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ILLINOIS COUNCIL ON LONG TERM CARE v. BRADLEY

March 29, 1991

ILLINOIS COUNCIL ON LONG TERM CARE; GILMAN NURSING CENTER, an Illinois limited partnership; SPRING VALLEY NURSING CENTER, an Illinois limited partnership; and WOODSIDE MANOR, an Illinois corporation, Plaintiffs,
v.
PHILLIP BRADLEY, in his official capacity as Director of the Illinois Department of Public Aid; DAWN CLARK NETSCH, in her official capacity as Comptroller of the State of Illinois; and PATRICK QUINN, in his official capacity as Treasurer of the State of Illinois, Defendants


James F. Holderman, United States District Judge.


The opinion of the court was delivered by: HOLDERMAN

JAMES F. HOLDERMAN, UNITED STATES DISTRICT JUDGE

 Plaintiffs, Illinois Council on Long Term Care (a non-for-profit health care association representing over 150 proprietary Illinois nursing homes) and three nursing homes with at least 70% Medicaid recipients as residents, bring this action for declaratory and injunctive relief against the director of the Illinois Department of Public Aid (IDPA), the state agency which administers the Illinois Medicaid program, and the Comptroller and Treasurer of the State of Illinois.

 Plaintiffs seek preliminary injunctive relief claiming that the slowdown in IDPA's Medicaid reimbursements to nursing homes for care provided to Medicaid beneficiaries violates the federal Medicaid Act (the "Act"), Title 42, United States Code, Sections 1396a(a)(2), 1396a(a)(13)(A), and 1396a(a)(30)(A), and implementing regulations at 42 C.F.R. §§ 447.250-.257.

 BACKGROUND FACTS

 Illinois participates in the Medicaid program, a cooperative federal-state program established by the Act under which federal matching funds are provided to states to furnish medical assistance to persons "whose income and resources are insufficient to meet the costs of necessary medical services." 42 U.S.C. § 1396. IDPA administers and supervises the Illinois Medicaid program pursuant to § 1396a(a)(5) and Ill. Rev. Stat. ch. 23, § 1-1 et seq. Plaintiff Illinois Council on Long Term Care has a membership comprised of 150 proprietary Illinois nursing homes. Most of the Council's members, including the three plaintiff nursing homes, participate in the Illinois Medicaid program.

 Under 42 U.S.C. § 1396a, a state becomes eligible to participate in the Medicaid program, and to receive federal matching funds, by submitting to the Secretary of Health and Human Services (HHS) (the "Secretary") a State Medicaid Plan that meets the federal standards prescribed in the Act and its implementing regulations, and by having the plan approved by the Secretary. A state plan for medical assistance must provide for financial participation by the state on a basis "which will assure that the lack of adequate funds from local sources will not result in lowering the amount, duration, scope, or quality of care and services available under the plan." 42 U.S.C. § 1396a(a)(2).

 As of October 1, 1981, the Act requires a state plan to provide for payment at rates "which the State finds, and makes assurances satisfactory to the Secretary, are 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)(13)(A).

 Section 1396a(a)(30) requires that state plans "provide such methods and procedures relating to the utilization of, and the payment for, care and services available under the plan . . . as may be necessary . . . to assure that payments are consistent with efficiency, economy, and quality of care."

 A Medicaid agency must pay for long term care services using rates determined in accordance with methods and standards specified in an approved state plan. 42 C.F.R. § 447.253(g).

 When a Medicaid agency makes a change in its "payment methods and standards," but not less often than annually, the agency must provide assurances and make findings that "the agency pays for . . . long-term care facility services through the use of rates that are reasonable and adequate to meet the costs that must be incurred by efficiently and economically operated providers to provide services in conformity with applicable State and Federal laws, regulations, and quality and safety standards." 42 C.F.R. § 447.253(a), (b).

 The IDPA has established monthly billing cycles. Historically, IDPA has had a median delay of approximately 30 days from the time services are rendered to the commencement of the processing of claims, and another 30 days delay before reimbursement is made to the providers. Plaintiffs claim that this 60 day delay in reimbursement from the date services are provided reflects the intention of the state plan and the expectations of the nursing homes. In fiscal years 1989 and 1990, however, the delay after presentation of claims to IDPA increased from 30 days to approximately 40 days. The delays expanded again in fiscal 1991: Payments for November, 1990 services were made between 80 and 90 days after presentation of the invoice, and, on March 21, 1991, payment was received for certain services rendered through December 6, 1990. As of the date of this opinion, March 29, 1991, no payments had been received by any nursing homes for any services rendered after December 6, 1990.

 DISCUSSION

 To support the issuance of a preliminary injunction, a plaintiff must demonstrate: (1) a reasonable likelihood of success on the merits; (2) the inadequacy of a remedy at law; (3) the existence of irreparable harm without the injunction; (4) that the threat of harm to the plaintiff outweighs any harm to the defendant if the injunction were issued; (5) that the public interest would not be disserved if the injunction were granted. Kellas v. Lane, 923 F.2d 492, slip op. at 3 (7th Cir. 1990). Though the plaintiff must satisfy each of these elements to prevail, his threshold burden is to show the first three factors. Id. Only when this burden is met does the inquiry become ...


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