Hospitals challenging inpatient reimbursement decisions typically have 180 days from the time they receive an NPR to request a hearing. See 42 U.S.C. § 1395oo(a)(3); 42 C.F.R. §405.1835(a)(3).

Similarly, the statutes and regulations governing appeals do not incorporate the rules for reopenings. See 42 U.S.C. § 1395oo(a) and 42 C.F.R. §§ 405.1835 and 405.

A provider that has submitted a timely cost report may appeal to the Board the contractor’s final determination, or notice of program reimbursement (NPR), for the cost period at issue. Pursuant to 42 U.S.C. §§ 1395oo(a)(1)(A), (a)(2), and (a)(3), and 42 C.F.R. §§ 405.1835(a)(1), (a)(2), and (a)(3)(i), a provider may obtain a hearing before the Board if: (1) the provider is “dissatisfied” with the final determination of the contractor or the Secretary; (2) the amount in controversy is at least $10,000; and (3) the provider files a request for a hearing to the Board within 180 days of notice of the final determination of the contractor or the Secretary.

It found the Provider failed to claim the physician malpractice costs on its cost report and that the Intermediary’s inclusion of the costs for wage index purposes did not allow the costs to be considered claimed as allowable costs generally. The Board found that since this was the only issue appealed and it did not have jurisdiction under 42 U.S.C. § 1395oo(a), it did not have any discretionary authority under 42 U.S.C. § 1395oo(d) to exercise jurisdiction. The Administrator declined to review.John H. Stroger, Jr.

Further, the agency asserts that – in order to conserve administrative and judicial resources required for these cases to be appealed to the PRRB, then moved and consolidated in federal district court, where the Secretary seeks remand – the cases should be remanded to the MACs upon filing at the PRRB. Once remanded to the MACs, they will calculate DSH payments in accordance with CMS's forthcoming final rule.The Ruling applies to "years before FY 2014 as to any appeals arising from NPRs [notices of final determination] from that period that pre-dates the forthcoming rule or that arise from an appeal based on an untimely NPR under 42 U.S.C. 1395oo(a)(1)(B) or (C) and any subsequently issued NPR for that fiscal year pre-dates the new final rule."The PRRB and other applicable administrative tribunals are instructed to first determine if they have jurisdiction over the appeal and, if so, to remand to the applicable MAC. Providers who wish to dismiss their cases that qualify for remand under the Ruling may request dismissal of their appeals rather than remand.

The PRRB rejected the providers’ request for expedited judicial review, asserting that the providers’ failure to include the costs on their cost reports as either allowable costs or protested amounts violated the self-disallowance regulation and thereby was a bar to the PRRB’s jurisdiction over the case. The Court analyzed the self-disallowance regulation through the two-step Chevron analysis and found that Congress had directly spoken to this issue in 42 U.S.C. § 1395oo, which is Step One of the Chevron analysis. The Court discussed at length the Supreme Court’s decision in Bethesda that interprets section 1395oo and addresses substantively the same issue.

The providers appealed that decision to the D.C. District Court. The district court found that the Supreme Court in Bethesda Hosp. Ass’n v. Bowen, 485 U.S. 399 (1988) had already considered the same section of the Medicare statute at issue (42 U.S.C. § 1395oo) and held that the plain language of section 1395oo did not require a provider to first raise with the MAC legal challenges to Medicare regulations in order to preserve its right to an appeal of those regulations. The district court rejected the Secretary’s argument that Bethesda was distinguishable because the Secretary had issued the self-disallowance regulation after the Bethesda decision, imposing an exhaustion requirement on providers before they could bring appeals on these issues.

Rather, the court explicitly limited its holding to appeals from a failure to timely issue an NPR and emphasized “that no provision of this Order pertains to the application of 42 C.F.R. § 405.1835(a)(1)’s ‘dissatisfaction’ requirement to Board appeals pursuant to 42 U.S.C. § 1395oo(a)(1)(A) that are based on a timely NPR” (emphasis added).The court’s order is consistent with CMS’s “technical correction” in the 2015 inpatient prospective payment system (IPPS) final rule, which is scheduled to be published in the Federal Register on August 22, whereby CMS clarifies that the dissatisfaction requirement does not apply to appeals stemming from the MAC’s failure to timely issue an NPR.

The provider appealed its Medicaid eligible days used for DSH calculation purposes. The PRRB found that it lacked jurisdiction over the appeal under 42 U.S.C. § 1395oo(a), and it declined to exercise its discretionary jurisdiction under § 1395oo(d). The PRRB dismissed the appeal.

In doing so, the Court reversed the judgment of the U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") allowing an administrative appeal made 10 years after the initial reimbursement determination. While the Supreme Court held that the 180-day limitation in section 42 U.S.C. § 1395oo(a)(3) is not jurisdictional, it also held that the U.S. Department of Health and Human Services ("DHHS") Secretary reasonably construed the statute to permit a regulation extending the time for a provider's appeal to the Provider Reimbursement Review Board ("PRRB") to three years, but that any larger presumption in favor of equitable tolling does not apply to administrative appeals like this one. In so holding, the Court has given approval to an inequality between providers that are limited to three years' time to uncover and seek to recoup underpayments, and the government, that may reopen an intermediary's reimbursement determination "at any time" if it is alleged that an overpayment had been procured by fraud or the fault of the provider.Please see full alert below for more information.