vs.
Respondent.
Case No. 18-1216MTR
Administrative Law Judge June C. McKinney of the Division of Administrative Hearings ("DOAH") heard this case by video teleconference at locations in Tallahassee and Lauderdale Lakes, Florida, on June 11, 2018.
For Petitioners: Floyd B. Faglie, Esquire
Staunton and Faglie, P.L.
For Respondent: Alexander R. Boler, Esquire
The issue is the amount payable to Respondent, Agency for Health Care Administration ("Respondent" or "AHCA"), in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioners, from a third party, pursuant to section 409.910, Florida Statutes (2016).
By letter, Petitioners were notified by Conduent Payment Integrity Solutions, Respondent's collections subcontractor, that monies were owed to satisfy a Medicaid lien claim in the amount of $49,115.61, from the medical benefits paid for Santos O. Rodriguez-Gomez ("Rodriguez-Gomez") from the proceeds of a
$100,000.00 settlement received as compensation for the injuries suffered as a result of being struck by a vehicle while lawfully crossing an intersection. Petitioners filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien ("Petition"), pursuant to section 409.910(17)(b) protesting the lien claim and requesting a hearing.
On March 6, 2018, the Petition was filed at DOAH and assigned to the undersigned administrative law judge. The case proceeded as scheduled on June 11, 2018.
At hearing, Petitioners presented the testimony of Joseph Abdallah, Esquire, an attorney who was qualified without objection as an expert in valuation of damages. Petitioners' Exhibits 1 through 11 were received into evidence. Respondent did not present any witnesses or proffer any exhibits for admission into evidence.
The proceedings of the hearing were recorded and transcribed. A one-volume Transcript of the hearing was filed at DOAH on August 8, 2018. On August 15, 2018, the parties filed a Joint Motion for Extension of Time to File Proposed Final Orders by August 17, 2018, which the undersigned granted. Both parties filed timely proposed recommended orders that the undersigned has considered in the preparation of this Final Order.
The parties stipulated to the facts in the Joint Pre-hearing Stipulation, and the relevant facts stipulated therein are accepted and made part of the Findings of Fact below. Unless otherwise noted, all statutory references are to the Florida
Statutes (2016).
On June 4, 2015, at approximately 11:36 p.m., Rodriguez- Gomez was struck by a car while lawfully walking across the street at the intersection of Hollywood Boulevard and North 62nd Avenue in Hollywood, Florida.
During the accident, Rodriguez-Gomez suffered catastrophic physical and neurological injuries. Rodriguez- Gomez's injuries included an open skull fracture, left pelvis fracture, and right fibula and tibia fractures. He was transported to the hospital where he underwent extensive medical intervention to save his life. On June 11, 2015, seven days after the accident, Rodriguez-Gomez died as a result of his injuries.
Rodriguez-Gomez was survived by his three adult sons and three minor children.
Rodriguez-Gomez's medical care related to his injury was paid by Medicaid, and the Medicaid program provided $49,115.61 in benefits associated with his injury. The $49,115.61 represented the entire claim for past medical expenses.
Rodriguez-Gomez's funeral bill totaled $3,250.00 and was paid by his surviving children.
Armando Rodriguez-Gomez was appointed the personal representative of the Estate of Santos Rodriguez-Gomez ("Estate").
Armando Rodriguez-Gomez, as personal representative ("Personal Representative") of the Estate, brought a wrongful death action to recover both the individual statutory damages of Rodriguez-Gomez's six surviving children, as well as the
individual statutory damages of the Estate against the driver and owner ("Defendant") of the vehicle that caused the accident.
Joseph Abdallah ("Abdallah"), a civil trial attorney with the law firm of Kanner & Pintaluga in Boca Raton, Florida, represented the Personal Representative and Estate in the wrongful death action.
During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA asserted a $49,115.61 Medicaid lien against the Estate cause of action and settlement of that action.
The Personal Representative, on behalf of Rodriguez- Gomez's six surviving children, as well as on behalf of the Estate, compromised and settled the wrongful death action with Defendant for the available insurance policy limits of
$100,000.00.
By letter, Abdallah as the Estate's attorney handling the wrongful death claim notified AHCA of the settlement. The letter requested that AHCA advise as to the amount AHCA would accept in satisfaction of the $49,115.61 Medicaid lien.
AHCA has neither filed an action to set aside, void, or otherwise dispute the wrongful death settlement nor started a civil action to enforce its rights under section 409.910.
AHCA, through its Medicaid program, spent $49,115.61 on behalf of Rodriguez-Gomez, all of which represents expenditures paid for Rodriguez-Gomez's past medical expenses.
No portion of the $100,000.00 settlement represents reimbursement for future medical expenses.
The taxable costs incurred in pursuing Defendant totaled $2,086.68.
The formula at section 409.910(11)(f), as applied to the entire $100,000.00 settlement, requires payment of $36,456.66 and AHCA is demanding payment of $36,456.66 from the $100,000.00 settlement.
