to appeal — or even sought to have reopened within the time allowed by the Secretary's regulations.

In addition, a requirement that equitable tolling be allowed would expose the Medicare program to claims of enormous amounts in the aggregate and make it more difficult for the Secretary and Congress to accurately gauge the financial status of the Medicare system when faced with open-ended claims from many years earlier. Allowing claims that can be a decade or more old would also reduce accuracy and increase uncertainty when determining providers' DSH allocations and ultimately inpatient PPS payments going forward. See, e.g., Methodist Hosp., 38 F.3d at 1229 (upholding as reasonable Secretary's longstanding policy of treating prospective payment rate determinations as final and not generally subject to retroactive correction); Palisades Gen. Hosp., Inc. v. Leavitt, 426 F.3d 400, 404 (D.C. Cir. 2005) (upholding as reasonable Secretary's determination that retroactive corrections would result in an unsupportable administrative burden on the agency and disrupt the Secretary's already complex administration of the Medicare program).

This Court's review is warranted to correct the court of appeals' erroneous imposition of equitable tolling on the complex payment and administrative review scheme established by Congress and the Secretary for the Medicare program, to resolve the conflict in the circuits concerning extensions of the 180-day period for filing administrative appeals, to bring judicial rulings governing the Medicare appeals process into conformity with this Court's decisions in Your Home and Vermont Yankee, and to prevent the imposition of substantial programmatic and financial burdens on the Medicare program.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.