Heckler v. Community Health Services case brief

Heckler v. Community Health Services case brief summary
467 U.S. 51 (1984)

CASE SYNOPSIS

Petitioner appealed the decision from the United States Court of Appeals for the Third Circuit, which held that petitioner was estopped from recovering federal funds, which respondent received and expended based upon the express authorization of petitioner's agent.

CASE FACTS
Petitioner Secretary of Health and Human Services sought to recover federal funds paid to respondent home health care provider under a contract in which respondent received reimbursement through a fiscal intermediary for services provided to individuals eligible for Medicare benefits. Under the Medicare program, grants received by a provider to pay operating costs had to be subtracted from reasonable costs, for which the provider could receive reimbursement. After respondent began receiving grants for salaries and benefits for certain employees, it sought advice from the fiscal intermediary to determine if the salaries for which it was receiving grant money were reimbursable costs.

DISCUSSION

• Reversing the lower court, the court held that petitioner was not estopped from asserting a claim for reimbursement of excess money paid because respondent should not have been induced to rely on the erroneous oral advice of petitioner's agent that the funds were reimbursable. 
• Where respondent had not lost any legal right, or suffered any adverse change in its status, the court held that there was nothing to warrant prohibiting petitioner's recovery of the money.

OUTCOME

The judgment of the lower court that petitioner was estopped from bringing reimbursement claim was reversed and remanded.

Recommended Supplements for Administrative Law
Examples & Explanations: Administrative Law, Fourth Edition
Administrative Law and Process: In a Nutshell (Nutshell Series)