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Unity Service Coordination v. Richard Armstrong

March 12, 2012

UNITY SERVICE COORDINATION, INC., A REFERRAL AND INFORMATION SERVICE LLC;
S.O.A.R., INC.; COORDINATED CARE SERVICES, LLC; UNBEFUDDLED, LLC; LLOYD BRINEGAR SHORT & ASSOCIATES, LLC, PLAINTIFFS,
v.
RICHARD ARMSTRONG, AND LESLIE CLEMENT, IN THEIR OFFICIAL CAPACITIES, DEFENDANTS.



The opinion of the court was delivered by: B. Lynn Winmill Chief Judge United States District Court

MEMORANDUM DECISION AND ORDER

INTRODUCTION

Before the Court is Plaintiffs' Motion for Attorney Fees (Dkt. 62) and Plaintiffs' Motion to Enforce Judgment (Dkt. 64). The matters are fully briefed and at issue. Having considered the briefing and being familiar with the record, the Court will deny Plaintiffs' motions for reasons expressed in this decision.

BACKGROUND

Plaintiffs are six Idaho service coordination agencies that provide services to developmentally disabled, mentally ill, physically disabled and medically fragile individuals across the state of Idaho. Defendants are Richard Armstrong, the Director of Idaho Department of Health and Welfare (IDHW), and Leslie Clement, the Administrator of IDHW's Medicaid Division.

Plaintiffs sought to enjoin Defendants from continuing to implement a change in Medicaid reimbursement rates for service coordination benefits, which became effective on July 1, 2009. Compl., Dkt. 1. Plaintiffs moved for summary judgment, and the Court agreed that IDHW's adjustment to the reimbursement rate for indirect costs failed to satisfy the Ninth Circuit's requirement that adjustments be reasonably related to efficient and economical (indirect) costs of providing quality services. Order, Dkt. 48; see also Indep. Living Ctr. of S. Cal., Inc. v. Maxwell-Jolly, 572 F.3d 644,651-52 (9th Cir. 2009); Orthopaedic Hosp. v. Belshe, 103 F.3d 1491, 1496 (9th Cir.1997). Defendants moved for, and were denied, reconsideration. Order, Dkt. 55.

The Court heard argument regarding what remedy to apply. On consideration of the record and argument of counsel, the Court ordered the Defendant to complete a cost study, calculate a new reimbursement rate in keeping with that study, and submit a State Plan Amendment (SPA) to Centers for Medicare & Medicaid Services (CMS), reflecting the new rate. Order, Dkt. 59.

On July 1, 2011, Defendants filed a Notice of Compliance (Dkt. 61) describing the cost study and statistical analysis performed. According to the Notice, the IDHW prepared and submitted a SPA which CMS approved on June 30, 2011, and made retroactively effective on April 1, 2011. Notice, Dkt. 61. Defendants assured the Court that claims submitted between April 1 and June 30, 2011 would be reprocessed in July 2011; through the re-processing, providers would be reimbursed the difference between the old and new rates. Id.

In their motion for attorney fees and costs, Plaintiffs ask the Court to spread the costs of litigation across all who benefited from the Court's decision for Plaintiffs, applying the equitable common fund doctrine.

In their motion to enforce judgment, Plaintiffs assert that the IDHW's fiscal intermediary has required service providers to reverse bills for services at the old rate, then re-bill at the new rate, before receiving reimbursements. Scott Aff., Dkt 64,¶ 7. Plaintiffs contend that these additional steps are an undue obstacle to reimbursement, and increase the potential for error. Id. Plaintiffs seek an accurate accounting of reimbursements that have occurred to date, and an order requiring any unpaid amounts to be placed in a Court-controlled fund.

DISCUSSION

1. Motion for Attorney Fees

A. Motion Not Premature

As an initial matter, Defendants argue that Plaintiffs' motion for attorney fees is premature because no final decision has been issued. "A 'final decision' generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Budinich v. Becton Dickinson and Co., 486 U.S. 196, 199 (1988). Finality is governed by practical considerations and "not abstractions." Budinich, 486 U.S. at 201-02. Defendants correctly observe that judgment has yet to be entered. However, because the Court considers Plaintiffs' ...


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