STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
WILSIN GUZMAN, AN INCAPACITATED ADULT, BY AND THROUGH HIS GUARDIAN ADELA MAYRA AGUILA,
vs.
Petitioners,
Case No. 20-0153MTR
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent.
/
FINAL ORDER
Pursuant to notice, a final hearing was held in this case on June 10, 2020, by video teleconference with sites in Tallahassee and Fort Lauderdale, Florida. The hearing was held before Robert L. Kilbride, an Administrative Law Judge of the Division of Administrative Hearings ("DOAH").
APPEARANCES
For Petitioners: Floyd B. Faglie, Esquire
Staunton & Faglie, PL 189 East Walnut Street Monticello, Florida 32344
For Respondent: Alexander R. Boler, Esquire
2073 Summit Lake Drive, Suite 330
Tallahassee, Florida 32317
STATEMENT OF THE ISSUE
What amount of Petitioners' $7,250,000.00 settlement related to personal injuries he received and also arising from a bad faith claim he intended to
file, is payable to Respondent, Agency For Health Care Administration ("AHCA"), to satisfy AHCA's Medicaid lien totaling $356,714.94.
PRELIMINARY STATEMENT
On January 15, 2020, Petitioners filed a petition with DOAH, pursuant to section 409.910(17)(b), Florida Statutes (2019). The matter was assigned to the undersigned to conduct a formal administrative hearing and enter a final order. The final hearing was scheduled for June 10, 2020.
Prior to the final hearing, the parties filed a Joint Pre-hearing Stipulation ("JPHS"), which included numerous stipulated and admitted issues of law and fact. The stipulated issues of fact have been incorporated herein.
The June 10, 2020, final hearing proceeded as scheduled, with the Petitioners calling two expert witnesses: attorney Alejandro Garcia-Halenar, Esquire, and attorney R. Vinson Barrett, Esquire. Petitioners' Exhibits 1 through 12 were admitted into evidence. AHCA did not call any witnesses or submit any evidence.
The one-volume Transcript of the proceedings was filed with DOAH on July 15, 2020. After receiving an extension of time to file their proposed final orders, the parties filed their respective orders on August 10, 2020. Both parties' proposed final orders were reviewed and considered by the undersigned in the preparation of this Final Order.
FINDINGS OF FACT
Based on the stipulations of the parties, the evidence presented at the hearing, and the record as a whole, the following Findings of Fact are made:
Stipulated Facts From the Parties
On June 21, 2013, Wilsin Guzman ("Guzman"), who was then 22 years old, was involved in a motor vehicle accident when his motorcycle struck a car that did not yield the right-of-way and turned left into Guzman's lane.
In the accident, Guzman suffered catastrophic and permanent injuries including fractures to his left and right femur, fractures to his left wrist, chest contusion, multiple facial fractures, and catastrophic brain damage. Guzman is now unable to ambulate, eat, toilet, or care for himself in any manner. JPHS p. 9 ¶1.
Guzman's medical care related to the injuries was paid by Medicaid. Medicaid, through AHCA, provided $356,714.94 in benefits. This $356,714.94 constituted Guzman's entire claim for past medical expenses. JPHS p. 9 ¶2.
Adela Mayra Aguila was appointed Guzman's guardian and she pursued a personal injury lawsuit against the driver/owner of the car that struck Guzman's motorcycle ("Defendants") to recover all Guzman's damages. JPHS p. 9 ¶3; Pet. Ex. 8
Guzman's personal injury action was settled through a series of confidential settlements in a lump-sum unallocated amount of $7,250,000.00. Because Guzman was incapacitated, court approval of the settlement was required and the circuit court, by order of December 5, 2019, approved the settlement. JPHS p. 9 ¶4.
As a condition of Guzman's eligibility for Medicaid, Guzman assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. §1396a (a)(25)(H) and § 409.910(6)(b), Fla. Stat.
During the pendency of Guzman's personal injury action, AHCA was notified of the action. JPHS p. 10 ¶5.
