The Issue This matter concerns the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Scott R. Brown, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $300,000.00 settlement from a third party. The Agency asserts that it is entitled to recover the full amount of its $112,500.00 lien. The incident that gave rise to this matter occurred on December 22, 2010. On that day, Petitioner, a Florida resident, was visiting relatives in Talladega County, Alabama. Petitioner was shot while sitting in the backseat of a car. The bullet struck Petitioner in his abdomen. Immediately following the incident, Petitioner was taken to UAB Hospital in Birmingham, Alabama. Petitioner received medical care and treatment from December 22, 2010, through January 27, 2011, which included surgical repair of his abdominal injuries. Following his release from UAB Hospital, Petitioner was admitted to Spain Rehabilitation on January 28, 2011. There, Petitioner was diagnosed with a T-10 ASIA-A spinal cord injury, which caused paralysis from the waist down, as well as: a T-12 vertebral fracture; L1 - 2 vertebral fracture; small bowel injury; pancreatic head laceration; and duodenal laceration. Petitioner was also noted to be incontinent and required assistance for all transfers and bed mobility. In short, the gunshot rendered Petitioner a paraplegic. He will continue to require medical treatment for the rest of his life. In June 2011, Petitioner brought a negligence lawsuit in Alabama against the two gunmen. Petitioner was represented by Michael J. Crow, Esquire. Mr. Crow litigated Petitioner’s case over the course of two years. In 2013, Mr. Crow was able to resolve the lawsuit for $300,000, which was the full amount of the gunmen’s homeowner’s insurance. At the final hearing, Mr. Crow testified that the homeowner’s insurance policy was the only available coverage or recoverable asset he identified that could be used to compensate Petitioner for his injuries. Consequently, Mr. Crow believed that it was in Petitioner’s best interests to settle the lawsuit for the policy limits. A portion of Petitioner’s medical care was paid for by the Medicaid programs in Alabama and Florida in the total amount of $262,536.95.2/ Following Petitioner’s settlement, the Alabama Medicaid Agency asserted a lien of $139,169.94 against Petitioner’s recovery. On November 21, 2013, Mr. Crow was able to settle the Alabama Medicaid lien for $6,000.00. This amount represents approximately 4.31 percent of the total Alabama Medicaid lien. Mr. Crow testified that he thought the settlement payment should have been lower based on the full value he placed on Petitioner’s damages (discussed below) versus the actual amount Petitioner recovered. However, he believed that it was in Petitioner’s best interests to settle the Alabama Medicaid lien to avert protracted litigation. The Agency, through the Florida Medicaid program, paid a total of $123,366.95 for Petitioner’s medical treatment from the gunshot injury. All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. No portion of the Agency’s Medicaid lien represents future medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $112,500.00 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed below, the formula in section 409.910(11)(f) allows the Agency to collect $112,500.00 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of the settlement than the amount it calculated using the section 409.910(11)(f) formula.3/ Petitioner specifically argues that the Agency’s Medicaid lien should be reduced proportionately, taking into account the full value of Petitioner’s damages. Otherwise, the application of the default statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner insists that reimbursement of the full lien amount violates the federal Medicaid law’s anti-lien provision (42 U.S.C. § 1396p(a)(1)) and Florida common law. Petitioner requests that the Agency’s allocation from Petitioner’s recovery be reduced to $1,389.00. To establish the value of his damages, Petitioner testified regarding the extent of, and the impact on his life from, the injuries he suffered from the gunshot wound. Petitioner relayed that he has received 18 surgeries on his stomach and intestines. Petitioner further described his future medical expenditures. Petitioner anticipates receiving a hernia operation. Petitioner also requires medication and medical supplies to address his pain and infections. In addition, Petitioner desires a handicap-equipped van that he can use for transportation to his medical visits. Petitioner would also like to install “trapeze” bars in his home to help him exercise. Mr. Crow also testified regarding the full value of Petitioner’s injuries. Mr. Crow has practiced law for 32 years and is a partner with the law firm of Beasley Allen in Montgomery, Alabama. In his practice, Mr. Crow handles serious personal injury and death cases involving car and truck litigation, premise liability cases, and brain injury cases. Mr. Crow has been involved in 15 to 25 lawsuits involving paralyzed clients. As part of his personal injury practice, Mr. Crow regularly evaluates damages similar to those Petitioner suffered. Mr. Crow asserted that the $300,000 settlement was far less than the true value of the injuries Petitioner suffered from this incident. Mr. Crow opined that the full value of Petitioner’s damages equals $26,639,170.00. Mr. Crow explained that this figure consists of $6.5 million present value for Petitioner’s future medical expenses, $5 million for pain and suffering, $10 million for mental anguish and loss of quality of life, $139,170 for the Alabama Medicaid lien, and $5 million in punitive damages. In deriving the value of Petitioner’s injuries, Mr. Crow considered that Petitioner is a younger individual suffering from paraplegia. Mr. Crow explained that Petitioner can live in his community with appropriate nursing support. However, he will require pain management on a monthly basis. His current medications include Baclofen, Colace, Cymbalta, Lopressor, Neurontin, Oxycodone, Senokot, and Glycerine suppositories. Petitioner will also need attendant care to help administer his medications, as well as with bathing, cooking, cleaning, dressing, grooming, and personal hygiene. In addition, Petitioner will require follow-up treatment involving physiatry, physical therapy, urology, and a wheelchair clinic. Furthermore, although Petitioner does not have sensory awareness from his waist down, he continues to experience severe pain in his back and legs. Mr. Crow represented that Petitioner is able to propel himself in a wheelchair, but he can only travel short distances due to fatigue and pain. Petitioner does not have access to a power wheelchair. Regarding transportation, Petitioner will need assistance to drive a van with a wheelchair lift. Finally, Petitioner offered the testimony of David A. Paul, Esquire. Mr. Paul has practiced law in Florida for 22 years as a plaintiff personal injury lawyer and is board- certified in Civil Trial Law by the Florida Bar. Mr. Paul handles catastrophic and serious personal injury cases involving birth injuries, medical malpractice, trucking accidents, and wrongful death. As part of his practice, Mr. Paul regularly evaluates catastrophic injuries. Mr. Paul testified that he has handled many cases with similar injuries to Petitioner. Mr. Paul was accepted as an expert regarding the value of personal injury damages and resolving liens in personal injury cases. At the final hearing, Mr. Paul supported Mr. Crow’s valuation of Petitioner’s injuries. Mr. Paul opined that a “fair full value” of Petitioner’s damages equals in excess of $26 million. In formulating his injury valuation, Mr. Paul considered Petitioner’s past medical expenses, anticipated future medical expenses, the cost of attendant care with daily living activities, past and future lost wages, pain and suffering, as well as mental anguish and loss of quality of life. Regarding the Medicaid liens, Mr. Paul relayed that the norm when resolving liens in Florida is to compare the total value of the injured party’s injuries to the amount of the actual recovery. The lien is then reduced proportionally by this ratio. Mr. Paul commented that he typically resolves Medicaid liens in workers compensation cases using this “equitable formula.” Based on the testimony from Mr. Crow and Mr. Paul that the $300,000 settlement did not fully compensate Petitioner for his damages, Petitioner argues that a lesser portion of the settlement should be allocated to reimburse Florida Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the ultimate value of Petitioner’s damages ($26,639,170.00) compared to the amount that Petitioner actually recovered ($300,000). Using these numbers, Petitioner’s settlement represents approximately a 1.126 percent recovery of the full value of Petitioner’s damages. In like manner, the Florida Medicaid lien should be reduced to 1.126 percent or approximately $1,389.00 ($123,366.95 times .01126). Therefore, Petitioner asserts that $1,389.00 is the portion of his third-party settlement that represents the equitable, fair, and reasonable amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to the Alabama wrongful injury lawsuit or Petitioner’s settlement. Petitioner was aware of both the Alabama and Florida Medicaid liens and past medical expense damages at the time he settled the lawsuit. No portion of the $300,000 settlement represents reimbursement for future medical expenses. The undersigned finds that Petitioner met his burden of proving, by a preponderance of the evidence, that the full value of his damages from this incident equals $21,639,170.00.4/ Further, based on the evidence in the record, Petitioner proved that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Finally, the undersigned finds that the evidence establishes that the Agency should be reimbursed in the amount of $5,317.95 from Petitioner’s recovery of $300,000 from a third party to satisfy the Florida Medicaid lien.
