STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARK CRAIN,

vs.

Petitioner,

Case No. 19-5157MTR

AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondent.

/

FINAL ORDER

The final hearing in this matter was conducted before

J. Bruce Culpepper, Administrative Law Judge of the Division of Administrative Hearings, pursuant to sections 120.569 and 120.57(1), Florida Statutes (2018),1/ on December 3, 2019, by video teleconference with sites in Tallahassee and Tampa, Florida.

APPEARANCES

For Petitioner: Allen J. Pipkins, Esquire

Winters & Yonker, P.A. Post Office Box 3342 Tampa, Florida 33601

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Mark Crain, a Medicaid recipient, following a settlement recovered from a third party.

PRELIMINARY STATEMENTS

On September 26, 2019, Petitioner, Mark Crain, a Medicaid recipient, filed a Petition to Determine the Amount Payable to the Agency for Health Care Administration in Satisfaction of Medicaid Lien (the “Petition”). Through the Petition, Petitioner challenged the Agency for Health Care Administration’s (the “Agency”) lien for medical expenses following Petitioner’s settlement with a third party. The Agency calculated its lien using the formula set forth in section 409.910(11)(f).

Petitioner asserts that reimbursement of a lesser portion of the settlement is warranted under section 409.910(17)(b).

On September 27, 2019, the Division of Administrative Hearings (“DOAH”) notified the Agency of Petitioner’s Petition for an administrative proceeding to determine the amount payable to the Agency to satisfy the Medicaid lien.

The final hearing was held on December 3, 2019. At the final hearing, Petitioner’s Exhibits 1 through 5 were admitted into evidence. The Agency’s Exhibit 1 was admitted.2/ Neither party presented witnesses.

A court reporter recorded the final hearing. Neither party ordered a transcript. At the close of the hearing, the parties were advised of a ten-day time frame starting after the final hearing to file post-hearing submittals. Both parties filed Proposed Recommended Orders, which were duly considered in preparing this Final Order.

FINDINGS OF FACT

1. This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $100,000 settlement from a third party. The Agency asserts that it is entitled to recover $35,700, which is the amount it calculated using the formula set forth in section 409.410(11)(f).

2. The facts that gave rise to this matter are found pursuant to a stipulation of the parties.3/

3. On June 23, 2016, Petitioner was working for a tree pruning company. Petitioner’s employer assigned him to remove several branches from a tree. As directed, Petitioner climbed to the top of the tree and secured himself with one rope lanyard. Unfortunately, after he began pruning, Petitioner cut through the rope lanyard, lost his balance, and plummeted 30 feet to the ground.

4. As a result of the fall, Petitioner suffered significant physical and neurological injuries. Petitioner underwent

   
   

   multiple surgeries. His medical procedures included an open reduction with internal fixation on his right wrist, lumbar fusion surgery, and a lumbar laminectomy.

5. At the final hearing, Petitioner’s counsel represented that Petitioner’s medical prognosis is not fully known at this time. However, what is known is that Petitioner will continue to experience serious neurologic deficits. Petitioner’s injuries have left him with overall mobility issues and have affected his ability to walk normally. He suffers from a right foot drop and has limited feeling below his waist. The parties also stipulated that Petitioner has completed all medical treatment and therapy related to his accident. However, Petitioner is uncertain whether or not he will be able to return to normal activities in the future.

6. Petitioner incurred sizable medical expenses due to his injuries. The charges for Petitioner’s medical procedures totaled approximately $375,000. However, only $62,067.28 has actually been paid for his medical care. Of this amount, the Florida Medicaid program paid $41,992.33. (In addition to the

   $41,992.22 paid by Medicaid, other health insurance covered

   
   

   $20,075.06.) Petitioner did not present evidence of monetary damages other than his past medical expenses.

7. Petitioner subsequently initiated a civil cause of action for negligence against his (former) employer. Petitioner

   
   

   alleged that he was not properly trained how to safely secure himself to the tree. According to Petitioner’s counsel, Petitioner’s employer should have instructed him to use two lanyards instead of one.

