The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds received from a third party should be paid to Respondent, Agency 1 All statutory references are to Florida Statutes (2019), as the parties agreed. for Health Care Administration (AHCA), to satisfy AHCA’s Medicaid lien under section 409.910, Florida Statutes.
Findings Of Fact Stipulated Facts On July 13, 2018, Mr. Miller was involved in an automobile accident in Sarasota County, Florida. Mr. Miller was struck from behind while stopped at a red light on Bee Ridge Road. At the time of the crash, the tortfeasor was driving under the influence of alcohol. Immediately after the accident, Mr. Miller was treated at Sarasota Memorial Hospital for multiple serious injuries including a T2 complete spinal cord injury, C5-C7 incomplete spinal cord injury, brachial plexus injury, loss of majority of function to dominant left hand, intracranial hemorrhage, acetabular fracture, basilar skull fracture, femur fracture, thoracic spine fracture, rib fractures, as well as a closed fracture of the pelvis. As a result of the accident, Mr. Miller cannot control his blood pressure, cannot sweat, and lacks control of his bowels and bladder due to the spinal cord injury. While hospitalized, he underwent a PEG placement and tracheostomy. As a result of the accident, Mr. Miller was rendered a paraplegic. Due to the severity of his injuries, Mr. Miller has required intermittent medical care for his significant injuries. Mr. Miller brought a personal injury action to recover for all the damages related to the incident. This action was brought against various defendants. Since this incident and the resulting spinal cord injury, Mr. Miller has been in a permanently disabled state, requiring assistance with most activities of daily living. In May of 2020, after litigation was commenced, Mr. Miller settled his tort action. AHCA was properly notified of Mr. Miller’s lawsuit against the defendants. AHCA indicated it had paid benefits related to the injuries from the incident in the amount of $108,456.65. AHCA has asserted a lien for the full amount it paid, $108,456.65, against Mr. Miller’s settlement proceeds. AHCA has maintained that it is entitled to application of the formula in section 409.910(11)(f), to determine the lien amount. Application of the statutory formula to Mr. Miller’s $1,110,000.00 settlement would result in no reduction of the lien, given the amount of the settlement. AHCA paid $108,456.65 for medical expenses on behalf of Mr. Miller, related to his claim against the liable third parties. The parties stipulated that AHCA is limited in this section 409.910(17)(b) proceeding to the past medical expenses portion of the recovery. Evidence at the Hearing Mr. Miller testified about the extent of the injuries he suffered as a result of the automobile accident that was the subject of the personal injury lawsuit. As a 23 year old, who is confined to a wheelchair, Mr. Miller testified about the severe, permanent injuries he endures and the tremendous and permanent impact it has and will have on his life. His testimony was detailed and compelling. He explained his recent and upcoming surgeries. He also explained the effects that his accident has had on his family, particularly his mother who helps him meet life’s daily routines. Petitioner called two experts to testify on his behalf: Mr. Fernandez, Petitioner’s personal injury attorney in the underlying case; and Mr. McLaughlin, an experienced board-certified civil trial attorney. Both Mr. Fernandez and Mr. McLaughlin were accepted as experts on the valuation of personal injury damages, without objection by AHCA. Mr. Fernandez is an attorney at Maney & Gordon, P.A., in Tampa, Florida. He is admitted to practice law in Florida and has been practicing for 12 years. In addition to Petitioner’s case, he has represented clients in personal injury matters, including cases involving catastrophic injuries similar to that of Mr. Miller’s. Mr. Fernandez regularly evaluates the damages suffered by injured people such as Mr. Miller. He is familiar with Mr. Miller’s damages from his representation of Mr. Miller in his personal injury lawsuit. Mr. Fernandez testified as to the difficulties he encountered in the personal injury suit on behalf of Mr. Miller, which included the inherent difficulties of dram shop claims2 and the limited insurance coverage available to fully compensate Mr. Miller for his injuries. Through his investigation, Mr. Fernandez sought out all of the available insurance coverage and filed a complaint in Sarasota County circuit court on behalf of Mr. Miller. As part of his work-up of the case, he evaluated all elements of damages suffered by Mr. Miller. After litigating the case for some time, Mr. Fernandez negotiated a total settlement for the insurance limits of $1,110,000.00 against the defendants. Mr. Fernandez provided detailed testimony regarding how Mr. Miller’s accident occurred and the extent of his injuries. Mr. Fernandez testified regarding the process he followed to evaluate and arrive at his opinion on the total value of the damages suffered in Mr. Miller’s case. Through the course of his representation, he reviewed all the medical information; evaluated the facts of the case; determined how the accident occurred; reviewed all records and reports regarding the injuries Mr. Miller suffered; analyzed liability issues and fault; developed economic damages figures; and also valued non- economic damages such as past and future pain and suffering, loss of capacity to enjoy life, scarring and disfigurement, and mental anguish. Mr. Fernandez testified about the impact of the accident on Mr. Miller’s life. As a result of his injuries, Mr. Miller can no longer perform many of the normal activities of daily living for himself and he has limited mobility. 