The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent) from the proceeds of Petitioner’s confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2019).1
Findings Of Fact Paragraphs 1 through 9 are the facts admitted8 and agreed upon by the parties, and required no proof at hearing. On December 7, 2012, A.F., an eight-year-old female, underwent an initial psychiatric evaluation. Following this assessment, A.F. was started on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD). A.F. was 4 Respondent’s Proposed Final Order provided that “Petitioner presented two witnesses: Andrew Needle, Esq., and Kenneth Bush, Esq.” The undersigned did not hear any testimony from Mr. Needle or Mr. Bush. 5 Respondent’s Exhibit 1, a “Provider Processing System Report,” contained a different “Total Claims” amount than the amount of A.F.’s medical expenses paid by AHCA to which the parties stipulated. Without testimony this exhibit is hearsay, and cannot support a finding of fact. As discussed at hearing, the parties agreed to use the stipulated amount: $261,334.61. 6 Although Petitioner’s PFO recites that Petitioner “did not order a transcript of the proceedings,” a review of the filed transcript shows otherwise. See Hearing Tran, pg. 10, lines 4–7. 7 The Hearing Transcript was electronically filed with DOAH on August 3, 2020; the hard– copy original Transcript was filed with DOAH on August 14, 2020. 8 Statement 3 has been reworded for clarity purposes. prescribed 18mg of the ADHD drug9 that was the subject of the personal injury litigation. On March 30, 2013, at the age of nine, and shortly after her ADHD medication was uptitrated from 18mg to 27mg daily, A.F. attempted suicide by way of hanging with a scarf fastened to her bunk bed. That action detrimentally impeded oxygen flow to A.F.’s brain for a dangerously prolonged period of time, resulting in extensive neurological damage and substantial motor impairment; ultimately leaving A.F. in a permanent vegetative state. Ms. Lopez, on behalf of A.F., brought a product liability and medical malpractice action to recover all of A.F.’s damages related to her prescription of the ADHD drug. This action was brought against various pharmaceutical and medical malpractice defendants. As a result of the alleged medical malpractice and pharmaceutical product liability claims, A.F. suffered a massive hypoxic brain injury. Since this incident and the resulting hypoxic brain injury, A.F. has been in a permanent vegetative state requiring 24/7 skilled nursing care. In 2020, Ms. Lopez, on behalf of A.F., settled her tort action for a limited confidential amount, due to significant liability challenges with her claims; even though she believed that A.F.’s injuries were tens of millions of dollars in excess of the recovery. AHCA was properly notified of A.F.’s lawsuit against the defendants and indicated it had paid benefits related to the injuries from the incident in the amount of $261,334.61. AHCA has asserted a lien for the full amount it paid, $261,334.61, against A.F.’s settlement proceeds. AHCA has maintained that it is entitled to application of section 409.910’s formula to determine the lien amount. Applying the statutory 9 The name of the drug is not being used based on the terms in the confidential settlement. reduction formula to this particular settlement would result in no reduction of the lien given the amount of the settlement. AHCA paid $261,334.61 on behalf of A.F., related to her claim against the liable third parties. The parties stipulated that AHCA is limited by section 409.910(17)(b) to the past medical expense portion of the recovery and that a preponderance of the evidence standard should be used in rendering this Final Order. There were two settlements regarding A.F.’s care and treatment: one with the doctor(s) who allegedly committed medical malpractice; and the second involving the pharmaceutical maker of the ADHD drug prescribed to A.F. Although AHCA was notified when the medical malpractice case was settled, AHCA did not file a lien on any of the recovery from the medical malpractice settlement. Limited information about the medical malpractice settlement was discussed, but the medical malpractice settlement is not considered in this Final Order. Petitioner’s Exhibit 1 is a February 16, 2019, letter (lien letter) from Conduent Payment Integrity Solutions, a subcontractor to Health Management Systems which is an authorized agent of AHCA “to operate the Florida Medicaid Casualty Recover Program.” In addition to directing A.F.’s counsel to review section 409.910, to determine the “responsibilities to Florida Medicaid,” Mark Lyles, Conduent’s case manager and author of this letter also posted the amount of the lien asserted by AHCA: $261,334.61. A.F. lives with her mother, sister, grandmother, and Ms. Lopez’s significant other. Everyone in the household can and does provide care and assistance to A.F. when necessary. Ms. Lopez rarely leaves A.F. in someone else’s care. A.F. is unable to speak and requires total care. Ms. Lopez described the injuries sustained by A.F. Ms. Lopez also detailed the care she has provided and is continuing to provide to A.F. since the event. A.F.’s activities of daily living (ADLs) must be met with assistance in every aspect of her being. When A.F. wakes up each morning: she is given all her medications; her diaper is changed; she is fed via a feeding tube; she is given lung treatments each morning; her trachea tube is cleaned and changed at times; and she is turned or moved every two hours to prevent sores forming on her skin. A.F. is on a ventilator at night and every four hours she is catheterized because she stopped urinating. In October 2019, A.F. started having seizures. Ms. Lopez testified that A.F.’s care is mentally and emotionally draining, and very tiring. She further added A.F.’s care is very repetitive and the “best way to describe it [each day] is the movie GROUNDHOG DAY,” (Columbia Pictures 1993); the same thing, every day. A.F. is confined to her hospital bed, a wheelchair, or a chair to which she can be secured. Although Ms. Lopez testified that A.F. is “entitled” to skilled nursing care 24/7, Ms. Lopez has learned how to care for A.F. because “they can’t staff me” with a skilled nurse (presumably referring to a Medicaid standard for care). Mr. Rafferty is a Florida board-certified civil trial lawyer with 26 years’ experience in personal injury law. He concentrates and specializes in pharmaceutical cases, including defective drug cases involving catastrophic injury, throughout Florida and the United States. As part of his ongoing practice, he routinely evaluates the damages suffered by injured clients, and relies on his own experience and his review of other jury verdicts to gauge any likely recovery for non-economic damages. Mr. Rafferty continues to handle cases involving similar injuries suffered by A.F. Mr. Rafferty was tendered and without objection was accepted as an expert regarding valuation of personal injury damages. Mr. Rafferty, along with Nathan Carter as co-counsel, represented A.F. and her mother in the civil litigation. He testified to the difficulties associated with pharmaceutical litigation in general, and then focused on the problematic causation and liability issues related to A.F. and her injuries. Mr. Rafferty met with the family; observed A.F. can no longer perform her ADLs; reviewed all of A.F.’s medical information; evaluated how the medication was uptitrated causing A.F.’s injury; analyzed the causation, liability issues, and fault; developed economic damages figures; and valued non-economic damages. Mr. Rafferty credibly testified regarding the evaluations he made regarding A.F.’s injuries and the pharmaceutical product prescribed. The non-economic damages included A.F.’s pain and suffering, both future and past, her loss of capacity to enjoy life, and her mental anguish. Mr. Rafferty explained the importance of assessing all of the elements of damages A.F. suffered as a result of her catastrophic injuries. Mr. Rafferty’s unrefuted testimony placed the total full value of A.F.’s damages conservatively in excess of $100,000,000.00.10 Mr. Rafferty included A.F.’s pain and suffering, mental anguish, and loss of quality of life, plus the economic damages. Further, using the $100,000,000.00 valuation amount and the confidential settlement proceeds, Mr. Rafferty opined that A.F. recovered only 4.75% of the full measure of all her damages. Mr. Rafferty reviewed Petitioner’s Exhibit 1, and as an experienced trial attorney understood the letter to contain the “lien for past medical” expenses of $261,334.61. Mr. Rafferty added that he routinely uses this type of approach with lien holders in his practice. Mr. Rafferty’s testimony was uncontradicted and persuasive on this point. Mr. Carter is an AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, with an active civil trial practice. He has always handled plaintiff’s medical malpractice, product liability, and car accident-type litigation. