High court nixes hospitals’ old Medicare claims

In a new ruling, the U.S. Supreme Court says hospitals cannot collect money from Medicare reimbursement claims they say were miscalculated and underpaid. Reason: The hospitals missed the deadline to file their claims.

A group of 18 hospitals that were entitled to extra compensation for treating a large number of low-income patients claimed the Centers for Medicare & Medicaid Services (CMS) miscalculated those payments between 1987 and 1994. The miscalculation resulted in underpayments, the hospitals said.

The government argued the hospitals missed their chance because the Medicare law imposes a six-month limit for appeals (up to three years for good cause). The hospitals filed their claims more than 10 years after the six-month deadline expired. They said the deadline should not apply because CMS knew about and failed to disclose its calculation errors. The hospitals argued that they could not have known there was a problem until after the appeal deadline had passed.

Too late: The high court sided with the government, saying that relaxing the deadline would "essentially gut" the deadline requirement for an appeal, Justice Ruth Bader Ginsburg wrote for the court.

If the hospitals had prevailed in the case, the government's exposure to claims for past payment errors could have been significant.