The opinion of the court was delivered by: Shadur, District Judge.
This action has been brought by (1) Illinois Hospital
Association ("Association") on behalf of its 243 member
hospitals, (2) nine hospitals and (3) two Medicaid recipients
against Illinois Department of Public Aid and its Director
Jeffrey Miller (collectively "IDPA"). Plaintiffs then moved for
a preliminary injunction. After all parties had filed memoranda
dealing with a number of issues posed by the Complaint and the
preliminary injunction motion, this Court inquired whether any
further submissions (either evidentiary or documentary in nature)
would be necessary to permit decision of the limited preliminary
injunction issue dealt with in the following findings of fact
("Findings") and conclusions of law ("Conclusions").*fn1
All parties agreed (1) no additional submissions were required
for that purpose and (2) their prior documentary filings should
constitute the record to be considered by this Court. In
accordance with Fed.R.Civ.P. ("Rule") 52(a), this Court makes the
following Findings and Conclusions based on the evidence now in
13. On July 5, 1983 the Illinois General Assembly appropriated
$543.9 million for hospital inpatient services during 1984. P.A.
83-23. IDPA's own inpatient reimbursement methodology
necessitated an appropriation of $690.9 million to make current
payment to hospitals of their Act-mandated Final Rates under
IDPA's new system (IDPA Mem. 12). Consequently there was an
appropriation shortfall of $147 million.*fn8 Illinois' total
appropriation for inpatient services rendered during fiscal year
1983 was $692 million. Id. Thus the assured fiscal year 1984
inpatient services funding is 22% less than the actual funding
for those services in fiscal year 1983. This is so despite the
fact inflation from fiscal year 1983 to fiscal year 1984, based
on IDPA's own inflation index, was 7.1%. Pl.Mem.L, ¶ 9.
Additional evidence from 81 Illinois hospitals also reveals their
losses caused by the Shortfall Rates as compared with the Final
Rates. See Pl.Mem. Vol. 3. Of those 81 hospitals, 18 will suffer
losses of over $1 million each, solely due to the Shortfall
17. After the commencement of this litigation IDPA's Acting
Director wrote to HHS, stating a "request for funds" to pay the
IDPA-determined Final Rates for fiscal year 1984 inpatient
services would be presented to the Illinois General Assembly
Thus IDPA contends it will remedy the shortfall problem by a
"request for funds" to pay the IDPA Final Rates for 1984. But its
executive branch "assurance" letter summarizes the true state of
affairs: Illinois' General Assembly (the legislative
branch) controls appropriations, and the executive branch can do
no more than "request" funds.
18. IDPA's contention is that it hopes to obtain in 1985 what
it has not yet obtained for fiscal year 1984. In the budget
process for 1984, the executive branch's Medicaid payment plan
was not fully accepted by the legislature. In July 1984 IDPA
informed hospitals that the fiscal year 1984 Final Rates were
subject to legislative constraints for an unspecified number of
future years. Pl.Mem.Ex. I, and 89 Ill.Admin.Code ch. I, §
140.371. IDPA now seeks to "assure" that the Final Rates for
fiscal year 1984 will be paid by July 1985. That "assurance"
lacks any factual basis in legislative developments, remains
unspecified in time and is in reality only an assurance that a
request will be made.
19. In any event, hospitals cannot borrow against a future
assurance of a "request for funds" — as distinct from an
assurance of the funds themselves. Hospitals cannot set budgets,
establish salary levels, determine service levels and pay
operating costs based upon a future fund request with no
assurance of payment.
20. IDPA urges its new methodology does not violate the Act
because there is no statutory requirement that reimbursement be
made during the fiscal year (as distinct from part being paid
during the fiscal year and part later). That argument is
oversimplistic because it ignores the critical difference between
(a) a state plan that assures hospital providers of payment of
the rates mandated by the Act, simply deferring a portion of that
payment, and (b) a plan that (like IDPA's) gives no assurance of
the mandated amount being paid — or when it will be. In situation
(a) the provider, if need be, can make current financing
arrangements against the assured future payment, meanwhile having
the capacity through such financing to maintain its staffing and
facilities; in situation (b) the lack of assurance prevents the
provider from taking the necessary actions described in Finding
19. Moreover even a plan that provided a guaranteed future
"make-up appropriation" for fiscal year 1984 (as IDPA's does not)
would fail to meet the federal standards mandated by the Act,
unless the "final rates" established by that plan were higher
than cash "final rates" — sufficiently higher to make up for the
discounted value of the future payment. As a result any "final
rate" that contemplates staged payments must take into account
the cost of financing the future payments to the extent they are
less than the hospitals' regular current cash requirements.