8. After two years of litigation, Petitioner settled his negligence action for $100,000. The settlement did not allocate Petitioner’s award between past medical expenses and other damage categories.

9. The Agency, through the Florida Medicaid program, paid a total of $41,992.33 for Petitioner’s medical treatment resulting from the accident.4/ All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses.

10. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered.

11. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $37,500 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed in endnote 7, the “default” formula in section 409.910(11)(f) allows the Agency to collect $37,500 to satisfy its Medicaid lien.) The Agency maintains that it should receive

    
    

    the full amount of its lien regardless of whether Petitioner settled for less than what Petitioner believes is the full value of his damages.

12. Petitioner, on the other hand, asserts that the Agency should be reimbursed a lesser portion of the settlement than the amount calculated using the section 409.910(11)(f) formula. Exercising its right to challenge the Medicaid lien pursuant to section 409.910(17)(b), Petitioner specifically argues that, taking into account the full value of Petitioner’s damages, the Agency’s Medicaid lien should be reduced proportionately. Otherwise, the application of the statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner requests the Agency’s allocation from Petitioner’s third-party recovery be reduced to $4,199.23.

13. To establish the value of his damages, Petitioner submitted the medical bills from his accident, as well as relied upon the stipulated facts. Petitioner’s medical bills show that he sustained the injuries identified above, as well as underwent surgery on his spine and wrist.

14. To place a monetary value on Petitioner’s injuries, Petitioner’s counsel represented that his law firm appraised Petitioner’s injuries at no less than $1 to 2 million. However, Petitioner did not introduce any evidence or testimony

    
    

    corroborating this injury valuation or substantiating an amount Petitioner might have recovered at trial in his personal injury cause of action.5/ Neither did Petitioner offer evidence of additional damages Petitioner might be facing from his accident, such as future medical expenses, loss of quality of life, loss of employment or wages, or pain and suffering.

15. Based on his estimate, Petitioner’s counsel asserted that the $100,000 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Petitioner for his damages. Therefore, a lesser portion of the settlement should be allocated to reimburse Medicaid, instead of the full amount of the lien.

16. Petitioner proposes that a ratio should be applied based on the full value of Petitioner’s damages (conservatively estimated at $1,000,000) compared to the amount that Petitioner actually recovered ($100,000). Using these numbers, Petitioner’s settlement represents a 10 percent recovery of Petitioner’s damages. In like manner, the Medicaid lien should be reduced to 10 percent or $4,199.23 ($41,992.33 times .10). Therefore, Petitioner asserts that $4,199.23 is the portion of his third- party settlement that represents the equitable and fair amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care.

    
    

17. The Agency was not a party to Petitioner’s negligence action or Petitioner’s $100,000 settlement. No portion of the

    $100,000 settlement represents reimbursement for future medical expenses.

18. The undersigned finds that, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $37,500 from Petitioner’s recovery of $100,000 from a third party to satisfy its Medicaid lien.

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings (“DOAH”) has jurisdiction over the subject matter and parties in this proceeding pursuant to sections 120.569, 120.57(1), and 409.910(17)(b). DOAH has final order authority.

    § 409.910(17)(b), Fla. Stat.

    
    

20. The Agency is the Medicaid agency for the State of Florida, as provided under federal law, and administers Florida’s Medicaid program. See § 409.901(2), Fla. Stat.

21. The federal Medicaid program “provide[s] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.” Harris v. McRae,

    
    

    448 U.S. 297, 301 (1980). While a state’s participation is entirely optional, once a state elects to participate in the federal Medicaid program, it must comply with federal requirements governing the program. Id.; 42 U.S.C. § 1396, et seq.

