Findings Of Fact 1. Petitioner was provided notice of the examination adjustments as set forth in the examination report letter. 2. The examination report letter disclosed the Petitioner’s administrative and due process rights. 3. Petitioner agrees to all audit readjustments as set forth in the settlement agreement. Filed September 19, 2014 1:43 PM Division of Administrative Hearings CONCLUSIONS OF LAW. 4. The Agency incorporates and adopts the statements and conclusions of law as set forth in the examination report letter. 5. The admitted facts support the conclusion that the cost report adjustments are true and accurate and form the basis for any corresponding rate adjustments. 6. Petitioner is advised that the rate adjustments will be assessed immediately and any overpayments which resulted are due and owing to the Agency. Notice of the rate adjustment and any overpayments which resulted from the retroactive rate adjustment have been conveyed to Petitioner. At that time, Petitioner is obligated to repay the overpayments or make satisfactory arrangements with the Agency. 7. Petitioner is also advised that pursuant to Section 409.913(15)(k), Florida Statutes, the Agency is required to apply an administrative sanction where a subsequent cost report includes a cost that is not allowable under a Florida Title XIX reimbursement plan, after having been advised that the costs were not allowable; therefore, Petitioner is advised that any costs that were disallowed by way of the examination report letter on the basis that the cost is not allowable under a Florida Title XIX reimbursement plan are prohibited in any future cost report.
Conclusions THIS CAUSE is before me for issuance of a Final Order. In a letter dated April 4, 2008, Petitioner was informed that the State of Florida, Agency for Health Care Administration (Agency) had completed an examination of Petitioner’s Medicaid cost reports for the reporting period specified in the letter. The letter consisted of an examination report that notified Petitioner of adjustments to its cost report for the reporting period specified in the letter. Adjustments to the cost report impact the rate of Medicaid payments to Petitioner. A retroactive rate adjustment can result in an overpayment determination for which Petitioner is obligated to repay. The examination report letter was sent Certified Mail, return receipt requested, to Petitioner at the address last shown on the provider enrollment file. The letter contained full disclosure and notice regarding Petitioner’s administrative hearing and due process rights. Petitioner requested a hearing to dispute the facts contained in the letter.
The Issue The issues are whether Respondent violated Chapter 440, Florida Statutes (2009), by failing to secure the payment of workers' compensation, and if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency responsible for enforcing the statutory requirement that Florida employers secure the payment of workers' compensation for the benefit of their employees. See § 440.107(3), Fla. Stat. Respondent is a Florida for-profit corporation providing pharmacy services. Respondent has business locations at 842 West Plymouth Avenue, Deland, Florida, and 112 East First Avenue, Pierson, Florida. Respondent's Pierson business site sells a small amount of food like bubble gum and other sundries. Activities at the Pierson location include filling prescriptions, compounding and blending drugs, and dispensing drugs or medicine to walk-in customers and patients. The patients are referred from a health care clinic known as Northeast Florida Health Services (NEFHS). The patients are federally qualified as indigent pursuant to a federal poverty calculation. Respondent's Deland location deals solely with prescription drug transactions to indigent patients who are referred by NEFHS. The Deland business site is very small and has no walk-in customers or food or other sundries for sale. At the end of the month, Respondent sends a bill to NEFHS for the prescriptions dispensed by Respondent at both locations. NEFHS than reimburses Respondent for its services. Respondent pays its employees at both locations out of a single checking account. Only one tax identification number is used for both business locations. On October 27, 2009, Hector Beauchamp, one of Petitioner's workers' compensation compliance investigators, received a referral, indicating that Respondent was operating without workers' compensation insurance coverage for its employees. After receiving the referral, Mr. Beauchamp used the website of the Department of State, Division of Corporations, to obtain Respondent's federal employer identification number. The Department of State website showed that Respondent became Pierson Community Pharmacy, Inc., on March 3, 2005. The website also indicated that Respondent had two corporate officers, John Eidt and Hanan Francis. Next, Mr. Beauchamp contacted Samantha Nixon, one of Petitioner’s penalty calculators, to research Respondent's unemployment compensation tax information on the Department of Revenue's website. Ms. Nixon's research revealed that Respondent employed in excess of four employees for each quarter in the past three years. Mr. Beauchamp also consulted Petitioner's Coverage and Compliance Automated System (CCAS) database. The CCAS database lists the workers' compensation insurance policy information for Florida employers together with any workers' compensation exemptions for corporate officers. The CCAS database accurately revealed that Respondent had no workers' compensation insurance policy in place for its employees and no workers' compensation exemptions for either Mr. Eidt or Ms. Francis as corporate officers. This was true from October 29, 2006, through October 28, 2009. Additionally, the CCAS database did not reveal any utilization of employee leasing by Respondent. Mr. Beauchamp also researched the National Council on Compensation Insurance, Inc. (NCCI) on-line database. Using Respondent's name and federal employer identification number, the database showed no record of a Florida workers' compensation insurance policy for Respondent. On October 28, 2009, Mr. Beauchamp visited both of Respondent's business locations. At the Pierson location, Mr. Beauchamp observed five individuals working behind a Plexiglas partition filling prescriptions. Mr. Beauchamp spoke with Mr. and Mrs. Francis. They confirmed that Respondent did not have workers' compensation insurance in place. Mr. Beauchamp then issued and served a Stop-Work Order. He also issued and served a records request. On October 29, 2010, Respondent provided Petitioner with the following records: (a) corporate tax records for 2007 and 2008; (b) a workers' compensation insurance application submitted after the issuance of the Stop-Work Order; and (c) payroll summaries for October 2006 through October 2009. The records confirmed that Respondent had employed more than four employees for the prior three years. On October 30, 2009, Petitioner issued and served the Amended Order of Penalty Assessment. That order was followed by the Second Amended Order of Penalty Assessment on March 15, 2010. Ms. Nixon calculated the gross payroll for Respondent's employees for the relevant time period. The gross payroll amounts for Ms. Francis from January 1, 2008, through December 31, 2008, and April 1, 2009, through June 30, 2009, were limited to the average weekly wage in effect at the time the Stop-Work Order was issued, multiplied by 1.5 for those periods pursuant to Florida Administrative Code Rule 69L- 6.035(2). As a corporate officer, Ms. Francis' actual earnings were in excess of these amounts. However, Florida Administrative Code Rule 69L-6.035(2) limits the amount of a corporate officer's income upon which workers' compensation penalties may be assessed to 1.5 times the average weekly wage in effect at the time a Stop-Work Order is issued or actual earnings, whichever is less. Using the classification codes in the NCCI Scopes® Manual, Petitioner accurately assigned the occupation classification code 8045, which corresponds to "Store: Drug Retail." Classification code 8045 is "applicable to store locations where the employer's books of accounts reflect at least 40 percent gross receipts in prescription sales and less than 50 percent gross receipts in the service of food." Prescription sales intended for the patients of health care facilities are included even though the facility is billed instead of the individual patient. Ms. Nixon then divided the payroll for each year by 100 and multiplied that figure by the approved manual rates adopted by the Florida Office of Insurance Regulation for 2006, 2007, 2008, and 2009 for classification code 8045. That product was then multiplied by 1.5 to find the penalty for the period for the three-year period. The total penalty is $13,996.60.
