GLORIA RODRIGUEZ, AN INCAPACITATED PERSON, BY AND THROUGH HER SISTER AND GUARDIAN, SONIA RODRIGUEZ,
vs.
Case No. 20-3877MTR
Respondent.
Pursuant to notice, a hearing was conducted in this case by video- conference via Zoom on November 3, 2020, before Administrative Law Judge June C. McKinney of the Division of Administrative Hearings (“DOAH”).
For Petitioner: Justin B. Shapiro, Esquire
Leesfield Scolaro, P.A. 2350 South Dixie Highway Miami, Florida 33133
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 of $144,076.45 from a $275,000 settlement received by
Petitioner, Gloria Rodriguez (“Petitioner” or “Ms. Rodriguez”), from a third party, pursuant to section 409.910, Florida Statutes (2019).
On August 27, 2020, a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien (“Petition”), Petitioner’s dispute of AHCA’s amount of Medicaid Lien, was filed at DOAH requesting a hearing.
The Petition was assigned to the undersigned administrative law judge. The case was noticed and proceeded to hearing as scheduled on November 3, 2020.
The parties filed an Amended Joint Pre-hearing Stipulation in which they identified stipulated facts for which no further proof would be necessary, and the relevant facts stipulated therein are accepted and made part of the Findings of Fact below.
At hearing, Petitioner presented the testimony of one expert witness, Attorney Eric Shane. Petitioner’s Exhibits 1 through 16 were received into evidence without objection. Respondent did not present any witnesses or proffer any exhibits for admission into evidence.
The proceedings of the hearing were recorded but not transcribed. Both parties filed timely proposed final orders that the undersigned has considered in the preparation of this Final Order.
Unless otherwise noted, all statutory references are to the Florida Statutes (2019).
On the morning of February 13, 2016, Ms. Rodriguez was standing safely off to the side of the road on Interstate-95 dealing with an emergency involving her vehicle. At that time, 16-year-old Alexander Rossian failed to pay attention to the road, lost control of his vehicle, drove off the road at
70 mph, and struck Ms. Rodriguez with his vehicle. Alexander Rossian was at fault for causing this collision.
As a result of the collision, Ms. Rodriguez sustained countless catastrophic injuries including, but not limited to, severe traumatic brain injury, incomplete paraplegia, comminuted (crushed) fractures of four spinal vertebrae, clavicle fractures, and comminuted (crushed) fractures of both legs.
On November 10, 2016, Ms. Rodriguez was declared incompetent due to the severity of her brain injury from the collision. Ms. Rodriguez’s sister, Sonia Rodriguez (“S. Rodriguez”), was appointed as Ms. Rodriguez’s guardian.
Thereafter, Ms. Rodriguez, by and through her guardian, S. Rodriguez, brought a personal injury action for negligence against Alexander Rossian and his mother Karen Rossian, the owner of the vehicle involved. The only insurance coverage available to either defendant in that case was a $100,000 automobile insurance policy held by Karen Rossian.
After nearly three years of litigation, Ms. Rodriguez resolved her lawsuit against Alexander Rossian and Karen Rossian for a gross sum of
$275,000 (before attorney’s fees and costs). This included a $175,000 personal contribution from Karen Rossian. Under the circumstances, and due to the limited insurance coverage available, this settlement was in the best interests of Ms. Rodriguez.
Ms. Rodriguez’s past medical expenses were paid by Medicaid, and AHCA provided $144,076.45 in benefits. This “$144,076”1 constituted Ms. Rodriguez’s entire claim for past medical expenses.
AHCA has asserted a lien for the full amount it paid, $144,076, against Ms. Rodriguez’s settlement proceeds.
AHCA has maintained that it is entitled to application of section 409.910(11)(f)’s formula to determine the lien amount. Operation of the formula results in $79,149.99 due in satisfaction of AHCA’s lien.
The parties stipulate that AHCA is limited in the section 409.910(17)(b) procedure to the past medical expense portion of the recovery, and that a preponderance of the evidence standard should be used.
