The Issue The issue in this case is whether the provider, Orietta Medical Equipment, Inc., d/b/a Pharmco Pharmacy (Respondent or Provider) should repay an alleged Medicaid overpayment and, if so, in what amount. The Petitioner’s Final Agency Audit Report (FAAR) claims the Provider must repay $486,879.06.
Findings Of Fact The Petitioner is the state agency charged with the responsibility of administering the Medicaid Program in Florida. As such, the Petitioner monitors payments to Medicaid providers and seeks to recover reimbursements when an overpayment is claimed. At all times material to the allegations of this case, the Respondent was a licensed pharmacy and was designated a “provider” of Medicaid pharmacy services pursuant to its provider agreement with the Petitioner. As a provider of Medicaid pharmacy services, the Respondent was authorized to dispense drugs to Medicaid recipients and to bill the Medicaid Program for the expenses associated with such pharmacy services. The Petitioner may, after-the-fact, seek to verify the claims paid for Medicaid recipients. This “pay and chase” methodology presumes that the Provider will maintain appropriate documentation to support the paid claims. When the Agency audits a provider, records supporting the claims paid must be produced. In this case, the Petitioner elected to perform an “invoice audit” for the audit period June 2, 2003 through May 28, 2004. The Agency sought to review the Provider’s drug acquisition records for the same drugs that were dispensed to Medicaid recipients. The paid claims should compare to the drugs acquired and held in inventory for the subject period of time. After performing a Provisional Agency Audit Report (PAAR) detailing an alleged overpayment, the Provider was notified of the audit results and was provided a spreadsheet of the work papers that detailed the overpayment claim. The Provider was given an opportunity to provide additional documentation to support the Medicaid claims and to establish the inventory to support its claims. After an additional review of the Provider's information, the Agency issued its FAAR dated February 2, 2005, which claimed a Medicaid overpayment in the amount of $486,879.06. This amount has not been repaid to the Petitioner. Instead, the Provider disputed the amount of the overpayment and requested an administrative proceeding. That request was timely submitted. All of the audit results were provided to the Provider at the time of the issuance of the FAAR and were, in fact, attached to the request for hearing submitted by the Provider on or about February 7, 2005. Florida Medicaid providers are required by their agreements with the state to comply with the Florida Medicaid Prescribed Drug Services Coverage, Limitations, and Reimbursement Handbook (the handbook). The handbook is furnished to providers and is also available on-line. The handbook outlines requirements for record keeping, as well as other pertinent information to assist providers. In this case, the Provider was obligated to maintain records to support the Medicaid claims paid by the State. The Agency contracted with Heritage Information Systems, Inc., to conduct the audit in this case. Auditors went to the Provider’s business location in Hialeah, Florida, to analyze the Respondent’s business records. More specifically, the auditors sought the records from the Provider to show that it had acquired sufficient inventory of the specific drugs for which claims had been paid during the audit period. It stands to reason that the drug inventory on hand for the Provider had to exceed the drugs dispensed during the audit period (presumably some of the Provider’s patients were not Medicaid recipients). In fact, in this case, the Provider could not produce inventory records to support the claims paid for the audit period. As the records did not support the claims, the Agency deemed the claims to be overpayments. As such, the Agency maintains the Provider was, under the terms of the guidelines set forth in the handbook, required to reimburse the Petitioner for the overpayment. To compute the overpayment the Agency used a methodology that established the use rate of the product for the audit period. For example, for the drug Acetylcysteine the Medicaid recipient use rate for the audit period was 97.27 percent. Applying this percentage to the units purchased for the audit period would establish the expected claims. Therefore, since the Respondent purchased 16,890 units of this drug, the number of units billed would be expected to be 97.27 percent (the Medicaid use rate) of that amount. Instead, the claims for this drug for the audit period totaled 96,120-- a difference of 79,691 units. The difference (79,691) must then be multiplied by the drug's $.56 cost to show an apparent overcharge in the amount of $44,626.96 for this drug. The Agency applied the same methodology described above for 20 different drugs that were billed during the audit period. The total overcharge for these drugs was $486,879.06. The Respondent presented no evidence to refute the audit findings. No acquisition records were produced to reduce the calculated overpayment. That is to say, no purchase records could demonstrate that the Provider had on hand the number of units of the drugs billed to Medicaid. The Respondent has not disputed that the pharmacy was a provider, was subject to the handbook and pertinent guidelines, was required to maintain records to support the claims, and was paid for claims submitted to the Agency. Moreover, the Respondent does not dispute that the audit, the audit work papers, and the spreadsheets describing the methodology used to compute the overpayment were provided to the Provider more than 14 days prior to the hearing. It claims the trial book of exhibits was not provided 14 days prior to the hearing date. The hearing in this cause was originally scheduled for two days, to commence on August 15, 2006. The Agency provided a trial book of its exhibits to the Respondent on or about 4:00 p.m., August 1, 2006. The Respondent maintains that all evidence presented by the Agency in this cause must be excluded pursuant to Section 409.913(22), Florida Statutes (2005).