22. As a condition for receipt of federal Medicaid funds, states are required to seek reimbursement for medical expenses from Medicaid recipients who later recover from legally liable third parties. See Ark. Dep’t of Health & Hum. Servs. v. Ahlborn, 547 U.S. 268, 276 (2006) and 42 U.S.C. § 1396a. To

    comply with this federal requirement, the Florida Legislature enacted section 409.910, Florida’s “Medicaid Third-Party Liability Act,” which authorizes and requires the Agency to be reimbursed for Medicaid funds paid for a recipient’s medical care when that recipient later receives a personal injury judgment or settlement from a third party. See Smith v. Ag. for Health Care

    Admin., 24 So. 3d 590 (Fla. 5th DCA 2009). The Legislature

    
    

    expressly set forth in section 409.910(1):

    
    

    If benefits of a liable third party are discovered or become available after medical assistance has been provided by Medicaid, it is the intent of the Legislature that Medicaid be repaid in full and prior to any other person, program, or entity. Medicaid is to be repaid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid. Principles of common law and equity as to assignment, lien,

    
    

    and subrogation are abrogated to the extent necessary to ensure full recovery by Medicaid from third-party resources. It is intended that if the resources of a liable third party become available at any time, the public treasury should not bear the burden of medical assistance to the extent of such resources.

    
    

23. Accordingly, by accepting Medicaid benefits, Medicaid recipients automatically subrogate their rights to any third- party benefits for the full amount of medical assistance provided by Medicaid and automatically assign to the Agency the right, title, and interest to those benefits, other than those excluded by federal law. See § 409.910(6)(a), (b), Fla. Stat.; see also

    42 U.S.C. § 1396k(a)(1) (requiring states participating in the federal Medicaid program to provide, as a condition of Medicaid eligibility, assignment to the state of the right to payment for medical care from any third party). Section 409.910(6)(c) creates an automatic lien on any such judgment or settlement with a third party for the full amount of medical expenses Medicaid paid on behalf of the Medicaid recipient.

24. However, the obligation to reimburse the Agency (and Medicaid) following recovery from a third party is not unbounded. Pursuant to 42 U.S.C. §§ 1396a(a)(25)(A), (B), and (H); 1396k(a), and 1396p(a), the Agency may only assert a Medicaid lien against that portion of Petitioner’s award from a third party that represents the costs of the medical assistance made available for

    
    

    the individual. See Ahlborn, 547 U.S. at 278; Wos v. E.M.A., 133

    
    

    S. Ct. 1391, 1396 (2013); Harrell v. State, 143 So. 3d 478, 480

    
    

    (Fla. 1st DCA 2014); Davis v. Roberts, 130 So. 3d 164, 266 (Fla.

    
    

    5th DCA 2013). The federal Medicaid statute’s anti-lien provision, 42 U.S.C. § 1396p(a)(1), prohibits a state from attaching a lien for medical assistance on a Medicaid recipient’s property other than that portion of a Medicaid recipient’s recovery designated as payment for medical care. See also

    sections 409.910(4), (6)(b)1., and (11)(f)4., which provide that the Agency may not recover more than it paid for the Medicaid recipient’s medical treatment.

25. As Ahlborn explains, the anti-lien provision of the

    
    

    federal Medicaid Act circumscribes these obligations by authorizing payment to a state only from those portions of a Medicaid recipient’s third-party settlement recovery allocated for payment of medical care. Ahlborn, 547 U.S. at 291; see also

    E.M.A. ex rel. Plyler v. Cansler, 674 F.3d 290, 312 (4th Cir.

    
    

    2012), where the court concluded “[a]s the unanimous Ahlborn Court’s decision makes clear, federal Medicaid law limits a state’s recovery to settlement proceeds that are shown to be properly allocable to past medical expenses.”

26. Section 409.910(11) establishes the formula to determine the amount the Agency may recover for medical assistance benefits paid from a judgment, award, or settlement

    
    

    from a third party.6/ Section 409.910(11)(f) states, in pertinent

    
    

    part:

    
    

    Notwithstanding any provision in this section to the contrary, in the event of an action in tort against a third party in which the recipient or his or her legal representative is a party which results in a judgment, award, or settlement from a third party, the amount recovered shall be distributed as follows:

    
    

    1. After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.

       
       

    2. The remaining amount of the recovery shall be paid to the recipient.

       
       

    3. For purposes of calculating the agency’s recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25 percent of the judgment, award, or settlement.