21. Although the Act itself contains no requirement that
hospitals participate in the Medicaid program, hospitals that
have accepted federal construction funds under the federal
Hill-Burton programs are required to participate perpetually in
the Medicaid program. 42 C.F.R. § 124.603(e)(1)(ii) (1980). As
our Court of Appeals said earlier this month in American Hospital
Ass'n v. Schweiker, 721 F.2d 170 at 176 (7th Cir. 1983):
We note, first of all, that the regulation which
mandates participation in the Medicare and Medicaid
programs by all Hill-Burton hospitals,
42 C.F.R. § 124.603(c), not only is virtually
identical to that contained in the earlier
regulations, see 42 C.F.R. § 53.113(d)(2), but
also represents a codification of case law under the
community service obligation. Cook v. Ochsner
Foundation Hospital, 61 F.R.D. 354, 359-60
Over two-thirds of the hospitals in Illinois are Hill-Burton
hospitals. Pl.R.Mem.Ex.I. None of those 172 hospitals has the
option of terminating its participation in the Medicaid program.
22. Under Generally Accepted Accounting Principles (GAAP) it is
inappropriate for Illinois hospitals to plan for eventual receipt
of their so-called Final Rates by booking a receivable for the
difference between the fiscal year 1984 Shortfall Rates and Final
Rates. Pl.Mem.Ex.J at ¶ 16. Moreover, under GAAP IDPA's assurance
of a "request for funds" does not change that result. Pl.R.Mem.
at 9, Ex. F.
Conclusions of Law ("Conclusions")
1. In determining whether issuance of a preliminary injunction
is appropriate this Court must evaluate four criteria:
1. whether plaintiffs have demonstrated at least a
reasonable likelihood they will succeed on the merits
of the action;
2. whether plaintiffs will suffer irreparable harm
for which there is no adequate remedy of law;
3. whether the threatened injury to plaintiffs
outweighs the threatened harm the injunction may pose
to defendants; and
4. whether issuance of the injunction will not
disserve the public interest.
Syntex Ophthalmics, Inc. v. Tsuetaki, 701 F.2d 677, 681 (7th Cir.
2. Under those standards courts have enjoined state amendments
to Medicaid plans where plaintiffs have shown a reasonable
likelihood of succeeding in establishing such plans fall short of
meeting the requirements of the Act. Children's Memorial Hospital
v. IDPA, 562 F. Supp. 165 (N.D.Ill. 1983) (enjoining an
application of the Medicaid utilization cap assigned by the state
to the plaintiff hospital); Wisconsin Hospital Ass'n v. Reivitz,
Medicare & Medicaid Guide (CCH) ¶ 32,380 (E.D.Wis. 1983), appeal
docketed, No. 83-1725 (7th Cir. 1983) (enjoining implementation
of a Medicaid reimbursement freeze); California Hospital Ass'n v.
Schweiker, 559 F. Supp. 110 (C.D.Cal. 1982), aff'd mem.,
705 F.2d 466 (9th Cir. 1983) (enjoining 6% cap on inpatient Medicaid
reimbursement increases); Nebraska Health Care Ass'n, Inc. v.
Dunning, 578 F. Supp. 543 (D.C.Neb. 1983) (enjoining 4% reduction
in Medicaid reimbursement for nursing home services).
3. Because the decision to issue a preliminary injunction is
one of judicial discretion, "the requirement of a `reasonable
likelihood of success' [on the merits] is necessarily a somewhat
flexible standard that allows the chancellor room for the
exercise of judgment." Fox Valley Harvestore, Inc. v. A.O. Smith
Harvestore Products, Inc., 545 F.2d 1096, 1098 (7th Cir. 1976),
quoting Mullis v. Arco Petroleum Corp., 502 F.2d 290, 293 (7th
Cir. 1974). Moreover, in evaluating that criterion "[c]ourts need
not defer to an administrative construction of a statute when
there are `compelling indications that it is wrong.'" Espinoza v.