Findings Of Fact Provider received the correspondence giving notice of Provider’s right to an administrative hearing regarding the improper Medicaid reimbursement. Provider filed a petition requesting an administrative hearing, and then caused that petition to be withdrawn and the administrative hearing case to be closed. Provider chose not to dispute the facts set forth in the letter dated August 1, 2011. The facts alleged in the letter are hereby deemed admitted, including the total improper reimbursement amount of twelve thousand, one hundred sixty-four dollars ($12,164.00). The Agency hereby adopts the facts as set forth in the letter, including the improper reimbursement amount of twelve thousand, one hundred sixty-four dollars ($12,164.00). CONCLUSIONS OF LAW. The Agency incorporates and adopts each and every relevant statement and conclusion of law set forth in the August 1, 2011, letter. The admitted facts support the legal conclusion that the improper reimbursement in the amount of twelve thousand, one hundred sixty-four dollars ($12,164.00) was appropriate. As partial payment has previously been made, five thousand, eight hundred sixty-four dollars ($5,864.00) is now due and owing from Provider to the Agency. Based on the foregoing it is ORDERD AND ADJUDGED that Provider remit, forthwith, the amount of five thousand, eight hundred sixty-four dollars ($5,864). Provider’s request for an administrative hearing is hereby dismissed. DONE and ORDERED on this the We day of fojtimla__. 2012, in Tallahassee, Florida. and Mf SECRETARY Agency for Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Rachic’ Wilson, Esquire Agency for Health Care Administration (Interoffice Mail) Roberto E. Moran, Esq. Rasco, Klock, Reininger, et al 283 Catalonia Avenue Second Floor Coral Gables, Florida 33134 (U.S. Mail) June C. McKinney Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Mike Blackburn, Chief, Medicaid Program Integrity Finance and Accounting HOA Agency for Persons with Disabilities (Facility) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail on this the Ainot Sek W12. = —az, Richard Shoop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630
Conclusions THIS CAUSE came before me for issuance of a Final Order on an August 1, 2011, letter from the Agency for Health Care Administration (“Agency”) to Bay Point Schools, Inc. (“Provider”) notifying Provider that it had been improperly reimbursed twelve thousand, one hundred sixty-four dollars ($12,264.00) by Medicaid. The August 1, 2011, letter indicated that partial payment had already been remitted by Provider and that five thousand, eight hundred sixty-four dollars ($5,864.00) remained due and owing from Provider to the Agency. The August 1, 2011, letter provided full disclosure and notice to Provider of procedures for requesting an administrative hearing to contest the allegations made in the letter. Provider filed a petition with the Agency requesting a formal administrative hearing on September 6, 2011. The Agency forwarded Provider’s hearing request to the Division of Administrative Hearings (“DOAH”) for a formal administrative hearing. On March 9, 2012, Provider filed a Motion to Withdraw Petition for Formal Hearing. DOAH issued an Order Filed September 6, 2012 1:46 PM Division of Administrative Hearings Closing File and Relinquishing Jurisdiction on March 12, 2012, closing the above-styled cause and relinquishing jurisdiction back to the Agency.
Conclusions This cause came before the Agency for Health Care Administration for issuance of a Final Order. 1. On June 14, 2013, the Agency sent Nancy Garcia, M.D. (provider number 002743900), a Final Audit Report based on an audit of claims for reimbursement for dates of service during the period October 1, 2008, through April 30, 2012, conducted by the Agency’s Office of Inspector General, Bureau of Medicaid Program Integrity (Exhibit A). 2. On July 10, 2013, the Respondent filed a Petition for Formal Hearing. 3. On July 15, 2013, the Agency Clerk referred the Petition for Formal Hearing to the Division of Administrative Hearings for further proceedings. 4. On August 9, 2013, the Administrative Law Judge assigned to the case entered an Order Closing File and Relinquishing Jurisdiction (Exhibit B) based on the Agency’s rescission of the Final Audit Report which had rendered the matter moot. Filed September 17, 2013 2:56 PM Division of Administrative Hearings Based on the foregoing, IT IS THEREFORE ORDERED AND ADJUDGED THAT: Respondent's right to a hearing in this matter has been rendered moot and the Agency’s June 14, 2013 Final Audit Report is rescinded. The parties shall govern themselves accordingly. DONE AND ORDERED this ME xy 0 _flylenba_. 2013 in Tallahassee, Leon County, Florida.