2 Florida’s dram shop law, as set forth in section 768.125, Florida Statutes, provides that “[a] person who sells or furnishes alcoholic beverages to a person of lawful drinking age shall not thereby become liable for injury or damage caused by or resulting from the intoxication of such person, except that a person who willfully and unlawfully sells or furnishes alcoholic beverages to a person who is not of lawful drinking age or who knowingly serves a person habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such minor or person.” Based on Mr. Fernandez’s evaluation of Petitioner’s case, he opined that the total value of Mr. Miller’s damages was conservatively estimated at $35 million. The valuation of the case includes past medical expenses, future medical expenses, economic damages, loss of quality of life, and pain and suffering. Mr. Fernandez testified that the non-economic damages were the greatest element of loss or damage sustained by Mr. Miller, and therefore the largest driver of the valuation and greatest portion of damages recovered in the settlement. Mr. Fernandez testified that his estimation of total damages is based upon his experience as a trial lawyer, and would be what he would have asked a jury to award related to Mr. Miller’s damages had the case gone to trial. Mr. Fernandez opined that in comparing the $35 million valuation of the damages in the case to the total settlement proceeds of $1,110,000.00 (that is, by dividing $1,110,000.00 by $35,000,000.00), Mr. Miller recovered only 3.17 percent of the full value of his claim. Mr. Fernandez opined that, as a result, the allocation formula is 3.17 percent. Mr. Fernandez went on to testify that he routinely uses a pro-rata approach with lien holders in his day-to-day practice of resolving liens in Florida. The past medical expenses of Mr. Miller are $108,456.65.3 That figure multiplied by 3.17 percent would result in recovery of $3,438.074 allocated to past medical expenses. Mr. Fernandez’s testimony was not contradicted by AHCA, and, mathematical error aside, was persuasive on this point. 3 There is no competent substantial evidence in the record that Mr. Miller’s past medical expenses amount to more than the sum of AHCA’s Medicaid lien. 4 The undersigned finds that 3.17 percent of $108,456.65 is $3,438.07, not $3,433.07, as testified to by Petitioner’s witnesses and presented in Petitioner’s Proposed Final Order. Mr. McLaughlin is a 23-year practicing plaintiff’s attorney with Wagner & McLaughlin. Mr. McLaughlin and his firm specialize in litigating serious and catastrophic personal injury cases throughout central Florida. As part of his practice, Mr. McLaughlin has reviewed numerous personal injury cases in so far as damages are concerned. Mr. McLaughlin has worked closely with economists and life care planners to identify the relevant damages in catastrophic personal injuries, and he regularly evaluates the types of damages suffered by those who are catastrophically injured. Mr. McLaughlin testified as to how he arrived at his valuation opinion in this case by explaining the elements of damages suffered by Mr. Miller. Similar to Mr. Fernandez, he stated that the greatest element of loss Mr. Miller suffered was non-economic damages. He testified that his estimates for the future care and pain and suffering damages of Mr. Miller would be in the high eight figures. Mr. McLaughlin testified that, in his opinion, the total damages suffered by Mr. Miller are conservatively estimated at $38,350,000.00. Mr. McLaughlin testified that it is a routine part of his practice to conduct round-table discussions about cases with other attorneys at his firm. His discussions regarding Mr. Miller’s case with attorneys in his firm resulted in a consensus that Mr. Miller’s total damages had a value in excess of $38 million. He agreed with the $35 million total valuation testified to by Mr. Fernandez for purposes of the lien reduction formula. Mr. McLaughlin also testified that he believed that the standard accepted practice when resolving liens in Florida was to look at the total value of damages compared to the settlement recovery (that is, dividing $1,110,000.00 by $35,000,000.00). This resulted in Mr. Miller recovering only 3.17 percent of the full value of his claim, and, as such, a 3.17 percent ratio may be used to reduce the lien amount sought by AHCA. Both Mr. Fernandez and Mr. McLaughlin testified about the ultimate value of the claim, measured in damages, for Mr. Miller’s personal injury liability case. They also testified as to a method that, in their opinions, reasonably allocated a percentage of the settlement amount to past medical expenses. Both witnesses reviewed Mr. Miller’s medical information and other information before offering an opinion regarding his total damages. Both Mr. Fernandez and Mr. McLaughlin’s approaches to evaluating the damages suffered by Mr. Miller and the resulting ratio for reducing past medical expenses were conservative. The undersigned finds that both were credible, persuasive, and well qualified to render their opinions. The valuation opinions by Mr. Fernandez and Mr. McLaughlin as to the total value of the claim were not rebutted or contradicted by AHCA on cross examination or by any other evidence. AHCA offered no evidence to question the credentials or opinions of either Mr. Fernandez or Mr. McLaughlin, or to dispute the methodology they proposed which would reduce Mr. Miller’s claim. AHCA did not offer any alternative expert opinions on the damage valuation or allocation method proposed by Mr. Fernandez or Mr. McLaughlin. The undersigned finds that Petitioner has established by persuasive, unrebutted, and uncontradicted evidence that the $1,110,000.00 recovery is 3.17 percent of the total value ($35 million) of Petitioner’s total damages. Applying the proportionality methodology, Petitioner has established that 3.17 percent of $108,456.65, or $3,438.07, is the amount of the recovery fairly allocable to past medical expenses and is the portion of the recovery payable to AHCA, pursuant to its Medicaid lien. Petitioner proved by a preponderance of the evidence that Respondent should be reimbursed $3,438.07, which is the portion of the settlement proceeds fairly allocable to past medical expenses.
