The Issue At issue are the actual expenses, if any, for medically necessary and reasonable medical and hospital, habilitative and training, residential, and custodial care and service, for medically necessary drugs, special equipment, and facilities and for related travel currently required for the infant, and the reasonable expenses, if any, incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees.
Findings Of Fact Background Michael Lebrun (Michael) is the natural son of Barnabas Lebrun and Rolande Lebrun, and was born October 9, 1990, at Jackson Memorial Hospital, Dade County, Florida. At birth, Michael suffered a "birth-related neurological injury," as that term is defined by Section 766.302(2), Florida Statutes, and he was accepted by respondent, Florida Birth- Related Neurological Injury Compensation Association (NICA) for coverage under the Florida-Birth Related Neurological Injury Compensation Plan (the Plan). Section 766.301, et seq., Florida Statutes. Consistent with Section 766.305(6), Florida Statutes, NICA's acceptance of the claim was approved by final order of March 30, 1994, and NICA was directed to pay "past medical expenses, a reasonable attorney's fee, and . . . future expenses as incurred" in accordance with Section 766.31, Florida Statutes. The order further reserved jurisdiction to resolve "any disputes, should they arise, regarding petitioners' entitlement to past medical expenses, a reasonable attorney's fee, and subsequently incurred expenses." At petitioners' request, a hearing was held to address, pertinent to this order, medically necessary and reasonable expenses alleged to be currently required by the infant, and the reasonable expenses incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees. Petitioners did not, however, at any time prior to hearing, present any requests for compensation to NICA which identified any specific needs of the infant which they felt should be covered by the Plan, but were currently unmet. 2/ Notably, the parties' stipulation, which resolved that Michael was covered under the Plan, approved by order of March 30, 1994, provided: 8. The Claimants and the Association hereby agree as follows: * * * The Association will pay all benefits, past and future, as authorized by Section 766.31, Florida Statutes. The Association and Alan Goldfarb, Esquire, the attorney for the Claimants, agree that a reasonable sum for attorneys fees and services and certain expenses incurred in the representation of the Claimant in this case will be determined at a future date. In absence of an agreement for a specific amount, either party may request a hearing for determination. * * * 11. The Parties agree that the issues of the actual expenses for medically necessary and reasonable medical and hospital, habilitative and training, residential and custodial care and service, for medically necessary drugs, special equipment and facilities, and for related travel as per Florida Statute 766.31 and for a reasonable attorney's fee and expenses, may be determined by the Hearing Officer if a dispute arises regarding the same. The association is not aware of any specific disputes regarding the services being provided to Michael Lebrun but acknowledges that petitioners have requested a hearing regarding the same. . . . * * * 16. In order for the Association to carry out its responsibility as provided in this stipulation, the Claimants shall provide within thirty (30) days of the date of approval of this stipulation, the following: A complete list (with copies, invoices, addresses, etc.) of all known past expenses for which the Claimants seek reimbursement in accordance with the terms and provisions of this stipulation document for medical and related expenses previously incurred; and A fully executed authorization of release of any and all medical records, insurance program records, and such other authorization as may, from time to time, reasonably be required by the Associa- tion to complete its duties hereunder; and Such other reasonable information as may be required by the Association, which relates to the provision of Michael [sic] [medical] or habilitative care or the payment of Michael's bills. Petitioners' failure to file a claim with NICA for benefits they were of the opinion that Michael currently required, but had not received, or supply NICA with the requested information to evaluate any request for benefits, was contrary to their obligation, as evidenced by the forgoing stipulation. Such failing was not, however, raised by NICA prior to hearing, nor did it object to such failing during the course of hearing. Accordingly, while, if timely raised, petitioners' failure to first provide NICA an opportunity to address the specifics of a claim for benefits prior to hearing could have been appropriately addressed, such failure is not a bar to the resolution of the issues presented. 3/ Michael's past and current history Following six months of life, Michael was referred to the Department of Health and Rehabilitative Services (DHRS), Children's Medical Services, Early Intervention program. Through his Early Intervention coordinator, Michael was initially provided services, at public expense, through what is known as the "Birth through Two" ("B-2") services program. That program is a public service program for handicapped children through 36 months of age, or until their transition to the Dade County Public Schools Special Education Pre-K Program, and is jointly funded by DHRS and the Dade County Public Schools. As of the date of hearing, Michael had been receiving, and was scheduled to continue to receive until his transition into the Pre-K Program, physical therapy three times a week at forty-five minutes a session and occupational therapy four times a week at forty-five minutes a session, including oral stimulation, through United Cerebral Palsy. Such other services or items of special equipment that Michael needed were also ordered or provided, at public expense, through the auspice of his Early Intervention coordinator. As of July 5, 1994, some two weeks following the hearing in this case, Michael was scheduled to transition from the B-2 Program into the Pre-Kindergarten Exceptional Education Program (Pre-K program), where he would receive a different level of rehabilitative services. According to the proof, once he transitions into the Pre-K program, Michael will receive sixty minutes per week of physical therapy and thirty to forty-five minutes of occupational therapy, during the course of the school day. Such therapies are not quantified by frequency or duration of a therapy session predicated on the well founded belief that a child's responsiveness to therapy will vary from day to day and, accordingly, the frequency of delivery is left to the discretion of the individual therapist. As provided by the School Board, physical therapy primarily deals with the functional mobility, positioning and musculoskeletal "status" of the lower extremity of the student, and occupational therapy primarily addresses the functioning of the upper extremities, classroom positioning and improvement of visual and perceptual motor skills to function in an educational program. Although available, the School Board does not propose to offer speech therapy to Michael since it has concluded, based upon evaluations and observations, that his speech development is commensurate with his present level of cognitive functioning and that no developmental deficiency exists. As noted, the physical therapy and occupational therapy provided by the School Board during the school year is predicated on what it perceives is necessary for the student to profit from the educational program. Under the circumstances, the services provided are not necessarily an objective evaluation of the medically necessary and reasonable habilitative services the infant may need for treatment; 4/ however, in some cases they may be. Whether the services to be provided the infant in this case will meet such standard can not, based on the record in this case, be resolved; however, if not, such services should be available, subject to available appropriations, through the Department of Health and Rehabilitative Services. Section 409.905, Florida Statutes. In addition to his apparent need for physical and occupational therapy, Michael also exhibits various self-abusive behaviors which require therapeutic correction. Such treatment was requested by Michael's Early Intervention coordinator, through Developmental Services, on February 18, 1994. As of the date of hearing, it was not shown whether Michael had or had not begun to receive such services. The subject claim At hearing, petitioners offered no proof of any expenses previously incurred for which they sought reimbursement, 5/ and their claim, relative to the current needs of Michael, was limited to certain equipment, therapy and attendant care which Paul M. Deutsch, Ph.D. ("Mr. Deutsch"), perceived was required for Michael. 