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Michael Reese Physicians and Surgeons v. Quern

July 18, 1980

MICHAEL REESE PHYSICIANS AND SURGEONS, S.C., AND LAWRENCE FERGUSON, M.D., PLAINTIFFS-APPELLEES,
v.
ARTHUR F. QUERN, DIRECTOR, ILLINOIS DEPARTMENT OF PUBLIC AID, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 77-C-3943 -- Joseph S. Perry, Judge .

Before Fairchild, Chief Judge, and Swygert, Cummings, Pell, Sprecher, Bauer, Wood and Cudahy, Circuit Judges.

Author: Per Curiam

CUMMINGS, Circuit Judge, with whom PELL, Circuit Judge, joins, dissenting.

A panel of this court initially issued an opinion, reported at 606 F.2d 732 (7th Cir.), which ordered that the preliminary injunction granted plaintiffs-appellees, Michael Reese Physicians and Surgeons, S.C., and Lawrence Ferguson, M.D., be dissolved. Based upon the plaintiffs-appellees' petition for rehearing with a suggestion that the case be reheard in banc, a majority of the judges in regular active service on this court voted to rehear the case in banc. Following reargument a majority of the judges in regular active service on the court decided to adopt the original panel decision dissolving the preliminary injunction.

PELL, Circuit Judge, for the reasons stated in his dissent from the panel opinion, 606 F.2d at 736, dissents from this decision.

CUMMINGS, Circuit Judge, joins in Circuit Judge PELL's dissent and adds additional reasons for dissenting.

I join in Judge Pell's original dissent, but I write separately to highlight some additional reasons, first advanced at the en banc oral argument, that support affirmance.

When Congress enacted the 1977 Medicare-Medicaid Antifraud and Abuse Amendments to the Social Security Act, the amended Section 1902a(a)(32) of the Act read in pertinent part as follows:

"(a) A state plan for medical assistance must --

"(32) provide that no payment under the plan for any care or service provided to an individual shall be made to anyone other than such individual or the person or institution providing such care or service, under an assignment or power of attorney or otherwise; except that --

"(A) in the case of any care or service provided by a physician, dentist, or other individual practitioner, such payment may be made (i) to the employer of such physician, dentist, or other practitioner if such physician, dentist, or practitioner is required as a condition of his employment to turn over his fee for such care or service to his employer, or (ii) (where the care or service was provided in a hospital, clinic, or other facility) to the facility in which care or service was provided if there is a contractual arrangement between such physician, dentist, or practitioner and such facility under which such facility submits the bill for such care or service * * *.' (Italics supplied; 42 U.S.C. ยง 1396a(a)(32).)

Prior to the amendment, said paragraph (a)(32) stated in pertinent part:

"(a) A State plan for medical assistance must --

"(32) provide that no payment under the plan for any care or service provided to an individual by a physician, dentist, or other individual practitioner shall be made to anyone other than such individual ...


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