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 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 Petitioner, from a third party, pursuant to section 409.910, Florida Statutes (2017).
Findings Of Fact On May 1, 2009, Toresco, who was then 18 years old, was involved in a car accident. In the accident, Toresco suffered severe personal injury, including numerous fractures and a closed head injury resulting in brain damage. Toresco is now permanently disabled, has limited use of her left arm and leg, and cannot walk without assistance. Toresco's accident occurred when she turned her vehicle left in an intersection, in front of a 3000-pound truck. The truck hit her vehicle's passenger side, and her vehicle went over a concrete curb and into two palm trees. After the accident, Toresco was in a coma for approximately two months and suffered skull fractures and brain damage. Toresco's injuries included kidney failure, hemorrhages, and cognitive loss. She was fed by a feeding tube. Toresco lost full use of her right side due to a brain injury. She is no longer able to work, horseback ride, dance, or participate in many of the activities she had participated in before the accident. Toresco's medical care related to the injury was paid by Medicaid, and the Medicaid program provided $116,549.10 in benefits associated with her injury. The $116,549.10 represented the entire claim for past medical expenses. Toresco brought a personal injury lawsuit against the driver/owner of the truck that caused the accident to recover all of her damages associated with her injuries. McCullough, a 23-year civil trial attorney with the law firm of McCullough and Leboff, P.A., in Davie, Florida, represented Toresco in her personal injury action. He was her third attorney handling the case and took over from the two previous attorneys because of the difficult liability issues in the personal injury action. During the pendency of the personal injury action, AHCA was notified of the action, and AHCA asserted a $116,549.10 Medicaid lien against cause of action and settlement of that action. McCullough handled the case through settlement. The personal injury lawsuit was settled for the lump-sum unallocated amount of $750,000.00. AHCA has neither filed an action to set aside, void, or otherwise dispute the settlement nor started a civil action to enforce its rights under section 409.910. AHCA, through its Medicaid program, spent $116,549.10 on behalf of Toresco, all of which represents expenditures paid for Toresco's past medical expenses. The formula at section 409.910(11)(f), as applied to the entire $750,000.00 settlement, requires payment in the full amount of the $116,549.10 Medicaid lien, and AHCA is demanding payment of $116,549.10 from the $750,000.00 settlement. Toresco 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). At the final hearing, Petitioner presented, without objection, the expert valuation of damages testimony of her Florida trial attorney, McCullough. McCullough practices exclusively personal injury law and always represents individuals who are injured. The majority of his cases involve automobile accidents. McCullough's expertise also encompasses evaluation of personal injury cases. He stays abreast of all State of Florida jury verdicts by reviewing jury verdict reporters and discussing personal injury verdicts and valuations with other attorneys in his geographical area. At hearing, McCullough explained that as a routine part of his practice, he makes assessments concerning the value of damages suffered, and he detailed his process for making those assessments. McCullough credibly made clear the process he took to develop an opinion concerning the value for the damages suffered in Toresco's case. McCullough testified that he reviewed Toresco's automobile report, medical records, Life Care Plan, Economist Report, and met with his client, Toresco, numerous times. McCullough testified that prior to the accident, Toresco was a champion horseback rider, and she spent most of her time at the stables. The accident "tremendously affected her" because she is unable to work, ride horses, and participate in daily activities due to her injury from the automobile accident. McCullough analyzed how the accident occurred and detailed that Toresco turned left in front of a 3000-pound truck, which hit the passenger side of Toresco's car and pushed her into two palm trees. Toresco was found to have significant head injury, with facial fractures, and a closed head injury when she was taken to the hospital. McCullough testified that the brain damage from the head injury caused Toresco to lose use of her full right side. McCullough further testified at hearing that the medical care related to the accident was paid by Medicaid in the amount of $116,549.10, which constituted Toresco's claim for past medical expenses. McCullough explained that Toresco sued the individual driver and driver's company because even though Toresco turned left in front of the driver's vehicle, if the driver had not been moving at a rate of speed above the speed limit, Toresco would not have been as seriously injured because she would not have been hit squarely in the middle of the vehicle. A slower lawful speed would not have resulted in as significant of an injury, or the truck might have even missed her. McCullough further stated that the defense's position was that Toresco was liable for her own injuries because she turned in front of the vehicle, and, ultimately, the case hinged on a battle of engineering experts and accident reconstructionists. McCullough explained that during the mediation of Toresco's case, the damages were presented to the defendant. He detailed how the economic damages were outlined for the defendant, including the $116,549.10 for past medicals and noneconomic pain and suffering of around $7,000,000.00. Ultimately, the case settled during mediation with the liable third parties for $750,000.00. McCullough opined that the settlement was not the full value of Toresco's damages and that the settlement only represents about ten percent of the full measure of her damages. McCullough's testimony was uncontradicted and compelling. McCullough explained that he based his valuation of Toresco's economic damages on the life care plan, which included the following claims: past medical expenses of $116,549.10; lost earnings of $68,106.00; future lost earnings of $976,186.00; and future medical expenses $2,154,509.00. He added the past medicals, past lost wages, future lost wages, and future medical expenses together, which totaled $3,300,000.00. Based on his training and experience, McCullough also credibly testified that the noneconomic damages would have significant value under the circumstances and that Toresco's economic and noneconomic damages together have a value that totals between a conservative $7,500,000.00 and $10,000,000.00. McCullough concluded that the low-end conservative number for the value of Toresco's damages is $7,500,000.00. At hearing, Barrett also provided an expert opinion without objection regarding the value of Toresco's case. Barrett is a 40-year trial attorney who has represented plaintiffs in various types of personal injury lawsuits, including automobile accidents. He is a partner with the law firm of Barrett, Nonni, and Homola and handles jury trials. Barrett routinely makes assessments concerning the value of damages suffered by injured parties in his daily practice. He is familiar with reviewing medical records, life care plans, and economist reports. He