6/ As to the items of equipment recommended by Mr. Deutsch, many were age specific and no longer required or had otherwise been provided through a public assistance program. Currently, according to Mr. Deutsch, Michael is in need of the following equipment: (1) TLC bath seat; (2) prone stander; (3) exercise mat; (4) hand-held shower; (5) wheelchair backpack; and, (6) Rifton pottychair. At the time of final hearing, the prone stander had been ordered through Children's Medical Services, but a TLC bath seat and hand-held shower had not. There was, however, no showing that the Lebruns desired such items or that the TLC bath seat and held-held shower were needed for Michael's care. Indeed, Michael can sit in the bathtub where he is regularly bathed by his parents without a TLC bath seat or hand-held shower. Should the Lebruns decide in the future that such items would be beneficial to them in the care of Michael, they are certainly able to ask NICA for such items; however, currently, they have demonstrated no desire or need for them. As to the wheelchair backpack, the proof fails to demonstrate that Michael needs such item because he does not suffer from any medical condition that requires the transport of special medical equipment. Likewise, Michael does not currently require a Rifton pottychair since he is not currently being "potty trained" nor is there any expressed expectation to begin such training in the known future. Michael also does not currently require an exercise mat since he is not receiving any home therapy. As for rehabilitative services, Mr. Deutsch recommends that in addition to the services that Michael is to receive through the Dade County Public School system that he receive two physical therapy sessions, two occupational therapy sessions, and two speech therapy sessions each week. Given that Mr. Deutsch was not specifically aware of the therapies Michael was receiving and was to soon receive, that he had never participated or observed any therapy sessions with Michael, and offered no specific reasons as to why these additional therapies were necessary to treat Michael's condition, Mr. Deutsch's opinion is rejected. Indeed, Mr. Deutsch's recommendations appear to be little more than a generic model, without specific reference to the needs of Michael and the benefits that might reasonably be expected from additional therapies, if any. Notably, Mr. Deutsch's life care plan recommends an annual evaluation by health care specialists to address Michael's specific needs for physical, occupational and speech therapy. That recommendation is a tacit recognition of the fact that each disabled child does not require the same services, and recognizes that the need for services is appropriately left to health care professionals involved with Michael's care. Significantly, the record is devoid of any proof, apart from public services, that petitioners or their counsel ever acted on Mr. Deutsch's recommendation, made May 27, 1993, that Michael receive an annual evaluation by health care specialists to address his need for such services. While the nature and frequency of services requested were not shown to be medically necessary or reasonable at the time of hearing, the record does demonstrate that Michael requires rehabilitative services and special equipment, which, although ordered through public service programs, may not have been provided or may not be adequate. Given the circumstances, it would be appropriate for NICA to continue its coordination with public service agencies, as discussed infra, to assure that Michael receives the services and special equipment he requires in a timely manner. 7/ Moreoever, since the proof fails to demonstrate whether a medical assessment has been made, it would be appropriate and in the best interests of the child for NICA to coordinate with the public service agencies to assure a comprehensive medical assessment is made of Michael's current need for speech therapy and to determine whether additional physical and occupational therapy may be warranted. Should there currently exist no obligation or ability, because of lack of funding or otherwise, for the public service agencies to provide a medical evaluation, therapy as needed, or special equipment, or should the agencies fail to timely provide a medical evaluation, therapy or special equipment, though required by law to do so, it would be appropriate for NICA, with the parents' consent, to provide those services or equipment until the appropriate pulbic service agency accepts responsibility for the provision of those services and equipment. Finally, Mr. Deutsch has recommended that "attendant care" be provided to the Lebrun family at the rate of two to four hours a day to provide consistency in the care of Michael while allowing the parents a respite. Notably, the Lebruns, who speak regularly with NICA, have never made such a request, and there was no showing that such services are necessary at this time. 8/ Attendant care is generally provided in the home to assist with an individual's daily living skills, such as bathing, moving the individual in and out of a wheelchair or repositioning. Attendant care is not necessary at this time as Michael is still quite small and he is mobile. Indeed, there was no proof at hearing that the Lebruns were incapable, by virtue of any circumstance, to care for Michael, or that he required inordinate care. NICA's activities NICA, consistent with its obligations under law, has maintained communication with Michael's Early Intervention coordinator at the Department of Health and Rehabilitative Services, Children's Medical Services, as well as Michael's staffing specialist with the Dade County Public Schools, to monitor Medicaid services to Michael and, if necessary, provide any services those agencies are unable to provide. NICA, through its Executive Director, Lynn Dickinson, has met personally with the Lebruns on numerous occasions, and has routinely spoken with them by telephone, regarding Michael's care and any perceived needs they may have had for his care. At no time, during the course of any of those conversations, did the Lebruns ever request any attendant care or any other service or equipment recommended by Mr. Deutsch. 9/ Attorney's fees and costs Although duly noticed at petitioners' request, as an issue to be heard, petitioners offered no proof, as required by Section 766.31(1)(c), Florida Statutes, to support their claim for an award of reasonable attorney's fees. As for costs, the only proof offered concerned an agreed fee arrangement with Mr. Deutsch. According to Mr. Deutsch, he agreed to a cap of $3,000 just to cover expenses. What those expenses were, are or will be, was not, however, explained of record, and it cannot be concluded, based on the proof, that such $3,000 cap is reasonable or recoverable.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or Agency), for medical expenses paid on behalf of Petitioner, Tyra Pierre, from a medical-malpractice settlement received by Petitioner from a third party.
Findings Of Fact On November 4, 2011, Petitioner, Tyra Pierre (Petitioner), fell from the window of the fourth floor apartment where she lived with her mother, Yanique Benjamin, in North Miami Beach, Florida. The apartment was owned by Harvard House, LLC (Harvard House). Petitioner was airlifted to, and treated at, Jackson Memorial Hospital Trauma Center. Petitioner suffered a spinal cord injury at cervical level C7-C8, and is paralyzed from the waist down, rendering her a permanent paraplegic. Medicaid paid for Petitioner’s medical expenses in the amount of $530,258.86. Petitioner was three years old at the time of her injury and has a normal life expectancy of 72.9 years. Petitioner is wheel-chair bound. She has no control of her bladder or bowels. Paraplegics suffer from a number of attendant complications, such as erosion of skin integrity, pressure ulcers, and kidney, bladder, and digestive system disorders. Paraplegics require care from neurologists, neurosurgeons, orthopedic surgeons, and gastroenterologists, among other physicians, throughout their normal life expectancy. Ms. Benjamin retained Scott Leeds, an attorney specializing in personal and catastrophic injury claims, to represent Petitioner in a personal injury claim against Harvard House. Mr. Leeds served Harvard House with a Notice of Intent to Initiate Litigation on December 29, 2011. The insurance liability of Harvard House was limited to $1 million. During discovery, Mr. Leeds determined Harvard House had no other collectible assets. Petitioner settled with Harvard House pre-suit for $750,000.1/ Mr. Leeds has practiced law in the area of catastrophic personal injury for 31 years. He has represented children in cases seeking damages for catastrophic injury. As part of his practice, Mr. Leeds routinely estimates the value of damages suffered by his clients. The components of damages in catastrophic personal injury cases generally follow the elements set out in a jury verdict form, including economic damages, such as past medical expenses (date of injury to date of trial), future medical expenses, loss of past earnings, loss of future earning capacity, past attendant care and rehabilitation, future attendant care and rehabilitation; as well as non-economic damages, such as past and future pain and suffering, and loss of enjoyment of life. Petitioner’s claim for past medical expenses is valued at $530,258.86, the amount paid by Medicaid for her past treatment. Mr. Leeds estimated Petitioner’s future medical care expenses at $8 million, based on statistics from the Christopher and Dana Reeves Foundation. Mr. Leeds testified that Petitioner’s attendant care costs for her expected lifetime are an additional $9 million. Mr. Leeds’ estimate of Petitioner’s economic damages is $17.5 million before valuing Petitioner’s loss of future earning capacity. Mr. Leeds’ opinion on the value of Petitioner’s damages is informed by his experience representing children in two separate catastrophic injury cases. In both cases, the children were under five years old and their injuries resulted in paraplegia. In both cases, Mr. Leeds negotiated structured settlements for the children in excess of $20 million in future benefits over the children’s