Petitioners have deposited the section 409.910(11)(f) formula 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).
At the final hearing, Petitioners presented, without objection, the expert valuation of damages testimony of Abdallah. Abdallah is a trial attorney in both Florida and New York who practices exclusively personal injury law and handles cases involving wrongful death, catastrophic injury, and other types of negligence involving injury. Abdallah's expertise also encompasses evaluation of personal injury cases based on staying abreast of all State of Florida jury verdicts.
At hearing, Abdallah explained that he served as lead counsel during Petitioners' proceeding, and, during his representation of the Estate, he met with the Personal Representative numerous times and reviewed Rodriguez-Gomez's accident report and medical records before he filed the lawsuit and amended complaint in this matter.
Abdallah testified that Rodriguez-Gomez had a very close relationship with his children.
Abdallah credibly explained the process he took to develop an opinion concerning the value for the damages suffered in this case. He started by looking at the wrongful death statute, section 768.21, Florida Statutes, to determine what damages could be recovered. Petitioners established through unrebutted testimony of their trial attorney and expert witness that personal injury actions can be grouped in the following categories: medical expenses; net accumulations; funeral expenses; loss of parental companionship and instruction; and mental pain and suffering.
Abdallah testified that since Rodriguez-Gomez was a day laborer, there was not a claim for net accumulations of the Estate. He concluded that the compensable damages were limited to past medical expenses, loss of parental companionship, instruction, guidance, and mental pain and suffering from the date of the injury for each of the six sibling children.
Abdallah evaluated jury verdicts of recent cases involving wrongful death and surviving children to determine what the valuation of the claim for the loss of parental companionship, instruction, guidance, and mental pain and suffering would be for Rodriguez-Gomez's six surviving children.
Abdallah also researched circuit court cases to determine appropriate allocation amounts for Medicaid liens.
At hearing, Abdallah testified specifically about two comparable jury verdicts involving wrongful death and surviving children that he researched and used to support his valuation, Melissa Corsini, Individually and as Personal Representative of the Estate of Andrew Corsini, Jr., Deceased v. Carlos Riol,
Case 09-5397-CA, 11FJVR 3-3, 2011 WL 845897 (Fla. Cir. Ct.
Collier Jan. 13, 2011)1/; and Thomas Christopher Heike v. Sr.
Singh Enterprises, LLC., Case No. CACE 16011472, 28 Fla. JVRA 3:22, 2017 WL 9286313 (Fla. Cir. Ct. Broward Nov. 26, 2017),2/
circuit court orders that were entered regarding allocation regarding Medicaid liens.
In Corsini, each surviving child received $460,000.00
and in Heike each surviving child received $500,000.00 for their damages associated with their father's death. Abdallah's review of comparable jury verdicts revealed that each of Rodriguez- Gomez's six children's claim for losses associated with their
father's death would have a very conservative value between
$200,000.00 and $800,000.00 each.
Abdallah also round-tabled the cases with other experienced attorneys and partners in his law firm to determine the value, and they each agreed that the $200,000.00 to
$800,000.00 is a conservative valuation to use for each of the surviving children when determining the value of the Estate's wrongful death case.
Based on his review to determine the value of Petitioners' claim, Abdallah credibly and persuasively put all the numbers together and opined that the valuation of the Estate's damages of $49,115.61 paid by Medicaid and the six surviving children's damages of $200,000.00 to $800,000.000 each totaled conservatively $1,200,000.00 to $4,800,000.00, and the conservative total value of all damages recoverable in the wrongful death lawsuit is $1,249,115.61 to $4,849,115.61.
Abdallah testified that $1,249,115.61 is the conservative value to use for the damages. Abdallah's compelling and credible testimony further explained that the $100,000.00 settlement constituted a recovery of approximately eight percent of the $1,249,115.61 value of the damages. Abdallah determined that eight percent should be applied to each damage category and should be reduced based on the ultimate settlement. He then went on to apply the eight percent to the total medical expenses that
were paid and further testified that a recovery of $3,929.25 in past medical expenses is eight percent of the $49,115.61 claim for past medical expenses. Abdallah's testimony was credible, persuasive, and is accepted.
The evidence demonstrates that the total value of the damages related to Rodriguez-Gomez's injury was $1,249,115.61 and that the settlement amount, $100,000.00 was eight percent of the total value. The $100,000.00 settlement does not fully compensate Petitioners for the total value of their damages.
Petitioners have established that the $100,000.00 settlement amount is eight percent of the total value ($1,249,115.61) of Petitioners' damages. Using the same calculation, Petitioners correctly showed that eight percent of
$49,115.61 (Petitioners' amount allocated in the settlement for past medical expenses), $3,929.25, should be the portion of the Medicaid lien paid.
Petitioners proved by a preponderance of the evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
CONCLUSIONS OF LAW
DOAH has jurisdiction over the subject matter and the parties in this case, and final order authority pursuant to
sections 120.569, 120.57(1), and 409.910(17), Florida Statutes
(2018).