stays abreast of jury verdicts and routinely runs facts by a listserv group of approximately 25 trial lawyers to get the value of what cases are reasonably worth. Barrett became familiar with Toresco's injuries after he reviewed the exhibits in this case, the report and patient summary, life care plan, economist report, and mediation summary. Barrett determined that Toresco's medical damages were severe, and she was largely at fault when she turned left in front of the vehicle that struck her. Barrett detailed how severe Toresco's injuries were by explaining that she was in a coma in the hospital for about two months and suffered kidney failure because of the brain damage and that "it affected her almost in every way." Barrett also explained that before the accident, Toresca was athletically built, a competitive equestrian and dancer, and was a working senior in high school, but she will never be able to work, ride a horse, dance, or do things young women do again. Barrett explained that the evidence supports over $3,000,000.00 in economic damages. He testified that he relied on the economist who had calculated the present value of Toresco's future medical expenses, lost past and future income, and claim for past medical expenses for a total of $3,315,350.00. Barrett further opined that "[Toresco's] future and past pain and suffering and mental anguish, loss of enjoyment of life was worth $6,000,000.00" in noneconomic damages. Barrett added the economic and noneconomic damages and determined the total would have a value between approximately $8,000,000.00 and $10,000,000.00 with an average around $9,000,0000.00. He credibly concluded that Petitioner's total conservative value of damages is $7,500,000.00. Barrett went on to explain that the $750,000.00 settlement was very conservative and did not fully compensate Toresco for the full value of her damages. Instead, he opined that the settlement only covered a ten-percent recovery of the conservative value of her damages, $7,500,000.00. Barrett further explained that each element of damages should be reduced to ten percent of the amount attributable to each element, and if ten percent was applied to the $116,549.10 claim for past medical expenses, the amount is $11,654.91. The evidence demonstrates that the total conservative value of the damages related to Toresco's injury was $7,500,000.00 and that the settlement amount, $750,000.00, is only ten percent of the total value. The $750,000.00 settlement does not fully compensate Petitioner for the total value of her damages. Petitioner has established by unrebutted uncontested evidence that the $750,000.00 settlement amount is ten percent of the total value ($7,500,000.00) of Petitioner's damages. Using the same calculation, Petitioner correctly established that applying ten percent to $116,549.10 (Petitioner's amount allocated in the settlement for past medical expenses) results in $11,654.91, the portion of the Medicaid lien owed. Petitioner 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).
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Micaiah McCray, from a medical-malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on November 11, 2008. In the months following birth, Petitioner underwent several surgeries and procedures including a percutaneous endoscopic gastrostomy tube placement on January 26, 2009, a repair of incomplete atrioventricular canal defect on April 15, 2009, and Nissen Fundoplication and revision of gastrostomy tube on July 8, 2009. On July 23, 2009, Petitioner was admitted to St. Mary’s Medical Center with suspected bronchitis and exacerbation of reactive airway distress. During this hospitalization, on or about August 15, 2009, Petitioner suffered a stroke involving the right hand and part of the right leg. A CT scan of Petitioner’s brain revealed a left middle cerebral artery distribution infarction suggesting a large ischemic infarct. Petitioner’s condition stabilized and Petitioner was released from the hospital on August 27, 2009, with the following discharge summary: Exacerbation of reactive airway disease Bronchitis Mitral stenosis Mild pulmonary hypertension Hypersecretory upper airway Pansinusitis Clostridium difficile colitis Hypoxemia with oxygen dependency Gastroesophageal reflux disease, status post fundoplication Left cerebral infarction of unknown etiology Endocardial cushion defect status post atrioventricular canal repair Bilateral optic nerve colobomas Rule out CHARGE association/Goletz syndrome On September 21, 2009, Petitioner was admitted to Palms West Hospital with a diagnosis of respiratory distress. Petitioner’s condition improved and he was discharged home on September 25, 2009. Subsequent to that hospitalization, an MRI performed on October 19, 2009, revealed new acute strokes. In the years following Petitioner’s strokes, he underwent numerous surgeries, procedures, and therapies for a multitude of medical conditions. Petitioner’s past medical expenses related to his injuries were paid by both private health insurance and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $217,545.58. United Healthcare and Aetna provided $37,090.17 and $3,231.72 in benefits, respectively. Total healthcare expense incurred for Petitioner’s injuries was $257,867.47. Petitioner is developmentally delayed and cannot walk or crawl. Petitioner requires a wheelchair or stroller for mobility and requires positioning and trunk support to maintain a seated position. His ability to independently explore his environment is severely restricted. Petitioner is completely dependent on others for activities of daily living. He cannot bathe, dress, or eat on his own. He requires a feeding tube, and receives professional in-home services to monitor his respiration and heartrate, manage his GJ tube, administer medication, and monitor bowel and bladder function. Petitioner does not vocalize words and has limited communication. He has no function of his right hand and has tightness in the right leg below the knee. Petitioner’s condition is permanent. Petitioner’s parents brought a medical malpractice action on his behalf in the Circuit Court of the 15th Judicial Circuit Court in and for Palm Beach County against Tenet St. Mary’s Inc., d/b/a St. Mary’s Medical Center; Palms West Hospital Limited Partnership, d/b/a Palms West Hospital; David Evan Mound Drucker, M.D.; South Florida Pediatric Surgeons, P.A.; Physicians Professional Liability Risk Retention Group; Alberto Antonio Marante, M.D.; Florida Pediatric Critical Care, P.A.; Diego Maurcio Diaz, M.D.; Gerard Minor, P.A.