The Issue What is the amount to be reimbursed to Respondent, Agency for Health Care Administration (AHCA), for medical expenses paid on behalf of Petitioner Bryant (Petitioner) pursuant to section 409.910, Florida Statutes, from a personal injury settlement received by Petitioner from a third party?
Findings Of Fact Factual Allegations that Served As a Basis for the Underlying Personal Injury Litigation On March 11, 2009, Petitioner, then 21 years old, suffered catastrophic physical injury and brain damage when her bicycle was struck by a car near the Oakland Park I-95 overpass in Broward County. Petitioner was taken to the North Broward Hospital, where she was intubated with mechanical ventilation. Imaging revealed a right subdural hematoma, and Petitioner showed signs of increased intracranial pressure. On March 12, 2009, Petitioner underwent bilateral frontoparietal craniotomies through separate incisions with evacuation of a left parietooccipital epidural hematoma and right frontal temporoparietal subdural hematoma; bilateral duraplasty to accommodate brain swelling; and repair of a left occipital laceration. On that same date, a CT scan revealed that Petitioner had numerous pelvic and hip fractures. Petitioner underwent an upper gastrointestinal endoscopy with a PEG tube placement. Eventually, her medical condition stabilized and she was discharged to rehabilitation. Petitioner is now unable to move the left side of her body. She receives her nutrition through a g-tube and is bowel and bladder incontinent. She suffers from cognitive deficits. Petitioner is cognizant of her condition and her surroundings, but has extreme difficulty with communication. Petitioner is severely disabled and unable to ambulate or care for herself in any manner. Prior to the accident, Petitioner was a healthy 21-year-old. It is anticipated that Petitioner's life span will be approximately another 60 years, her condition is permanent, and she will always need full-time medical care. The Personal Injury Litigation Due to Petitioner's incapacity, Freda Bryant (Bryant) was appointed the guardian of the person and property of Petitioner. As Petitioner's guardian, Bryant brought a personal injury action to recover all of Petitioner's damages against the company responsible for maintaining the lights on the highway where Petitioner's accident occurred ("Defendant"). Freda Bryant retained the Krupnick, Campbell, Malone, et al., law firm of Fort Lauderdale, a firm concentrating in the areas of catastrophic personal injury, wrongful death, and products liability. The Medicaid Lien Petitioner is a Medicaid recipient and her medical care was paid for by Medicaid. AHCA, through the Medicaid program, paid $404,399.68 on behalf of Petitioner for medical benefits related to the injuries sustained by Petitioner. This $404,399.68 paid by Medicaid represented Petitioner's entire claim for past medical expenses up until the time of settlement. During the pendency of Petitioner's personal injury action, AHCA was notified of the action and AHCA, through its collections contractor Xerox Recovery Services, asserted a $404,399.68 Medicaid lien against Petitioner's cause of action and settlement of that action. Valuation of the Personal Injury Claim Joseph Slama (Slama), the attorney representing Petitioner in her personal injury action, prepared an evaluation of her claim in preparation for trial and/or settlement negotiations. Slama has extensive experience representing parties in catastrophic personal injury, wrongful death, and product liability cases since 1982. Slama has practiced in this field for 33 years, is a board-certified civil trial attorney, first certified in 1987, who has litigated hundreds of these types of cases. Slama is a member of the American Board of Trial Advocates (ABOTA), the Florida chapter of ABOTA (FLABOTA), Attorneys Information Exchange Group, Florida Justice Association, Broward Justice Association, and the Florida Bar. Slama was offered and accepted, without objection, as an expert in the valuation of damages in catastrophic injury cases. In making the determination regarding the valuation of Petitioner's personal injury claim, Slama reviewed Petitioner's medical records, accident report, prepared fact and expert witnesses for trial, and personally interacted with Petitioner on multiple occasions. Slama is very familiar with the injuries suffered by Petitioner and her need for constant care. Slama was present during the filming of Petitioner's "Day in the Life" video which was intended to be shown to the jury if Petitioner's case went to trial. Slama also reviewed Petitioner's economic damages report prepared by an economist1/ and is familiar with the mental pain and suffering Petitioner experiences as a result of her ability to understand the change in her life from a normal functioning individual to someone requiring total care for the rest of her life. To properly determine the value of Petitioner's claim, Slama researched Florida jury verdicts in personal injury cases with catastrophic brain injuries for young people requiring total care. Slama reviewed five comparable cases with verdicts for the plaintiff. The average jury award per plaintiff in these five cases was $51,474,346.00, and the average pain and suffering component of that award was $28,735,850.00. The case most closely comparable to that of Petitioner was the 2014 case of Mosley v. Lloyd, Case No. CACE09-025532, 2014 WL 7910512, a Broward County Circuit Court trial in which the jury awarded $75,543,527.00, of which $39,500,000.00 represented damages for past and future pain and suffering. Another similar case was that of Lymans v. Bynum Transportation, Case No. 2007CA-007728, 2009 WL 9051959, decided by a Pasco County jury. According to Slama, Pasco County juries are generally considered very conservative. In the Lymans case, a 21-year-old sustained a catastrophic brain injury resulting in her requiring 24/7 total care, much like the Petitioner. The jury awarded $65,000,000.00, of which $41,000,000.00 represented damages for pain and suffering. Based upon the five verdicts, including the Mosley and Lymans jury verdicts, review of the medical records, extensive personal interaction with Petitioner, and his personal experience and knowledge in valuing catastrophic personal injury cases from decades of practice in this field, Slama conservatively valued the damages for mental pain and suffering to be $15 million or greater. Slama acknowledged litigation risk issues with this personal injury action, which included a reduction or elimination of liability based on the defense of contributory negligence and a statutory restriction on liability for a utility company unless there was prior written notice to the utility company of deficient lighting. Slama consulted Allen McConnaughhay, Esquire, an attorney with the Tallahassee law firm of Fonvielle, Lewis, Foote & Messer, for an independent assessment of Petitioner's claim. McConnaughhay has practiced in the field of catastrophic personal injury cases for 15 years. He was offered and accepted, without objection, as an expert in the field of valuation of catastrophic injury cases. McConnaughhay explained that his firm, like that of Slama, relies on the expertise of its partners, a review of the injured party's medical records, research of jury verdicts in comparable cases, and it conducts a roundtable discussion to determine the value of a catastrophic personal injury claim. McConnaughhay and his partners engaged in such review of Petitioner's claim and found that a figure in excess of $50 million was a proper value for her pain-and-suffering damages. McConnaughhay opined that the $15 million figure ascertained by Slama was extremely conservative. The Settlement Allocation On May 18, 2015, Bryant settled Petitioner's personal injury lawsuit for $1,164,000. Given the facts of this case, the figure agreed upon was supported by the competent professional judgment of the trial attorneys in the interests of their clients. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement, taking into account all of the strengths and weaknesses of their positions. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to the payment of costs expended for Petitioner's medical care by AHCA. The General Release with the settling Defendants stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Petitioner Bryant for all of the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Petitioner Bryant for a fraction of the total monetary value of her alleged damages. The parties agree that Petitioner Bryant's alleged damages have a value in excess of $15,000,000, of which $404,399.68 represents Petitioner Bryant's claim for past medical expenses. Given the facts, circumstances, and nature of Petitioner Bryant's injuries and this settlement, the parties have agreed to allocate $31,381.42 of this settlement to Petitioner Bryant's claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Petitioner Bryant's damages. Further, the parties acknowledge that Petitioner Bryant may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Petitioner Bryant will incur in the future. However, the parties acknowledge that Petitioner Bryant, or others on her behalf, have not made payments in the past or in advance for Petitioner Bryant's future medical care and Petitioner Bryant has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. Because Petitioner was incapacitated, court approval of the settlement was required. Accordingly, on June 4, 2015, the Honorable Circuit Court Judge Cynthia Imperato approved the settlement by entering an Order Approving Settlement. By letter of May 26, 2015, Petitioner's personal injury attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release, Order Approving Settlement, and itemization of Petitioner's $75,852.90 in litigation costs. This letter explained that Petitioner's damages had a value in excess of $15,000,000, and the settlement represented only a 7.76 percent recovery of Petitioner's $404,399.68 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $404,399.68 Medicaid lien. AHCA responded to Petitioner's attorney's letter by letter of June 25, 2015, and demanded a "check made payable to 'Agency for Health Care Administration' in the amount of $404,399.68." AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner's settlement. AHCA has not commenced a civil action to enforce its rights under Section 409.910, Florida Statutes. No portion of the $404,399.68 paid by AHCA through the Medicaid program on behalf of Petitioner represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. AHCA has determined that of Petitioner's $75,852.90 in litigation costs, $63,375.06 are taxable costs for purposes of the section 409.910(11)(f) formula calculation. Based on $63,375.06 in taxable costs, the section 409.910(11)(f) formula applied to Petitioner's $1,164,000 settlement, results in $404,812.47 payable to AHCA in satisfaction of its $404,399.68 Medicaid lien. Because $404,399.68 is less than the $404,812.47 amount derived from the formula in section 409.910(11)(f), AHCA is seeking reimbursement of $404,399.68 from Petitioner's settlement in satisfaction of its Medicaid lien. Petitioner has deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, which constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner proved by clear and convincing evidence that the $15 million total value of the claim was a reasonable and realistic value. Furthermore, Petitioner proved by clear and convincing evidence, based on the relative strengths and weaknesses of each party's case, and on a competent and professional assessment of the likelihood that Petitioner would have prevailed on the claims at trial and the amount she reasonably could have expected to receive on her claim if successful, that the amount agreed upon in settlement of Petitioner's claims constitutes a fair, just, and reasoned settlement, including $31,381.42, the amount attributable to the Medicaid lien for medical expenses as its 7.76 percent proportionate share of the total settlement.