Farah Manufacturing Co., 414 U.S. 86, 94-95, 94 S.Ct. 334, 339,
38 L.Ed.2d 287 (1973), quoting Red Lion Broadcasting Co. v. FCC,
395 U.S. 367, 381, 89 S.Ct. 1794, 1801, 23 L.Ed.2d 371 (1969). In
a Medicaid case concerning IDPA's 1983 reimbursement methodology,
this Court acknowledged the flexibility of the deference standard
by stating "substantial deference does not call for abdication of
this Court's responsibility." Children's Memorial Hospital, 562
F. Supp. at 170.
A. Reasonable Likelihood Of Success on the Merits
4. Plaintiffs have demonstrated far more than a reasonable
likelihood of success on the merits (which is the only
merits-related standard they are required to meet). IDPA's
Shortfall Rates, which are approximately 23.5% less than what
IDPA determined would be appropriate reimbursement for hospitals
under its own fiscal year 1984 reimbursement methodology, clearly
do not (based on IDPA's own determination) meet the Act's
requirement that hospitals be reimbursed at rates "reasonable and
adequate to meet the costs which must be incurred by efficiently
and economically operated facilities in order to provide care and
services in conformity with applicable state and federal laws,
regulations, and quality and safety standards. . . ."
5. IDPA's Shortfall Rates are being paid to Illinois hospitals
solely in response to the budgetary shortfall in the General
Assembly's fiscal year 1984 inpatient services appropriation.
Because those Shortfall Rates are so far below IDPA's Final
Rates, which were based on IDPA's calculations as to the amounts
necessary to satisfy the Act's requirement quoted in
Conclusion 4, the Shortfall Rates are by definition unreasonable
and inadequate in relation to the Act's standards.
6. Medicaid payment rates may not be based solely on budgetary
needs. Alabama Nursing Home Ass'n v. Harris, 617 F.2d 388, 396
(5th Cir. 1980) made that plain:
Inadequate state appropriations do not excuse
noncompliance. A state may not circumvent its
previous guarantee of reasonable cost related
reimbursement by failing to take requisite steps to
ensure adequate funding of the program's projected
Thomas v. Johnston, 557 F. Supp. 879, 914 (W.D.Tex. 1983)
(emphasis added in part) similarly stated:
The federal statutory standard and its attendant
legislative history clearly require that the
conclusive factor in rate determination must not be
the amount of money appropriated by a given state's
legislature; rather the state Medicaid agency must
make an objective, principled decision with regard to
what rates are reasonable and adequate.
See also Alabama Nursing Home Ass'n v. Califano, 433 F. Supp. 1325,
1330 (M.D.Ala. 1977):
If a state could evade the requirements of the
[Medicaid] Act simply by failing to appropriate
sufficient funds to meet them, it could rewrite the
congressionally imposed standards at will.*fn11
As Welfare Rights Organization of Allegheny County v. Shapp,
Medicare & Medicaid Guide (CCH) ¶ 28,597, at 10,075 (W.D.Pa.
1977) put it, in the face of inadequate Medicaid appropriations
a state has only two options: "cancel the
plan . . . or provide the money to carry out the plan."
7. In Wisconsin Hospital Ass'n and in California Hospital Ass'n
(both cited in Conclusion 2) federal courts have enjoined states'
impositions of limitations on Medicaid reimbursement rates based
on budgetary considerations rather than compliance with the Act's
standards. In each of those cases the degree and level of
noncompliance were far less egregious than IDPA's 23.5% shortfall
described in the Findings.
8. In opposition to the squarely applicable and compelling
federal authorities cited in Conclusions 6 and 7, IDPA wrongly
contends it has discretion to fashion Medicaid payments based on
available legislative appropriations, citing in support of that
false proposition a case involving payment levels for the state's
General Assistance program. Estep v. Illinois Department of
Public Aid, 115 Ill.App.3d 644, 71 Ill.Dec. 402, 450 N.E.2d 1281
(1st Dist. 1983). That case has no relevance because it involves
a state-controlled public aid program in no way tied to the
requirement and the standards set forth in the Act.
9. By tieing payment rates solely to state budgetary needs,
IDPA has totally ignored the federal mandate that rates must be
adequate to assure Medicaid beneficiaries reasonable access to
hospital services of adequate quality, Section 1396a(a)(30).
Several Illinois hospitals have stated the inadequate fiscal year
1984 inpatient reimbursement threatens their continued viability.
See Pl.Mem.Exs. A, B
and D. Significantly those hospitals serve high proportions of
Medicaid patients. Id. IDPA has not considered the impact on
Medicaid patients' access to care if those and other hospitals
are forced to curtail or cease operations entirely as a result of
the inadequate fiscal year 1984 payments.