-C; Children’s Center Gastroenterology & Nutrition, P.A.; Chartis Claims, Inc.; Lexington Insurance Company; Eunice Cordoba, M.D; and Edwin Liu, M.D., P.A., d/b/a Pediatric Neurologist of Palm Beach (Defendants). Petitioner’s action alleged, among other theories, that the Defendants failed to recognize in Petitioner a sickle cell trait and properly treat Petitioner’s dehydration, a factor contributing to Petitioner’s strokes. Petitioner’s parents retained Scott Marlowe Newmark, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in the medical malpractice action against Defendants. In preparation for litigation, Stephanie P. Chalfin, M.S., prepared a life care plan for Petitioner. The plan sets out the need for future medical care, equipment, hospitalizations, surgeries, medications, and attendant care, through Petitioner’s expected life span. In this case, Petitioner’s life expectancy is an additional 66.9 years. During the pendency of the medical malpractice action, J. Rody Borg, Ph.D., an economist, prepared a report assigning a present value between $24,373,828 and $29,065,995 for the future costs of Petitioner’s life care plan, lost benefits, and lost earning capacity. Mr. Newmark’s expert valuation of the total damages suffered by Petitioner is at least $30 million. Mr. Newmark considered the life care plan and Dr. Borg’s report in arriving at the value of total economic damages. Mr. Newmark then examined jury verdicts in similar cases involving catastrophic injury to value non-economic damages. Of the nine jury verdicts examined, Mr. Newmark highlighted three as particularly relevant because they involved young children with brain injuries similar to Petitioner’s injury and who required life-long care. The nine cases had an average award of $12 million for non-economic damages (past and future pain and suffering). Mr. Newmark arrived at his valuation of Petitioner’s damages at $30 million by considering the low-end of Dr. Borg’s economic damages estimate, $24 million, along with the average jury award for non-economic damages in similar cases. Mr. Newmark’s testimony was credible, reliable and persuasive. Mr. Newmark’s valuation of total damages was supported by the testimony of two additional personal injury attorneys, Mark Finklestein and R. Vinson Barrett, both of whom have practiced personal injury law for more than 30 years and were accepted as experts in valuation of damages (in personal injury cases). Mr. Finkelstein served as Petitioner’s guardian ad litem in the underlying medical malpractice action and agreed with the valuation of total damages at $30 million. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations, the life care plan, Dr. Borg’s report, and a day-in-the-life video of Petitioner. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Newmark. Mr. Barrett likewise agreed with the $30 million valuation of Petitioner’s total damages. Respondent was notified of Petitioner’s medical malpractice action during its pendency. Respondent asserted a Medicaid lien in the amount of $217,545.58 against the proceeds of any award or settlement arising out of that action. In 2012 and again in 2015, Petitioner received a series of settlements from the Defendants. The settlements totaled $2,450,000. The settlements do not fully compensate Petitioner for the total value of his damages. The settlements are undifferentiated, meaning they are not apportioned to specific types of damages, such as economic or non-economic, past or future. In all of the releases signed by the parties thereto, the parties agreed that, “if an allocation of this settlement is necessary in the future, this allocation should be made by applying the same ratio this settlement bears to the total monetary value of all [Petitioner’s] damages to the specific damage claim.” Respondent was not a party to the 2012 and 2015 settlements and did not execute any of the applicable releases. Respondent’s position is that it should be reimbursed for its Medicaid expenditures on behalf of Petitioner pursuant to the formula set forth in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting a 25 percent attorney’s fee and taxable costs (in this case, $613,131) from the $2,450,000 recovery, which yields a sum of $1,836,869 then dividing that amount by two, which yields $918,434.50. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of its lien, whichever is less. In the case at hand, Respondent may recover under the statute the full amount of its lien. Petitioner’s position is that reimbursement for past medical expenses should be limited to the same ratio as Petitioner’s recovery amount to the total value of damages. Petitioner urges Respondent should be reimbursed $21,067.77 in satisfaction of its Medicaid lien. The settlement amount of $2,450,000 is 8.17 percent of the total value ($30 million) of Petitioner’s damages. By the same token, 8.17 percent of $257,867.47 (Petitioner’s past medical expenses paid by both Medicaid and private insurance) is $21,067.77. Both Mr. Finklestein and Mr. Barrett testified that $21,067.77 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. Petitioner proved by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue The amount to be reimbursed to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), for medical expenses paid on behalf of Petitioner, Mitchell Fowler, from settlement proceeds received by Petitioner from third parties.
Findings Of Fact On September 4, 2016, Mr. Fowler suffered a catastrophic and permanent spinal cord injury when he fell at a boat ramp. Mr. Fowler is now a paraplegic unable to walk, stand, or ambulate without assistance. Mr. Fowler’s medical care related to his injury was paid by Medicaid. Medicaid, through AHCA, provided $74,693.24 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Humana, provided $7,941.28 in benefits. The sum of these Medicaid benefits, $82,634.52, constituted Mr. Fowler’s entire claim for past medical expenses. Mr. Fowler pursued a personal injury action against the owner/operator of the boat ramp where the accident occurred (“Defendants”) to recover all his damages. The personal injury action settled through a series of confidential settlements in a lump-sum unallocated amount of $800,000. As a condition of Mr. Fowler’s eligibility for Medicaid, Mr. Fowler assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See § 409.910(6)(b), Fla. Stat. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $74,693.24 Medicaid lien associated with Mr. Fowler’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. By letter, AHCA was notified of the settlements. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlements. The Medicaid program through AHCA spent $74,693.24 on behalf of Mr. Fowler, all of which represents expenditures paid for past medical expenses. No portion of the $74,693.24 paid by AHCA through the Medicaid program on behalf of Mr. Fowler represented expenditures for future medical expenses. The $74,693.24 in Medicaid funds paid towards the care of Mr. Fowler by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Humana spent $7,941.28 on Mr. Fowler’s medical expenses. Thus, the total amount of past medical expenses incurred by Mr. Fowler is $82,634.52. The taxable costs incurred in securing the settlements totaled $45,995.89. Application of the formula at section 409.910(11)(f) to the $800,000 settlement requires payment to AHCA of the full $74,693.24 Medicaid lien. Petitioner deposited the full Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that the total of Mr. Fowler’s economic damages, including future medical expenses, were $5,652,761.00 which, added to the $82,634.52 in past medical expenses, results in a sum of $5,735,395.52 in economic damages. Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioner established, by clear and convincing evidence that was unrebutted by AHCA, that non-economic damages alone could reasonably be up to $26,000,000. When added to the economic damages, a value of Mr. Fowler’s total damages well in excess of $30,000,000 would not be unreasonable. However, in order to establish a very conservative figure against which to measure Mr. Fowler’s damages, both experts agreed that $15,000,000 would be a reasonable measure of Mr. Fowler’s damages for purposes of this proceeding. Based on the forgoing, it is found that $15,000,000, as a full measure of Mr. Fowler’s damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $800,000 settlement is 5.33 percent of the $15,000,000 conservative value of the claim.