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order sustaining the Medicaid overpayment in the amount of $486,879.06. DONE AND ENTERED this 1st day of December, 2006, in Tallahassee, Leon County, Florida. S J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 2006. COPIES FURNISHED: Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Christa Calamas, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308 David W. Nam, Esquire Agency for Health Care Administration Fort Knox Building, Mail Station 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 William M. Furlow, III, Esquire Akerman Senterfitt Highpoint Center, Suite 1200 106 East College Avenue Tallahassee, Florida 32301
The Issue What amount from Petitioner’s settlement proceeds should be paid to satisfy Respondents’ Medicaid liens under section 409.910, Florida Statutes (2020)?1
Findings Of Fact On January 28, 2018, Mr. Sciesinski[,] who was then 43 years old, was admitted to the Hospital with an epidural abscess and a[n] oral abscess. He was treated with antibiotics and had his oral abscess lysed and molars removed. In February 2018[,] he presented to the Hospital with shaking, chills, fevers[,] and malaise. His antibiotics were changed and he was discharged home. On May 30, 2018[,] Mr. Sciesinski again presented to the [H]ospital with increasing neck pain. He was diagnosed with a retropharyngeal abscess and underwent surgery. During surgery[,] Mr. Sciesinski suffered a spinal cord injury permanently rendering Mr. Sciesinski a quadriplegic. Mr. Sciesinski is now unable to stand, walk, ambulate, eat, toilet, or care for himself in any manner. Mr. Sciesinski’s medical care related to the injury was paid by Medicaid. AHCA through the Medicaid program provided $56,838.94 in Medicaid benefits related to the injury and Sunshine through the Medicaid program provided $78,957.18 in Medicaid benefits related to the injuries. The sum of these benefits, $135,796.12, constituted Mr. Sciesinski’s claim for past medical expenses. Mr. Sciesinski pursued a medical malpractice action against the parties allegedly liable for his injuries (Defendants) to recover all his damages associated with his injuries. Mr. Sciesinski’s medical malpractice action was settled through a series of confidential settlements in a lump-sum unallocated amount of $1,725,000. During the pendency of Mr. Sciesinski’s medical malpractice action, AHCA and Sunshine were notified of the action. AHCA asserted a $56,838.94 Medicaid lien and Sunshine asserted a $78,957.18 lien against Mr. Sciesinski’s cause of action and settlement of that action. AHCA and Sunshine did not commence a civil action to enforce [their] rights under [section] 409.910 or intervene or join in Mr. Sciesinski’s action against the Defendants. By letter, AHCA and Sunshine were notified of Mr. Sciesinski’s settlement. AHCA and Sunshine have not filed a motion to set-aside, void[,] or otherwise dispute Mr. Sciesinski’s settlement. The Medicaid program through AHCA and AHCA’s contractor[,] Sunshine[,] spent $135,796.12 on behalf of Mr. Sciesinski, all of which represents expenditures paid for Mr. Sciesinski’s past medical expenses. Mr. Sciesinski’s taxable costs incurred in securing the settlement totaled $48,943.00. Application of the formula at [section] 409.910(11)(f) to Mr. Sciesinski’s $1,725,000 settlement requires full payment of AHCA’s $56,838.94 Medicaid lien and Sunshine’s $78,957.18 Medicaid lien. The Petitioner has deposited the 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). Sunshine is under contract with AHCA to provide Medicaid benefits to Medicaid beneficiaries. Pursuant to AHCA’s contract with Sunshine, AHCA’s Medicaid lien takes priority and must be paid first from the amount of the settlement allocated to past medical expenses. As previously noted, Petitioner presented testimony from Scott Borders, Esquire, and Karen Gievers, Esquire. Mr. Borders represented Petitioner in his personal injury claim against the tortfeasors, and Ms. Gievers and Mr. Borders both offered opinion testimony regarding the value of Petitioner’s underlying personal injury claim(s). Mr. Borders has been a trial attorney for 32 years, and he practices exclusively in the area of medical malpractice law. Mr. Borders has been Florida Bar Board Certified in the area of “civil trial” since 1997. Mr. Borders credibly testified that based on his professional training and experience, Petitioner’s claim(s) were valued at between $27 and $41 million. Ms. Gievers has been a member of The Florida Bar since 1978, and has been Florida Bar Board Certified in the area of “civil trial” since 1985. From 1978 until 2010, Ms. Gievers practiced in the area of personal injury law. In 2010 she was elected Circuit Judge of the Second Judicial Circuit for the State of Florida. As a Circuit Judge, Ms. Gievers presided over all manner of civil matters, including personal injury lawsuits. Ms. Gievers retired from the bench in April 2019, and has returned to the practice of law. Ms. Gievers credibly testified that based on her professional training and experience, Petitioner’s claim(s) had a value of at least $25 million, and that this amount is “very conservative.” Using the pro rata allocation methodology, Ms. Gievers and Mr. Borders testified that $9,369.93 of the $1,725,000 settlement proceeds should be allocated to past medical expenses because the personal injury claims were settled for 6.9 percent of its conservative value. The testimony of Ms. Gievers and Mr. Borders was credible, persuasive, and uncontradicted by Respondents.