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration ("AHCA"), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On or about September 17, 2007, Alicia M. Fallon ("Alicia"), then 17 years old, drove to the mall to meet friends and became involved in an impromptu street race. Alicia lost control of the vehicle she was driving, crossed the median into oncoming traffic, and was involved in a motor vehicle crash. Her injuries consisted of traumatic brain injury ("TBI") with moderate hydrocephalus, right subdural hemorrhage, left pubic ramus fracture, pulmonary contusions (bilateral), and a clavicle fracture. Since the time of her accident, she has undergone various surgical procedures including the insertion of a gastrostomy tube, bilateral frontoparietal craniotomies, insertion of a ventriculoperitoneal shunt, and bifrontal cranioplasties. As a result of the accident, in addition to the physical injuries described above, Alicia suffered major depressive disorder, and Post-Traumatic Stress Disorder injuries. She is confined to a wheelchair for mobility, has no bowel or bladder control, and suffers from cognitive dysfunction. Alicia is totally dependent on others for activities of daily living and must be supervised 24 hours a day, every day of the week. A lawsuit was brought against the driver of the other car in the race, as well as the driver's mother, the owner of the vehicle. It could not be established that the tortfeasor driver hit Alicia's car in the race, or that he cut her off. The theory of liability was only that because Alicia and the other driver in the race were racing together, that the tortfeasor was at least partially responsible for what happened. It was viewed that there was no liability on the part of the driver of the third vehicle. The tortfeasor only had $100,000 in insurance policy limits, but the insurance company did not timely offer payment. The tortfeasor had no pursuable assets. The lawsuit was bifurcated and the issue of liability alone was tried. The jury determined that the tortfeasor driver was 40 percent liable for Alicia's damages. Because of the risk of a bad faith judgment, the insurance company for the tortfeasor settled for the gross sum of $2.5 million. AHCA, through its Medicaid program, provided medical assistance to Ms. Fallon in the amount of $608,795.49. AHCA was properly notified of the lawsuit against the tortfeasors, and after settlement, asserted a lien for the full amount it paid, $608,795.49, against the settlement proceeds. AHCA did not "institute, intervene in, or join in" the medical malpractice action to enforce its rights as provided in section 409.910(11), or participate in any aspect of Alicia's claim against the tortfeasors or their insurance company. Application of the formula at section 409.910(11)(f), to the settlement amount requires payment to AHCA in the amount of $608,795.49. Another provider, Optum, provided $592,554.18 in past medical expense benefits on behalf of Ms. Fallon. However, that amount was reduced through negotiation to a lien in the amount of $22,220.78.1/ Petitioner deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner, Donna Fallon, the mother of Alicia, testified regarding the care that was and is continuing to be provided to Alicia after the accident. She is a single parent, and with only the assistance of an aide during the day, she is responsible for Alicia's care. Alicia must be fed, changed, bathed, and turned every few hours to avoid bed sores. Alicia can communicate minimally by using an electronic device and by making noises that are usually only discernable by her mother. Although she needs ongoing physical therapy and rehabilitation services, the family cannot afford this level of care. Petitioner presented the testimony of Sean Domnick, Esquire, a Florida attorney with 30 years' experience in personal injury law, including catastrophic injury and death cases, medical malpractice, and brain injury cases. Mr. Domnick is board certified in Civil Trial by the Florida Bar. He represented Alicia and her mother in the litigation against the tortfeasors and their insurance company. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He was accepted, without objection, as an expert in valuation of damages. Mr. Domnick testified that Alicia's injuries are as catastrophic as he has handled. Alicia has no strength, suffers contractions and spasms, and is in constant pain. Alicia has impaired speech, limited gross and fine motor skills, is unable to transfer, walk, or use a wheelchair independently. Alicia is unable to self-feed. All of her food must be cooked and cut up for her. Alicia is unable to perform self-hygiene and has no ability to help herself in an emergency and therefore requires constant monitoring. As part of his work-up of the case, Mr. Domnick had a life care plan prepared by Mary Salerno, a rehabilitation expert, which exceeded $15 million on the low side, and $18 million on the high side, in future medical expenses alone for Alicia's care. Mr. Domnick testified that the conservative full value of Alicia's damages was $45 million. That figure included $30 million for Alicia's pain and suffering, mental anguish and loss of quality of life, disability, and disfigurement, extrapolated for her life expectancy, plus the low end of economic damages of $15 million. Petitioner also presented the testimony of James Nosich, Esquire, a lawyer who has practiced primarily personal injury defense for 29 years. Mr. Nosich and his firm specialize in defending serious and catastrophic personal injury/medical malpractice cases throughout Florida. As part of his practice, Mr. Nosich has reviewed more than 1,000 cases of personal injury/medical malpractice cases and formally reported the potential verdict and full value to insurance companies that retained him to defend their insureds. Mr. Nosich has worked closely with economists and life care planners to identify the relevant damages of those catastrophically injured in his representation of his clients. Mr. Nosich has also tried over 30 cases in Broward County in which a plaintiff suffered catastrophic injuries similar to those of Alicia. Mr. Nosich was tendered and accepted, without objection, as an expert in the evaluation of damages in catastrophic injury cases. In formulating his expert opinion with regard to this case, Mr. Nosich reviewed: Alicia's medical records and expenses; her life care plan prepared by Ms. Salerno; and the economist's report. He took into consideration the reputation of Alicia's lawyer (Mr. Domnick); and the venue in which the case would be tried. Mr. Nosich opined that Broward County is known for liberal juries who tend to award high amounts in catastrophic cases. He also testified that Mr. Domnick is known as a lawyer with extreme capability and who has an excellent rapport with juries and the ability to get higher dollar verdicts. Mr. Nosich agreed with Mr. Domnick that the estimated $45 million figure for the total value of Alicia's case was conservative. He agreed with Ms. Salerno's estimated economic damages of $15 million and a doubling of that amount ($30 million) for Alicia's noneconomic damages. Mr. Nosich credibly explained that the $45 million total value was very conservative in his opinion based on Alicia's very high past medical bills and the fact that she will never be able to work. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2.5 million does not fully compensate Alicia for the full value of her damages. As testified to by Mr. Domnick, Alicia's recovery represents only 5.55 percent of the total value of her claim. However, in applying a ratio to reduce the Medicaid lien amount owed to AHCA, both experts erroneously subtracted attorney's fees and costs of $1.1 million from Alicia's $2.5 million settlement to come up with a ratio of 3 percent to be applied to reduce AHCA's lien.2/ Further, in determining the past medical expenses recovered, Petitioner's experts also failed to include the Optum past medical expenses in the amount of $592,554.18. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner's evidence was unrebutted. However, through cross-examination, AHCA properly contested the methodology used to calculate the allocation to past medical expenses. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that 5.55 percent is the appropriate pro rata share of Alicia's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $608,795.49, plus the Optum past medicals in the amount of $592,554.18, which equals $1,201,349.67. Applying the 5.55 percent pro rata ratio to this total equals $66,674.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or Agency), for medical expenses paid on behalf of Petitioner, Leigh Ann Holland (Petitioner), from a medical-malpractice settlement received by Petitioner from a third-party.
