floyd b. faglieVs.alexander r. boler|Agency for Health Care ... -- eLawyers

Petitioner: MARCELLO FLETCHER, A MINOR, BY AND THROUGH HIS MOTHER AND NATURAL GUARDIAN, ALICIA FLETCHER
Respondent: AGENCY FOR HEALTH CARE ADMINISTRATION
Judges: JOHN D. C. NEWTON, II
Agency: Agency for Health Care Administration
Locations: Tallahassee, Florida
Filed: Sep. 29, 2017
Status: Closed
DOAH Final Order on Monday, May 21, 2018.
Latest Update: Nov. 27, 2018
Summary: What amount of the malpractice settlement of Petitioner, Marcello Fletcher, must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $395,618.55 Medicaid Lien?Medicaid recipient proved that settlement received was 6% of the value of his damages and applying the 6% to the amount Medicaid spent on medical costs to determine the amount subject to the Medicaid lien under §409.910 was proper and reasonable.

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STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARCELLO FLETCHER, A MINOR, BY AND THROUGH HIS MOTHER AND NATURAL GUARDIAN, ALICIA FLETCHER,

vs.

Petitioner,

Case No. 17-5414MTR

AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondent.

FINAL ORDER

Administrative Law Judge John D. C. Newton, II, of the Division of Administrative Hearings (Division) conducted the final hearing in this case on February 7, 2018, in Tallahassee,

Florida.

APPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street Monticello, Florida 32344

For Respondent: Alexander R. Boler, Esquire Suite 300

2073 Summit Lake Drive Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

What amount of the malpractice settlement of Petitioner, Marcello Fletcher, must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $395,618.55 Medicaid Lien?

PRELIMINARY STATEMENT

On September 29, 2017, Marcello Fletcher, by and through his mother, Alicia Fletcher, filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien. The matter was assigned to the undersigned to conduct a formal administrative hearing and render a final order.

The matter was set for hearing to begin on December 7, 2018. Marcello moved, without opposition, to continue the hearing. The motion was granted, and the hearing was rescheduled for

February 7, 2018. The parties filed a pre-hearing stipulation that included undisputed facts.1/ At the final hearing, Marcello’s Exhibits 1 through 5 and 7 through 9 were admitted into evidence. Marcello also presented expert testimony from R. Vinson Barrett and G. Scott Vezina. The Agency did not offer any evidence. The parties ordered a transcript of the proceedings.

They timely filed proposed recommended orders which have been considered in the preparation of this Order.

FINDINGS OF FACT

Stipulated Facts

On October 29, 2013, Alicia Fletcher was involved in a car accident. She was 28 weeks pregnant with MARCELLO. Alicia Fletcher was taken to the hospital emergency room. An ultrasound was performed, which noted a “possible suspicious for area for abruption.” Alicia Fletcher began complaining of bleeding and pain. Her obstetrician ordered a second ultrasound to rule out abruption. The second ultrasound reflected a similar suspicious area. Alicia Fletcher began experiencing placental abruption, contractions and pain. An emergency C-Section was performed. MARCELLO was born on October 29, 2013 without a heartbeat and requiring resuscitation.
During the time leading up to birth and during the birthing process, MARCELLO suffered a hypoxic ischemic encephalopathy. This permanent catastrophic brain damage left MARCELLO unable to speak, walk, ambulate, eat, toilet, or care for himself in any manner.
MARCELLO’s medical care related to the injury was paid by Medicaid and Medicaid provided $395,618.55 associated with MARCELLO’s injury. This $395,618.55 paid by Medicaid constituted MARCELLO’s entire claim for past medical expenses.
MARCELLO’s Parents and Natural Guardians, ALICIA FLETCHER and TYLER BONFIGLIO, brought a medical malpractice

action against the medical providers and staff responsible for MARCELLO’s care (“Defendant medical providers”) to recover all of MARCELLO’s damages as well as their own individual damages associated with MARCELLO’s injuries.
The medical malpractice lawsuit was settled through a series of confidential settlements totaling $1,500,000 and this settlement was approved by the Court by Order of January 30, 2017.
During the pendency of MARCELLO’s medical malpractice action, AHCA was notified of the action and AHCA asserted a
$395,618.55 Medicaid lien against MARCELLO’s cause of action and settlement of that action.
AHCA through the Medicaid program spent $395,618.55 on behalf of MARCELLO, all of which represents expenditures paid for MARCELLO’s past medical expenses.
Application of the formula at §409.910(11)(f)2/ to MARCELLO’s settlement requires payment to AHCA of the full
$395,618.55 Medicaid lien.
The Petitioner has deposited the full 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, pursuant to §409.910(17).

