be entitled to assert the irreparable damages its turned-away
Medicaid patients might suffer under Rule 4.13.8 (see n. 2). But
the relationship between patients and their hospitals and doctors
is such that, quite independently of the legal issue of standing,
irreparable damage to patients carries with it irreparable damage
to their doctors and hospitals. Arbitrary elimination of Medicaid
patients after mid-March will necessarily affect (1) Children's
Memorial's utilization of its staff and equipment, (2) its
reputation and staff morale and (3) its desirability as a
facility to which to donate volunteer services or refer pediatric
patients. Frederick Aff. ¶¶ 15-16; O'Flynn Aff. ¶¶ 13-14.
There is no doubt Children's Memorial will suffer grave
financial consequences should Rule 4.13.8 be enforced against it.
Frederick Aff. ¶¶ 7-13. There is considerable doubt any financial
losses can be recovered from Illinois, and there is considerable
evidence Children's Memorial will suffer irreparable injury to
the quality, desirability and reputation of its services.
Children's Memorial has made an adequate showing of the need for
preliminary injunctive relief.
III. Balancing of Harms
IDPA and Miller identify (Ans.Mem. 31) financial expense as the
potential harm to Illinois that would be inflicted by a
preliminary injunction. They really have not shown, however, that
barring enforcement of Rule 4.13.8 as to Children's Memorial
alone would necessarily cause Illinois to exceed its fiscal 1983
ceiling or its planned 1984 reconciliation budget. Similarly it
is not at all clear an adequate plan would deprive other
efficiently-operated hospitals of Medicaid funds (id.). Moreover,
if the $797.5 million ceiling operates arbitrarily to curtail
Children's Memorial's ability to meet the needs uniquely served
by its facilities, Illinois can hardly portray the ceiling as
sacrosanct.*fn15 In any event, because the scope of the
injunctive relief granted will be narrow and because IDPA will
have every incentive to limit the financial consequences on
Illinois, this Court determines the threatened injury to
Children's Memorial far outweighs any threatened harm an
injunction may arguably inflict on Illinois.
IV. Disservice to the Public Interest
This is not a case in which a private interest is set against
the public interest or the public fisc. Rather Children's
Memorial's Complaint asserts — and it has proved for current
purposes — Illinois' Medicaid plan applies to Children's Memorial
in a way that conflicts with the national public interest as
articulated in Section 13(A) and applicable regulations.
Preliminary injunctive relief here clearly will not disserve the
Scope of Relief
Children's Memorial (Motion at 6) seeks (1) a preliminary
injunction against enforcement of Section 5-5.11 and Rule 4.13.8
and (2) an order requiring Medicaid reimbursement to Children's
Memorial at 1981 levels. Both requests are broader than the
evidence and law will allow.
As part I reflects, the arguments on the merits show Children's
Memorial has a reasonable likelihood of success on its contention
Section 5-5.11 and Rule 4.13.8 — as they establish the 80th
percentile formula in its application to Children's Memorial
itself — are arbitrary and unreasonable and therefore in violation
of Section 13(A). Injunctive relief must be limited accordingly:
IDPA and Miller will be enjoined from enforcing Children's
Memorial's designated maximum number of reimbursable fiscal 1983
days based on the new formula.
No possible predicate has been advanced for this Court's
ordering a return to the 1981 rates or formula. Not only has
Children's Memorial failed to show the Illinois fiscal 1983
ceiling violates Section 13(A), but it has also failed to show
the 1983 formula in general violates Section 13(A).
More importantly Congress itself repealed the 1981 SSA
requirements, and this Court is not about to override that
legislative judgment. Children's Memorial's plea for broad relief
pays insufficient regard to the values of federalism and
separation of powers.
For all the foregoing reasons this Court concludes:
1. Children's Memorial has proved it has at least a
reasonable likelihood of success on the merits of its
claim that (a) Section 5-5.11 and its implementing
Rule 4.13.8, as applied to Children's Memorial, are
arbitrary and unreasonable and in violation of
Section 13(A) and (b) the limitation they impose on
the maximum number of reimbursable fiscal 1983
Medicaid days cannot validly be enforced against
2. Children's Memorial has no adequate remedy at
law and will otherwise be irreparably harmed by that
limitation on reimbursement.
3. Injuries to Children's Memorial threatened by
the likely invalid limitation on reimbursement far
outweigh any asserted threatened harm a preliminary
injunction may cause IDPA and Miller.
4. Granting the preliminary injunction will promote
— not disserve — the public interest as defined by
All criteria for issuance of a preliminary injunction under
Rule 65 have therefore been met. Counsel are directed to proceed
1. On or before March 25, 1983 Children's
Memorial's counsel shall file (with a copy to
opposing counsel) a draft order complying with Rule
65(d) for a preliminary injunction, as approved in
this opinion, and a statement as to the appropriate
amount of security required to satisfy Rule 65(c).
2. Within one week after such filing defendants'
counsel shall file (with a copy to opposing counsel)
their comments on Children's Memorial's submission.
This Court will promptly issue the formal preliminary injunction
order in accordance with this opinion.