Hearing
Petitioner presented expert testimony from Attorney Eric Shane (“Shane”). Shane is a 17-year civil trial lawyer who has specialized in catastrophic injury claims for his entire career. He is a partner at Ferrer, Shane & Gonzalez, where he handles catastrophic personal injury and death cases throughout Florida exclusively for plaintiffs. Previously, Shane practiced insurance defense. He has been featured in Florida Trend’s Legal Elite publication for several years and has provided legal analysis on national television shows, including ABC’s 20/20, World News with Diane Sawyer, and MSNBC’s “The Dylan Ratigan Show.” He is admitted to practice before all Florida courts.
Shane testified that, over the past 17 years, he has handled dozens, if not hundreds, of cases that involved severe traumatic brain injury, severe spinal cord injury, and other injuries similar to those sustained by
Ms. Rodriguez. He testified that determining the value of such cases has always been an integral part of his career. To that end, as a regular part of his job, he researches jury verdicts and settlements on Westlaw and Lexis
1 The parties stipulated to rounding down the past medical damages in its Joint Pre-hearing Stipulation.
Nexis to stay abreast of all of the latest results throughout the State of Florida.
Shane testified that he is intimately familiar with Petitioner’s damages, having reviewed numerous documents including the following items from the underlying injury case:
Photographs of Ms. Rodriguez before and after the automobile collision;
Medical records from Memorial Regional Hospital;
Medical records from Jackson Memorial Hospital;
Deposition Transcript of Miles Moss (plaintiff accident reconstruction expert);
Deposition Transcript of Kevin Breen (defense accident reconstruction expert);
Deposition Transcript of John Merritt, M.D. (plaintiff life care planner);
Deposition Transcript of Michael Shahnasarian, Ph.D. (defense life care planner);
Deposition Transcript of Oscar Padron (economist expert in lawsuit);
Deposition Transcript of S. Rodriguez (sister of Ms. Rodriguez);
Deposition Transcript of Ana Vega (friend of Ms. Rodriguez);
Deposition Transcript of Alexander Rossian (at fault driver);
Life Care Plan of John Merritt, M.D.;
Economic Report of Oscar Padron, CPA;
Medicaid Lien and correspondence from Medicaid;
Traffic Crash Report.
Shane provided detailed testimony about how the accident occurred and Ms. Rodriguez’s subsequent injuries. He testified to the grossly insufficient insurance coverage in Ms. Rodriguez’s underlying personal injury case. He explained that, while the $275,000 settlement was the best result under the circumstances, it represented only a small fraction of the reasonable value of Ms. Rodriguez’s damages.
Shane credibly testified regarding the process he took in evaluating and determining the reasonable value of the damages Ms. Rodriguez suffered in this case. He reviewed all the medical records, depositions of doctors, experts and fact witnesses, Life Care Plans, economic reports, and various other materials. He also spoke directly to Ms. Rodriguez’s sister,
S. Rodriguez, and close friend, Ana Vega, at length to confirm the nature of Ms. Rodriguez’s current condition. Shane analyzed and valued Ms. Rodriguez’s economic damages (past and future medical expenses) and non- economic damages (past and future pain and suffering, mental anguish, disability, loss of enjoyment of life) to determine Ms. Rodriguez’s total damage amount.
Shane testified to the enormous impact of the motor vehicle collision on Ms. Rodriguez’s life. As a result of her severe traumatic brain injury and spinal cord injury, Ms. Rodriguez is essentially in a permanent, vegetative state. She is permanently bedridden, unable to walk, unable to use the restroom, unable to bathe herself, unable to feed herself, and unable to care for herself without assistance. From a cognitive standpoint, he explained, due to her severe traumatic brain injury, she is unable to hold a conversation, unable to enjoy a television program, and unable to comprehend the world around her. Shane credibly testified that Ms. Rodriguez lives a life of suffering with virtually no quality of life.
Shane also testified that the total reasonable value of Ms. Rodriguez’s damages was, very conservatively, $19,076,738. At hearing, Shane credibly explained how he calculated that figure by detailing each element that totaled the damage amount.
Past Medical Damages
Shane testified that the past medical damages totaled $144,076, the amount of AHCA’s Medicaid lien.
