Rehabilitation Ass'n of Virginia, Inc. v. Metcalf

8 F. Supp. 2d 520, 1998 U.S. Dist. LEXIS 8535, 1998 WL 309852
CourtDistrict Court, E.D. Virginia
DecidedJune 5, 1998
DocketCivil 3:93CV402
StatusPublished
Cited by5 cases

This text of 8 F. Supp. 2d 520 (Rehabilitation Ass'n of Virginia, Inc. v. Metcalf) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rehabilitation Ass'n of Virginia, Inc. v. Metcalf, 8 F. Supp. 2d 520, 1998 U.S. Dist. LEXIS 8535, 1998 WL 309852 (E.D. Va. 1998).

Opinion

*523 MEMORANDUM

MERHIGE, District Judge.

Plaintiff Rehabilitation Association of Virginia (“RAV”), brought this action pursuant to 42 U.S.C. § 1983 alleging that certain Medicaid Plan provisions were unlawful and invalid under federal law. On November 22, 1993, the Court entered an Order granting summary judgment in favor of RAV, holding, inter alia, that Robert C. Metcalf, as Director of the Virginia Department of Health and Human Services (the “State defendant”), acting under color of state law, had deprived RAV’s members of rights secured by § 1983. In that same Order, the Court ordered that “Plaintiff shall recover their taxable costs and shall also recover reasonable counsel fees and expenses.” There are three motions relating to the issue of attorney fees now pending before this Court. For the reasons which follow, the Court will (1) GRANT the Motion by Secretary of Health and Human Services to Alter, Amend or Clarify Pursuant to Rules 59(e) and 60(a); (2) DENY Robert C. Metcalfs Motion for Contribution and Apportionment of Attorneys Fees; and (3) GRANT Plaintiffs Petition for Expenses and Attorneys’ Fees and enter judgment for the Plaintiff in the amount of $334,851.47 plus interest at the rate of 5.434% per annum from this date and continuing until such time as the State defendant satisfies the Court’s award of attorneys’ fees and costs.

Procedural History

Plaintiff Rehabilitation Association of Virginia is an association of rehabilitation agencies that provide services to Medicare and Medicaid eligible beneficiaries in the state of Virginia. RAV was formed in 1992, and one of its goals was to confront the Virginia-Department of Medical Assistance Services about Virginia Medicaid Plan amendments of 1988 and 1990 which it believed to be unlawful and, if necessary, to organize a legal challenge to those amendments in federal court. In August of 1992, when RAV decided to bring this legal challenge, it retained the New York law firm of Rosenman & Colin, which has an experienced Health Care Practice Group. The head of that group, Peter F. Nadel, had recently won judgments for other clients in a similar § 1983 action, New York City Health and Hospitals v. Perales, 954 F.2d 854 (2nd Cir.), cert. denied, 506 U.S. 972, 113 S.Ct. 461, 121 L.Ed.2d 369 (1992), and other eases challenging state limitations on payment of Medicare cost-sharing for Qualified Medicare ■ Beneficiaries (“QMBs”). Rosenman & Colin’s local co-counsel was the Richmond law firm of Mays & Valentine, for whom LeClair Ryan was later substituted.

In this action, RAV sought declaratory and injunctive relief from a series of Virginia State Medicaid Plan Amendments that it believed nullified federal statutory rights concerning payment for services rendered to QMBs, a category of Medicare beneficiaries with incomes below federal poverty levels. QMBs include, but are not limited to, individuals who are dually eligible for benefits under the Medicare and Medicaid programs (“dual eligibles”).

Specifically, the payments at issue are known as the Medicare “cost-sharing” amounts: the annual deductible and twenty percent coinsurance portion of the Medicare-approved costs or charges for which the Medicare-eligible patient remains personally liable. The Virginia Medicaid program had long reimbursed providers for such cost-sharing amounts on behalf of dual eligibles and other QMBs. Beginning in 1988, however, Virginia adopted a series of State Plan Amendments that, as applied, prohibited direct payment of such cost-sharing amounts for therapy services furnished to patients in nursing facilities. Effective January 1, 1991, Virginia also amended its Medicaid State Plan to reduce or eliminate State payments of cost-sharing amounts for all Medicare Part B covered services furnished to QMBs. This reduction or elimination was effected by limiting total payments to providers to the Medicaid rate or fee for the particular service.

On November 22, 1993, the Court granted Plaintiffs motion for summary judgment, holding that health care providers that render services to QMBs are entitled to recover 100% of their Medicare-determined reasonable costs and charges. The Court also held that the State’s refusal to pay Medicare de *524 ductible and coinsurance amounts in Ml for services furnished to QMBs in nursing facilities, and to pay such amounts directly to rehabilitation agencies such as members of Plaintiffs organization, violated the Medicare and Medicaid 'Acts. By decision dated December 5, 1994, the Fourth Circuit affirmed this Court’s November 22, 1993 summary judgment decision. See Rehabilitation Ass’n of Virginia v. Kozlowski, 42 F.3d 1444 (4th Cir.1994), cert. denied, 516 U.S. 811, 116 S.Ct. 60, 133 L.Ed.2d 23 (1995).

I. Motion by Secretary of Health and Human Services to Alter, Amend or Clarify Pursuant to Rules 59(e) and 60(a)

On December 7, 1993, the Secretary of Health and Human Services (the “Federal defendant”) moved pursuant to Rules 59(e) and 60(a) to Alter, Amend or Clarify this Court’s November 22, 1993 Order. That Order provided for reasonable counsel fees and expenses, but did not specify whether they were to be recovered against both defendants. The Federal defendant requests that the Court (1) alter, amend or clarify the Order to state that fees and expenses are not to be awarded against them, and (2) order the Plaintiff to submit an application for fees, if it wishes, to address its eligibility for an award and whether the government’s position was substantially justified, as well as the amount of such requested fees.

In support of her motion, the Federal defendant notes that in cases brought under the Medicare or Medicaid Acts, attorney’s fee awards are governed by the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(d). Pursuant to the EAJA, the Court shall award fees to a “prevailing party” in a civil action brought against the United States. 28 U.S.C. § 2412(d). However, if the Court finds that the position of the United States was “substantially justified” or that “special circumstances make an award unjust,” it shall not award attorney fees. See 28 U.S.C. § 2412(d)(1)(A) Additionally, the statute mandates that a “party seeking an award of fees or other expenses shall ... submit to the court an application ... which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought.... The party shall also allege that the position of the United States was not substantially justified.” 28 U.S.C. § 2412(d)(1)(B). Once the application has been submitted, the government bears the burden of establishing that its position was “substantially justified.” Lively v. Bowen,

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Bluebook (online)
8 F. Supp. 2d 520, 1998 U.S. Dist. LEXIS 8535, 1998 WL 309852, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rehabilitation-assn-of-virginia-inc-v-metcalf-vaed-1998.