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.
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 a "sliding scale" analysis of the harm to the parties and the public from the grant or denial of the injunction and the actual likelihood of success on the merits. Id.
In order to establish a reasonable likelihood of success on the merits, the plaintiff need only show that his chances are better than negligible. Id. The court, having considered the evidence presented at the evidentiary hearing held on March 28, 1991, finds that plaintiffs have not met this standard.
Plaintiffs allege that the delay of Medicaid reimbursement payments violate various provisions of 42 U.S.C. § 1396a(a) -- namely, §§ 1396a(a)(13)(A), 1396a(a)(30)(A), and 1396a(a)(2). The provisions of § 1396a(a) set forth the requirements of state plans for medical assistance. The Secretary will approve state plans which fulfill the conditions specified in § 1396a(a). 42 U.S.C. § 1396a(b). It is undisputed that the Illinois State Medicaid Plan (the "State Plan") has been approved by the Secretary. The only provision in the State Plan concerning timeliness of payments for services rendered by providers is § 4.19(e). It states that "the Medicaid agency [IDPA] meets all requirements of 42 C.F.R. 447.45 for timely payment of claims." (Exhibit E, Illinois State Medicaid Plan, p. 61.) That federal regulation requires IDPA to pay all claims within twelve months of the date of receipt of the claim. 42 C.F.R. § 447.45(d)(4).
In evaluating the State Plan pursuant to 42 U.S.C. § 1396a(b), the Secretary was required to evaluate the State Plan in light of the requirements of 42 U.S.C. § 1396a(a). The subsequent approval of the State Plan signifies the Secretary's finding that the sole timeliness provision in § 4.19(e) adequately addresses any timeliness concerns raised by § 1396a(a). For example, the Secretary's approval of the State Plan demonstrates that the directive of 42 U.S.C. § 1396a(a)(13)(A) -- that the plan provide for payments through the use of rates which are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities -- is satisfied by the State Plan. Also, approval indicates that the Secretary found that the State Plan, including the § 4.19(e) timeliness provision, adequately provides 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," as required by § 1396a(a)(30)(A). Finally, the Secretary's approval demonstrates that the State Plan provides 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," as required by 42 U.S.C. § 1396a(a)(2).
Thus, by giving its imprimatur to the State Plan, the Secretary has made a finding that a delay in payments of up to twelve months, as permitted by the State Plan, does not contravene the provisions of § 1396a(a). See Wisconsin Hospital Ass'n v. Reivitz, 733 F.2d 1226, 1237 (7th Cir. 1984) (determination by Secretary of the reasonableness and adequacy of rates provides major guidance to the district court). By approving the State Plan, the Secretary consented to the manner in which the State of Illinois and the Medicaid providers in Illinois are to share the risk of nontimely payment, with the Illinois providers responsible for financing the first twelve months and the State of Illinois responsible for any delays thereafter.
As stated above, it is the State Plan which must comply with 42 U.S.C. § 1396a(a), and not the "practices," "intentions," or "expectations" of the agency and the providers.
Plaintiffs' allegations of a slowdown simply constitute a change in practice by IDPA. A new practice, even one that imposes great hardships on Medicaid providers, that does not violate the provisions of the State Plan cannot, by itself, cause the Plan to contravene the federal requirements with which the Plan has been found to comply.
Plaintiffs contend that, by paying in a slower manner than was previously the practice of IDPA, the agency has violated 42 C.F.R. § 447.253(a) and (b). These sections require a Medicaid agency, such as IDPA, to provide assurances and make findings in order to receive HHS approval of a state plan change. The primary finding that the agency must make is that the amended plan continues to comply with the mandates of § 1396a(a)(13)(A), i.e., that the plan's rates are "reasonable and adequate." 42 C.F.R. § 447.253(b)(1)(i).
An agency does not encounter the requirements of 42 C.F.R. § 447.253(a) and (b) unless a change has been made to the state plan's "methods and standards." Throughout this subpart of the federal regulations, the term "methods and standards" relates to payment rates. See 42 C.F.R. § 447.252(b) ("the methods and standards used by the agency to set payment rates"); § 447.253(f) ("significant changes to its methods or standards for setting payment rates"); § 447.253(g) ("using rates determined in accordance with methods and standards specified in an approved State plan"). The provision of the Medicaid Act implemented by this subpart, 42 U.S.C. § 1396a(a)(13)(A), requires "the use of rates (determined in accordance with methods and standards developed by the State)." Thus, unless the IDPA slowdown amounts to a change in the "methods and standards" of payment rates, IDPA is not required to make the assurances and findings specified in 42 C.F.R. § 447.253(a) and (b).
Plaintiffs equate delayed payments with reduced payments, which would constitute a change of rates under the State Plan. However, plaintiffs cite no authority for this position. Most of the cases cited by plaintiff pertain to actual rate changes. The remainder involve rate freezes. None of the cases concern delays in reimbursement without alleging that the actual payment rates used by the state agency are different from those set out in the state plan. Plaintiffs make two arguments to equate the slowdown to a rate reduction. First, plaintiffs claim that the slowdown is tantamount to a decision by the IDPA to make no payments for November and half of December, 1990. Second, plaintiffs try to equate the slowdown to a rate reduction of 12.5 percent for 1990. Both of these positions would be correct if IDPA had taken the posture that no reimbursement for services rendered during that one and a half month period would be forthcoming. However, the circumstances are to the contrary. IDPA has not denied liability for that period, and has stated that it plans to reimburse plaintiffs for that period at the rates and in the time frame set forth by the State Plan. At this point, plaintiffs are unable to, and have no reason to, disprove this assertion. Thus, plaintiffs' attempts to equate delayed payment with reduced payment are unpersuasive.
The court finds that the payment slowdown is not inconsistent with the terms of the State Plan. Consequently, the slowdown does not constitute an amendment to the Plan and IDPA is not required to obtain approval from the Secretary through the submission of assurances and findings.
For these reasons, the court finds that plaintiffs do not have a better than negligible likelihood of success on the merits of their claim. Where the plaintiff is unable to show likelihood of success on the merits, the harm to the plaintiff will never override this failure. Curtis v. Thompson, 840 F.2d 1291, 1296 (7th Cir. 1988). Denial of an injunction for failure to establish such likelihood of success is appropriate and proper. Id. at 1297.
Although the court need not and therefore will not address the other requirements for the issuance of a preliminary injunction, the court is not unmindful of the necessity of adequate health care for those who qualify for Medicaid benefits and would once again encourage the parties to attempt to settle this dispute.
Defendants' motion to dissolve the temporary restraining order dated March 20, 1991 is GRANTED. Plaintiffs' motion for a rule to show cause and motion for preliminary injunction are DENIED. The parties are encouraged to discuss settlement and report on the status thereof on May 3, 1991 at 10:30 a.m.