Future Medical Damages
Shane testified that the value of Ms. Rodriguez’s claim for future medical expenses is $8,932,662. He explained that he determined the amount from the comprehensive and un-rebutted Life Care Plan2 created by John Merritt, M.D. (“Dr. Merritt”). Dr. Merritt is board certified in brain injury medicine and spinal cord injury medicine. The Life Care Plan is based on two different life expectancies for Ms. Rodriguez, a 25-year plan and a
30-year plan, because that is the range under the U.S. Centers for Disease Control Life Tables. The Life Care Plan for all future medical costs came out to $7,931,964 (for a 25-year life expectancy) and $9,538,617 (for a 30-year life expectancy).
Shane testified that Dr. Merritt’s Life Care Plan was then submitted to an expert economist, Oscar Padron, CPA (“Padron”), to account for inflation of medical costs, and then reduce the figures to present value, as is standard in injury cases. Shane explained that Dr. Merritt’s Life Care Plan and the final numbers that Padron calculated in his economic report3 were
$8,082,929 for a 25-year life expectancy, and $9,782,395 for a 30-year life expectancy. Shane testified that it is standard and appropriate to use the median of the life expectancy range, in this case 27.5 years, in calculating
the final value of future medical expenses. Accordingly, Shane concluded that the median of Padron’s final calculations, and final reasonable value of
Ms. Rodriguez’s future medical expense claim, is $8,932,662. Non-Economic Damages
Shane testified that, under Florida law, a jury would be instructed to award Ms. Rodriguez damages for pain and suffering, mental anguish, disability, disfigurement, and loss of the enjoyment of life as non-economic damages. He explained that these damages are to be awarded in the past and future amounts.
2 Pet.’s Ex. 3.
3 Pet.’s Ex. 5.
Shane testified that the non-economic damages awarded to individuals who sustain either severe brain damage or severe spinal cord injury are routinely in the millions because these are situations where the victim's life is drastically diminished. In the case of Ms. Rodriguez, she sustained both severe brain damage and severe spinal cord injury. Shane explained that her brain damage is completely incapacitating, and she is effectively paralyzed. She is 100 percent dependent on her sister to care for her, and she has virtually no quality of life. Shane testified that, based on his expertise, and having conducted multiple verdict searches for purposes of this particular proceeding, he values Ms. Rodriguez’s non-economic damages to be in the range of range of $15,750,000 to $23,625,000. However, in an effort to err on the conservative side, Shane testified that an extraordinarily conservative valuation of these damages would be a total of $10,000,000 ($2 million for the past and $8 million for the future). Shane testified that these figures are so conservative that no reasonable attorney in this field could dispute them.
Shane added up the past medical damages of $144,076; future medical damages of $8,932,662; and non-economic damages of $10,000,000 to value Ms. Rodriguez’s total damages at $19,076,738.
Pro-rata Formula
Shane testified that the “pro-rata formula” is the most logical, sensible, and commonly used approach to determining what portion of a personal injury settlement is fairly allocable to past medical expenses. Shane explained that the “pro-rata formula” involves determining what percentage of the total reasonable value of the case was actually recovered in the personal injury settlement. That percentage will then represent the pro-rata percentage of every element of damages recovered. Shane explained credibly that the percentage should be applied to each element of damages to determine the fair allocation of the settlement to each element of damages.
Shane testified that the logic and common sense behind the “pro-rata formula” is flawless. Particularly, if there is insufficient insurance coverage
in a personal injury case, no single element of damages will be reduced more than any other, hence the pro-rata reduction. Shane also testified that this “pro-rata formula” has been approved by numerous Florida appellate courts seeking to determine fair allocation of personal injury settlements, including Eady v. State, Agency for Health Care Administration, 279 So. 3d 1249
(Fla. 1st DCA 2019), and Willoughby v. Agency for Health Care Administration, 212 So. 3d 516 (Fla. 2d DCA 2017), and has been applied in numerous DOAH proceedings.