AHCA did not "institute, intervene in, or join in" the personal injury action to enforce its rights as provided in section 409.910(11) or participate in any aspect of Guzman's personal injury action against the Defendants. JPHS p. 10 ¶6.
Instead, AHCA asserted a $356,714.94 Medicaid lien against Guzman's cause of action and settlement of that action. JPHS p. 10 ¶5.
By letter, AHCA was notified of Guzman's settlement. JPHS p. 10 ¶7.
AHCA has not filed a motion to set-aside, void, or otherwise dispute Guzman's settlement. JPHS p. 10 ¶8.
The Medicaid program through AHCA spent $356,714.94 on behalf of Guzman, all of which represents expenditures paid for Guzman's past medical expenses. JPHS p. 10 ¶9.
Guzman's taxable costs incurred in securing the settlement totaled
$281,958.20. JPHS p. 10 ¶10.
Application of the formula at section 409.910(11)(f) to Guzman's
$7,250,000.00 settlement requires payment to AHCA of the full $356,714.94 Medicaid lien. JPHS p. 10 ¶11.
Petitioners have deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). JPHS p.10 ¶12.
Evidence From the Hearing
Testimony of Alejandro Garcia-Halenar, Esquire
Alejandro Garcia-Halenar, Esquire ("Garcia"), has been a trial attorney for 20 years and practices with Steinger, Greene & Feiner in Fort Lauderdale, Florida. He is the head of his firm's Fort Lauderdale litigation department and handles four to six jury trials each year. Most of his cases involve traumatic catastrophic brain injury.
He is familiar with reviewing medical records, life care plans, economist reports, and interviewing/deposing expert witnesses. Garcia stays abreast of jury verdicts by reviewing jury reports and discussing cases with other attorneys. Garcia is a member of a number of trial attorney
associations, including the Florida Justice Association and the Broward County Justice Association.
As a routine part of his law practice, he makes assessments concerning the value of damages suffered by injured clients and he explained his process for making these determinations. Garcia is familiar with, and routinely participates in, allocation of settlements in the context of health insurance liens, worker compensation liens, and Medicare set-asides, as well as, allocations of judgments made by trial judges, post-verdict.
Garcia represented Guzman in his personal injury claim. Garcia reviewed the accident report, reviewed Guzman's medical records, reviewed the life care plan, reviewed the economist report, interviewed/deposed fact and expert witnesses, and met with Guzman and his family numerous times.
On the day of the accident, Guzman left work around 3:00 p.m. on his motorcycle. A short distance from work, the defendant turned her Cadillac Escalade left in front of Guzman's motorcycle. Guzman laid-down his motorcycle in an attempt to avoid hitting the defendant's vehicle, but ultimately struck the side of her vehicle. There were no line of sight issues or anything blocking her view, and the defendant was cited by law enforcement for making an illegal left turn and reckless driving.
Guzman was taken to the hospital where it was determined that he had multiple broken bones, internal injuries, and catastrophic brain damage. It was questionable if Guzman was going to survive and he remained in a coma for over two months and in the ICU for some time longer.
Garcia felt that Guzman's injuries profoundly and negatively impacted his life. Due to the catastrophic brain damage, Guzman is unable to walk, feed himself, bathe, and requires 24-hour-a-day care. He has limited speech and only short-term memory.
Guzman's mother quit her job as a home health aide to stay home and care for Guzman 24/7. Further, Guzman's fiancée moved out of her parents' home and into Guzman's parents' home to help care for Guzman.
Based on his professional training and experience, Garcia testified that Guzman's total damages have a value in excess of $50 to $60 million. Garcia explained that during the litigation of the case, a life care plan and economist report was prepared calculating the present value of Guzman's past and future lost wages and future medicals.
The economist report provided a low and a high valuation based on whether Guzman remained in-home or was transferred to a nursing home. The lower calculation placed a value of past lost wages at $28,208.00, future lost wages at $194,761.00, and future medicals at $15,160,055.00. The higher calculation valued past lost wages at $28,208.00, future lost wages at
$240,814.00, and future medicals at $30,664,888.00.