Recommendation Based on the foregoing Findings of Facts and Conclusion of Law, it is RECOMMENDED: That the Department of Financial Services, Division of Workers' Compensation, issue a final order affirming the Stop- Work Order and Second Amended order of Penalty Assessment in the amount of $13,996.60. DONE AND ENTERED this 26th day of April, 2010, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of April, 2010. COPIES FURNISHED: John C. Eidt Pierson Community Pharmacy Inc. 112 East 1st Avenue Pierson, Florida 32180 Justin H. Faulkner, Esquire Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399 Julie Jones, CRP, FP Agency Clerk Department of Financial Services Division of Legal Services 200 East Gaines Street Tallahassee, Florida 32399-0390 Benjamin Diamond, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307 Honorable Alex Sink Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue to be determined in this matter is whether the Agency for Health Care Administration (“AHCA”) is entitled to recover its attorney’s fees and costs, pursuant to section 409.913(23), Florida Statutes, incurred prosecuting a matter pursuant to section 409.913.
Findings Of Fact AHCA is the state agency responsible for administering the Florida Medicaid Program. Medicaid is a joint federal/state program to provide health care and related services to qualified individuals, including hospice services. Covenant is a provider of hospice and end-of-life services and at all times relevant to this matter, the program was an authorized provider of Medicaid services pursuant to a valid Medicaid provider agreement with AHCA. AHCA is authorized to recover Medicaid overpayments, as deemed appropriate, pursuant to section 409.913. The U.S. Department of Health & Human Services, Centers for Medicare and Medicaid Services (“CMS”), contracted with Health Integrity, a private vendor, to perform an audit of Covenant. Health Integrity retained a company called Advanced Medical Reviews (“AMR”) to provide peer physician reviews of claims to determine whether an overpayment occurred. Based on the audit findings in the Overpayment Case, AHCA prosecuted claims against Covenant for Medicaid overpayment. On August 9, 2016, AHCA provided a Final Audit Report (“FAR”) to Covenant seeking $715,518.14 in overpayments, $142,903.63 in fines, and $131.38 in costs. On August 29, 2016, Covenant timely filed a Petition for Formal Administrative Hearing. The undersigned conducted a final hearing on March 19 through 23, 2018, on Covenant’s Petition filed in the Overpayment Case. At the time of the final hearing, AHCA sought a modified overpayment of $677,023.44, and a fine of $135,404.68. On August 15, 2018, the undersigned issued a Recommended Order in the Overpayment Case finding AHCA is entitled to collect an overpayment of $637,632.15, and a fine of $127,526.43. The Recommended Order noted that AHCA reserved its right to amend its cost worksheet in this matter and, pursuant to section 409.913(23), file a request with the undersigned to recover all investigative and legal costs, if it prevailed. On October 17, 2018, AHCA issued a Final Order in the Overpayment Case finding AHCA is entitled to recover $637,973.10 in overpayments and to impose a fine of $127,594.62. The Final Order concluded, “[a]dditionally, since the Agency has prevailed in this matter, it is entitled to recover its investigative, legal, and expert witness costs it incurred in this matter. § 409.913(23), Fla. Stat.” Further, it provided that if the parties are unable to reach an agreement as to costs, either party may file a request with the Division requesting a final hearing within 30 days of the date of the rendition of the Final Order. On November 15, 2018, AHCA timely filed its Petition for Recovery of AHCA’s Legal Fees and Costs. On February 7, 2018, AHCA amended its Petition. Covenant opposed AHCA’s Petition and disputed whether AHCA is entitled to legal fees. Covenant has appealed the Final Order in the Overpayment Case, and the appeal is pending before the First District Court of Appeal in Covenant v. AHCA, Case No. 1D18-4797. The final hearing was held on a stipulated record, Petitioner’s Memorandum of Law in Support of Petitioner’s Amended Petition for Legal Fees, and Covenant’s Brief in Opposition to AHCA’s Petition for Recovery of Costs and Fees (with exhibits). Legal issues were framed by the Joint Stipulation. There was no testimony of any witnesses offered by either party. The exhibits constituting the record were exhibits to Respondent’s Brief and Petitioner’s Memorandum of Law. The parties have stipulated to the reasonableness of AHCA’s claimed attorney’s fees, in accordance with the parties’ agreement stated in the Joint Motion for Case Management Conference dated March 11, 2019. The issue that remains is whether AHCA is entitled to recovery of $330,186.14 in attorney’s fees under section 409.913(23). For the reasons explained below, the undersigned finds that Florida law does not support a finding that AHCA is entitled to the attorney’s fees in dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order that section 409.913(23)(a) does not authorize the Agency for Health Care Administration to recover its attorney’s fees under the guise of “legal costs” for the audit related to this matter. DONE AND ENTERED this 12th day of June, 2019, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of June, 2019.