The Issue The issue to be determined in this matter is the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Amora Gonzalez, a Medicaid recipient, following Petitioner’s recovery from a third party.
Findings Of Fact On August 14, 2015, Amora, who was then five years old, was the backseat passenger in a car driven by her mother, Nicalea R. Gonzalez. Amora was secured in a child seat. While Ms. Gonzalez was stopped at a traffic light, a commercial cargo van collided directly into the rear end of her car at a speed of approximately 50 to 60 miles per hour. The impact crumpled the back of Ms. Gonzalez’s vehicle. The collision also severed the seat belt securing Amora’s child seat. Amora was thrown violently forward. Following the accident, Amora was found lying on the back floor of the vehicle, wedged between the front seats. When emergency services personnel arrived, Amora was found lying on the ground exhibiting signs of a severe brain injury. Subsequent CT scans and an MRI revealed that Amora had suffered diffuse axonal injury to her corpus callosum region of the brain, a temporal lobe hematoma, and a subdural hematoma in her right tentorial region. Due to elevated cranial pressure, Amora underwent neurosurgery for placement of an external ventricular drain, and she was placed in a medically induced coma. Amora also underwent a decompressive craniotomy due to continued intracranial pressure. Amora was diagnosed with a neuro cognitive disorder due to traumatic brain injury with a behavioral disorder. As a result of her brain injury, Amora suffers from serious cognitive impairment, executive functioning level disabilities, and behavioral disturbances. Amora’s past medical expenses related to the 2015 automobile accident total $108,725.29. Of that amount, the Agency, through the Medicaid program, paid $108,656.31 for Petitioner’s medical care and services. Petitioner did not make any payments on Amora’s behalf for past medical care or in advance for Amora’s future medical care. Ms. Gonzalez pursued a personal injury claim as Natural Guardian and Legal Guardian of the Property of Amora to recover all of Amora’s damages against the driver/owner of the vehicle that caused the car accident (the “Tortfeasor”). The Tortfeasor maintained an insurance policy with limits of $1,000,000 and had no other collectable assets. Prior to filing the lawsuit, the Tortfeasor tendered the $1,000,000 insurance policy limit in compromise and settlement of Amora’s claim for damages. No evidence or testimony was presented at the final hearing indicating that a specific portion of the $1,000,000 settlement was designated to cover past medical expenses. Neither was there any evidence or testimony offered segregating the $1,000,000 settlement between medical and non-medical expenses. The Agency was not a party to the settlement or settlement agreement. When notified of Ms. Gonzalez’s recovery on behalf of Amora, the Agency asserted a Medicaid lien for $108,656.31, the full amount of its medical expenses paid for Amora’s medical costs and services. This administrative proceeding centers on the amount the Agency should be reimbursed to satisfy its Medicaid lien following Petitioner’s recovery of $1,000,000 from a settlement with a third party. Under section 409.910, the Agency may be repaid for its Medicaid expenditures from any recovery from liable third parties. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of its Medicaid lien ($108,656.31) regardless of the actual value of Petitioner’s damages. Using the section 409.910(11)(f) formula, the Agency subtracted a statutorily recognized attorney fee of $250,000 from $1,000,000 leaving $750,000. One-half of $750,000 is $375,000. Because the $375,000 formula amount exceeds the Medicaid lien, the Agency seeks the full $108,656.31. Petitioner asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s recovery than the amount it calculated under section 409.910(11)(f). Petitioner specifically argues that the Medicaid lien must be reduced pro rata, taking into account the full value of Amora’s injuries which Petitioner calculates as $8,000,000. Otherwise, application of the default statutory formula under section 409.910(11)(f) would permit the Agency to collect more than that portion of the settlement representing compensation for medical expenses. Petitioner maintains that such reimbursement violates the federal Medicaid law’s anti-lien provision, 42 U.S.C. § 1396p(a)(1). Petitioner contends that the Agency’s allocation from Petitioner’s recovery should be reduced to the amount of $13,590.66. To establish the full value of Amora’s injuries, Petitioner presented the testimony of attorneys Paul Catania and Vince Barrett. Mr. Catania represented Petitioner in the underlying personal injury claim and obtained the $1,000,000 settlement for Amora. Mr. Catania explained that prior to finalizing the settlement, he explored the possibility of collecting a verdict in excess of the policy limits. Mr. Catania concluded that not only were the defendants uncollectable, but multiple claimants were going after the same insurance proceeds. Consequently, Mr. Catania believed that it was in his clients’ best interest to settle expeditiously for the tendered insurance policy limits. Mr. Catania also opined on what he considered to be the actual value of Amora’s damages. Mr. Catania heads a plaintiff’s injury firm and has represented plaintiffs in personal injury cases for over 28 years. Mr. Catania has extensive experience handling cases involving automobile accidents, including catastrophic injury claims and traumatic brain injuries to children. Mr. Catania expressed that he routinely evaluates damages suffered by injured parties as part of his practice. He stays current on jury verdicts throughout Florida and the United States. Mr. Catania was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Catania valued Amora’s damages as conservatively between $8,000,000 and $10,000,000. In deriving this figure, Mr. Catania reviewed the neuro psychological report in Amora’s discharge summary, as well as the subsequent neuro psychological updates that were performed on Amora approximately one year later. Mr. Catania noted Amora’s memory problems, inattention, hyperactivity, and behavioral issues. Mr. Catania relayed how these deficits will affect Amora’s ability to learn and be gainfully employed over her lifetime. Amora will need ongoing speech and occupational therapy. Mr. Catania also considered Amora’s past medical expenses, her wage loss or lost wage capacity, and her past and future pain and suffering. Finally, Mr. Catania testified that, in placing a dollar value on Amora’s injuries, he reviewed nine jury verdicts involving