JUSTICE STEVENS delivered the opinion of the Court.
Under what is recognized for present purposes as an incorrect interpretation of rather complex federal regulations, during 1975, 1976, and 1977 respondent received and expended $71,480 in federal funds to provide health care services to Medicare beneficiaries to which it was not entitled. The question presented is whether the Government is estopped from recovering those funds because respondent relied on the express authorization of a responsible Government agent in making the expenditures.
I
Under the Medicare program, Title XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U. S. C. §§ 1395-1395vv, providers of health care services are reimbursed for the reasonable cost of services rendered to Medicare beneficiaries as determined by the Secretary of Health and Human Services (Secretary). § 1395x(v)(1)(A). Providers receive interim payments at least monthly covering the cost of services
The Act also permits a provider to elect to receive reimbursement through a "fiscal intermediary." 42 U. S. C. § 1395h; 42 CFR § 421.103 (1982). If the intermediary the provider has nominated meets the Secretary's requirements, the Secretary then enters into an agreement with the intermediary to have it perform those administrative responsibilities she assigns it. §§ 421.5, 421.110. These duties include receipt, disbursement, and accounting for funds used in making Medicare payments, auditing the records of providers in order to ensure payments have been proper, resolving disputes over cost reimbursement, reviewing and reconsidering payments to providers, and recovering overpayments to providers. §§ 421.100(b), (c), (e), (f), 421.120(e). The fiscal intermediary must also "serve as a center for, and communicate to providers, any information or instructions furnished to it by the Secretary, and serve as a channel of communication from providers to the Secretary." 42 U. S. C. § 1395h(a)(2)(A).
Respondent Community Health Services of Crawford County, Inc. (hereafter respondent), is a nonprofit corporation. In 1966 it entered into a contract with petitioner's predecessor, the Secretary of Health, Education, and Welfare, to provide home health care services to individuals eligible
In 1973 Congress enacted the Comprehensive Employment and Training Act (CETA), 87 Stat. 839, codified, as amended, at 29 U. S. C. § 801 et seq. (1976 ed. and Supp. V), and repealed, Pub. L. 97-300, 96 Stat. 1357, authorizing the use of federal funds to provide training and job opportunities for economically disadvantaged persons. In 1975 respondent began participating in the program, which reimbursed it for the salaries and fringe benefits paid to certain of its employees. CETA funds made it possible for respondent to take on additional personnel and to provide additional home health care services.
To prevent what would be in effect double reimbursement of providers' costs, one of the regulations concerning reasonable costs reimbursable under the Medicare program indicates that grants received by a provider in order to pay specific operating costs must be subtracted from the reasonable costs for which the provider may receive reimbursement.
Relying on Travelers' advice, respondent included costs for which it was receiving CETA reimbursement in its cost reports, and received reimbursement for those sums amounting
It is undisputed that correct administrative practice required Travelers to refer respondent's inquiry to the Department of Health and Human Services for a definitive answer. However, Travelers did not do this until August 7, 1977, when a written request for instructions was finally submitted to the Philadelphia office of the Department's Bureau of Health Insurance. Travelers was then formally advised that the CETA funds were not "seed money" and therefore had to be subtracted from respondent's Medicare reimbursement. On October 7, 1977, Travelers formally notified respondent of this determination. Travelers then reopened respondent's cost reports for the preceding three years and recomputed respondent's reimbursable costs, determining that respondent had been overpaid a total of $71,480.
In May 1978 Travelers made a formal demand for repayment of the disputed amount. Respondent filed suit and obtained temporary injunctive relief against the Secretary and Travelers; in November 1979, the parties entered into a
Thereafter, the Secretary's Provider Reimbursement Review Board (PRRB) conducted a hearing and issued a written opinion rejecting the position that CETA funds were "seed money." The PRRB found, however, that the Secretary's right to recoup the 1975 overpayment was barred because Travelers had not given respondent a written notice of reopening within the 3-year limitations period;
The Court of Appeals reversed, reaching only the estoppel question. Community Health Services of Crawford County, Inc. v. Califano, 698 F.2d 615 (CA3 1983). It held that the Government may be estopped by the "affirmative misconduct" of its agents and that Travelers' erroneous advice coupled with its failure to refer the question to the Secretary constituted such misconduct. It rejected as "clearly erroneous"
II
Estoppel is an equitable doctrine invoked to avoid injustice in particular cases. While a hallmark of the doctrine is its flexible application, certain principles are tolerably clear:
Thus, the party claiming the estoppel must have relied on its adversary's conduct "in such a manner as to change his position for the worse,"
III
To analyze the nature of a private party's detrimental change in position, we must identify the manner in which reliance on the Government's misconduct has caused the private citizen to change his position for the worse. In this case the consequences of the Government's misconduct were not entirely adverse. Respondent did receive an immediate benefit as a result of the double reimbursement. Its detriment is the inability to retain money that it should never have received in the first place. Thus, this is not a case in which the respondent has lost any legal right, either vested or contingent,
There is no doubt that respondent will be adversely affected by the Government's recoupment of the funds that it has already spent. It will surely have to curtail its operations and may even be forced to seek relief from its debts through bankruptcy. However, there is no finding as to the extent of the likely curtailment in the volume of services provided by respondent, much less that respondent will reduce its activities below the level that obtained when it was first advised that the double reimbursement was proper. Respondent may need an extended period of repayment or other modifications in the recoupment process if it is to continue to operate, but questions concerning the Government's method of enforcing collection are not before us. The question is whether the Government has entirely forfeited its right to the money.
A for-profit corporation could hardly base an estoppel on the fact that the Government wrongfully allowed it the interest-free use of taxpayers' money for a period of two or three years, enabling it to expand its operation.