Garcia explained that taking these numbers and adding them to the
$356,714.94 claim for past medical expenses, Guzman's total claim for economic damages would be between $15,739,738.00 and $31,290,624.00.
Garcia opined that Guzman's life care plan and economist report were consistent with life care plans and economist reports he had seen in other cases involving catastrophic brain damage. He concluded that the calculation of Guzman's economic damages was conservative.
Garcia explained that added to the estimated $15 million to
$31 million in economic damages, would be Guzman's claim for noneconomic damages. This added amount was necessary to calculate the full value of Guzman's damages. Garcia testified that typically the noneconomic damages awarded by a jury alone are in excess of the value of the economic damages.
Garcia explained that his law firm routinely presents cases to focus groups and mock juries to gauge the potential reaction of a jury. Garcia testified that in Guzman's case, the focus groups and mock juries consistently placed a high value on Guzman's noneconomic damages, and that each focus group assessed noneconomic damages with numbers ranging from $50 million, up to as high as $100 million. Garcia testified that the jury verdicts
in Petitioners' Exhibit 12 were comparable to Guzman's case and supported his valuation of Guzman's damages.
Garcia testified that Guzman's noneconomic damages could have been in this $22 to 39 million range, based on the focus groups and mock jury results for noneconomic damages.
Adding the $15 to $31 million in economic damages to the noneconomic damages, Garcia testified that Guzman's damages had a total value in excess of $50 to $60 million. Garcia testified that it is a routine part of his practice to round-table cases with other attorneys. His discussions regarding Guzman's case with attorneys in his firm, as well as with the law firm handling the potential insurance bad faith claim, resulted in a consensus that Guzman's total damages had a value in excess of $50 to $60 million.
Garcia recapped his total damage valuation and concluded that it would be extremely conservative to value all of Guzman's damages at
$30 million.
Garcia testified that after his evaluation and investigation of the case, a personal injury lawsuit was filed against the owner and driver of the vehicle. He explained that prior to filing the suit, a demand was made for the defendant/owner's $30,000.00 insurance policy limits in settlement of the personal injury claim because there was no other insurance available.
The insurance company did not appropriately tender the $30,000.00 in a timely manner. In Garcia's professional opinion, this gave rise to a potential claim for bad faith against the driver's insurance company, making it potentially liable for all personal injury damages suffered by Guzman.
Garcia summarized the procedures related to a bad faith claim brought against an insurance company. He explained that in such circumstances the initial lawsuit for personal injuries is brought against the underlying at-fault party, in this case, the driver. If and when a judgment is
entered against the at-fault party, a separate bad faith lawsuit is ripe and may be brought against the insurance company to recover on the judgment.
In Garcia's opinion, a bad faith claim against an insurance company and related litigation, can be a lengthy process and is extremely complicated with mixed results. In this case, the initial lawsuit was brought against the owner and driver of the vehicle. The insurance company was notified of the lawsuit against the driver and was aware of its potential bad faith liability if a judgment was entered against the Defendants.1
After five years of litigation, the personal injury case settled on the eve of trial for $7,250,000.00. Garcia testified that the settlement was based, in part, on the risk of proceeding forward with a future complicated bad faith lawsuit and the extensive time involved in such a proceeding.2
Garcia testified that the $7,250,000.00 settlement did not fully compensate Guzman for the total or full value of his damages arising from the accident. He opined that based on a conservative value of total damages of $30 million, Guzman recovered only 24.16% of the total value of his damages in the settlement.
He further explained that because Guzman recovered only 24.16% of his total damages, he recovered only 24.16% of his $356,714.94 claim for past medical expenses in the settlement, or $86,182.33.
Garcia concluded, without objection, that it would be reasonable and fair to allocate $86,182.33 of the settlement to past medical expenses. Garcia also testified that because the allocation to past medical expenses was based on a conservative value of all damages at $30 million, the allocation of
$86,182.33 of the settlement to past medical expenses was conservative as well.
1 Guzman had attorneys working on his personal injury case who specialized in bad faith litigation. The insurance company participated in the litigation of the personal injury lawsuit.