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients, including the liability, causation, and possible damages. Mr. Carter 10 For ease of discussion, the conservative total amount, $100,000,000.00 will be used. All the witnesses agreed that the economic value of the case was above $70 million and the non- economic damages were at least $30 million. confirmed that it is essential to have every element (liability, causation, and damages) evaluated because these types of cases are expensive in both time and money. Mr. Carter specifically looks at the injuries sustained, who the plaintiff is, how the injuries have affected their life, and the permanency of those injuries. He continues to handles cases with catastrophic injuries. Mr. Carter testified that the injuries suffered by A.F. were “worse than almost, almost any case … handled.” He added that A.F.’s damages were “catastrophic” and “one of the worst damage cases [he had] ever seen.” Mr. Carter was tendered and without objection was accepted as an expert regarding valuation of medical malpractice damages.11 Mr. Carter testified that “as a matter of course, [we] put every lienholder on notice as soon as we learn about them” and “then throughout the case.” Mr. Carter was in regular contact with Mr. Lyles. The medical malpractice case was settled before the pharmaceutical action. After the medical malpractice case was settled, Mr. Carter understood that AHCA would not negotiate on the medical malpractice settlement. When the “entire case” was completed, Mr. Carter notified Mr. Lyles, and then received the lien letter. As an experienced trial attorney he understood the letter to contain the “final lien figure:” $261,334.61. Mr. Carter also met with the family, reviewed all of A.F.’s medical information and records, and evaluated the medication that was uptitrated. Mr. Carter utilized a similar detailed analysis of A.F.’s injuries and her current condition. Mr. Carter also described the severity of A.F.’s injuries that entered into his decision to pursue the civil case and to testify in this proceeding. Mr. Carter analyzed the causation, liability issues, and fault. He evaluated the economic damages figures and valued non-economic damages 11 Mr. Carter was offered as an expert in medical malpractice damages. His insight in the combined totality of the medical malpractice and pharmaceutical product litigation warranted consideration, but AHCA’s failure to include the medical malpractice settlement precluded any consideration of that settlement. Without a more decisive understanding of what “pretty significant” means, ACHA’s attempt to question Mr. Carter’s knowledge of A.F.’s past medical expenses is unpersuasive. such as pain and suffering, both future and past, loss of capacity to enjoy life, scarring and disfigurement, and mental anguish. Mr. Carter opined A.F.’s damages could have easily been in excess of $100,000,000.00. Mr. Carter further opined that A.F.’s non-economic damages were “very significant” and “could have driven the total value of damages in excess of the $100,000,000.00.” However, Mr. Carter testified he used $100,000,000.00 in order to resolve the Medicaid lien. Mr. Carter used the same mathematical approach he has used in other lien issues: he divided the confidential settlement amount by the conservative full value of damages ($100,000,000.00) and arrived at a recovery of 4.75% of the full measure of her damages. Mr. Carter’s testimony was uncontradicted and persuasive on this point. Mr. McKenna is a board-certified, AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, who maintains an active civil trial practice. He has always practiced plaintiff’s work, and has tried between 40 and 50 cases to verdict. In the last 15 years, Mr. McKenna testified that “at least half … focused on … catastrophic cases either from the medical malpractice arena or from general liability trucking arena.” Mr. McKenna has reviewed thousands of personal injury cases relative to damages, and provided a detailed explanation of how he evaluates damages of catastrophic injury cases. He further provided that half of his cases were wrongful death cases and the other half were physical or brain injury cases. Mr. McKenna also provided the various resources he uses to keep abreast of personal injury verdicts and settlements. Mr. McKenna was tendered as “an independent expert attorney as to valuation of damages.” Mr. McKenna was not involved in the underlying civil litigation, but became A.F.’s guardian ad litem, appointed by the trial judge, to offer his “opinions regarding the reasonableness of the potential medical malpractice settlement, and ... the pharmaceutical settlement” which is the subject of this Final Order. Respondent did not object to Mr. McKenna’s tender and he was accepted as an expert in the valuation of damages. Mr. McKenna testified that he reviewed the facts and circumstances of both the medical malpractice and the pharmaceutical sides and the chronologies of A.F.’s medical records. He acquired an “intimate understanding” of A.F’s on going care and treatment in light of the injuries she sustained. Mr. McKenna agreed with Messrs. Rafferty and Carter that the non-economic damages in this case were very significant, and he agreed with their conservative $100,000,000.00 valuation of her total damages. Further, Mr. McKenna testified that the normal course for resolving liens in Florida was to look at the total value of damages in relation to the recovery to get a ratio by which to reduce the lien amount. Based on his past experiences in resolving Medicaid liens, other courts have resolved such liens using the formula from the Arkansas Department of Health & Human Services. v. Ahlborn, 547 U.S. 268 (2006), with the only other alternative formula found in section 409.910. The testimony of Petitioner’s three experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the confidential settlement does not fully compensate A.F. for the full value of her damages. As testified to by the experts, A.F.’s recovery represents only 4.75% of the total value of her claim. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner’s evidence was unrebutted. AHCA did, however, contest the methodology used to calculate the allocation of past medical expenses, but was unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $261,334.61. It is logical and rational to conclude that this figure is the amount expended for A.F.’s past medical expenses. Applying the 4.75% pro rata ratio to $261,334.61 equals $12,413.39, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioner proved by a preponderance of the evidence as set forth in section 409.910(11)(f) that AHCA should be reimbursed at the lesser amount: $12,413.39.