Findings Of Fact On or about November 19, 2010, Petitioner entered the North Florida Women’s Physicians, P.A. facility in Gainesville, Florida, for the birth of her second child. North Florida Women’s Physicians, P.A. (NFWP) operates in space leased from the North Florida Regional Medical Center (NFRMC). The two are separate entities. By all accounts, Petitioner was in good health at the time of her admission. The child, Colt, was delivered on November 19, 2010, by a nurse midwife employed by NFWP. After Colt was delivered, Petitioner was transferred to a room at the NFRMC, where she was attended to by staff of the NFRMC. However, decisions regarding her care remained the responsibility of the health care providers and staff of the NFWP. On November 21, 2010, Petitioner was slated for discharge. The NFRMC nurse attending was concerned that Petitioner was exhibiting low blood pressure, an elevated heart rate, and some shaking. Petitioner’s nurse midwife was off-work on November 21, 2010. The NFRMC nurse called the nurse midwife at her home. The substance of the call was disputed, with the NFRMC nurse asserting that she expressed her concern with Petitioner’s condition, and with the nurse midwife asserting that the NFRMC nurse failed to convey the potential seriousness of Petitioner’s condition.3/ Regardless, Petitioner was discharged on November 21, 2010. Over the course of the following two days, Petitioner’s health deteriorated. On November 23, 2010, Petitioner was taken to the hospital in Lake City. Her condition was such that she was sent by Life Flight to Shands Hospital (Shands) in Gainesville. While in route to Shands, Petitioner “coded,” meaning that, for practical purposes, she died. She was revived by the Life Flight medical crew. As a result of the efforts to revive her, drugs were administered that had the effect of drawing blood away from her extremities and toward her core organs. Petitioner’s fingers and toes were affected by blood loss. They mostly recovered, except for her right big toe, which later had to be partially amputated. Petitioner has since experienced some difficulty in balance and walking normally. Upon arrival at Shands, Petitioner was admitted with post-partum endometritis which had developed into a widespread sepsis infection. She spent the next three months in the hospital, and underwent five surgeries. She had 2/3 of her colon removed and underwent two ileostomies. She bears scars that extend from sternum to pelvis. While in the hospital, her body temporarily swelled to twice its normal size, leaving her with scars and stretch marks on her torso and legs. Medicaid paid for Petitioner’s medical expenses in the amount of $148,554.69. Because Petitioner’s ability to process food and absorb nutrients is so dramatically compromised, she must use the restroom 9 to 15 times per day, occasionally with no advance warning which can lead to accidents. Thus, both her social life and her ability to get and hold employment are severely limited. Petitioner has little stamina or endurance, limiting her ability to play and keep-up with her six-year-old son. Her sex life with her husband is strained, due both to issues of physical comfort and body image. Finally, Petitioner can have no more children, a fact rendered more tragic by Colt’s unexpected death at the age of three months, scarcely a week after Petitioner’s release from the hospital. As a result of the foregoing, Petitioner suffered economic and non-economic damages. Therefore, Petitioner filed a lawsuit in Alachua County seeking recovery of past and future economic and non-economic damages. Petitioner’s husband also suffered damages, and was named as a plaintiff in the lawsuit. Named as defendants to the lawsuit were NFWP and NFRMC. Medicaid is to be reimbursed for medical assistance provided if resources of a liable third party become available. Thus, Respondent asserted a Medicaid lien in the amount of $148,554.69 against any proceeds received from a third party. NFWP was under-insured, which compelled Petitioner to settle with NFWP for its policy limits of $100,000. As a result, NFWP was removed as a party to the ongoing lawsuit. Of the NFWP settlement proceeds, $18,750.00 was paid to Respondent in partial satisfaction of its Medicaid lien, leaving a remaining lien of $129,804.69. On July 10, 2013, and November 15, 2013, Petitioner’s counsel, Mr. Smith, provided NFRMC’s counsel, Mr. Schwann, with his assessment of the damages that might reasonably be awarded by a jury. Mr. Smith testified convincingly that a jury would have returned a verdict for non-economic damages well in excess of $1.5 million. However, in calculating the total damages, he conservatively applied the statutory cap on non-economic damages of $1.5 million that would have been allowed by the judgment. With the application of the capped amount, the total damages -- i.e., the “value” of the case -- came to $3.1 million. That figure was calculated by the application of the following: Past lost wages - $61,000 Future loss of earning capacity - between $360,000 and $720,000 Past medical expenses - $148,982.904/ Future medical expenses - $682,331.99 Past and future non-economic damages - $1,500,000 (capped) The elements of damages are those that appear on a standard jury form. The numbers used in assessing Petitioner’s economic damages were developed and provided by Mr. Roberts. The evidence in this case was convincing that the calculation of economic damages reflected a fair, reasonable, and accurate assessment of those damages. Mr. Smith was confident that the damages could be proven to a jury, a belief that is well-founded and supported by clear and convincing evidence. However, the existence of a Fabre defendant5/ led to doubt on the part of Petitioner as to the amount of proven damages that would be awarded in a final judgment. Counsel for NFRMC, Mr. Schwann, performed his own evaluation of damages prior to the mediation between the parties. Mr. Schwann agreed that a jury verdict could have exceeded $3 million. Although he believed the strengths of the NFRMC’s case to be significant, he had concerns as to “what the worst day would have looked like,” especially given the wild unpredictability of juries. In Mr. Schwann’s opinion, the NFRMC nurse, Ms. Summers, was a credible, competent and believable witness. However, the nurse midwife presented with a reasonably nice appearance as well. Thus, there was little to tip the balance of believability far in either direction, leaving it to the jury to sort out. Mr. Schwann understood Petitioner’s personal appeal, and the significant personal and intangible damages suffered by Petitioner, that could lead a jury to award a large verdict. He also credibly testified that juries were consistent in awarding economic damages “to the penny.” The case was submitted to mediation, at which the parties established a framework for a settlement. Given the uncertainty of obtaining a verdict for the full amount of the damages due to the Fabre defendant, NFWP, the parties agreed that the most likely scenarios would warrant a settlement with NFRMC for some fraction of the total damages. After mediation, Petitioner ultimately accepted a settlement offer of $700,000 from NFRMC, which reflected, after rounding, 22.5% percent of the total value of the case as estimated by Mr. Smith. Given the facts of this case, the figure agreed upon was supported by the competent professional judgment of the trial attorneys in the interests of their clients. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement, taking into account all of the strengths and weaknesses of their positions. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to the payment of costs expended for Petitioner’s medical care. On December 6, 2013, Petitioner and NFRMC executed a Release of Claims which differentiated and allocated the $700,000 total recovery in accordance with the categories identified in Mr. Smith’s earlier letters. As a differentiated settlement, the settlement proceeds were specifically identified and allocated, with each element of the total recovery being assigned an equal and equitable percentage of the recovery. The parties knew of the Medicaid lien, and of the formula for recovery set forth in section 409.910(11)(f). They understood that if the damages were undifferentiated, the rote formula might apply. However, since the Medicaid lien applied only to medical expenses, the parties took pains to ensure a fair allocation as to each element of the damages, including that element reflecting the funds spent by Medicaid. The differentiated settlement proceeds, after rounding, were allocated as follows: Past lost wages - $15,000 Future loss of earning capacity - $160,000 Past medical expenses - $35,000 Future medical expenses - $150,000 Past and future non-economic damages - $340,000 The evidence was clear and convincing that all elements of the damages were subject to the same calculation and percentage of allocation, were fact-based and fair, and were subject to no manipulation to increase or decrease any element. The full amount of the Medicaid lien (prior to the partial payment from the NFWP described herein) was accounted for and allocated as “past medical expenses” in the stipulated Release of All Claims that was binding on all parties. Respondent was not a party to the lawsuit or the settlement. Petitioner did not invite Respondent to participate in litigation of the claim or in settlement negotiations, and no one represented Respondent’s interests in the negotiations. Except for the amount recovered from the settlement with NFWP, Respondent has not otherwise executed a release of the lien. Respondent correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee from the $700,000.00 recovery leaves a sum of $525,000.00, half of which is $262,500.00. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds to satisfy the unsatisfied Medicaid lien amount of $129,804.69. Petitioner proved by clear and convincing evidence that the $3.1 million total value of the claim was a reasonable and realistic value. Furthermore, Petitioner proved by clear and convincing evidence, based on the relative strengths and weaknesses of each party’s case, and on a competent and professional assessment of the likelihood that Petitioner would have prevailed on the claims at trial and the amount she reasonably could have expected to receive on her claim if successful, that the amount agreed upon in settlement of Petitioner’s claims constitutes a fair, just, and reasoned differentiated settlement for each of the listed elements, including that attributable to the Medicaid lien for medical expenses.