catastrophic injuries similar to Amora’s. Based on these sample results, Mr. Catania was comfortable valuing Amora’s damages conservatively in the $8 million to $10 million range given her injuries and her life expectancy. Mr. Catania testified that the $1,000,000 settlement did not fully or fairly compensate Amora for her injuries. Therefore, Mr. Catania urged that a lesser portion of Petitioner’s settlement be allocated to reimburse the Agency instead of the section 409.910(11)(f) formula amount of $108,656.31. Mr. Catania proposed applying a ratio based on the true value of Amora’s injuries ($8,000,000) compared to the amount Petitioner actual recovered ($1,000,000). Using his estimate of $8 million, the settlement represents a 12.5 percent recovery of the total value of all Amora’s damages. In like manner, the amount of medical expenses should also be reduced to 12.5 percent or $13,590.66. Therefore, in Mr. Catania’s professional judgment, $13,590.66 is the portion of Amora’s settlement that represents her compensation for past medical expenses. Mr. Catania testified that no portion of the settlement represents future medical expenses.2/ Mr. Catania expressed that allocating $13,590.66 for Amora’s past medical expenses is “reasonable” and “rational” under the circumstances. Mr. Barrett also testified on behalf of Petitioner. Mr. Barrett is a trial attorney with almost 40 years’ experience and works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. Mr. Barrett has handled many catastrophic injury matters involving catastrophic injuries and traumatic brain injury to children. Mr. Barrett was accepted as an expert in valuation of damages in personal injury cases. Prior to the final hearing, Mr. Barrett had reviewed Amora’s medical records, as well as Petitioner’s exhibits. He also reviewed the sample jury verdicts Petitioner presented at the final hearing as Exhibit 14. Based on his valuation of Amora’s injuries and his professional training and experience, Mr. Barrett expressed that injuries similar to Amora’s would result in jury awards averaging between $8 and $20 million dollars. In light of Amora’s “catastrophic” injuries, Mr. Barrett valued Amora’s injuries as at least $8 million. Mr. Barrett opined that Mr. Catania’s valuation of $8 million to $10 million was appropriate, if conservative. Mr. Barrett supported Mr. Catania’s proposed method of calculating a reduced portion of Petitioner’s $1,000,000 to represent past medical expenses. With injuries valued at $8 million, the $1,000,000 settlement only compensated Amora for 12.5 percent of the total value of her damages. Therefore, because Amora only recovered 12.5 percent of her damages, the most “reasonable and rational” manner to apportion the $1,000,000 settlement is to apply that same percentage to determine Amora’s recovery for past medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces a definitive value of that portion of Petitioner’s $1,000,000 settlement that represents compensation for past medical expenses, i.e., $13,590.66 ($108,725.29 times 12.5 percent). The undersigned finds that the competent substantial evidence in the record establishes, clearly and convincingly, that the full value of Amora’s injuries is $8 million. However, the evidence in the record is not sufficient to prove that a lesser portion of Petitioner’s $1,000,000 settlement recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $108,656.31 from Petitioner’s recovery from a third party to satisfy its Medicaid lien.
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 to be decided is the amount payable to Respondent in satisfaction of Respondent's Medicaid lien from a settlement, judgment, or award received by Petitioner from a third party under section 409.910(17), Florida Statutes.1/
Findings Of Fact It was stipulated that Petitioner, Mr. Nelson Puente, sustained gunshot injuries on or about February 4, 2010, for which he received medical treatment. Mr. Puente had Medicaid at that time, and Medicaid paid the amount of $112,397.79 to treat Mr. Puente for his injuries. As a result of his injuries, Mr. Puente has permanent scars on his abdomen and thigh. Mr. Mario Quintero, Jr., Esquire, represented Mr. Puente in a personal injury case alleging negligent security. Mr. Quintero has been practicing law in Florida for over 30 years, specializing in personal injury litigation. He has tried well over 150 cases and has handled catastrophic injury cases that were similar to Mr. Puente's case. Mr. Quintero is an expert on the valuation of personal injury cases. Mr. Quintero interviewed Mr. Puente regarding the scope of his injuries, reviewed extensive medical records, considered the prognosis for improvement, and examined jury verdict reports and facts from similar cases to reach an opinion as to the value of Mr. Puente's damages. Mr. Quintero testified that if he had presented the case to a jury that he would have asked for damages for past medical expenses, future medical expenses, future loss of earning capacity, pain and suffering, permanent scarring, and inability to lead a normal life. Mr. Quintero testified that, in addition to the $112,397.79 paid by Medicaid, the Florida Patients' Compensation Fund2/ or another fund paid for some of Mr. Puente's medical care. There was no evidence presented as to the specific amount that this fund paid. Mr. Quintero testified: I don't have the figures in front of me right now. But it was probably significantly less than Medicaid. * * * I do know, I just don't remember. I am--my file is three boxes large. And for purposes of my testimony here today, I don't believe it was necessary for me to bring in those three boxes and go through everything. So I mentioned it would be less than Medicaid, but I don't remember the exact amount. The exact amount for which the fund's claim was settled was similarly not in evidence, but Mr. Quintero characterized it as a "few thousand dollars." He testified, "They understood the severity of Mr. Puente's injuries and damages, they knew the amount of the settlement, and they took-—they factored in everything and significantly reduced the amount that we had to repay them." Mr. Quintero said that he would have asked a jury for significant damages for future lost earning capacity. He noted that Mr. Puente was 35 years old at the time of the settlement, had a long life expectancy, and the "potential to earn 35 to 40 thousand dollars per year." Mr. Quintero did not offer a dollar estimate of lost future earnings. There was no evidence as to Mr. Puente's occupation. Mr. Quintero admitted on cross- examination that he was "pretty sure" that Mr. Puente was unemployed at the time of his injuries. Mr. Quintero testified