The Issue Whether the Petitioner, Cesare Raoli, M.D., must reimburse the Respondent, Agency for Health Care Administration, for an alleged overpayment of Medicaid funds for the audit period February 22, 1997 through February 22, 1999.
Findings Of Fact At all times material to the allegations of this case, the Respondent is the state agency charged with the responsibility of administering the Florida Medicaid Program. At all times material to the allegations of this matter the Petitioner was a Medicaid provider. It is undisputed the Petitioner received payments for services rendered to Medicaid recipients during the period of time covered by the audit at issue in this proceeding. The audit period for purposes of this case was February 22, 1997 through February 22, 1999. As a Medicaid provider the Petitioner is required to comply with a Medicaid Provider Agreement. Additionally, all services provided by the Petitioner must be fully and completely documented by records maintained by the provider. Such records must comply with the Physicians Coverage and Limitations Handbook, and the Florida Medicaid Provider Reimbursement Handbook. In performing an audit such as the one at issue, the Respondent reviews the provider's records to verify that the appropriate documentation supports the amount paid to the provider for the service rendered. In this case the parties have not challenged the authenticity of the patient records. The parties stipulated to the use of all patient records addressed in this order. In this case, the Respondent claims the psychiatric codes billed by the Petitioner (and paid by the Agency) are not supported by the documentation submitted by the Petitioner. In many instances the billing code was "down graded" to a lesser amount. As a result the difference between that paid and the amount documented is the amount of the overpayment sought. In other instances the documentation did not support any charge and the entire amount is claimed for reimbursement. When a provider signs on to the Medicaid program the Respondent provides copies of the handbooks identified in paragraph 3. Additionally, although supplied at the time of enrollment in the program, the handbooks are also available thereafter. When an audit is performed of a provider's records, the handbooks, billing codes, and types of services applicable for the type of provider are reviewed. In this case the Petitioner is a psychiatrist. The Agency reviewed Petitioner's records to determine if the service provided was medically necessary and properly documented. For billing purposes when psychiatric codes 90805, 90806, 90807, 90808, 90809, 90812, 90813, 90815, or G0078 were used, the Petitioner was required to document the specific time spent providing the service to the recipient. In many instances the Petitioner's records did not include a specific time. The Petitioner conceded that he did not note the length of the time spent with the patient and that the specific time is required by the billing guidelines. Similarly, when the records were reviewed at hearing, the Respondent conceded (and therefore eliminated) some of the disputed charges paid to the Petitioner. Consequently, the reimbursement amount now claimed by the Respondent is less than the amount previously sought. In performing an audit such as the one at issue, the Respondent took a random sample of all claims filed by the Petitioner for the audit period. After the computer program generated and identified 41 claims randomly selected, the individual records were fully reviewed. The use of a random sample of 41 (from 376) is statistically valid for purposes of extrapolating the results of the sample and applying it to the whole claims for the period of the audit. In fact, within a statistical certainty, the amount claimed in this cause based on the 41 records used is lower than the reimbursement amount actually owed by the Petitioner if all records were reviewed. The Respondent established that its methodology in computing the overpayment was statistically valid. The Petitioner did not document or refute with any statistical or actual analysis that the methodology could not be accepted. Moreover, the Petitioner did not produce records to support an argument that the extrapolation is factually unreliable. To fully review the 41 claims, the patient records associated with the claims were introduced at hearing. On a claim-by-claim basis each individual document was reviewed to determine if it was accurately billed to Medicaid. Listed by recipient number the claims totaled 218 entries. The Respondent has acknowledged that there is no overpayment claimed for recipient numbers 5, 17, 20, 22, 30, and 34. As to recipient number 1, the Petitioner withdrew his challenge to the overpayment as to all claims submitted for April 7, 1998. As to recipient number 2, the Petitioner withdrew his challenge to the overpayment as to the claim dated August 12, 1997. As to recipient number 3, the Petitioner did not either submit documentation to support the claims or specify the time spent with the patient. Accordingly, the Respondent has established the overpayment for this recipient. As to recipient number 4, the Petitioner did not specify the time spent with the patient. Accordingly, the Respondent has established the overpayment for this recipient. As to recipient number 6, the Petitioner did not either