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.
Findings Of Fact Petitioner was employed at Respondent as a bartender from May, 1987 until October 29, 1987, when she was terminated. On October 29, 1987, she was terminated by Scott McGregor, owner of Respondent, due solely to the fact that she was pregnant at the time. Petitioner was nine and one-half weeks pregnant when she was terminated. She had told her employer when she became pregnant, and he had told her she could keep her job as long as she wanted, and even into her ninth month of pregnancy. On the day Petitioner was fired, McGregor referred to her pregnancy and indicated her condition was not consistent with the name of his business, "Heavenly Bodies". Petitioner's gross hourly wage was $4.50, and she regularly worked six days a week, seven and one-half hours a day, for a total of 45 hours a week. She attempted to find other work as a bartender after she was terminated, but could not find employment because of her pregnancy. She remains unemployed to date. However, her current unemployed status appears to result from her decision to stay home with her baby. Due to her termination based solely on her pregnancy, Petitioner was discriminated against by Respondent based on sex. Respondent has suffered damages in the amount of $4,455.00 due to lost wages. This amount is computed from her hourly wage for a period of 22 weeks, which covers the period of time from her termination at nine and one-half weeks to the end of her eighth month of pregnancy. No award is made for the period after her baby was born since she has voluntarily remained home with her baby, and has not sought employment during this time.
Recommendation Based upon the foregoing, it is recommended that the City of Clearwater, Community Relations Board, enter a Final Order finding that Respondent has unlawfully discriminated against Petitioner based upon sex, and awarding Petitioner $4,455.00 in actual damages for back wages as a result of such discrimination. DONE AND ENTERED this 6th day of September, 1988 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of September, 1988. COPIES FURNISHED: Lori Baxter 3054-G Beecher Drive, East Palm Harbor, Florida 34683 Scott McGregor, Owner Heavenly Bodies II 3323 U.S. 19 North Clearwater, Florida 34619 Ronald M. McElrath Office of Community Relations Post Office Box 4748 Clearwater, Florida 34618 Miles Lance, Esquire Post Office Box 4748 Clearwater, Florida 34618
The Issue The issue in this case is the amount of Petitioner’s personal injury settlement required to be paid to the Agency for Health Care Administration (AHCA) to satisfy its Medicaid reimbursement claim under section 409.910, Florida Statutes.1/
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Background On April 9, 2009, Petitioner, Glenn Holland, came into contact with an energized overhead electric power line owned by the local utility company. At the time of the incident, Mr. Holland was working as a professional tree trimmer. As a result of his contact with the wire, he was shocked, lost his balance and grip and fell approximately 30 feet to the ground, and sustained catastrophic bodily injuries which rendered him a wheelchair-bound paraplegic. Petitioner’s emergency and other medical expenses were paid by Medicaid. The parties stipulated that Medicaid has paid a total of $219,908 to treat Petitioner for his injuries. Petitioner commenced a civil action against the utility company, alleging negligence in the maintenance of the power line and adjacent pole and structures. The utility company defended, claiming comparative negligence on the part of Mr. Holland. Ultimately, Petitioner settled the lawsuit for $500,000. The costs incurred by Petitioner in the underlying action were stipulated to be $65,183.49. Thereafter, AHCA, pursuant to the formula set forth at section 409.910(11)(f), Florida Statutes, asserted an entitlement to be paid $154,908.25 from the proceeds of the $500,000 settlement. Petitioner objected to the Agency’s demand for $154,908.25 and timely commenced this action. Evidence Relating to Damages On February 24, 2014, the parties filed with DOAH a document entitled “Stipulation #1.” Through the document, the parties stipulated to the following: The Petitioner, had the underlying matter gone to trial, would have presented and sought to prove-up the damage figures that appear on page 10 of 10 of Dr. J. Rody Borg’s report as Mr. Glenn Holland, III's economic damages. These figures appear on page 3 of the Petitioner’s Petition in the instant case at the Division of Administrative Hearings. The figures in Dr. Borg's Report were calculated by Rody Borg, Ph.D., in consultation with the life care report of Dr. Craig Lichtblau, MD. The Respondent agrees to not object to testimony from Petitioner's expert witnesses (i.e. Chris Shakib) at final hearing regarding the economic damages figures contained in Dr. Borg's report, including, by way of example, that Dr. Borg opined that the amount of lost past earnings was $297,741; future earnings lost were $1,139,070, that lost benefits were $113,907 and the low present value amount of future life care expenses total $4,656,614, for a total calculated economic loss (assuming low estimated figures) of $6,207,333. Petitioner stipulates that he will not seek to admit into evidence Dr. Borg’s report nor the Dr. Lichblau report. Page 3 of the Petition referenced in the first stipulation above sets forth estimated (past) and projected (future) economic damages suffered by Petitioner, as follows: At hearing on this matter, plaintiff will submit proof of: the amount of Medicaid’s lien $219,108.80—by reference to Medicaid’s lien demand amount. Mr. Holland’s total injuries, medical and otherwise, by reference to Craig H. Lichtblau, M.D.’s life care plan pertaining to medical damages and a summary of medical bills. The present dollar value of Mr. Holland’s injuries by reference to Dr. Borg’s expert report. Total future medical damages, those not paid by AHCA exceed $4.65 million on a present value basis. (See e.g. table below from Dr. Borg’s Economic Damages Report.) LIFE CARE PLAN TOTALS LOW MID HIGH Actual Future Expected $16,708,080.52 $19,121,210.31 $21,534,340.10 Present Value $4,656,614.47 $5,388,683.20 $6,120,751.93 ECONOMIC DAMAGES SUMMARY Glenn Holland III OVERALL LOSS TOTALS LOW MID HIGH Past Earnings $297,741.27 $297,741.27 $297,741.27 Future Earnings $1,139,070.35 $1,518,760.47 $1,898,450.59 Future Benefits $113,907.04 $227,814.07 $379,690.12 Future Life Care $4,656,614.47 $5,388,683.20 $6,120,751.93 OVERALL TOTALS $6,207,333.14 $7,432,999.02 $8,696,633.91 Dr. Craig Lichtblau is a physiatrist (a physician specializing in physical medicine) retained by Mr. Holland in the underlying action to evaluate his condition and to render an opinion regarding the future care and treatment needs of Mr. Holland as a result of injuries. Dr. Lichtblau prepared a report of his findings and projections, referred to as the Life Care Plan. Rody Borg, Ph.D., is an economist and professor at Jacksonville University. He was retained by Petitioner to evaluate the Life Care Plan and to calculate what it would cost to provide the services outlined in the plan. Dr. Borg prepared an “Economic Damages Report” that reduced to present value the cost of future medical expenses and other damages sustained by Mr. Holland, as outlined by Dr. Lichtblau. Christopher Shakib, Esquire, was called as Petitioner’s only witness. Mr. Shakib has practiced law for more than 20 years, and has experience in personal injury, civil trial, and catastrophic injury cases. Prior to testifying, Mr. Shakib reviewed the pleadings in the underlying tort action, discovery, deposition testimony, and the expert reports prepared by Dr. Lichtblau and Dr. Borg. Mr. Shakib first discussed the economic damages that Petitioner has, and will, continue to suffer as a result of the accident. Those categories of economic losses include past earnings, future earnings, future benefits, and future life care (medical) expenses. Consistent with the figures appearing on page 3 of the Petition, Mr. Shakib testified that in his opinion, the amount of economic damages sustained by Mr. Holland ranged in present value, from a low of approximately $6.2 million to a high of approximately $8.7 million. Subsumed within these projections were projected future medical expenses ranging from a low of approximately $4.6 million to a high of approximately $6.1 million. Mr. Shakib further opined that in addition to economic losses, Petitioner has, and will, suffer non-economic losses. These include pain and suffering, loss of enjoyment of life, inconvenience, and mental anguish. In his opinion, the non- economic damages sustained by Mr. Holland would range from $8.7 million to $20 million. Mr. Shakib explained the approach he followed to come up with his projection of non-economic losses, as follows: A. Right. There are different ways to do it. Some people will amortize it and come up with a daily rate for pain and suffering. And, you know, in my opinion sometimes that ends up making the numbers too high, higher than I think are reasonable. What I do in my practice, and I’ve done this for many years, is when trying to evaluate what a case is worth, I will take all of the economic losses and I’ll add one extra component for the medicals in the past that were billed; I won’t just use the amount that was paid but I will use the actual amount that was billed to come up with the total economics, as a rule of thumb that I use. And I think it was closer to a million and the amount that was actually billed versus the $219,000 or so that was actually paid. And so I’ll add the difference between the billed amount and the paid amount back in, and then I will double the economics to get my low range value of a case like this; and I’ll triple the economics, and that will give me the high range for what I think the case is worth. Although the Medicaid program paid $219,108.80 for medical services provided to Petitioner, a total of $1,140,386.80 was billed to Medicaid for Petitioner’s medical care. The remaining $921,278.00 represented the “write-off” taken by medical services providers. Mr. Shakib has never met Mr. Holland, or personally evaluated his physical condition. Mr. Shakib testified that in catastrophic injury cases, he typically interviews the treating physicians, yet there is no evidence in this record that he did so in preparing to render testimony in this case. Nor did Mr. Shakib offer testimony regarding the actual degrees of pain and suffering, loss of enjoyment of life, inconvenience, and mental anguish that has been suffered, or will be suffered in the future, by Mr. Holland. Mr. Shakib conducted no jury verdict research and did not compare this case to any case tried to verdict. Mr. Shakib’s testimony regarding Petitioner’s non- economic damages was lacking in detail, and was unpersuasive. The imprecision of Mr. Shakib’s projections was underscored by his projected range of non-economic damages, from $8.7 million to $20 million, a swing of more than $11 million. According to Mr. Shakib, the total economic and non- economic damages sustained by Mr. Holland were in the range of $15 million to $29.5 million.3/ Mr. Shakib opined that “regardless of any issues of liability; if 100 percent liability could be proved with no comparative fault and there was someone who could pay these damages, this case is worth between 15 million and a little less than 30 million, and I think that because of his age at the time that he became a quadriplegic, that his actual damages are more on the higher side of that than the lower side of that.” Mr. Shakib’s testimony regarding the total damages suffered by Petitioner is rejected, since the largest component of the total damages estimate are the non-economic damages, which are non-credible. Mr. Shakib thereafter calculated the proportion that the amount of past medical expenses ($219,108.80) bore to the full value of the case. He calculated the proportion as a range of between 1.46%4/ and 0.742%.5/ In other words, according to Mr. Shakib, the Agency’s recovery should be limited to between 1.46% and 0.742% of the settlement amount. Mr. Shakib then applied these ratios to the settlement and the amount sought by the Agency. In this regard, he testified, “[M]y opinion is that the lien recovery by the agency should be between $3700 and $7300, and my opinion would be it should really be more towards the lower end of that because of the value of the case given the fact that this is a 22-year-old who becomes a quadriplegic.” As noted, Mr. Shakib did not include the projected future medical expenses in his calculation of the proportion that medical expenses bore to the full value of the case. Had he done so, the following chart illustrates the impact the inclusion of future medical expenses would have on the calculation of the Medicaid lien recovery amount: CALCULATION OF LIEN RECOVERY AMOUNT USING PETITIONER’S METHODOLOGY WITH INCLUSION OF FUTURE MEDICAL EXPENSES LOW HIGH PAST MEDICALS PAID BY AHCA $219,108.80 $219,108.80 FUTURE MEDICALS $4,656,614.00 $6,120,752.00 TOTAL MEDICALS $4,875,722.80 $6,339,860.80 TOTAL DAMAGES $15,000,000.00 $29,511,063.33 PROPORTION OF MEDICAL EXPENSES TO TOTAL DAMAGES 32.505% 21.483% SETTLEMENT AMOUNT X $500,000 X $500,000 LIEN RECOVERY AMOUNT $162,524.09 $107,414.98