that future medical expenses would "probably not" be very large, based upon his understanding that "other than maybe palliative issues with therapy and things like that," there wasn't that much more that could be done for Mr. Puente. Mr. Quintero noted that "there probably would be some rehabilitation that he could benefit from in the future, but nothing major." On cross examination, he admitted that there was nothing in evidence to indicate that there would not be significant future medical expenses for Mr. Puente. No life care plan or testimony from health care personnel, vocational specialists, or economists was introduced. Mr. Quintero stated that it is expensive to have life care plans and economist reports prepared. He stated that they are prepared only when there is adequate insurance coverage, and it is worth the expenditure. Mr. Quintero testified that he believed that 80 to 85 percent of a jury verdict in Mr. Puente's personal injury case would have been based upon pain and suffering and the inability to lead a normal life. He did not elaborate on how he arrived at this conclusion. Mr. Quintero testified that, although the value that a particular jury might put on a case can never be absolutely determined, in his opinion, a reasonable estimate of the value of Mr. Puente's damages was $2.5 million. He testified that, in his opinion, the range of damages would be from $2 million to $5 million and that $2.5 million was a conservative estimate. Mr. Quintero's testimony on this point was credible, Respondent offered no contrary testimony, and the value of Mr. Puente's damages is found to be $2.5 million. The settlement in the personal injury case was for the sum of $100,000. There was no direct evidence as to what portion of the $100,000 total settlement was designated by the parties as compensation to Petitioner for medical expenses, or conversely, for the various other types of damages he may have suffered, such as pain and suffering, scarring and other permanent physical injury, or loss of future earnings. Neither the settlement agreement itself nor any other documents prepared in connection with the settlement were introduced. Mr. Quintero offered no testimony on this issue. Based upon the evidence presented at hearing, all of the settlement might have been for medical care, or none of it might have been. It is possible that there was no discussion or understanding among the parties as to what portions of the settlement were to be allocated to Mr. Puente's various categories of damages, but such a conclusion would be pure speculation, for there was no testimony or other evidence to that effect. Mr. Puente did not show by clear and convincing evidence that the settlement was "unallocated" by the parties. The Florida Statutes provide that Respondent, Agency for Health Care Administration (AHCA), is the Florida state agency authorized to administer Florida's Medicaid program. § 409.902, Fla. Stat. The Florida Statutes provide that Medicaid shall be reimbursed for medical assistance that it has provided if resources of a liable third party become available. § 409.910(1), Fla. Stat. AHCA did not participate in settlement negotiations or sign any of the settlement documents. There was no evidence to suggest that AHCA otherwise released its lien. Application of the formula found in section 409.910(11)(f) to the $100,000 settlement in the personal injury case yields a Medicaid lien in the amount of $33,319.66. The $100,000 total recovery represents four percent of the $2.5 million total economic damages. Mr. Puente failed to prove by clear and convincing evidence that the settlement was unallocated as to categories of damages. Mr. Puente failed to prove by clear and convincing evidence that all categories of damages sought in the personal injury case were, or should be, compromised pro rata in the settlement. Mr. Puente failed to prove the amount of the settlement that should be allocated to medical expenses by clear and convincing evidence. Mr. Puente failed to prove by clear and convincing evidence that the statutory lien amount of $33,319.66 exceeds the amount actually recovered in the settlement for medical expenses.
The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Markus Smith (“Petitioner” or “Mr. Smith”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds he received from a third party.
Findings Of Fact The following Findings of Fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On February 12, 2018, Mr. Smith was 26 years old and working for $11.00 an hour as a custodian for E&A Cleaning at All Saints Academy, in Winter Haven, Florida. While leaving the school just before 9:00 a.m., Mr. Smith came to a traffic light at the school’s entrance. When the light turned green and Mr. Smith moved into the intersection, another car ran the red light and slammed into the driver’s side of Mr. Smith’s vehicle. Mr. Smith was severely injured and transported to Lakeland Regional Medical Center where he stayed until approximately April 13, 2019. Mr. Smith’s injuries included, but were not limited to, a collapsed lung, altered mental state, intracerebral hemorrhage, traumatic subdural hematoma, traumatic subarachnoid hemorrhage with loss of consciousness, traumatic intraventricular hemorrhage, lumbar transverse process fracture, and a left ankle fracture. Mr. Smith required surgery to repair his left ankle, and he now walks with a severe limp. He experiences a constant, dull ache in his left ankle and is unable to walk any significant distance without experiencing severe pain. It is very difficult for Mr. Smith to stand, and he has a constant fear of falling because his balance is “terrible.” Mr. Smith is left-handed, and the accident left him with very limited use of his left hand. Since the accident, Mr. Smith’s vision has been blurry, and he suffers from double vision. He believes that his impaired vision would prevent him from obtaining a driver’s license. As described above in paragraph 3, Mr. Smith suffered a brain injury during the accident, and there was some bleeding inside his skull. He now has difficulty forming long-term memories and often records conversations so that he has a record of what was said. Since the accident, Mr. Smith has been struggling with anger and depression. He has difficulty controlling his anger and is prone to random outbursts of rage. He has experienced suicidal thoughts and asked his current caretaker if she would kill him, if he gave her a knife. Since being released from the hospital, Mr. Smith has not received any physical or occupational therapy. He was receiving some mental health treatment and taking medicine to treat his depression and memory issues. However, he cites a lack