The Issue The issue 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 issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioners, Devyn Jeffries (Devyn) and Makayla Jeffries (Makayla), minors, by and through their parents and natural guardians, Theresa Jeffries and Christopher Jeffries, (collectively Petitioners), from settlement proceeds received by Petitioners from third parties.
Findings Of Fact On January 24, 2010, Devyn and Makayla were born via emergency C-Section at 27 weeks gestation. During the birthing process, both children suffered severe and permanent brain damage. As a result, Devyn suffers from Cerebral Palsy with spastic paralysis and cognitive developmental disabilities, and Makayla suffers from Cerebral Palsy, failure to thrive, feeding difficulties, and cognitive deficits. Devyn and Makayla’s medical care related to their birth injuries was paid by Medicaid in the following amounts: 1 Respondent’s Proposed Final Order was served by email and received by DOAH at 9:50 p.m. on October 21, 2020. It was, therefore, “filed” at 8:00 a.m. on October 22, 2020, in accordance with Florida Administrative Code Rule 28-106.104(3). However, it is accepted and considered as though timely filed. In regard to Devyn, Medicaid, through AHCA, provided $108,068.58 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $25,087.08 in benefits. The sum of these Medicaid benefits, $133,155.66, constituted Devyn’s entire claim for past medical expenses. In regard to Makayla, Medicaid, through AHCA, provided $107,912.33 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $13,915.84 in benefits. The sum of these Medicaid benefits, $121,828.17, constituted Makayla’s entire claim for past medical expenses. Devyn and Makayla’s parents and natural guardians, Theresa and Christopher Jeffries, pursued a medical malpractice lawsuit against the medical providers responsible for Devyn and Makayla’s care (“Defendants”) to recover all of Devyn and Makayla’s damages, as well as their own individual damages associated with their children’s injuries. The medical malpractice action settled through a series of confidential settlements, which were approved by the court on February 21, 2020. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $108,068.58 Medicaid lien associated with Devyn’s cause of action and settlement of that action and a $107,912.33 Medicaid lien associated with Makayla’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 settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlement. The Medicaid program through AHCA spent $108,068.58 on behalf of Devyn and $107,912.33 on behalf of Makayla, all of which represents expenditures paid for past medical expenses. No portion of the $215,980.91 paid by AHCA through the Medicaid program on behalf of Petitioners represented expenditures for future medical expenses. The $215,980.91 combined total in Medicaid funds paid towards the care of Devyn and Makayla by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Simply Health spent $39,002.92 on Petitioners’ medical expenses. Thus, the total amount of past medical expenses incurred by Petitioners is $254,983.83. The taxable costs incurred in securing the settlement totaled $109,701.62. Application of the formula at section 409.910(11)(f) to the settlement requires payment to AHCA of the full $108,068.58 Medicaid lien associated with Devyn and the full $107,912.33 Medicaid lien associated with Makayla. Petitioners have deposited the full Medicaid lien amounts in interest- bearing accounts 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). This case is somewhat unique in that it involves two petitioners, with separate injuries and separate Medicaid expenditures. However, the incident causing the injuries was singular, and resulted in a total settlement of all claims asserted by Devyn, Makayla, and their parents of $2,650,000. Therefore, for purpose of determining the appropriate amount of reimbursement for the Medicaid lien, it is reasonable and appropriate to aggregate the amounts paid in past medical expenses on behalf of Devyn and Makayla, and the economic and non-economic damages suffered by them. 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 Devyn’s and Makayla’s economic damages, consisting of lost future earnings, past medical expenses, and future medical expenses were, at the conservative low end, roughly $4,400,000 for Devyn and $2,400,000 for Makayla, for a sum of $6,800,000 in economic damages.2 Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioners established that non- economic damages would reasonably be in the range of $10,000,000 to $15,000,000 for each of the children. Based on the forgoing, it is found that $15,000,000, as a full measure of Petitioners’ combined 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 $2,650,000 settlement is 17.67 percent of the $15,000,000 conservative value of the claim.3
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 Petitioner, Yesica Cardenas, from a personal injury settlement received by Petitioner from a third party.