10. This Court has considered fully and has rejected the
concept that the doctrine of "primary jurisdiction" applies to
preclude issuance of this preliminary injunction. Primary
jurisdiction is a common-law doctrine that enables a court to
determine the appropriate timing of its own exercise of
jurisdiction so that an agency sharing concurrent jurisdiction
with the court over the subject matter has time to make its own
findings with respect to the claims and disputes. United States
v. Western Pacific R.R., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1
L.Ed.2d 126 (1956). Its objective is to encourage "proper
relationships between courts and administrative agencies charged
with particular regulatory duties." Id. at 63, 77 S.Ct. at 164.
Primary jurisdiction is appropriately invoked "when a claim is
cognizable in a court but adjudication of the claim" requires the
special competence of administrative bodies created by Congress
to regulate the subject matter. Hansen v. Norfolk & Western Ry.,
689 F.2d 707, 710 (7th Cir. 1982).
11. Plaintiffs contend that in total contrast to proper
occasions for the application of primary jurisdiction concepts,
under the Act HHS does not perform an adjudicatory function with
respect to any Medicaid reimbursement scheme IDPA may adopt. They
argue neither the Act nor its implementing regulations provide
for adjudicative proceedings whereby hospitals and program
beneficiaries can present to HHS evidence detailing their
complaints with IDPA's reimbursement methodology for hospital
inpatient services to HHS. On the contrary, plaintiffs say, HHS
requires only that IDPA submit assurances to HHS that IDPA has
made findings its Medicaid hospital inpatient reimbursement rates
satisfy federal standards.*fn12 Plaintiffs therefore conclude that
as HHS has performed no independent investigation or adjudication
of the adequacy of IDPA's Medicaid reimbursement rates, deferral
to its "approval" process is not required by the doctrine of
12. It is unnecessary for purposes of this order to determine
the validity of plaintiffs' arguments expressed in Conclusion 11.
Even were the primary jurisdiction doctrine applicable to HHS'
ultimate review of IDPA's establishment of Medicaid reimbursement
rates, that could go only to IDPA's determination of what this
order terms Final Rates: the amounts necessary to satisfy the
Act's "reasonable and adequate" requirement. This order has
assumed arguendo the correctness of IDPA's determination in the
latter respect. All that is before this Court now is a purely
legal question: whether IDPA, having decided what amounts are
"reasonable and adequate," can pay less than those amounts
because the Illinois General Assembly's appropriation does not
permit full funding. And on that purely legal score the
administrator has no expertise, no special competence.
Conclusions 4-9 establish plaintiffs' likelihood of success on
the ultimate merits, and the Findings and the following
Conclusions establish the irreparability of harm plaintiffs will
sustain if compelled to function (or more accurately, to cease
functioning) under the deprivation of "reasonable and adequate"
reimbursement caused by the Shortfall Rates.
B. Plaintiffs' Harm is Substantial, Immediate and Irreparable,
and They Have No Adequate Remedy at Law
13. As already stated, IDPA itself has determined the Final
Rates to be the "reasonable
and adequate" level required to reimburse the hospitals for
inpatient hospital services rendered to Medicaid beneficiaries.
IDPA's partial reimbursement of plaintiff hospitals at the
Shortfall Rates, which are 23.5% less than the Final Rates, will
adversely affect every Illinois hospital providing inpatient
services to Medicaid beneficiaries.
14. Plaintiffs have demonstrated that at the Shortfall Rates
many Illinois hospitals will be unable to maintain the
availability, quality and scope of services necessary to serve
their patients and communities. Plaintiffs are presently
suffering substantial and irreparable harm because IDPA's payment
of Shortfall Rates fails to satisfy the federal statutory
requirements that Medicaid reimbursement rates be sufficient to
insure quality of care and be "reasonable and adequate to meet
the costs which must be incurred by efficiently and economically
operated facilities in order to provide care and services in
conformity with applicable state and federal laws, regulations,
and quality and safety standards. . . ."
