The Issue The issue is whether, for the 2001-02 cost-reporting year, Respondent is entitled to recoupment of Medicaid reimbursements that it paid to Petitioner, in connection with its operation of numerous intermediate care facilities for the developmentally disabled (ICF/DD) and, if so, what is the amount of the overpayments.
Findings Of Fact The Audit For over 40 years, Petitioner has operated as a not- for-profit provider of ICF/DD services. These cases involve a compliance audit of ten of Petitioner's 2001-02 cost reports. During 2001-02, Petitioner operated over 300 ICF/DDs-- both owned and leased--in eight states and earned an annual revenue of over $90 million. A typical facility is a group home serving 24 developmentally disabled residents, although some of Petitioner's facilities serve much larger numbers of residents. Respondent outsourced the compliance audit of Petitioner's 2001-02 cost reports, as well as a similar audit of Petitioner's 2002-03 cost reports, which are not involved in these cases. Prior to completing the audit, the outside auditor withdrew from the engagement because it had concluded that it would be required to issue a disclaimer of opinion--an auditing nonopinion, as described below. In late 2005, two and one-half years after the outside auditor had commenced its work, Respondent's staff auditors assumed responsibility for the compliance audit. After examining the outside auditor's workpapers, Respondent's staff auditors found it necessary to re-perform at least some of the field work. By letter dated January 3, 2006, Respondent advised Petitioner of this development and, among other things, requested information about 16 identified motor vehicles and a statement concerning the 1981 Piper airplane noted in the May 29, 2002 Insurance sub-committee minutes. What was the plane used for and in what cost centers and accounts are the costs recorded? Possible costs would include fuel, insurance, depreciation, maintenance, and any salaries. Petitioner responded by a letter dated March 3, 2006, but this letter is not part of the record. Evidently, not much audit activity took place for the next couple of years. By letter dated January 25, 2008, Respondent advised Petitioner of several potential audit adjustments and noted that Petitioner had not provided the "detail general ledger" and information on aircraft and vehicles that Respondent had sought in its January 3, 2006 letter. In March 2008, Respondent's staff auditor visited Petitioner's main office in Miami and audited Petitioner's records for three days. He confirmed the existence of a 1981 Piper aircraft and a second aircraft, which he was unable to identify. Respondent's staff auditor determined that he still lacked information necessary to determine if Petitioner's aircraft expenses were reasonable when compared to common- carrier expenses. By letter dated May 12, 2008, Respondent informed Petitioner that, after the March 2008 onsite visit, several issues remained. Among the issues listed were the costs of two private aircraft, for which Respondent requested access to all flight and maintenance logs and detailed documentation of business purpose of trips, identification of aircraft bearing two cited tail numbers, the names of pilots on Petitioner's payroll, and any other cost information justifying the cost of the aircraft compared to common-carrier costs. By letter dated June 13, 2008, Petitioner responded to the May 12, 2008 letter. This letter states that the 1981 Piper was sold at an undisclosed time, and the maintenance logs had been delivered with the plane. The letter supplies registration documentation for the two tail numbers, a personnel file checklist for the pilot, and justification for the cost of operating an aircraft compared to the cost of using common carriers. On December 4, 2008, Respondent's staff auditor conducted an exit conference by telephone with Petitioner's principals and its independent auditor. Respondent's staff auditor proposed audit adjustments of various cost items that the auditor had guessed involved the aircraft. Petitioner did not agree with these proposed audit adjustments or various others that Respondent's staff auditor proposed. For the next 17 months, neither side contacted the other, until, on May 12, 2010, Respondent issued examination reports for the 2001-02 cost-reporting period. It had taken Respondent over seven years to issue examination reports based on cost reports that Petitioner had filed on February 3, 2003, for a cost-reporting year that had ended almost two years earlier. Cost Items in Dispute On January 28, 2011, Respondent filed a Notice of Filing of a spreadsheet that lists all of the adjustments that have been in dispute. During the hearing, the parties announced the settlement of other cost items. As noted by the Administrative Law Judge, these adjustments are shown on the judge's copy of this filing, which is marked as Administrative Law Judge Exhibit 1 among the original exhibits. Most of the items in dispute are Home Office costs, which are allocated to each of Petitioner's audited facilities. With the reason for disallowance, as indicated in the examination reports, as well as the Schedule of Proposed Auditing Adjustment (SOPAA) number, the Home Office costs in dispute are: Other consultants. "To disallow out of period costs." $7,000. SOPAA #19. Professional fees--other. "To disallow out of period costs." $1,500. SOPAA #20. Administrative Travel. "To disallow out of period costs." $1,038. SOPAA #21. Transportation--repairs. "To remove airplane costs not documented as being reasonably patient care related." $36,496. SOPAA #22. Transportation--fuel and oil. "To remove airplane costs not documented as being reasonably patient care related." $78,336. SOPAA #22. Insurance. "To remove airplane costs not documented as being reasonably patient care related." $24,000. SOPAA #22. Transportation--Depreciation. "To remove airplane costs not documented as being reasonably patient care related." $106,079. SOPAA #22. Transportation--Interest. "To remove airplane costs not documented as being reasonably patient care related." $57,714. SOPAA #22. Staff Development Supplies. "To remove unreasonable cash awards." SOPAA #26. At the conclusion of the hearing, the Administrative Law Judge encouraged the parties to try to settle as many of the issues as they could and, as to the aircraft issues, consider entering into a post-hearing stipulation due to the lack of facts in the record concerning this important issue. The parties produced no post-hearing stipulation and have not advised the Administrative Law Judge of any settled issues. The Administrative Law Judge has identified the remaining issues based on the issues addressed in the parties' Proposed Recommended Orders. With two exceptions, the remaining issues are all addressed in each Proposed Recommended Order. One exception is the Country Meadows return-on-equity issue, which neither party addressed. There is a small discrepancy between the amount of this adjustment on Administrative Law Judge Exhibit 1 and elsewhere in the record, so this issue may have been settled. If so, Respondent may ignore the portions of the Recommended Order addressing it. Also, Respondent failed to address the $123,848 in transportation salaries and benefits. Based on the services corresponding to these expenses and the motivation of Respondent's staff auditor in citing these reimbursements as overpayments, as discussed below, the decision of Respondent's counsel not to mention these items is understandable. The remaining issues are thus: Burial costs of $4,535 at the Ambrose Center. Return on equity adjustment of $3,418 at the Country Meadows facility. Legal fees of $4,225 for the Bayshore Cluster as out-of-period costs. Inclusion of state overhead of $9,529 at Mahan Cluster, $9,529 at Dorchester Cluster, and $9,529 at Bayshore Cluster. Transportation Salaries and Benefits of $123,848 at Main Office. Individual Cost Items Burial Costs After the death of an indigent resident at Petitioner's Ambrose Center, the family contacted Petitioner and informed it that they desired a burial, not a cremation, but could not afford to pay for any services. Petitioner's staff contacted several vendors about the cost of a simple burial service and, after negotiating a discount due to the unfortunate circumstances, selected a vendor. The vendor duly performed the burial service, which was attended by survivors of the deceased's group home, and Petitioner paid the vendor $4,535 for the service. For a burial service, the amount paid was reasonable. Petitioner's staff determined that the burial would have therapeutic value to the surviving residents of the deceased's group home. The quality of life of the residents is enhanced to the extent that they identify with each other as family. Petitioner's staff justifiably determined that a burial service would help sustain these familial relationships by bringing to the survivors a sense of closure, rather than subjecting them to the jarring experience of an unmarked departure of their fellow resident from their lives. However, routine counseling or therapy could have achieved the same results at less cost than a burial service. Out-of-Period Costs The so-called out-of-period costs are $1,038 of rental-car fees, $1,500 of computer consultation fees, $4,225 of legal fees, and $7,000 of "duplicated" insurance broker services. "Out-of-period" means that the expenses were incurred, and should properly be reported, outside of the cost- reporting year ending June 30, 2002. Generally accepted auditing standards (GAAS) and generally accepted accounting principles (GAAP) incorporate the principle of materiality. At least for the purpose of determining the cost-reporting year in which to account for an expense, the materiality threshold for Petitioner is tens of thousands of dollars. The out-of-period issue, which involves the integrity of the cost-reporting year, is different from the other issues, which involve the allowability of specific costs. The cost items under the out-of-period issue are all allowable; the question is in which cost-reporting year they should be included. The test of materiality is thus whether the movement of these cost items from one cost-reporting year to an adjoining cost-reporting year will distort the results and, thus, Petitioner's Medicaid reimbursements. Given Petitioner's revenues, distortion would clearly not result from the movement of the subject cost items, even if considered cumulatively. In theory, Petitioner could be required to amend the cost report for the year in which any of these expenses were incurred, if they were not incurred in the subject cost- reporting year. Unfortunately, by the time Respondent had generated the SOPAAs, the time for amending the cost reports for the adjoining cost-reporting years had long since passed, so a solution of amending another cost report means the loss of the otherwise-allowable cost. This result has little appeal due to Respondent's role in not performing the audit in a timely, efficient manner, but each out-of-period cost is allowable for different reasons. The car-rental expense arises out of an employee's rental of a car for business purposes in June 2001. The submittal and approval of the travel voucher, which are parts of the internal-control process, did not take place until after June 30, 2001. Although Petitioner's liability to the rental-car company probably attached at the time of the rental, the contingency of reimbursement for an improper rental was not removed until the internal-control process was completed, so it is likely that this is not an out-of-period expense. The legal expenses included services provided over the three months preceding the start of the subject cost-reporting year. The attorney submitted the invoice to Petitioner's insurer. After determining that Petitioner had not satisfied its applicable deductible, after June 30, 2001, the insurer forwarded the bill to Petitioner for payment. Absent evidence of the retainer agreement, it is not possible to determine if Petitioner were liable to the law firm prior to the insurer's determination that the payment was less than the deductible, so it is unclear whether this is an out-of-period expense. The computer-consulting work occurred about three months before the end of the preceding cost-reporting year, but the vendor did not bill Petitioner until one year later. This is an out-of-period expense. To the extent that these three items may have been out-of-period expenses, it is not reasonable to expect Petitioner to estimate these liabilities and include them in the preceding cost-reporting year. This is partly due to the lack of materiality explained above. For the car-rental and computer expenses, it is also unreasonable to assume that Petitioner's employees responsible for the preparation of the cost reports would have any knowledge of these two liabilities or to require them to implement procedures to assure timely disclosure of liabilities as modest as these. The last cost item is $7,000 for insurance broker services. This is not an out-of-period expense. In its audit, Respondent determined that this amount represents a sum that was essentially a duplicate payment for services over the same period of time to two different insurance brokers. This is a payment for services over the same period of time to two different insurance brokers for nonduplicated services reasonably required by Petitioner. Given the size and the nature of its operations, Petitioner has relatively large risk exposures that are managed through general liability, automobile liability, director and officer liability, property, and workers' compensation insurance. Paying premiums of $4-5 million annually for these coverages, which exclude health insurance, Petitioner retains insurance brokers to negotiate the best deals in terms of premiums, collateral postings, and other matters. Petitioner experienced considerable difficulty in securing the necessary insurance in mid-2001. At this time, Petitioner was transitioning its insurance broker services from Palmer and Kay to Gallagher Bassett. Difficulties in securing workers' compensation insurance necessitated an extension of the existing policy to July 15, 