lifetime. Mr. Leeds testified, convincingly, that a jury would likely award Petitioner a substantial sum to compensate Petitioner for her non-economic damages, given her life expectancy of over 70 years to endure the consequences of her injury. Mr. Leeds’ valuation of Petitioner’s combined economic and non-economic damages in excess of $20 million is accepted as credible and reliable, as well as persuasive. Petitioner also presented the testimony of a second expert in valuing damages in catastrophic personal injury cases, R. Vinson Barrett, Jr. Mr. Barrett is a civil trial lawyer who has practiced exclusively in the area of personal injury for the past 30 years. He is a senior partner in the law firm of Barrett, Fasig & Brooks in Tallahassee, Florida. In preparing for his testimony, Mr. Barrett reviewed Petitioner’s medical records, the police report filed on the date of Petitioner’s injury, Mr. Leeds' demand letter to Harvard House, some discovery documents, the settlement, and the court order approving the settlement. In formulating his opinion as to the value of Petitioner’s damages, Mr. Barrett also consulted with colleagues practicing personal injury law in South Florida. According to Mr. Barrett, jury awards vary by region in the state of Florida, with South Florida juries returning high jury verdicts in personal injury cases. Mr. Barrett emphatically agreed that the value of Petitioner’s damages are in excess of $20 million. In formulating his opinion, Mr. Barrett reviewed jury verdicts in cases which he considered comparable, or otherwise instructive. In one case, a four-year-old boy rendered a paraplegic in an automobile accident was awarded $19.9 million in damages in 2010. That verdict was rendered in Osceola County. Mr. Barrett testified that a jury verdict in Dade County would be expected to be higher than in Osceola County. In a second case, a jury in Pinellas County awarded over $10 million to a 57-year-old woman who was rendered paraplegic as a result of medical malpractice. The jury award allocated $3 million for future medical expenses and $7 million for future pain and suffering. Mr. Barrett testified that future pain and suffering awards are generally lower for older plaintiffs, such as this 57-year-old woman, than for younger plaintiffs, like Petitioner, with a much longer life expectancy. Another case to which Mr. Barrett referred involved an adult male construction worker rendered paraplegic in a fall from a steel beam which resulted in a spinal injury similar to Petitioner’s. The Hillsborough County jury awarded over $16 million to the plaintiff in that case. The construction worker’s life expectancy was shorter than Petitioner’s, thus Mr. Barrett believes an award greater than $16 million would be made in Petitioner’s case. Mr. Barrett would also expect a higher award in a present-day civil jury trial than this $16-million award which was made in 1995. Mr. Barrett’s opinion on the value of Petitioner’s damages was both credible and persuasive. Medicaid is to be reimbursed for medical assistance provided if resources of a liable third party become available. Thus, Respondent asserted a Medicaid lien in the amount of $530,258.86 against any proceeds Petitioner received from a third party. Respondent’s position is that it should be reimbursed for its Medicaid expenditures on behalf of Petitioner pursuant to the formula set forth in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting a 25 percent attorney’s fee and taxable costs (in this case, $8,704.50) from the $750,000.00 recovery, which yields a sum of $553,795.50, then dividing that amount by two, which yields $276,897.75. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Petitioner’s position is that Respondent should be reimbursed $19,884.71 in satisfaction of its Medicaid lien. On August 27, 2014, Petitioner and Harvard House executed a Release of Claims (Release) based upon the settlement of $750,000. In the Release, the parties acknowledge that the settlement “only compensat[es] Tyra Pierre for a fraction of the total monetary value of her alleged damages.” The Release does not differentiate or allocate the total recovery among the components of damages, such as economic or non-economic. However, the Release allocates $19,884.71 to Petitioner’s claim for past medical expenses, and allocates the “remainder of the settlement towards the satisfaction of claims other than past medical expenses.” The Release provides that said “allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Tyra Pierre’s damages.” The settlement amount of $750,000 is 3.75% of the total value of Petitioner’s damages. The figure of $19,884.71 is 3.75% of the value of past medical expenses paid by Medicaid on Petitioner’s behalf. Respondent was not a party to the settlement. Respondent did not participate in litigation of the claim or in settlement negotiations, and no one represented Respondent’s interests in the negotiations. Respondent has not otherwise executed a release of the lien. Petitioner did not introduce the settlement in evidence. However, Petitioner did introduce the circuit court order authorizing the settlement. The order reads, in pertinent part, as follows: Given the facts, circumstances, and nature of Tyra’s injuries and this settlement, the parties have agree[d] to allocate $19,884.71 of this settlement to Tyra’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio the settlement bears to the total monetary value of all Tyra’s damages. * * * 5. The allocation of damages recited in the previous paragraph and made a material term of the settlement, is fair and accurate, and is expressly adopted by this Court. (emphasis added). Mr. Leeds testified that allocation of $19,884.71 of the settlement proceeds to Petitioner’s past medical expenses was fair and accurate, “based upon the analysis of this catastrophic injury and the future 73 years that Tyra Pierre will have and the value of this case[.]” Mr. Barrett testified that allocation of $19,884.71 for past medical expenses was reasonable and rational. Petitioner proved by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA or Respondent), as reimbursement for medical expenses paid on behalf of Petitioner pursuant to section 409.910, Florida Statutes (2020),1 from settlement proceeds he received from third parties.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 6, 2019, Mr. St. Surin was severely injured when his motorcycle struck a car. In this accident, Mr. St. Surin suffered severe and permanent injury to his back, neck, scapula, ribs, and knee. 1 All references to Florida Statutes are to the 2020 codification, unless otherwise indicated. Mr. St. Surin’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, provided $28,482.15 in benefits. In addition, Medicaid, through a Medicaid managed care organization known as WellCare of Florida, paid $7,278.25 in benefits. The combined total amount of these benefits, $35,760.40, constitutes Mr. St. Surin’s entire claim for past medical expenses. Mr. St. Surin pursued a personal injury claim against the owner and driver of the car who caused the accident (collectively the “Tortfeasors”) to recover all of his damages. The Tortfeasors’ insurance policy limits were $100,000, and the Tortfeasors had no other collectable assets. Mr. St. Surin’s personal injury claim was settled for the insurance policy limits of $100,000. During the pendency of Mr. St. Surin’s personal injury claim, AHCA was notified of the claim and AHCA asserted a Medicaid lien in the amount of $28,482.15 against Mr. St. Surin’s cause of action and the settlement proceeds. AHCA did not commence a civil action to enforce its rights under section 409.910, or intervene or join in Mr. St. Surin’s action against the Tortfeasors. AHCA was notified of Mr. St. Surin’s settlement by letter. AHCA has not filed a motion to set aside, void, or otherwise dispute Mr. St. Surin’s settlement. Application of the formula found in section 409.910(11)(f) would require payment to AHCA of the full $28,482.15 Medicaid lien given the $100,000 settlement. Petitioner has deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending a final administrative determination of AHCA’s rights. Petitioner presented testimony from Scott Kimmel, Esquire. Mr. Kimmel represented Mr. St. Surin in his personal injury claim against the Tortfeasors. Mr. Kimmel is a personal injury attorney and has practiced law for 30 years. Mr. Kimmel testified that he placed a conservative value of $1 million on Mr. St. Surin’s personal injury claim, but that the personal injury claim was settled for policy limits of $100,000 because the Tortfeasors had no other collectable assets. Using the pro rata allocation methodology, Mr. Kimmel testified that $3,576 of the $100,000 settlement proceeds should be allocated to past medical expenses because the personal injury claim was settled for ten percent of its conservative value. Mr. Kimmel’s testimony was credible, persuasive, and uncontradicted. AHCA did not challenge Mr. Kimmel’s valuation of the personal injury claim, or his use of the pro rata allocation methodology to determine the amount of settlement proceeds that should be allocated to past medical expenses, nor did AHCA offer any evidence from which the undersigned could arrive at a different valuation or allocation. There is no reasonable basis to reject Mr. Kimmel’s testimony, and it is accepted here in its entirety. The undersigned finds that the value of Mr. St. Surin’s personal injury claim is $1 million, and that $3,576.04 of the $100,000 settlement proceeds should be allocated to past medical expenses.