42 U.S.C. § 1396a(a)(30), 1396a(a)(13)(A).
15. IDPA seeks to inject a false issue into this proceeding by
its claim that the total of (a) the fiscal year 1983
reconciliation payments and (b) the fiscal year 1984 Shortfall
Rate payments puts plaintiff hospitals in a better financial
position today than they were one year ago. Payments currently
made in satisfaction of IDPA's statutory obligation to make
reconciliation payments for fiscal year 1983 are wholly
irrelevant to the determination and satisfaction of IDPA's duty
under the Act for fiscal year 1984. IDPA's "interim" payments for
fiscal year 1983 plus the reconciliation payments for the same
fiscal year, though made after the end of that fiscal year,
together satisfy IDPA's reimbursement obligation for fiscal year
1983. IDPA improperly attempts to have the same dollars do double
duty — counted once for fiscal year 1983 to satisfy its duty for
that year, and counted again for fiscal year 1984 to show the
absence of hardship to the hospitals in cash flow terms. That
will not wash, for the hospitals do not have the luxury of IDPA's
sleight of hand "accounting": They can only use the same dollars
16. Even on IDPA's own terms, however, its premise is false.
Under the IDPA methodology in effect for fiscal year 1983,
plaintiff hospitals knew the "interim" payments they were
receiving would be reconciled after the end of that year, so the
aggregate amounts would represent reimbursement of reasonable
costs for that year only. That knowledge plus their right to
receive reconciliation payments enabled them to take steps —
including borrowing — to manage their cash flow until the
reconciliation was made. Accordingly their current receipt of the
fiscal year 1983 reconciliation payments provides only funds
allocable to and budgeted for that year. By contrast, plaintiff
hospitals can budget for fiscal year 1984 only in terms of funds
paid and assured to be paid for this year. Under IDPA's revised
methodology there is no longer a reconciliation process that
provides additional funds. This year's Shortfall Rates are the
only assured appropriation, and no hospital can undertake
short-term borrowing against such a shortfall, in the same way
that was possible for them during fiscal year 1983, when they
knew additional monies would be paid within a fixed time frame.
17. For purposes of the present order plaintiffs have
sufficiently demonstrated their losses, which they have incurred
and will continue to incur if they are reimbursed only at IDPA's
Shortfall Rates rather than the Final Rates, are much more than
mere money alone. Those losses threaten the viability of Illinois
hospitals. Continued reimbursement at the Shortfall Rates will
force the reduction or even elimination of critically important
hospital services (and is likely to force the closing of some
plaintiffs). Such reductions, eliminations and closing will
inevitably threaten the health of Illinois Medicaid beneficiaries
and the employment status of Illinois hospital employees, many of
whom are losing and will lose their jobs and thus may be
permanently lost to the Illinois health care industry.
18. Preliminary injunctive relief is necessary to avoid the
daily losses caused by inadequate Medicaid reimbursement.
Plaintiffs have made far more than a prima facie showing such
losses are threatening the viability of Illinois hospitals, the
quality and scope of services they render and the health and
well-being of the Medicaid beneficiaries they serve.
C. Any Balancing of Relative Harms (or Hardships) Favors
19. IDPA has acknowledged the interim relief requested by
plaintiffs, requiring IDPA to reimburse hospitals for inpatient
services at their IDPA Final Rates, will impose no real burden on
IDPA. IDPA has already calculated each hospital's Final Rate and
thus has only to substitute those Final Rates for the Shortfall
Rates presently in IDPA's computer system.
20. Issuance of a preliminary injunction cannot be viewed as
imposing a severe hardship on the citizens of Illinois.*fn13 Once a
state has voluntarily elected to participate in the Medicaid
program, as Illinois has, it must comply with all federal
Medicaid standards. Alabama Nursing Home Ass'n, 617 F.2d at 396.
Accordingly no state may characterize its duty to comply with the
requirements of an elective program such as Medicaid as
constituting a hardship to its citizens.
21. Even were the impact of a preliminary injunction on IDPA
substantial (as it is not), the harm plaintiffs would sustain if
the injunction were denied (see Conclusions 13-14 and 17-18) is
so great and irreparable that the balance of hardships must be
found to favor plaintiffs as long as the damage to IDPA caused by
granting the injunction can be adequately remedied. Ohio Oil Co.
v. Conway, 279 U.S. 813, 815, 49 S.Ct. 256, 257, 73 L.Ed. 972
(1929) (per curiam). That accurately describes the situation
here: If the preliminary injunction is granted but IDPA were
nevertheless ultimately to prevail on the merits, it is highly
likely that the additional expenditure of funds during the
pendency of the injunction could readily be restored to IDPA
through adjustments to plaintiffs' individual payment rates or
some other cost settlement mechanisms. Michigan Osteopathic
Medical Center, Inc. v. Dempsey, Medicare & Medicaid Guide (CCH)
¶ 31,934 (E.D.Mich. 1982).