The Issue The issue in this matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Malk S. Sunwabeh, a Medicaid recipient, following a settlement recovered from a third party by the Personal Representative of the Mr. Sunwabeh’s estate.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $275,000 settlement from a third party. The Agency asserts that it is entitled to recover the full amount of its $85,279.65 lien. Malk S. Sunwabeh, the person who received the benefit of the Agency’s Medicaid payments, died as a result of a hit-and-run accident. Petitioner is the duly appointed Personal Representative of Mr. Sunwabeh’s estate and is authorized to bring this action on his behalf. The accident that gave rise to this matter occurred on October 29, 2013. Early that morning, in pre-dawn darkness, Mr. Sunwabeh left his residence to walk to his high school. The well-worn path he followed led him to a divided roadway that ran in front of his school. With no crosswalk or intersection nearby, Mr. Sunwabeh walked straight across the road. Just after Mr. Sunwabeh stepped into the road, he was struck from behind by a car driven by another student. As he lay sprawled on the pavement, a second vehicle (a gas truck) ran over his body. After the accident, Mr. Sunwabeh was transported by ambulance to Shands Hospital in Jacksonville. He immediately underwent surgery. Tragically, Mr. Sunwabeh died during surgery. He was 16 years old. The Agency, through the Medicaid program, paid Shands Hospital a total of $85,279.65 for Mr. Sunwabeh’s medical care, which was the full amount of his medical expenses following the accident.3/ All of the expenditures Medicaid spent on Mr. Sunwabeh’s behalf are attributed to past medical expenses. No portion of the $85,279.65 Medicaid lien represents future medical expenses. Mr. Sunwabeh’s aunt, Kapitola Morgan (Petitioner), was appointed Personal Representative of Mr. Sunwabeh’s estate. Petitioner brought a wrongful death action to recover both the damages of Mr. Sunwabeh’s estate, as well as the individual statutory damages of Mr. Sunwabeh’s mother, against both drivers who hit Mr. Sunwabeh. Johnny Pineyro, Esquire, represented Petitioner in the wrongful death lawsuit. On June 10, 2015, Mr. Pineyro negotiated a $275,000 settlement for Petitioner with the second driver. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the wrongful death settlement, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of the medical costs it paid on Mr. Sunwabeh’s behalf ($85,279.65). The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what Petitioner represents is the full value of the damages. (As discussed below, the formula in section 409.910(11)(f) allows the Agency to collect the full Medicaid lien.) Petitioner, on the other hand, asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of the settlement than the amount it calculated using the section 409.910(11)(f) formula. Petitioner specifically argues that the Agency’s Medicaid lien should be reduced proportionately, taking into account the “true” value of Petitioner’s damages. Otherwise, the application of the default statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents compensation for past medical expenses. Petitioner insists that such reimbursement violates the federal Medicaid law’s anti-lien provision (42 U.S.C. § 1396p(a)(1)) and Florida common law. Therefore, Petitioner requests that the Agency’s allocation from Petitioner’s recovery be reduced to the amount of $9,065.23. To establish the value of Petitioner’s damages, Petitioner presented the testimony of Mr. Pineyro. Mr. Pineyro heads the Florida Injury Law Firm in Celebration, Florida. He has practiced law for over 20 years and focuses on personal injury, wrongful death, and aviation law. Mr. Pineyro handles jury trials and cases involving catastrophic injury. In his practice, he regularly reviews accident reports, expert reports, and medical records. Mr. Pineyro stays abreast of jury verdicts. He also discusses jury results with members of his firm and other personal injury attorneys. Mr. Pineyro testified that as a routine part of his practice, he ascertains the value of damages suffered by injured parties, and he explained his process for making these determinations. Mr. Pineyro was accepted as an expert in the valuation of damages suffered by injured (and deceased) parties. Mr. Pineyro opined that the conservative value of Mr. Sunwabeh’s damages, as well as his mother’s claim for pain, suffering, and loss of her son’s companionship under the Florida Wrongful Death Act, at between $2,500,000 and $5,000,000.4/ In deriving this figure, Mr. Pineyro considered the accident and homicide reports, the medical examiner’s report, and Petitioner’s medical records. Regarding Mr. Sunwabeh’s mother’s damages, Mr. Pineyro described comparable jury verdicts which involved the death of a child. Mr. Pineyro also testified regarding the significant obstacles Petitioner faced to recovering the full amount of damages in the wrongful death lawsuit based on the disputed facts and circumstances of the accident, as well as insurance policy limits. As part of his representation of Petitioner, Mr. Pineyro deposed several fact and expert witnesses and visited the accident scene. Mr. Pineyro conveyed that the first driver who hit Mr. Sunwabeh was not covered by bodily injury insurance, nor did she possess recoverable assets. Therefore, collecting a full damages award against her would prove challenging. Furthermore, Mr. Pineyro expressed that Petitioner did not have a strong liability case against the second driver based on causation and comparative negligence issues. (Mr. Sunwabeh was wearing all black clothes which concealed his fallen body on the road in the early morning gloom.) Mr. Pineyro was prepared to argue a negligence theory asserting that the second driver failed to use reasonable caution and react in time to avoid driving over Mr. Sunwabeh. However, during his testimony, Mr. Pineyro conceded that a defense verdict in favor of the second driver was a real possibility. Consequently, Mr. Pineyro believed that it was in Petitioner’s best interests to settle the lawsuit. Based on Mr. Pineyro’s testimony that the $275,000 settlement did not fully compensate Ms. Sunwabeh’s estate or his mother for their damages, Petitioner argues that a lesser portion of the settlement should be allocated to reimburse Medicaid instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the “true” value of Petitioner’s damage claim ($2,585,279) compared to the amount that was actually recovered ($275,000). Using these numbers, the settlement represents a 10.63 percent recovery of the total value of Petitioner’s damages. In like manner, the amount of the Medicaid lien should also be reduced to 10.63 percent or approximately $9,065.23. Therefore, Petitioner asserts that $9,065.23 is the portion of the third-party settlement that represents the fair and reasonable reimbursement of the amount Medicaid paid for Mr. Sunwabeh’s medical care. The Agency was not a party to the wrongful death lawsuit or Petitioner’s settlement. Petitioner was aware of the Medicaid lien and past medical expense damages at the time she settled the lawsuit. No portion of the $275,000 settlement represents reimbursement for future medical expenses. The undersigned finds that Petitioner did not meet her burden of proving that the “true” value of Petitioner’s damages from this accident equaled $2,585,279.65. Further, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s total recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $85,279.65 from Petitioner’s recovery of $275,000 from a third party to satisfy its Medicaid lien.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner be reimbursed for fiscal year 1979 and 1980 in accordance with the foregoing adjustments. DONE and ENTERED this 17th day of December, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1982.
Findings Of Fact Respondent, Agency for Health Care Administration (Department), is the successor in interest to the Department of Health and Rehabilitative Services as the single state agency responsible for the Florida Medicaid program. Petitioner, Ian L. Garriques, M.D. (Dr. Garriques), is a licensed physician. He is a board certified internist with a subspeciality in infectious diseases. In 1980, he came to Key West, Florida, to practice. In the early 1980's Dr. Garriques and his colleagues began to see patients who were experiencing symptoms resembling mononucleosis syndrome and who were dying from pneumonia for unexplained reasons. These patients were diagnosed with AIDS and thus, began the AIDS epidemic in Key West. Many AIDS patients did not have the resources to pay for medical care. They would go to the emergency room when they needed to see a doctor, resulting in a lack of continuity of care because they would see the doctor who happened to be covering the emergency room on that particular day. The patients would be released to a home health care agency that would continue with the medications prescribed on discharge regardless of whether the medications continued to be effective. Dr. Garriques began to see AIDS patients in his office that were getting worse because of the medications that they were being given. In 1986, AIDS Help, Inc. (AHI), a non-profit organization was formed to help those AIDS victims who were not receiving adequate