AHCA is the agency authorized to administer Florida's Medicaid program. See § 409.902, Fla. Stat.
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). Though participation is optional, once a state elects to participate in the Medicaid program, it must comply with federal requirements governing the same. Id.
As a condition for receipt of federal Medicaid funds, states are required to seek reimbursement for medical expenses incurred on behalf of beneficiaries who later recover from a third party. See Ark. Dep't of Health & Human Servs. v. Ahlborn,
547 U.S. 268, 276 (2006). To secure reimbursement from liable third parties, the state must require a Medicaid recipient to assign to the state his right to recover medical expenses from those third parties. In relevant part, 42 U.S.C. § 1396a(a)(25) requires:
(H) that to the extent that payment has been made under the State Plan for medical assistance in any case where a third party has a legal liability to make payment for such assistance, the State has in effect laws under which, to the extent that payment has been made under the State Plan for medical assistance for health care items or services furnished to an individual, the State is
considered to have acquired the rights of such individual to payment by any other party for such health care items or services.
To comply with this federal mandate, the Florida Legislature enacted section 409.910, Florida's Medicaid
Third-Party Liability Act. This statute authorizes and requires the State, through AHCA, 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.
Smith v. Ag. for Health Care Admin., 24 So. 3d 590 (Fla. 5th DCA 2009). The statute creates an automatic lien on any such judgment or settlement for the medical assistance provided by Medicaid. § 409.910(6)(c), Fla. Stat.
The amount to be recovered for Medicaid medical expenses from a judgment, award, or settlement from a third party is determined by the formula in section 409.910(11)(f). Ag. for Health Care Admin. v. Riley, 119 So. 3d 514, 515 n.3 (Fla. 2d DCA
2013).
The parties stipulated that the amount due to AHCA in satisfaction of its lien, pursuant to the formula set forth in section 409.910(11)(f), is $36,456.66. Petitioners, however, assert that a lesser amount is owed to Respondent because Petitioners did not recover the full value of their damages.
It is undisputed that Medicaid provided $49,115.61 in medical expenses for Rodriguez-Gomez and that AHCA asserted a
Medicaid lien against Petitioners' $100.000.00 settlement and the right to seek reimbursement for its expenses. AHCA is utilizing the mechanism set forth in section 409.910(11)(f) to enforce its right.
Section 409.910(13) provides that AHCA is not automatically bound by the allocation of damages set forth in Petitioner's settlement agreement. Section 409.910(13) provides in pertinent part that:
(13) 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.
Section 409.910(17)(b) provides a method whereby a recipient may challenge AHCA's presumptively correct calculation of medical expenses payable to the agency. The mechanism is a means for determining whether a lessor portion of 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). Section 409.910(17)(b) provides in pertinent part that:
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.
An administrative procedure for adversarial testing of the fair allocation of the amount of the settlement that is attributable to medical costs includes considering the evidence used to rebut the section 409.910(11)(f) formula when determining
whether AHCA's lien amount should be adjusted. See Harrell v.
State, 143 So. 3d 478, 480 (Fla. 1st DCA 2014) (holding 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").
Notwithstanding the language of section 409.910(17)(b), because of rulings in Gallarado v. Senior, U.S. Dist., Case
No. 4:16-cv-116-MW-CAS (N.D. Fla. 2017), and stipulations of the parties, Petitioners' burden in this case is a preponderance of the evidence and any settlement proceeds attributed to future medical expenses shall not be considered in calculation of AHCA's lien.
The Florida Supreme Court defines "preponderance of the evidence" as follows:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
S. Fla. Water Mgmt. v. RLI Live Oak, LLC, 139 So. 3d 869, 872 n.1
(Fla. 2014).
The undersigned is not persuaded by Respondent's position in its Proposed Final Order that Petitioners' allocation
method is incorrect because Respondent failed to provide any evidence or an alternative to rebut Petitioners' method.
Instead, the record demonstrates that the allocation process in this matter is rational, proper, and reasonable.
In this matter, Petitioners' challenged AHCA's calculation and demonstrated by a preponderance of the evidence that the settlement amount is eight percent of the total value of damages suffered by Rodriguez-Gomez. All the testimony and other evidence offered proved that a lesser portion of the total recovery should be allocated as reimbursement.
Specifically, the evidence presented at hearing demonstrated that the settlement recovered in this matter was only eight percent of the value of damages and the lien recovery should be allocated and reduced in each damage category based on the eight percent. Applying the eight percent ratio to the
$49,115.61 claim for past medical expenses is $3,929.25 of the settlement and represents the Estate's recovery of past medical expenses, which constitutes a fair, reasonable, and accurate share of the total recovery for past medical expenses actually paid by AHCA.
In summary, the evidence in this case is that $3,939.25 of the total third-party recovery represents the share of the settlement proceeds fairly attributable to the expenditures that