       
       

    4. Notwithstanding any provision of this section to the contrary, the agency shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid. For purposes of this paragraph, “medical coverage” means any benefits under health insurance, a health maintenance organization, a preferred provider arrangement, or a prepaid health clinic, and the portion of benefits designated for medical payments under coverage for workers’ compensation, personal injury protection, and casualty.

       
       

27. In short, section 409.910(11)(f) establishes that the Agency’s recovery for a Medicaid lien is limited to the lesser of: (1) its full lien; or (2) one-half of the total award, after deducting attorney’s fees of 25 percent of the recovery and all taxable costs, up to, but not to exceed, the total amount actually paid by Medicaid on the recipient’s behalf. See Ag. for Health Care Admin. v. Riley, 119 So. 3d 514, 515 n.3 (Fla. 2d DCA

    2013).

    
    

28. Accordingly, in this matter, where Petitioner (a Medicaid recipient) recovered less than what he believes is the full value of his injuries, section 409.910 protects his interest in the non-medical expense portion of the settlement. Under the section 409.910(11)(f) formula, the Agency’s lien is limited to

    $37,500, instead of the full amount of its Medicaid expenditures ($41,992.33).7/

29. However, section 409.910(17)(b) provides a method by which a Medicaid recipient may contest the amount designated as recovered medical expenses payable under section 409.910(11)(f). Following the U.S. Supreme Court decision in Wos, the Florida

    Legislature created an administrative process to determine the portion of the judgment, award, or settlement in a tort action that is properly allocable to medical expenses; and, thus, the portion of the recovery that may be used to reimburse the Medicaid lien. Section 409.910(17)(b) states:

    
    

    If federal law limits the agency to reimbursement from the recovered medical expense damages, a recipient, or his or her legal representative, may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula specified in paragraph (11)(f) by filing a petition under chapter 120 within 21 days after the date of payment of funds to the agency or after the date of placing the full amount of the third-party benefits in the trust account for the benefit of the agency pursuant to paragraph (a). The petition shall be filed with the Division of Administrative Hearings. For purposes of chapter 120, the payment of funds to the agency or the placement of the full amount of the third-party benefits in the trust account for the benefit of the agency constitutes final agency action and notice thereof.

    Final order authority for the proceedings specified in this subsection rests with the Division of Administrative Hearings. This procedure is the exclusive method for challenging the amount of third-party benefits payable to the agency. In order to successfully challenge the amount designated as recovered medical expenses, the recipient must prove, by clear and convincing evidence, that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f).

    Alternatively, the recipient must prove by clear and convincing evidence that Medicaid provided a lesser amount of medical assistance than that asserted by the agency. (emphasis added).

    
    

30. Stated succinctly, section 409.910(17)(b) establishes that the section 409.910(11)(f) formula constitutes a “default” allocation of the amount of a settlement that is attributable to medical costs, and sets forth an administrative procedure for an

    
    

    adversarial challenge of that allocation. See Harrell, 143 So.

    
    

    3d at 480 (“we now hold that a plaintiff must be given the opportunity to seek reduction of the amount of a Medicaid lien established by the statutory formula outlined in section 409.910(11)(f), by demonstrating, with evidence, that the lien amount exceeds the amount recovered for medical expenses.”).

31. In order to successfully challenge the amount payable to the Agency, the burden is on the Medicaid recipient to prove, by a preponderance of the evidence that a lesser portion of the total recovery should be allocated as reimbursement for (past) medical expenses than the amount the Agency calculated.

    § 409.910(17)(b), Fla. Stat.; See Gallardo v. Dudek, 263 F. Supp. 3d 1247, 1256 (N.D. Fla. 2017)8/ In other words, if Petitioner can demonstrate that the portion of the $100,000 settlement that should be designated as past medical expenses is less than the amount the Agency calculated using the section 409.910(11)(f) formula, the amount Petitioner must reimburse the Agency may be reduced below $35,700.

