STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEXTER ST. SURIN,

Petitioner,

vs.

AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondent.

/

Case No. 20-2511MTR

FINAL ORDER

The final hearing was held in this case by video teleconference with sites in Tallahassee and West Palm Beach, Florida, on September 3, 2020, before Brian A. Newman, an Administrative Law Judge of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: 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

The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA or Respondent), as reimbursement for medical expenses paid on behalf of Petitioner pursuant

to section 409.910, Florida Statutes (2020),1 from settlement proceeds he received from third parties.

PRELIMINARY STATEMENT

On June 1, 2020, Petitioner filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien (Petition). The Petition challenged AHCA’s placement of a Medicaid lien in the amount of $28,482.15 on Petitioner’s $100,000 settlement proceeds from third parties.

Prior to the final hearing, the parties filed a Joint Pre-hearing Stipulation, in which they stipulated to certain facts and law. To the extent relevant, the parties’ stipulated facts and law have been incorporated below.

At the final hearing, Petitioner presented testimony from one witness, Scott Kimmel, Esquire. Petitioner’s Exhibits 1 through 8 were admitted in evidence. Respondent did not call any witnesses or offer any exhibits.

A one-volume Transcript of the final hearing was filed on November 5, 2020. The parties timely filed Proposed Final Orders, which have been considered in preparing this Final Order.

FINDINGS OF FACT

1. AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409.

2. On September 6, 2019, Mr. St. Surin was severely injured when his motorcycle struck a car. In this accident, Mr. St. Surin suffered severe and permanent injury to his back, neck, scapula, ribs, and knee.

   
   

   1 All references to Florida Statutes are to the 2020 codification, unless otherwise indicated.

   
   

3. Mr. St. Surin’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, provided $28,482.15 in benefits. In addition, Medicaid, through a Medicaid managed care organization known as WellCare of Florida, paid $7,278.25 in benefits. The combined total amount of these benefits, $35,760.40, constitutes Mr. St. Surin’s entire claim for past medical expenses.

4. Mr. St. Surin pursued a personal injury claim against the owner and driver of the car who caused the accident (collectively the “Tortfeasors”) to recover all of his damages.

5. The Tortfeasors’ insurance policy limits were $100,000, and the Tortfeasors had no other collectable assets.

6. Mr. St. Surin’s personal injury claim was settled for the insurance policy limits of $100,000.

7. During the pendency of Mr. St. Surin’s personal injury claim, AHCA was notified of the claim and AHCA asserted a Medicaid lien in the amount of $28,482.15 against Mr. St. Surin’s cause of action and the settlement proceeds.

8. AHCA did not commence a civil action to enforce its rights under section 409.910, or intervene or join in Mr. St. Surin’s action against the Tortfeasors.

9. AHCA was notified of Mr. St. Surin’s settlement by letter.

10. AHCA has not filed a motion to set aside, void, or otherwise dispute Mr. St. Surin’s settlement.

11. Application of the formula found in section 409.910(11)(f) would require payment to AHCA of the full $28,482.15 Medicaid lien given the

    $100,000 settlement.

12. Petitioner has deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending a final administrative determination of AHCA’s rights.

    
    

13. Petitioner presented testimony from Scott Kimmel, Esquire.

    Mr. Kimmel represented Mr. St. Surin in his personal injury claim against the Tortfeasors.

14. Mr. Kimmel is a personal injury attorney and has practiced law for 30 years. Mr. Kimmel testified that he placed a conservative value of

    $1 million on Mr. St. Surin’s personal injury claim, but that the personal injury claim was settled for policy limits of $100,000 because the Tortfeasors had no other collectable assets.

15. Using the pro rata allocation methodology, Mr. Kimmel testified that

    $3,576 of the $100,000 settlement proceeds should be allocated to past medical expenses because the personal injury claim was settled for ten percent of its conservative value.