2001--evidently from its original termination date of June 30, 2001. Due to these market conditions, Petitioner had to pay broker fees to Palmer and Kay after June 30, 2001, even though, starting July 1, 2001, Petitioner began to pay broker fees to Gallagher Bassett. There was no overlap in insurance coverages, and each broker earned its fee, even for the short period in which both brokers earned fees. Employee Cash Awards Petitioner paid $8,500 in employee cash awards in the 2001-02 cost-reporting year as part of a new policy to provide relatively modest cash awards to employees with relatively long terms of service. For employees with at least 20 years of service, Petitioner paid $100 per year of service. The legitimate business purpose of these longevity awards was to provide an incentive for employees to remain with Petitioner, as longer-tenured employees are valuable employees due to their experience and lack of need for expensive training, among other things. The disallowance arose from the application of a nonrule policy that has developed among Respondent's staff auditors: employee compensation is not an allowable cost unless it is includible in the employee's gross income. The evident purpose of the nonrule policy is to exclude from allowable costs payments to employees who, due to their prominence in the ranks of the provider, are able to cause the provider to structure the payments so as to avoid their inclusion in the recipient's gross income (and possibly deprive a for-profit provider of an offsetting deduction for the payments). For the 2001-02 cost-reporting year, only three employees qualified for these payments. Two had 30 years of service, so each of them received $3,000, and one had 25 years of service, so he or she received $2,500. The total of the payments at issue is thus $8,500. The record contains ample support for the finding that the addition of $3,000 to the annual compensation paid to any of Petitioner's employees would not result in excessive compensation. Return on Equity During the cost-reporting year, Petitioner maintained $128,000 in a bank account dedicated for the use of the Country Meadows facility. This sum represented about three months' working capital for Country Meadows. At the time, Respondent encouraged providers to maintain cash reserves of at least two months' working capital, so this sum was responsive to Respondent's preferred working capital levels. Consistent with its purpose as working capital, funds in this account were regularly withdrawn as needed to pay for the operation of Country Meadows. The record does not indicate whether the bank paid interest on this account. Also, the concept of return on equity does not apply to a not-for-profit corporation such as Petitioner, which, lacking shareholders, lacks equity on which a return might be calculated or anticipated. State Overhead at Three Clusters This item involves three ICF/DD clusters that, at the time, were owned by, and licensed to, the State of Florida. Petitioner operated the facilities during the cost-reporting year pursuant to a lease and operating agreement. As in prior cost-reporting years, Respondent did not disallow the depreciation included in the subject cost reports for these three clusters. The record does not reveal whether Petitioner or the State of Florida bore the economic loss of these capital assets over time. But the treatment of depreciation costs is not determinative of the treatment of operating or direct care costs. During the subject cost-reporting year, for these three clusters, the State of Florida retained various operational responsibilities, including admissions. However, the costs at issue arise from the expenditures of the State of Florida, not the provider. The costs include the compensation paid to several, state-employed Qualified Mental Retardation Professionals, who performed various operational oversight duties at the three clusters, and possibly other state employees performing services beneficial to these three clusters. Petitioner never reimbursed the State of Florida for these costs. There is no dispute concerning the reasonableness of the compensation paid these employees by the State of Florida, nor the necessity of these services. The issue here is whether Petitioner is entitled to "reimbursement" for these costs, which amount to $5,139 per cluster, when the costs were incurred by the State of Florida, not Petitioner. Disallowed Transportation Costs and Airplane Costs The $123,848 in disallowed Main Office Transportation salary and benefits represents the salary and benefits of eight Main Office van drivers, who earn about $15,000 per year in pay and benefits. At least 40 residents of the Main Office are not ambulatory, but, like all of the other residents, need to be transported for medical, recreational, and other purposes. There probably remains no dispute concerning these expenses. They are reasonable and necessary. The explanation for why these costs were disallowed starts with the inability of Respondent's staff auditor to find the aircraft expenses in the financial records of Petitioner. It is not possible to determine why the audit failed to identify these expenses prior to the issuance of the examination report. On this record, the only plausible scenario is that Respondent's outside auditor was off-the-mark on a number of items while conducting the audit, Petitioner's representatives lost patience and became defensive, and, when the outside auditor withdrew from the engagement, Respondent's staff auditors, already fully engaged in other work, may not have had the time to add this substantial responsibility to their workload. It is clear, though, that, after the departure of Respondent's outside auditor, the audit failed due to a combination of the lack of Petitioner's cooperation and Respondent's lack of diligence. Unable to identify the aircraft expenses after years of auditing left Respondent with options. It could have continued the audit process with renewed diligence until it found the aircraft expenses. Or it could have declared as noncompliant the cost report, the underlying financial records, or Petitioner itself. Instead, Respondent converted the examination report from what it is supposed to be--the product of an informed analysis of Petitioner's financial records--to a demand to pay up or identify these expenses and, if related to aircraft, justify them. The problem with Respondent's choice is that, as noted in the Conclusions of Law, an audit requires Respondent to proceed, on an informed basis, to identify the expenses, analyze them, and, if appropriate, determine that they are not allowable--before including them as overpayments in an examination report. Proceeding instead to cite overpayments on the basis of educated guesses, Respondent entirely mischaracterized the $123,848 in transportation salaries and benefits, which did not involve any aircraft expenses. Respondent's educated guesses were much better as to the remaining items, which are $36,496 in transportation repairs, $78,336 in transportation fuel and oil, $24,000 in insurance, $106,079 in transportation depreciation, and $57,714 in transportation interest. But the process still seems hit-or-miss. Thinking that he had found the pilot's salary in the item for the van drivers' salaries, Respondent's staff auditor missed the pilot's salary, which was $30,000 to $40,000, as it was contained in an account containing $1.3 million of administrative salaries. Respondent's staff auditor also missed the hanger expense, which Petitioner's independent auditor could not find either. On the other hand, Respondent's staff auditor hit the mark with the $78,336 of fuel and oil, $106,079 of depreciation, and $36,496 in repairs--all of which were exclusively for Petitioner's aircraft. Respondent's staff auditor was pretty close with the transportation interest, which was actually $60,168. It is difficult to assess the effort of Respondent's staff auditor on insurance; he picked a rounded number from a larger liability insurance account, which includes aircraft insurance, but other types of insurance, as well. Respondent correctly notes in its Proposed Recommended Order that the auditing of aircraft expenses requires, in order, their identification, analysis, and characterization as allowable or nonallowable. As Respondent argues, the analysis must compare the aircraft expenses to other means of transportation or communication to determine the reasonableness of the aircraft expenses. As Respondent notes elsewhere in its Proposed Recommended Order, the analysis also must ensure that a multijurisdictional provider, such as Petitioner, has fairly allocated its allowable costs among the jurisdictions in which it operates. Although Respondent's staff auditor found a number of aircraft expenses, he did not try to compare these expenses with other means of travel or communication, so as to determine the reasonableness of these aircraft expenses, or determine if Petitioner had allocated these costs, as between Florida and other jurisdictions, in an appropriate manner. The failure of the examination report, in its treatment of the expenses covered in this section, starts with the failure to secure the necessary information to identify the expenses themselves, but continues through the absence of any informed analysis of these expenses. Respondent's staff auditor used the examination report's treatment of the items covered in this section as a means to force Petitioner both to identify and explain these costs. The fact that Respondent's staff auditor guessed right on many of the aircraft expenses does not mean that he had an informed basis for these guesses. At one point during his testimony, Respondent's staff auditor seemed pleasantly surprised that he had been as accurate as he was in finding these expenses. But, regardless of the basis that he had for the identification of these expenses, Respondent's staff auditor never made any effort to analyze the expenses that he had chosen to include in the examination report as aircraft expenses. Nor is the record insufficient to permit such analysis now. Among the missing data is the number of planes that Petitioner owned at one time during the subject cost-reporting year. It is now clear that, for awhile, the number was two, probably at the end of the cost-reporting year, but this was unknown at the time of the issuance of the examination report. It is unclear, even now, for how long Petitioner owned two planes, or whether it operated both planes during the same timeframe. Cost comparisons are impossible without the knowledge that the cost-comparison exercise is for one or two private aircraft. Likewise, Respondent lacked basic information about the aircraft, such as the planes' capacities and costs of operation, per hour or per passenger mile. Again, this information remains unknown, so it is still impossible to establish a framework for comparison to the costs of common carriers. The record includes a three-page log provided during the audit process by Petitioner to Respondent, which appears never to have analyzed it, probably due to its determination that it had not identified the aircraft expenses adequately. The log shows 118 trips for purposes other than maintenance or engineering during the subject cost-reporting year. The log shows the cities visited and a very brief description of the purpose of the trip. Not the detailed description requested by Respondent, the proffered description is often not more than the mention of a facility or meeting. The log does not show the duration of the trip, but often notes the number of persons on the plane. If the aircraft costs identified above, including the unassessed pilot salary, are divided by the number of trips, the per trip cost is about $2,600. Some trips list several persons, as many as seven. Some trips list only one or two persons. Some trips list "staff," so it is impossible to tell how many persons traveled. And some trips provide no information about the number of travelers. It is a close question, but these findings alone do not establish that the use of the aircraft was unreasonable when compared to common carriers. Also, Respondent lacked any information about the purpose of the trips, so as to be able to determine if they were necessary or whether they could have been accomplished by videoconference or telephone. And the hearing did not provide this information. Respondent's staff auditor also never considered allocation methods, which is understandable because this analysis would necessarily have followed the identification process, in which he justifiably lacked confidence, and the cost-comparison analysis, which he had never undertaken. At the hearing, Respondent's staff auditor briefly mentioned other allocation methods, but never criticized the approved allocation method used by Petitioner. Although an approved allocation method might not offset disproportionate travel expenses to West Virginia and Connecticut, the record is insufficient to determine that the chosen allocation method was inappropriate or transferred excessive expenses to Florida for Medicaid reimbursement.
Recommendation Based on the foregoing, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order determining that, for the 2001-02 cost- reporting year, Petitioner has been overpaid $23,370 (including $3,418 for return on equity, if not already settled), for which recoupment and a recalculation of Petitioner's per-diem reimbursement rate are required. DONE AND ENTERED this 25th day of April, 2011, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 25th day of April, 2011. COPIES FURNISHED: Daniel Lake, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Steven M. Weinger, Esquire Kurzban Kurzban Weinger Tetzeli & Pratt, P.A. 2650 Soutwest 27th Avenue Miami, Florida 33133 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Justin Senior, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Elizabeth Dudek, Secretary Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308
The Issue The issue to be determined is the amount payable under section 409.910, Florida Statutes,1/ in satisfaction of Respondent's Medicaid lien on settlement proceeds received by Petitioner, Victor Hugo Herrera, Sr., from a third party.