IV
Justice Holmes wrote: "Men must turn square corners when they deal with the Government." Rock Island, A. & L. R. Co. v. United States, 254 U.S. 141, 143 (1920). This observation has its greatest force when a private party seeks to spend the Government's money. Protection of the public fisc requires that those who seek public funds act with scrupulous regard for the requirements of law; respondent could expect no less than to be held to the most demanding standards in its quest for public funds. This is consistent with the general rule that those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law.
The appropriateness of respondent's reliance is further undermined because the advice it received from Travelers was oral. It is not merely the possibility of fraud that undermines our confidence in the reliability of official action that is not confirmed or evidenced by a written instrument. Written advice, like a written judicial opinion, requires its author to reflect about the nature of the advice that is given to the citizen, and subjects that advice to the possibility of review, criticism, and reexamination. The necessity for ensuring that governmental agents stay within the lawful scope of their authority, and that those who seek public funds act with scrupulous exactitude, argues strongly for the conclusion that an estoppel cannot be erected on the basis of the oral advice that underlay respondent's cost reports. That is especially true when a complex program such as Medicare is involved, in which the need for written records is manifest.
In sum, the regulations governing the cost reimbursement provisions of Medicare should and did put respondent on
Thus, assuming estoppel can ever be appropriately applied against the Government, it cannot be said that the detriment respondent faces is so severe or has been imposed in such an unfair way that petitioner ought to be estopped from enforcing the law in this case. Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded to that court for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE REHNQUIST, with whom THE CHIEF JUSTICE joins, concurring in the judgment.
I entirely agree with the Court that there was no estoppel in favor of respondent by reason of the Government's conduct in this case, because even a private party under like circumstances would not have been estopped. I write separately because I think the Court's treatment of our decided cases in this area gives an inaccurate and misleading impression of what those cases have had to say as to the circumstances, if any, under which the Government may be estopped to enforce the laws.
Sixty-seven years ago, in Utah Power & Light Co. v. United States, 243 U.S. 389 (1917), private parties argued that they had acquired rights in federal lands, contrary to the law, because Government employees had acquiesced in their exercise of those rights. In that case the Court laid down the general principle governing claims of estoppel on behalf of private individuals against the Government:
Since then we have applied that principle in a case where a private party relied on the misrepresentation of a Government agency as to the coverage of a crop insurance policy, a misrepresentation which the Court agreed would have estopped a private insurance carrier. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 383-386 (1947). We have applied it in a case where a private party relied on a misrepresentation by a Government employee as to Social Security eligibility, a misrepresentation which resulted in the applicant's losing 12 months of Social Security benefits. Schweiker v. Hansen, 450 U.S. 785 (1981) (per curiam). And we have applied it on at least three occasions to claims of estoppel in connection with the enforcement of the immigration laws and the denial of citizenship because of the conduct of immigration officials. INS v. Miranda, 459 U.S. 14 (1982) (per curiam); INS v. Hibi, 414 U.S. 5 (1973) (per curiam); Montana v. Kennedy, 366 U.S. 308, 314-315 (1961). In none of these cases have we ever held the Government to be estopped by the representations or conduct of its agents. In INS v. Hibi, supra, at 8, we noted that it is still an open question whether, in some future case, "affirmative misconduct" on the part of the Government might be grounds for an estoppel. See Montana v. Kennedy, supra, at 314-315.
We do not write on a clean slate in this field, and our cases have left open the possibility of estoppel against the Government only in a rather narrow possible range of circumstances. Because I think the Court's opinion, in its efforts to phrase new statements of the circumstances under which the Government may be estopped, casts doubt on these decided cases, I concur only in the judgment.
FootNotes
"(b) Definitions — (1) Unrestricted grants, gifts, income from endowment. Unrestricted grants, gifts, and income from endowments are funds, cash or otherwise, given to a provider without restriction by the donor as to their use.
"(2) Designated or restricted grants, gifts, and income from endowments. Designated or restricted grants, gifts, and income from endowments are funds, cash or otherwise, which must be used only for the specific purpose designated by the donor. This does not refer to unrestricted grants, gifts, or income from endowments which have been restricted for a specific purpose by the provider.
"(c) Application. (1) Unrestricted funds, cash or otherwise, are generally the property of the provider to be used in any manner its management deems appropriate and should not be deducted from operating costs. It would be inequitable to require providers to use the unrestricted funds to reduce the payments for care. The use of these funds is generally a means of recovering costs which are not otherwise recoverable.
"(2) Donor-restricted funds which are designated for paying certain hospital operating expenses should apply and serve to reduce these costs or group of costs and benefit all patients who use services covered by the donation. If such costs are not reduced, the provider would secure reimbursement for the same expense twice; it would be reimbursed through the donor-restricted contributions as well as from patients and third-party payers including the title XVIII health insurance program." 42 CFR § 405.423 (1982) (emphasis supplied).
See United States v. California, 332 U.S. 19, 39-40 (1947); United States v. Stewart, 311 U. S., at 70; United States v. San Francisco, 310 U.S. 16, 31-32 (1940); Wilber National Bank v. United States, 294 U.S. 120, 123-124 (1935); Utah v. United States, 284 U.S. 534, 545-546 (1932); Jeems Bayou Fishing & Hunting Club v. United States, 260 U.S. 561, 564 (1923); Sutton v. United States, 256 U. S., at 579; Utah Power & Light Co. v. United States, 243 U.S. 389, 409 (1917); Pine River Logging Co. v. United States, 186 U. S., at 291; Hart v. United States, 95 U. S., at 318-319; Gibbons v. United States, 8 Wall. 269, 274 (1869); Lee v. Munroe, 7 Cranch 366 (1813).
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