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Micaiah McCray, from a medical-malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on November 11, 2008. In the months following birth, Petitioner underwent several surgeries and procedures including a percutaneous endoscopic gastrostomy tube placement on January 26, 2009, a repair of incomplete atrioventricular canal defect on April 15, 2009, and Nissen Fundoplication and revision of gastrostomy tube on July 8, 2009. On July 23, 2009, Petitioner was admitted to St. Mary’s Medical Center with suspected bronchitis and exacerbation of reactive airway distress. During this hospitalization, on or about August 15, 2009, Petitioner suffered a stroke involving the right hand and part of the right leg. A CT scan of Petitioner’s brain revealed a left middle cerebral artery distribution infarction suggesting a large ischemic infarct. Petitioner’s condition stabilized and Petitioner was released from the hospital on August 27, 2009, with the following discharge summary: Exacerbation of reactive airway disease Bronchitis Mitral stenosis Mild pulmonary hypertension Hypersecretory upper airway Pansinusitis Clostridium difficile colitis Hypoxemia with oxygen dependency Gastroesophageal reflux disease, status post fundoplication Left cerebral infarction of unknown etiology Endocardial cushion defect status post atrioventricular canal repair Bilateral optic nerve colobomas Rule out CHARGE association/Goletz syndrome On September 21, 2009, Petitioner was admitted to Palms West Hospital with a diagnosis of respiratory distress. Petitioner’s condition improved and he was discharged home on September 25, 2009. Subsequent to that hospitalization, an MRI performed on October 19, 2009, revealed new acute strokes. In the years following Petitioner’s strokes, he underwent numerous surgeries, procedures, and therapies for a multitude of medical conditions. Petitioner’s past medical expenses related to his injuries were paid by both private health insurance and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $217,545.58. United Healthcare and Aetna provided $37,090.17 and $3,231.72 in benefits, respectively. Total healthcare expense incurred for Petitioner’s injuries was $257,867.47. Petitioner is developmentally delayed and cannot walk or crawl. Petitioner requires a wheelchair or stroller for mobility and requires positioning and trunk support to maintain a seated position. His ability to independently explore his environment is severely restricted. Petitioner is completely dependent on others for activities of daily living. He cannot bathe, dress, or eat on his own. He requires a feeding tube, and receives professional in-home services to monitor his respiration and heartrate, manage his GJ tube, administer medication, and monitor bowel and bladder function. Petitioner does not vocalize words and has limited communication. He has no function of his right hand and has tightness in the right leg below the knee. Petitioner’s condition is permanent. Petitioner’s parents brought a medical malpractice action on his behalf in the Circuit Court of the 15th Judicial Circuit Court in and for Palm Beach County against Tenet St. Mary’s Inc., d/b/a St. Mary’s Medical Center; Palms West Hospital Limited Partnership, d/b/a Palms West Hospital; David Evan Mound Drucker, M.D.; South Florida Pediatric Surgeons, P.A.; Physicians Professional Liability Risk Retention Group; Alberto Antonio Marante, M.D.; Florida Pediatric Critical Care, P.A.; Diego Maurcio Diaz, M.D.; Gerard Minor, P.A.-C; Children’s Center Gastroenterology & Nutrition, P.A.; Chartis Claims, Inc.; Lexington Insurance Company; Eunice Cordoba, M.D; and Edwin Liu, M.D., P.A., d/b/a Pediatric Neurologist of Palm Beach (Defendants). Petitioner’s action alleged, among other theories, that the Defendants failed to recognize in Petitioner a sickle cell trait and properly treat Petitioner’s dehydration, a factor contributing to Petitioner’s strokes. Petitioner’s parents retained Scott Marlowe Newmark, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in the medical malpractice action against Defendants. In preparation for litigation, Stephanie P. Chalfin, M.S., prepared a life care plan for Petitioner. The plan sets out the need for future medical care, equipment, hospitalizations, surgeries, medications, and attendant care, through Petitioner’s expected life span. In this case, Petitioner’s life expectancy is an additional 66.9 years. During the pendency of the medical malpractice action, J. Rody Borg, Ph.D., an economist, prepared a report assigning a present value between $24,373,828 and $29,065,995 for the future costs of Petitioner’s life care plan, lost benefits, and lost earning capacity. Mr. Newmark’s expert valuation of the total damages suffered by Petitioner is at least $30 million. Mr. Newmark considered the life care plan and Dr. Borg’s report in arriving at the value of total economic damages. Mr. Newmark then examined jury verdicts in similar cases involving catastrophic injury to value non-economic damages. Of the nine jury verdicts examined, Mr. Newmark highlighted three as particularly relevant because they involved young children with brain injuries similar to Petitioner’s injury and who required life-long care. The nine cases had an average award of $12 million for non-economic damages (past and future pain and suffering). Mr. Newmark arrived at his valuation of Petitioner’s damages at $30 million by considering the low-end of Dr. Borg’s economic damages estimate, $24 million, along with the average jury award for non-economic damages in similar cases. Mr. Newmark’s testimony was credible, reliable and persuasive. Mr. Newmark’s valuation of total damages was supported by the testimony of two additional personal injury attorneys, Mark Finklestein and R. Vinson Barrett, both of whom have practiced personal injury law for more than 30 years and were accepted as experts in valuation of damages (in personal injury cases). Mr. Finkelstein served as Petitioner’s guardian ad litem in the underlying medical malpractice action and agreed with the valuation of total damages at $30 million. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations, the life care plan, Dr. Borg’s report, and a day-in-the-life video of Petitioner. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Newmark. Mr. Barrett likewise agreed with the $30 million valuation of Petitioner’s total damages. Respondent was notified of Petitioner’s medical malpractice action during its pendency. Respondent asserted a Medicaid lien in the amount of $217,545.58 against the proceeds of any award or settlement arising out of that action. In 2012 and again in 2015, Petitioner received a series of settlements from the Defendants. The settlements totaled $2,450,000. The settlements do not fully compensate Petitioner for the total value of his damages. The settlements are undifferentiated, meaning they are not apportioned to specific types of damages, such as economic or non-economic, past or future. In all of the releases signed by the parties thereto, the parties agreed that, “if an allocation of this settlement is necessary in the future, this allocation should be made by applying the same ratio this settlement bears to the total monetary value of all [Petitioner’s] damages to the specific damage claim.” Respondent was not a party to the 2012 and 2015 settlements and did not execute any of the applicable releases. 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, $613,131) from the $2,450,000 recovery, which yields a sum of $1,836,869 then dividing that amount by two, which yields $918,434.50. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of its lien, whichever is less. In the case at hand, Respondent may recover under the statute the full amount of its lien. Petitioner’s position is that reimbursement for past medical expenses should be limited to the same ratio as Petitioner’s recovery amount to the total value of damages. Petitioner urges Respondent should be reimbursed $21,067.77 in satisfaction of its Medicaid lien. The settlement amount of $2,450,000 is 8.17 percent of the total value ($30 million) of Petitioner’s damages. By the same token, 8.17 percent of $257,867.47 (Petitioner’s past medical expenses paid by both Medicaid and private insurance) is $21,067.77. Both Mr. Finklestein and Mr. Barrett testified that $21,067.77 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. 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 The amount to be reimbursed to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), for medical expenses paid on behalf of Petitioner, Mitchell Fowler, from settlement proceeds received by Petitioner from third parties.
Findings Of Fact On September 4, 2016, Mr. Fowler suffered a catastrophic and permanent spinal cord injury when he fell at a boat ramp. Mr. Fowler is now a paraplegic unable to walk, stand, or ambulate without assistance. Mr. Fowler’s medical care related to his injury was paid by Medicaid. Medicaid, through AHCA, provided $74,693.24 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Humana, provided $7,941.28 in benefits. The sum of these Medicaid benefits, $82,634.52, constituted Mr. Fowler’s entire claim for past medical expenses. Mr. Fowler pursued a personal injury action against the owner/operator of the boat ramp where the accident occurred (“Defendants”) to recover all his damages. The personal injury action settled through a series of confidential settlements in a lump-sum unallocated amount of $800,000. As a condition of Mr. Fowler’s eligibility for Medicaid, Mr. Fowler assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See § 409.910(6)(b), Fla. Stat. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $74,693.24 Medicaid lien associated with Mr. Fowler’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. By letter, AHCA was notified of the settlements. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlements. The Medicaid program through AHCA spent $74,693.24 on behalf of Mr. Fowler, all of which represents expenditures paid for past medical expenses. No portion of the $74,693.24 paid by AHCA through the Medicaid program on behalf of Mr. Fowler represented expenditures for future medical expenses. The $74,693.24 in Medicaid funds paid towards the care of Mr. Fowler by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Humana spent $7,941.28 on Mr. Fowler’s medical expenses. Thus, the total amount of past medical expenses incurred by Mr. Fowler is $82,634.52. The taxable costs incurred in securing the settlements totaled $45,995.89. Application of the formula at section 409.910(11)(f) to the $800,000 settlement requires payment to AHCA of the full $74,693.24 Medicaid lien. Petitioner deposited the 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). There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that the total of Mr. Fowler’s economic damages, including future medical expenses, were $5,652,761.00 which, added to the $82,634.52 in past medical expenses, results in a sum of $5,735,395.52 in economic damages. Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioner established, by clear and convincing evidence that was unrebutted by AHCA, that non-economic damages alone could reasonably be up to $26,000,000. When added to the economic damages, a value of Mr. Fowler’s total damages well in excess of $30,000,000 would not be unreasonable. However, in order to establish a very conservative figure against which to measure Mr. Fowler’s damages, both experts agreed that $15,000,000 would be a reasonable measure of Mr. Fowler’s damages for purposes of this proceeding. Based on the forgoing, it is found that $15,000,000, as a full measure of Mr. Fowler’s damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $800,000 settlement is 5.33 percent of the $15,000,000 conservative value of the claim.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), in satisfaction of Respondent’s Medicaid lien of $847,526.16 from a $500,000.00 settlement received by Petitioner (“Petitioner” or “Ms. Doe”) from a third party, pursuant to section 409.910, Florida Statutes (2019).