Findings Of Fact On July 29, 2014, unbeknownst to Mr. Herrera, an individual (hereinafter Assailant) entered the common area where Mr. Herrera rented an office. The Assailant stalked Mr. Herrera and forced his way into Mr. Herrera’s office. The Assailant attacked Mr. Herrera in his office and shot Mr. Herrera in the leg. As a result of being shot in the leg, Mr. Herrera had his leg medically amputated above the knee, suffered a collapsed lung, and was comatose for nearly two months. As a result of his severe injuries, Mr. Herrera is now permanently disabled, disfigured, and wheelchair-bound, unable to walk. Mr. Herrera’s medical expenses related to his injuries were paid by Medicaid, which provided $271,344.06 in benefits. Mr. Herrera brought a personal injury lawsuit to recover all of his damages associated with his injuries against the owner of the office and security company responsible for providing security (Defendants). The $271,344.06 paid by Medicaid constituted Mr. Herrera’s entire claim for past medical expenses. On December 11, 2015, Mr. Herrera compromised and settled his personal injury action against the Defendants for $925,000. The General Release of Claims memorializing the settlement with the Defendants stated, inter alia: The First Party, the Second Party and their respective counsel acknowledge that this settlement does not fully compensate the First Party for the damages he has allegedly suffered, but as provided herein this settlement shall operate as a full and complete release as to all claims against Second Party, without regard to this settlement only compensating the First Party for a fraction of the total monetary value of his alleged damages. These parties agree that the damages suffered by the First Party have a value in excess of $5,000,000.00, of which $271,344.06 represents First Party’s claim for past medical expenses. Given the facts, circumstances, and nature of the First Party’s alleged injuries and this settlement, $50,198.65 of this settlement has been allocated to the First Party’s claim for past medical expenses and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the First Party’s alleged damages. Further, the parties acknowledge that the First Party may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for those future medical expenses the First Party may incur in the future. However, the parties acknowledge that the First Party, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and the First Party has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for payments made to secure future medical care. During the pendency of Mr. Herrera’s personal injury lawsuit, the Agency for Health Care Administration (AHCA) was notified of the lawsuit and AHCA, through its collections contractor Xerox Recovery Services, asserted a $271,344.06 Medicaid lien against Mr. Herrera’s cause of action and settlement of that action. By letter of January 22, 2016, AHCA was notified by Mr. Herrera’s personal injury attorney of the settlement and provided a copy of the executed release and itemization of Mr. Herrera’s $10,114.38 in litigation costs. This letter explained that Mr. Herrera’s damages had a value in excess of $5,000,000, and the $925,000 settlement represented only an 18.5 percent recovery of Mr. Herrera’s damages. Accordingly, he had recovered only 18.5 percent of his $271,344.06 claim for past medical expenses, or $50,198.65. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $271,344.06 Medicaid lien. AHCA did not respond to Mr. Herrera’s attorney’s letter of January 22, 2016. AHCA has not filed an action to set aside, void, or otherwise dispute Mr. Herrera’s settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. The Medicaid program spent $271,344.06 on behalf of Mr. Herrera, all of which represents expenditures paid for Mr. Herrera’s past medical expenses. No portion of the $271,344.06 paid by the Medicaid program on behalf of Mr. Herrera represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Mr. Herrera and AHCA agree that application of the formula at section 409.910(11)(f) to Mr. Herrera’s $925,000 settlement would require payment to AHCA of the full $271,344.06 Medicaid lien. Petitioner has deposited the full Medicaid lien amount into an interest-bearing account 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. Zebersky, who represented Mr. Herrera in his underlying personal injury action, testified and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney for 27 years and has demonstrated considerable experience in handling plaintiffs’ personal injury and insurance class action claims in South Florida. In rendering his opinion as to the value of Mr. Herrera’s claim, Mr. Zebersky explained that, as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties and he explained his process for making these determinations. Mr. Zebersky was familiar with and gave a detailed explanation of the circumstances giving rise to Mr. Herrera’s claim. In making his valuation determination, Mr. Zebersky reviewed the police report, the State Attorney’s file on the shooting, all of Mr. Herrera’s medical records, and met numerous times with Mr. Herrera and his family. Mr. Zebersky testified that through his representation of Mr. Herrera, review of Mr. Herrera’s file, and based on his training and experience, he had developed the opinion that the value of Mr. Herrera’s damages was $5,000,000. Mr. Zebersky suggested that the $5,000,000 amount was conservative, by testifying that “five million dollars, you know, is probably what the pain and suffering value is especially in Broward County.” In addition to his first-hand experience with Mr. Herrera’s claim, Mr. Zebersky further supported his valuation opinion by explaining that he had “round-tabled” the case with other experienced attorneys and they agreed that the value of Mr. Herrera’s damages was $5,000,000. Further, Mr. Zebersky testified that he had reviewed jury verdicts in developing his opinion and the jury verdicts in Petitioner’s Exhibit 12 were comparable to Mr. Herrera’s case and support the valuation of Mr. Herrera’s damages at $5,000,000. Mr. Zebersky’s testimony 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 40 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 Mr. Herrera’s injuries through review of pertinent medical records and Petitioner’s Exhibits, including the police report, pictures of Mr. Herrera, Mr. Herrera’s complaint and Mr. Herrera’s General Release of Claims, Mr. Barrett offered his opinion, based upon his professional training and experience, that “five million was a conservative estimate” for the value of Mr. Herrera’s damages and that Mr. Herrera’s damages were “undoubtedly at least five million dollars.” Mr. Barrett also reviewed the jury verdicts in Petitioner’s Exhibit 12 and opined that those verdicts were comparable and supported his valuation of Mr. Herrera’s damages. Mr. Barrett’s testimony was credible and is accepted. AHCA’s designated expert, Mr. Bruner, was not available for testimony at the final hearing. Instead of asking for a continuance, the parties agreed to take Mr. Bruner’s deposition after the final hearing and then file the transcript with DOAH. Further, during the final hearing, AHCA agreed that Mr. Bruner would not be testifying as to the value of Mr. Herrera’s damages. In accordance with that agreement, Mr. Brunner’s deposition was subsequently taken and his deposition transcript was filed on August 3, 2016. At Mr. Bruner’s deposition, AHCA proffered Mr. Bruner as an expert in evaluation of cases and settlements. Petitioner objected on the grounds that Mr. Bruner lacked experience or expertise in personal injury cases and should not be allowed to testify as an expert. Further, Petitioner objected to the relevance of Mr. Bruner’s testimony based on AHCA’s earlier agreement that he would not be testifying concerning the value of the damages suffered. Counsel for AHCA responded to Petitioner’s objection to the relevance of Mr. Bruner’s testimony by agreeing that AHCA would not be seeking any “expert testimony as to evaluation of damages,” but would only be using Mr. Bruner’s testimony to “evaluate” the jury verdicts in Petitioner’s Exhibit 12. While Mr. Bruner does not have the same level of experience in personal injury claims as the experts offered by Petitioner, Mr. Bruner has sufficient experience to offer an opinion on the jury verdicts set forth in Petitioner’s Exhibit 12, and to that extent, his expertise in the evaluation of cases is accepted. However, because of his lack of recent experience in settling personal injury claims, Mr. Brunner is not accepted as an expert in personal injury settlements.2/ In his deposition testimony, Mr. Bruner criticized the relevance of the 12 verdicts in Petitioner’s Exhibit 12 on the grounds that, while the verdicts involved amputations of legs, there were factual differences in the mechanism of injury. Mr. Bruner further asserted that, to the extent the verdicts in Petitioner’s Exhibit 12 included awards for future medical expenses, they should not be considered because, according to Mr. Bruner’s understanding, Mr. Herrera did not recover any future medical expenses in the settlement. Finally, while the juries in the 12 jury verdicts had determined the value of the damages, Mr. Bruner criticized the verdicts because he asserted that it was possible that the cases may have settled post-verdict for less, or that the injured parties may have received less, due to reductions for comparative negligence. On this last point, it appears that Mr. Bruner confused the issue of the value of the damages with the settlement value of the case. The value of the damages is the estimation of the monetary value a jury would assign to the damages. On the other hand, the settlement value of the case is the amount it settled for with the considerations of liability, causation, the Defendant’s ability to pay, risk of trial, and other limiting factors, which are a calculus in every settlement. Despite Mr. Bruner’s criticisms of the jury verdicts in Petitioner’s Exhibit 12, the undersigned finds those verdicts supportive of the valuation opinions offered by Petitioner’s experts. Further, Petitioner’s experts’ opinions were not primarily reliant on those 12 verdicts, but were rather based upon their knowledge of Mr. Herrera’s injury and their extensive experience in handling cases involving catastrophic injury, including jury trial experience. Mr. Bruner’s testimony did not provide an alternative value of the damages suffered by Petitioner. The value of $5,000,000 for Mr. Herrera’s claim opined by Petitioner’s experts is unrebutted. Considering the valuation of Mr. Herrera’s claim in the amount of $5,000,000, his $925,000 settlement represents only an 18.5 percent recovery of Mr. Herrera’s damages. Applying that same 18.5 percent to the $271,344.06 paid by Medicaid for past medical expenses results in the sum $50,198.65 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
The Issue The issue presented for determination herein is whether or not disciplinary action should be taken against the Respondents' licenses as funeral directors, embalmers and a funeral establishment based on conduct set forth hereinafter in detail based on allegations in the Administrative Complaint filed herein dated February 2, 1982.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the oral and documentary evidence adduced at the hearing, and the entire record compiled herein, the following relevant facts are found. At all times pertinent to this proceeding, Respondent E. Stone, held a license to practice funeral directing and embalming and acted as the funeral director in charge of Respondent Stone's Funeral Home. (Petitioner's Exhibit No. 1) At all times pertinent to this proceeding, Respondent Janorise G. Stone (herein sometimes called Mrs. Stone), held a license to practice funeral directing and embalming. (Petitioner's Exhibit No. 2) At all times pertinent to this proceeding, Respondent Stone's Funeral Home was a licensed funeral establishment. (Petitioner's Exhibit No. 1) On or about September 12, 1979, Gerald M. Jordan was stillborn to Mr. and Mrs. Earnest Jordan. The Jordans, not lawfully married at the time, subsequently did so. Mrs. Jordan contacted the Respondents' establishment for the purpose of arranging a funeral for the deceased Jordan. Mr. Jordan went to Stone's Funeral Home and met with Rudolph E. Stone, the owner/ manager of Stone's Funeral Home. Rudolph Stone is not licensed as a funeral director. Respondent, Janorise Stone, quoted Mr. Jordan a $95.00 charge for a burial, without funeral services, for his son. Respondent Janorise Stone advised Mr. Jordan that she would call Riverview Memorial Gardens (Riverview) an area cemetery to find out how much it would cost to bury the child there. After speaking on the phone to an agent of Riverview, Mrs. Stone advised Mr. Jordan that the price would be $50.00, i.e., $25.00 for the perpetual care fund and $25.00 for the burial space. Mr. Jordan paid $50.00 to Stone's Funeral Home. The payment was accepted by Respondents' maid who gave Mr. Jordan a receipt for the payment. The baby was buried on September 20, 1979. The Jordans never asked the Respondents to return the $25.00 fee paid for the burial space at Riverview. 2/ There was no written agreement or contract evidencing the terms of the services provided to the Jordans by the Respondents. However, Mrs. Stone gave the Jordans an itemized statement for the services rendered. Mrs. Geraldine Jordan stated that she was present when her husband was told by Mrs. Stone that the burial space at Riverview was $50.00. Mrs. Stone had telephonically inquired of Riverview the price of a grave site for a premature baby. She advised the Jordans that the fee would be $50.00 following the telephone inquiry. During December, 1981, Mrs. Stone delivered to Mrs. Jordan a check in the amount of $25.00 which was specifically given as a "refund on perpetual care" for Riverview. Doris Shumway acted as secretary for Riverview during September, 1979. Mrs. Shumway recalled that Riverview had been recently purchased in a receivership proceeding from American Bank of Merritt Island, Florida. Mr. R. J. Witek, the purchaser, related that that was his first endeavor in the management of cemeteries and was his second dealing with the burial of an infant. As a result, Riverview was then developing a pricing policy and in fact relied upon the advice and guidance of the Respondents as well as other area funeral homes for assistance in formulating a pricing policy for burial sites and other related services. (Testimony of Shumway and R. J. Witek) Mr. Witek related that at one period there was in fact a $50.00 charge for the burial of a newborn infant while the cemetery had been in receivership. Throughout the period while the receivership proceeding was pending, and subsequent to Witek's purchase of the cemetery, the price for the burial of a newborn infant at Riverview fluctuated until a pricing policy was established. (Testimony of Witek) Mrs. Jordan, mother of the deceased, did not meet with Respondents until approximately three months after the burial of her son. At that time, Respondents provided her with an itemized list of the services provided and the costs therefor. The Respondent establishment has been in existence since approximately 1923. The subject complaint represents the second administrative complaint in the Respondent establishment's fifty-nine (59) year existence. Mrs. Stone, Respondents' licensed funeral director and embalmer, delivered to Mrs. Jordan a check for the sum of $25.00 after she was contacted by the Petitioner and was advised that the Jordans had made a $25.00 overpayment for the burial services of the deceased Jordan. Mrs. Stone checked her records and confirmed the existence of an overpayment and immediately refunded same to Mrs. Jordan. (Deposition of R. J. Witek and Exhibit 1 attached thereto) Mrs. Stone reviewed the pricing schedule of all the other area cemeteries for the benefit of, and at the request of, Mr. Jordan in arriving at a fee which was charged to the Jordans. Mrs. Stone had no specific independent recollection as to the exact payment to Riverview on behalf of the Jordans. Mrs. Stone denied any attempt to misrepresent or otherwise defraud the Jordans of any monies. She related that the overcharge occurred as a result of the fluctuating fee schedule which was in effect at Riverview due to its (Riverview) new entry in the cemetery business. Mrs. Stone recalled providing Mrs. Jordan an itemized statement for the services provided them during 1979 although no formal contract with signatures was given the Jordans. Mrs. Stone reiterated the fact that the Jordans were not provided an itemized statement or contract detailing the specifics respecting prices and the services offered inasmuch as the Jordans did not meet with the Respondents until some three (3) months after the burial of their son.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: (1) That the Administrative Complaint filed herein against Respondents be DISMISSED. 3/ RECOMMENDED this 18th day of November, 1982, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 1982.