The Issue What is the amount to be reimbursed to Respondent, Agency for Health Care Administration (AHCA), for medical expenses paid on behalf of Petitioner Bryant (Petitioner) pursuant to section 409.910, Florida Statutes, from a personal injury settlement received by Petitioner from a third party?
Findings Of Fact Factual Allegations that Served As a Basis for the Underlying Personal Injury Litigation On March 11, 2009, Petitioner, then 21 years old, suffered catastrophic physical injury and brain damage when her bicycle was struck by a car near the Oakland Park I-95 overpass in Broward County. Petitioner was taken to the North Broward Hospital, where she was intubated with mechanical ventilation. Imaging revealed a right subdural hematoma, and Petitioner showed signs of increased intracranial pressure. On March 12, 2009, Petitioner underwent bilateral frontoparietal craniotomies through separate incisions with evacuation of a left parietooccipital epidural hematoma and right frontal temporoparietal subdural hematoma; bilateral duraplasty to accommodate brain swelling; and repair of a left occipital laceration. On that same date, a CT scan revealed that Petitioner had numerous pelvic and hip fractures. Petitioner underwent an upper gastrointestinal endoscopy with a PEG tube placement. Eventually, her medical condition stabilized and she was discharged to rehabilitation. Petitioner is now unable to move the left side of her body. She receives her nutrition through a g-tube and is bowel and bladder incontinent. She suffers from cognitive deficits. Petitioner is cognizant of her condition and her surroundings, but has extreme difficulty with communication. Petitioner is severely disabled and unable to ambulate or care for herself in any manner. Prior to the accident, Petitioner was a healthy 21-year-old. It is anticipated that Petitioner's life span will be approximately another 60 years, her condition is permanent, and she will always need full-time medical care. The Personal Injury Litigation Due to Petitioner's incapacity, Freda Bryant (Bryant) was appointed the guardian of the person and property of Petitioner. As Petitioner's guardian, Bryant brought a personal injury action to recover all of Petitioner's damages against the company responsible for maintaining the lights on the highway where Petitioner's accident occurred ("Defendant"). Freda Bryant retained the Krupnick, Campbell, Malone, et al., law firm of Fort Lauderdale, a firm concentrating in the areas of catastrophic personal injury, wrongful death, and products liability. The Medicaid Lien Petitioner is a Medicaid recipient and her medical care was paid for by Medicaid. AHCA, through the Medicaid program, paid $404,399.68 on behalf of Petitioner for medical benefits related to the injuries sustained by Petitioner. This $404,399.68 paid by Medicaid represented Petitioner's entire claim for past medical expenses up until the time of settlement. During the pendency of Petitioner's personal injury action, AHCA was notified of the action and AHCA, through its collections contractor Xerox Recovery Services, asserted a $404,399.68 Medicaid lien against Petitioner's cause of action and settlement of that action. Valuation of the Personal Injury Claim Joseph Slama (Slama), the attorney representing Petitioner in her personal injury action, prepared an evaluation of her claim in preparation for trial and/or settlement negotiations. Slama has extensive experience representing parties in catastrophic personal injury, wrongful death, and product liability cases since 1982. Slama has practiced in this field for 33 years, is a board-certified civil trial attorney, first certified in 1987, who has litigated hundreds of these types of cases. Slama is a member of the American Board of Trial Advocates (ABOTA), the Florida chapter of ABOTA (FLABOTA), Attorneys Information Exchange Group, Florida Justice Association, Broward Justice Association, and the Florida Bar. Slama was offered and accepted, without objection, as an expert in the valuation of damages in catastrophic injury cases. In making the determination regarding the valuation of Petitioner's personal injury claim, Slama reviewed Petitioner's medical records, accident report, prepared fact and expert witnesses for trial, and personally interacted with Petitioner on multiple occasions. Slama is very familiar with the injuries suffered by Petitioner and her need for constant care. Slama was present during the filming of Petitioner's "Day in the Life" video which was intended to be shown to the jury if Petitioner's case went to trial. Slama also reviewed Petitioner's economic damages report prepared by an economist1/ and is familiar with the mental pain and suffering Petitioner experiences as a result of her ability to understand the change in her life from a normal functioning individual to someone requiring total care for the rest of her life. To properly determine the value of Petitioner's claim, Slama researched Florida jury verdicts in personal injury cases with catastrophic brain injuries for young people requiring total care. Slama reviewed five comparable cases with verdicts for the plaintiff. The average jury award per plaintiff in these five cases was $51,474,346.00, and the average pain and suffering component of that award was $28,735,850.00. The case most closely comparable to that of Petitioner was the 2014 case of Mosley v. Lloyd, Case No. CACE09-025532, 2014 WL 7910512, a Broward County Circuit Court trial in which the jury awarded $75,543,527.00, of which $39,500,000.00 represented damages for past and future pain and suffering. Another similar case was that of Lymans v. Bynum Transportation, Case No. 2007CA-007728, 2009 WL 9051959, decided by a Pasco County jury. According to Slama, Pasco County juries are generally considered very conservative. In the Lymans case, a 21-year-old sustained a catastrophic brain injury resulting in her requiring 24/7 total care, much like the Petitioner. The jury awarded $65,000,000.00, of which $41,000,000.00 represented damages for pain and suffering. Based upon the five verdicts, including the Mosley and Lymans jury verdicts, review of the medical records, extensive personal interaction with Petitioner, and his personal experience and knowledge in valuing catastrophic personal injury cases from decades of practice in this field, Slama conservatively valued the damages for mental pain and suffering to be $15 million or greater. Slama acknowledged litigation risk issues with this personal injury action, which included a reduction or elimination of liability based on the defense of contributory negligence and a statutory restriction on liability for a utility company unless there was prior written notice to the utility company of deficient lighting. Slama consulted Allen McConnaughhay, Esquire, an attorney with the Tallahassee law firm of Fonvielle, Lewis, Foote & Messer, for an independent assessment of Petitioner's claim. McConnaughhay has practiced in the field of catastrophic personal injury cases for 15 years. He was offered and accepted, without objection, as an expert in the field of valuation of catastrophic injury cases. McConnaughhay explained that his firm, like that of Slama, relies on the expertise of its partners, a review of the injured party's medical records, research of jury verdicts in comparable cases, and it conducts a roundtable discussion to determine the value of a catastrophic personal injury claim. McConnaughhay and his partners engaged in such review of Petitioner's claim and found that a figure in excess of $50 million was a proper value for her pain-and-suffering damages. McConnaughhay opined that the $15 million figure ascertained by Slama was extremely conservative. The Settlement Allocation On May 18, 2015, Bryant settled Petitioner's personal injury lawsuit for $1,164,000. Given the facts of this case, the figure agreed upon was supported by the competent professional judgment of the trial attorneys in the interests of their clients. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement, taking into account all of the strengths and weaknesses of their positions. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to the payment of costs expended for Petitioner's medical care by AHCA. The General Release with the settling Defendants stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Petitioner Bryant for all of the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Petitioner Bryant for a fraction of the total monetary value of her alleged damages. The parties agree that Petitioner Bryant's alleged damages have a value in excess of $15,000,000, of which $404,399.68 represents Petitioner Bryant's claim for past medical expenses. Given the facts, circumstances, and nature of Petitioner Bryant's injuries and this settlement, the parties have agreed to allocate $31,381.42 of this settlement to Petitioner Bryant's claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Petitioner Bryant's damages. Further, the parties acknowledge that Petitioner Bryant may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Petitioner Bryant will incur in the future. However, the parties acknowledge that Petitioner Bryant, or others on her behalf, have not made payments in the past or in advance for Petitioner Bryant's future medical care and Petitioner Bryant has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. Because Petitioner was incapacitated, court approval of the settlement was required. Accordingly, on June 4, 2015, the Honorable Circuit Court Judge Cynthia Imperato approved the settlement by entering an Order Approving Settlement. By letter of May 26, 2015, Petitioner's personal injury attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release, Order Approving Settlement, and itemization of Petitioner's $75,852.90 in litigation costs. This letter explained that Petitioner's damages had a value in excess of $15,000,000, and the settlement represented only a 7.76 percent recovery of Petitioner's $404,399.68 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $404,399.68 Medicaid lien. AHCA responded to Petitioner's attorney's letter by letter of June 25, 2015, and demanded a "check made payable to 'Agency for Health Care Administration' in the amount of $404,399.68." AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner's settlement. AHCA has not commenced a civil action to enforce its rights under Section 409.910, Florida Statutes. No portion of the $404,399.68 paid by AHCA through the Medicaid program on behalf of Petitioner represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. AHCA has determined that of Petitioner's $75,852.90 in litigation costs, $63,375.06 are taxable costs for purposes of the section 409.910(11)(f) formula calculation. Based on $63,375.06 in taxable costs, the section 409.910(11)(f) formula applied to Petitioner's $1,164,000 settlement, results in $404,812.47 payable to AHCA in satisfaction of its $404,399.68 Medicaid lien. Because $404,399.68 is less than the $404,812.47 amount derived from the formula in section 409.910(11)(f), AHCA is seeking reimbursement of $404,399.68 from Petitioner's settlement in satisfaction of its Medicaid lien. Petitioner has deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, which constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner proved by clear and convincing evidence that the $15 million total value of the claim was a reasonable and realistic value. Furthermore, Petitioner proved by clear and convincing evidence, based on the relative strengths and weaknesses of each party's case, and on a competent and professional assessment of the likelihood that Petitioner would have prevailed on the claims at trial and the amount she reasonably could have expected to receive on her claim if successful, that the amount agreed upon in settlement of Petitioner's claims constitutes a fair, just, and reasoned settlement, including $31,381.42, the amount attributable to the Medicaid lien for medical expenses as its 7.76 percent proportionate share of the total settlement.
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA), as reimbursement for medical expenses paid on behalf of Petitioner Elisha Loebell, deceased, by and through Sylvia Loebell, as administrator of the estate of Elisha Loebell (Petitioner), pursuant to section 409.910, Florida Statutes (2018), from settlement proceeds Petitioner received from a third party.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On March 12, 2012, Sylvia Loebell (Sylvia), who was 37 weeks pregnant with Elisha Loebell (Elisha), was traveling with her husband through Virginia. Sylvia began experiencing severe back, left flank, and abdominal pain and presented to the emergency room. She was transferred to a hospital where she was given morphine, antibiotics for a suspended kidney infection, and anti-nausea medicine. On or about March 15, 2012, delivery was induced. During the early morning hours of March 16, 2012, extreme difficulty was experienced in the delivery and a vacuum was applied to Elisha’s head. During this time, Sylvia requested delivery via C-section, but the request was ignored. Further, during the delivery process, the medical staff failed to monitor or recognize extreme fetal distress. Eventually, at 5:07 a.m., Elisha was delivered. Elisha’s head was severely bruised, swollen, bleeding, and blistered. She was not breathing and required resuscitation. Elisha was taken to the Neonatal Intensive Care Unit (NICU), but the pediatrician on duty did not arrive in the NICU until over four hours after Elisha was born, and a neonatologist was not consulted until 24 hours after birth. Elisha was diagnosed with catastrophic brain damage due to a lack of oxygen to the brain during and after birth. Due to this catastrophic brain damage, Elisha suffered from quadriplegic cerebral palsy, seizures, global development delay, bilateral cervical blindness, temperature instability, and microcephaly. Elisha was G-tube dependent and required a tracheostomy. After three years of suffering from her extensive birth injuries, Elisha died on April 2, 2015. Elisha was survived by her mother, Sylvia, and her father, Matthew Loebell, who are married and who reside in Florida. Elisha’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $372,654.53 in benefits associated with her injury. This $372,654.54 represents the entire claim for past medical expenses. The costs associated with Elisha’s funeral totaled $3,000.00, which her surviving parents paid. Sylvia was appointed the administrator of the estate of Elisha. Petitioner filed a lawsuit for medical malpractice and wrongful death in Virginia to recover both the individual damages of Elisha’s surviving parents and the individual damages of Petitioner against the medical providers and staff who were responsible for Elisha’s care at the time of her birth (Virginia Defendants). During the pendency of Petitioner’s lawsuit against the Virginia Defendants, Petitioner notified AHCA of the lawsuit, and AHCA asserted a Medicaid lien of $372,654.53 against Petitioner’s lawsuit and settlement of that action. Petitioner settled the lawsuit for medical malpractice and wrongful death with the Virginia Defendants for $1,000,000.00. Those parties executed a Settlement Agreement and Full and Final Release (Release), which stated, in part: Although it is acknowledged that this settlement does not fully compensate Elisha Loebell for all of the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to Releases without regard to this settlement only compensating Elisha Loebell for a fraction of the total monetary value of her alleged damages. The parties agree that Elisha Loebell’s alleged damages have a value in excess of $6,372,654.53, of which $372,654.54 represents Elisha Loebell’s claim for past medical expenses. Given the facts, circumstances, and nature of Elisha Loebell’s injuries and this settlement, the parties have agreed to allocate $58,506.76 of this settlement to Elisha Loebell’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the claimed total monetary value of all [of] Elisha Loebell’s alleged damages. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioner’s lawsuit against the Virginia Defendants. AHCA has not sought to set aside, void, or otherwise dispute the settlement of Petitioner’s lawsuit. Application of the formula set forth in section 409.910(11)(f) to Petitioner’s $1,000,000.00 settlement authorizes payment to AHCA of $331,682.12. Expert Witness Testimony Testimony of Charles J. Zauzig, III Petitioner presented the testimony of Charles J. Zauzig, III, the lead trial attorney who litigated Petitioner’s lawsuit against the Virginia Defendants. Mr. Zauzig is a partner with the law firm of Nichols Zauzig in Woodbridge, Virginia. Mr. Zauzig has been a trial attorney for 40 years and focuses his practice on representing parties in medical malpractice cases involving catastrophic injuries and death. Mr. Zauzig tries, on average, three to four jury trials, per year, that result in a verdict. He testified that he is familiar with meeting with injured clients, reviewing medical records, reviewing expert reports, interviewing and deposing fact witnesses, and preparing cases for trial. He further testified that he regularly reviews jury verdict reports in Virginia, and discusses cases, including valuation and jury verdicts, with other attorneys. Mr. Zauzig testified that as a routine part of his practice, he assesses the value of damages that injured clients have suffered. Mr. Zauzig is a member of several trial attorney associations, including the Virginia Trial Lawyers Association, American College of Trial Lawyers, American Association of Justice, Southern Trial Lawyers Association, American Board of Trial Advocacy, and the International Academy of Trial Lawyers. Mr. Zauzig served on the American Association of Justice’s Board of Governors and chaired its Medical Negligence Group. Petitioners moved, and the undersigned accepted, Mr. Zauzig as an expert in the valuation of damages. AHCA did not oppose Mr. Zauzig’s designation as an expert. As part of his representation of Petitioner in the lawsuit against the Virginia Defendants, Mr. Zauzig met with Elisha’s parents, reviewed Elisha’s medical records, and met with fact and expert witnesses concerning her care. Mr. Zauzig explained that during birth, Elisha suffered catastrophic brain damage as a result of being forced into her mother’s pelvis repeatedly during contractions, which were induced through administration of drugs. He further explained that Elisha suffered catastrophic brain damage that resulted in Elisha having severe cerebral palsy, with additional issues such as blindness, respiratory failure, inability to regulate her body temperature, seizures, and difficulties with feeding that required the use of a G-tube. Because of this catastrophic brain damage and resulting issues, Elisha required constant care, much of which her parents provided. Mr. Zauzig testified that after three years, Elisha passed away as a result of her birth injuries. Mr. Zauzig stated that Elisha’s parents suffered deeply during Elisha’s life and as a result of her death. Mr. Zauzig testified that under the Virginia Wrongful Death Act, damages may include the parents’ mental pain and suffering from the date of injury through death of their child, as well as sorrow thereafter, and medical expenses. See Va. Code Ann. §§ 8.01-50 through 8.01-95 (2018). He testified that based on his professional training and experience, including a review of comparable Virginia jury verdicts, the damages suffered in the Petitioner’s lawsuit against the Virginia Defendants had a value in excess of $6,372,654.53. Mr. Zauzig noted that one of his first medical malpractice trials involving a brain injury at birth resulted in a $6,000,000.00 verdict, in which each parent received a $3,000,000.00 verdict. Mr. Zauzig also testified that in 2002, a jury returned a verdict of $6,000,000.00 to the surviving parents of an infant wrongful death in a comparable venue in Virginia. Mr. Zauzig stated that these comparable verdicts supported his valuation of Petitioner’s damages being in excess of $6,000,000.00. Mr. Zauzig testified that Petitioner could also recover, under the Virginia Wrongful Death Act, Elisha’s past medical expenses, which totaled $372,654.53. Thus, he concluded that it would be reasonable to value the combined damages at $6,372,654.53. Mr. Zauzig admitted that the theory of liability and causation in the Petitioner’s lawsuit—that the medical professionals should have stopped the drugs given to induce delivery when they determined the baby was in distress and should have instead performed a caesarian section—was novel and controversial. He testified that many experts disagree over whether this theory of liability was the cause of the injuries Elisha suffered. Mr. Zauzig believed that the Virginia Defendants would vigorously defend this case on the issues of causation and standard of care, and that he expected that they would attack these issues in pre-trial motions. Mr. Zauzig testified that based on these concerns, the parties settled this lawsuit for $1,000,000.00. He further testified that this settlement did not fully compensate Elisha’s parents and Petitioner for the full value of damages. He testified that based on a valuation of all damages of $6,372,654.53, the $1,000,000.00 settlement represented a recovery of 15.7 percent of the value of the damages recovered in the $1,000,000.00 settlement. According to Mr. Zauzig, as Elisha’s parents and Petitioner only recovered 15.7 percent of the value of the damages, it would be reasonable to allocate 15.7 percent of the claim for past medical expenses ($372,654.53), or $58,506.76. Mr. Zauzig noted that in the Release, the Virginia Defendants agreed that the damages had a value in excess of $6,372,654.53, of which $372,654.53 represented the claim for past medical expenses. He further noted that the parties to the Release agreed to allocate $58,506.76 of the settlement to past medical expenses, which he further testified was reasonable. Testimony of R. Vinson Barrett Petitioner also presented the testimony of Mr. Barrett, a trial attorney with over 40 years of experience, who is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee. Mr. Barrett dedicates his legal practice to representing plaintiffs in personal injury and wrongful death lawsuits. Mr. Barrett has conducted numerous jury trials and has represented clients with catastrophic brain injuries. Mr. Barrett testified that he routinely reviews jury verdict reports and makes assessments concerning the value of damages that injured parties have suffered. He also explained the process for making these assessments. He further testified that he is familiar with settlement allocation in the context of health insurance liens, Medicare set-asides, and workers’ compensation liens. The Division and other courts have accepted Mr. Barrett as an expert in the evaluation and valuation of damages. Petitioners moved, and the undersigned accepted, Mr. Barrett as an expert in the valuation of damages. AHCA did not oppose Mr. Barrett’s designation as an expert. Mr. Barrett testified that he was familiar with Elisha’s injuries and Petitioner’s lawsuit for medical malpractice and wrongful death against the Virginia Defendants. He detailed the cause of her injury, the level of round-the-clock care Elisha required for her short life, and the impact and trauma her parents suffered as a result of her injuries and death. Mr. Barrett opined, based on his review of Virginia and Florida jury verdicts, that a conservative estimate of the overall value of the damages would be $3,000,000.00 per parent, along with the past medical expenses of $372,654.53, for a total valuation of $6,372,654.53. Mr. Barrett testified that Petitioner and the Virginia Defendants settled the lawsuit for $1,000,000.00, which did not fully compensate Elisha’s parents. Mr. Barrett opined that using his conservative valuation of $6,372,654.53, the $1,000,000.00 settlement represented a 15.7 percent recovery of the value of the damages. Mr. Barrett further testified that because the settlement represented 15.7 percent of the damages, an allocation of 15.7 percent of the claim for past medical expenses, or $58,506.76, was reasonable and appropriate. Ultimate Findings of Fact The undersigned finds that the testimony of Mr. Zauzig and Mr. Barrett was credible and persuasive as to the total damages incurred by Petitioner. Mr. Zauzig’s extensive experience in litigating catastrophic injuries and death, and medical malpractice actions, along with his experience as the lead trial counsel in Petitioner’s lawsuit against the Virginia Defendants, made him a compelling witness regarding the valuation of damages that Petitioner suffered, and the allocation of damages. Mr. Barrett’s vast experience as a trial lawyer, who has previously testified numerous times before the Division and other courts regarding valuation and allocation of damages, similarly made him a credible witness regarding the valuation and allocation of damages in Petitioner’s lawsuit against the Virginia Defendants. AHCA’s attorney cross-examined Mr. Zauzig and Mr. Barrett on some of the underpinnings of how each reached their opinions, but ultimately offered no evidence to counter these expert opinions regarding Petitioner’s total damages or the past medical expenses recovered. Accordingly, the undersigned finds that the preponderance of the evidence establishes that the total value of Petitioner’s medical malpractice and wrongful death claim is $6,372,654.53, and that the $1,000,000.00 settlement resulted in Petitioner recovering 15.7 percent of Elisha’s past medical expenses. In addition, the preponderance of the evidence establishes that $58,506.76 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or Agency), for medical expenses paid on behalf of Petitioner, Leigh Ann Holland (Petitioner), from a medical-malpractice settlement received by Petitioner from a third-party.