Credible, Unimpeached, and Un-rebutted Testimony
Mr. Vezina and Mr. Barrett testified about the value, measured in damages, of Marcello’s malpractice claims. They also testified to a method that, in their informed opinions, reasonably allocated a percentage of the settlement amount to past medical expenses. Both witnesses reviewed Marcello’s medical records and other information about him. Both were persuasive and well qualified. Both took a conservative approach to evaluating Marcello’s claim and allocating a portion of the settlement proceeds to past medical expenses.
Mr. Vezina has been practicing law for 20 years.

Ninety-five percent of Mr. Vezina’s practice involves catastrophic birth-related injuries caused by medical malpractice. During the first eight years of Mr. Vezina’s practice he defended malpractice actions. Since then he has concentrated his practice on the representation of children injured by medical negligence. Mr. Vezina’s firm specializes in representing children who suffered catastrophic injuries, like Marcello’s, at birth.
As part of his practice, Mr. Vezina has reviewed countless medical records. He has reviewed life care plans that identify the services and supports a person with catastrophic injuries like Marcello’s will need through the course of his life. Mr. Vezina has worked closely with economists and

physicians to identify the nature and extent of injuries and the costs of services and supports an injured person will need.
Mr. Vezina keeps informed about medical malpractice verdicts around the country. Mr. Vezina’s practice requires him to regularly evaluate damages suffered by injured people. He represented Marcello in his malpractice claims.
Mr. Barrett’s qualifications to evaluate medical malpractice claims are similarly imposing. Mr. Barrett is an experienced trial attorney. For 40 years, he has dedicated his practice to representing plaintiffs in medical malpractice cases, medical products liability cases, and pharmaceutical products liability cases. Mr. Barrett has handled medical malpractice cases involving catastrophic injury to children. He has represented children with catastrophic hypoxic brain injury like Marcello. Mr. Barrett regularly reviews jury verdict reporters, discusses cases and verdict with his peers, and tries cases to juries.
Like Mr. Vezina, Mr. Barrett has reviewed numerous medical records, life care plans, and economist reports for children suffering from catastrophic brain injury. He also has regularly and routinely assessed the value of damages suffered by injured parties.
The Agency did not offer evidence to question the qualifications or opinions of Mr. Vezina and Mr. Barrett.

The Agency did not offer testimony to rebut the testimony of Mr. Vezina and Mr. Barrett. The Agency did not offer alternatives to the damages evaluation and allocation method
testified to by Mr. Barrett and Mr. Vezina. The findings of fact rely in large part on the credible, unimpeached, and un-rebutted testimony of these expert witnesses.
Value of Marcello’s Damages
In a case tried to a jury verdict or a settlement with a party with sufficient resources, malpractice claims like Marcello’s would result in damages valued at between 50 million dollars and 25 million dollars.
Twenty-five million dollars is a reasonable and conservative value for Marcello’s damages. He settled his claims for less because of the limited amount of insurance and other resources from which to pay damages.
Allocation of Damages to Past Medical Expenses
A number of injuries and costs combine to make the value of damages for medical malpractice. They include the actual medical expenses of the injured party, the projected future medical expenses of the party, the value of the party’s lost income, the cost of continuing care and assistance in life’s daily activities such as bathing or changing clothes, and the value of pain and suffering endured. Marcello’s damages necessarily encompassed all of these factors.
Using the conservative damages valuation of 25 million dollars, the 1.5 million dollars for damages that Marcello recovered is six percent of the value of his medical malpractice claim and the value of his damages.
In the absence of evidence to the contrary, concluding that Marcello recovered six percent of the value of each component of his damages is reasonable.
The value of past medical expenses for Marcello’s care is $395,618.55, the value of services provided by Medicaid. It is reasonable to conclude that six percent of that amount is the value of damages for past medical expenses recovered by

Marcello in the settlement of his claims. This means

that $23,737.11 of the 1.5 million dollar settlement is the amount Marcello recovered for past medical expenses.

CONCLUSIONS OF LAW

23. Sections 120.569, 120.57(1), and 409.910(17), Florida Statutes (2017) grant the Division jurisdiction over the subject matter and parties in this case.

