Under the authority of 42 CFR 405.724 and 20 CFR 404.969, the Medicare Appeals Council has assumed jurisdiction of this case on its own motion because there is an error of law. In taking this action and in reaching the findings in this decision, the Council has considered the record that was before the Administrative Law Judge, including the tape of the oral hearing. The Council has also considered the memorandum with attachments dated June 6, 2000, from the Health Care Financing Administration, a copy of which has been furnished to the appellant. The memorandum and the Council's notice to the appellant advising of its action have been entered into the record.

In a decision dated April 28, 2000, the Administrative Law Judge found that hospital services the beneficiary received in Canada were covered by Medicare, notwithstanding the statutory provision to the contrary, because the beneficiary had obtained the services in reliance on information from official sources that such services would be covered. The Medicare Appeals Council reverses the Administrative Law Judge's decision and finds that the services were not covered and the charges the beneficiary incurred may not be reimbursed by Medicare.

The Council adopts the Administrative Law Judge's factual finding, uncontradicted in the record, that the beneficiary received emergency inpatient care at Hotel Dieu Hospital in Quebec City, Quebec, Canada, from October 3 through 12, 1998, while vacationing in Canada (Exhs. 1 and 3, and testimony at the hearing).

Section 1862(a)(4) of the Social Security Act precludes payment for items or services "which are not provided within the United States (except for inpatient hospital services furnished outside the United States under the conditions described in section 1814(f) . . . )." As relevant here, section 1814(f) of the Act provides that inpatient hospital services outside the United States may be covered in certain limited and specified situations:

(f) Payment for certain inpatient hospital services furnished outside United States

(1) Payment shall be made for inpatient hospital services furnished to an individual entitled to hospital insurance benefits . . . by a hospital located outside the United States, or under arrangements . . . with it, if--

(A) such individual is a resident of the United States, and

(B) such hospital was closer to, or substantially more accessible from, the residence of such individual than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual's illness or injury.

(2) Payment may also be made for emergency inpatient hospital services furnished to an individual entitled to hospital insurance benefits . . . by a hospital located outside the United States if--

(A) such individual was physically present--

(i) in a place within the United States; or

(ii) at a place within Canada while traveling without unreasonable delay by the most direct route (as determined by the Secretary) between Alaska and another State;

at the time the emergency which necessitated such inpatient hospital services occurred, and

(B) such hospital was closer to, or substantially more accessible from, such place than the nearest hospital within the United States which was adequately equipped to deal with, and was available for the treatment of, such individual's illness or injury.

[Internal citations omitted.]

In the present case, none of these conditions are alleged to have been met. Instead, the beneficiary has based her claim for reimbursement on erroneous information she allegedly received from one or more Social Security employees which, combined with incomplete and arguably misleading information in the Medicare Handbook, led her to believe that the type of care she received in Canada would be covered. The Council does not dispute these allegations, or the Administrative Law Judge's acceptance of them as credible. The Council does find, however, that even where misinformation is given and relied on, there is no legal basis for Medicare reimbursement of a service explicitly excluded from coverage by statute.

The appellant's argument is essentially that it would be unjust, and therefore improper, for the statutory provisions precluding reimbursement for medical care outside the United States to be applied in her case. In effect, she argues that the Health Care Financing Administration (HCFA) and its adjudicators ⁽¹⁾ should be "estopped," or barred, from applying the law here.

In 1984, the United States Supreme Court decided in Heckler v. Community Health Services of Crawford Co. that estoppel could not be invoked to prevent recoupment of an overpayment to a medical provider under Part A of Medicare. 467 U.S. 51. In Crawford Co., the provider had accepted payment of costs for certain operating expenses in reliance on erroneous oral advice from the fiscal intermediary that such payments were appropriate. Id. at 56-57. In considering whether HCFA should be estopped from recovering the overpayment, the Court noted that "it is well settled that the Government may not be estopped on the same terms as any other litigant." Id. at 60. "[T]he general rule," the Court said, is "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." Id. at 64. "[A]nyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority." Id. (quoting from Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 384 [1947]).