The Issue On October 3, 2016, Petitioners, Ammar Al Batha, as Personal Representative of the Estate of Abdel-Kader Al Batha, deceased, and Shahira Alshami, individually, filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien (Petition) with the Division of Administrative Hearings (DOAH) pursuant to section 409.910(17)(b), Florida Statutes (2016).1/ The final hearing was scheduled for December 14, 2016. On November 30, 2016, Respondent filed a Motion for Summary Final Order. In the Motion for Summary Final Order, Respondent asserted that Petitioners, as a matter of law, cannot successfully challenge the amount payable to AHCA under section 409.910(17)(b) because Petitioners are not the Medicaid recipients. On December 2, 2016, Petitioners filed a Motion for Continuance and Extension of Time to Respond to Motion for Summary Final Order. That motion was granted by the undersigned on December 6, 2016, and the hearing scheduled for December 14, 2016, was canceled. On December 12, 2016, Petitioners filed an Objection to Respondent’s Motion for Summary Final Order, asserting that a Medicaid recipient’s right to challenge the payment of a Medicaid lien through DOAH does not die with the recipient, and the recipient’s representative is entitled to challenge the amount payable to AHCA under the procedure in section 409.910(17)(b). Both Respondent’s Motion for Summary Final Order and Petitioners’ Objection to Respondent’s Motion for Summary Final Order have been duly considered in preparation of this Summary Final Order.
Findings Of Fact Based on the record as a whole, the following Findings of Fact are made: On July 2, 2015, Abdel-Kader Al Batha (Mr. Al Batha) was involved in a car accident in Broward County, Florida. In this accident, Mr. Al Batha suffered catastrophic physical and neurological injuries, and, as a result, died on July 20, 2015. Mr. Al Batha was survived by his spouse, Shahira Alshami (Ms. Alshami). Mr. Al Batha’s medical care related to his injury was paid by Medicaid, and AHCA, through the Medicaid program. Medicaid provided $143,663.18 in benefits associated with Mr. Al Batha’s injury. This $143,663.18 represented the entire claim for past medical expenses. Mr. Al Batha’s funeral expenses were in the amount of $3,850. As a result of Mr. Al Batha’s injury and death, Ms. Alshami suffered economic and non-economic damages, which are defined and limited by the Florida Wrongful Death Act to loss of support, services, companionship, and protection from the date of injury, as well as her mental pain and suffering from the date of injury per section 768.21, Florida Statutes. In addition, the Estate of Abdel-Kader Al Batha (the Estate) suffered economic damages, which are defined and limited, by the Florida Wrongful Death Act, to medical expenses, funeral expenses, and loss of net accumulations per section 768.21(6). Altogether, the total combined monetary value of Ms. Alshami and the Estate’s individual damages, and the value a jury would assign to these damages, are no less than $2,500,000 to $5,000,000. Ammar Al Batha, as the Personal Representative of the Estate, brought a wrongful death action to recover both the individual statutory damages of Ms. Alshami, as well as the individual statutory damages of the Estate, against the driver/owner of the vehicle that caused the accident (Defendant). While Ms. Alshami and the Estate’s damages have an exceedingly high monetary value in excess of $2,500,000 to $5,000,000, there were significant limitations to recovering the full value of these damages from the Defendant associated with disputed facts, liability, and policy insurance limits of the primary responsible parties. Based on these significant limiting factors, the wrongful death action was settled through a confidential settlement. While settlement was appropriate given the limiting factors, that does not negate that in the settlement, Ms. Alshami and the Estate are not being fully compensated for all their damages, and they are only receiving a fraction of the total monetary value of all their damages. Understanding that the settlement does not fully compensate Ms. Alshami and the Estate for all their damages, and in the settlement they are only receiving a fraction of the total monetary value of all the damages, including only a fraction of the $143,663.18 claim for past medical expenses, the parties to the settlement made an allocation to the claim for past medical expenses. This allocation was based on the calculation of the ratio the settlement bore to the total monetary value of all damages. Using the conservative valuation of all damages of $2,500,000, the parties calculated that Ms. Alshami and the Estate were receiving 44.5 percent of the total monetary value of all their damages in the settlement, and accordingly they were receiving in the settlement 44.5 percent, or $63,930.12, of their $143,663.18 claim for past medical expenses. In making this allocation, the parties agreed that: The settlement does not fully compensate Mr. Al Batha’s surviving spouse and the Estate of Abdel-Kader Al Batha for all the damages they have suffered and the settlement only compensates them for a fraction of the total monetary value of all the damages; The damages have a value in excess of $2,500,000; The claim for past medical expenses was $143,663.18; and Allocation of the $63,930.12 of the settlement to past medical expenses, and the remainder of the settlement toward the satisfaction of claims other than the past medical expenses, is reasonable and proportionate based on the same ratio this settlement bears to the total monetary value of all the damages. The parties memorialized the allocation of $63,930.12 of the settlement to past medical expenses in the General Release (Release). The Release stated: Although it is acknowledged that this settlement may not fully compensate Releasing Party for all of the damages they have allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Releasing Party for a fraction of the total claimed monetary value of their alleged damages. The parties agree that Releasing Party’s alleged damages may have a value in excess of $2,500,000, of which approximately $143,663.18 represents the claimed amount for past medical expenses. Given the facts, circumstances, and nature of Releasing Party’s damages and this settlement, the parties have agreed to allocate $63,930.12 of this settlement to Releasing Party’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the claimed total monetary value of all Releasing Party’s damages. As a condition of Mr. Al Batha’s eligibility for Medicaid, Mr. Al Batha, before his death, assigned to AHCA his right to recover from liable third parties, medical expenses paid by Medicaid. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA, through its collections contractor, Xerox Recovery Services, asserted a $143,663.18 Medicaid lien against the Estate’s cause of action and settlement of that action. The attorney handling the wrongful death claim notified AHCA of the settlement by letter and provided AHCA with a copy of the executed General Release. The letter explained that the damages had a value in excess of $2,500,000, and the settlement represented only a 44.5 percent recovery of the $143,663.18 claim for past medical expenses, or $63,930.12. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $143,663.18 Medicaid lien. AHCA calculated its payment pursuant to the formula in section 409.910(11)(f) based on the gross settlement, which includes those funds compensating Ms. Alshami for her individual claim for pain and suffering and loss of support, services, and companionship. This resulted in AHCA demanding payment for the full amount of the Medicaid lien, or $143,663.18.
The Issue The issue in this proceeding is the amount payable to Respondent in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioner from a third party, pursuant to section 409.910(17), Florida Statutes.