The Issue What amount of Petitioner’s malpractice settlement must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $13,904.06 Medicaid Lien?1/
Findings Of Fact On September 12, 2015, [Petitioner] was a 28-year-old single male living alone in Tampa, Florida and enrolled as a student at the University of South Florida working on his master’s degree in education. Because he recently ceased his employment with the Hillsborough County School Board, [Petitioner] had no health insurance. He called 911 for emergency medical services due to severe abdominal pain and was taken by EMS to the Emergency Department at St. Joseph’s Hospital where he was diagnosed with acute pancreatitis and admitted. His condition worsened and was complicated by abdominal distention that made his breathing difficult. In the evening of September 13th, [Petitioner] was transferred to the Medical Intensive Care Unit (“ICU”) because of a rapidly worsening condition and need for close monitoring. Over the next several hours, vital sign monitoring showed high heart and respiratory rates. A consulting physician found “acute respiratory insufficiency likely developing ARDS,” and directed he be “monitor closely, may need to be on mechanical ventilation, his work of breathing is hard to keep current sats [sic]”. During the early morning of September 14, [Petitioner’s] heart rate and respiratory rates remained high, he was short of breath, and given multiple doses of Morphine for severe pain and Ativan for agitation/anxiety, which drugs are known to suppress respiratory function. Throughout the morning, [Petitioner] was in a perilous condition due to a combination of his prolonged efforts to breathe, suppressive medications, and systemic complications of acute pancreatitis including electronical abnormalities associated with hypokalemia and hypocalcemia, and with electrocardiographic changes resulting in arrhythmia, conduction abnormalities and changes in cardiac T wave and QT period. At around 11:30, [Petitioner] attempted to perform a breathing exercise as instructed earlier that morning which required him to get on his hand and knees to relieve the pressure on his chest. [Petitioner’s mother], a licensed and practicing RN herself, was present and attempted to help him when his cardiac monitoring leads became disconnected. At this time, the attending RN was on break. An unknown RN reported [Petitioner] to have a change in the condition “with increased confusion and restlessness” and a call was made to the ICU specialist who issued verbal orders for Haldol, a medication used for sedation but in combination with the Morphine, Ativan and Labetatol, further lowers blood pressure and is contraindicated for cardiac arrhythmias. Without informing [Petitioner or his mother], the nursing staff mistakenly issued a "code grey" to control [Petitioner] and the nursing supervisor approved the administration of the Haldol without any physician assessment or knowing his cardiac status because the monitor was not connected. The ICU specialist who ordered the Haldol was close by in the ICU area but did not evaluate [Petitioner] or assess his condition, cardiac status and need for mechanical ventilation before the Haldol was administered. Immediately upon administration of the Haldol, [Petitioner] became “agonal” and his heart was thrown into a cardiac arrhythmia (PEA) causing a prolonged time period where his brain was deprived of oxygen that resulted in permanent hypoxic encephalopathy so that [Petitioner] now lives in a persistent minimally conscious state. The acute pancreatitis which [Petitioner] initially sought treatment resolved without further complications. His current medical condition is only complicated by the sequelae of his hypoxic encephalopathy and persistent minimally conscious state. Petitioner complied with all requirements of Chapter 766, Florida Statutes, including, all pre-suit requirements and presuit investigation of claims against the treating Hospital, the ICU Specialist and her employer that were corroborated by an expert witness, which were rejected. On October 27, 2017, Petitioner filed a lawsuit in the Circuit Court for Hillsborough County Florida, Case No. 17-CA-009829, against the treating Hospital and the ICU Specialist asserting claims for medical negligence. Based on the foregoing limitations, the medical malpractice claims were settled for a total of $1,975,000, which was approved by the Court to be in the best interest of [Petitioner]. [The Agency], through its Medicaid program, provided medical assistance to [Petitioner] in the amount of $13,904.36. During the pendency of the medical negligence case, [the Agency] was notified of the action and asserted a $13,904.06 Medicaid lien against Petitioner's cause of action and settlement. [The Agency] did not commence a civil action to enforce its rights under §409.910 or intervene or join in [Petitioner’s] action against Defendants. [The Agency] did not file a motion to set-aside, void or otherwise dispute Petitioner's settlement with Defendants. Application of the formula at §409.910(1l)(f) to the settlement requires payment to [the Agency] in the amount of the full $13,904.06 Medicaid lien. Petitioner deposited the full Medicaid lien amount in an interest-bearing account for the benefit of [the Agency] pending an administrative determination of [the Agency’s] rights, and this constitutes "final agency action" for purposes of chapter 120, pursuant to §409.910(17). Credible, Unimpeached, and Unrebutted Testimony Mr. Tonelli is the only person who testified about the value of the various elements of damages making up Petitioner’s malpractice claim. Mr. Tonelli has practiced law for 44 years. He has practiced in Tampa, Florida, the venue where Petitioner’s case would have been tried if it had not settled. He first practiced primarily in the area of personal injury defense. Presently, Mr. Tonelli spends over 25 percent of his time as a mediator. Since 1985, he has mediated many medical negligence cases. Mr. Tonelli also serves as a guardian ad litem in approximately 50 cases per year. Usually two to five of the cases involve catastrophic injury. Mr. Tonelli has served as counsel in 50 to 75 civil trials. Approximately 20 were jury trials. Mr. Tonelli’s practice includes review of medical records and life care plans. He also consults with economists about lost wage claims and works with doctors to identify the nature and extent of injuries and costs of medical services for injured persons. Mr. Tonelli participates in regular intake review of personal injury cases for his firm. The review includes evaluating the recoverable damages. He informs himself about jury awards and settlement amounts through his firm work, his participation in the American Board of Trial Attorneys, and his mediation practice. Mr. Tonelli was Petitioner’s Guardian Ad Litem. He reviewed the case and the proposed settlement and reported to the court about whether the settlement was in Petitioner’s best interests. Mr. Tonelli’s knowledge, skill, and experience qualify him to provide an opinion about the value of the elements of the damages for Petitioner’s malpractice claims against the hospital and the physician. Mr. Tonelli reviewed Petitioner’s hospital and physician medical records. He also reviewed the deposition of Roland Snyder, M.D., who prepared the life care plans admitted into evidence. Between Mr. Tonelli’s service as Guardian Ad Litem for Petitioner and his record review to prepare for his testimony, he had sufficient facts and data to form an opinion about the value of elements of damages of Petitioner’s malpractice claims. Also, he reasonably and reliably applied principles and methods based upon his knowledge, skill, and experience to provide a credible and conservative determination of the value of each element of damages that make up Petitioner’s malpractice claim. His testimony was unrebutted, unimpeached, credible, and persuasive. Injuries and Negligence Petitioner suffers from profound anoxic encephalopathy. This brain damage leaves him in a permanent, minimally conscious state, just barely more conscious than a patient in a vegetative state. He cannot speak, walk, or care for himself. Petitioner lives in pain. He breathes and eats only with the assistance of a tracheostomy. He takes nourishment through a “G-tube.” This is a gastrojejunostomy tube that delivers nutrients directly to the stomach. Petitioner requires daily care and assistance in every task of life from eating to waste elimination. His condition will not change for his estimated 20-year remaining life span. Petitioner’s multiple, severe medical conditions require that he live those 20 years in a long-term care facility with medical services, such as a skilled nursing home. This condition resulted from treatment he received for pancreatitis, a condition from which he fully recovered. While in the hospital, Petitioner developed cardiac and respiratory problems. A cascading series of improper prescriptions exacerbated Petitioner’s medical problems leading to catastrophic injuries resulting in his current condition. Damages The elements of damages for Petitioner’s malpractice claims are past medical expenses, future medical expenses, loss of current income, loss of future income, pain and suffering, and loss of enjoyment of life. The value of the damages in Petitioner’s malpractice claims falls within a range of $25,000,000 to $35,000,000. The amount of $25,000,000 is a reasonable, conservative value to place on Petitioner’s damage claims. The only evidence of past medical expenses is the stipulation that Medicaid paid $13,904.36. Consequently, that is the amount of past medical expenses. Future medical expenses in the form of costs for continued treatment and supports necessary to maintain Petitioner’s existence are a significant part of the damages. As explicated in two detailed life care plans, those expenses will range from $14,535,508.26, for residence in a modified home with supportive caregivers, to $31,082,301.36, for residence in a skilled long-term nursing facility. Loss of current income, comparatively, is not a major factor in this case. Loss of future income is. Petitioner was 30 years old earning $34,000 per year teaching “at-risk” children who would have otherwise been suspended from school. He was dedicated to his profession, volunteered at Boys and Girls Clubs, and had just been accepted to a master’s degree program. Petitioner’s lost future income ranges between $750,000 to $1,000,000. Petitioner’s injuries and resulting conditions are catastrophic. Pain and suffering damages and loss of enjoyment of life damages easily range between 10 and 20 million dollars. They could reasonably exceed 50 million dollars. Consideration of the value of the elements of damages affirms that the total damages that would have been proven if Petitioner’s claims had been tried would have been at least $25,000,000. Settlement Realities Petitioner’s claims were not tried. Petitioner had a strong malpractice claim against the doctor. The doctor, however, had only $500,000 worth of insurance coverage. There is no evidence of assets of the doctor that could have been reached to enforce a judgment. Petitioner’s claim against the hospital was not as strong. The hospital had significant liability and causation defenses. The doctor was not an employee or agent of the hospital. Hospital employees in most instances were following the doctor’s instructions, including when administering the medications that caused the damages. The limits of the doctor’s insurance coverage and the liability and causation issues of the claim against the hospital resulted in the decision to settle. Uncertainty about the provability or amount of damages was not a factor. The trial court approved the settlement. The settlement amount is 7.9 percent of the value of Petitioner’s claims. The stipulated amount of medical expenses the Agency paid through the Medicaid program is $13,904.36. The reasonable inference from the record in this case is that applying the 7.9 percent ratio of claims value to settlement recovery to the stipulated amount of medical expenses paid by the Medicaid program demonstrates that $1,098.44 of Petitioner’s settlement recovery was for past medical expenses. The Agency did not call witnesses, present evidence of the value of damages, or propose an alternative way to value damages.