Findings Of Fact Certain hospital equipment ("Equipment") was sold in 1973 and 1974 by Hospital Contract Consultants ("Vendor") to F & E Community Developers and Jackson Realty Builders (hereinafter referred to as "Purchasers") who simultaneously leased the Equipment to Petitioner. These companies are located in Indiana. At the time of purchase, Florida sales tax ("Tax") was paid by the Purchasers and on or about March 18, 1974, the tax was remitted to the State of Florida by the Vendor. However, the Tax was paid in the name of Medical Facilities Equipment Company, a subsidiary of Vendor. In 1976, the Department of Revenue audited Petitioner and on or about April 26, 1976 assessed a tax on purchases and rental of the Equipment. On or about April 26, 1976, petitioner agreed to pay the amount of the assessment on the purchases and rentals which included the Equipment, in monthly installments of approximately Ten Thousand and no/100 Dollars ($10,000.00) each and subsequently paid such amount of assessment with the last monthly installment paid on or about November 26, 1976. On or about December, 1976, the Department of Revenue, State of Florida, checked its records and could not find the Vendor registered to file and pay sales tax with the State of Florida. Petitioner then looked to the State of Indiana for a tax refund. On or about January 4, 1977, Petitioner filed for a refund of sales tax from the State of Florida in the amount of Thirty Five Thousand One Hundred Four and 02/100 Dollars ($35,104.02). This amount was the sales tax paid to and remitted by various vendors for certain other equipment purchased in 1973 and 1974 and simultaneously leased. The amount of this refund request was granted and paid. Relying upon the facts expressed in paragraph 4 heretofore, Petitioner on or about June 2, 1977 filed with the Department of Revenue of the State of Indiana for the refund of the Tax. On or about June 7, 1979, the Department of Revenue of Indiana determined that the Vendor was registered in the State of Florida as Medical Facilities Equipment Company and therefore Petitioner should obtain the refund of the Tax form the State of Florida. So advised, Petitioner then filed the request for amended refund, which is the subject of this lawsuit, on July 16, 1979 in the amount of Seventeen Thousand Two Hundred Sixteen and 28/100 Dollars ($17,216.28). This request for refund was denied by Respondent, Office of the Comptroller, on the basis of the three year statute of non-claim set forth in section 215.26, Florida Statutes. Purchasers have assigned all rights, title and interest in sales and use tax refunds to Petitioner. During the audit of Petitioner in 1976 the lease arrangement on the equipment apparently came to light and Petitioner was advised sales tax was due on the rentals paid for the equipment. This resulted in an assessment against Petitioner of some $80,000 which was paid at the rate of $10,000 per month, with the last installment in November, 1976. The auditor advised Petitioner that a refund of sales tax on the purchase of this equipment was payable and he checked the Department's records for those companies registered as dealers in Florida. These records disclosed that sales taxes on the sale of some of this rental equipment had been remitted by the sellers of the equipment but Hospital Contract Consultants was not registered. Petitioner was advised to claim a refund of this sales tax from Indiana, the State of domicile of Hospital Contract Consultants. By letter on March 18, 1974, Amedco Inc., the parent company of wholly owned Hospital Contract Consultants, Inc. had advised the Florida Department of Revenue that Medical Facilities Equipment Company, another subsidiary, would report under ID No. 78-23-20785-79 which had previously been assigned to Hospital Contract Consultants Inc. which had erroneously applied for this registration. (Exhibit 2) Not stated in that letter but contained in Indiana Department of Revenue letter of April 18, 1979 was the information that the name of Hospital Contract Consultants had been changed to Medical Facilities Equipment Company. The request for the refund of some $17,000 submitted to Indiana in 1976 was finally denied in 1979 after research by the Indiana Department of Revenue showed the sales tax had been paid to Florida and not to Indiana.
Findings Of Fact Respondent administers Florida's Medical Assistant Program (Medicaid Program) which is jointly funded by the state and federal government under Title XIX of the Social Security Act. Under the Medicaid Program, eligible recipients receive services from providers who voluntarily participate in the program. Under the Medicaid Program, Respondent is required to reimburse providers only reasonable costs, not all costs incurred. Petitioner is a licensed Florida nursing home facility and at all times material hereto, was certified to and was participating in the Medicaid Program. Participation in the program is subject to all State and Federal laws, regulations, standards and guidelines relating to medicaid. The methodology for determining reimbursement to a nursing home such as Petitioner under the Medicaid Program is set forth in the Title XIX Long-Term Care Reimbursement Plan (Gainesville Plan) which is incorporated by reference in Rule 10C-7.0482, Florida Administrative Code. The validity of the amended rule is not being challenged in this proceeding, only its application to Petitioner. Prior to implementation of the Gainesville Plan on April 1, 1983, Medicaid's reimbursement to nursing homes was more restrictive. The Gainesville Plan resulted from settlement of a lab suit challenging the reasonableness of reimbursement to nursing homes. The Gainesville Plan as implemented on April 1, 1983, placed ceilings on the reimbursement for operating and patient care costs but not reimbursement for property costs. In 1982 Petitioner ended years of litigation when it won approval to build a nursing home without a certificate of need. Due to the extended litigation, Petitioner lost an earlier financing arrangement which, due to the then existing economic conditions, resulted in the Petitioner being forced to seek financing for the construction of the nursing home through the issuance and sale of Industrial Development Revenue Bonds authorized pursuant to City of Gainesville, Florida Resolution R- 82-13 of January 13, 1982. Under the terms of the bond issue, the facility cannot be leased, resold or refinanced before 1990 and, therefore, Petitioner is still paying the "high rate" of interest negotiated in 1982. In determining the financial feasibility of the nursing home, the auditors preparing the bond documents based their calculations on the more restrictive reimbursement methodology for Medicaid which was in effect before the Gainesville Plan. Petitioner was projecting a forty per cent (40 percent) Medicaid utilization and the bond documents warned investors of the possibility of changes in the Medicaid Program. The present Medicaid utilization is in excess of eighty per cent (80 percent) At the time it financed the nursing home, Petitioner was aware of the upcoming changes to be implemented by the Gainesville Plan but those changes were not reflected in the bond issue. The State of Florida was not involved in the bond issue. Petitioner built its nursing home to Florida licensure standards and was not required by Respondent to meet any more stringent requirements than for other Florida nursing homes. Upon entering the Medicaid Program, Petitioner was warned that its property costs appeared excessive. Petitioner's property costs were the highest of all nursing homes participating in Florida's Medicaid program as of January 1, 1985. Because the Gainesville Plan placed no A limitations on property costs, Petitioner was allowed to recover all of those costs in its Medicaid per diem rate. Petitioner could not recover all of its operating and patient care costs because those costs exceeded caps that were placed in the Gainesville Plan. The medicaid per patient day amount of such total property