Applying the “pro-rata formula,” Shane testified that Ms. Rodriguez’s personal injury settlement ($275,000) represents only 1.44 percent of the reasonable value of her case ($19,076,738). Shane explained that the percentage came from dividing the total settlement ($275,000) by the reasonable value of the case ($19,076,738). Shane then testified that
Ms. Rodriguez’s past medical expenses claim of $144,076 must be reduced to
1.44 percent to determine the portion of the settlement that is fairly allocable to past medical expenses. Shane further testified credibly that 1.44 percent of
$144,076 equates to a $2,074.69, meaning only $2,074.69 of Ms. Rodriguez’s personal injury settlement is fairly allocable to past medical expenses.
Ultimate Findings of Fact
The testimony of Petitioner’s expert regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement does not fully compensate Ms. Rodriguez for the full value of damages.
As testified by the expert, Ms. Rodriguez’s recovery represents only
1.44 percent of the total value of her claim.
AHCA did not offer any witnesses, alternate opinions, or documentary evidence as to the value of damages, Life Care Plan, economic report, or pro- rata methodology. Hence, Petitioner’s evidence is unrebutted and uncontradicted.
Petitioner also demonstrated that the settlement allocation should be based on the ratio between the settlement amount of $275,000 and the conservative valuation of damages, $19,076,738, meaning 1.44 percent of the settlement proceeds should be allocated to past medical expenses. Hence,
$2,074.69 of the settlement represents AHCA’s reasonable and fair reimbursement for past medical expenses.
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 (2020). 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. 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 the Medicaid recipient 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 of Florida, 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 Florida Supreme Court has determined that the state’s recovery of certain portions of settlement funds received by a Medicaid recipient to be the amount in a personal injury settlement fairly allocable to past medical expenses. Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53, 56
(Fla. 2018).
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, 516 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
$79,149.99. Petitioner, however, asserts that a lesser amount is owed to Respondent because Petitioner did not recover the full value of her damages.
It is undisputed that Medicaid provided $144,076 in past medical expenses for Ms. Rodriguez and that AHCA asserted a Medicaid lien against Petitioner's $275,000 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(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 lesser 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:
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.
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, Ag. for Health Care Admin., 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").
In this case, AHCA failed to present evidence that Petitioner’s pro-rata methodology was inaccurate or that another method would be more appropriate to apply.
AHCA cross-examined Petitioner’s expert but did not elicit any compelling information or persuasive evidence to refute Shane’s opinion that a fair allocation of past medical expenses recovered from Petitioner’s settlement was $2,074.69. Additionally, AHCA failed to contest or contradict the reduced amount presented by Petitioner’s expert as the fair allocation of past medical expenses from Petitioner’s settlement. In short, Petitioner’s 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.
Where uncontradicted testimony is presented by the recipient, the factfinder must have a "reasonable basis in the record" to reject it. Giraldo, 248 So. 3d at 56 (quoting Wald v. Grainger, 64 So. 3d 1201, 1205-06
(Fla. 2011)). In the instant case, Shane’s uncontradicted testimony was clear and concise. AHCA provided no reasonable basis to reject the testimony.
Accordingly, the undersigned is not persuaded by AHCA’s reliance on Gray v. Agency for Health Care Administration, 288 So. 3d 95, 99 (Fla. 1st DCA 2019), asserting that Petitioner failed to demonstrate its methodology is correct.
The application of the 1.44 percent ratio to Petitioner’s total past medical expenses of $144,076 results in a sum of $2,074.69, which is the share of the settlement proceeds reasonably and proportionately allocable to Ms. Rodriguez’s past medical expenses to satisfy AHCA’s lien.
Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby ORDERED that the Agency for Health Care Administration is entitled to $2,074.69 in satisfaction of its Medicaid lien.
DONE AND ORDERED this 3rd day of December, 2020, in Tallahassee, Leon County, Florida.
JUNE C. MCKINNEY
Division of Administrative Hearings this 3rd day of December, 2020.
Shena L. Grantham, Esquire
Alexander R. Boler, Esquire
Justin B. Shapiro, Esquire Leesfield Scolaro, P.A.
Thomas M. Hoeler, Esquire
Bill Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3
Shevaun L. Harris, Acting Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1
Richard J. Shoop, Agency Clerk
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.