submit documentation to support the claims or specify the time spent with the patient. Accordingly, the Respondent has established the overpayment for this recipient. As to recipient number 7, the Petitioner withdrew his challenge to the claim overpayment for December 6, 1997. The Respondent withdrew its overpayment claim for two of the codes for May 4, 1998, however the third claim for that date had no documentation and should be reimbursed. As to recipient number 8, the Petitioner conceded the overpayment amount. As to recipient number 9, there was no documentation to support the claim billed therefore the overpayment is established. As to recipient number 10, the Petitioner either withdrew his challenge to the overpayment or presented no documentation to support the claim as billed. Therefore, the overpayment is established as to this recipient. As to recipient number 11, the Respondent conceded the claim for June 30, 1998, therefore this overpayment must be eliminated. As to the other two dates of services, the Petitioner did not provide a specific time in the record. Accordingly the overpayment has been established for December 18, 1998 and January 25, 1999. As to recipient number 12, either the Petitioner failed to document a specific time in the record, did not document the examination claimed, or withdrew his challenge to the overpayment. Therefore, the overpayment as to this recipient has been established. As to recipient number 13, the Petitioner failed to document the service. Therefore, the overpayment as to this recipient has been established. As to recipient number 14, the Petitioner failed to document the specific time spent with the recipient. Therefore, the overpayment as to this recipient has been established. As to recipients numbered 15, 16, 18, 19, 21, 23, 24, 28, 29, 32, 33, 36, 37, 38, 39, and 41, either the Petitioner withdrew his challenge to the amount of overpayment claimed, supplied no documentation to support the claim, or the Respondent conceded the original claim amount. Accordingly, while not in the amount originally claimed by the Agency, an overpayment for these recipients has been established. As to recipient number 25, the Respondent has conceded the claims dated July 8 and July 10, 1998. As to the other claims for this recipient, the Petitioner either provided no documentation to support the amount of the claim or failed to document the specific time spent with the recipient. Therefore, the Respondent has established an overpayment as to this recipient. As to recipient number 27, the Petitioner has conceded the correct billing code for the date of service April 19, 1998, should have been 99215, thereby supporting the overpayment claim. The Respondent conceded the code billing for the second service of that date. As to recipient number 31, either the Respondent conceded the billed amount, or the Petitioner agreed to a reduced code billing, or no time was specified, or the Petitioner withdrew his challenge to the overpayment. Therefore, although not in the amount of its original overpayment claim, the Agency has established an overpayment as to this recipient. As to recipient numbers 35 and 40, either the Petitioner withdrew his challenge to the overpayment claim, did not perform the service billed, or provided no documentation to support the service billed. Therefore, the overpayment as to this recipient has been established. As to every instance where the specific time spent with the recipient was not documented, the medical records provided by the Petitioner were the sole source of information available to the Respondent. No medical expertise is necessary to determine whether or not the specific time was posted on the records. Similarly, where no document was provided to support a claim, medical expertise is not required to disallow such claim. It is undisputed that the Petitioner served Medicaid- eligible recipients. Additionally, there is no claim that the recipients served (and whose records were reviewed) were not eligible for the service provided. The Petitioner did not willfully or fraudulently overstate the claims. In order to perform a "peer review of records," the Respondent's agent does not have to directly interview the recipient regarding the services rendered.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order requiring the Petitioner to reimburse the state for an overpayment of Medicaid funds. Such overpayment must be calculated using the revised amounts for each of the recipients identified in this record and extrapolating the total to claims for the entire audit period. DONE AND ENTERED this 14th day of February 2003, in Tallahassee, Leon County, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 2003. COPIES FURNISHED: Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Jeffries H. Duvall, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Fort Knox Building III Tallahassee, Florida 32308-5403 Anthony C. Vitale, Esquire Anthony C. Vitale, P.A. 799 Brickell Plaza, Suite 700 Miami, Florida 33131
The Issue The issue to be determined is the amount payable to the Agency for Health Care Administration (AHCA or Respondent) in satisfaction of its $157,983.63 Medicaid lien asserted against medical malpractice settlement proceeds received by Hunter Lamendola (Hunter), a minor, by and through his mother and natural guardian, Ashley Lamendola (Petitioner).