Findings Of Fact On April 24, 2008, Petitioner, who was then 18 years old, was viciously assaulted outside a library. As a result of the assault, Ms. Doe suffered catastrophic and permanent brain damage. She is now unable to ambulate without assistance, speak, see, or care for herself in any manner. She is dependent on others for every aspect of daily life. Ms. Doe’s medical care related to the injury was paid by Medicaid. Medicaid through AHCA provided $847,526.16 in benefits. Ms. Doe’s mother was appointed as Ms. Doe’s plenary guardian. Ms. Doe’s guardian pursued a personal injury action against the parties allegedly liable for Ms. Doe’s injuries (“Defendants”) to recover all Ms. Doe’s damages. As a condition of Ms. Doe’s eligibility for Medicaid, Ms. Doe assigned to AHCA her right to recover from liable third parties medical expenses that were paid by Medicaid. Mariano Garcia (“Garcia”), a civil trial attorney of 26 years, last represented Ms. Doe in her personal injury action. Ms. Doe’s personal injury action was settled through a series of confidential settlements in a lump-sum unallocated amount. Due to Ms. Doe’s incapacity, the Guardianship Court approved the settlement on January 7, 2020. During the pendency of Ms. Doe’s personal injury action, AHCA was notified of the action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Ms. Doe’s action against the Defendants. AHCA asserted an $847,526.16 Medicaid lien against Ms. Doe’s cause of action and settlement of that action. By letter, AHCA was notified of Ms. Doe’s settlement of the personal injury action. AHCA has not filed a motion to set-aside, void, or otherwise dispute Ms. Doe’s settlement. AHCA, through its Medicaid program, spent $847,526.16 in Medicaid benefits on behalf of Ms. Doe, all of which represent expenditures paid for Ms. Doe’s past medical expenses. Ms. Doe’s taxable costs in pursing the personal injury action totaled $153,145.25. The formula at section 409.910(11)(f), as applied to Ms. Doe’s $500,000.00 settlement, requires payment of the Medicaid lien in the full amount of $110,927.37. AHCA is demanding payment of $110,927.37 from the settlement. Petitioner has deposited the $110,927.37, section 409.910(11)(f) formula amount, in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Hearing Petitioner presented expert testimony from Garcia, Ms. Doe's Florida trial attorney. Garcia is a Florida bar member who practices personal injury law specializing in medical malpractice, traffic accidents, premises cases, and aviation cases. He is a shareholder with the West Palm Beach and Tallahassee, Florida, based law firm of Searcy, Denny, Scarola, Barnhart & Shipley, PA. Garcia has handled numerous catastrophic personal injury plaintiff cases. He is also a board-certified civil trial attorney and a member of the American Justice Association, Florida Justice Association, and Palm Beach County Justice Association. Garcia testified that he took over Ms. Doe’s case from her original attorney who died in a plane crash. When he took over the case, it had been through several appellate proceedings and a number of the counts in the Complaint had been dismissed. Garcia detailed how Ms. Doe had been accepted and was planning to attend the University of Florida. The incident occurred when she went to the library to drop off books in the night drop box. Ms. Doe was viciously attacked while in the book drop box area and taken to the back of the library and violently assaulted. After being raped and strangled, Ms. Doe was left for dead. Fortunately, Ms. Doe was on the phone with a friend when she got out of her car to drop off the books and the friend heard her scream and called the police. The police arrived at the book drop scene and followed a blood trail to Ms. Doe’s naked body and she was flown by helicopter to the hospital. Garcia explained at hearing that the strangulation from the attack stopped the oxygen to Ms. Doe’s brain and caused anoxic brain damage. As a result of her catastrophic brain damage, she is blind, incapable of communicating, confined to a wheelchair, and requires 24-hour-a-day assistance. She can only make gestures and recognizes the voices of her family members. Garcia also explained that Ms. Doe’s family is remarkable and takes wonderful care of her. They immigrated to the United States from Vietnam. Garcia testified that the perpetrator that attacked Ms. Doe was arrested, his DNA was matched with another crime, and he is serving a life sentence in prison for both cases. Garcia’s practice regularly encompasses the assessment and evaluation of cases and arriving at the case value of damages for injured parties. He reviews clients’ cases daily to determine their value by accessing the economic and noneconomic damages. He is familiar with reviewing medical records, life care plans, economic reports, and deposing and interviewing fact and expert witnesses. As a routine part of his practice, Garcia also explained that he stays abreast of jury verdicts through jury verdict reports and roundtables cases by discussing them with other attorneys to determine damage amounts weekly on Thursdays. Garcia testified further that he routinely participates in the process of allocation of settlement amounts as part of his law practice and is familiar with the process in the context of Medicare liens, Medicare set-asides, and health insurance liens. Garcia credibly made clear the process he took to develop an opinion concerning the value for the damages suffered in Ms. Doe’s case. Garcia explained that to determine the damage amount, he reviewed and analyzed Ms. Doe’s medical records, police investigation reports, and met with both the family and also Ms. Doe on several occasions. He also reviewed Ms. Doe’s current condition including her catastrophic brain injury, blindness, inability to communicate, ability to only make unintelligible sounds, wheelchair confinement, requirement of 24-hour-a-day care, and long-life expectancy. Garcia detailed the care that has been provided to Ms. Doe and what she continues to need since the brutal attack. He testified that Ms. Doe requires total care. Her activities of daily living must be met with assistance in every aspect of her life. She cannot do the following activities without assistance: move, eat, take care of herself, and change diapers. Additionally, Ms. Doe requires a catheter and feeding tube. Ms. Doe needs 24-hour care, which is expensive. Garcia also evaluated Ms. Doe’s life expectancy. Garcia testified that he determined that Ms. Doe was likely to live to her full life expectancy, 70 or 80 years. Garcia also reviewed a number of cases to help determine the full damages amount. He testified he relied on Korzeniowski, a case of a birth injury resulting in anoxic brain injury, and the Edwards case. Both cases involve significant monetary damage amounts because of the care required for young people that will take place for the rest of their lives in addition to money for past and future damages suffered. Garcia explained that the defendants did not disagree with the amount of damages. The disputed issue in Ms. Doe’s case was liability. The theory of the case rested on the negligent