Findings Of Fact Based on the stipulations of the parties, evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: On December 31, 2010, Yesica Cardenas (“Ms. Cardenas”) was a passenger on a motor scooter that was involved in an accident on State Road 112 in Miami, Florida. As a result of this accident, Ms. Cardenas suffered serious physical injury, including amputation of her left leg below the knee. (JPHS p. 8) Ms. Cardenas’ past medical expenses related to her injuries were paid in part by Medicaid, and Medicaid provided $89,518.80 in benefits. This $89,518.80 in benefits paid by Medicaid, combined with $12,449.80 in medical bills not paid by Medicaid, constituted Ms. Cardenas’ entire claim for past medical expenses. Accordingly, Ms. Cardenas’ claim for past medical expenses was in the amount of $101,968.60. (JPHS p. 8) Ms. Cardenas, or others on her behalf, did not make payments in the past or in advance for Ms. Cardenas’ future medical care, and no claim for damages was made for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Ms. Cardenas brought a personal injury lawsuit in Miami-Dade County to recover all of her damages against those responsible for her injuries (“Defendants”). (JPHS p. 8) On September 9, 2015, Ms. Cardenas compromised and settled her lawsuit with the Defendants for the amount of $240,000. (JPHS p. 8) In making this settlement, the settling parties agreed that: 1) the settlement did not fully compensate Ms. Cardenas for all her damages; 2) Ms. Cardenas’ damages had a value in excess of $2,400,000, of which $101,968.60 represented her claim for past medical expenses; and 3) allocation of $10,196.86 of the settlement to Ms. Cardenas’ claim for past medical expenses was reasonable and proportionate. In this regard, the General Release and Settlement Agreement (“Release”) memorializing the settlement stated: Although it is acknowledged that this settlement does not fully compensate RELEASOR for the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to all claims against [Defendants] without regard to this settlement only compensating the RELEASOR for a fraction of the total monetary value of her alleged damages. The damages have a value in excess of $2,400,000, of which $101,968.60 represents RELEASOR’S claim for past medical expenses. Given the facts, circumstances, and nature of the RELEASOR’S alleged injuries and this settlement, the parties settled this matter for 10% of the value of the damages ($240,000.00) and as such, have allocated $10,196.86 of this settlement the RELEASOR’S claim for past medical expenses and the remainder of the settlement has been allocated toward the satisfaction of her other claims. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the RELEASOR’S alleged damages. Further, the parties acknowledge that the RELEASOR may need future medical care related to her alleged injuries, and some portion of this settlement may represent compensation for these future medical expenses that the RELEASOR may incur in the future. However, the parties acknowledge that the RELEASOR, or others on her behalf, have not made payments in the past or in advance for the RELEASOR’S future medical care and the RELEASOR has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for payments made to secure future medical care. (JPHS p. 8-9) As a condition of Ms. Cardenas’ eligibility for Medicaid, Ms. Cardenas assigned to AHCA her right to recover from liable third parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. During the pendency of Ms. Cardenas’ personal injury action, AHCA was notified of the action and AHCA, through its collections contractor, Xerox Recovery Services, asserted a $89,518.80 Medicaid lien against Ms. Cardenas’ cause of action and settlement of that action. (JPHS p. 9) By letter of September 11, 2015, AHCA was notified by Ms. Cardenas’ personal injury attorney of the settlement and provided a copy of the executed Release and itemization of $2,711.70 in litigation costs. This letter explained that Ms. Cardenas’ damages had a value in excess of $2,400,000, and the $240,000 settlement represented only a 10-percent recovery of Ms. Cardenas’ damages. Accordingly, she had recovered only 10 percent of her $101,968.60 claim for past medical expenses, or $10,196.86. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of its Medicaid lien. (JPHS p. 9) AHCA did not respond to Ms. Cardenas’ attorney’s letter of September 11, 2015. (JPHS p. 9) AHCA did not file an action to set aside, void, or otherwise dispute Ms. Cardenas’ settlement with the Defendants. (JPHS p. 9) AHCA has not commenced a civil action to enforce its rights under section 409.910. (JPHS p. 9) The Medicaid program spent $89,518.80 on behalf of Ms. Cardenas, all of which represents expenditures paid for Ms. Cardenas’ past medical expenses. (JPHS p. 9) No portion of the $89,518.80 paid by the Medicaid program on behalf of Ms. Cardenas represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. (JPHS p. 10) Ms. Cardenas is no longer a Medicaid recipient. (JPHS p. 10) AHCA has determined that $2,711.70 of Ms. Cardenas’ litigation costs are taxable costs for purposes of the section 409.910(11)(f) formula calculation. (JPHS p. 10) Subtracting the $2,711.70 in taxable costs and allowable attorney’s fees, the section 409.910(11)(f) formula applied to Ms. Cardenas’ $240,000 settlement requires payment of $88,644.15 to AHCA in satisfaction of its $89,518.80 Medicaid lien. Since the $89,518.80 Medicaid lien amount is more than the $88,644.15 amount required to be paid to AHCA under the section 409.910(11)(f) formula, AHCA is seeking reimbursement of $88,644.15 from Ms. Cardenas’ $240,000 settlement in satisfaction of its Medicaid lien. (JPHS p. 10) Petitioner has deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). (JPHS p. 10) Testimony of Michael Weisberg Mr. Weisberg has been an attorney since 1967 and is a partner with Weisberg and Weisberg, P.A. Mr. Weisberg explained that he is a civil trial attorney who has spent 30 years handling insurance defense, and in the last 20 years has focused his practice on plaintiff personal injury. Mr. Weisberg testified that over his