16. Mr. Kimmel’s testimony was credible, persuasive, and uncontradicted. AHCA did not challenge Mr. Kimmel’s valuation of the personal injury claim, or his use of the pro rata allocation methodology to determine the amount of settlement proceeds that should be allocated to past medical expenses, nor did AHCA offer any evidence from which the undersigned could arrive at a different valuation or allocation. There is no reasonable basis to reject

    Mr. Kimmel’s testimony, and it is accepted here in its entirety.

17. The undersigned finds that the value of Mr. St. Surin’s personal injury claim is $1 million, and that $3,576.04 of the $100,000 settlement proceeds should be allocated to past medical expenses.

    
    

    CONCLUSIONS OF LAW

18. DOAH has jurisdiction over the subject matter and the parties to this proceeding in accordance with sections 120.57(1) and 409.910(17), Florida Statutes. Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53 (Fla. 2018).

19. AHCA is the agency authorized to administer Florida’s Medicaid program. § 409.902, Fla. Stat.

    
    

20. The parties have stipulated that Petitioner’s burden of proof to challenge the statutory lien is the preponderance of the evidence standard under section 120.57(1)(j).

21. A preponderance of the evidence is defined as “the greater weight of the evidence,” or evidence that “more likely than not tends to prove a certain proposition.” S. Fla. Water Mgmt. Dist. v. RLI Live Oak, LLC, 139 So. 3d 869, 872 (Fla. 2014).

22. Medicaid is a cooperative federal-state medical assistance program. See 42 U.S.C. § 1396, et seq. Florida has elected to participate in the program, and thus must comply with federal Medicaid statutes and regulations. See Wilder v. Virginia Hosp. Ass’n, 496 U.S. 498 (1990); Public Health Trust of Dade Cty. v. Dade Cty. Sch. Bd., 693 So. 2d 562, 564 (Fla. 3d DCA 1997).

23. The federal Medicaid program requires every participating state to implement a third-party liability provision that authorizes a state to seek reimbursement for Medicaid expenditures from third parties when those resources become available. See 42 U.S.C. § 1396a(a)(25); § 409.910(4), Fla. Stat.; Giraldo, 248 So. 3d at 55. To accomplish this, section 409.910(6) establishes that AHCA is automatically assigned any rights a Medicaid recipient has to third-party benefits. Section 409.910(1) states, in part:

    
    

    It is the intent of the Legislature that Medicaid be the payor of last resort for medically necessary goods and services furnished to Medicaid recipients. All other sources of payment for medical care are primary to medical assistance provided by Medicaid. 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 paid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid.

    
    

24. In addition, section 409.910(7) authorizes AHCA to recover payments paid from any third party, the recipient, the provider of the recipient’s medical services, or any person who received the third-party benefits.

25. Section 409.910(11)(f) provides a formula to establish the amount AHCA may recover from a settlement, as follows:

    (f) 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.

    
    

26. Applying the formula set forth in section 409.910(11)(f), to the

    $100,000 settlement proceeds recovered by Petitioner, results in AHCA being owed $28,482.15—100 percent of its payments—to satisfy the Medicaid lien. Petitioner contends, however, that a lesser amount is owed because his personal injury claim was settled for less than its full value.

27. Section 409.910(17)(b) provides an administrative procedure to determine whether a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses, instead of the amount calculated pursuant to section 409.910(11)(f). Section 409.910(17)(b) provides, in pertinent part, that a recipient:

    [M]ay 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 … . 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 expense 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[2] that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.

    
    

    2 The undersigned reiterates, as concluded in paragraph 20, the preponderance of the evidence standard, rather than the clear and convincing evidence standard provided in this statutory subsection, has been applied in this proceeding pursuant to the stipulation of the parties. Nevertheless, because the Findings of Fact herein are based entirely on the parties’ stipulated facts, and the credible and uncontradicted testimony offered by Mr. Kimmel, all Findings of Fact are also supported by clear and convincing evidence.