Findings Of Fact On June 26, 2012, Petitioner presented to the hospital with a history of contractions for six hours prior to her arrival at the hospital. She had been placed on bed rest for gestational hypertension five days prior to arriving at the hospital. When she arrived, she had hypertension. Petitioner was admitted to the labor and delivery unit at 8:33 p.m. Petitioner was placed on a fetal monitor and progressed through her course of labor. Her initial fetal monitoring showed the baby was healthy and well-oxygenated, however, throughout the course of labor, the fetal monitor exhibited signs that the baby was in significant distress. At 4:01 a.m. on June 27, 2012, Petitioner was given an epidural, and after a course of labor, Hunter was delivered at 3:47 p.m. through an operative vaginal delivery. Hunter suffered permanent and catastrophic brain damage during his birth. As a result, Hunter is unable to eat, speak, toilet, ambulate, or care for himself in any manner. Hunter’s medical care related to the delivery was paid by Medicaid. The Medicaid program through AHCA provided $157,983.63 in benefits. The Medicaid program through the Department of Health Children’s Medical Services Title XIX MMA – Pedicare (DOH), provided $26,189.66 in benefits; the Medicaid program through a Medicaid-managed care organization, known as Amerigroup Community Care (Amerigroup), provided $51,696.99 in benefits; and the Medicaid program through a Medicaid-managed care organization, known as WellCare of Florida (WellCare), provided $13,239.19 in benefits. Accordingly, the sum of these Medicaid benefits, $249,109.47, constituted Hunter’s entire claim for past medical expenses. Petitioner brought a medical malpractice action against the medical providers and staff responsible for Hunter’s care (Defendant medical providers) to recover all of Hunter’s damages, as well as her own individual damages associated with Hunter’s injuries. The medical malpractice lawsuit was settled through a series of confidential settlements totaling $10,000,000 and this settlement was approved by the Court. During the pendency of Hunter’s medical malpractice action, AHCA was notified of the action, and AHCA asserted a $157,983.63 Medicaid lien against Hunter’s cause of action and settlement of that action. AHCA, through the Medicaid program, spent $157,983.63 on behalf of Hunter, all of which represents expenditures paid for Hunter’s past medical expenses. No portion of the $157,983.63 paid through the Medicaid program on behalf of Hunter represent expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Application of the formula set forth in section 409.910(11)(f), Florida Statutes, to Hunter’s settlement requires payment to AHCA of the full $157,983.63 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, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Mr. Harwin, who represented Hunter and his family in the underlying medical malpractice action, testified, and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Harwin is a member of several trial attorney associations, stays abreast of jury verdicts relative to birth injuries, and ascertains the value of damages suffered by injured parties as a routine part of his practice. Mr. Harwin was familiar with and explained Hunter’s catastrophic brain injury giving rise to Petitioner’s claim. He also explained that, as a result of Hunter’s injury, Hunter is blind, fed through a feeding tube, unable to control his arms, legs or head, and suffers between six to eight seizures per day. Mr. Harwin testified that Hunter’s injury has also had a devastating impact on Hunter’s mother, Ashley Lamendola. According Mr. Harwin, considering Hunter’s past medical expenses, a life care plan for Hunter’s care prepared by an economist, and the extent of non-economic damages, and in light of determinations of mock juries and a jury consultant in this case, as well as Mr. Harwin’s familiarity with jury verdicts reached in similar cases, Hunter and his mother’s damages have a value in excess of $35,000,000. Mr. Harwin’s testimony as to the value of Petitioner’s claim was credible and is accepted. Petitioner also presented the testimony of Mr. Barrett, who was accepted as an expert in the valuation of damages. Mr. Barrett has been accepted as an expert in valuation of damages in a number of other Medicaid lien cases before DOAH. Mr. Barrett has been a trial attorney for 41 years, with a primary focus on plaintiff personal injury cases, including medical malpractice, medical products liability, and pharmaceutical products liability. Mr. Barrett stays abreast of jury verdicts and often makes assessments concerning the value of damages suffered by injured parties. After familiarizing himself with Hunter’s injuries through review of pertinent medical records and Petitioner’s exhibits, Mr. Barrett offered his opinion, based upon his professional training and experience, as well as review of comparable jury verdicts, that a conservative value of the damages suffered would be “$35,000,000 to $50,000,000.” Mr. Barrett’s testimony as to the value of Petitioner’s claim was credible and is accepted. AHCA did not call any witnesses, present any evidence as to the value of Petitioner’s claim, or propose a differing valuation of the damages. Based upon the unrebutted evidence presented by Petitioner’s experts, it is found that a conservative value of Petitioner’s claim is $35,000,000. Attorney’s fees for the underlying medical malpractice case leading to Petitioner’s $10,000,000.00 settlement totaled $4,500,000.00, with costs of $490,486.33. While the formula under section 409.910(11)(f) determines amounts distributable to Medicaid after attorney’s fees and taxable costs, there is no language in section 409.910(17)(b) suggesting that attorney’s fees or costs should be subtracted from settlement proceeds in determining whether a lesser portion of the total recovery should be allocated to reimburse Medicaid. Costs and attorney’s fees are not an element of Petitioner’s damages and were not subtracted from the settlement proceeds in determining whether a lesser portion of the total recovery should be allocated to AHCA’s Medicaid lien. Considering the valuation of Petitioner’s claim at $35,000,000.00, Petitioner’s $10,000,000.00 settlement represents only a 10/35ths recovery of Petitioner’s damages. Multiplying that same 10/35 fraction to the $157,983.63 paid by AHCA through the Medicaid program for past medical expenses results in the proportional sum of $45,138.18 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
Conclusions This cause came before the Agency for Health Care Administration for issuance of a Final Order. 1. On May 23, 2013, the Agency sent a letter to the Petitioner notifying the Petitioner that it owed an overpayment in the amount of $50,992.15 to the Agency based upon an adjustment in the Petitioner's overpayment rates (Exhibit A). On June 17, 2013, the Petitioner filed a Petition for Formal Hearing and the Agency Clerk referred the Petition for Formal Hearing to the Division of Administrative Hearings for further proceedings. On July 1, 2013, the Administrative Law Judge assigned to the case entered an Order Closing File and Relinquishing Jurisdiction based upon a Joint Motion to Relinquish Jurisdiction filed by the parties. On May 23, 2014, the Agency rescinded the overpayment letter (Exhibit B). The Agency’s rescission of the overpayment letter has rendered this matter moot. Filed August 14, 2014 9:30 AM Division of Administrative Hearings a tenE’ AGENCY CLERK P 3 3u Based on the foregoing, IT IS THEREFORE ORDERED AND ADJUDGED THAT: Respondent’s right to a hearing in this matter has been rendered moot and the Agency’s May 11, 2013 overpayment letter is rescinded. The parties shall govern themselves accordingly. DONE AND ORDERED this g day of Avnus® ; 2014 in Tallahassee, Leon County, Florida. AGENCY FOR HEALTH CARE ADMINISTRATION
Conclusions This cause came before the Agency for Health Care Administration for issuance of a Final Order. 1. On April 8, 2013, the Agency sent a letter to the Petitioner notifying the Petitioner that it owed an overpayment in the amount of $63,378.06 to the Agency based upon an adjustment in the Petitioner’s overpayment rates (Exhibit A). On April 23, 2013, the Petitioner filed a Petition for Formal Hearing and the Agency Clerk referred the Petition for Formal Hearing to the Division of Administrative Hearings for further proceedings. On May 16, 2013, the Administrative Law Judge assigned to the case entered an Order Closing File and Relinquishing Jurisdiction based upon a Joint Motion to Relinquish Jurisdiction filed by the parties. On May 23, 2014, the Agency rescinded the overpayment letter (Exhibit B). The Agency’s rescission of the overpayment letter has rendered this matter moot. Filed August 14, 2014 9:31 AM Division of Administrative Hearings OA / CLERK P 33u Based on the foregoing, IT IS THEREFORE ORDERED AND ADJUDGED THAT: Respondent’s right to a hearing in this matter has been rendered moot and the Agency’s May 11, 2013 overpayment letter is rescinded. The parties shall govern themselves accordingly. DONE AND ORDERED this > day of Avow ot , 2014 in Tallahassee, Leon County, Florida. NOTICE OF RIGHT TO JUDICIAL REVIEW. A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW, WHICH SHALL BE INSTITUTED BY FILING THE ORIGINAL NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE AGENCY FOR HEALTH CARE ADMINISTRATION, AND A COPY ALONG WITH THE FILING FEE PRESCRIBED BY LAW WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. or interoffice mail to the persons named below on this Ut day of ZL Lisas OC, 2014. RICHARD J. SHOOP, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308 9850) 412-3630 COPIES FURNISHED TO: Douglas Lomonico Assistant General Counsel George N. Meros, Jr. GrayRobinson, P.A. Post Office Box 11189 Tallahassee, Florida 32302-3189 Medicaid Program Integrity Office of the Inspector General Shawn McCauley Medicaid Contract Management Division of Medical Quality Assurance Department of Health