Findings Of Fact Petitioner is a 35-year-old female who currently resides in Homestead, Florida. Respondent is the state agency authorized to administer Florida's Medicaid program. § 409.902, Fla. Stat. On or about February 15, 2012, Petitioner was struck by a motor vehicle and severely injured while attempting to rescue her young son, who had run into a busy street in front of her home in Hollywood, Florida. Petitioner suffered a fractured skull and broken leg. She was hospitalized and received medical care for her injuries. Subsequently, she was treated by an orthopedic physician and a neurologist. She estimated that she last received care or treatment from these physicians in August 2013. The Florida Medicaid program paid $35,952.47 in medical assistance benefits on behalf of Petitioner. Petitioner filed a lawsuit against the owners of the vehicle that struck her. On January 11, 2013, Petitioner and the owners of the vehicle that struck Petitioner ("Releasees") entered into a "Release and Hold Harmless Agreement" ("Settlement") under which the Releasees agreed to pay Petitioner $150,000 to settle any and all claims Petitioner had against them. Attached to the Settlement was a document titled "Addendum to Release Signed 1/11/13" ("Addendum"), which allocated liability between Petitioner and the Releasees and provided a commensurate allocation of the Settlement proceeds for past and future medical expense claims. The Addendum stated in pertinent part: The parties agree that a fair assessment of liability is 90% on the Releasor, Mirta B. Agras, and 10% on the Releasees. Furthermore, the parties agree that based upon these injuries, and the serious nature of the injuries suffered by the Releasor, Mirta B. Agras, that $15,000.00 represents a fair allocation of the settlement proceeds for her claim for past and future medical expenses. Petitioner testified that she primarily was at fault in the accident. She acknowledged that the statement in the Addendum that she was 90% at fault for the accident and the Releasees were 10% at fault was an estimate that she formulated entirely on her own, without obtaining any legal or other informed opinion regarding the apportionment of respective fault. Petitioner is not a physician, registered nurse, or licensed practical nurse. There was no evidence presented establishing that she has any medical training or expertise. Thus, there is no professional basis for Petitioner's position that 10% of the Settlement proceeds represents a fair, accurate, or reasonable allocation for her medical expenses. Rather, her position appears to be based on the intent to maximize the Settlement proceeds that are allocated to non-medical expenses, so that she is able to retain a larger portion of the Settlement proceeds. Respondent did not participate in discussions regarding the Settlement or Addendum and was not a party to the Settlement. Petitioner acknowledged that she still receives medical bills related to the injuries she suffered as a result of the accident, and that she still owes money for ambulance transportation and physician treatment. She was unable to recall or estimate the amount she owes. No evidence was presented regarding the actual amount of Petitioner's medical expenses incurred due to her injury. Petitioner has not paid any of her own money for medical treatment, and no entities other than Medicaid have paid for her medical treatment. Since being injured, Petitioner continues to experience medical problems, including pain, dizziness, memory loss, difficulty in walking or standing for extended periods, inability to ride in vehicles for extended periods, balance problems, and difficulty watching television or staring at a computer screen for extended periods. Petitioner claims that, nonetheless, she has not been told that she would need additional medical care or treatment. On or about January 31, 2013, Respondent, through ACS, asserted a Medicaid claim pursuant to section 409.910(17), seeking reimbursement of the $35,952.47 in medical assistance benefits it paid on behalf of Petitioner. Petitioner instead sought to reimburse Respondent $15,000, the amount that Petitioner and Releasees agreed in the Addendum represented a fair allocation of the Settlement proceeds for Petitioner's claim for past and future medical expenses. When Petitioner and Respondent were unable to agree on the amount Petitioner owed Respondent in satisfaction of its Medicaid lien, Petitioner paid ACS the $35,952.47 alleged to be owed Respondent and filed the Petition initiating this proceeding.
Findings Of Fact The Respondent John Competiello currently holds Funeral Director's License No. 1468, and Embalmer's License No. 1656, both of which were issued by the Petitioner. Mr. Competiello is the licensed funeral director and embalmer in charge of the Respondent Home for Funerals, Inc. The Respondent Home for Funerals, Inc. holds Establishment Operating License No. 994 issued by the Petitioner. The Respondent Competiello has been a licensed funeral director for approximately eight years. Prior to his employment with the Respondent Home for Funerals, Inc., Competiello had never served as the general manager of a funeral home. Competiello was hired as the general manager of Home for Funerals, Inc., and he commenced work on August 8, 1976. Home for Funerals, Inc. was an operating funeral home and crematory when Competiello became general manager. Home for Funerals, Inc. had been properly licensed with the Petitioner as a crematory. Prior to September 1, 1976, the license of Home for Funerals, Inc. expired, and no application was made on behalf of Home for Funerals, Inc. for inspection and licensing of the crematory. From September 1, 1976 until approximately September 23, 1976, approximately 54 cremations were performed at Home for Funerals, Inc. by John Competiello. Competiello did not know that Home for Funerals, Inc. had not been properly inspected and licensed by the Petitioner, and as soon as he was advised of that fact he immediately ceased all cremation activities at Home for Funerals, Inc. Competiello was never formally advised by the Petitioner that Home for Funerals, Inc. was not properly licensed, but this fact was communicated to him orally by a representative of the Petitioner. Petitioner issued a permit for a crematory at Home for Funerals, Inc., on October 23, 1976. From the date that Competiello was advised of the licensing failure until the date that a new permit was issued, no cremations were performed at Home for Funerals, Inc. The permit for a crematory at Home for Funerals, Inc. was issued by the Petitioner with full knowledge that cremations had been performed at Home for Funerals, Inc. during a time when Home for Funerals, Inc. was not properly licensed with the Petitioner as a crematory. There was no evidence offered at the hearing from which it could be determined that any of the cremations performed at Home for Funerals, Inc. during the time that it was not properly licensed with the Petitioner were performed in other than a proper manner. During the time that Competiello has been the licensed funeral director in charge of Home for Funerals, Inc., Home for Funerals has had a business relationship with an entity known as the National Cremation Society, Inc. The National Cremation Society, Inc. is a membership organization. Members of the public pay a fee to become members of the society. The fee entitles members to certain services including cremation upon death at a set price which cannot be increased. National Cremation Society, Inc. utilized the services of Home for Funerals. If a member of the Society died within the service area of Home for Funerals, the member's family would first notify the National Cremation Society, which would in turn notify Home for Funerals. Home for Funerals would conduct the cremation. The National Cremation Society has been Home for Funerals' largest account. There was evidence offered at the hearing which would appear to indicate that Home for Funerals and the National Cremation Society have more than merely a close business relationship. For example, one employee of National Cremation Society was paid on checks from Home for Funerals. The evidence would not, however, support a finding that Home for Funerals and National Cremation Society were alter egos of one another, or were other than separately operating entities. The National Cremation Society maintains an office in Miami Beach, Florida. Ms. Martha Lewis is the office manager. Ms. Lewis is not a licensed funeral director nor an embalmer. Martha Lewis' duties with the National Cremation Society were generally as follows: (a) to receive incoming calls regarding the deaths of Society members or other persons who desired cremation services; (b) to contact a removal service to pick up the deceased's body; (c) to obtain information required for the death certificate from the deceased's family or friends, and to collect money owing to the National Cremation Society; (d) to obtain the necessary medical certification required for the death certificate; (e) to deliver the completed death certificate and burial transit permit application to the Bureau of Vital Statistics for filing and to obtain the necessary burial transit permit; and (f) after cremation, if desired by the deceased's family, to pick up the deceased's remains from the funeral home and to deliver them to the family. Prior to November 1, 1976 Martha Lewis obtained the information for death certificates, signed the certificates herself, and filed them with the Bureau of Vital Statistics in Miami. Subsequent to November 1, 1976, Ms. Lewis was advised by an employee of the Bureau of Vital Statistics that they would no longer accept death certificates that were signed by her, but rather that the death certificates would need to be signed by a licensed funeral director. During this period the National Cremation Society was utilizing the services of Slade Funeral Home in Dade County, Florida to conduct cremations of Society members. The director of the Slade Funeral Home did not wish to sign the death certificates. The National Cremation Society arranged with Mr. Competiello to sign the certificates. Ms. Lewis would prepare the certificates, and forward them by bus to Mr. Competiello. Mr. Competiello would pick up the certificates at the bus terminal, sign them, and return them, also by bus, to Ms. Lewis. This pattern was followed in connection with the deaths of Leonard Schmidt, Joseph Miller, Leonard Scott, Winifred Piepper, Lina Bracher, Elizabeth Spray, James Halpin, Gertrude Keller, and others. The deaths occurred in Dade County, and the cremations were performed at the Slade Funeral Home. Neither Competiello nor Home for Funerals ever had any connection with the deceased persons other than through Competiello's signing of the death certificates. Neither Home for Funerals nor Competiello ever had custody of the bodies. Competiello did not gather any of the information that was set out on the death certificates and he made no examination as to the accuracy of the information. Competiello performed this service as a favor to Home for Funerals' largest account in order to facilitate the filing of death certificates by the National Cremation Society. Neither Competiello nor Home for Funerals had any formal relationship with Slade Funeral Home. Mr. Competiello testified that Slade Funeral Home acted as the agent for Home for Funerals in performing the cremations; however, insufficient evidence was offered to establish that Slade Funeral Home was in fact the agent for Home for Funerals for these purposes. In fact, Slade Funeral Home did not consider itself Home for Funerals' agent. Barbara Reynolds was employed by the National Cremation Society from October 12, 1976 through March 30, 1977 at its Sarasota office. Barbara Reynolds' duties with National Cremation Society were essentially as follows: the secretary or office manager would advise her that a death had occurred, and she would contact Home for Funerals to make arrangements to remove the body; she would contact the deceased's relatives, and obtain information for the death certificate which was not already in National Cremation Society's files, and fill out the death certificate; (c) obtain the required medical certification for the death certificates (d) file the completed death certificates and the burial transit permit applications and receive the burial transit permit; (e) at the request of the deceaseds family, she would pick up the deceased's remains at Home for Funerals, and deliver them to the family; (f) at the deceased's family's request she would place newspaper obituary notices; (g) she would handle paper work for application for the deceased's Social Security benefits or Veterans Administration benefits. Death certificate forms utilized were signed by Mr. Competiello. Mr. Competiello signed the forms in blank and provided them to National Cremation Society. Ms. Reynolds would file the completed death certificate when she obtained all of the information. Since the certificates had already been signed by Mr. Competiello, she would not need to obtain any further signature from him. Mr. Competiello did not gather any of the information for the death certificates and he made no independent examination of the facts set out on the certificates. In fact, Mr. Competiello never saw the death certificates after he signed them in blank. Mr. Competiello provided National Cremation Society a supply of signed blank burial transit permit applications in the same manner. There was no evidence offered at the hearing from which it could be concluded that either Home for Funerals, Inc. or John Competiello received any direct compensation from the National Cremation Society in connection with cremations of Society members conducted by the Slade Funeral Home in Dade County. It does not appear from the evidence that any of the cremations were performed in other than a proper manner, or that any member of the public was directly injured by the activities of Competiello and Home for Funerals, Inc. It does appear that the office of the Bureau of Vital Statistics in Dade County was uncertain as to the necessity for having death certificates signed by a licensed funeral director. Prior to November 1, 1976, the office accepted death certificates for filing which were not signed by a licensed funeral director. At no time did the Bureau of Vital Statistics either in Dade County or any place else complain to Competiello about his practices in connection with the signing of death certificates or burial transit permit applications.