2 Regardless of what considerations drove the settlement amount, the evidence showed that Petitioners' experts still valued Guzman’s total damages at $30 million.
Testimony of R. Vinson Barrett, Esquire
Barrett has been a trial attorney for over 40 years and is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee, Florida. His practice is dedicated to plaintiff's personal injury and wrongful death cases. He has handled cases involving catastrophic brain injury and routinely handles jury trials.
Barrett is familiar with reviewing medical records, life care plans, and economist reports. Barrett stays abreast of jury verdicts by reviewing jury verdict reports and discussing cases with other trial attorneys. He is a member of the Florida Justice Association and the Capital City Justice Association.
As a regular part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. He explained his process for making these assessments. Barrett testified that he is familiar with settlement allocation in the context of health insurance liens, Medicare set-asides, and workers' compensation liens.
He is familiar with the process of allocating settlements in the context of Medicaid liens and described that process. Barrett has been accepted as an expert in the valuation of damages in federal court as well as numerous Medicaid lien hearings at DOAH.
Barrett reviewed the exhibits filed in this proceeding, the JPHS, and listened to Garcia's testimony. He was familiar with Guzman's injuries. Barrett detailed the extensive nature of Guzman's injuries and the impact Guzman's injuries had on his life.
Barrett commented that Guzman had suffered as catastrophic an injury as you can possibly suffer, and he could not imagine how an individual could be hurt much worse. In Guzman's case, the injuries were made worse by the fact that Guzman was not just in a coma or "completely out of it." Guzman had enough mental capacity remaining to realize that his life, as he would have hoped for it, was over.
Based on his professional training and experience, Barrett believed Guzman's total damages had a conservative value between $30 and $50 million. Barrett outlined that the economist report placed the present value of Guzman's economic damages at between $15 and $31 million. Barrett testified that this present valuation of the economic damages was very similar to valuations he had seen in other economic reports involving catastrophic brain damage, and he believed the valuations were reasonable.
He believed that in addition to the $15 to $31 million in economic damages, he would add Guzman's claim for noneconomic damages. According to Barrett, Guzman's claim for noneconomic damages would have a significantly high value. He felt that it would be extremely unlikely for a jury to award less than $15 million to Guzman for his noneconomic damages.
Barrett noted that the jury verdicts included in Petitioners' Exhibit 12 were comparable to Guzman's case--noting that the average award for pain and suffering in those verdicts was $24.7 million. The $24.7 million value of noneconomic damages was in-line with his opinion that Guzman's noneconomic damages alone would be in the same range as Guzman's economic damages--$15 to $31 million.
Barrett testified that, in light of the fact that he believed Guzman's damages would have a total combined value of between $30 and 50 million, a total value of $30 million was extremely conservative.
Barrett was aware that the case settled for $7,250,000.00. He concluded that this settlement amount did not fully compensate Guzman for all the damages he had suffered.
Using a value of total damages of $30 million, the $7,250,000.00 settlement represented a recovery of 24.16% of the value of the damages. Because only 24.16% of the total damages were recovered by Guzman, only
24.16% of the $356,714.94 claim for past medical expenses was recovered in the settlement, or $86,182.33.3
Barrett concluded that it was reasonable and conservative to allocate
$86,182.33 of the settlement to past medical expenses.
AHCA did not call any witnesses, present any evidence regarding a different value of the damages or utilize experts to propose a different way or method to value the total damages suffered by Guzman. Nor did AHCA persuasively contest the experts' valuation of Petitioners' total damages or the methodology used to calculate the $86,182.33 allocation to past medical expenses. As a result, Petitioners' testimony and evidence presented regarding his total damages was essentially unrebutted and uncontradicted.
To recap the evidence, Petitioners presented the unrebutted expert testimony of two trial lawyers who made projections as to the amount of total damages suffered by Guzman. This evidence, in turn, adequately proved what portion of Guzman's undifferentiated settlement was "fairly allocable to past medical expenses."