care because of a lack of financial resources. AHI provides medical services, housing, transportation, case management, counseling, food, utility assistance, and drugs to its clients. At first AHI was funded from private donations. Later, AHI began to receive state general revenue funds and applicable Department of Health and Rehabilitative Services (HRS) funds for its operations pursuant to legislative appropriations. From 1987 to 1991, Dr. Garriques was a member of the board of directors for AHI. DUPLICATE BILLING Because of Dr. Garriques' expertise in treating HIV, AHI contracted with him to provide services to AHI clients in 1991. Dr. Garriques provided services at the Aids Help Clinic under the terms of that contract during the audit period at issue. The contract recited the background of the agreement as follows: AHI has entered into a contract with the State of Florida, Department of Health and Rehabili- tative Services (HRS) to provide certain medical, evaluative, consultative, referral and treatment services to its clients. AHI presently has the need to staff the Health Care Center and provide the services which it has contracted to provide. Discussions have taken place between AHI and the Doctor [Dr. Garriques] in regard to subcontracting the necessary services to him. . . . The contract further provided: AHI hereby retains the Doctor to provide the services, equipment, supplies and personnel described in this Agreement and the Doctor agrees to provide them from the date of the execution of this Agreement by all parties hereto until June 30, 1991 under the terms hereof. In payment therefor AHI agrees to pay the Doctor the sum of $3,000.00 per month, to be paid by AHI in the following manner: The Doctor shall submit to AHI an invoice between the first and the tenth day of each month of this Agreement, beginning March 1, 1991, for the services, supplies and personnel in the amount of $3,000.00. AHI shall then pay to the Doctor the sum billed by the fifteenth day of this month. The amount of $3,000.00 shall be reviewed by the parties hereto at the end of the second month of the term of this Agreement in order to determine whether this amount is fair and adequate to both of the parties in view of the nature and volume of the services provided and also to review whether any other changes are needed in the terms and provisions of this Agreement. The parties agree to discuss these matters in good faith and to attempt to come to a mutually agreeable resolution of their differences, if any. In addition to this amount, the Doctor shall be allowed to bill for his services and to retain such amounts which he may collect from Medicare, Medicaid, private insurers, companies, or other federal or state reimbursement programs. He shall be responsible for the fairness and accuracy of such billing and shall hold AHI harmless from any and all liability or responsibility whatsoever for such billing. He shall look solely and exclusively to patients or to those persons or third party payors who are responsible for services rendered to these patients and not to AHI. The Doctor shall, personally, be present at the Health Center one day each week, presently contemplated to be Wednesday, for a period of approximately eight hours. On each such day he shall be available to provide medical, evaluative, consultative and treatment services which he deems necessary and appropriate to any and all patients referred to the Health Center. He shall act as the primary care physician for all such persons and shall make such referrals to other physician specialists and other health persons (sic) and shall make such referrals to other physician specialists and other health care personnel and he shall admit any such persons to a hospital or such other medical facility as he deems necessary and appropriate in the exercise of his best medical judgment. He will continue to provide such primary care to such persons and shall continue to parti- cipate in the care of such persons as may be necessary in his best medical judgment. The Doctor shall provide on each day of service a Florida licensed registered nurse for approximately eight hours to assist him in the performance of his services hereunder, shall pay the nurse from his own funds and supervise the performance of his/her duties. In addition, the Doctor shall provide the services of a billing clerk and such other personnel as are required to competently carry out his duties hereunder. The Doctor shall also provide, at his own expense such equipment, supplies (medical and office) as may be necessary to carry out his duties hereunder. The Doctor shall provide AHI with such records, summaries, information and reports as AHI may from time to time request pertaining to the rendering of his services hereunder and the oper- ations of the Health Care Center, including but not limited to financial and billing records, medical records and correspondence. The Doctor shall also conduct a monthly case review with the staff/case managers of AHI to discuss with them the medical status of AHI's clients which he has seen. The contract was amended to extend the term through June 30, 1993, to increase the rate of payment to $6,000.00 per month and to increase the time of the nurse practitioner at the clinic to one-and-one-half days per week. Dr. Garriques was an enrolled Medicaid provider during January 1, 1991 through June 30, 1994, the audit period at issue. Dr. Garriques' Medicaid provider number is 036395200. By signing the Medicaid provider agreement, Dr. Garriques agreed to be bound by the applicable law and Medicaid policies and manuals. During the term of the contract, Dr. Garriques sent AHI an invoice each month for a flat fee. AHI also requested Dr. Garriques to send it a production analysis, listing all the transactions for the clinic patients each month. There was no correlation between the number of patient transactions and the amount of money that Dr. Garriques received each month from AHI. Dr. Garriques billed Medicaid for medical services provided to the clinic patients who were Medicaid eligible. Dr. Garriques paid the nurse practitioner, which he was required to provide pursuant to the AHI contract, approximately $1500.00 per month and he paid a nurse approximately $700 to $800 per month to assist in running the clinic. In addition, he paid a secretary to perform clerical duties associated with the clinic. Dr. Garriques spent approximately fifty percent of his time caring for approximately 75 to 100 AHI clinic patients. The Department takes the position that Medicaid made payments to Dr. Garriques for services which were also paid for pursuant to the contract between Dr. Garriques and AHI. Thus, the Department considers the amounts paid by Medicaid for the patients listed below constitute overpayments for which the Department is entitled to be reimbursed. a C.H. (listed as Patient Number 1) b. J.M. (listed as Patient Number 6) c. A.K. (listed as Patient Number 9) d. G.S. (listed as Patient Number 10) e. T.V. (listed as Patient Number 16) f. K.H. (listed as Patient Number 17) g. R.W. (listed as Patient Number 18) h. T.S. (listed as Patient Number 19) i. R.M. (listed as Patient Number 21) j. S.V. (listed as Patient Number 23) k. P.N. (listed as Patient Number 25) l. L.A. (listed as Patient Number 26) m. T.T. (listed as Patient Number 27) n. J.G. (listed as Patient Number 31) o. J.C. (listed as Patient Number 32) p. G.L. (listed as Patient Number 33) Dr. Garriques takes the position that the services provided under the terms of his contract with AHI were different from and not included in the services that he billed Medicaid. Services which Dr. Garriques provided pursuant to the AHI agreement included administrative services associated with the responsibility of running the clinic; 24-hour on-call, seven days a week availability to AHI patients; physician services for which Medicaid does not reimburse; admitting AHI patients to the hospital; answering patient questions by telephone; coordinating the care of AHI patients with their treating providers; reviewing patient labs; billing related to treating AHI patients; seeing patients in the hospital; seeing patients outside the clinic; answering questions from patients and staff; quality assurance; attendance at Board meetings; and meeting with case managers and home health personnel. He claims the services he provided under the AHI agreement were either non-reimbursable Medicaid services or services for clients who were not eligible for Medicaid services. It is AHI's position that the payments made to Dr. Garriques were for services which were not compensable under Medicaid and for services to clients who were not eligible for Medicaid services. The Department of Health and Rehabilitative Services's policy is that the funds which it provided to AHI to subcontract with Dr. Garriques were to be used for services and clients that were not covered by other funding sources. The records from AHI show that Dr. Garriques provided services to C.H. either at the clinic or the hospital on the following dates: 10/16/91, 10/30/91, 11/20/91, 1/8/92, 2/12/92, 4/22/92, 6/24/92, 7/8/92, 7/21/92, 7/22/92, 7/29/92, 8/12/92, 9/2/92, 9/9/92, 10/7/92, 10/21/92, 10/22/92, 10/23/92, 10/24/92, 10/25/92, 10/26/92, 10/27/92, 11/4/92, 12/9/92, 1/13/93, 2/10/93, 3/24/93, 5/12/93, and 5/13/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to C.H. on the dates listed above. The records from AHI show that Dr. Garriques provided services to J.M. at the clinic on September 21, 1991. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to J.M. on that date. The records from AHI show that Dr. Garriques provided services to G.S at the clinic on the following dates: 2/20/91, 2/27/91, 3/13/91, 3/21/91, 4/3/91, 5/8/91, and 8/7/91. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to G.S. on those dates. The records from AHI show that Dr. Garriques provided services to T.V. at the clinic on the following dates: 12/4/91, 12/11/91, 6/3/92, 8/19/92, 12/2/92, 3/3/93, and 6/3/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to T.V. on those dates. The records from AHI show that Dr. Garriques provided services to K.H. at the clinic on the following dates: 1/8/92, 1/15/92, 1/30/92, 2/12/92, 2/26/92, 3/4/92, 3/18/92, 4/1/92, 4/15/92, 4/29/92, 5/27/92, 6/24/92, 7/15/92, 10/7/92, 11/4/92, and 11/25/92. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to K.H. on those dates. The records from AHI show that Dr. Garriques provided services to R.W. at the clinic on the following dates: 5/6/92, 7/1/6/92, 8/3/92, 10/15/92, 1/13/93, and 3/31/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to R.W. on those dates. The records from AHI show that Dr. Garriques provided services to T.S. at the clinic on the following dates: 5/20/92, 6/3/92, 7/1/92, 7/15/92, 7/29/92, 8/19/92, 9/2/92, 9/23/92, 10/21/92, 11/18/92,12/9/92, 1/6/93, 1/20/93, 3/10/93, 3/17/93, 4/48/93, and 5/26/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to T.S. on those dates. The records from AHI show that Dr. Garriques provided services to R.M. at the clinic on the following dates: 3/24/93, 4/7/93, 4/28/93, and 6/16/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to R.M. on those dates. The records from AHI show that Dr. Garriques provided services to S.V. at the clinic on the following dates: 10/7/92, 10/15/92, and 11/9/92. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to S.V. on those dates. The records from AHI show that Dr. Garriques provided services to P.N. at the clinic on 11/9/92, 2/24/92, and 4/21/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to P.N. on those dates. The records from AHI show that Dr. Garriques provided services to L.A. at the clinic on the following dates: 1/6/93, 1/20/93, 2/10/93, 3/10/93, 4/21/93, and 6/2/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to L.A. on those dates. The records from AHI show that Dr. Garriques provided services to T.T. at the clinic on 5/12/93 and 6/2/93. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to T.T. on those dates. The records from AHI show that Dr. Garriques provided services to J.C. either at the clinic or the hospital on the following dates: 2/6/91, 3/6/91, 3/11/91, 3/12/91, 3/13/91, 3/14/91, 3/15/91, 3/17/91, and 3/18/91. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to J.C. on those dates. The records from AHI show that Dr. Garriques provided services to N.S. either at the clinic or the hsopital on the following dates: 5/29/91, 8/7/91, 8/21/91, 9/4/91, 9/5/91, and 9/18/91. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to N.S. on those dates. The records from AHI show that Dr. Garriques provided services to J.F. at the clinic on the following dates: 2/13/91, 3/20/91, 5/1/91, 5/15/91, 5/29/91, and 6/26/91. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to J.F. on those dates. The records from AHI show that Dr. Garriques provided services to W.M. either at the clinic or the hospital on the following dates: 6/5/91, 11/10/91, 11/11/91, 11/12/91, 11/13/91, 11/14/91, 1/3/92, 1/8/92, 1/9/92, 1/10/92, 1/11/92, 1/12/92, 1/13/92, 1/14/92, and 2/19/92. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to W.M. on those dates. The records from AHI show that Dr. Garriques provided services to M.L. either at the clinic or the hospital on the following dates: 4/22/92, 5/13/92, 5/14/92, 5/15/92, 5/16/92, 5/17/92, 5/18/92, 5/19/92, 5/20/92, 5/21/92, 5/22/92, 5/23/92, 5/24/92, and 5/25/92. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to M.L. on those dates. The records from AHI show that Dr. Garriques provided services for D.M. on April 28, 1993, at the clinic. The records from the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to D.M. on that date. The records from AHI show that Dr. Garriques provided services to J.G. either at the clinic or the hospital on the following dates: 9/18/91, 10/23/91, 11/20/91, 1/22/92, 3/11/92, 3/25/92, 4/15/92, 5/20/92, 5/27/92, 6/24/92, 7/15/92, 8/5/92, 9/9/92, 9/18/92, 9/19/92, 9/20/92, 9/21/92, 9/22/92, and 9/23/92. The records for the Department show that Dr. Garriques billed and received payment from Medicaid for services which he provided to J.G. on those dates. DISPUTES OVER LEVEL OF SERVICE Part of the recoupment action deals with the level of service which Dr. Garriques claims to have provided and the level of service which the Department deems to be the appropriate level of service for payment. Payment for services are made in accordance with the level of service provided. The level of service is coded according to Current Procedural Terminology (CPT), which is a compilation of codes by the American Medical Association Committee. For patient D.W., there was a dispute over the level of services provided on June 8, 9, and 10, 1992. For those dates, Dr. Garriques submitted a claim showing a CPT code of 99223, which stands for an initial hospital visit. Patient D.W. had been admitted for HIV and streptococcal meningitis on June 7, 1992. Dr. Sullenberger, who was the expert witness for Respondent concerning level of service, correctly opined that given the seriousness of the patient's disease, the CPT code for services on June 8 and 9 should be 99233. At the hearing the parties stipulated that the appropriate CPT code for June 10 should be 99232. For patient J.G., there was a dispute over the level of services provided on April 24 and 25, 1994. Patient J.G. was admitted to the hospital for an overdose of tylenol. If not treated properly, a patient's liver can be destroyed within 12 hours of taking an overdose of tylenol. The liver damage will not be apparent until approximately a week later when the patient dies. Therefore, it is important that the patient be given the correct medication and that the blood level of the patient be monitored very closely during the first 12 hours after admission to the hospital. Dr. Sullenberger, apparently unaware of the potentially lethal effects of a tylenol overdose, opined that the CPT code for the service provided on April 24 should be 99222, which stands for a moderately complex level of care and that the CPT code for April 25 should be reduced to 99231. However, based on Dr. Garriques' testimony of the seriousness of a tylenol overdose, it is found that Dr. Garriques correctly entered CPT codes of 99291 for April 24 and 25. For patient N.D., there was a dispute over the level of service provided on September 17, 1991, and February 1, 1994. Patient N.D. was seen on September 17 for a physical examination. It took Dr. Garriques time to complete the physical because of communication difficulties stemming from N.D.'s mental retardation. However the level of service has nothing to do with the ability to communicate with the patient. The proper CPT code for the September 17 service was at an intermediate level of service, CPT code 90060. Dr. Garriques referred the patient to an opthamologist at the February 1 visit. The CPT code of 99214 billed by Dr. Garriques was correct. Patient G.M. was admitted to the hospital on October 18, 1991 based on Dr. Garriques' telephone orders. Dr. Garriques saw the patient for the first time during his stay at the hospital on October 19, 1991. There should have been no payment for the telephone order on October 18 because there was no face to face contact with the patient. The CPT code for October 19 should have been 90220. The CPT code for the services provided on October 20 and 21 should have been 90250.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding that the Medicaid payments at issue for patients C.H., J.M., A.K., G.S., T.V., K.H., R.W., T.S., R.M., S.V., P.N., L.A., T.T., J.G., J.C., and G.L. did not constitute duplicate payments for which Dr. Garriques should reimburse AHCA; that the level of service for D.W. on June 8 and 9, 1992 is 99233 and 99232 on June 10, 1992; that the CPT code for the services provided to J.G. on April 24 and 25, 1994 is 99291; that the CPT code for the services provided to N.D. on September 17, 1991 is 90060 and the CPT code for services on February 1, 1994 is 99214; and that payment for the claim for October 18, 1991 for G.M. should be reimbursed by Dr. Garriques, the CPT code for October 19, 1991 services is 90220, and the CPT code for services on October 20 and 21 is 90250. DONE AND ENTERED this 8th day of July, 1996, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of July, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5094 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraph 1: The first sentence is accepted in substance. The remaining is rejected as unnecessary. Paragraphs 2-6: Accepted in substance. Paragraph 7: Rejected as irrelevant. The contract between AHI and Dr. Garriques defines what services are to be provided. Paragraphs 8-15: Accepted in substance. Paragraph 16: Rejected as not necessary. Paragraph 17: Accepted in substance. 