32. In apportioning Petitioner’s settlement, the Florida Legislature, despite establishing a procedure for a Medicaid recipient to challenge the amount of the lien, furnished little guidance as to the specific method or standard DOAH should use to determine what (if any) portion of a third-party recovery should

    
    

    be allocated to satisfy the Medicaid lien, instead of applying the formula in section 409.910(11)(f).

33. Using the default formula, the Agency calculated the Medicaid lien at $35,700. Petitioner contends that this amount should be reduced using a ratio that reflects the full value of Petitioner’s injuries. Petitioner calculates this lesser portion as follows: Petitioner’s injury should be valued at (conservatively) $1,000,000. Petitioner recovered $100,000 through the settlement. Petitioner’s settlement amounts to 10 percent of the full value of his damages. Applying this percentage to the Medicaid lien, Petitioner proposes that the Agency should only recover $4,199.23 from the settlement funds ($41,992.33 times 10 percent).9/ Petitioner maintains that this alternative calculation apportions a more equitable and reasonable share of the settlement to Petitioner in light of his significant injuries.

34. On the other hand, notwithstanding Petitioner’s ability to contest the lien amount, the undersigned is mindful that Medicaid funds serve as a vital safety net for those in need. “The Medicaid program provides federal and state funding to pay healthcare costs for individuals who cannot afford it.” Vestal

    v. First Recovery Grp., LLC, 292 F. Supp. 3d 1304, 1310 (M.D. Fla. 2018); see also Giraldo v. Ag. for Health Care Admin., 248

    So. 3d 53, 55 (Fla. 2018); and 42 U.S.C. § 1396a(a)(25)(A)-(B).

    
    

    “The federal government pays a substantial portion of Medicaid costs.” Vestal, 292 F. Supp. 3d at 1310. To keep the Medicaid program viable, Congress recognized that it is necessary to obtain reimbursement when a third party makes payment to the Medicaid beneficiary for medical care already paid for by Medicaid. Roberts v. Albertson’s Inc., 119 So. 3d 457, 459 (Fla. 4th DCA 2012). Roberts also observed that the Medicaid program’s

    requirement that states take all reasonable measures to seek reimbursement from legally liable third parties ensures that tax dollars are protected, while preventing Medicaid recipients from receiving “a windfall by recovering medical costs they did not pay.” Roberts, 119 So. 3d at 459 (citing Tristani v. Richman,

    652 F.3d 360, 373 (3d Cir. 2011)).

    
    

35. The undersigned is further aware that the Florida Legislature repeatedly emphasizes its desire that, “Medicaid is to be repaid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid.” § 409.910(1), Fla. Stat. (emphasis added). Moreover, “[e]quities of a recipient . . . shall not defeat, reduce, or prorate recovery by the agency as to its subrogation rights.” § 409.910(6)(a), Fla. Stat.10/

36. In balancing the competing interests of Petitioner and the Agency in this matter, the undersigned finds that Petitioner failed to introduce sufficient evidence to support a reduction of

    
    

    the $35,700 Medicaid lien. With little to no evidence describing the substantive impact of Petitioner’s injuries, the full extent of Petitioner’s current and future medical and non-medical needs (if any) remains ambiguous. Furthermore, Petitioner did not present evidence that any portion of his settlement addresses Petitioner’s possible lost wages or earning capacity, or takes into account Petitioner’s future pain and suffering.