More specifically, and in "doing the math" under the proportionality methodology--the $7,250,000.00 settlement represents a 24.16% recovery of all damages. ($7,250,000.0 is 24.16% of $30 million).
Applying the same ratio of 24.16% to the $356,714.94 in past medical expenses paid by AHCA, the undersigned finds that $86,182.33 in the settlement agreement is "fairly allocable" to past medical expenses.
CONCLUSIONS OF LAW
AHCA is the state agency responsible for administering Florida's Medicaid program. § 409.910(2), Fla. Stat.
DOAH has jurisdiction of this matter, pursuant to section 409.910(17)(b). The parties acknowledged in their JPHS that the proper
3 This analysis used by both Barrett and Garcia is commonly referred to as the proportionality or pro rata methodology or test.
standard of proof in this proceeding for Petitioners is a preponderance of the evidence.
"Medicaid is a cooperative federal-state welfare program providing medical assistance to needy people." Roberts v. Albertson's Inc., 119 So. 3d 457, 458 (Fla. 4th DCA 2012). Although state participation in this federal program is voluntary, once a state elects to participate, it must comply with the federal Medicaid law. Id.
Federal law requires that participating states seek reimbursement for medical expenses incurred on behalf of Medicaid recipients who later recover from legally-liable third parties.
Under the United States Supreme Court's reasoning in Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), the federal Medicaid anti-lien provision at 42 U.S.C. § 1396p(a)(1) prohibits a Medicaid lien on any proceeds from a Medicaid recipient's tort settlement.
However, the provisions requiring states to seek reimbursement of their Medicaid expenditures from liable third parties, also create an express exception to the anti-lien law, and authorize states to seek reimbursement from the medical expense portion of the recipient's tort recovery.
As noted, the Federal Medicaid Act limits a state's recovery to certain portions of the settlement funds received by the Medicaid recipient. In Florida, this has been recently interpreted by the Florida Supreme Court to be the amount in a personal injury settlement which is fairly allocable to past (not future) medical expenses. Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53, 56 (Fla. 2018).4
4 Recently, in Gallardo v. Dudek, 963 F.3d 1167 (11th C.A. 2020), the Eleventh Circuit Court of Appeals determined that amounts in a settlement agreement fairly allocable to both past and future medical expenses are subject to the agency's lien. However, this is contrary to the Florida Supreme Court's holding in Giraldo. Generally, state courts are not required to follow the decisions of intermediate federal appellate courts on questions of federal law. "Although state courts are bound by the decisions of the United States Supreme Court construing federal law, Chesapeake & O. Ry. Co. v. Martin, 283 U.S. 209, 220–221, 51 S.Ct. 453, 75 L.Ed. 983 (1931), there is no similar obligation with respect to decisions of the lower federal courts." Abela v. Gen. Motors Corp., 469 Mich. 603, 677, N.W. 2d 325, 327 (2004), cert.
In this case, Guzman settled his bad faith claim against third parties liable to him for injuries related to AHCA's Medicaid lien. Therefore, AHCA's lien may be enforced against his tort settlement.
The underlying question in this case, however, is how much is AHCA entitled to recover from Petitioners for the medical payments it provided to Guzman?
Section 409.910(11) establishes a formula to determine the amount AHCA may recover for medical assistance benefits paid from a judgment, award, or settlement from a third party. 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:
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.
The remaining amount of the recovery shall be paid to the recipient.
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
denied, 543 U.S. 870, 125 S.Ct. 98, 160 L.Ed.2d 117 (2004). Decisions of numerous state Supreme Courts have similarly held that state courts are under no obligation to follow the decisions of the lower federal courts. See, e.g., Skelly Oil Co. v. Jackson, 194 Okla. 183, 148 P.2d 182, 185 (1944) ("[D]ecisions of lower federal courts are persuasive and usually followed unless a conflict between the decisions of such courts makes it necessary to choose between one or more announced interpretations."). Carnival Corp. v. Carlisle, 953 So. 2d 461 (Fla.
2007). As a result, the undersigned has limited his inquiry to that portion of Guzman’s settlement allocable to past medical expenses.
at 25 percent of the judgment, award, or settlement.