career, he has handled approximately 550 jury trials to verdict and he often handles cases involving catastrophic injuries. Mr. Weisberg testified that as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties. Petitioner proffered Mr. Weisberg as an expert in the valuation of damages suffered by injured parties, and AHCA did not object to the proffer. Mr. Weisberg was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Weisberg represented Ms. Cardenas relative to her personal injury action. He explained that as part of his representation, he reviewed Ms. Cardenas’ medical records, met with her doctors, reviewed the accident report, took the deposition of persons involved in the accident, took the deposition of witnesses to the accident, and met with Ms. Cardenas many times. Mr. Weisberg gave a detailed explanation of the circumstances giving rise to Ms. Cardenas’ injury. He explained that Ms. Cardenas was a hostess at a restaurant in a Miami Beach hotel. After her shift ended, she was asked to stay and continue working. After the restaurant closed, she was unable to take the Metro Mover home because it ceased running at midnight. Instead, she was given a ride home by a co-worker who had a motor scooter. The co-worker’s motor scooter was too slow for the highway he chose to travel upon, and it was struck from behind by a motorcycle. Ms. Cardenas was thrown off the motor scooter. She was taken to Jackson Memorial Hospital where her leg was amputated a few inches below the knee. Due to her lack of financial resources, Ms. Cardenas was provided limited rehabilitation and she was provided only a rigid prosthetic leg that did not have a flexible ankle/foot. Mr. Weisberg explained that this injury has had a negative impact on Ms. Cardenas’ life. Because of the limitations presented by having an amputated leg, she has had difficulty maintaining her relationship with her friends and has become isolated. She is unable to enjoy her previous pastime of shopping due to the injury and is unable to play with her son in the same manner as before. Mr. Weisberg testified that Ms. Cardenas’ injury has caused Ms. Cardenas to suffer from depression and “she is not a happy girl.” Mr. Weisberg testified that Ms. Cardenas’ claim for past medical expenses related to her injury was $101,968.60, which consisted of $89,518.80 in Medicaid benefits and $12,449.80 in medical bills not paid by Medicaid. Mr. Weisberg testified that Ms. Cardenas, or others on her behalf, did not make payments in the past or in advance for future medical care, and no claim was brought to recover reimbursement for past payments for future medical care. Mr. Weisberg testified that through his representation of Ms. Cardenas, review of Ms. Cardenas’ file, and based on his training and experience, he had developed the opinion that the value of Ms. Cardenas damages was “a minimum of five million dollars.” In support of his valuation, he compared Ms. Cardenas’ case to a case he had tried to jury verdict involving a man with a preexisting leg amputation who was struck by a bus and suffered a degloving injury to his other leg. This client regained use of the injured leg and the jury still awarded him $1.3 million. Mr. Weisberg explained that if that client’s less severe injury where he regained use of his injured leg, warranted a $1.3 million verdict, then “a person with no leg, a reasonable verdict, in my opinion . . . would be in excess of five million dollars.” Mr. Weisberg also testified that he “round tabled” Ms. Cardenas’ case with five other experienced attorneys, and they believed Mr. Weisberg’s valuation of Ms. Cardenas’ damages at $5 million was low. Further, Mr. Weisberg testified that he had reviewed the jury verdicts in Petitioner’s Exhibit 11 and he believed those cases were comparable to Ms. Cardenas’ case and supported his valuation of Ms. Cardenas’ damages as being in excess of $5 million. Mr. Weisberg explained that the driver/owner of the motor scooter Ms. Cardenas was riding, as well as the driver/owner of the motorcycle that struck the motor scooter, did not have liability insurance or assets, so no recovery was possible against them. Instead, a lawsuit was brought against the restaurant under the theory that by requesting Ms. Cardenas to work after her shift was finished, they caused her to be unable to use public transit and rely upon transport home by way of the motor scooter. Mr. Weisberg explained that the theory of liability was difficult and there were numerous disputed facts associated with the case. Based on these issues, Ms. Cardenas settled her case for $240,000. Mr. Weisberg testified that the settlement did not fully compensate Ms. Cardenas for the full value of her damages. Mr. Weisberg testified that based on the conservative valuation of all Ms. Cardenas’ damages of $2,400,000, the settlement represented a recovery of 10 percent of the value of Ms. Cardenas’ damages. Mr. Weisberg testified that because Ms. Cardenas only recovered 10 percent of the value of her damages in the settlement, she only recovered 10 percent of her $101,968.60 claim for past medical expenses, or $10,196.86. Mr. Weisberg testified that the settling Defendant was represented by experienced trial attorneys and that the settling parties agreed in the Release that Ms. Cardenas’s damages had a value in excess of $2.4 million, as well as the allocation of $10,196.86 of the settlement to past medical expenses. Mr. Weisberg further testified that the allocation of $10,196.86 of the settlement to past medical expenses was reasonable and rational, as well as conservative, because it was based on a very low-end valuation of her damages of $2.4 million. If a higher valuation of her damages was used, the amount allocated to past medical expenses would have been much less. Mr. Weisberg testified that because no claim was made to recover reimbursement for past payments for future medical care, no portion of the settlement represented reimbursement for past payments for future medical care. He also testified that the parties agreed in the Release that no claim was made for reimbursement of past payments for future medical care, and no