The Issue Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds received from a third party should be paid to Respondent, Agency 1 All statutory references are to Florida Statutes (2019), as the parties agreed. for Health Care Administration (AHCA), to satisfy AHCA’s Medicaid lien under section 409.910, Florida Statutes.
Findings Of Fact Stipulated Facts On July 13, 2018, Mr. Miller was involved in an automobile accident in Sarasota County, Florida. Mr. Miller was struck from behind while stopped at a red light on Bee Ridge Road. At the time of the crash, the tortfeasor was driving under the influence of alcohol. Immediately after the accident, Mr. Miller was treated at Sarasota Memorial Hospital for multiple serious injuries including a T2 complete spinal cord injury, C5-C7 incomplete spinal cord injury, brachial plexus injury, loss of majority of function to dominant left hand, intracranial hemorrhage, acetabular fracture, basilar skull fracture, femur fracture, thoracic spine fracture, rib fractures, as well as a closed fracture of the pelvis. As a result of the accident, Mr. Miller cannot control his blood pressure, cannot sweat, and lacks control of his bowels and bladder due to the spinal cord injury. While hospitalized, he underwent a PEG placement and tracheostomy. As a result of the accident, Mr. Miller was rendered a paraplegic. Due to the severity of his injuries, Mr. Miller has required intermittent medical care for his significant injuries. Mr. Miller brought a personal injury action to recover for all the damages related to the incident. This action was brought against various defendants. Since this incident and the resulting spinal cord injury, Mr. Miller has been in a permanently disabled state, requiring assistance with most activities of daily living. In May of 2020, after litigation was commenced, Mr. Miller settled his tort action. AHCA was properly notified of Mr. Miller’s lawsuit against the defendants. AHCA indicated it had paid benefits related to the injuries from the incident in the amount of $108,456.65. AHCA has asserted a lien for the full amount it paid, $108,456.65, against Mr. Miller’s settlement proceeds. AHCA has maintained that it is entitled to application of the formula in section 409.910(11)(f), to determine the lien amount. Application of the statutory formula to Mr. Miller’s $1,110,000.00 settlement would result in no reduction of the lien, given the amount of the settlement. AHCA paid $108,456.65 for medical expenses on behalf of Mr. Miller, related to his claim against the liable third parties. The parties stipulated that AHCA is limited in this section 409.910(17)(b) proceeding to the past medical expenses portion of the recovery. Evidence at the Hearing Mr. Miller testified about the extent of the injuries he suffered as a result of the automobile accident that was the subject of the personal injury lawsuit. As a 23 year old, who is confined to a wheelchair, Mr. Miller testified about the severe, permanent injuries he endures and the tremendous and permanent impact it has and will have on his life. His testimony was detailed and compelling. He explained his recent and upcoming surgeries. He also explained the effects that his accident has had on his family, particularly his mother who helps him meet life’s daily routines. Petitioner called two experts to testify on his behalf: Mr. Fernandez, Petitioner’s personal injury attorney in the underlying case; and Mr. McLaughlin, an experienced board-certified civil trial attorney. Both Mr. Fernandez and Mr. McLaughlin were accepted as experts on the valuation of personal injury damages, without objection by AHCA. Mr. Fernandez is an attorney at Maney & Gordon, P.A., in Tampa, Florida. He is admitted to practice law in Florida and has been practicing for 12 years. In addition to Petitioner’s case, he has represented clients in personal injury matters, including cases involving catastrophic injuries similar to that of Mr. Miller’s. Mr. Fernandez regularly evaluates the damages suffered by injured people such as Mr. Miller. He is familiar with Mr. Miller’s damages from his representation of Mr. Miller in his personal injury lawsuit. Mr. Fernandez testified as to the difficulties he encountered in the personal injury suit on behalf of Mr. Miller, which included the inherent difficulties of dram shop claims2 and the limited insurance coverage available to fully compensate Mr. Miller for his injuries. Through his investigation, Mr. Fernandez sought out all of the available insurance coverage and filed a complaint in Sarasota County circuit court on behalf of Mr. Miller. As part of his work-up of the case, he evaluated all elements of damages suffered by Mr. Miller. After litigating the case for some time, Mr. Fernandez negotiated a total settlement for the insurance limits of $1,110,000.00 against the defendants. Mr. Fernandez provided detailed testimony regarding how Mr. Miller’s accident occurred and the extent of his injuries. Mr. Fernandez testified regarding the process he followed to evaluate and arrive at his opinion on the total value of the damages suffered in Mr. Miller’s case. Through the course of his representation, he reviewed all the medical information; evaluated the facts of the case; determined how the accident occurred; reviewed all records and reports regarding the injuries Mr. Miller suffered; analyzed liability issues and fault; developed economic damages figures; and also valued non- economic damages such as past and future pain and suffering, loss of capacity to enjoy life, scarring and disfigurement, and mental anguish. Mr. Fernandez testified about the impact of the accident on Mr. Miller’s life. As a result of his injuries, Mr. Miller can no longer perform many of the normal activities of daily living for himself and he has limited mobility. 2 Florida’s dram shop law, as set forth in section 768.125, Florida Statutes, provides that “[a] person who sells or furnishes alcoholic beverages to a person of lawful drinking age shall not thereby become liable for injury or damage caused by or resulting from the intoxication of such person, except that a person who willfully and unlawfully sells or furnishes alcoholic beverages to a person who is not of lawful drinking age or who knowingly serves a person habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such minor or person.” Based on Mr. Fernandez’s evaluation of Petitioner’s case, he opined that the total value of Mr. Miller’s damages was conservatively estimated at $35 million. The valuation of the case includes past medical expenses, future medical expenses, economic damages, loss of quality of life, and pain and suffering. Mr. Fernandez testified that the non-economic damages were the greatest element of loss or damage sustained by Mr. Miller, and therefore the largest driver of the valuation and greatest portion of damages recovered in the settlement. Mr. Fernandez testified that his estimation of total damages is based upon his experience as a trial lawyer, and would be what he would have asked a jury to award related to Mr. Miller’s damages had the case gone to trial. Mr. Fernandez opined that in comparing the $35 million valuation of the damages in the case to the total settlement proceeds of $1,110,000.00 (that is, by dividing $1,110,000.00 by $35,000,000.00), Mr. Miller recovered only 3.17 percent of the full value of his claim. Mr. Fernandez opined that, as a result, the allocation formula is 3.17 percent. Mr. Fernandez went on to testify that he routinely uses a pro-rata approach with lien holders in his day-to-day practice of resolving liens in Florida. The past medical expenses of Mr. Miller are $108,456.65.3 That figure multiplied by 3.17 percent would result in recovery of $3,438.074 allocated to past medical expenses. Mr. Fernandez’s testimony was not contradicted by AHCA, and, mathematical error aside, was persuasive on this point. 3 There is no competent substantial evidence in the record that Mr. Miller’s past medical expenses amount to more than the sum of AHCA’s Medicaid lien. 4 The undersigned finds that 3.17 percent of $108,456.65 is $3,438.07, not $3,433.07, as testified to by Petitioner’s witnesses and presented in Petitioner’s Proposed Final Order. Mr. McLaughlin is a 23-year practicing plaintiff’s attorney with Wagner & McLaughlin. Mr. McLaughlin and his firm specialize in litigating serious and catastrophic personal injury cases throughout central Florida. As part of his practice, Mr. McLaughlin has reviewed numerous personal injury cases in so far as damages are concerned. Mr. McLaughlin has worked closely with economists and life care planners to identify the relevant damages in catastrophic personal injuries, and he regularly evaluates the types of damages suffered by those who are catastrophically injured. Mr. McLaughlin testified as to how he arrived at his valuation opinion in this case by explaining the elements of damages suffered by Mr. Miller. Similar to Mr. Fernandez, he stated that the greatest element of loss Mr. Miller suffered was non-economic damages. He testified that his estimates for the future care and pain and suffering damages of Mr. Miller would be in the high eight figures. Mr. McLaughlin testified that, in his opinion, the total damages suffered by Mr. Miller are conservatively estimated at $38,350,000.00. Mr. McLaughlin testified that it is a routine part of his practice to conduct round-table discussions about cases with other attorneys at his firm. His discussions regarding Mr. Miller’s case with attorneys in his firm resulted in a consensus that Mr. Miller’s total damages had a value in excess of $38 million. He agreed with the $35 million total valuation testified to by Mr. Fernandez for purposes of the lien reduction formula. Mr. McLaughlin also testified that he believed that the standard accepted practice when resolving liens in Florida was to look at the total value of damages compared to the settlement recovery (that is, dividing $1,110,000.00 by $35,000,000.00). This resulted in Mr. Miller recovering only 3.17 percent of the full value of his claim, and, as such, a 3.17 percent ratio may be used to reduce the lien amount sought by AHCA. Both Mr. Fernandez and Mr. McLaughlin testified about the ultimate value of the claim, measured in damages, for Mr. Miller’s personal injury liability case. They also testified as to a method that, in their opinions, reasonably allocated a percentage of the settlement amount to past medical expenses. Both witnesses reviewed Mr. Miller’s medical information and other information before offering an opinion regarding his total damages. Both Mr. Fernandez and Mr. McLaughlin’s approaches to evaluating the damages suffered by Mr. Miller and the resulting ratio for reducing past medical expenses were conservative. The undersigned finds that both were credible, persuasive, and well qualified to render their opinions. The valuation opinions by Mr. Fernandez and Mr. McLaughlin as to the total value of the claim were not rebutted or contradicted by AHCA on cross examination or by any other evidence. AHCA offered no evidence to question the credentials or opinions of either Mr. Fernandez or Mr. McLaughlin, or to dispute the methodology they proposed which would reduce Mr. Miller’s claim. AHCA did not offer any alternative expert opinions on the damage valuation or allocation method proposed by Mr. Fernandez or Mr. McLaughlin. The undersigned finds that Petitioner has established by persuasive, unrebutted, and uncontradicted evidence that the $1,110,000.00 recovery is 3.17 percent of the total value ($35 million) of Petitioner’s total damages. Applying the proportionality methodology, Petitioner has established that 3.17 percent of $108,456.65, or $3,438.07, is the amount of the recovery fairly allocable to past medical expenses and is the portion of the recovery payable to AHCA, pursuant to its Medicaid lien. Petitioner proved by a preponderance of the evidence that Respondent should be reimbursed $3,438.07, which is the portion of the settlement proceeds fairly allocable to past medical expenses.
The Issue The issue in this case is the amount of money to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Larry J. Griffis, from a personal injury claim settlement received by Petitioner from a third party.