costs was initially approved by Respondent in the sum of $37.6740, based on a low occupancy during the start up phase of the facility. The implementation of the Gainesville Plan created a significant increase in the state funds budgeted for nursing homes. It was estimated that the first year increase would be approximately $50 million. The Florida Legislature, which appropriates the funds for Medicaid and makes recommendations as to how that money is to be spent, directed Respondent to implement ceilings on property costs. On September 1, 1984, the Gainesville Plan was amended to include caps for property costs. In determining reasonable caps, Respondent through the Gainesville Plan, utilized a formula similar to that which it utilizes in capping operating and patient care caps. That formula took the median of the per diem property costs for the 100 newest nursing homes participating in Medicaid and increased it by one standard deviation. New nursing homes were given a higher property cost cap during their first 18 months of operation to allow for startup costs. As a result of Respondent using this new formula for determining reimbursement rates for property cost, the Petitioner was notified in August, 1984 that effective in September 1, 1984 its property costs reimbursement rate would be reduced to $15.91 per patient day and further reduced to $12.56 effective January 1, 1985. Respondent considered the property costs reimbursement rate caps reasonable based upon a comparison of statewide per diem rates. As of January 1, 1985, only 38 or 10 percent of nursing homes participating in Medicaid had their property costs capped. The Gainesville Plan was subsequently approved by the federal government which considers the reasonableness of cost reimbursement in approving such plans. Since property costs reimbursement rates must be set at a level which will be adequate to reimburse allowable and reasonable property costs of an economically and efficiently operated facility, property costs of existing facilities that exceeded the "cap" were not "grandfathered" in under the September 1, 1984 amendment to the Gainesville Plan because they were considered not to be reasonable. Petitioner was immediately affected by the reduction in the property costs reimbursement rates which became effective on September 1, 1984. Because of its financing arrangement and because of a large Medicaid population, Petitioner experienced a large shortfall between actual costs incurred and costs that would be reimbursed by the Medicaid Program. Petitioner's property costs were the highest of all nursing homes participating in Florida's Medicaid Program as of January 1, 1985. Nationwide, Florida ranks in the top ten percent (10 percent) in average Medicaid nursing home per diem payment. There is no requirement that a nursing home accept Medicaid's patients. On October 1, 1985, Respondent went to a fair rental value system to determine allowable Medicaid property costs. Under that system, through negotiations with representatives of the nursing home industry, $28,500 was established as a reasonable cost per bed. In 1982, Petitioner's cost per bed, including financing, was approximately $41,000. Petitioner's Medicaid per diem rate has been calculated in accordance with the method set forth in the Gainesville Plan and Petitioner has not been treated differently than any other provider in the determination of its Medicaid per diem rate. Although Petitioner had been previously allowed to recover all its property cost under the Gainesville Plan prior to amendment, there was insufficient evidence in the record to prove that Petitioner's property costs not reimbursed under the plan as amended were allowable and reasonable costs of an economically and efficiently run facility.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Respondent enter a Final Order denying Petitioner's request for an adjustment to its Medicaid per diem rate. Respectfully submitted and entered this 21st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 84-3405 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Covered in the Background. Adopted in Finding of Fact 20. Adopted in Finding of Fact 4. 4.-5. Adopted in Finding of Fact 8 but clarified. 6.-8. Adopted in Finding of Fact 12 but clarified. Adopted in Finding of Fact 12 as clarified and 14. Adopted in Finding of Fact 14. Adopted in Finding of Fact 17. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record and as immaterial and irrelevant. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record. Rejected as immaterial and irrelevant. 17.-21. Rejected as not supported by substantial competent evidence in the record. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record. Rulings on Proposed Findings of Fact submitted by the Respondent 1.-13. Adopted in Findings of Fact 1 through 13, respectively. 14. Adopted in Finding of Fact 21. 15. Adopted in Finding of Fact 14. 16. Adopted in Finding of Fact 15. 17. Adopted in Finding of Fact 16. 18. Adopted in Finding of Fact 17. 19. Adopted in Finding of Fact 18. 20. Adopted in Finding of Fact 19. 21. Adopted in Finding of Fact 22. 22. Adopted in Finding of Fact 23. 23. Adopted in Finding of Fact 20. 24. Adopted in Finding of Fact 24. 25. Adopted in Finding of Fact 25. COPIES FURNISHED: Grafton B. Wilson, II, Esquire Gregory L. Coler, Post Office Box 1292 Secretary Gainesville, Florida 32602 Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Theodore E. Mack, Esquire 1323 Winewood Boulevard Building 1, Room 40 Tallahassee, Florida 32399
Findings Of Fact Case history On January 25, 2006, Renee Michelle Oliver, on behalf of and as parent and natural guardian of Ian David Oliver (Ian), a minor, and Renee Michelle Oliver, individually, filed a petition with the Division of Administrative Hearings (DOAH) to resolve whether Ian qualified for compensation under the Florida Birth-Related Neurological Injury Compensation Plan (Plan), and whether the hospital at which Ian was born (Central Florida Regional Hospital) and the participating physician who delivered obstetrical services at Ian's birth (David C. Mowere, M.D.) complied with notice provisions of the Plan. Additionally, the petition raised certain constitutional issues regarding the Plan. More particularly, the petition alleged: This Petition is being filed in compliance with the Circuit Court Order of Honorable James Perry dated January 18, 2006.[1] The Petitioners do not believe this claim falls properly under the NICA Act and file this Petition under protest. Further, Petitioners state that the NICA Act is unconstitutional as written and unconstitutional as specifically applied to this claim. Further, Petitioners state that clear and concise notice was never given to Renee Oliver by either Dr. Mowere or Central Florida Regional Hospital as required by 766.316, Florida Statutes of her rights and limitations under the NICA plan. Additionally, Petitioners would state that the composition of the NICA Board of Directors is biased on its face and it creates an unconstitutional lack of due process and proper access to the Courts. DOAH served the Florida Birth-Related Neurological Injury Compensation Association (NICA) with a copy of the petition on January 25, 2006, and on July 28, 2006, following a number of extensions of time within which to do so, NICA gave notice that it was of the view the claim was compensable, and requested that a hearing be scheduled to resolve compensability. In the interim, Central Florida Regional Hospital, as well as Dr. Mowere and Mid-Florida OB/GYN Specialists, P.A. (the practice at which Dr. Mowere was a member, and at which Ms. Oliver received her prenatal care), were accorded leave to intervene. (Order on Compensability and Notice, p. 4, and paragraph 8). Given the issues raised by the petition, a hearing was scheduled for October 10, 2006, to address compensability and notice, and leaving issues related to an award, if any, to be addressed in a subsequent proceeding. § 766.309(4), Fla. Stat.2 The parties were also accorded the opportunity to make a record