portion of the settlement represented reimbursement for future medical expenses. Testimony of Thomas Backmeyer Thomas Backmeyer has been an attorney since 1970, and since 1996, he has worked as a mediator. Prior to becoming a mediator in 1996, he was board-certified in civil trial law by the Florida Bar and the National Board of Trial Advocates. Mr. Backmeyer testified that he has handled 100 to 125 jury trials, 90 percent of which were personal injury cases. He further testified that in his practice he regularly made assessments concerning the value of damages suffered by injured parties. Petitioner proffered Mr. Backmeyer as an expert in the valuation of damages suffered by injured parties. AHCA did not object to the proffer, and Mr. Backmeyer was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Backmeyer testified that he was familiar with Ms. Cardenas’ injuries and had reviewed the hospital records from Jackson Memorial, pictures of Ms. Cardenas, the Complaint, and Petitioner’s exhibits. Mr. Backmeyer testified that in his opinion, Ms. Cardenas’ damages had a value in excess of $5 million to $10 million. He explained that his valuation was “based on my experience in handling jury trials. It’s based on my experience of dealing with cases over the last twenty years as a mediator, some of which involve amputations of, I can think of one that involved the amputation of a leg of a young lady.” Mr. Backmeyer also testified that he had reviewed the jury verdicts in Petitioner’s Exhibit 11 and he found those verdicts comparable with Ms. Cardenas’ case and supportive of his valuation of her damages. He discussed two of the verdicts in relation to Ms. Cardenas’ case. Mr. Backmeyer testified that he was aware of the Cardenas settlement, and that the parties had allocated $10,196.86 to past medical expenses based on a valuation of all damages of $2,400,000. He further testified that he believes allocation of $10,196.86 to past medical expenses was “a generous number” because he believed the value of the damages was much higher than the $2,400,000 valuation used by the parties in calculating the allocation to past medical expenses. AHCA did not propose a differing valuation of Ms. Cardenas’ damages or contest the methodology used by the parties to calculate the $10,196.86 allocation to past medical expenses. The testimony and evidence presented concerning the value of Petitioner’s damages, and the allocation to past medical expenses, was unrebutted. The evidence presented is not in conflict or ambiguous. The parties to the settlement agreed that: 1) Ms. Cardenas was not being fully compensated for all her damages in the settlement; 2) Ms. Cardenas’ damages had a value in excess of $2,400,000, of which $101,968.60 represented her claim for past medical expenses; 3) the parties allocated $10,196.86 of the settlement to past medical expenses based on the same ratio the settlement bore to the total monetary value of all damages; and 4) because there was no claim made for reimbursement, restitution, repayment, indemnification, or to be made whole for payments made in the past for future medical care, no portion of the settlement represented reimbursement for future medical expenses. AHCA was not a party or participant in the settlement. However, the unrebutted evidence and testimony is of sufficient quality and quantity to establish that the value of Ms. Cardenas’ damages was in excess of $2,400,000; the allocation of $10,196.86 to past medical expenses under the method of calculation used was reasonable, fair, and accurate; and no portion of the settlement represented reimbursement for future medical expenses. Petitioner has proven by clear and convincing evidence that $10,196.86 of the settlement represents reimbursement for past and future medical expenses. Petitioner has proven by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the $88,644.15 amount calculated by the Respondent pursuant to the formula set forth in section 409.910(11)(f).
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 his settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On January 1, 2013, Josiah Delva ("Josiah"), who was only 18-months-old, was presented to a hospital with a fever and emesis. He was discharged only one and a half hours later after he was misdiagnosed with a "normal" condition. The following day, Josiah's fever continued, and he began suffering from a purpuric rash on his body and decompensated septic shock. He was taken back to the Emergency Room where he was diagnosed with meningococcal meningitis and meningococcal bacteremia and grew Moraxella catarrhalis in his sputum. Josiah was admitted to and remained in the intensive care unit of the hospital for five months. Due to the necrosis, which was caused by the meningococcus, Josiah's left arm below the elbow, his right leg below his knee, and the toes of his left foot were all amputated. In addition, he required bilateral patellectomies (removal of his knee caps). Josiah's medical care related to the injury was paid by AHCA's Medicaid program. Medicaid provided $237,408.60 of the costs associated with Josiah's injury. The $237,408.60 paid by Medicaid constituted Josiah's entire claim for past medical expenses. Josiah's parents and natural guardians, Jennifer Paulino Delva and Johnny Delva, brought a medical malpractice suit against the medical providers and staff responsible for Josiah's care ("Defendant medical providers") to recover all of Josiah's damages as associated with his injuries. As a condition of Josiah's eligibility for Medicaid, Josiah assigned to AHCA his right to recover from liable third parties any medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H); § 409.910(6)(b), Fla. Stat. During the pendency of the medical malpractice action, AHCA was notified of the action, and it asserted a $237,408.60 Medicaid lien against Josiah's cause of action and future settlement of that action. AHCA made payments totaling $237,408.60 related to Josiah's injuries for which the defendant medical providers are liable. Josiah's lawsuit ultimately settled in December of 2018 or January of 2019 for the gross unallocated sum of $550,000.00. 