of transportation as to why he is no longer receiving any care. Mr. Smith has not worked since the accident, and the Social Security Administration has determined that he is disabled. After leaving the hospital, Mr. Smith stayed with his girlfriend. After they separated, Mr. Smith lived with his father. Since November of 2018, he has been living with his father’s ex-wife in Georgia. Mr. Smith, through counsel, filed a lawsuit against the driver and owner of the car that slammed into him. They settled Mr. Smith’s claims for the available policy limits of $100,000.00. There was no other liable person or other insurance available to Mr. Smith to compensate him for his injuries. AHCA provided $74,312.38 in Medicaid benefits to Mr. Smith and determined through the formula in section 409.910(11)(f), that $36,596.54 of Ms. Smith’s settlement proceeds was subject to the Medicaid lien. Mr. Smith, through counsel, deposited the entire settlement proceeds of $100,000.00 into an interest bearing account pending resolution of AHCA’s interest. Valuation of the Personal Injury Claim David Dismuke was identified as Mr. Smith’s expert witness. Since 2012, Mr. Dismuke has been a board-certified trial lawyer, and approximately one percent of attorneys in Florida possess that credential. That designation essentially means that an attorney can represent that he or she is an expert in civil trial practice. Mr. Dismuke has his own law practice and has handled at least 34 civil jury trials. Over the course of his 18-year legal career, he has assessed the value of at least 2,000 personal injury cases, including ones involving brain injuries. Mr. Dismuke also has extensive experience in valuing the individual components of a damages award: Q: Before we get to this final opinion, Mr. Dismuke, in your practice, have you had to allocate portions of settlements between past medical expenses, usual medical expenses, and the other elements of damages? A: Many times. Q: And for what purpose would you do that sort of allocation? A: We do it, we do it frequently. We do it often times in situations just like this, where we’re trying to determine what an appropriate amount would be for either a Medicare or Medicaid lien, health insurance liens, we deal with it in situations, and we have lien issues on almost every case. Q: And do you also do it when you are trying to help clients figure out how, and in what manner, to structure their settlements, so they can have enough money for their future medical expenses and pay their old medical expenses? A: Yes, we do. And in fact to make another point, every single case I have to allocate [] the value [of past medical expenses], that’s one element of damages, what the value of future [medical expenses] is, that’s another element of damages, past lost wages, another element of damages, future lost wages, another element of damages, pain and suffering, inconvenience, you know, the noneconomic stuff. Every case we make these, we make these determinations. That’s how we come to total value on every case that we settle or get a verdict on. Q: And even on the ones that you settle for less than full value, are you still performing that same evaluation of the allocation of the various elements of damages? A: Yes sir. Mr. Dismuke has similar experience with Medicare set asides: Q: Now, another area where you allocate between elements of damages is where you require a Medicare set aside, isn’t that true? A: That’s correct. Q: Now, tell the court what a Medicare set aside is? A: A Medicare set aside is something that we put in place to protect the future interest of Medicare for when there’s a settlement. So we receive a large settlement that the person is still going to require future medical care, so we have to evaluate what is a reasonable amount of that settlement to set aside to protect Medicare’s future interests, so the client doesn’t just get a windfall from the settlement. Q: And have you done that? A: Multiple times. Q: And that requires you to evaluate the total settlement and allocate between past medical expenses, future medical expenses, pain and suffering and other elements of damages? A: That’s correct. In Mr. Dismuke’s opinion, Mr. Smith’s total damages easily amount to $1 million and could be as high as $2 to $3 million. Mr. Dismuke values Mr. Smith’s lost wages at no less than $750,000.00. While Mr. Smith is not currently receiving medical treatment, Mr. Dismuke believes those expenses would amount to hundreds of thousands of dollars and possibly millions of dollars. However, the damages resulting from Mr. Smith’s pain and suffering would be the largest component of his total damages. Mr. Dismuke believes that Mr. Smith’s past medical expenses would be the smallest component of his total damages given Mr. Smith’s age, future needs, and lost wages. With regard to allocating $10,000.00 of Mr. Smith’s total recovery to past medical expenses, Mr. Dismuke testified that a “$10,000 allocation of the $100,000 settlement is perfectly reasonable if not, more than generous, given the past [medical expenses] in this case of around $70,000. So setting forth ten percent of that is a generous allocation for past medical expenses.” Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Dismuke was compelling and persuasive as to the total damages incurred by Mr. Smith. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Dismuke’s considerable experience with litigating personal injury lawsuits makes him a very compelling witness regarding the valuation of damages suffered by an injured party such as Mr. Smith. The undersigned also finds that Mr. Dismuke was qualified to present expert testimony as to how a damages award should be allocated among its components, such as past medical expenses, economic damages, and noneconomic damages.2/ AHCA offered no evidence to counter Mr. Dismuke’s opinions regarding Mr. Smith’s total damages or the past medical expenses he recovered. Accordingly, it is found that the preponderance of the evidence demonstrates that the total value of Mr. Smith’s personal injury claim is no less than $1 million and that the $100,000.00 settlement resulted in him recovering no more than 10 percent of his past medical expenses. In addition, the preponderance of the evidence demonstrates that $10,000.00 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Smith and payable to AHCA.
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 to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), for medical expenses paid on behalf of Clifford J. Deyampert (“Petitioner” or “Mr. Deyampert”) pursuant to section 409.910, Florida Statutes (2015),1/ from settlement proceeds received by Mr. Deyampert from a third party.