37. In addition, the evidence presented at the final hearing does not substantiate the “full” value of Petitioner’s damages at $1,000,000. Petitioner merely argued in a conclusory manner that Petitioner’s injuries are worth $1 to 2 million in a civil trial without offering comparative jury verdicts, expert testimony, or some frame of reference supporting such appraisal.11/

38. Petitioner’s alternative calculation certainly apportions a more equitable share of the settlement to Petitioner. However, although Petitioner’s medical bills indicate that Petitioner suffered serious injuries from his fall, the record in this matter contains little evidence of the lasting financial impact of such injuries on Petitioner. Further, Petitioner did not prove that the $100,000 settlement does not include sufficient funds to cover the full amount of the Medicaid’s expenditures for Petitioner’s past medical costs as calculated under section 409.910(11)(f). Consequently,

    
    

    Petitioner failed to persuasively demonstrate that his future needs outweigh the legislative imperative that Medicaid must be “repaid in full.” Therefore, Petitioner did not provide a sufficiently compelling reason to compromise the amount the Medicaid program should recover from the third-party benefits. See Gray, No. 1D17-355, 2019 Fla. App. LEXIS 18808, at *8-9 (1st

    DCA Dec. 19, 2019)(“when the plaintiff fails to produce evidence or present testimony showing that the lien amount should be reduced, the plain language of section 409.910(11)(f) requires the ALJ to apply the statutory formula.”).12/

39. In sum, Petitioner failed to meet his burden of proving that $4,199.23 is the “lesser” portion of the $100,000 settlement that should be allocated as past medical costs, instead of the amount the Agency calculated using the section 409.901(11)(f) formula. Petitioner did not establish that its alternative methodology appropriately calculates the share of the settlement that should be allotted to satisfy the Medicaid lien. Accordingly, the Agency is entitled to the full amount of its Medicaid lien ($35,700) from Petitioner’s third-party recovery.

ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is

ORDERED that Petitioner, Mark Crain, shall pay to Respondent, Agency for Health Care Administration, the sum of

$35,700 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 27th day of December, 2019, in Tallahassee, Leon County, Florida.

S

J. BRUCE CULPEPPER Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 27th day of December, 2019.

ENDNOTES

1/ All references to the Florida Statutes are to the 2018 version, unless otherwise noted. Petitioner settled his negligence lawsuit in 2018. The Agency obtained its right to reimbursement from third-party benefits at that time.

Accordingly, the 2018 version of the governing statute (section 409.910) controls DOAH’s jurisdiction. See Suarez v. Port Charlotte HMA, LLC, 171 So. 3d 740 (Fla. 2d DCA 2015).

2/ After the final hearing, the parties moved for a protective order sealing all exhibits to protect Petitioner’s personal health information, which was granted.

3/ The parties filed a Joint Pre-hearing Stipulation agreeing to certain facts upon which the undersigned relied. At the final hearing, Petitioner did not present witness testimony to establish the extent of Petitioner’s injuries or explain the alleged full value of Petitioner’s damages. However,

Petitioner’s counsel did provide certain background information regarding Petitioner’s accident, to which Agency also stipulated at the hearing.

4/ Section 409.910(17)(c) allows the admission of Agency’s provider processing system reports (Agency Exhibit 1) as prima facie evidence to substantiate Agency’s claim for third-party benefits.

5/ At the final hearing, Petitioner’s counsel conceded that Petitioner’s civil case faced several challenges to an award of

$1 to 2 million. Petitioner’s counsel explained that a number of issues relating to the employer’s liability remained to be determined, including Petitioner’s comparative fault for the fall, whether Petitioner was an employee or independent contractor, and whether insurance coverage applied to Petitioner’s injuries.

6/ “Third-party benefit” is broadly defined to include any settlement between a Medicaid recipient and a third party for any Medicaid-covered injury, including costs of medical services related thereto, for personal injury or for death of the recipient. § 409.901(28), Fla. Stat.

7/ The Agency calculated its Medicaid lien as follows: Petitioner recovered $100,000 in his settlement with a third party. Using the section 409.910(11)(f) formula, first, 25 percent ($25,000) is subtracted from the full settlement amount, which leaves $75,000. One-half of that remaining recovery is

$37,500. Therefore, up to $37,500 is available to pay the Agency for the financial assistance Medicaid provided for Petitioner’s medical expenses.

8/ Recent federal case law directs that “clear and convincing evidence” is not the appropriate standard of proof by which to determine whether a Medicaid recipient rebuts the default formula in section 409.910(11)(f). See Gallardo v. Dudek, 263 F. Supp.

