Saint Anthony Hospital v. Eagleson, No. 21-2325 (7th Cir. 2022)Annotate this Case
Illinois moved its Medicaid program from a fee‐for‐service model, where a state agency pays providers’ medical bills, to one dominated by managed care, where private insurers pay medical bills. Most patients of Saint Anthony Hospital are covered by Medicaid, so Saint Anthony depends on Medicaid payments. Over the last four years, it has lost roughly 98% of its cash reserves, allegedly because managed‐care organizations have repeatedly and systematically delayed and reduced Medicaid payments to it. Saint Anthony sued, arguing that Illinois officials owe it a duty under the Medicaid Act to remedy the late and short payments.
The Seventh Circuit reversed the dismissal of the suit, concluding that Saint Anthony has alleged a viable claim for relief under 42 U.S.C. 1396u‐ 2(f) and may seek injunctive relief under 42 U.S.C. 1983 against the state official who administers the Medicaid program in Illinois. Illinois has tools available to remedy systemic slow payment problems—problems alleged to be so serious that they threaten the viability of a major hospital and even of the managed‐care Medicaid program as administered in Illinois. If Saint Anthony can prove its claims, the chief state official could be ordered to use some of those tools to remedy systemic problems that threaten this literally vital health care program.
The court issued a subsequent related opinion or order on September 8, 2022.