American Med. Ass'n v. Thompson,
No. 99 C 7850 (N.D. Ill. May 29, 2001)

A 1989 Medicare statute introduced the idea of a fee schedule, which was to be recalculated for the 1998 and 1999 fiscal years by the Health and Human Services ("HHS") Secretary. One of the core factors to the recalculation formula is the sustainable growth rate ("SGR"). When the Secretary decided not to adjust the SGR rate, a group of physicians sued HHS claiming violations of due process and the takings clause of the Fifth Amendment of the United States Constitution. The Secretary filed a motion to dismiss citing the "no review" provision of the Medicare statute, which prohibits the judiciary from hearing this case. The United States District Court for the Northern District of Illinois granted the motion to dismiss, stating there was no violation of the Constitution and holding that the Medicare statute does not explicitly contain a provision requiring the Secretary to make adjustments to the SGR. The district court also held that the physicians did not have a viable "takings" claim because participation in Medicare is voluntary.