The Legislature authorized the Agency to administer Florida’s Medicaid program. See § 409.902, Fla. Stat. (2016).
The 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). If a state elects to participate in the Medicaid

program, it must comply with federal requirements governing the program. Id.
Federal law requires states to seek reimbursement for medical expenses incurred on behalf of Medicaid recipients who later recover from third parties. See Ark. Dep't of Health &
Human Servs. v. Ahlborn, 547 U.S. 268, 276 (2006).
Florida’s Legislature enacted section 409.910 to comply with that requirement. Section 409.910 authorizes and requires the Agency to be reimbursed for Medicaid funds paid for a Medicaid recipient's medical care when the recipient later receives a personal injury judgment or settlement from a third party. Smith
v. Ag. for Health Care Admin., 24 So. 3d 590 (Fla. 5th DCA 2009). The statute creates an automatic lien on the proceeds of any such judgment or settlement for the medical services provided by Medicaid. See § 409.910(6)(c), Fla. Stat.
The formula in section 409.910(11)(f) determines the amount the Agency may recover from a judgment, award, or settlement from a third party for Medicaid medical expenses. Ag. for Health Care Admin. v. Riley, 119 So. 3d 514, 515 n.3 (Fla. 2d DCA 2013).
The parties stipulated that the amount owed the Agency to satisfy its lien, pursuant to the formula of section 409.910(11)(f), is $395,618.55. Marcello maintains that he owes

a smaller amount because he did not recover the full value of his damages, including his claim for past medical expenses.
Section 409.910(17)(b) establishes the right to contest a Medicaid lien and provides that section 409.910(11) establishes the default allocation of damage amounts attributable to medical costs. The parties stipulate that $395,618.55 is that amount. Section 409.910(17)(b) also creates a right to challenge the statutory allocation at the Division. It requires the Medicaid recipient to “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” resulting from application of the statutory formula.
See Harrell v. State, 143 So. 3d 478, 480 (Fla. 1st DCA 2014) (adopting the holding in Riley that petitioner “should be
afforded an opportunity to seek the reduction of a Medicaid lien amount established by the statutory default allocation by demonstrating, with evidence, that the lien amount exceeds the amount recovered for medical expenses”)(quoting Roberts v.
Albertson’s, Inc., 119 So. 3d 457, 465-466 (Fla. 4th DCA 2012)).
Despite the language of section 409.910(17)(b), because of rulings in Gallarado v. Senior, U.S. District, Case No. 4:16-
cv-116-MW-CAS (N.D. Fla. 2017), and stipulation of the parties, Marcello’s burden of proof is a preponderance of the evidence.

Also, the lien may not be calculated or satisfied from settlement proceeds attributed to future medical expenses or other damages.
Marcello proved by a preponderance of the evidence that the settlement proceeds of 1.5 million dollars are six percent of the total value of his malpractice claim. Applying that six percent to the amount of the Medicaid lien is a fair, reasonable, and accurate way to determine the portion of the settlement amount attributable to past medical expenses and therefore recoverable by the Agency.
The Agency criticizes this allocation method. However, it did not offer an alternative or produce evidence to support its criticism. The evidence of record proved that the allocation process described here is reasonable, proper, and rational. Courts have accepted this allocation approach. Lugo v. Beth

Israel Med. Ctr., 819 N.Y.S. 2d 892, 897 (Sup. Ct. 2006). See also Delgado v. Ag. for Health Care Admin., Case No. 1D16-5786,

2018 Fla. App. LEXIS 1012 (Fla. 1st DCA, Jan. 26, 2018)(accepting use of this allocation process in Delgado v. Ag. for Health Care Admin., Case No. 16-2084 (Fla. DOAH Nov. 30, 2016)).

ORDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that the Respondent, Agency for Health Care Administration, is entitled to $23,737.11 for satisfaction of its Medicaid lien.

DONE AND ORDERED this 21st day of May, 2018, in Tallahassee,

Leon County, Florida.

JOHN D. C. NEWTON, II

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 21st day of May, 2018.

ENDNOTES

1/ Findings of Fact one through nine in this Order incorporate those stipulations without alteration. In these findings, the Agency is referred to as AHCA, and Marcello is sometimes referred to as Petitioner.

2/ All references to the Florida Statutes are to the 2016 codification unless noted otherwise. Section 409.910 did not change from 2013 through 2016.

COPIES FURNISHED:

Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317 (eServed)

Floyd B. Faglie, Esquire Staunton and Faglie, P.L.

189 East Walnut Street Monticello, Florida 32344 (eServed)

Kim Annette Kellum, Esquire

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