Findings Of Fact On or about November 19, 2010, Petitioner entered the North Florida Women’s Physicians, P.A. facility in Gainesville, Florida, for the birth of her second child. North Florida Women’s Physicians, P.A. (NFWP) operates in space leased from the North Florida Regional Medical Center (NFRMC). The two are separate entities. By all accounts, Petitioner was in good health at the time of her admission. The child, Colt, was delivered on November 19, 2010, by a nurse midwife employed by NFWP. After Colt was delivered, Petitioner was transferred to a room at the NFRMC, where she was attended to by staff of the NFRMC. However, decisions regarding her care remained the responsibility of the health care providers and staff of the NFWP. On November 21, 2010, Petitioner was slated for discharge. The NFRMC nurse attending was concerned that Petitioner was exhibiting low blood pressure, an elevated heart rate, and some shaking. Petitioner’s nurse midwife was off-work on November 21, 2010. The NFRMC nurse called the nurse midwife at her home. The substance of the call was disputed, with the NFRMC nurse asserting that she expressed her concern with Petitioner’s condition, and with the nurse midwife asserting that the NFRMC nurse failed to convey the potential seriousness of Petitioner’s condition.3/ Regardless, Petitioner was discharged on November 21, 2010. Over the course of the following two days, Petitioner’s health deteriorated. On November 23, 2010, Petitioner was taken to the hospital in Lake City. Her condition was such that she was sent by Life Flight to Shands Hospital (Shands) in Gainesville. While in route to Shands, Petitioner “coded,” meaning that, for practical purposes, she died. She was revived by the Life Flight medical crew. As a result of the efforts to revive her, drugs were administered that had the effect of drawing blood away from her extremities and toward her core organs. Petitioner’s fingers and toes were affected by blood loss. They mostly recovered, except for her right big toe, which later had to be partially amputated. Petitioner has since experienced some difficulty in balance and walking normally. Upon arrival at Shands, Petitioner was admitted with post-partum endometritis which had developed into a widespread sepsis infection. She spent the next three months in the hospital, and underwent five surgeries. She had 2/3 of her colon removed and underwent two ileostomies. She bears scars that extend from sternum to pelvis. While in the hospital, her body temporarily swelled to twice its normal size, leaving her with scars and stretch marks on her torso and legs. Medicaid paid for Petitioner’s medical expenses in the amount of $148,554.69. Because Petitioner’s ability to process food and absorb nutrients is so dramatically compromised, she must use the restroom 9 to 15 times per day, occasionally with no advance warning which can lead to accidents. Thus, both her social life and her ability to get and hold employment are severely limited. Petitioner has little stamina or endurance, limiting her ability to play and keep-up with her six-year-old son. Her sex life with her husband is strained, due both to issues of physical comfort and body image. Finally, Petitioner can have no more children, a fact rendered more tragic by Colt’s unexpected death at the age of three months, scarcely a week after Petitioner’s release from the hospital. As a result of the foregoing, Petitioner suffered economic and non-economic damages. Therefore, Petitioner filed a lawsuit in Alachua County seeking recovery of past and future economic and non-economic damages. Petitioner’s husband also suffered damages, and was named as a plaintiff in the lawsuit. Named as defendants to the lawsuit were NFWP and NFRMC. Medicaid is to be reimbursed for medical assistance provided if resources of a liable third party become available. Thus, Respondent asserted a Medicaid lien in the amount of $148,554.69 against any proceeds received from a third party. NFWP was under-insured, which compelled Petitioner to settle with NFWP for its policy limits of $100,000. As a result, NFWP was removed as a party to the ongoing lawsuit. Of the NFWP settlement proceeds, $18,750.00 was paid to Respondent in partial satisfaction of its Medicaid lien, leaving a remaining lien of $129,804.69. On July 10, 2013, and November 15, 2013, Petitioner’s counsel, Mr. Smith, provided NFRMC’s counsel, Mr. Schwann, with his assessment of the damages that might reasonably be awarded by a jury. Mr. Smith testified convincingly that a jury would have returned a verdict for non-economic damages well in excess of $1.5 million. However, in calculating the total damages, he conservatively applied the statutory cap on non-economic damages of $1.5 million that would have been allowed by the judgment. With the application of the capped amount, the total damages -- i.e., the “value” of the case -- came to $3.1 million. That figure was calculated by the application of the following: Past lost wages - $61,000 Future loss of earning capacity - between $360,000 and $720,000 Past medical expenses - $148,982.904/ Future medical expenses - $682,331.99 Past and future non-economic damages - $1,500,000 (capped) The elements of damages are those that appear on a standard jury form. The numbers used in assessing Petitioner’s economic damages were developed and provided by Mr. Roberts. The evidence in this case was convincing that the calculation of economic damages reflected a fair, reasonable, and accurate assessment of those damages. Mr. Smith was confident that the damages could be proven to a jury, a belief that is well-founded and supported by clear and convincing evidence. However, the existence of a Fabre defendant5/ led to doubt on the part of Petitioner as to the amount of proven damages that would be awarded in a final judgment. Counsel for NFRMC, Mr. Schwann, performed his own evaluation of damages prior to the mediation between the parties. Mr. Schwann agreed that a jury verdict could have exceeded $3 million. Although he believed the strengths of the NFRMC’s case to be significant, he had concerns as to “what the worst day would have looked like,” especially given the wild unpredictability of juries. In Mr. Schwann’s opinion, the NFRMC nurse, Ms. Summers, was a credible, competent and believable witness. However, the nurse midwife presented with a reasonably nice appearance as well. Thus, there was little to tip the balance of believability far in either direction, leaving it to the jury to sort out. Mr. Schwann understood Petitioner’s personal appeal, and the significant personal and intangible damages suffered by Petitioner, that could lead a jury to award a large verdict. He also credibly testified that juries were consistent in awarding economic damages “to the penny.” The case was submitted to mediation, at which the parties established a framework for a settlement. Given the uncertainty of obtaining a verdict for the full amount of the damages due to the Fabre defendant, NFWP, the parties agreed that the most likely scenarios would warrant a settlement with NFRMC for some fraction of the total damages. After mediation, Petitioner ultimately accepted a settlement offer of $700,000 from NFRMC, which reflected, after rounding, 22.5% percent of the total value of the case as estimated by Mr. Smith. Given the facts of this case, the figure agreed upon was supported by the competent professional judgment of the trial attorneys in the interests of their clients. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement, taking into account all of the strengths and weaknesses of their positions. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to the payment of costs expended for Petitioner’s medical care. On December 6, 2013, Petitioner and NFRMC executed a Release of Claims which differentiated and allocated the $700,000 total recovery in accordance with the categories identified in Mr. Smith’s earlier letters. As a differentiated settlement, the settlement proceeds were specifically identified and allocated, with each element of the total recovery being assigned an equal and equitable percentage of the recovery. The parties knew of the Medicaid lien, and of the formula for recovery set forth in section 409.910(11)(f). They understood that if the damages were undifferentiated, the rote formula might apply. However, since the Medicaid lien applied only to medical expenses, the parties took pains to ensure a fair allocation as to each element of the damages, including that element reflecting the funds spent by Medicaid. The differentiated settlement proceeds, after rounding, were allocated as follows: Past lost wages - $15,000 Future loss of earning capacity - $160,000 Past medical expenses - $35,000 Future medical expenses - $150,000 Past and future non-economic damages - $340,000 The evidence was clear and convincing that all elements of the damages were subject to the same calculation and percentage of allocation, were fact-based and fair, and were subject to no manipulation to increase or decrease any element. The full amount of the Medicaid lien (prior to the partial payment from the NFWP described herein) was accounted for and allocated as “past medical expenses” in the stipulated Release of All Claims that was binding on all parties. Respondent was not a party to the lawsuit or the settlement. Petitioner did not invite Respondent to participate in litigation of the claim or in settlement negotiations, and no one represented Respondent’s interests in the negotiations. Except for the amount recovered from the settlement with NFWP, Respondent has not otherwise executed a release of the lien. Respondent correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee from the $700,000.00 recovery leaves a sum of $525,000.00, half of which is $262,500.00. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds to satisfy the unsatisfied Medicaid lien amount of $129,804.69. Petitioner proved by clear and convincing evidence that the $3.1 million total value of the claim was a reasonable and realistic value. Furthermore, Petitioner proved by clear and convincing evidence, based on the relative strengths and weaknesses of each party’s case, and on a competent and professional assessment of the likelihood that Petitioner would have prevailed on the claims at trial and the amount she reasonably could have expected to receive on her claim if successful, that the amount agreed upon in settlement of Petitioner’s claims constitutes a fair, just, and reasoned differentiated settlement for each of the listed elements, including that attributable to the Medicaid lien for medical expenses.