Recommendation That a final order be entered adjudicating the Respondent John Competiello guilty of performing cremations at Home for Funerals, Inc., at a time when Home for Funerals, Inc. was not properly registered as a crematory; and reprimanding him for such conduct. That a final order be entered adjudicating the Respondent Home for Funerals, Inc. guilty of performing cremations at a time when it was not properly registered as a crematory, and reprimanding it for such conduct. That a final order be entered adjudicating the Respondent John Competiello guilty of violations of Section 382.081 Florida Statutes (1975), and Section 470.1D(6), Florida Statutes (1976 Supp.) as set out in Paragraphs 4 and 5 of the Conclusions of Law above, and suspending the licenses of John Competiello to practice as an embalmer and as a funeral director for a period of one year. That a final order be entered adjudicating the Respondent Home for Funerals, Inc. in violation of Chapter 470.12 (4)(a), Florida Statutes (1976 Supp.) and suspending the license of Home for Funerals, Inc. as a funeral establishment for a period of one year. RECOMMENDED this 2nd day of November, 1977, in Tallahassee, Florida. G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Michael J. Dewberry, Esquire 1300 Florida Title Building Jacksonville, Florida 32202 James A. Devito, Esquire Devito and Colen 5362 Central Avenue St. Petersburg, Florida 337D7
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (17b),1 Petitioner has proved that Respondent's recovery of $535,312 in medical assistance expenditures2 from $5 million in proceeds from the settlement of a personal injury action must be reduced to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)3; and, if so, the maximum allowable amount of Respondent's recovery.
Findings Of Fact On September 28, 2005, Petitioner was born by an unremarkable delivery at 42 weeks' gestation at a hospital in West Palm Beach. On October 1, 2005, from all appearances a healthy infant, Petitioner was discharged to home. However, Petitioner was born with an extremely rare metabolic disorder known as B-ketothiolase deficiency (BKT), which prevents the body from processing a protein building block called isoleucine and impedes the body's processing of ketones. A few weeks after Petitioner's birth, the birth hospital began screening that would have detected this condition and permitted timely management and treatment of this serious condition. Petitioner progressed normally until, at the age of five years, she acquired an infection that caused her to suffer a decompensation attack and guardian," and DOAH Case 20-2124MTR identifies by name a parent, "individually and as parent and natural guardian of A. F., a minor." As to the latter case, the same attorneys represent the petitioner and respondent as represent Petitioner and Respondent. 9 Resp.'s proposed final order, footnote 2. metabolic crisis. Over the span of a few hours, Petitioner suffered irreversible and progressive atrophic changes to her basal ganglia. This brain damage produced, among other permanent conditions, intermittent painful spasms, multiple times during the day and night, that cause Petitioner to thrash her head about wildly, to arch her back into an extreme "U-like position," and uncontrollably to scratch her eyes or mouth until the spasm ends or her arms are secured or become entrapped in the wheelchair. Otherwise, Petitioner's arms and legs are in a permanent state of contracture, so as to be of little use to her, and her head is typically deviated to the left. Unable to walk, Petitioner requires the use of a wheelchair for mobility, but chronic pain, especially in her back, prevents her from remaining in the chair for more than 30 minutes at a time. Unable to maintain any position for very long, Petitioner is unable even to watch television or a movie. Petitioner attends school, where she is assisted by a one-to-one paraprofessional, but, due to pain, she typically finds it necessary to leave, often in tears, prior to the end of the school day. Petitioner is completely dependent on others for all of the activities of daily living. She is fed through a gastrostomy tube. Without respite care, Petitioner's mother is unable to leave her daughter unattended and provides nearly all of the required care. Among many other things, the mother secures Petitioner to her bed, changes her position, stretches her, brushes her teeth, and takes her to appointments, including brain stimulation therapy in Gainesville twice weekly to help with the spasms. The impact of Petitioner's condition upon the family is nearly inestimable. For instance, nearly the entire family must accommodate Petitioner's desire to go to an amusement park, as the mother, Petitioner's father, and the older of their other two children must help to get Petitioner into one ride. Petitioner's ability to speak is limited, and she lacks the means of expressive communication by writing or a keyboard. The frustration of these communication barriers is heightened by the fact that Petitioner is likely to be cognitively intact, meaning that she is substantially "locked in," so as to understand what is going on about her, but is unable to express herself, even by body movement or gesture. No single measure adequately conveys the extensive care required just to maintain, to the maximum extent possible, Petitioner's present, limited functionality. When assessed for a life care plan, Petitioner was being seen by nine different physicians, three therapists, and the school nurse; was taking nine different medications; and was served by or consumed nearly two dozen items of equipment or supplies. In 2013, Petitioner filed a personal injury action in circuit court in West Palm Beach against the birth hospital and its corporate parent. The case presented three major problems in establishing liability. At the time of Petitioner's birth, only two hospitals in the state of Florida provided BKT screening at birth, and the birth hospital was not one of them. However, the corporate parent owns numerous hospitals in other states, and at least some of these hospitals were providing BKT screening at the time. Petitioner's ability to establish a favorable standard of care was thus dependent on keeping the corporate parent in the case, even though its liability was attenuated. Petitioner's task was complicated by a Florida statute that explicitly provides that the failure of a healthcare provider to provide supplemental diagnostic tests is not actionable if the provider acted in good faith with due regard to the prevailing standard of care.10 Lastly, Petitioner was confronted by a causation issue because, when informed of Petitioner's rare metabolic condition, the parents did not immediately obtain a screening for her older brother. In September 2017, the circuit judge ordered the parties to submit to two summary jury trials, in which each side had a little over one hour to present the case to actual jurors for a nonbinding verdict. Each party devoted 10 § 766.102(4). nearly all of its allotted time to a presentation on liability, not damages. One jury returned a verdict for the defendants, and the other returned a verdict for the plaintiffs, awarding $23.5 million as follows: the loss of earning capacity and future medical expenses after the age of 18 years--$10.5 million; past and future pain and suffering--$5 million; past and future medical expenses until the age of 18 years--$5 million; and the parents' loss of consortium--$3 million. In the ensuing settlement negotiations, the defendants' counsel did not contest the damages. Significantly, in calculating future medical expenses and loss of earning capacity, both sides chose conservative reduced actuarial values with only four years separating their choices. Additionally, the defendants' counsel did not contend that a timely screening might not have prevented the injuries. Instead, the defendants' counsel argued the above-described liability and causation issues. The plaintiffs' counsel opposed these arguments and, secondarily, argued that the $23.5 million summary jury verdict was too low due to the necessity of counsel's preoccupation with liability during their presentations. Nearly one year after the summary jury verdicts and after extensive discovery and the expenditure of about $200,000 in costs by the plaintiffs, the parties reached the settlement described above. By any standard of proof, Petitioner has proved that the true value of her case was at least $23.5 million, including $535,000 for past medical expenses, and that the $5 million settlement was driven by concerns as to liability and causation, not damages. The only noteworthy damages component in the true value is Petitioner's past and future pain and suffering, which could have supported a larger value based on the Florida Supreme Court's jury instructions on the matter.11 11 Florida Standard Jury Instructions in Civil Cases, Appendix B, Form 2, states in part: What is the total amount of (claimant’s) damages for pain and suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect (list any other noneconomic damages) and loss The $5 million settlement represents a discount of $18.5 million or 78.7% when compared to the true value of the case. Applying the same discount to $535,312 results in Respondent's recovery of $114,021.