7 Paragraph 18: Rejected as immaterial. Paragraphs 19-20: Accepted in substance Paragraph 21: Rejected as subordinate to the facts found. Paragraphs 22-23: Accepted in substance. Paragraph 24: Rejected as unnecessary. Paragraph 25-27: Rejected as subordinate to the facts found. Paragraph 28: Accepted in substance. Paragraph 29: Rejected as subordinate to the facts found. Paragraphs 30-31: Accepted in substance. Paragraphs 32-34: Accepted in substance except Patient Number 5 is G.M. not C.M. Paragraphs 35-36: Accepted in substance. Respondent's Proposed Findings of Fact. Paragraphs 1-3: Accepted in substance. Paragraphs 4-5: Rejected as unnecessary. Paragraph 6: Accepted in substance. Paragraph 7: Rejected as unnecessary. Paragraphs 8-9: Accepted in substance. Paragraph 10: Rejected as unnecessary given the stipulation of the parties that the amount of reimbursement, if any, would not be decided in this proceeding. Paragraph 11: The first sentence is rejected as unnecessary. The remainder is accepted in substance. Paragraphs 12-13: Accepted in substance. Paragraph 14: The first sentence is rejected as unnecessary. The second through the fifth sentences are accepted in substance. The sixth sentence is accepted that that was Dr. Sullenberger's testimony but rejected that the correct CPT code was 99222. Paragraph 15: The first sentence is accepted. The remainder is rejected as not supported by the greater weight of the evidence. Paragraph 16: The first sentence is rejected as unnecessary. The remainder is accepted in substance. Paragraphs 17-18: Accepted in substance. Paragraph 19: The last sentence is rejected as to code 90260. The remainder is accepted in substance. Paragraph 20: Accepted. Paragraph 21: The first sentence is rejected as unnecessary. The remainder is accepted in substance to the extent that the services were rendered at the clinic but not that the services were funded by the AHI contract. Paragraph 22: Rejected as not supported by the greater weight of the evidence that the dates listed were for services which were funded by the AHI contract. The listing merely shows who was served at the clinic and on what dates. Paragraph 23: The first sentence is accepted in substance. Rejected as not supported by the greater weight of the evidence. The evidence is clear that the parties contemplated that non-Medicaid reimbursable services and non- Medicaid eligible clients were funded by the AHI contract. Paragraph 24: The first and last sentences are accepted in substance. The second and third sentences are rejected as not supported by the record. The contract indicated that some services would be funded by AHI and some would be funded by Medicaid. Paragraph 25: Rejected as constituting argument. Paragraph 26: The first sentence is accepted in substance to the extent that Medicaid was billed for the services on that date but not that AHI paid for the same services. The remainder is rejected as not supported by the greater weight of the evidence. 21. Paragraphs 27, 31, 35, 39, 43, 47, 51, 55, 59, 63, 67, 71, 75, 79, 83, 87, 91, and 95: The first sentence is rejected as unnecessary. The remainder is accepted in substance to the extent that Medicaid was billed for the services provided at the clinic but not that AHI funded those services. 22. Paragraphs 28, 32, 36, 40, 44, 48, 52, 56, 60, 64, 68, 72, 76, 80, 84, 88, 92, and 96: Rejected as not supported by the greater weight of the evidence. The contract provided that some of the services would be funded by Medicaid and some of the services would be funded by AHI 23. Paragraph 29, 33, 37, 41, 45, 49, 53, 57, 61, 65, 69, 73, 77, 81, 85, 89, 93, and 97: The first sentence is accepted in substance to the extent that the patients were seen at the clinic but not that the services were funded by the AHI agreement. The remainder is rejected as constituting argument. 24. Paragraph 30, 34, 38, 42, 46, 50, 54, 58, 62, 66, 70, 74, 78, 82, 86, 90, 94, and 98: Accepted in substance to the extent that Medicaid paid for services on those dates but rejected that the Medicaid payment was duplicative of payments from the AHI contract. COPIES FURNISHED: Wayne Mitchell, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Louise T. Jeroslow, Esquire Zack, Sparber, Kosnitzky, Truxton, Spratt and Brooks, P.A. One International Place 100 Southeast Second Street, Suite 2800 Miami, Florida 33131 S. Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Jerome W. Hoffman General Counsel Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration (AHCA), in satisfaction of Respondent’s Medicaid lien from a settlement received by Petitioner, James T. Stirk, from a third party pursuant to section 409.910, Florida Statutes (2015).
Findings Of Fact On January 24, 2014, Petitioner, then 25 years old, was involved in a serious motorcycle accident. Petitioner struck the rear of a truck with a trailer near mile marker 129 on I-75 in Lee County, Florida. Petitioner was taken to Lee Memorial Hospital where he remained in a coma for a couple of months. He sustained a broken back at T-4 level, two broken arms, a fractured neck and internal injuries. As a result of his injuries, Petitioner is now a paraplegic from the chest down and confined to a wheelchair. Respondent is the state agency authorized to administer Florida’s Medicaid program. See § 409.902, Fla. Stat. Prior to the accident, Petitioner worked as an appliance and air conditioning repairman, earning $16 an hour. After the accident and his recovery, Petitioner has been unable to work and his only source of income is through a Social Security disability check of approximately $1,083 monthly. He believes he is now eligible for Medicare, which should start “next month” (August 2016). He rents a home ($750 monthly) and lives there with his four-year-old son. Petitioner brought a negligence claim against the truck driver to recover his damages sustained in the crash. Petitioner settled his negligence claim for $95,000.00. During the pendency of Petitioner’s claim, AHCA was notified of the third-party negligence claim. AHCA has not filed an action to set aside or otherwise object to Petitioner’s $95,000.00 settlement. Petitioner’s past medical care related to his motorcycle accident totaled approximately $929,589.46. Petitioner was insured under a Florida Blue ERISA Health Insurance Plan (Florida Blue) for a portion of the time he received medical treatment. He subsequently became eligible for Medicaid after being unable to work after the accident. Florida Blue paid approximately $501,487.30 towards Petitioner’s medical care. Medicaid paid $47,008.81 towards Petitioner’s medical care. No portion of this amount was paid for future medical expenses and no payments were made in advance for medical care. By letter dated January 20, 2016, AHCA, through its contractor Xerox Recovery Services, asserted a lien of $47,008.81 against Petitioner’s third-party negligence claim and settlement thereof. By letter dated January 21, 2016, Petitioner’s counsel provided Xerox Recovery Services the settlement information and requested the Medicaid lien be proportionally reduced to $714.05, 1.9 percent of the total value of Petitioner’s claim. By letter dated February 18, 2016, AHCA, through its contractor, applied the statutory formula to Petitioner’s gross settlement and requested a check in the amount of $32,062.25 for full satisfaction of its lien. Petitioner’s attorney forwarded payment of $32,062.25 from Petitioner’s settlement proceeds. The payment of these funds to AHCA constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Section 409.910(11)(f), provides, in pertinent part, as follows: (f) [I]n 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 . . . 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 . . . shall be calculated at 25 percent of the judgement, award, or settlement. Pursuant to the formula set forth in 409.910(11)(f), Respondent should be reimbursed $32,062.25, the amount set forth in the February 18, 2016, letter. However, the statute provides a method by which a recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula set forth in subsection (11)(f). “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. § 409.910(17)(b), Fla. Stat. The testimony spoke in generalities and global assessments. The testimony did not explicitly disclose that a lesser amount of the total recovery should be allocated for past and future medical expenses in this instance. Ty Roland is an attorney with over 20 years’ experience representing plaintiffs in personal injury and wrongful death claims. The majority of Mr. Roland’s cases have been in the Fort Myers area. Mr. Roland was accepted as an expert in the valuation of the damages (in personal injury cases), and testified as to his opinion of the total value of damages in Petitioner’s underlying action. In formulating his opinion of the total value of Petitioner’s damages, Mr. Roland considered cases he has previously tried. Petitioner’s suit demanded $5 million; however, Mr. Roland estimated the value of Petitioner’s suit at $10 million. There were no specifics as to the elements of damages. Total recovery for Petitioner’s damages through settlement was $95,000, roughly 1.9 percent of the estimated total value of his damages. The parties stipulated the amount due under section 409.910(11)(f) is $32,062.25.