The Issue What amount from Petitioners’ settlement proceeds should be paid to satisfy Respondent’s Medicaid lien under section 409.910, Florida Statutes (2018)?1/
Findings Of Fact Stipulated Facts (near-verbatim) On February 13, 2017, Grace Provvedi (Mrs. Provvedi) underwent an outpatient surgical procedure. Post-surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the management of pain. Additionally, she was discharged home with a prescription for the oral pain medicines, Lorazepam and Robaxin. Mrs. Provvedi returned for a follow-up doctor’s visit on February 15, 2017. That same day, February 15, 2017, Mrs. Provvedi went into cardiopulmonary arrest at home. She was transported to the hospital where she was ultimately diagnosed with anoxic brain injury due to pain medicine overdose. Mrs. Provvedi remained in a vegetative state until her death on March 24, 2017. Mrs. Provvedi was survived by her husband Timothy Provvedi, their four-year-old child, B.P. and an adult child, Kyle Lima. Mrs. Provvedi’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $54,071.79 in benefits associated with Mrs. Provvedi’s injury. This $54,071.79 represented the entire claim for past medical expenses. Mrs. Provvedi’s funeral bill totaled $11,422.97 and was paid by her surviving husband. Timothy Provvedi was appointed the personal representative of the Estate of Grace Provvedi. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, brought a wrongful death claim to recover both the individual statutory damages of Mrs. Provvedi’s surviving spouse and two surviving children, as well as the individual statutory damages of the Estate of Grace Provvedi against the doctor and physician’s group (Defendants) who prescribed the deadly combination of the Fentanyl patch and oral pain medication. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, on behalf of Mrs. Provvedi’s surviving husband and two children, as well as on behalf of the Estate of Grace Provvedi, compromised and settled the wrongful death claim with the Defendants for the unallocated lump sum amount of $225,000. During the pendency of the wrongful death claim, AHCA was notified of the action and AHCA asserted a $54,071.79 Medicaid lien against the Estate of Grace Provvedi’s cause of action and settlement of that action. By letter, the attorney handling the wrongful death claim notified AHCA of the settlement. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $54,071.79 Medicaid lien. AHCA has not filed an action to set aside, void, or otherwise dispute the wrongful death settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. AHCA, through the Medicaid program, spent $54,071.79 on behalf of Mrs. Provvedi, all of which represents expenditures paid for Mrs. Provvedi’s past medical expenses. No portion of the $225,000 settlement represents reimbursement for future medical expenses. The formula at section 409.910(11)(f), as applied to the entire $225,000 settlement, requires payment of the full $54,071.79 Medicaid lien and AHCA is demanding payment of $54,071.79 from the $225,000 settlement. The Petitioners have 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 Statutues, pursuant to section 409.910(17). Additional Findings of Fact Mr. Provvedi, as surviving husband, and the two children of Mrs. Provvedi, suffered economic and non-economic damages. The Estate of Mrs. Provvedi suffered economic damages in the form of medical expenses resulting from the Defendant’s alleged negligence. Mrs. Provvedi’s funeral bill was paid by Mr. Provvedi. Pursuant to the Florida Wrongful Death Act, burial expenses are generally charged to the estate, unless, as in the present case, such expenses are paid by a surviving spouse and reimbursement of the same is not sought from the estate. Mrs. Provvedi, as a condition of eligibility for Medicaid, assigned to AHCA her right to recover medical expenses paid by Medicaid from liable third parties. Petitioners presented the testimony of Mr. John W. Pate, a trial attorney with the law firm of Haygood, Orr & Pearson in Irving, Texas. Mr. Pate has been a trial attorney for 14 years and he specializes in representing individuals in personal injury, medical malpractice, and wrongful death cases. Mr. Pate testified that during the last several years, his practice has focused extensively on litigating medical malpractice cases involving the wrongful administration of prescription medications, including opioids like Fentanyl, Oxycodone, Hydrocodone, and other drugs which impact an individual’s central nervous system (CNS). Such drugs are often referred to as CNS depressant drugs. Mr. Pate routinely conducts civil jury trials, and as a consequence thereof, he stays abreast of jury verdicts by reviewing jury verdict reporters and discussing cases with other trial attorneys. Although Mr. Pate is not a member of the Florida Bar, he represents injured parties in Florida which necessitates that he stays up-to-date with civil jury verdicts from the State of Florida. Mr. Pate testified