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 were $146,110.61 in attorney's fees and costs incurred to make the recovery. The parties stipulated that operation of the statutory formula to Josiah's settlement would require repayment to AHCA in the amount of $185,694.69. Witness Testimony Zarahi Nunez was accepted, with no objection, as an expert in life care planning. She met with the Delva family and consulted with medical professionals regarding the treatment needs and options for Josiah. She also reviewed the appropriate manuals to determine a course of treatment for Josiah. Ms. Nunez developed a life care plan, along with dollar figures for each aspect of treatment totaling $5,998,080.19.2/ Mrs. Delva testified how she noticed that Josiah developed a fever and was vomiting on New Year's Eve (December 31, 2012). After midnight, he vomited again, so Mrs. Delva brought him to the hospital. He was discharged a few hours later around 4:00 a.m. on New Year's Day (January 1, 2013). Josiah was diagnosed with a stomach flu, and was given a prescription to stop vomiting. Josiah developed a rash, which concerned Mrs. Delva. Upon talking to medical professionals via phone, Mrs. Delva determined that Josiah's rash would not change with pressure on his skin. This apparently indicated that his white blood cell count was low. Mrs. Delva immediately rushed Josiah to the hospital upon the doctor's instruction. At the hospital, Josiah bypassed triage as the rash continued to spread and as symptoms of sepsis became apparent. The doctors diagnosed Josiah as having a bacterial meningitis infection and treated him. His organs began shutting down and his body turned colors from the rash. Mrs. Delva vividly explained the horror of: watching multiple physicians rush to her son's bedside; seeing the Emergency Room go into quarantine due to her son's infection; providing the names of all the people Josiah had come into recent contact so that they could be given precautionary antibiotics; having the health department remove all of Josiah's things from the house to prevent the spread of the infection; and seeing her son essentially die on the table and be resuscitated. Josiah was in the hospital from January 1 through May 2, 2013. Due to the lack of blood circulation, Josiah lost multiple body parts. His left hand at the wrist, his right leg at the ankle, and part of his left foot were amputated, and both knee caps were removed. His skin is tough and scarred. According to Mrs. Delva, had the doctor properly diagnosed Josiah when they first arrived after midnight on New Year's Day, he would not have suffered the extent of his injuries. Mrs. Delva and her husband have four children, including Josiah, and she detailed the extent to which the family facilitates Josiah's needs. Josiah's siblings do not always understand the extra attention needed by Josiah from their parents. She explained every day is a constant struggle, and most notably explained, the need to travel from Miami to Tampa to Shriner's Hospital ten or more times per year for check-ups and to update Josiah's prosthetics. No witness testified to Josiah's or his parents claim for noneconomic damages. While it is clear that the malpractice caused grievous pain and suffering to the family that will last Josiah's entire life, no expert was presented to discuss the valuation of these damages. No testamentary or other evidence was advanced to show how the $550,000.00 settlement amount should be allocated between past medical expense damages and other elements of damages. Petitioner's Theory of the Case Petitioner's counsel argues that the total value of the case that Petitioner should reasonably have expected to be awarded by a jury was $110,735,488.79. Counsel explained that this number represents the past medicals paid by Medicaid, $6 million for future medicals, $20 million for past pain and suffering, $80 million for future pain and suffering, and $2 million each (a total of $4 million) for Mr. and Mrs. Delva's loss of consortium claims. Petitioner argues that the past medicals, as paid by Medicaid in the amount of $234,408.60, represent 0.0021 percent of the total value of the case of $110,735,488.79. Petitioner argues that applying this 0.0021 percent times the actual recovery of $550,000.00 results in Medicaid's pro rata recovery being reduced to $1,155.00 as the portion of the settlement allocable to past medicals.3/ No expert testimony was introduced on the calculation of any element of damages other than future medical expenses.4/ In support of the $110 million dollar plus "total value" of the case, Petitioner provided three jury verdicts to establish comparable pain and suffering awarded in similar circumstances. These cases include: A.H., a minor, et al. v. Trustees of Mease Hospital, Inc., et al., 2018 FL Jury Verdict Rptr. LEXIS 277; Lisa-Marie Carter v. Larry Roy Glazerman, M.D., et al., 2018 FL Jury Verdict Rptr. LEXIS 175; and Cynthia N. Underwood and Stephen R. Underwood v. Katherine Strong, 2017 FL Jury Verdict Rptr. LEXIS 11578. The facts of how the injuries happened and the effects of the injuries, in these cited cases, differ highly from Josiah's case. The first of the three jury verdicts shows a gross verdict award of $9,250,000.00. The third of the jury verdicts show a gross award of $6,132,642. The second of the three jury verdicts shows an award of $109,760,930. This includes the staggering figure of $94 million for pain and suffering damages. The undersigned took official recognition of the docket for the Carter case and the Notice of Appeal filed on March 22, 2018, which show that the Carter verdict is on appeal. Unfortunately, these jury verdicts provide no guidance for calculating Josiah's or his parents' claims for noneconomic damages or the total value of the case.
The Issue The issues for determination are, first, whether a lesser portion of Petitioner’s total recovery from a third-party tortfeasor should be designated as recovered medical expenses than the share presumed by statute; if so, then the amount of Petitioner’s recovery to which Respondent’s Medicaid lien may attach must be determined.