Both in the present case and in Crawford Co., the parties were in doubt as to the law and sought advice from an official source, on which they then relied. The two cases differ significantly, however, in that the appellant in this case is not a medical provider engaged in a business contract with the government involving large sums of money, with the experience and means to obtain accurate information with further effort. Instead, she is an individual Medicare beneficiary who relied on information from sources available to her, including the Medicare Handbook and employees of entities involved in administering the program. The beneficiary's circumstances make her a sympathetic appellant. The Medicare Handbook in her possession at the time she received the services (Exh. 12, page 3), in combination with the verbal information she was allegedly given, could have persuaded her that the emergency treatment she received in Canada would be covered.

In 1990, however, the Supreme Court issued a decision in another case that made it clear that estoppel could not be applied in any case involving monetary benefits from the government. Office of Personnel Management (OPM) v. Richmond, 496 U.S. 414. That case also involved an individual beneficiary and was also, the Court observed, "in practical effect one for misrepresentation." ⁽²⁾ Id. at 430. While stopping short of finding that estoppel could never apply against the government, the Court in Richmond wished to settle the matter clearly with regard to money claims against the government. Id. at 426, 434 (As for monetary claims, . . . there can be no estoppel . . . .")

The Court's reasoning in Richmond stressed the exclusive power of Congress to appropriate federal funds under the Constitution. "[W]e cannot accept . . . that the terms of a statute should be ignored based on the facts of individual cases." ⁽³⁾

496 U.S. at 424-26, 432. Even assuming that there was "much equity" in Mr. Richmond's claim for benefits, the Court concluded that it did not "have authority to order the payment he seeks." Id. at 416. Similarly, the Council find itself without authority to do so in this case.

Therefore, the Medicare Appeals Council concludes that the Administrative Law Judge's decision estopping the application of the statute because of the appellant's reliance on official misinformation is erroneous as a matter of law. Accordingly, the Medicare Appeals Council finds that the inpatient hospital services the beneficiary received in Canada from October 3 through 12, 1998, are not covered by Medicare, nor may the cost of the services be reimbursed by Medicare as a consequence of any official misinformation the beneficiary may have received.

1. From October 3 through 12, 1998, the beneficiary received inpatient hospital services at Hotel Dieu Hospital in Quebec City, Quebec, Canada, while vacationing there.

2. The services are not covered by Medicare.

3. The cost of the services may not be reimbursed by Medicare because of any official misinformation leading the beneficiary to believe that the services would be covered.

Payment may not be made under Part A or Part B of Title XVIII of the Social Security Act for emergency hospital services provided to the beneficiary outside the United States from October 3 through 12, 1998.

Date: May 2, 2001

M. Susan Wiley
Administrative Appeals Judge

Terry Johnson
Administrative Appeals Judge

1. Hospital insurance benefit claims under Part A of Medicare are adjudicated by private contractors ("fiscal intermediaries") initially and upon reconsideration, by Administrative Law Judges of the Social Security Administration at the hearing level, and by the Medicare Appeals Council of the Department of Health and Human Services' Departmental Appeals Board in certain post-hearing cases. 42 CFR 405.701ff.

2. At issue in Richmond was erroneous information as to the amount a recipient of government disability benefits could earn without losing benefits. Mr. Richmond had relied on misinformation given by his former agency's personnel department concerning the amount of wages he could earn annually and still retain his disability benefits. When OPM subsequently discovered that he had exceeded the statutory earnings limit, it discontinued his disability annuity. The U.S. Supreme Court held that OPM could not be estopped from applying the statutory limit because of the reliance on misinformation from an official source. 496 U.S. at 416-18.

3. In emphasizing the exclusive role of Congress in authorizing statutory benefits, the Richmond Court also noted that Congress may provide remedies to those denied such benefits. Besides amending the statute itself to include the additional benefits, Congress may enact private legislation to address an individual case, 496 U.S. at 431, or public legislation specifically providing for payment of benefits where there has been detrimental reliance on misinformation, id. at 428-29 (citing Budget Reconciliation Act of 1989, allowing for payment of Social Security benefits based on a deemed application date where official misinformation has caused a claimant to delay filing to his detriment). In the present case, no such special statute permits payment of the beneficiary's hospital expenses.