that as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties and credibly explained his process for making such assessments. Without objection, Mr. Pate was recognized as an expert in the valuation of damages suffered by injured parties. Mr. Pate served as lead attorney in the litigation against the medical providers who treated Mrs. Provvedi. In his capacity as lead attorney, Mr. Pate reviewed Mrs. Provvedi’s medical records, consulted with an anesthesiology and pain management expert in North Carolina, consulted with a plastic surgery expert in Miami, met personally with Mr. Provvedi, and spoke with Mrs. Provvedi’s children. Mr. Pate, in explaining the circumstances that allegedly led to the death of Mrs. Provvedi, testified that on February 13, 2017, Mrs. Provvedi underwent an outpatient surgical procedure at a plastic surgery center. Soon after the surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the treatment of pain. Ms. Provvedi was then discharged home with a prescription for Lorazepam and Robaxin, each of which is an oral pain medication. Mr. Pate testified that the federal Food and Drug Administration (FDA) warns against the use of Fentanyl patches post-surgery, and also warns against the combination of a Fentanyl patch with other CNS depressant drugs, such as Lorazepam and Robaxin. Mr. Pate explained, as to his theory of legal liability against Mrs. Provvedi’s medical providers, that over time the prescribed CNS depressants accumulated in Mrs. Provvedi’s body which resulted in her being found unresponsive two days after surgery. Mrs. Provvedi was transported by EMS to the hospital, where, upon arrival, the Fentanyl patch was removed. Mrs. Provvedi was diagnosed as having suffered from an acute anoxic brain injury and respiratory failure due to a pain medication overdose. Mrs. Provvedi never regained consciousness, and one month later was discharged from the hospital to hospice care where she died on March 24, 2017. Mr. Pate’s undisputed testimony was that his investigation revealed that Mr. and Mrs. Provvedi had a loving and devoted marriage, and that it was emotionally devastating to Mr. Provvedi to watch his wife die over the course of five weeks. Mr. Pate also testified that his investigation revealed that the Provvedi’s minor son, B.P., who was five at the time of Mrs. Provvedi’s death, was profoundly affected by the loss of his mother and that Ms. Provvedi’s adult son, who lived with the Provvedis prior to and at the time of his mother’s passing, was similarly devastated by the death of his mother. Mr. Pate credibly testified that based on his training and experience, the wrongful death damages recoverable in Mrs. Provvedi’s case had a conservative value of between $3,054,071.79 to $5,054,071.79. According to Mr. Pate’s undisputed testimony, Mrs. Provvedi’s estate had a claim for damages in the amount of $54,071.79, which is the amount of medical expenses that were paid, and resulted from Mrs. Provvedi’s injury and death. Mr. Pate excluded the funeral bill from the estate’s damages because the same bill was paid by Mr. Provvedi, as surviving husband. Mr. Pate also testified that the estate likely did not have a viable claim for net accumulations because Mrs. Provvedi did not work outside of the marital home. Mr. Pate testified that a wrongful death claim was brought against the plastic surgeon that operated on Mrs. Provvedi and the surgical facility where the procedure was performed. The basis of the claim was that the doctor violated the standard of care by prescribing the Fentanyl patch to Mrs. Provvedi in clear contravention of the FDA warnings, and it was error to prescribe the other oral pain medicines in conjunction with the Fentanyl patch. Mr. Pate testified that he expected the at-fault parties to dispute causation, but ultimately the main issue was that the alleged at-fault parties had only $250,000 in insurance coverage. Mr. Pate credibly testified that expenses associated with litigating the wrongful death case would be considerable and would significantly erode any likely net recovery. Given these concerns, the decision was made to settle the case pre-suit for $225,000. Utilizing the conservative value of $3,054,071.79, the $225,000 settlement represents a recovery of only 7.367214 percent of the value of all damages. Thus, only 7.367214 percent of the $54,071.79 claim for past medical expenses was recovered in the settlement, or $3,983.58. Based on the methodology of applying the same ratio the settlement bore to the total monetary value of all the damages to the estate, $3,983.58 of the settlement represents the estate’s compensation for past medical expenses. The allocation of $3,983.58 of the settlement to the estate’s claim for past medical expenses is reasonable and rational. Petitioners have proven by a preponderance of the evidence that $3,983.58 represents the portion of the $225,000 settlement recovered to compensate the estate for medical expenses necessitated by the alleged negligence of the tortfeasors.
