## Facts

- A federal health-care program for military dependents permits civilian care when military facilities cannot provide services and is implemented through CHAMPUS, which imposes nationally uniform reimbursement limits for private providers.
- CHAMPUS reimbursement was capped at the lowest of: (1) the billed charge; (2) 80% of the average billed rate in the locality; or (3) the Medicare Economic Index prevailing charge for the service.
- Total Medical Management, Inc. (TMM), a private provider, entered a facility-sharing agreement with Ireland Army Hospital to provide outpatient services to eligible dependents.
- The hospital’s fiscal intermediary reviewed and approved the contract, which set reimbursement at “up to 80 percent of the prevailing charge” for the service.
- After performance began, the fiscal intermediary informed TMM that reimbursement would be processed under CHAMPUS regulations rather than the contract’s more favorable formula.
- TMM sought the difference between amounts paid under CHAMPUS and amounts it claimed were owed under the contract clause.
- The Court of Federal Claims granted summary judgment for TMM and awarded $57,197.50 plus interest.
- The United States appealed.

## Issues

1. Whether the United States may be held contractually liable for a reimbursement term in a local facility-sharing agreement that conflicts with nationally applicable CHAMPUS reimbursement regulations.
2. Whether the government signatory had actual authority to bind the United States to a reimbursement formula inconsistent with CHAMPUS regulations, permitting recovery under the Contract Disputes Act.

## Decision

- The Federal Circuit reversed the judgment for TMM.
- The court held the contract’s base reimbursement term conflicted with valid national CHAMPUS regulations and was void as beyond the authority of the government signatory.
- The case was remanded with instructions to dismiss the complaint for failure to state a claim.

## Legal Principles

- Government agents can bind the United States only within the scope of actual authority conferred by statute and regulation.
- A contract provision that conflicts with binding federal regulations is unenforceable to the extent of the conflict because the government signatory lacks authority to agree to it.
- Facility-sharing authority does not permit local agreements to override nationally applicable reimbursement limits established by regulation.
- Money damages are unavailable under the Contract Disputes Act when the claim depends entirely on an ultra vires contract term.

## Conclusion

Because national CHAMPUS regulations set binding reimbursement caps, the local contract’s more generous reimbursement clause was beyond the government signatory’s authority and void; TMM therefore could not recover additional payments based on that clause, and its action was dismissed for failure to state a claim.


Total Med. Mgmt., Inc. v. United States, 104 F.3d 1314 (Fed. Cir. 1997)