with regard to the constitutional issues Petitioners had raised. Shortly before hearing, on September 29, 2006, the parties filed a Joint Pre-Hearing Stipulation whereby it was agreed the claim was compensable (a "participating physician" (Dr. Mowere) delivered obstetrical services at Ian's birth and Ian suffered a "birth-related neurological injury"), and that the hospital and the participating physician provided Ms. Oliver a copy of the NICA brochure, as required by Section 766.316, Florida Statutes. Left to resolve, with regard to notice, was whether the NICA brochure "include[d] a clear and concise explanation of a patient's rights and limitations under the plan," as required by Section 766.316, Florida Statutes. Otherwise, the only unresolved matter pending was the opportunity for the parties to make a record on the constitutional issues Petitioners had raised. As heretofore noted in the Preliminary Statement, the hearing was held as scheduled, on October 10, 2006, and on November 16, 2006, an Order on Compensability and Notice was entered. Thereafter, following Petitioners' unsuccessful appeal of that order to the Fifth District Court of Appeal, the parties resolved all issues related to the award, except those related to the amount owing for reasonable attorney's fees and expenses. The award provisions of the Plan relating to attorney's fees and costs Pertinent to this case, Section 766.31(1)(c), Florida Statutes, provides for an award of the following expenses: (c) Reasonable expenses incurred in connection with the filing of a claim under ss. 766.301-766.316, including reasonable attorney's fees, which shall be subject to the approval and award of the administrative law judge. In determining an award for attorney's fees, the administrative law judge shall consider the following factors: The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly. The fee customarily charged in the locality for similar legal services. The time limitations imposed by the claimant or the circumstances. The nature and length of the professional relationship with the claimant. The experience, reputation, and ability of the lawyer or lawyers performing services. The contingency or certainty of a fee. The claim for attorney's fees To calculate a reasonable attorney's fee, the first step is to determine the number of hours reasonably expended pursuing the claim. See Standard Guarantee Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990); Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985); Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 633 So. 2d 1103 (Fla. 3d DCA 1994). Notably, "[u]nder the 'hour-setting' portion of the lodestar computation, it is important to distinguish between 'hours actually worked' versus 'hours reasonably expended'." Carreras, 633 So. 2d at 1110. . . . "Hours actually worked" is not the issue. The objective instead is for the trier of fact to determine the number of hours reasonably expended in providing the service. 'Reasonably expended' means the time that ordinarily would be spent by lawyers in the community to resolve this particular type of dispute. It is not necessarily the number of hours actually expended by counsel in the case. Rather, the court must consider the number of hours that should reasonably have been expended in that particular case. The court is not required to accept the hours stated by counsel. In re Estate of Platt, 586 So. 2d 333-34 (emphasis in original). The trier of fact must determine a reasonable time allowance for the work performed-which allowance may be less than the number of hours actually worked. Such a reduction does not reflect a judgment that the hours were not worked, but instead reflects a determination that a fair hourly allowance is lower than the time put in. Id. Moreover, only time incurred pursuing the claim is compensable, not time incurred exploring civil remedies or opportunities to opt out of the Plan through lack of notice or otherwise. Carreras, 633 So. 2d at 1109. See also Braniff v. Galen of Florida, Inc., 669 So. 2d 1051, 1053 (Fla. 1st DCA 1995)("The presence or absence of notice will neither advance nor defeat the claim of an eligible NICA claimant who has decided to invoke the NICA remedy . . .; thus, there is no reason to inquire whether proper notice was given to an individual who has decided to proceed under NICA. Notice is only relevant to the defendants' assertion of NICA exclusivity where the individual attempts to invoke a civil remedy."). Accord, O'Leary v. Florida Birth-Related Neurological Injury Compensation Plan, 757 So. 2d 624, 627 (Fla. 5th DCA 2000)("We recognize that lack of notice does not affect a claimant's ability to obtain compensation from the Plan."). Finally, a fee award must be supported with expert testimony, and cannot be based entirely on the testimony of the claimant's attorney. Palmetto Federal Savings and Loan Association v. Day, 512 So. 2d 332 (Fla. 3d DCA 1987); Fitzgerald v. State of Florida, 756 So. 2d 110 (Fla. 2d DCA 1999). See Nants v. Griffin, 783 So. 2d 363, 366 (Fla. 5th DCA 2001)("To support a fee award, there must be evidence detailing the services performed and expert testimony as to the reasonableness of the fee Expert testimony is required to determine both the reasonableness of the hours and reasonable hour rate."). To support the claim for attorney's fees, Petitioners offered an "Attorney Services" statement, which reflects a claim for 81 hours Petitioners' counsel, Gary Cohen, claims he dedicated to the claim. (Petitioners' Exhibit 1). Notably, the statement is not a business record, since Mr. Cohen did not, and does not in the ordinary course of his practice, maintain time records. Rather, the statement represents an effort to construct a time record to support Petitioners' claim for fees, and provides a summary of activities performed, with an estimate of time expended for each activity documented. The major activities were noted as "Meeting with Clients (2005)," 4.0 hours; "Preparation of Petition for Benefits," .5 hours; "Research before Petition re: NICA" (five areas listed), 10.5 hours; "Medical Records Review" (21 providers listed), 17.5 hours; "Depositions: Preparation and Attendance at" (6 depositions), 16.5 hours; "Hearings: Preparation and Attendance at" (9 entries), 8.75 hours; "Motions and Pleadings" (23 entries), 9.25 hours; "Correspondence: 2/06-9/06 77 letters and attachments," 10 hours; and "Expert Conferences" (with Dr. Mary Minkin, Dr. James Balducci, Frederick Raffa, Ph.D., and Paul Deutch, Ph.D., at 1 hour each), 4 hours. Where, as here, "attorneys have not kept contemporaneous time records, it is permissible for a reconstruction of time to be prepared." Brake v. Murphy, 736 So. 2d 745, 747 (Fla. 3d DCA 1999). However, the attorney must present evidence of his services in "sufficient . . . detail to allow a determination of whether each activity was reasonably necessary and whether the time allocation for each was reasonable." Id. (Emphasis omitted). See Florida Patient's Compensation Fund v. Rowe, 472 So. 2d at 1150 ("Inadequate documentation may result in a reduction of hours claimed, as will a claim for hours that the court finds to be excessive or unnecessary."); Lubkey v. Compuvac Systems, Inc., 857 So. 2d 966, 968 (Fla. 2d DCA 2003)("[T]he party seeking fees has the burden to allocate them to the issues for which fees are awardable or to show that the issues were so intertwined that allocation is not feasible."). Here, counsel claims 4 hours for a "Meeting with Clients (2005)," that likely predated the trial court's order of abatement and likely involved a discussion of matters not directly related to the NICA claim (Tr., p. 37). Nevertheless, an initial conference with a client, and the information obtained regarding her circumstances, is a natural starting point for any claim, be it a NICA claim or one sounding in medical malpractice. Consequently, the time claimed (4 hours) being reasonable, counsel should be compensated for his time. Also reasonable, is counsel's claim of .5 hours for "Preparation of Petition for