GOVERNMENT OF THE DISTRICT OF COLUMBIA OFFICE OF THE ATTORNEY GENERAL xk * aE Ba December 10, 2010 David W. Wilmot, Esq. Chairman and President Individual Development, Inc. 1010 Vermont Avenue, N.W., Suite 810 Washington, D.C. 20005 SUBJECT: District of Columbia v. Individual Development, Inc., Civil Action No. 7399-09 (D.C. Super. Ct.) — District of Columbia’s Final Demand for Immediate Payment of Monetary Pen: of $241,089.60 Dear Mr. Wilmot: By letter dated October 21, 2010, the District of Columbia (“District”) sent Individual Development, Inc. (“IDI”) notification of monetary penalties totaling $241,089.60, in accordance with the Consent Order and Settlement Agreement (“Settlement Agreement”) dated October 28, 2009. While IDI exercised its right under the Settlement Agreement to appeal the imposition of these monetary penalties to my office by submission dated October 28, 2010, I carefully considered all of the documentation that IDI provided and denied the appeal in my letter dated November 2, 2010. Consistent with the agreed-upon terms of the Settlement Agreement, the District provided IDI with 30 calendar days or until December 2, 2010, within which to submit a check for $241,089.60 made payable to the District of Columbia Treasurer. This letter constitutes the District’s final demand for payment before exercising its rights under the Settlement Agreement to terminate the ICF/ID certifications for each of the six IDI homes which are subject to these monetary penalties. As you are well aware, the monetary penalties are triggered by Liberty Healthcare Corporation’s (“Liberty”) findings during the past two bi-monthly reviews of non-compliance with certain Directed Plans of Correction (“DPoC”) and full implementation of the Continuous Quality Improvement Plan (“CIP”) under the Settlement Agreement. Liberty's findings identified eight, DPoC items (i.¢., 20(d), 24, 36(a), 39, 40, 41, 42 and 43) and two CIP items (i.e., 173 and 174) with which IDI was out of compliance at the conclusion of the July through August 2010 bi- monthly review and the previous bi-monthly review (ie., May through June 2010) for six IDI- operated homes. In October 2009, the parties negotiated the terms of the Settlement Agreement to include third-party state monitoring by Liberty, an appeal process to the Attorney General to resolve disagreements, and failure to make payment as one of four triggers for automatic termination of ICF/ID certification. By Order Granting Joint Motion to Approve Settlement Agreement dated October 30, 2009, the Honorable Brook Hedge both approved and ordered the 1350 Pennsylvania Avenue, N.W., Suite 409, Washington, D.C. 20004 + (202) 724-1301David W. Wilmot, Esq, Chairman and President, IDI December 10, 2010 Page 2 Settlement Agreement. Accordingly, IDI’s failure to pay constitutes both a material breach of the Settlement Agreement and contempt of court. Consistent with the terms of the Settlement Agreement as ordered by the Court, the District hereby demands immediate payment by IDI of $241,089.60, plus four percent interest for eight days on that amount for the period of nonpayment from December 2, 2010, to today’s date. The check should be made payable to the District of Columbia Treasurer and be hand-delivered to my office by 3:00 pm today. The District negotiated the Settlement Agreement in good faith and fully expects IDI to abide by its obligation to make payment of $241,089.60, plus interest, immediately. Any failure to make full and immediate payment will result in the District proceeding with automatic termination of the certification for the six aforementioned IDI ICFS/ID, and such other relief as may be available under the parties” agreed-upon and court- ordered Settlement Agreement, including specific performance and contempt of court. ‘Thank you for your attention to this matter. s neral for the District of Columbia ce: Mark D. Back, Acting General Counsel Ellen A. Efros, Assistant Deputy/Chief, Office of the Attorney General Sarah A. Sulkowski, Assistant Attorney General Laura L, Nuss, DDS Director Cathy R. Anderson, DDS Deputy Director for DDA Nicholas G. Karambelas, Counsel to IDI