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Colorado Dept. of Health Care Policy and Financing — Class Action Lawsuit (Case Concluded)



CCDC, et al. v. Henneberry and Colorado Department of Health Care Policy and Financing, 2009CV11761


Despite requiring CDASS Program Participants to stay within their monthly allocation budgets or be removed from the program, the Department reduced allocation amounts without notification. Plaintiffs allege violations of due process rights.

In recent filings with the Court, (see “Motion to Dismiss” and “Response to Motion to Dismiss”) the Department, through the state attorney general’s office, has said the following about the CDASS program:


“In the sense that CDASS consumers direct and manage their care and are responsible for all aspects of service delivery, including payroll, these CDASS participants ‘stand in the shoes’ of a Medicaid provider. No Medicaid provider is permitted to dispute, on appeal, the reimbursement rate that Medicaid pays for covered services. Participation in the Medicaid program by providers is voluntary, as is participation in CDASS by Medicaid consumers. Just as providers dissatisfied with Medicaid rates have the option not to participate in the program, CDASS consumers may choose to opt out of the consumer directed care model and receive services from a Medicaid provider who accepts the reimbursement rates.”


“Indeed, the allocation reductions break down to such a small increase [sic EDITOR’S NOTE: THE DEPARTMENT INCORRECTLY USES THE WORD “INCREASE” INSTEAD OF “DECREASE IN”] funds actually available to pay attendants that a CDASS recipient with even the barest amount of competence should have experienced only the most negligible of effects.”

“Plaintiffs state that individual recipients have received comparatively disparate reductions and that some CDASS recipients saw changes in their allocation amounts that exceeded 3.56%. This is explained by the fact that, in September, 2009, when the 1% provider rate cut was implemented, (reducing rates for all services, including those utilized by CDASS participants), the Department forwarded an electronic worksheet to case managers to use to adjust each of their client’s allocations. Unfortunately, there was a defect in the embedded formula that was part of the worksheet. Errors in the electronic worksheet resulted in erroneous adjustments statewide to some allocations. To correct these allocations, the Department is auditing allocations and recalculating those that were incorrectly adjusted.”
“Errors in the electronic worksheet resulted in erroneous adjustments statewide to some allocations. To correct these allocations, the Department is auditing allocations and recalculating those that were incorrectly adjusted. The Department will complete its audit and communicate the results of the approximately 1,035 audited client allocations that were reported within the next couple of weeks.”

The parties reached a settlement regarding the substance.  The Department agreed to pay attorneys’ fees and then, after agreeing, refused.  Plaintiffs requested the Court enforce the agreement, including payment of fees.  The Department opposed, stating Plaintiffs were not entitled to recover fees.  On January 17, 2011, the Court ruled the Department must pay reasonable fees, and set a timetable for the parties to submit briefs regarding the reasonableness of those fees.


The Complaint was filed in Denver District Court on December 22, 2009.

The Department’s Motion to Dismiss was denied.

The Court granted our motion to enforce the settlement agreement.  At the Court’s suggestion, we petitioned the Court to award our reasonable attorneys’ fees an costs.  A hearing on this matter has been set for July 21, 2011.

On July 21 at 8:30 a.m. Judge Hoffman will be conducting a hearing to determine the reasonable amount of fees and costs the Department is liable for.  On July 8, an attorney from the Attorney General’s office representing Risk Management contacted CCDC to discuss a possible settlement before the hearing.  When CCDC pressed that attorney for an actual offer of fees and costs and made a counter-offer, that attorney explained the process for issuing payment.  This process will take too long and wouldn’t be delivered before the hearing.  We will go forward with the 7/21 hearing.

Yesterday Denver District Court Judge Morris B Hoffman held a hearing on the question of the reasonableness of CCDC’s counsel’s attorneys’ fees in this case.  Earlier this year, Judge Hoffman ruled that HCPF was required to pay Plaintiffs’ reasonable attorneys’ fees for time spent on this case and requested that the parties submit briefs to the Court explaining their positions.  The hearing yesterday lasted over three hours.  Argument was made by our attorney, Kevin Williams, and Patricia Herron of the Attorney General’s office for HCPF.  Expert witness testimony regarding the reasonable ness of the fees was provided for Plaintiffs by Tom Fox of Fox & Robertson P.C. and by David Brougham of Hall & Evans for HCPF.  Judge Hoffman has invited the parties to submit written closing statements on August 1.  These statements will be posted on our website after they are filed.  Judge Hoffman indicated that he hoped to issue a ruling within 1-2 weeks of receiving the written closing arguments.

We were awarded a portion of our actual attorneys’ fees.  The case has concluded.

Available Document

Media Coverage

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