Benefits." However, counsel's claim for "Research before Petition re: NICA," 10.5 hours, is, but for the claim of "NICA statute 766.302," 1 hour, rejected as the activities noted were not shown to be reasonably necessary to filing or pursuing the claim, and the time allocation for each activity was not shown to be reasonable. In so concluding, it is noted that the research activities mentioned ("Benefit Handbook," 2 hours; "NICA Notice and handout," .5 hours; "Case law re: NICA," 2.5 hours; and "Task Force Recommendation," 4.5 hours) are vague on specifics, and not demonstrative of necessity to filing a petition. It is further noted that the requisites for filing a claim are straight forward, and an attorney of moderate experience should experience no difficulty in filing a claim. Additionally, it is noted that counsel's testimony revealed he had filed 24 to 36 claims for compensation, and presumably was familiar with the requisites to file a claim. Consequently, if such "research" was done, apart from reviewing the statutory provisions of the Plan, it likely related to the issues of notice and constitutionality, and not issues related to compensability or benefits, which are prescribed by Sections 766.301, et seq., Florida Statutes. Finally, there is nothing to support a conclusion that the time claimed for each task was reasonable. Consequently, for Petitioners' claim for "Research before Petition re: NICA," 1 hour is considered reasonable. Next, counsel claims 17.5 hours for "Medical Records Review." Included are the medical records of 19 providers, and the reports of Michael Duchowny, M.D. (Respondent's Exhibit 2), and Donald Willis, M.D. (Respondent's Exhibit 1). With regard to the time claimed for reviewing (reading) Dr. Duchowny's report (.5 hours) and Dr. Willis' report (.5 hours), that time is disallowed as unreasonable (excessive) and redundant, since counsel requested and was granted credit, discussed infra, under "Motions and Pleadings" for .5 hours associated with "Receipt and review of NICA's Notice of Compensability, which included a copy of the reports of Doctors Duchowny and Willis. Otherwise, the remaining record review, as well as the time allocation (16.5 hours), was reasonable. Next, counsel claims 16.5 hours for "Depositions: Preparation and Attendance at " the depositions of Renee Oliver, on July 17, 2006; Patty Osbourne, R.N., on July 20, 2006; Jenette Dorff, R.N., on July 20, 2006; Debra Brinkmeyer, R.N., M.D., on July 20, 2006; David Mowere, M.D., on August 3, 2006; and Kenney Shipley, on September 27, 2006. With regard to the time claimed incident to the depositions of Dr. Mowere and Ms. Shipley (6 hours), it must be resolved that such time was not shown to be reasonably necessary to the pursuit of the claim. In so concluding, it is noted that by the time Dr. Mowere was deposed (August 3, 2006), NICA had agreed the claim was compensable. Under such circumstances it is unreasonable to expect NICA to pay for time expended that addressed compensability and notice. With regard to Ms. Shipley's deposition, taken September 27, 2006, it is also observed that when she was deposed, NICA had agreed the claim was compensable, and the only issues pertinent to her deposition were notice and the constitutionality of the Plan. Indeed, those were the announced reasons Petitioners requested, and were accorded leave to take her deposition. (See Petitioners' Motion for Request of the Deposition of Kenney Shipley, Executive Director of NICA, filed May 1, 2006; Order, July 13, 2006.) Such being the case, it is not reasonable to expect NICA to pay for time associated with Ms. Shipley's deposition. With regard to time associated with the depositions of Ms. Oliver, taken by Intervenors on July 17, 2006, and Nurses Osbourne, Dorff, and Brinkmeyer, taken July 20, 2006, the circumstances are different since NICA had not yet agreed the claim was compensable. Consequently, since Nurse Osborne's deposition addressed compensability, the 1.5 hours incurred attending her deposition was reasonably related to the claim. With regard to the depositions of Ms. Oliver, and Nurses Dorff and Brinkmeyer, those depositions addressed both compensability and notice. However, the time associated with notice was de minimus. Consequently, the 5 hours incurred in attending their depositions (Ms. Oliver, 3.5 hours, Nurse Dorff, .5 hours, and Nurse Brinkmeyer, 1 hour) were reasonably related to the claim. Also reasonably related to the claim were the 4 hours incurred preparing for Ms. Olivers' and the nurses' depositions. In all, 10.5 hours were reasonably dedicated to preparation and attendance at depositions. Next, counsel claims 8.75 hours for "Hearings: Preparation and Attendance at," 7 hearings (items a-f and h), preparation for final hearing (item g), and review of judge's final order (item i). With regard to the time claimed for a hearing on February 23, 2006 (.25 hours) and September 15, 2006 (.25 hours), no hearing was held, and that time is disallowed. However, with regard to the hearing of March 22, 2006 (item b), Petitioner overlooked noting time dedicated to that hearing, and is entitled to a .5 hour credit.3 With regard to the time claimed for attendance at the final hearing of October 10, 2006 (2.0 hours), given that issues related to compensability were resolved prior to hearing, and most of the time at hearing involved issues related to notice and compensability, only .5 hours are approved as reasonably related to the claim. Moreover, given the issues left to address at hearing, of the time claimed for preparation for hearing (4.0 hours), only 1 hour will be approved as reasonable. Petitioners' claim of .5 hours to review the final order is reasonable. In all, under the activity "Hearings: Preparation and Attendance at," 4.25 hours are found to be reasonably incurred in pursuing the claim. Next, counsel claims 9.25 hours for various activities associated with "Motions and Pleadings," such as preparation, receipt, review, and research, and has documented a claim for 23 entries (items a-w). With regard to Petitioners' claim of 1.0 hour for "Receipt, review, research into Defendant Mowere & Hosp Motion to Intervene; Petitioners' Objection to Motion to Intervene" (item a), that claim is disallowed as such activities that related to Petitioners' objection (apart from receipt and review of the motions, which time was de minimus), were frivolous.4 As for Petitioners' claim of .5 hours related to preparation of motion to depose Ms. Shipley (item i), and .25 hours related to review of Respondent's response (item k), that .75 hours is disallowed, as it relates to Petitioners' notice and constitutional claims. As for items f (.25 hours), j (.25 hours), n (.25 hours), o (.25 hours), p (.25 hours), s (.25 hours), and u (.25 hours), 1.75 hours, those activities only warrant a claim for .1 hours each (.7 hours). The other activities (5.75 hours) are reasonable. In all, 6.45 hours were reasonably expended on motions and pleadings. Next, counsel claims 10.0 hours for preparing or reviewing, from "2/06-9/06 [,] 77 letters and attachments by and between counsel for Petitioner, counsel for NICA and Judge Kendrick." Notably, there was no explanation of what those letters related to, what issues they addressed, or any method offered to assess whether the time allocation was reasonable. Accordingly, the proof failed to support a conclusion that the activity or hours claimed was reasonable, and the 10 hours claimed is disallowed. Finally, counsel claims 4 hours for "Expert Conferences" with Dr. Minkin (1 hour), Dr. Balducci (1 hour), Dr. Raffa (1 hour), and Dr. Deutch (1 hour). However, there was no explanation of when the conference occurred, what was discussed, or any proof to support a conclusion that the time allocation was reasonable and related to the pursuit of the claim. Accordingly, the proof failed to support the conclusion that the activity or hours were reasonable.5 Here, the total time and labor reasonably expended to pursue the claim was 43.20 hours. The next consideration in establishing