lighting design of the book drop area where the attack occurred. After years of appeals, the contractor and construction claims did not survive, only the claim against the architect survived. Garcia opined that based on his professional education, training, and experience, the full value of Ms. Doe’s damages is $30 million. Garcia testified that the only thing that would reduce the 30-million-dollar value is if evidence had come to light that Ms. Doe would have a compromised life expectancy. However, there is no evidence that would occur, which demonstrated Ms. Doe will live to her full life expectancy. Garcia explained that he did not need a life care plan or economists to calculate the value, because in his experience, the claim for future medical expenses would have an exceedingly high value when there is no evidence of a compromised life expectancy. He also expounded on how Ms. Doe would have a claim for both economic damages and a claim for past and future suffering. He testified that he believed her past and future suffering damages would have a significantly high value, at least in the amount of the economic damages. Garcia testified that $30 million was a conservative valuation for Ms. Doe’s damages. He explained that he had roundtabled Ms. Doe’s damages with his law partners and other attorneys in his firm several times and they all agreed with the valuation of damages for $30 million. Garcia further explained during the hearing that ultimately Ms. Doe’s case was mediated and settled for $500,000.00. Garcia testified that the settlement amount was a “gross under recovery of the damages” and a “minuscule amount of the full value of the case.” Garcia’s unrefuted testimony that placed the value of all damages at $30 million concluded that Ms. Doe’s settlement only recovered 1.66 percent of the value of her damages. Garcia opined credibly that because Ms. Doe recovered only 1.66 percent of her damages, she recovered from the settlement only 1.66 percent of the $847,526.16 claim for past medical expenses or $14,068.93. He further explained that it would be reasonable and fair to allocate $14,068.93 of the settlement to past medical expenses. At hearing, R. Vinson Barrett (“Barrett”) also testified. He is a 40-year trial lawyer and partner with the law firm of Barrett Nonni & Homola, in Tallahassee, with an active civil practice. Barrett practices plaintiffs’ personal injury and wrongful death law. He has handled cases involving catastrophic brain injury to children and routinely litigates cases involving jury trials. Barrett is familiar with reviewing medical records, life care plans, and economist reports. He stays abreast of jury verdicts by reviewing jury verdict reports and discussing cases with other trial attorneys. He is also a member of the Florida Justice Association and Capital City Justice Association. As a routine part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. Barrett explained the process for making the assessments. He testified that he also has experience with settlement allocations and it has been a part of his law practice in the context of health insurance liens, Medicare set-asides, and workers’ compensation liens. Barrett testified that he has been accepted as an expert in the valuation of damages in federal court as well as in numerous Medicaid lien hearings at DOAH. Barrett explained that he is familiar with Ms. Doe’s injuries and circumstances of her injuries, as he has reviewed the exhibits filed in this proceeding, medical records, and the Joint Pre-hearing Stipulation. Barrett testified that Ms. Doe seemed to have had everything going for her and was preparing to attend college until the attack had a horrible impact on her life. The incident made her wheelchair bound, blind, unable to communicate, and dependent on others for every aspect of her daily life. Barrett testified that based on his professional training and experience, he believed that Ms. Doe’s damages had a value of at least $30 million. He explained that Ms. Doe’s economic damages would have a value between $20 and $30 million based on his experience reviewing life care plans and economist reports for people with similar brain injuries and the need for 24-hour-a-day care. Barrett explained further that his valuation was within range of damages of jury verdicts from Petitioner’s Exhibit 9. Barrett detailed three cases that substantiated Ms. Doe’s damage amount. First, Barrett testified that in the Mosely verdict, the brain damaged child needed 24-hour, seven days a week care and the future economic damages were $34,278,738.00. In Korzeniowski, the verdict was $30 million in future economic damages for the brain damaged child, and, in the Coleman verdict, there was an $11 to $28 million award in future economic damages. Barrett testified that “Ms. Doe’s case falls in the same range as those cases and also a lot of other cases that I’ve seen when children have had severe brain injury damage.” Barrett further testified that Ms. Doe’s economic damages alone would be upwards of $30 million without non-economic damages. Barrett explained that Ms. Doe’s non-economic damages would have a high value. He concluded that it would be “very conservative” to value Ms. Doe’s damages at $30 million. Barrett also testified that the settlement amount of $500,000.00 did not fully compensate Ms. Doe for all the damages she suffered. Barrett used his allocation experience and credibly testified that using the conservative value of all damages, $30 million, the $500,000.00 settlement represents a recovery of 1.66 percent of the value of the damages. Barrett further testified that because the settlement was only 1.66 percent of the value of the damages recovered, only 1.66 percent of the $847,526.16 claim for past medical expenses, $14,068.93, should be recovered. Barrett testified that his method of determination was reasonable to allocate $14,068.93 of the settlement to past medical expenses in this case. Barrett’s testimony was uncontradicted and persuasive on this point. Barrett also testified that the methodology to calculate the $14,068.93 was consistent with his testimony in other MTR cases at DOAH. The testimony of Petitioner’s two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement does not fully compensate Ms. Doe for the full value of damages. As testified to by the experts, Ms. Doe’s recovery represents only 1.66 percent of the total value of her claim. AHCA did not offer any witnesses, alternate opinions, or documentary evidence as to the value of damages. Hence, Petitioner’s evidence is unrebutted. AHCA did, however, contest the methodology used to calculate the allocation of past medical expenses, but was unpersuasive. The parties stipulated to the value of the services provided by AHCA as $110,927.37. Petitioner also demonstrated that the settlement allocation should be based on the ratio between the settlement amount of $500,000.00 and the conservative valuation of $30 million, meaning 1.66 percent of the settlement proceeds should be allocated to past medical expenses. Hence, $14,068.93 of the settlement represents AHCA’s reasonable and fair reimbursement for past medical expenses.