The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent), from the proceeds of Petitioners’ confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2020).1
Findings Of Fact Paragraphs 1 through 10 are the enumerated stipulated facts admitted and agreed upon by the parties, and required no proof at hearing. Petitioners commenced a medical malpractice action in 2013 to recover damages related to the injuries sustained by Tavarion Sanders at the time of his birth in 2009. Tavarion Sanders was born September 16, 2009. Misty Mobley is Tavarion Sanders’ mother. The medical malpractice action contains a cause of action asserted on behalf of Tavarion Sanders’ parents, Misty Mobley and Tavaris Sanders, for their own injuries, including for the loss of services, earnings, companionship, society, and affection of the infant, and for the value and expense of the infant’s hospitalizations in the past and future. The injuries related to Tavarion Sanders’ medical malpractice claim include hypoxic brain damage, cerebral palsy with decreased muscle tone in all four extremities, global developmental delays, and a neurogenic bowel and bladder. As a result of these permanent injuries, Tavarion Sanders requires, for the rest of his life, total assistance with all of his activities of daily living, including dressing, feeding, grooming, bathing, and toileting. Medicaid first made payments for medical care on behalf of Tavarion Sanders in 2010. 4 Page one of the Transcript provides that “the Honorable Lawrence P. Stevenson, Administrative Law Judge” heard this case. That is inaccurate. The undersigned was assigned this case on September 9, 2020. As found on page four of the Transcript, the undersigned called this hearing to order and presided throughout the hearing. In 2020, the medical malpractice action settled for a confidential amount. Petitioners assert that the settlement amount was not for the full value of Petitioners’ claims because of the challenges with proving liability and the risk of litigating the case to trial. AHCA was properly notified of the medical malpractice action, and the instant Petition was timely commenced by Petitioners. AHCA has asserted a lien against Tavarion Sanders’ settlement proceeds in the amount of $129,939.87. AHCA paid $129,939.87 on behalf of Tavarion Sanders, related to his claim against the liable third parties in the Petitioners’ medical malpractice action. The amount of the settlement in the medical malpractice action, and the allocation of the proceeds of the settlement as between Tavarion Sanders and Misty Mobley, is identified in Petitioners’ Lien Allocation and Reduction Worksheet. (Petitioners’ Exhibit 25). Petitioners’ Exhibit 1 is an August 18, 2020, letter (lien letter) from Conduent Payment Integrity Solutions, a subcontractor to Health Management Systems, which is an authorized agent of AHCA “to operate the Florida Medicaid Casualty Recover Program.” In addition to directing Tavarion Sanders’ counsel to review section 409.910 to determine the “responsibilities to Florida Medicaid,” Mark Lyles, Conduent’s case manager and author of this letter also posted the amount of the lien asserted by AHCA: $129,939.87.6 Ms. Tejedor is a Florida board-certified civil trial lawyer with 23 years’ experience in personal injury law. She focuses on “birth-related injuries of 5 As noted in footnote 3 above, Petitioners’ Exhibit 2 was amended during the course of the hearing, and Exhibit 2a was filed at the conclusion of the hearing. 6 At some time during the course of this proceeding, Petitioners challenged approximately $3,000.00 of the stipulated amount. However, at hearing, Ms. Tejedor conceded and confirmed as correct the figure found in Petitioners’ Exhibit 2a: the stipulated amount, $129,939.87. children suffering birth injuries during delivery.” As part of her ongoing practice, she routinely evaluates the damages suffered by injured clients. Ms. Tejedor relies on her own experience including her daily legal practice, three of her most recent medical malpractice trials, plus her review of other jury verdicts to gauge any likely recovery. Ms. Tejedor continues to handle cases involving similar injuries suffered by Tavarion Sanders. Ms. Tejedor met and observed Tavarion Sanders; met with Tavarion Sanders’ family and discussed Tavarion Sanders’ condition with his parents and treating medical personnel; and reviewed Tavarion Sanders’ medical information, including the actual medical records of the treating physicians and the multiple MRI reports. Ms. Tejedor represented Petitioners in the civil litigation. She testified to the difficulties associated with this type of medical malpractice litigation in general, and then focused on the problematic causation and liability issues related to Tavarion Sanders and his injuries. Ms. Tejedor credibly testified regarding the evaluations she made of Tavarion Sanders’ injuries and the legal actions she orchestrated.7 In addition to the stipulated injuries listed in paragraph 4 above, Ms. Tejedor described, in laymen’s terms, Tavarion Sanders’ injuries based upon the evidence discovered in the civil litigation: Tavarion Sanders has a severe brain injury; a form of cerebral palsy with motor impairment and cognitive delays; significant mental retardation with seizure disorders; and he is essentially nonverbal. She also explained Tavarion Sanders’ current situation as he is “really not capable of learning;” will never be “gainfully employed any time in the future;” will “require 24/7 care;” and will never live alone. 7 The medical malpractice action was initially brought through the “Neurological Impairment Compensation Association: fund and dismissed because the presiding ALJ found that Tavarion Sanders had not suffered a birth-related neurological injury. Following an appeal, the civil medical malpractice action was restarted, which resulted in a confidential settlement. Ms. Tejedor’s unrefuted testimony placed the total full value of Tavarion Sanders’ damages conservatively at $21,972,186.87. Included in this total value are: Tavarion Sanders’ future medical care, $14,516,878.00; Tavarion Sanders’ loss of earnings capacity, $2,325,369.00; Tavarion Sanders’ pain and suffering, $5,000,000.00; and the past medical expenses, stipulated to by Petitioners and AHCA, $129,939.87. Further, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Ms. Tejedor averred she used the same formula to determine that 6.8% is the ratio of the settlement to the full value of Tavarion Sanders’ claim. Ms. Tejedor followed the formula as set forth in: Valeria Alcala, a Minor, by Yobany E. Rodriguez- Camacho and Manuel E. Alcala, as Natural Guardians and next friends vs. Agency for Health Care Administration, Case No. 20-0605MTR, 2020 Florida Division of Administrative Hearings, 2020 WL 4934729 (Fla. DOAH August 18, 2020); and Amy Lopez, Individually and as Parent and Natural Guardian of A.F., a Minor, vs. Agency for Health Care Administration, Case No. 20-2124MTR (Fla. DOAH Sept. 3, 2020). Ms. Tejedor testified she used the “same formula that other jurisdictions in Florida have followed, which is the, you know, Ahlborn[8] decision, which basically ... lists out how you determine the percentage that ... the percentage of the value of the case that represents past medical expenses, and that’s exactly the way we did it in this case.” Ms. Tejedor’s testimony was competent, substantial, persuasive and uncontradicted on this point. Mr. Copeland is a Florida civil trial lawyer with 28 years’ experience in personal injury law, with an active civil trial practice. He has handled and continues to practice in the areas of products liability and medical malpractice litigation. As part of his every day practice, Mr. Copeland is involved in resolving liens. 8 Ark. Dept of Health & Human Serv. v. Ahlborn, 547 U.S. 268 (2006). In addition to serving as a witness for damage valuation cases and an expert in the reduction of liens, Mr. Copeland has worked with the legislation that deals with “damages, calculation of damages, and to some extent on occasion lien resolution was part of those calculations.” Mr. Copeland has “spent quite a bit of time testifying before committees in the House and Senate,” and on “Blue Ribbon panels appointed by governors that dealt in part with damages, and evaluating personal injury statutes.” Mr. Copeland’s expert testimony has always been accepted in evidence. Mr. Copeland was tendered and without objection was accepted as an “expert witness in the valuation of damages in medical malpractice actions and in the resolution of health care liens.” Mr. Copeland testified that Florida “courts generally are following the Ahlborn formula.” Mr. Copeland routinely works with life care planners and economists in his practice, and used the economic damage numbers provided to him for this case. Further, Mr. Copeland testified that he based his opinion on Tavarion Sanders’ future medical care expense, lost earnings capacity, the medical expenses identified in the lien letter, Tavarion Sanders’ loss of enjoyment for the capacity of life, and Tavarion Sanders’ pain and suffering (both past and future) “just like you’re going through a jury verdict form” in Florida. Mr. Copeland opined that the full value of Tavarion Sanders’ claim, using his conservative approach, was $21,972,186.87. Using the Ahlborn pro rata methodology or formula, that is, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Mr. Copeland testified that Tavarion Sanders recovered only 6.8% of the full measure of all his damages. Then, by applying that 6.8% to the full amount that Medicaid claimed of $129.939.87, the full satisfaction of the lien is $8,835.91. Mr. Copeland’s testimony was uncontradicted and persuasive on this point. The testimony of Petitioners’ expert regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioners proved that the confidential settlement does not fully compensate Tavarion Sanders for the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different methodology to the valuation of the damages. In short, Petitioners’ evidence was unrebutted. Respondent’s attempt to quibble with how many significant figures were used in determining the appropriate percentage for the pro rata methodology calculation is tenuous and unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $129,939.87. It is logical and rational to conclude that this figure is the amount expended for Tavarion Sanders’ past medical expenses. Respondent explored an additional past medical expense of $762.66, however the parties stipulated to the past medical expense figure. There is a lack of evidence to support this purported additional past medical expense, and the undersigned is not persuaded to amend the stipulated amount. Applying the 6.8% pro rata ratio to $129,939.87 equals $8,835.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioners proved by a preponderance of the evidence as set forth in section 409.910(11)(f) that AHCA should be reimbursed at the lesser amount: $8,835.91.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (sometimes referred to as "17b"), Respondent's recovery of medical assistance expenditures from $500,000 in proceeds from the settlement of a products liability action must be reduced from its allocation under section 409.910(11)(f) (sometimes referred to as "11f")1 to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)2; and, if so, the amount of Respondent's recovery.