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.
In essence, section 409.910(11)(f) provides that the agency's recovery for a Medicaid lien is the lesser of: (1) its full lien; or (2) one-half of the total award, after deducting attorney's fees of 25% of the recovery and taxable costs, 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 (Fla. 2d DCA 2013).
Here, the parties agreed that application of the section 409.910(11)(f) formula to Petitioners' settlement would require payment to AHCA of
$356,714.94.
However, another corresponding section, section 409.910(17)(b), outlined below, provides a means by which a Medicaid recipient may challenge the amount AHCA seeks under the default formula found above at section 409.910(11)(f).
More specifically, following the United States Supreme Court's decision in Wos v. E.M.A., 568 U.S. 627, 633 (2013), the Florida Legislature created an administrative process to challenge and determine what portion of a judgment, award, or settlement in a tort action is properly allocable to medical expenses and, thus, what portion of a petitioner's settlement may be
recovered to reimburse the Medicaid lien held by AHCA. Section 409.910(17)(b) states:
A recipient 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 payable to the agency, the recipient must prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.[ 5]
In simple terms, if Petitioners can demonstrate that the portion of Guzman's settlement agreement fairly allocable as payment for past medical expenses is less than the amount the agency seeks, then the amount Petitioners are obligated to pay to AHCA for its lien should be reduced.
Notably, the question of how to fairly allocate the past medical expense portion of an undifferentiated settlement agreement has been the
5 In this case, as previously noted, the parties agreed that the standard of proof is a preponderance of the evidence.
subject of considerable and ongoing debate. Unfortunately, this has not yet been squarely decided by the United States Supreme Court, as it acknowledged:
A question the Court had no occasion to resolve in Ahlborn is how to determine what portion of a settlement represents payment for medical care. The parties in that case stipulated that about 6 percent of respondent Ahlborn's tort recovery (approximately $35,600 of a $550,000 settlement) represented compensation for medical care. Id., at 274, 126 S. Ct. 1752. The Court nonetheless anticipated the concern that some settlements would not include an itemized allocation. It also recognized the possibility that Medicaid beneficiaries and tortfeasors might collaborate to allocate an artificially low portion of a settlement to medical expenses.
Wos, 568 U.S. at 627, 634.
In an effort to ascertain the proper answer to the "allocation conundrum," several Florida District Court of Appeal opinions have relied on the following statement by the Florida Supreme Court as settling the question and have used it to discern the correct methodology to establish AHCA's lien. The Florida Supreme Court noted:
Because we hold that the federal Medicaid Act prohibits AHCA from placing a lien on the future medical expenses portion of a Medicaid recipient's tort recovery, we remand with instructions that the First District direct the ALJ to reduce AHCA's lien amount to $13,881.79. Although a factfinder may reject "uncontradicted testimony," there must be a "reasonable basis in the evidence" for the rejection. Wald v. Grainger, 64 So. 3d 1201, 1205-06 (Fla. 2011). Here, Villa presented uncontradicted evidence establishing $13,881.79 as the settlement portion properly allocated to his past medical expenses, and there is no reasonable basis in this
record to reject Villa's evidence. For this reason, no further fact finding is required. (Emphasis added).
Giraldo, 248 So. 3d at 56.
Fortunately, the vexing question that had existed in the law regarding an appropriate methodology to use has been resolved by the First District Court of Appeal in a series of related opinions. While the Florida Supreme Court has not issued a definitive or express opinion on the matter, the prevailing law in the First District Court of Appeal appears to be settled when certain evidentiary circumstances exist.
More specifically, in Eady v. Agency for Health Care Admininistration, 279 So. 3d 1249 (Fla. 1st DCA 2019); Larrigui-Negron v. Agency for Health Care Administration, 280 So. 3d 550 (Fla. 1st DCA 2019); and Mojica v. Agency for Health Care Administration, 285 So. 3d 393 (Fla. 1st DCA 2019), the appellate panels accepted the proportionality test or pro-rata method advanced by Petitioners as one acceptable method of proof.6
As a result, a petitioner may carry his burden of proof, and the tribunal may reduce AHCA's lien, by the same ratio that petitioner's settlement bears to his total damage claim. This may be accomplished through the testimony of expert witnesses.