Findings Of Fact Griffis was severely injured in an accident occurring on April 29, 2012. The accident occurred generally as follows: Griffis owned and operated a large truck with a long aluminum dump trailer attached. He hauled hazardous waste and other materials for a living. At the end of each job, Griffis would raise the dump trailer for the purpose of cleaning out any residual material. On the date of the accident, Griffis did not clean his trailer in the usual because of some obstruction on that date. Instead, he drove out into a field next to his house to clean the trailer. When Griffis raised the trailer to clean it, he failed to notice electrical lines just above his trailer. He raised the trailer into the lines, resulting in an extremely high voltage of electricity running through his body. As a result of the accident, Griffis was transported to the burn unit at Shands hospital in Gainesville for treatment of his extensive injuries. He had over 50 medical procedures while at Shands, including debridement, skin grafts, tracheostomies, multiple chest tubes, etc. He had 19 different complications while in the hospital, including infections and kidney failure. Over 30 percent of his body surface area was burned; 23 percent of those burns were third degree. While undergoing treatment, Shands gave him only a 22 percent chance of surviving. Griffis remained in the hospital for three and one half months. The medical bills for Griffis’ treatment totaled Griffis cost $1,363,285.65. Medicaid paid $48,640.57 of that total amount. The Veterans Administration (VA) paid $275,911.87. Shands was eventually paid $324,552.44 of its charges and wrote off over $1 million. Griffis filed a lawsuit against Suwannee Valley Electric Cooperative, Inc. (“Suwannee”), seeking payment of economic and non-economic damages related to Suwannee’s alleged liability for the accident. After negotiations and mediation, a settlement was reached whereby Griffis was to receive the sum of $500,000 from Suwannee in full settlement of all his claims. After the settlement was reached between Griffis and Suwannee, the Agency attempted to enforce its lien, seeking repayment of the entire amount it had paid. Griffis, believing that less than the lien amount was actually owed, filed a Motion for Order Apportioning Damages as part of his pending lawsuit against Suwannee. The purpose of the motion was not to have the circuit court judge determine the amount of the Agency’s lien. The motion was filed to obtain an Order that would apportion the settlement among the lawful elements of damages to which Griffis was entitled. A hearing on the motion was set for April 14, 2015, before Circuit Court Judge Andrew J. Decker, III. The Agency was served a copy of the motion and the notice of hearing. The Agency filed an objection to the motion, seeking to relieve the circuit court of jurisdiction in favor of the Division of Administrative Hearings. See § 409.910 (17)(b), Fla. Stat. Griffis replied to the Agency’s objection, stating that “the purpose of the Motion is to differentiate or allocate the settlement among Mr. Griffis’ different elements of damages [rather than] asking this Court to resolve a Medicaid lien dispute.” At the Circuit Court hearing on Griffis’ motion, the Agency made an appearance and, in fact, cross-examined the expert witness who testified. The only testimony provided at that hearing was from retired District Court of Appeal Judge Edwin B. Browning, Jr. Judge Browning provided expert testimony as to the value of Griffis’ claim, which he set at $6 million. Mr. Smith also provided some argument in support of Griffis’ claim, but as an attorney, rather than a sworn witness. Judge Decker took the $6 million figure, plus economic damages in the sum of $211,518, plus past medical expenses of $324,552.44 for a total of $6,536,070.44. That was then divided into the $500,000 settlement figure amount. That resulted in a factor of 7.649 percent, which, applied to the “value of the case” amount, resulted in a figure of $458,919.49. Applying the factor to economic damages resulted in an amount of $16,179.01. The past medical expenses amount, once factored, resulted in a figure of $24,825.01.1/ After hearing the evidence presented at his motion hearing, Judge Decker entered an Order dated April 21, 2015, establishing the past medical expenses amount, i.e., the Agency’s lien, at $24,901.50. The Order did not address future medical expenses because they were not sought by Petitioner. Inasmuch as his future medical costs would be paid by VA, his attorneys did not add potential medical expenses to the claim.2/ A copy of Judge Decker’s Order was received into evidence in the instant proceeding (although, pursuant to section 90.202, Florida Statutes, it could have been officially recognized by the undersigned Administrative Law Judge). The Order, along with Griffis’ other exhibits and Mr. Smith’s testimony, constituted the evidence in this matter.
The Issue At issue are the actual expenses, if any, for medically necessary and reasonable medical and hospital, habilitative and training, residential, and custodial care and service, for medically necessary drugs, special equipment, and facilities and for related travel currently required for the infant, and the reasonable expenses, if any, incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees.
Findings Of Fact Background Michael Lebrun (Michael) is the natural son of Barnabas Lebrun and Rolande Lebrun, and was born October 9, 1990, at Jackson Memorial Hospital, Dade County, Florida. At birth, Michael suffered a "birth-related neurological injury," as that term is defined by Section 766.302(2), Florida Statutes, and he was accepted by respondent, Florida Birth- Related Neurological Injury Compensation Association (NICA) for coverage under the Florida-Birth Related Neurological Injury Compensation Plan (the Plan). Section 766.301, et seq., Florida Statutes. Consistent with Section 766.305(6), Florida Statutes, NICA's acceptance of the claim was approved by final order of March 30, 1994, and NICA was directed to pay "past medical expenses, a reasonable attorney's fee, and . . . future expenses as incurred" in accordance with Section 766.31, Florida Statutes. The order further reserved jurisdiction to resolve "any disputes, should they arise, regarding petitioners' entitlement to past medical expenses, a reasonable attorney's fee, and subsequently incurred expenses." At petitioners' request, a hearing was held to address, pertinent to this order, medically necessary and reasonable expenses alleged to be currently required by the infant, and the reasonable expenses incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees. Petitioners did not, however, at any time prior to hearing, present any requests for compensation to NICA which identified any specific needs of the infant which they felt should be covered by the Plan, but were currently unmet. 2/ Notably, the parties' stipulation, which resolved that Michael was covered under the Plan, approved by order of March 30, 1994, provided: 8. The Claimants and the Association hereby agree as follows: * * * The Association will pay all benefits, past and future, as authorized by Section 766.31, Florida Statutes. The Association and Alan Goldfarb, Esquire, the attorney for the Claimants, agree that a reasonable sum for attorneys fees and services and certain expenses incurred in the representation of the Claimant in this case will be determined at a future date. In absence of an agreement for a specific amount, either party may request a hearing for determination. * * * 11. The Parties agree that the issues of the actual expenses for medically necessary and reasonable medical and hospital, habilitative and training, residential and custodial care and service, for medically necessary drugs, special equipment and facilities, and for related travel as per Florida Statute 766.31 and for a reasonable attorney's fee and expenses, may be determined by the Hearing Officer if a dispute arises regarding the same. The association is not aware of any specific disputes regarding the services being provided to Michael Lebrun but acknowledges that petitioners have requested a hearing regarding the same. . . . * * * 16. In order for the Association to carry out its responsibility as provided in this stipulation, the Claimants shall provide within thirty (30) days of the date of approval of this stipulation, the following: A complete list (with copies, invoices, addresses, etc.) of all known past expenses for which the Claimants seek reimbursement in accordance with the terms and provisions of this stipulation document for medical and related expenses previously incurred; and A fully executed authorization of release of any and all medical records, insurance program records, and such other authorization as may, from time to time, reasonably be required by the Associa- tion to complete its duties hereunder; and Such other reasonable information as may be required by the Association, which relates to the provision of Michael [sic] [medical] or habilitative care or the payment of Michael's bills. Petitioners' failure to file a claim with NICA for benefits they were of the opinion that Michael currently required, but had not received, or supply NICA with the requested information to evaluate any request for benefits, was contrary to their obligation, as evidenced by the forgoing stipulation. Such failing was not, however, raised by NICA prior to hearing, nor did it object to such failing during the course of hearing. Accordingly, while, if timely raised, petitioners' failure to first provide NICA an opportunity to address the specifics of a claim for benefits prior to hearing could have been appropriately addressed, such failure is not a bar to the resolution of the issues presented. 3/ Michael's past and current history Following six months of life, Michael was referred to the Department of Health and Rehabilitative Services (DHRS), Children's Medical Services, Early Intervention program. Through his Early Intervention coordinator, Michael was initially provided services, at public expense, through what is known as the "Birth through Two" ("B-2") services program. That program is a public service program for handicapped children through 36 months of age, or until their transition to the Dade County Public Schools Special Education Pre-K Program, and is jointly funded by DHRS and the Dade County Public Schools. As of the date of hearing, Michael had been receiving, and was scheduled to continue to receive until his transition into the Pre-K Program, physical therapy three times a week at forty-five minutes a session and occupational therapy four times a week at forty-five minutes a session, including oral stimulation, through United Cerebral Palsy. Such other services or items of special equipment that Michael needed were also ordered or provided, at public expense, through the auspice of his Early Intervention coordinator. As of July 5, 1994, some two weeks following the hearing in this case, Michael was scheduled to transition from the B-2 Program into the Pre-Kindergarten Exceptional Education Program (Pre-K program), where he would receive a different level of rehabilitative services. According to the proof, once he transitions into the Pre-K program, Michael will receive sixty minutes per week of physical therapy and thirty to forty-five minutes of occupational therapy, during the course of the school day. Such therapies are not quantified by frequency or duration of a therapy session predicated on the well founded belief that a child's responsiveness to therapy will vary from day to day and, accordingly, the frequency of delivery is left to the discretion of the individual therapist. As provided by the School Board, physical therapy primarily deals with the functional mobility, positioning and musculoskeletal "status" of the lower extremity of the student, and occupational therapy primarily addresses the functioning of the upper extremities, classroom positioning and improvement of visual and perceptual motor skills to function in an educational program. Although available, the School Board does not propose to offer speech therapy to Michael since it has concluded, based upon evaluations and observations, that his speech development is commensurate with his present level of cognitive functioning and that no developmental deficiency exists. As noted, the physical therapy and occupational therapy provided by the School Board during the school year is predicated on what it perceives is necessary for the student to profit from the educational program. Under the circumstances, the services provided are not necessarily an objective evaluation of the medically necessary and reasonable habilitative services the infant may need for treatment; 4/ however, in some cases they may be. Whether the services to be provided the infant in this case will meet such standard can not, based on the record in this case, be resolved; however, if not, such services should be available, subject to available appropriations, through the Department of Health and Rehabilitative Services. Section 409.905, Florida Statutes. In addition to his apparent need for physical and occupational therapy, Michael also exhibits various self-abusive behaviors which require therapeutic correction. Such treatment was requested by Michael's Early Intervention coordinator, through Developmental Services, on February 18, 1994. As of the date of hearing, it was not shown whether Michael had or had not begun to receive such services. The subject claim At hearing, petitioners offered no proof of any expenses previously incurred for which they sought reimbursement, 5/ and their claim, relative to the current needs of Michael, was limited to certain equipment, therapy and attendant care which Paul M. Deutsch, Ph.D. ("Mr. Deutsch"), perceived was required for Michael. 