Findings Of Fact As a result of a motor vehicle accident that took place on May 27, 2012, Petitioner sustained grave personal injuries, including damage to his spinal cord that has left him a paraplegic incapable of self-ambulation of more than a few steps, except by means of a wheelchair or rolling walker. Petitioner was a passenger in a 2003 extended-cab Ford F-150 pickup truck that was driven at a high rate of speed by his brother, who lost control of the vehicle in a curve, over-corrected, and caused the vehicle to rollover three times, ejecting Petitioner with such force that he traveled a distance of 150 feet in the air. The force of the rollovers crushed the vehicle's roof, which caused Petitioner's door latch to fail, allowing Petitioner's door to open and Petitioner to be expelled from the relative safety of the passenger compartment. In settlement negotiations, Petitioner's trial counsel claimed that Ford F-150s of the relevant vintage suffered from deficient door latches, but the forces to which the latch were subjected were overwhelming and well beyond reasonable design limits: the truck's door could not have resisted these forces unless it had been welded to the frame. The one-vehicle accident was substantially, if not entirely, caused by Petitioner's brother, who was intoxicated and is now serving a five-year sentence in prison for his role in the crash. Petitioner shared some responsibility because he likely was not wearing a seatbelt when the truck rolled over. Petitioner's brother and another passenger who were not ejected from the vehicle sustained minor injuries. Petitioner commenced a products liability action against Ford Motor Company and the manufacturer of the door latch. Ford Motor Company defended the case vigorously. Expert witnesses were unable to find any federal safety standards that had been violated in connection with the vehicle, the door latch, or the performance of the vehicle and door latch during the rollovers. The manufacturer of the door latch raised a substantial defense of a lack of personal jurisdiction. At the time of the incident, Petitioner was a 25-year-old plumber and construction worker. He was the sole means of support for his three young children. He has undergone an arduous course of rehabilitation to gain wheelchair-dependent self-autonomy. At the time of the settlement, which appears to have resolved the products liability action, the putative true value of Petitioner's case was $6 million, consisting of $154,219 of past medical expenses, $2.1 million of future medical expenses, $800,000 of lost wages and loss of future earning capacity, and about $2.95 million of noneconomic damages, including pain and suffering and loss of consortium. Petitioner has proved each of these damages components, so the putative true value is the true value (sometimes referred to as the "actual true value"). Petitioner settled the case for $500,000, representing a settlement discount of 91.7% from the true value of $6 million (Settlement Discount). Petitioner has paid or incurred $147,000 in attorneys' fees and about $123,000 in recoverable costs in prosecuting the products liability action. Respondent has expended $154,219 of medical assistance. Under the 11f formula, which is described in the Conclusions of Law, Respondent would recover approximately $126,000 from the $500,000 settlement. This provisional 11f allocation provides the point of reference for determining whether Petitioner has proved in this 17b proceeding a reduced recovery amount for Respondent. Having proved the Settlement Discount of 91.7% from the actual, not putative, true value to the settled value, Petitioner has proved that each damages component of the true value, including past medical expenses, must be proportionately reduced by 91.7% to identify the portion of the settlement proceeds representing past medical expenses, which, as discussed in the Conclusions of Law, is the only portion of the proceeds subject to the Medicaid lien. Reducing the past medical expenses of $154,219 by 91.7% yields about $12,800, which is Respondent's tentative 17b recovery. As mentioned in the Conclusions of Law, Respondent's recovery must bear its pro rata share of the attorneys' fees and costs paid or incurred to produce the settlement. The total fees and costs of $270,000 represent 54% of the settlement. The record provides no reason to find that these fees and costs are unreasonable in amount or were not reasonably expended to produce the $500,000 settlement. Reducing Respondent's recovery of $12,800 by 54% yields $5888, which is Respondent's 17b recovery.
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA or Respondent), as reimbursement for medical expenses paid on behalf of Petitioner pursuant to section 409.910, Florida Statutes (2020),1 from settlement proceeds he received from third parties.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 6, 2019, Mr. St. Surin was severely injured when his motorcycle struck a car. In this accident, Mr. St. Surin suffered severe and permanent injury to his back, neck, scapula, ribs, and knee. 1 All references to Florida Statutes are to the 2020 codification, unless otherwise indicated. Mr. St. Surin’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, provided $28,482.15 in benefits. In addition, Medicaid, through a Medicaid managed care organization known as WellCare of Florida, paid $7,278.25 in benefits. The combined total amount of these benefits, $35,760.40, constitutes Mr. St. Surin’s entire claim for past medical expenses. Mr. St. Surin pursued a personal injury claim against the owner and driver of the car who caused the accident (collectively the “Tortfeasors”) to recover all of his damages. The Tortfeasors’ insurance policy limits were $100,000, and the Tortfeasors had no other collectable assets. Mr. St. Surin’s personal injury claim was settled for the insurance policy limits of $100,000. During the pendency of Mr. St. Surin’s personal injury claim, AHCA was notified of the claim and AHCA asserted a Medicaid lien in the amount of $28,482.15 against Mr. St. Surin’s cause of action and the settlement proceeds. AHCA did not commence a civil action to enforce its rights under section 409.910, or intervene or join in Mr. St. Surin’s action against the Tortfeasors. AHCA was notified of Mr. St. Surin’s settlement by letter. AHCA has not filed a motion to set aside, void, or otherwise dispute Mr. St. Surin’s settlement. Application of the formula found in section 409.910(11)(f) would require payment to AHCA of the full $28,482.15 Medicaid lien given the $100,000 settlement. Petitioner has deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending a final administrative determination of AHCA’s rights. Petitioner presented testimony from Scott Kimmel, Esquire. Mr. Kimmel represented Mr. St. Surin in his personal injury claim against the Tortfeasors. Mr. Kimmel is a personal injury attorney and has practiced law for 30 years. Mr. Kimmel testified that he placed a conservative value of $1 million on Mr. St. Surin’s personal injury claim, but that the personal injury claim was settled for policy limits of $100,000 because the Tortfeasors had no other collectable assets. Using the pro rata allocation methodology, Mr. Kimmel testified that $3,576 of the $100,000 settlement proceeds should be allocated to past medical expenses because the personal injury claim was settled for ten percent of its conservative value. Mr. Kimmel’s testimony was credible, persuasive, and uncontradicted. AHCA did not challenge Mr. Kimmel’s valuation of the personal injury claim, or his use of the pro rata allocation methodology to determine the amount of settlement proceeds that should be allocated to past medical expenses, nor did AHCA offer any evidence from which the undersigned could arrive at a different valuation or allocation. There is no reasonable basis to reject Mr. Kimmel’s testimony, and it is accepted here in its entirety. The undersigned finds that the value of Mr. St. Surin’s personal injury claim is $1 million, and that $3,576.04 of the $100,000 settlement proceeds should be allocated to past medical expenses.
