According to TMZ.com, prosecutors insisted that the troubled starlet should accept a significant amount of time in a residential rehab facility instead of jail time.
They were reportedly even willing to reduce the 60 days they initially wanted her in rehab to 30 days but Heller still refused, the New York Post reported.
A source told the website that negotiations are ongoing.
Heller and his troubled client don't seem to be on the same page.
He's reportedly willing to settle for a deal that involves counseling and possibly some sort of rehab.
Heller has suggested to prosecutors that the actress serve as a motivational speaker and perform non-jail activities to resolve her latest criminal case, according to a letter to the court.
But to Lohan it sounds like punishment for something I didn't do.
Lohan is charged with lying to police regarding her June car crash and for violating her probation in a previous theft case as a result. If convicted she could face 245 days in jail.