a reasonable fee is the determination of the fee customarily charged in the locality for similar legal services, when the fee basis is hourly billing for time worked. Carreras, 633 So. 2d at 1108. Here, given the nature of the expertise and legal skills required, for what may be described as a moderately complex case, the proof supports the conclusion that the "market rate" (a rate actually being charged to paying clients) is $300.00 an hour. A reasonable fee under the methodology established by Florida Patient's Compensation Fund v. Rowe, supra, and Florida Birth-Related Neurological Injury Compensation Association v. Carreras, supra, is determined by multiplying the hours reasonably expended by the reasonable hourly rate. The results produce the "lodestar figure" which, if appropriate, may be adjusted because of the remaining factors contained in Section 766.31(1)(c), Florida Statutes. Applying such methodology to the facts of this case produces a "lodestar figure" of $12,960.00 (43.20 hours x $300 per hour). Upon consideration of the facts of this case, and the remaining criteria established at Section 766.31(1)(c)3-6, Florida Statutes, there is no apparent basis or reason to adjust the "lodestar figure." In this regard, it is observed that there were no significant time limitations shown to have been imposed by the claimants or the circumstances in this particular case, and the nature and length of the professional relationship with the claimants was likewise a neutral consideration. The experience, reputation and ability of the lawyer who performed the services has been considered in establishing the reasonable hours and reasonable hourly rate and does not, in this case, afford any additional basis to adjust the "lodestar figure." Finally, although counsel was employed on a contingency fee basis and stood to recover no fee if he proved unsuccessful in pursuing the claim or, alternatively, in pursuing a malpractice action, the contingency nature of the fee arrangement does not warrant an adjustment of the "lodestar figure." Given the nature of the claim, which was relatively straight-forward, lacked any novel aspects, and the earliest medical records disclosed the infant had likely suffered a significant brain injury during birth, the risk of nonrecovery was not sufficient to warrant any adjustments. The claim for other expenses Finally, Petitioners' counsel incurred certain expenses in his representation of Petitioners for which he seeks recovery. (Petitioners' Exhibit 2). Such costs total $33,075.24. However, at hearing, Petitioners withdrew the claim for "Services," set forth at the top of page 1, Petitioners' Exhibit 2, in the sum of $3,537.50, leaving a claim for $29,537.74. (Tr., pp. 73 and 73). Of those costs, NICA did not object to the following expenses: 08/09/05 OB/GYN Clinic Records $ 19.31 09/07/05 West Volusia Pediatrics $ 150.00 09/08/05 Pediatric Surgery $ 4.00 09/13/05 Community Medical Assoc. $ 7.82 09/16/05 Florida Hospital $ 1,360.55 09/21/05 Seminole County $ 3.50 09/28/05 Childrens Resp. Care $ 9.00 09/28/05 Donald Willis, M.D. $ 1,000.00 10/11/05 Pediatric Neurology $ 7.00 01/20/06 DOAH Filing Fee $ 15.00 08/09/06 Depo. Renee Oliver $ 496.30 11/01/06 Hearing Transcript $ 604.72 12/04/06 Halifax Med. Center $ 68.10 $ 3,745.30 Accordingly, such expenses, totaling $3,745.30, are awarded without further discussion. Pertinent to an award of expenses, the Statewide Uniform Guidelines for Taxation of Costs in Civil Actions, effective January 1, 2006, provide: Purpose and Application. These guidelines are advisory only. The taxation of costs in any particular proceeding is within the broad discretion of the trial court. The trial court should exercise that discretion in a manner that is consistent with the policy of reducing the overall costs of litigation and of keeping such costs as low as justice will permit. . . . Burden of Proof. Under these guidelines, it is the burden of the moving party to show that all requested costs were reasonably necessary either to defend or prosecute the case at the time the action precipitating the cost was taken. Litigation Costs That Should Be Taxed. Depositions The original and one copy of the deposition and court reporter's per diem for all depositions. The original and/or one copy of the electronic deposition and the cost of the services of a technician for electronic depositions used at trial. Telephone toll and electronic conferencing charges for the conduct of telephone and electronic depositions. Documents and Exhibits The costs of copies of documents filed (in lieu of "actually cited") with the court, which are reasonably necessary to assist the court in reaching a conclusion. The costs of copies obtained in discovery, even if the copies were not used at trial. Expert Witnesses A reasonable fee for deposition and/or trial testimony, and the costs of preparation of any court ordered report. Witnesses Costs of subpoena, witness fee, and service of witnesses for deposition and/or trial. Court Reporting Costs Other than for Depositions Reasonable court reporter's per diem for the reporting of evidentiary hearings, trial and post-trial hearings. * * * III. Litigation Costs That Should Not Be Taxed as Costs. The Cost of Long Distance Telephone Calls with Witnesses, both Expert and Non- Expert (including conferences concerning scheduling of depositions or requesting witnesses to attend trial) Any Expenses Relating to Consulting But Non-Testifying Experts Cost Incurred in Connection with Any Matter Which Was Not Reasonably Calculated to Lead to the Discovery of Admissible Evidence Travel Time Travel time of attorney(s). Travel time of expert(s) Travel Expenses of Attorney(s) Also pertinent to an award of expenses are the following decisions: Miller v. Hayman, 766 So. 2d 1116 (Fla. 4th DCA 2000)(recognizing that in the absence of exceptional circumstances, travel expenses for attorney to attend depositions should not be taxed as costs); Department of Transportation v. Skidmore, 720 So. 2d 1125 (Fla. 4th DCA 1998)(recognizing that postage, long distance calls, fax transmissions, delivery service, and computer research are overhead and not properly taxable as costs); Gray v. Bradbury, 668 So. 2d 296, 298 (Fla. 1st DCA 1996)("The prevailing party's burden, at an evidentiary cost hearing, to recover an expert witness fee is 'to present testimony concerning the necessity and reasonableness of the fee.'"); Powell v. Barnes, 629 So. 2d 185 (Fla. 5th DCA 1993)(recognizing that evidence to support an award for expert witness fees must come from witnesses qualified in the areas concerned); Gray v. Bradbury, 668 So. 2d at 298. (Testimony of "a trial attorney and an insurance casualty claim manager, who were not shown to have proficiency in the various fields of expertise at issue (ranging from accident reconstruction to neurosurgery)," was not competent to support an award for expert witness fees.); Carreras, 633 So. 2d at 1109 ("[T]he exploration of the possibility of opting out of NICA through the 'bad faith' exception or otherwise is not, as the statute requires, work performed 'in connection with the filing of a claim '"). Considering the foregoing standards, Petitioners have established their entitlement to the recovery of $828.00 as the court reporter's fee for the depositions of Nurses Osbourne, Brinkmeyer, and Dorff. However, since the electronic depositions were not used at hearing, those expenses are not recoverable. Expenses associated with the depositions of Dr. Ravello, which addressed notice; Dr. Mowere, the only relevant portion of which, at the time it was taken, dealt with notice; and Ms. Shipley, which addressed notice and the constitutionality of the Plan, are not recoverable. Also not recoverable are the fees Petitioners paid their various experts, since they were neither deposed nor testified at hearing, and there was no showing that their consideration of the claim was necessary or that their fee was reasonable. Finally, the remaining items were either not explicated or are considered overhead, and not taxable.