6/ As to the items of equipment recommended by Mr. Deutsch, many were age specific and no longer required or had otherwise been provided through a public assistance program. Currently, according to Mr. Deutsch, Michael is in need of the following equipment: (1) TLC bath seat; (2) prone stander; (3) exercise mat; (4) hand-held shower; (5) wheelchair backpack; and, (6) Rifton pottychair. At the time of final hearing, the prone stander had been ordered through Children's Medical Services, but a TLC bath seat and hand-held shower had not. There was, however, no showing that the Lebruns desired such items or that the TLC bath seat and held-held shower were needed for Michael's care. Indeed, Michael can sit in the bathtub where he is regularly bathed by his parents without a TLC bath seat or hand-held shower. Should the Lebruns decide in the future that such items would be beneficial to them in the care of Michael, they are certainly able to ask NICA for such items; however, currently, they have demonstrated no desire or need for them. As to the wheelchair backpack, the proof fails to demonstrate that Michael needs such item because he does not suffer from any medical condition that requires the transport of special medical equipment. Likewise, Michael does not currently require a Rifton pottychair since he is not currently being "potty trained" nor is there any expressed expectation to begin such training in the known future. Michael also does not currently require an exercise mat since he is not receiving any home therapy. As for rehabilitative services, Mr. Deutsch recommends that in addition to the services that Michael is to receive through the Dade County Public School system that he receive two physical therapy sessions, two occupational therapy sessions, and two speech therapy sessions each week. Given that Mr. Deutsch was not specifically aware of the therapies Michael was receiving and was to soon receive, that he had never participated or observed any therapy sessions with Michael, and offered no specific reasons as to why these additional therapies were necessary to treat Michael's condition, Mr. Deutsch's opinion is rejected. Indeed, Mr. Deutsch's recommendations appear to be little more than a generic model, without specific reference to the needs of Michael and the benefits that might reasonably be expected from additional therapies, if any. Notably, Mr. Deutsch's life care plan recommends an annual evaluation by health care specialists to address Michael's specific needs for physical, occupational and speech therapy. That recommendation is a tacit recognition of the fact that each disabled child does not require the same services, and recognizes that the need for services is appropriately left to health care professionals involved with Michael's care. Significantly, the record is devoid of any proof, apart from public services, that petitioners or their counsel ever acted on Mr. Deutsch's recommendation, made May 27, 1993, that Michael receive an annual evaluation by health care specialists to address his need for such services. While the nature and frequency of services requested were not shown to be medically necessary or reasonable at the time of hearing, the record does demonstrate that Michael requires rehabilitative services and special equipment, which, although ordered through public service programs, may not have been provided or may not be adequate. Given the circumstances, it would be appropriate for NICA to continue its coordination with public service agencies, as discussed infra, to assure that Michael receives the services and special equipment he requires in a timely manner. 7/ Moreoever, since the proof fails to demonstrate whether a medical assessment has been made, it would be appropriate and in the best interests of the child for NICA to coordinate with the public service agencies to assure a comprehensive medical assessment is made of Michael's current need for speech therapy and to determine whether additional physical and occupational therapy may be warranted. Should there currently exist no obligation or ability, because of lack of funding or otherwise, for the public service agencies to provide a medical evaluation, therapy as needed, or special equipment, or should the agencies fail to timely provide a medical evaluation, therapy or special equipment, though required by law to do so, it would be appropriate for NICA, with the parents' consent, to provide those services or equipment until the appropriate pulbic service agency accepts responsibility for the provision of those services and equipment. Finally, Mr. Deutsch has recommended that "attendant care" be provided to the Lebrun family at the rate of two to four hours a day to provide consistency in the care of Michael while allowing the parents a respite. Notably, the Lebruns, who speak regularly with NICA, have never made such a request, and there was no showing that such services are necessary at this time. 8/ Attendant care is generally provided in the home to assist with an individual's daily living skills, such as bathing, moving the individual in and out of a wheelchair or repositioning. Attendant care is not necessary at this time as Michael is still quite small and he is mobile. Indeed, there was no proof at hearing that the Lebruns were incapable, by virtue of any circumstance, to care for Michael, or that he required inordinate care. NICA's activities NICA, consistent with its obligations under law, has maintained communication with Michael's Early Intervention coordinator at the Department of Health and Rehabilitative Services, Children's Medical Services, as well as Michael's staffing specialist with the Dade County Public Schools, to monitor Medicaid services to Michael and, if necessary, provide any services those agencies are unable to provide. NICA, through its Executive Director, Lynn Dickinson, has met personally with the Lebruns on numerous occasions, and has routinely spoken with them by telephone, regarding Michael's care and any perceived needs they may have had for his care. At no time, during the course of any of those conversations, did the Lebruns ever request any attendant care or any other service or equipment recommended by Mr. Deutsch. 9/ Attorney's fees and costs Although duly noticed at petitioners' request, as an issue to be heard, petitioners offered no proof, as required by Section 766.31(1)(c), Florida Statutes, to support their claim for an award of reasonable attorney's fees. As for costs, the only proof offered concerned an agreed fee arrangement with Mr. Deutsch. According to Mr. Deutsch, he agreed to a cap of $3,000 just to cover expenses. What those expenses were, are or will be, was not, however, explained of record, and it cannot be concluded, based on the proof, that such $3,000 cap is reasonable or recoverable.
The Issue What is the proper amount of Petitioner's personal injury settlement payable to Respondent, Agency for Health Care Administration ("AHCA"), to satisfy AHCA's $191,298.99 Medicaid lien under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulations of the parties, the evidence presented at the hearing, and the record as a whole, the following findings of fact are made: On August 9, 2018, Petitioner, Russell Wellington ("Wellington"), who was 59 years old, was driving a motorcycle in the inside northbound lane of U.S. Highway 1 at or near mile marker 99 in Monroe County, Florida. A vehicle driven by JI Young Chung ("Chung"), and owned by a car rental company, was northbound in the outside lane on U.S. Highway 1. Chung turned left into Wellington’s motorcycle causing him to be ejected from the motorcycle. As a result of the accident, Wellington sustained catastrophic injuries including a right leg amputation, a fractured pelvis, fractured humerus, fractured ribs, kidney failure, and a head injury. Wellington is now disabled and unable to work. JPHS p. 10, ¶1. Wellington’s medical care related to the injury was paid by Medicaid, and Medicaid, through AHCA, provided $191,298.99 in benefits. This $191,298.99 constituted Wellington’s entire claim for past medical expenses. JPHS p. 10, ¶2. Wellington pursued a personal injury claim against the driver and owner of the car that struck his motorcycle (“tortfeasors”) to recover all his damages. JPHS p. 10, ¶3. The other driver, Chung, maintained an insurance policy with only $100,000 in insurance limits, and had no other recoverable assets. The rental company that owned the vehicle maintained an insurance policy with only $10,000 in insurance limits. Wellington’s personal injury claim against the tortfeasors was settled for an unallocated lump sum amount of $110,000.00. JPHS p. 10, ¶4. As a condition of Wellington’s eligibility for Medicaid, Wellington assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) ; § 409.910(6)(b), Fla. Stat. During the pendency of Wellington’s personal injury claim, AHCA was notified of the claim and asserted a $191,298.99 Medicaid lien against Wellington’s cause of action and settlement of that action. JPHS p. 10, ¶5. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Wellington’s claim against the tortfeasors. JPHS p. 10, ¶6. By letter, AHCA was notified of Wellington’s settlement. JPHS p. 10, ¶7. AHCA has not filed a motion to set-aside, void, or otherwise dispute Wellington’s settlement. JPHS p. 10, ¶8. The Medicaid program, through AHCA, spent $191,298.99 on behalf of Wellington, all of which represents expenditures paid for Wellington’s past medical expenses. JPHS p. 10, ¶9. Wellington’s taxable costs incurred in securing the $110,000.00 settlement totaled $766.78. JPHS p. 10, ¶10. Application of the formula at section 409.910(11)(f) to Wellington’s $110,000.00 settlement requires payment to AHCA of $40,866.61. JPHS p. 11, ¶11. Petitioner has deposited the 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). JPHS p.11, ¶12. Testimony of Steven G. Jugo, Esquire Steven G. Jugo, Esquire ("Jugo"), was called by Petitioner. He has been an attorney for 41 years and practices with the law firm of Jugo & Murphy in Miami, Florida. For the past 37 years, Jugo has practiced exclusively plaintiff’s personal injury, medical malpractice, and wrongful death law. He routinely handles jury trials and cases involving catastrophic injury. He is familiar with reviewing medical records, reviewing accident reports, and deposing fact and expert witnesses. He stays abreast of jury verdicts in his geographic area by reviewing jury verdict reporters and discussing cases with other trial attorneys. He is a member of several trial attorney organizations including the Florida Justice Association and the American Association for Justice. As a routine part of his practice, Jugo makes assessments concerning the value of damages suffered by injured clients. He briefly explained his process for making these determinations. Jugo is familiar with, and routinely participates in, processes involving the allocation of settlements in matters including health insurance liens, workers' compensation liens, and Medicare set-asides, as well as, allocations of judgments made by judges post-verdict. Jugo represented Wellington in his underlying personal injury claim. Jugo reviewed the accident report, reviewed Wellington’s medical records, met with Wellington numerous times, and deposed the driver of the vehicle that struck Wellington’s motorcycle. As a result of the accident, Wellington underwent many surgeries and extensive medical intervention. Jugo felt that Wellington’s injuries have tremendously impacted his life in a negative way. He explained that Wellington is no longer able to work and he is no longer able to adequately care for or play with the three young children he adopted. Without objection by AHCA, Jugo testified that based on his professional training and experience, it was his opinion that a very conservative value for Wellington’s damages would be $4 million. Jugo explained that his valuation of Wellington’s total projected damages was based on his experience, his comparison of Wellington’s case to similar jury verdicts, and discussions about the case with other attorneys. He explained that the jury verdicts outlined in Petitioner’s Exhibit 9 were comparable to Wellington’s case and supported his valuation of Wellington’s total and projected damages in this case. Jugo detailed that about 70 percent of the verdicts he reviewed which were similar in nature, were in the $5 million range. He opined that this demonstrated that Wellington’s total and projected damages would also have a minimum value of $4 million. Jugo discussed the value of Wellington’s damages with other attorneys, and they agreed with the valuation of Wellington’s total projected damages being in excess of $4 million. Wellington’s personal injury claim was brought against the driver and the rental car company that owned the vehicle which struck Wellington’s motorcycle. The vehicle driver, Chung, maintained an insurance policy with only $100,000.00 in coverage, and had no other recoverable assets. Jugo explained that because the vehicle was owned by a rental car company, the law shielded the rental car company from suit. Nonetheless, he explained that the rental car company had a $10,000.00 insurance policy it made available. As a result, the total settlement was $110,000.00. Jugo believed that the personal injury settlement did not fully compensate Wellington for all of his projected personal injury damages. Without objection by AHCA’s counsel, Jugo testified that based on a conservative value of all damages of $4 million, Wellington recovered in the settlement only 2.75 percent of the value of his total and projected damages. Again, without objection, he testified that because Wellington recovered only 2.75 percent of his total and projected damages, he recovered in the settlement only 2.75 percent of his $191,298.99 claim for past medical expenses, or $5,260.72. Jugo also testified that it would be reasonable to allocate $5,260.72 of the settlement to past medical expenses, stating “[t]hat’s the maximum amount I believe should be allocated to past medical expenses.” Testimony of R. Vinson Barrett, Esquire R. Vinson Barrett, Esquire ("Barrett"), has been a trial attorney for over 40 years. He is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee. His legal practice is dedicated to plaintiff’s personal injury and wrongful death cases. He has handled cases involving automobile accidents and catastrophic injuries. Barrett routinely handles jury trials. Barrett stays abreast of jury verdicts by periodically reviewing jury verdict reports and discussing cases with other trial attorneys. He is a member of the Florida Justice Association and the Capital City Justice Association. As a routine part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. He