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.
The Issue The issue is the amount of money, if any, that must be paid to the Agency for Health Care Administration (AHCA) to satisfy its Medicaid lien under section 409.910, Florida Statutes (2013).
Findings Of Fact Harry Silnicki, at age 52, suffered devastating brain injuries when a ladder on which he was standing collapsed. Mr. Silnicki, now age 59, has required, and will for the remainder of his life require, constant custodial care as a result of his injuries. He has been, and will be into the indefinite future, a resident of the Florida Institute of Neurological Rehabilitation (FINR) or a similar facility that provides full nursing care. Debra Silnicki is the wife and guardian of Mr. Silnicki. Mr. Silnicki, through his guardian, brought a personal injury lawsuit in Broward County, Florida, against several defendants, including the manufacturer of the ladder, the seller of the ladder, and two insurance companies (Defendants), contending that Mr. Silnicki's injuries were caused by a defective design of the ladder. The lawsuit sought compensation for all of Mr. Silnicki's damages as well as his wife's individual claim for damages associated with Mr. Silnicki's damages. When referring to the personal injury lawsuit, Mr. and Mrs. Silnicki will be referred to as Plaintiffs. During the course of the trial, before the jury reached its verdict, the Plaintiffs entered into a High-Low Agreement (HLA) with the Defendants by which the parties agreed that, regardless of the jury verdict, the Defendants would pay to the Plaintiffs $3,000,000 if the Plaintiffs lost the case, but would pay at most $9,000,000 if the Plaintiffs won the case. After a lengthy trial, on March 27, 2013, the jury returned a verdict finding no liability on the part of the manufacturer or any other defendants. Consequently, the jury awarded the Plaintiffs no damages. The Defendants have paid to the Plaintiffs the sum of $3,000,000 pursuant to the HLA (the HLA funds). The HLA constitutes a settlement of the claims the Plaintiffs had against the Defendants.1/ As shown in their Closing Statement (Petitioners' Exhibit 7), dated September 23, 2013, the Silnickis' attorneys have disbursed $1,100,000 of the HLA funds as attorney's fees and $588,167.40 as costs. The sum of $1,011,832.602/ was paid under the heading "Medical Liens/Bills to be Paid/Waived/Reduced by Agreement Pending Court Approval." Included in that sum were payments to Memorial Regional Hospital in the amount of $406,464.49 and a payment to FINR in the amount of $600,000.00. Also included was the sum of $245,648.57, which was to be deposited in an interest-bearing account. Subject to court approval, the Closing Statement earmarked, among other payments, $100,000 for a special needs trust for Mr. Silnicki and a $100,000 payment to Mrs. Silnicki for her loss of consortium claim. AHCA has provided $245,648.57 in Medicaid benefits to Mr. Silnicki. AHCA has asserted a Medicaid lien against the HLA funds in the amount of $245,648.57. As required by section 409.910(17)(a), the amount of the Medicaid lien has been placed in an interest-bearing account. The Closing Statement reflects that should Petitioners prevail in this proceeding by reducing or precluding the Medicaid lien, any amounts returned to Petitioners will be split 50% to FINR, 25% to attorney's fees, and 25% to the Petitioners. Section 409.910(11)(f) provides as follows: (f) Notwithstanding any provision in this section to the contrary, in 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 as defined by the Florida Rules of Civil Procedure, 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 or his or her legal representative shall be calculated at 25 percent of the judgment, award, or settlement. The parties stipulated that the amount of Petitioners' "taxable costs as defined by the Florida Rules of Civil Procedure" is $347,747.05. The parties have also stipulated that if the section 409.910(11)(f) formula is applied to the $3,000,000 settlement funds received by Mr. and Mrs. Silnicki, the resulting product would be greater than the amount of AHCA's Medicaid lien of $245,648.57. That amount is calculated by deducting 25% of the $3,000,000 for attorneys' fees, which leaves $2,250,000. Deducting taxable costs in the amount of $347,747.05 from $2,250,000 leaves $1,902,352.95. Half of $1,902,352.95 equals $951,176.48 (the net amount). The net amount exceeds the amount of the Medicaid lien. Section 409.910(17)(b) provides the method by which a recipient can challenge the amount of a Medicaid lien as follows: (b) A recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula specified in paragraph (11)(f) by filing a petition under chapter 120 within 21 days after the date of payment of funds to the agency or after the date of placing the full amount of the third-party benefits in the trust account for the benefit of the agency pursuant to paragraph (a). The petition shall be filed with the Division of Administrative Hearings. For purposes of chapter 120, the payment of funds to the agency or the placement of the full amount of the third-party benefits in the trust account for the benefit of the agency constitutes final agency action and notice thereof. Final order authority for the proceedings specified in this subsection rests with the Division of Administrative Hearings. This procedure is the exclusive method for challenging the amount of third-party benefits payable to the agency. In order to successfully challenge the amount payable to the agency, the recipient must prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency. Scott Henratty and his firm represented the Plaintiffs in the underlying personal injury case. Mr. Henratty is an experienced personal injury attorney. Mr. Henratty testified that the Plaintiffs asked the jury for a verdict in the amount of $50,000,000 for Mr. Silnicki for his total damages, not including his wife's consortium claim. Mr. Henratty valued the claim at between $30,000,000 and $50,000,000. There was no clear and convincing evidence that the total value of Mr. Silnicki's claim exceeded $30,000,000. Mr. Henratty testified that Plaintiffs presented evidence to the jury that Mr. Silnicki's past medical expenses equaled $3,366,267, and his future medical expenses, reduced to present value, equaled $8,906,114, for a total of $12,272,381. Those two elements of damages equal approximately 40.9% of the total value of the claim if $30,000,000 is accepted as the total value of the claim.3/ The Closing Statement reflects that more than the amount of the claimed Medicaid lien was to be used to pay past medical expenses. Petitioners assert in their Petition and Amended Petition three alternatives to determine what should be paid in satisfaction of the Medicaid lien in the event it is determined that the HLA funds are subject to the lien. All three alternatives are premised on the total value of Mr. Silnicki's recovery being $30,000,000 (total value) and compare that to the recovery under the HLA of $3,000,000, which is one-tenth of the total value. All three methods arrive at the figure of $24,564.86 as being the most that can be recovered by the Medicaid lien, which is one-tenth of the Medicaid lien. Future medical expenses is not a component in these calculations. The portion of the HLA funds that should be allocated to past and future medical expenses is, at a minimum, 30% of the recovery.4/