Findings Of Fact The following findings of fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On July 25, 2015, Mr. Deyampert was attending a party held at a friend’s house and was shot in the throat by another guest. The bullet traveled down Mr. Deyampert’s throat, struck his spinal cord, and caused Mr. Deyampert to be paralyzed from the chest down. As a result, Mr. Deyampert is permanently disabled, disfigured, and wheelchair-bound. In addition, Mr. Deyampert is bowel and bladder incontinent.2/ Medicaid paid $76,944.67 in order to cover Mr. Deyampert’s past medical expenses. No portion of the $76,944.67 paid by Medicaid on Mr. Deyampert’s behalf represents expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Mr. Deyampert initiated a personnel injury lawsuit by making a claim against a homeowner’s insurance policy that covered the shooter. Mr. Deyampert’s personal injury action settled for $305,000, and that was the limit of an aforementioned insurance policy.3/ The General Release memorializing the settlement stated the following: Although it is acknowledged that this settlement does not fully compensate Clifford Deyampert for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating Clifford Deyampert for a fraction of the total monetary value of his alleged damages. The parties agree that Clifford Deyampert’s alleged damages have a value in excess of $6,000,000, of which $76,944.67 represents Clifford Deyampert’s claim for past medical expenses. Given the facts, circumstances, and nature of Clifford Deyampert’s injuries and this settlement, the parties have agreed to allocate $3,847.23 of this settlement to Clifford Deyampert’s claim for past medical expenses and allocate the remainder of the settlement 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 Clifford Deyampert’s damages. Further, the parties acknowledge that Clifford Deyampert may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses Clifford Deyampert will incur in the future. However, the parties acknowledge that Clifford Deyampert, or others on his behalf, have not made payments in the past or in advance for Clifford Deyampert’s future medical care and Clifford Deyampert 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. During the pendency of Mr. Deyampert’s personal injury action, AHCA was notified of the suit and asserted a Medicaid lien in the amount of $76,944.67 against any damages received by Mr. Deyampert. Via a letter issued on July 24, 2017, Mr. Deyampert’s attorney notified AHCA that Mr. Deyampert’s personal injury action had settled. The letter asked AHCA to specify what amount it would accept in satisfaction of the $76,944.67 Medicaid lien. AHCA responded by demanding full payment of the lien. Section 409.910(11)(f) sets forth a formula for calculating the amount that AHCA shall recover in the event that a Medicaid recipient or his or her personal representative initiates a tort action against a third party that results in a judgment, award, or settlement from a third party.4/ AHCA is seeking to recover $76,944.67 in satisfaction of its Medicaid lien. See § 409.910(11)(f)4., Fla. Stat. (providing that “[n]otwithstanding any provision in this section to the contrary, [AHCA] shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid.”). Valuation of the Personal Injury Claim F. Emory Springfield represented Mr. Deyampert during the personal injury action and testified during the final hearing. Mr. Springfield has practiced law for 32 years. He owns his own law firm and handles cases involving personal injury, workers’ compensation, and social security disability. Mr. Springfield has experience with jury trials and monitors jury verdicts issued in his fields of practice. Mr. Springfield routinely assesses the value of damages suffered by injured parties. He makes those assessments by determining the injured person’s life expectancy, evaluating the injuries, and conferring with lifecare planners about the injured party’s need for future care. In addition, Mr. Springfield learns as much as possible about the injured party’s past life activities and compares those activities to what the injured party is presently capable of doing. Mr. Springfield also assesses an injured party’s damages by examining jury verdicts from other cases. Mr. Springfield was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Springfield is of the opinion that Mr. Deyampert’s damages (including damages for pain and suffering and economic damages) are well in excess of $6 million. According to Mr. Springfield, the $305,000 settlement does not “come close” to fully compensating Mr. Deyampert for all of his damages. Furthermore, the $305,000 settlement only represents a five percent recovery of the more than $6 million in damages incurred by Mr. Deyampert. Therefore, in Mr. Springfield’s opinion, only five percent (i.e., $3,847.23) of the $76,944.67 in Medicaid payments for Mr. Deyampert’s past medical expenses were recovered. Mr. Deyampert also presented the testimony of R. Vinson Barrett, Esquire, during the final hearing. Mr. Barrett is a trial attorney who has been practicing in North Florida since the mid 1970s. Over the last 30 years, he has focused his practice on the areas of medical malpractice, medical products liability, and pharmaceutical liability. Mr. Barrett routinely handles jury trials and monitors jury verdicts issued in his practice areas. Mr. Barrett routinely assesses the value of damages suffered by injured parties. According to Mr. Barrett, a personal injury attorney must be skilled at estimating the value of a client’s claim. Otherwise, the high cost of bringing a case to trial can result in a personal injury attorney losing money and going bankrupt. Mr. Barrett was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Barrett gave the following testimony regarding Mr. Deyampert’s damages: This man not only is a paraplegic, but during all this, and I couldn’t really tell from the records I read whether the bullet caused this or some intubation in the hospital, but he got air into the space between his lung and his diaphragm, which can be a very painful problem, he had to be intubated to get that out. He developed, I believe, sepsis, at some point in his -- in his treatment; and it’s already evidence early on in his situation that he’s going to be, and is very susceptible to pressure ulcers on his skin. His skin is going to be prone to breakdown from prolonged periods of sitting in the same position and that sort of thing. Fortunately, he has enough strength left in his upper body that he’s able to ameliorate that somewhat. He’s able actually, on his own, and after a lot of rehab, to roll over in his bed to different positions even though his lower extremities are not working at all. He’s able to -- he’s able to reposition himself in his chair using the strength of his arms, so that will cut down a little bit on that. But he had already developed a pressure ulcer or two by the time he got into rehab in this case. He – so, he’s got no use at all, it appears, of his lower extremities. He had a number of complications that had to be dealt with. He was in the hospital a long time. His overall prospects after rehabilitation -– and he was still in some rehabilitation as early as about February of this year, so I’m not totally sure he’s through all his rehab yet. He has to take rehabilitation courses to learn -– relearn how to do things. He’ll need his home made wheelchair accessible, cabinets, and thing[s] like that, all the things that a person normally does without thinking about, are going to be challenges for him just in daily household stuff. He will have to have modifications, most likely, of his kitchen, his bathroom, that sort of thing. And so, yeah, there’s quite a bit to work within this case to come up with an evaluation. Mr. Barrett opined that $6 million was a “very conservative” estimate of the damages suffered by Mr. Deyampert. Mr. Barrett also opined that allocating five percent of the $76,000 claim (i.e., $3,847.23) to past medical expenses was a reasonable and rational allocation to past medical expenses and reflected the ratio of the amount recovered to the actual value of Mr. Deyampert’s damages. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Springfield and Mr. Barrett was compelling and persuasive. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Springfield’s and Mr. Barrett’s decades of experience with litigating personal injury lawsuits make them very compelling witnesses regarding the valuation of damages suffered by injured parties such as Mr. Deyampert.5/ Accordingly, the undersigned finds that Mr. Deyampert proved by a preponderance of the evidence that $3,847.23 constitutes a fair and reasonable recovery for past medical expenses actually paid by Medicaid.