The Issue The issue for determination in this case is whether Respondent’s application of a fair rental value system of property cost reimbursement to Petitioner under the Florida Title XIX Long-Term Care Medicaid Reimbursement Plan is appropriate.
Findings Of Fact Petitioner, CONSULTING MANAGEMENT AND EDUCATION, INC., d/b/a GULF COAST NURSING AND REHABILITATION CENTER (CME), is the licensed operator of a 103-bed nursing home in Clearwater, Florida, which is presently known as GULF COAST NURSING AND REHABILITATION CENTER (GULF COAST). CME participates in the Florida Medicaid Program as an enrolled provider. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION (AHCA), is the agency of the State of Florida authorized to implement and administer the Florida Medicaid Program, and is the successor agency to the former Department of Health and Rehabilitative Services, pursuant to Chapter 93-129, Laws of Florida. Stipulated Facts Prior to 1993, the GULF COAST nursing home facility was known as COUNTRY PLACE OF CLEARWATER (COUNTRY PLACE), and was owned and operated by the Clearwater Limited Partnership, a limited partnership which is not related to CME. In 1993 CME agreed to purchase, and did in fact purchase, COUNTRY PLACE from the Clearwater Limited Partnership. Simultaneous with the purchase of COUNTRY PLACE, CME entered into a Sale/Leaseback Agreement with LTC Properties, Inc., a Maryland real estate investment trust which engages in the financing of nursing homes. The Purchase and Sale Agreement between Clearwater Limited Partnership and CME was contingent upon the Sale/Leaseback Agreement and the proposed Lease between CME and LTC Properties, Inc. On September 1, 1993, CME simultaneously as a part of the same transaction purchased COUNTRY PLACE, conveyed the facility to LTC Properties, Inc., and leased the facility back from LTC Properties, Inc. As required, CME had notified AHCA of the proposed transaction. AHCA determined that the transaction included a change of ownership and, by lease, a change of provider. CME complied with AHCA's requirements and became the licensed operator and Medicaid provider for COUNTRY PLACE. Thereafter, CME changed the name of the facility to GULF COAST. After CME acquired the facility and became the licensed operator and Medicaid provider, AHCA continued to reimburse CME the same per diem reimbursement which had been paid to the previous provider (plus certain inflation factors) until CME filed its initial cost report, as required for new rate setting. In the normal course of business, CME in 1995 filed its initial Medicaid cost report after an initial period of actual operation by CME. Upon review of the cost report, AHCA contended that the cost report was inaccurate and engaged in certain "cost settlement" adjustments. During this review, AHCA took the position that CME's property reimbursement should be based on FRVS methodologies rather than "cost" due to the lease. In November of 1995, CME received from AHCA various documents which recalculated all components of Petitioner's Medicaid reimbursement rates for all periods subsequent to CME's acquisition of the facility. In effect, AHCA placed CME on FRVS property reimbursement. The practical effect of AHCA's action was to reduce CME's property reimbursement both retroactively and prospectively. The retroactive application would result in a liability of CME to AHCA, due to a claimed overpayment by AHCA. The prospective application would (and has) resulted in a reduction of revenues. CME is substantially affected by AHCA's proposed action and by Sections I.B., III.G.2.d.(1), V.E.1.h., and V.E.4. of the Florida Medicaid Plan. Additional Findings of Fact The Florida Medicaid Plan establishes methodologies for reimbursement of a nursing home's operating costs and patient care costs, as well as property costs. The dispute in this matter relates only to reimbursement of property costs. CME as the operator of the GULF COAST nursing home facility is entitled to reimbursement of property costs in accordance with the Florida Medicaid Plan. CME as the operator of the GULF COAST facility entered into a Florida Medicaid Program Provider Agreement, agreeing to abide by the provisions of the Florida Medicaid Plan. The Sale/Leaseback Agreement entered into by CME and LTC Properties Inc. (LTC) specifically provides for a distinct sale of the nursing home facility to LTC. LTC holds record fee title to GULF COAST. LTC, a Maryland corporation, is not related to CME, a Colorado corporation. The Florida Medicaid Plan is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Florida Medicaid Plan pays a single per diem rate for all levels of nursing care. After a nursing home facility's first year of operation, a cost settling process is conducted with AHCA which results in a final cost report. The final cost report serves as a baseline for reimbursement over the following years. Subsequent to the first year of operation, a facility files its cost report annually. AHCA normally adjusts a facility's reimbursement rate twice a year based upon the factors provided for in the Florida Medicaid Plan. The rate-setting process takes a provider through Section II of the Plan relating to cost finding and audits resulting in cost adjustments. CME submitted the appropriate cost reports after its first year of operation of the GULF COAST facility. Section III of the Florida Medicaid Plan specifies the areas of allowable costs. Under the Allowable Costs Section III.G.2.d.(1) in the Florida Title XIX Plan, a facility with a lease executed on or after October 1, 1985, shall be reimbursed for lease costs and other property costs under the Fair Rental Value System (FRVS). AHCA has treated all leases the same under FRVS since that time. AHCA does not distinguish between types of leases under the FRVS method. The method for the FRVS calculation is provided in Section V.E.1.a-g of the Florida Medicaid Plan. A “hold harmless” exception to application of the FRVS method is provided for at Section V.E.1.h of the Florida Medicaid Plan, and Section V.E.4 of the Plan provides that new owners shall receive the prior owner’s cost-based method when the prior owner was not on FRVS under the hold harmless provision. As a lessee and not the holder of record fee title to the facility, neither of those provisions apply to CME. At the time CME acquired the facility, there was an indication that the Sale/Leaseback transaction with LTC was between related parties, so that until the 1995 cost settlement, CME was receiving the prior owner’s cost-based property method of reimbursement. When AHCA determined that the Sale/Leaseback transaction between CME and LTC was not between related parties, AHCA set CME’s property reimbursement component under FRVS as a lessee. Property reimbursement based on the FRVS methodology does not depend on actual period property costs. Under the FRVS methodology, all leases after October 1985 are treated the same. For purposes of reimbursement, AHCA does not recognize any distinction between various types of leases. For accounting reporting purposes, the Sale/Leaseback transaction between CME and LTD is treated as a capital lease, or “virtual purchase” of the facility. This accounting treatment, however, is limited to a reporting function, with the underlying theory being merely that of providing a financing mechanism. Record fee ownership remains with LTC. CME, as the lease holder, may not encumber title. The Florida Medicaid Plan does not distinguish between a sale/leaseback transaction and other types of lease arrangements. Sections IV.D., V.E.1.h., and V.E.4., the “hold harmless” and “change of ownership” provisions which allow a new owner to receive the prior owner’s method of reimbursement if FRVS would produce a loss for the new owner, are limited within the Plan’s organizational context, and within the context of the Plan, to owner/operators of facilities, and grandfathered lessee/operators. These provisions do not apply to leases executed after October 1, 1985. Capital leases are an accounting construct for reporting purposes, which is inapplicable when the Florida Medicaid Plan specifically addresses this issue. The Florida Medicaid Plan specifically addresses the treatment of leases entered into after October 1985 and provides that reimbursement will be made pursuant to the FRVS method.