    
    

28. The formula set forth in section 409.910(11)(f) provides an initial determination of AHCA’s recovery for past medical expenses paid on a Medicaid recipient’s behalf, and section 409.910(17)(b) sets forth an administrative procedure for an adversarial challenge to that recovery. “[W]hen AHCA has not participated in or approved a settlement, the administrative procedure created by section 409.910(17)(b) … serves as a means for determining whether a lesser portion of the total recovery should be allocated as reimbursement for medical expenses in lieu of the amount calculated by application of the formula in section 409.910(11)(f).” Eady v. Ag. for Health Care Admin., 279 So. 3d 1249, 1255 (Fla. 1st DCA 2019) (quoting Delgado v. Ag. for Health Care Admin., 237 So. 3d 432, 435 (Fla. 1st DCA 2018)). To challenge successfully the amount payable to AHCA, the Medicaid recipient must prove that a lesser portion of the total recovered should be allocated as reimbursement for past medical expenses than the amount AHCA has calculated pursuant to section 409.910(11)(f).

29. The undersigned concludes that Petitioner proved, by a preponderance of the evidence, that the $100,000 settlement proceeds represent ten percent of the value of Petitioner’s personal injury claim.

30. As explained in Smith v. Agency for Health Care Administration,

    24 So. 3d 590 (Fla. 5th DCA 2009), evidence of all medical expenses must be presented, as AHCA may recover from the entirety of the medical expense portion—not just the portion that represents its lien. Further, section 409.910(17)(b) grants the undersigned the power to find “the portion of the total recovery which should be allocated as past … medical expenses,” and to limit AHCA to that amount. The statute does not authorize a reduction of the Medicaid lien to the Medicaid-only portion of a recipient’s recovery for past medical expenses. See also Garcia v. Ag. for Health Care Admin., Case

    No. 19-2013MTR, FO at 31 (Fla. DOAH Aug. 27, 2019) (considering the full amount of all medical expenses in making a determination on past medical expenses). Accordingly, the undersigned concludes that Mr. St. Surin’s past

    
    

    medical expenses, which have been stipulated to by the parties, consist of the amounts provided by Medicaid ($28,482.15) and WellCare of Florida ($7,278.25), and total $35,760.40.

31. When applying the percentage allocation of ten percent to the past medical expenses of $35,760.40, the result is $3,576.04, which constitutes the share of the settlement proceeds properly allocated to Petitioner’s recovery of past medical expenses under the pro rata allocation methodology.

32. AHCA argued in its Proposed Final Order that Petitioner failed to offer evidence that the other categories of damages Mr. St. Surin could have recovered—such as his claims for lost wages, or pain and suffering—were recovered at the same rate as past medical expenses when the claim was settled. The unrefuted testimony from Mr. Kimmel, however, is that the sole reason Mr. St. Surin’s personal injury claim was compromised was the inability to collect an award in excess of the $100,000 policy limits that were available. There is no reasonable basis to find that the recovery for all categories of damages should be more, or less, than the ten percent recovery that resulted when the settlement proceeds of $100,000 were accepted in satisfaction of the personal injury claim valued conservatively at $1 million. Although imperfect, the pro rata allocation methodology Petitioner relies upon here has been accepted as an appropriate methodology, and must be accepted when there is no reasonable basis in the record to reject it. See Giraldo, 248 So. 3d at 56; Bryan v. State, 291 So. 3d 1033, 1036 (Fla. 1st DCA 2020); Mojica v. Ag. for Health Care Admin., 285 So. 3d 393, 398 (Fla. 1st DCA 2019); Eady, 279 So. 3d at 1259. Because there is no reasonable basis to reject the pro rata allocation methodology in this case, AHCA’s Medicaid lien must be reduced to $3,576.04, representing ten percent of the stipulated amount of past medical expenses.

ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that the Agency for Health Care Administration is entitled to

$3,576.04 as satisfaction of its Medicaid lien.

DONE AND ORDERED this 2nd day of December, 2020, in Tallahassee, Leon County, Florida.

S

BRIAN A. NEWMAN

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 2nd day of December, 2020.

COPIES FURNISHED:

Shena Grantham, Esquire

Agency for Health Care Administration Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, Florida 32308 (eServed)

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)

Shevaun L. Harris, Acting Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Bill Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 (eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

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.

Docket for Case No: 20-002511MTR

Orders for Case No: 20-002511MTR