3d 1247, 1256 (N.D. Fla. 2017); and Gallardo v. Senior,

No. 4:16cv116-MW/CAS, 2017 U.S. Dist. LEXIS 112448, at *24

(N.D. Fla. July 18, 2017). Therefore, the undersigned applied the preponderance of evidence standard to Petitioner’s challenge under section 409.910(17)(b). See § 120.57(1)(j), Fla. Stat.

Further, the Florida Supreme Court instructs that a Medicaid lien may only be imposed on settlement funds attributed to past (not future) medical expenses. See Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53 (Fla. 2018). (The evidence did not

establish that any portion of Petitioner’s $100,000 settlement represents future medical expenses.).

9/ While a pro rata formula is one approach that may be used to calculate the amount of the Agency’s share of a third-party recovery, nothing in section 409.910 authorizes or requires an administrative law judge to apply a pro rata apportionment to the settlement proceeds. Gray v. Ag. for Health Care Admin.,

No. 1D17-355, 2019 Fla. App. LEXIS 18808, at *8 (1st DCA Dec. 19,

2019); cf. Eady v. State, 279 So. 3d 1249, 1253 (Fla. 1st DCA 2019) and Mojica v. State, No. 1D18-2105, 2019 Fla. App. LEXIS 18810, at *8-9 (1st DCA Dec. 19, 2019) wherein the court approved the application of a pro rata allocation methodology.

10/ See also section 409.910(13), which states:

No action of the recipient shall prejudice the rights of the agency under this section. No settlement, agreement, consent decree, trust agreement, annuity contract, pledge, security arrangement, or any other device, hereafter collectively referred to in this subsection as a “settlement agreement,” entered into or consented to by the recipient or his or her legal representative shall impair the agency’s rights. However, in a structured settlement, no settlement agreement by the parties shall be effective or binding against the agency for benefits accrued without the express written consent of the agency or an appropriate order of a court having personal jurisdiction over the agency.

11/ On the contrary, Petitioner did not prove (by a preponderance of the evidence) that he could have recovered the full amount of his alleged damages in a negligence lawsuit. See endnote 5 above. Therefore, the evidence does not substantiate Petitioner’s claim that the full value of his injuries equals at least $1,000,000.

12/ See also Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53, 56 (Fla. 2018) wherein the court instructed that “there must be a ‘reasonable basis in the evidence’ for the factfinder [the administrative law judge] to reject uncontradicted testimony supporting the reduction of a Medicaid lien. A “reasonable basis” can include “conflicting medical evidence, evidence that

impeaches the expert’s testimony or calls it into question, such as the failure of the plaintiff to give the medical expert an accurate or complete medical history, conflicting lay testimony or evidence that disputes the injury claim, or the plaintiff’s conflicting testimony or self-contradictory statements regarding the injury.” Wald v. Grainger, 64 So. 3d 1201, 1206 (Fla. 2011)

COPIES FURNISHED:

Patrick D. Brannon, Esquire Winters & Yonker, P.A.

Post Office Box 3342 Tampa, Florida 33601 (eServed)

Allen J. Pipkins, Esquire Winters & Yonker, P.A. Post Office Box 3342 Tampa, Florida 33601

Alexander R. Boler, Esquire Suite 300

2073 Summit Lake Drive Tallahassee, Florida 32317 (eServed)

Shena Grantham, Esquire

Agency for Health Care Administration Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308-2202 (eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308-2202 (eServed)

Mary C. Mayhew, Secretary

Agency for Health Care Administration Mail Stop 1

2727 Mahan Drive

Tallahassee, Florida 32308-2202 (eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308-2202 (eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308-2202 (eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing the original notice of administrative appeal with the agency clerk of the Division of Administrative Hearings within 30 days of rendition of the order to be reviewed, and a copy of the notice, accompanied by any filing fees prescribed by law, with the Clerk of the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides or as otherwise provided by law.

Docket for Case No: 19-005157MTR

Orders for Case No: 19-005157MTR