briefly explained his process for making these assessments. It has been part of his law practice to gain familiarity with settlement allocation involving health insurance liens, Medicare set-asides, and workers’ compensation liens. He is also familiar with the process of allocating settlements in the context of Medicaid liens, and he described that process. Barrett has been accepted as an expert in the valuation of personal injury damages in federal court, as well as numerous Medicaid lien hearings at DOAH. Barrett addressed the instant case. He was familiar with Wellington’s injuries and the circumstances resulting in the injuries. Barrett detailed the extensive nature of Wellington’s injuries and the general impact of such injuries. Barrett testified, without objection, that based on his professional training and experience, he believed Wellington’s damages had a conservative value of $4 million. More specifically, he stated, “I felt that the damages were conservatively, very conservatively, $4 Million. I believe this case, if it had gone to a jury could well have gone up into the eight figures, probably would have, I think. If I was asking for damages in this case in front of a jury, it would probably be somewhere, between $8 and 12 million or even a little higher, if I was in South Florida jurisdiction.” Barrett has been accepted as an expert in the valuation of personal injury damages in other cases at DOAH. Barrett explained that the jury verdicts outlined in Petitioner’s Exhibit 9 involved injuries comparable to Wellington’s injuries and supported his valuation of Wellington’s total and projected damages at $4 million. Barrett went on to explain that the average trial verdict and award he reviewed from Exhibit 9 was $5.5 million and the average award for pain and suffering was $3,788,333.00. Barrett believed that the jury verdict in the Nummela case, from Exhibit 9, most closely tracked Wellington’s case. Barrett explained that the injuries suffered by Nummela compared most closely with Wellington’s injuries and he noted the similarities. Barrett also pointed out that the jury in Nummela had determined that the damages had a value of $9.5 million, which Barrett testified was in line with what he believed a jury would have awarded to Wellington, if this matter had proceeded to trial. Barrett was aware that Wellington’s case had settled for the insurance policy limits of $110,000.00. He testified that this settlement amount did not fully compensate Wellington for all the personal injury damages he had suffered. Barrett testified, without objection by AHCA’s counsel, that using a conservative value of $4 million for all projected damages, the $110,000.00 settlement represented a recovery of 2.75 percent of the total and projected damages. Barrett testified, again without objection, that because only 2.75 percent of his damages were recovered in the settlement, only 2.75 percent of the $191,298.99 claim for past medical expenses was recovered by Wellington in the settlement, namely $5,260.72. Barrett testified that it would be reasonable to allocate $5,260.72 of Wellington’s settlement to his past medical expenses. Inexplicably, AHCA did not call any witnesses, present any contradictory evidence as to a lower value of Wellington’s projected or total damages, or call any witnesses to contest the methodology used to calculate the $5,260.72 allocation to past medical expenses. The unrebutted evidence supports that Wellington’s total and projected damages had a value in excess of $4 million. By applying the same ratio to AHCA's lien that the settlement ($110,000.00) bears to the total projected monetary value of all the damages ($4,000,000.00), a finding is reached that $5,260.72 of the settlement is fairly allocable to past medical expenses. Under the proportionality methodology, the $110,000.00 settlement represents a 2.75 percent recovery of the expert’s total and projected damages of $4 million ($110,000.00 is 2.75 percent of $4 million). Applying this same 2.75 percent to the $191,298.99 claim for past medical expense, the experts opined that Wellington recovered $5,260.72 in past medical expenses in the settlement.2 Of particular consequence to this case, AHCA did not call any expert witnesses, nor did it present any evidence, to rebut or contradict Petitioner's experts or proposed allocation of $5,260.72 in the settlement to past medical expenses. Likewise, AHCA did not dispute or present any persuasive evidence or arguments that Wellington’s injuries were overstated or incorrectly described by Messrs. Jugo or Barrett. 2 This methodology is commonly referred to as the proportionality test or pro-rata formula. On AHCA's cross-examination of the attorney experts, the methodology used by them to arrive at their opinion concerning a fair allocation of past medical expenses in Wellington’s settlement was not persuasively challenged or overcome by AHCA. Simply put, the amount of $5,260.72 proposed by Petitioner as a fair allocation of past medical expenses from the settlement agreement was not successfully refuted or challenged by AHCA. Under the circumstances and proof presented in this case, Petitioner proved by a preponderance of the evidence that $5,260.72 was a fair allocation of the total settlement amount to past medical expenses. AHCA failed to develop any adequate basis or evidence in the record to reject Jugo’s or Barrett’s opinion, or to reach any other conclusion concerning a fair allocation, other than the amount of $5,260.72 presented by the evidence and proposed by Petitioner.
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 from a settlement received by Petitioners, from a third party, pursuant to section 409.910, Florida Statutes (2016).
Findings Of Fact On June 4, 2015, at approximately 11:36 p.m., Rodriguez- Gomez was struck by a car while lawfully walking across the street at the intersection of Hollywood Boulevard and North 62nd Avenue in Hollywood, Florida. During the accident, Rodriguez-Gomez suffered catastrophic physical and neurological injuries. Rodriguez- Gomez's injuries included an open skull fracture, left pelvis fracture, and right fibula and tibia fractures. He was transported to the hospital where he underwent extensive medical intervention to save his life. On June 11, 2015, seven days after the accident, Rodriguez-Gomez died as a result of his injuries. Rodriguez-Gomez was survived by his three adult sons and three minor children. Rodriguez-Gomez's medical care related to his injury was paid by Medicaid, and the Medicaid program provided $49,115.61 in benefits associated with his injury. The $49,115.61 represented the entire claim for past medical expenses. Rodriguez-Gomez's funeral bill totaled $3,250.00 and was paid by his surviving children. Armando Rodriguez-Gomez was appointed the personal representative of the Estate of Santos Rodriguez-Gomez ("Estate"). Armando Rodriguez-Gomez, as personal representative ("Personal Representative") of the Estate, brought a wrongful death action to recover both the individual statutory damages of Rodriguez-Gomez's six surviving children, as well as the individual statutory damages of the Estate against the driver and owner ("Defendant") of the vehicle that caused the accident. Joseph Abdallah ("Abdallah"), a civil trial attorney with the law firm of Kanner & Pintaluga in Boca Raton, Florida, represented the Personal Representative and Estate in the wrongful death action. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA asserted a $49,115.61 Medicaid lien against the Estate cause of action and settlement of that action. The Personal Representative, on behalf of Rodriguez- Gomez's six surviving children, as well as on behalf of the Estate, compromised and settled the wrongful death action with Defendant for the available insurance policy limits of $100,000.00. By letter, Abdallah as the Estate's attorney handling the wrongful death claim notified AHCA of the settlement. The letter requested that AHCA advise as to the amount AHCA would accept in satisfaction of the $49,115.61 Medicaid lien. AHCA has neither filed an action to set aside, void, or otherwise dispute the wrongful death settlement nor started a civil action to enforce its rights under section 409.910. AHCA, through its Medicaid program, spent $49,115.61 on behalf of Rodriguez-Gomez, all of which represents expenditures paid for Rodriguez-Gomez's past medical expenses. No portion of the $100,000.00 settlement represents reimbursement for future medical expenses. The taxable costs incurred in pursuing Defendant totaled $2,086.68. The formula at section 409.910(11)(f), as applied to the entire $100,000.00 settlement, requires payment of $36,456.66 and AHCA is demanding payment of $36,456.66 from the $100,000.00 settlement. Petitioners have deposited the 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). At the final hearing, Petitioners presented, without objection, the expert valuation of damages testimony of Abdallah. Abdallah is a trial attorney in both Florida and New York who practices exclusively personal injury law and handles cases involving wrongful death, catastrophic injury, and other types of negligence involving injury. Abdallah's expertise also encompasses evaluation of personal injury cases based on staying abreast of all State of Florida jury verdicts. At hearing, Abdallah explained that he served as lead counsel during Petitioners' proceeding, and, during his representation of the Estate, he met with the Personal Representative numerous times and reviewed Rodriguez-Gomez's accident report and medical records before he filed the lawsuit and amended complaint in this matter. Abdallah testified that Rodriguez-Gomez had a very close relationship with his children. Abdallah credibly explained the process he took to develop an opinion concerning the value for the damages suffered in this case. He started by looking at the wrongful death statute, section 768.21, Florida Statutes, to determine what damages could be recovered. Petitioners established through unrebutted testimony of their trial attorney and expert witness that personal injury actions can be grouped in the following categories: medical expenses; net accumulations; funeral expenses; loss of parental companionship and instruction; and mental pain and suffering. Abdallah testified that since Rodriguez-Gomez was a day laborer, there was not a claim for net accumulations of the Estate. He concluded that the compensable damages were limited to past medical expenses, loss of parental companionship, instruction, guidance, and mental pain and suffering from the date of the injury for each of the six sibling children. Abdallah evaluated jury verdicts of recent cases involving wrongful death and surviving children to determine what the valuation of the claim for the loss of parental companionship, instruction, guidance, and mental pain and suffering would be for Rodriguez-Gomez's six surviving children. Abdallah also researched circuit court cases to determine appropriate allocation amounts for Medicaid liens. At hearing, Abdallah testified specifically about two comparable jury verdicts involving wrongful death and surviving children that he researched and used to support his valuation, Melissa Corsini, Individually and as Personal Representative of the Estate of Andrew Corsini, Jr., Deceased v. Carlos Riol, Case 09-5397-CA, 11FJVR 3-3, 2011 WL 845897 (Fla. Cir. Ct. Collier Jan. 13, 2011)1/; and Thomas Christopher Heike v. Sr. Singh Enterprises, LLC., Case No. CACE 16011472, 28 Fla. JVRA 3:22, 2017 WL 9286313 (Fla. Cir. Ct. Broward Nov. 26, 2017),2/ circuit court orders that were entered regarding allocation regarding Medicaid liens. In Corsini, each surviving child received $460,000.00 and in Heike each surviving child received $500,000.00 for their damages associated with their father's death. Abdallah's review of comparable jury verdicts revealed that each of Rodriguez- Gomez's six children's claim for losses associated with their father's death would have a very conservative value between $200,000.00 and $800,000.00 each. Abdallah also round-tabled the cases with other experienced attorneys and partners in his law firm to determine the value, and they each agreed that the $200,000.00 to $800,000.00 is a conservative valuation to use for each of the surviving children when determining the value of the Estate's wrongful death case. Based on his review to determine the value of Petitioners' claim, Abdallah credibly and persuasively put all the numbers together and opined that the valuation of the Estate's damages of $49,115.61 paid by Medicaid and the six surviving children's damages of $200,000.00 to $800,000.000 each totaled conservatively $1,200,000.00 to $4,800,000.00, and the conservative total value of all damages recoverable in the wrongful death lawsuit is $1,249,115.61 to $4,849,115.61. Abdallah testified that $1,249,115.61 is the conservative value to use for the damages. Abdallah's compelling and credible testimony further explained that the $100,000.00 settlement constituted a recovery of approximately eight percent of the $1,249,115.61 value of the damages. Abdallah determined that eight percent should be applied to each damage category and should be reduced based on the ultimate settlement. He then went on to apply the eight percent to the total medical expenses that were paid and further testified that a recovery of $3,929.25 in past medical expenses is eight percent of the $49,115.61 claim for past medical expenses. Abdallah's testimony was credible, persuasive, and is accepted. The evidence demonstrates that the total value of the damages related to Rodriguez-Gomez's injury was $1,249,115.61 and that the settlement amount, $100,000.00 was eight percent of the total value. The $100,000.00 settlement does not fully compensate Petitioners for the total value of their damages. Petitioners have established that the $100,000.00 settlement amount is eight percent of the total value ($1,249,115.61) of Petitioners' damages. Using the same calculation, Petitioners correctly showed that eight percent of $49,115.61 (Petitioners' amount allocated in the settlement for past medical expenses), $3,929.25, should be the portion of the Medicaid lien paid. Petitioners proved by a preponderance of the evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