Other Judicial Opinions 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.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (sometimes referred to as "17b"), Respondent's recovery of medical assistance expenditures from $500,000 in proceeds from the settlement of a products liability action must be reduced from its allocation under section 409.910(11)(f) (sometimes referred to as "11f")1 to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)2; and, if so, the amount of Respondent's recovery.
Findings Of Fact As a result of a motor vehicle accident that took place on May 27, 2012, Petitioner sustained grave personal injuries, including damage to his spinal cord that has left him a paraplegic incapable of self-ambulation of more than a few steps, except by means of a wheelchair or rolling walker. Petitioner was a passenger in a 2003 extended-cab Ford F-150 pickup truck that was driven at a high rate of speed by his brother, who lost control of the vehicle in a curve, over-corrected, and caused the vehicle to rollover three times, ejecting Petitioner with such force that he traveled a distance of 150 feet in the air. The force of the rollovers crushed the vehicle's roof, which caused Petitioner's door latch to fail, allowing Petitioner's door to open and Petitioner to be expelled from the relative safety of the passenger compartment. In settlement negotiations, Petitioner's trial counsel claimed that Ford F-150s of the relevant vintage suffered from deficient door latches, but the forces to which the latch were subjected were overwhelming and well beyond reasonable design limits: the truck's door could not have resisted these forces unless it had been welded to the frame. The one-vehicle accident was substantially, if not entirely, caused by Petitioner's brother, who was intoxicated and is now serving a five-year sentence in prison for his role in the crash. Petitioner shared some responsibility because he likely was not wearing a seatbelt when the truck rolled over. Petitioner's brother and another passenger who were not ejected from the vehicle sustained minor injuries. Petitioner commenced a products liability action against Ford Motor Company and the manufacturer of the door latch. Ford Motor Company defended the case vigorously. Expert witnesses were unable to find any federal safety standards that had been violated in connection with the vehicle, the door latch, or the performance of the vehicle and door latch during the rollovers. The manufacturer of the door latch raised a substantial defense of a lack of personal jurisdiction. At the time of the incident, Petitioner was a 25-year-old plumber and construction worker. He was the sole means of support for his three young children. He has undergone an arduous course of rehabilitation to gain wheelchair-dependent self-autonomy. At the time of the settlement, which appears to have resolved the products liability action, the putative true value of Petitioner's case was $6 million, consisting of $154,219 of past medical expenses, $2.1 million of future medical expenses, $800,000 of lost wages and loss of future earning capacity, and about $2.95 million of noneconomic damages, including pain and suffering and loss of consortium. Petitioner has proved each of these damages components, so the putative true value is the true value (sometimes referred to as the "actual true value"). Petitioner settled the case for $500,000, representing a settlement discount of 91.7% from the true value of $6 million (Settlement Discount). Petitioner has paid or incurred $147,000 in attorneys' fees and about $123,000 in recoverable costs in prosecuting the products liability action. Respondent has expended $154,219 of medical assistance. Under the 11f formula, which is described in the Conclusions of Law, Respondent would recover approximately $126,000 from the $500,000 settlement. This provisional 11f allocation provides the point of reference for determining whether Petitioner has proved in this 17b proceeding a reduced recovery amount for Respondent. Having proved the Settlement Discount of 91.7% from the actual, not putative, true value to the settled value, Petitioner has proved that each damages component of the true value, including past medical expenses, must be proportionately reduced by 91.7% to identify the portion of the settlement proceeds representing past medical expenses, which, as discussed in the Conclusions of Law, is the only portion of the proceeds subject to the Medicaid lien. Reducing the past medical expenses of $154,219 by 91.7% yields about $12,800, which is Respondent's tentative 17b recovery. As mentioned in the Conclusions of Law, Respondent's recovery must bear its pro rata share of the attorneys' fees and costs paid or incurred to produce the settlement. The total fees and costs of $270,000 represent 54% of the settlement. The record provides no reason to find that these fees and costs are unreasonable in amount or were not reasonably expended to produce the $500,000 settlement. Reducing Respondent's recovery of $12,800 by 54% yields $5888, which is Respondent's 17b recovery.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner he reimbursed for vehicle costs and utilization review costs for fiscal years 1980 and 1981 in accordance with the conclusions of law portion of this order. DONE and ENTERED this 4th day of February, 1983, 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 4th day of February, 1983.
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $20,000 in administrative fines and a $6,000 survey fee. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due in accord with the law. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 3. Conditional licensure status is imposed upon Respondent commencing July 17, 2013 and ending October 23, 2013. Filed May 15, 2014 4:18 PM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this _ 1h of L Wt Gaz » 2014. Elizabeth Dudek, Secretary Agency for Heath Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to 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 of 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. CERTIFICATE OF SERVICE I CERTIFY that a true and correc! of this Final Oyder, was served on the below-named persons by the method designated on this Bay oF , 2014. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Andrea M. Lang, Esq. Margaret A. Chamberlain, Esq. Office of the General Counsel Kitch Drutchas Wagner Valitutti & Sherbrook Agency for Health Care Administration 2379 Woodlake Drive, Suite 400 (Electronic Mail) Okemos, Michigan 48864-6032 (U.S. Mail) Lynne A. Quimby-Pennock Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