The Issue The issue to be decided in this proceeding is the amount to be paid to Respondent, Agency for Health Care Administration (“AHCA” or the “Agency”), from the proceeds of a personal injury settlement received by Petitioner, Joseph Pinto Domingo, referred to herein as either “Petitioner” or “Domingo,” to reimburse Medicaid for expenditures made on his behalf.
Findings Of Fact The following findings of fact are derived from the exhibits and oral testimony at final hearing, as well as from the stipulated facts between the parties. On July 13, 2012, Domingo’s parents took him to a hospital emergency room (“ER”) with complaints of a persistent fever, runny nose, congestion and a cough. He was 24 months old at the time and had been sick for a few days. After evaluation by hospital ER staff, Domingo was found to have a fever of 103 degrees Fahrenheit. He was treated with Tylenol, but minutes later began to have seizures. He experienced on-going seizure activity that compromised his ability to breathe, resulting in a catastrophic hypoxic ischemic brain injury. As a result of his brain injury, Domingo is permanently disabled and unable to stand, walk, ambulate, speak, eat, toilet or care for himself in any manner. As a result of Domingo’s injuries, he suffered both economic and non-economic damages, including but not limited to: pain and suffering, mental anguish, loss of ability to enjoy life, disability, disfigurement, lost ability to earn money, and extensive medical expenses, past and future. Of course Domingo’s parents also suffered extensively because of Domingo’s injuries. The medical care Domingo received for treatment of his injuries was paid for by Medicaid. The amount paid by Medicaid for his treatment was $641,174.03 (the “Lien Amount”). Domingo’s parents brought medical malpractice claims against the ER physician, the ER nurse practitioner, a professional association to which the doctor belonged, and the hospital. During the course of litigation, it was determined that a conservative value of Domingo’s claim for damages would be thirty million dollars ($30,000,000.00), referred to herein as the “Claim Amount.” After years of litigation, a settlement was reached wherein Domingo was to be paid ten million dollars ($10,000,000), which will be called the “Settlement Amount.” An undisclosed portion of the Settlement Amount, presumably 25 percent or $2,500,000, was paid for attorneys’ fees. Domingo’s recovery was therefore less than $10,000,000. The Settlement Amount was paid by two separate entities: 1) the physician, nurse practitioner, and their professional associations (collectively the “Association”); and 2) the hospital where Domingo presented to the ER for treatment. The Association paid $2,000,000 of the Settlement Amount and the hospital paid $8,000,000. Both entities entered into settlement agreements with Domingo (through his parents). Domingo offered into evidence a Complete Liability Release from the Association and a General Release from the hospital which Domingo’s representatives had signed. In the releases, the Association and the hospital were released from further liability for and in consideration of payments made to Domingo in the amounts described above. The releases, by their terms, are considered “settlement agreements” between the parties thereto. The hospital’s settlement agreement indicated that $170,937 was being allocated for Domingo’s past medical expenses, recognizing that the Settlement Amount was less than the perceived value of Domingo’s claim. The Association’s settlement agreement did not allocate any of the $2,000,000 sum specifically to past medical expenses; it did acknowledge that the Settlement Amount was less than the value of the Claim Amount. Domingo’s parents and legal counsel signed the releases, wherein all future claims against the defendants were barred. Neither the defendants in the malpractice case nor AHCA were signatories to the releases. The copies of the documents entered into evidence at final hearing were not signed by the Association or the hospital. Oddly, the documents do not even provide a place for the defendants to sign. Nor was there testimony from any principal of the Association or the hospital to verify the terms of the releases-qua-settlement agreements. Nonetheless, the gross Settlement Amount received by Domingo was only one-third, i.e., 33.3 percent, of the Claim Amount. All the parties hereto acknowledge that Domingo did not receive the full potential value of his claim in the Settlement Amount. Domingo continues to reside with his parents, who, despite the difficulties associated with Domingo’s injury and the stress related thereto, have remained married. The parents will be responsible for Domingo’s care for the rest of his life. The parties do not dispute that Domingo’s life situation is grave and serious. But that is not the issue in this proceeding. The economic and non-economic damages for Domingo include several factors: future medical expenses, loss of income, and past medical expenses comprise the economic portion; pain and suffering, loss of consortium, mental anguish, loss of enjoyment of life, and disability, to name a few, make up the non-economic damages. Of all the postulated damages, only the past medical expenses (i.e., the Lien Amount) are finite and absolute. In fact, the parties have stipulated that “[Domingo’s] medical care related to the injury was paid by Medicaid and Medicaid provided $641,174.03 associated with [Domingo’s] injury.” All the other damages are estimates by experts, based on comparisons of other cases and/or their professional experience. Domingo asserts that inasmuch as he received only about 33.3 percent of his Claim Amount, he should only have to pay 33.3 percent of the Lien Amount. His assertion is essentially based on a mathematical calculation which seeks to make Domingo as whole as possible. The calculation is offered as an equitable way to provide Domingo with more of the Settlement Amount than he might otherwise retain. As discussed more fully below, the mathematical calculation runs afoul of statutory provisions. The amount allocated by the hospital for Domingo’s past medical expenses ($170,397), is 26.6 percent of the Lien Amount. This is because the hospital’s share of the $10,000,000 settlement ($8,000,000) represents 26.6 percent of the alleged value of the claim, according to Petitioner. (The undersigned could not mathematically reconcile this percentage, but based on the findings and conclusions herein, the calculation is not relevant.) The Association did not allocate a specific amount for past and medical expenses, but Domingo argues that a factor of 33.3 percent should be applied to their settlement payment, as the Settlement Amount is 33.3 percent of the Claim Amount. Other than the accuracy of that mathematical calculation, Petitioner does not provide any basis for applying the percentage to the Lien Amount. AHCA was made aware of the settlement discussions between Domingo and his healthcare providers, but chose not to be involved in the process. Rather, AHCA established the amount of the lien and asserts that the entire Lien Amount should be paid from the Settlement Amount.