Notably, if the expert testimony is not adequately contradicted or rebutted, it stands as the proper allocation in the settlement agreement and sets the amount AHCA may recover.
6 These cases do not exclude the possibility that the agency may present evidence to refute or contradict the expert testimony offered. Likewise, every case is different. Neither Eady, Larrigui-Negron, or Mojica define the exact parameters of the pro-rata formula. Nor do they exclude the possibility that there may be other acceptable or competing methods of proof to use at the hearing. Likewise, there may be facts elicited from the experts on direct or cross examination or other evidence presented, which warrant an adjustment to the proportionality test or the total damages projected by the experts. As an example, the undersigned has previously found that a petitioner’s high degree of comparative negligence in an accident should be considered insofar as it affects the total damages recoverable by the petitioner at trial. Hosek ex rel. Hosek v. Ag. For Health Care Admin., Case No. 18-6720MTR (Fla. DOAH July 3, 2019)(Rev. Apr. 27, 2020).
In this case, there was no evidence presented by AHCA to contest or contradict that the amount of $86,182.33 was a fair allocation of past medical expenses in Petitioners' settlement, as presented by his experts.
The fact that the settlement resulted from negotiations between Guzman, the Driver/Defendant, and insurance company related, in whole or in part, to a potential bad faith lawsuit does not appear to be an impediment to the application and use of the proportionality methodology. See Willoughby v. Ag. for Health Care Admin. 212 So. 3d 516, 520-21 (Fla. 2d DCA 2017), approved Giraldo v. Ag. For Health Care Admin., 248 So. 3d 53 (Fla. 2018).
The Willoughby court held that settlements in cases involving bad faith claims are subject to Medicaid liens and the tribunal may consider the bad faith settlement in a section 409.910(17)(b) administrative proceeding. AHCA has cited no law or case to the contrary.
Counsel for AHCA cross-examined Petitioners' experts, but elicited no compelling information or persuasive evidence to assail their opinions that a fair allocation of past medical expenses recovered in the Petitioners' undifferentiated settlement was $86,182.33.
In short, Petitioners' expert testimony concerning a fair allocation of the settlement agreement was unchallenged by AHCA, without any contrary or contradictory facts or evidence in the record.
In the aforementioned cases, the First District Court of Appeal has determined that it would be an error to reject the expert testimony, unless there is a basis in the record to do so. There was no basis in this record to do so.
As such, and based on this record, the undersigned is obliged to follow Eady, Larrigui-Negron, and Mojica, and concludes that $86,182.33 is the amount due to AHCA.
ORDER
Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that AHCA shall recover the sum of $86,182.33 from the Petitioners to fully satisfy its Medicaid lien.
DONE AND ORDERED this 3rd day of September, 2020, in Tallahassee, Leon County, Florida.
S
ROBERT L. KILBRIDE
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 3rd day of September, 2020.
COPIES FURNISHED:
Alexander R. Boler, Esquire
2073 Summit Lake Drive, Suite 330
Tallahassee, Florida 32317 (eServed)
Floyd B. Faglie, Esquire Staunton & Faglie, PL 189 East Walnut Street Monticello, Florida 32344 (eServed)
Shena Grantham, Esquire
Agency for Health Care Administration Building 3, Room 3407B
2727 Mahan Drive
Tallahassee, Florida 32308 (eServed)
Richard J. Shoop, Agency Clerk
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Stefan Grow, General Counsel
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Mary C. Mayhew, Secretary
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1
Tallahassee, Florida 32308 (eServed)
Thomas M. Hoeler, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (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.
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 03, 2020 | DOAH Final Order | In the absence of any evidence by ACHA to contradict or rebut the Petitioner's expert testimony relating to the proportionality test they employed to challenge the lien, ACHA's lien is reduced proportionally from $356,714.94 to $86,182.33, or by 24.16%. |
