Healthcare News & Insights

Supreme Court ruling affects hospital payment appeals

Bad news: The Supreme Court overturned a ruling that could’ve given hospitals and physicians a bit more breathing room when it comes to appealing payments.

According to Reuters, the case originally began after it came to light that the Centers for Medicare & Medicaid Services (CMS) had used an inaccurate formula when calculating payments to hospitals that provided care to low-income patients. CMS’ error resulted in these hospitals being underpaid.

The hospitals didn’t discover these underpayments until after the deadline to appeal had already passed. The Medicare review board refused to reopen the claims, saying they were “too old” at that point.

Legal recourse

In response, the hospitals argued that CMS should’ve given them more leeway since they were aware the formula used to calculate payments was flawed long before the hospitals found out. And they sought legal recourse for their assertion.

The result was several years of court proceedings. An article in Courthouse News states that lawyers argued the claims should be subject to “equitable tolling,” where if someone learns of an injury after the deadline has passed, the statute of limitations can be waived.

CMS said its appeals process was generous enough. After the initial six-month deadline, the hospitals could’ve questioned the claims for up to three years after they were first submitted.

Ruling overturned

A district court sided with Medicare, but an appeals court overturned the ruling, saying the hospitals’ argument had merit.  Then, the case was brought before the high court.

The Supreme Court’s ruling was unanimous: The hospitals had missed the deadline to appeal the payments, and nothing more could be done.

The three-year window after the initial deadline for appealing claims was enough to invalidate the argument that equitable tolling would apply in this circumstance.

To the court, the extended window served as proof that the government allowed hospitals a reasonable amount of time to review payments for any discrepancies.

This means that if hospitals discover an underpayment after several years, there’s no remedy. They just have to eat the loss.

With that in mind, it’s a good idea to remind your billing team to make sure all payments are for the correct amount as soon as they’re received. That way, any appeals can be made right away, well before the deadline.

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