D. Issuance of a Preliminary Injunction Will Affirmatively Serve
the Public Interest
22. All the law requires of a plaintiff is a showing the
preliminary injunction "will not disserve the public interest."
That showing is unquestionably satisfied here, for it cannot be
said an injunction that compels compliance with the Act — a
congressional mandate, the classic expression of the "public
interest" in a democracy — could disserve the public interest.
But plaintiffs have exceeded the necessary showing, for they have
demonstrated the preliminary injunction will clearly
affirmatively serve the public interest by preserving plaintiffs'
ability to provide care and medical services to Illinois'
23. IDPA may legitimately take state budgetary factors into
consideration when developing its reimbursement methodology. What
it may not do, however, is to flout the Act's requirements for
reimbursement of hospitals under the Medicaid program in order to
suit state budgetary needs. Alabama Nursing Home Ass'n, 617 F.2d
at 396; see also Thomas, 557 F. Supp. at 914. That is what IDPA
has done here. Surely the public interest would be disserved by
permitting IDPA thus to violate its duty to administer a viable
state Medicaid program consistently with federal law and
24. IDPA Mem. 50-51 asserts plaintiff hospitals may "terminate
their relationship with Medicaid and no longer accept Medicaid
recipients as [patients]" if they are dissatisfied with Medicaid
reimbursement rates. Even to the limited extent that represents
a possible alternative, it would be wholly counterproductive in
terms of the public interest: Any payment structure that would
irreparably destroy the ability of many hospitals to serve the
medically indigent of their communities disserves the public
interest in the broadest sense of that term.
For all the foregoing reasons this Court concludes:
1. Plaintiffs have proved they have at least a reasonable
likelihood of success on the merits of their claim that IDPA's
fiscal year 1984 inpatient payment rates (the Shortfall Rates,
not the Final Rates) are arbitrary and unreasonable and in
violation of Sections 1396a(a)(13)(A) and 1396a(a)(30).
2. Plaintiffs have no adequate remedy at law and will otherwise
be irreparably harmed by continued reimbursement at those
arbitrarily and unreasonably low and illegal rates.
3. Injuries the plaintiffs will continue to sustain by reason
of those arbitrary, unreasonable and illegal rates of
reimbursement, if no preliminary injunction were to be granted,
far outweigh any asserted threatened harm a preliminary
injunction may cause IDPA.
4. Granting the preliminary injunction will promote — not
disserve — the public interest as defined by Congress.
It is therefore ordered that until otherwise ordered by this
1. IDPA shall pay to each Illinois hospital participating in
the Medicaid program its "Final Rate" for all unpaid claims for
inpatient services to Medicaid recipients during fiscal year
1984. All such claims shall be paid expeditiously after the
respective participating hospitals shall have complied with the
reasonable administrative requirements established by IDPA for
payment of such claims. For purposes of this order the "Final
Rate" for each hospital means the rate specified in IDPA
notifications to that hospital (generally dated on or about June
14, 1983) and includes any modifications or adjustments that may
have been granted to that hospital as a result of a successful
appeal of its fiscal year 1984 Final Rate (pursuant to 89
Ill.Admin.Code ch. I, § 140.372).
2. Any changes or alterations proposed by IDPA that would
adversely affect the amounts or rates or timing of payments
required to conform to the preceding paragraph shall not be
implemented without prior submission to this Court for review and
3. At the status hearing held December 2, 1983 the parties
submitted argument and authorities on the question of security
(if any) to be given by plaintiffs as provided in Rule 65(c).
They agree there is always a period of delay in IDPA's payment of
reimbursement claims to hospitals in the ordinary course.
Moreover IDPA can recover any excess reimbursements made to most
plaintiff hospitals (including all Association members in the
term "plaintiff hospitals") out of future reimbursable amounts,
given the fact Hill-Burton-financed hospitals cannot withdraw
from the Medicaid program. This Court specifically finds (a) IDPA
has ample security, in the form of its ability to recapture any
excess reimbursements out of future Medicaid reimbursements, for
the payment of any costs or damages it may incur or suffer were
it found to have been wrongfully enjoined or restrained (Rule
65(c)) and (b) no surety bond or undertaking is required under
Rule 65.1. Each hospital receiving payment of Final Rates by
virtue of this order shall, as a condition of such receipt, be
deemed to have consented to IDPA's right of recapture as
described in this paragraph.