Findings Of Fact On June 17, 2018, Cruz, then age 28, went boating in Biscayne Bay, near Elliott Key. The boat belonged to Cruz’s cousin, Victor Fonseca (“Fonseca”), who operated the vessel at all relevant times. Others were with them. At some point during this outing, Fonseca’s boat became stuck on a sandbar. Cruz, who was in the water, got close to the boat’s engines, apparently intending to attempt to free the boat. As he did so, Fonseca, who knew or should have known of Cruz’s whereabouts, engaged the engines. Cruz’s clothes became caught in a moving propeller, which dragged him in. The result, predictably, was catastrophic, as the fast-spinning propeller chopped into Cruz’s lower body, causing severe injuries. The medical records describe Cruz’s injuries as including extensive trauma to all muscles of the right thigh and left gluteal muscles, multiple significant fractures of bones in the right leg, a right thigh degloving injury, and a severe rectal injury, which required the surgical removal of his anal sphincter. Post injury, Cruz developed RLE compartment syndrome and underwent a fasciotomy. He suffered an acute pulmonary embolism for which an IVC filter was placed. He underwent multiple surgical debridements and closure procedures. An end-colostomy was also laced. He underwent eternal fixation of his femur fracture. Cruz remained in the hospital for more than one year. The foregoing clinical description is amplified by emergency room photographs, which vividly depict the bodily destruction that the propeller caused. The words “gruesome” and “horrific,” or others to that effect, come to mind when viewing these pictures. It is undisputed that Cruz’s devastating injuries are disfiguring, permanently disabling, and chronically painful. As a result of this accident, Cruz will require medical treatment for the rest of his life. He must use a wheelchair or walker to move about and has been fitted with orthotic devices. Cruz is unable to care for himself and depends upon others to assist him in all activities of daily living. Before his injury, Cruz was employed as a heating, ventilation, and air conditioning (“HVAC”) technician. He will not be able to resume working in this field, and, indeed, Cruz is unlikely ever to work again. As mentioned, Cruz experiences chronic pain from his injuries, and he is unable to sit normally for extended periods without discomfort, due to the absence of gluteal muscles. His right thigh now consists, essentially, of skin- wrapped bone, because the muscle and connective tissue are gone. Not surprisingly, Cruz has suffered, and continues to suffer, adverse emotional effects, including depression. Cruz’s family suffers as well. He and his wife have two children, twins, who were three years old at the time of the accident. As a husband and father of young children, Cruz is no longer able to provide the same level of support and companionship to his family as before becoming disabled. Cruz brought a personal injury lawsuit against Fonseca, the person whose negligence seems likely to have been the sole proximate cause of the accident. (There is no evidence of, nor any reason to infer, the involvement of a defective product or joint tortfeasor. Likewise, there is no persuasive evidence that Cruz’s own negligence contributed to causing the accident.) Unfortunately for Cruz, Fonseca was practically judgment proof. He had no assets upon which to levy and could discharge any judgment in bankruptcy. Fonseca’s homeowner’s policy, having limits of $300,000, was woefully inadequate to satisfy Cruz’s damages, and the insurer initially denied coverage and refused to pay even this relatively scanty sum (as compared to Cruz’s enormous loss) because Fonseca, allegedly, had failed properly to declare his ownership of the boat. Eventually, the insurer tendered its policy limits pursuant to a confidential and complete settlement of Cruz’s claims and the derivative claims of his wife and children for loss of consortium, which the parties entered into on October 17, 2019. Of the $300,000 in insurance proceeds, which were not differentiated between claims or items of damages, the sum of $220,210.98 (“Gross Recovery”) was allocated, by Cruz’s attorney, to the settlement of Cruz’s cause(s) of action. The balance was allocated to the derivative claims of Cruz’s wife and children. Cruz’s Gross Recovery will be further reduced by attorney’s fees in the amount of $44,934.20 and costs totaling $2,842.70, leaving him a Net Recovery of $172,434.08. As mentioned, the recovery was an undifferentiated lump sum. It would be reasonable to infer that the defendant (and his carrier) had little or no interest in negotiating the manner of the plaintiffs’ distribution, between themselves, of the $300,000 settlement. There is no evidence of such bargaining, in any event. Consequently, an allocation of the recovery needed to be made, on the plaintiffs’ side, between the four injured parties (Cruz, his wife, and two children), each of whom had discrete losses for which Fonseca was liable. This is how the Gross Recovery wound up being exactly equal to the amount of medical assistance expenditures made on Cruz’s behalf by Medicaid. Cruz’s attorney testified that he had divided the $300,000 this way to give Cruz’s family members some recovery, albeit a small one, on their consortium claims. Since any allocation of the very limited, and arbitrarily capped, recovery of $300,000 between Cruz, on the one hand, and his family members, on the other, would necessarily be, at best, only very loosely related to the intrinsic value of each injured person’s individual claims; and because the Agency presented no evidence supporting an allocation that would have been as or more reasonable, the undersigned finds, based on the uncontested testimony of Cruz’s attorney, that setting aside approximately three-quarters of the insurance proceeds for the Gross Recovery, to match the Medicaid payments, was a reasonable and rational decision under the circumstances. The Agency was properly notified of Cruz’s personal injury action, and it informed the parties that medical assistance expenditures totaling $220,210.98 had been paid by Medicaid on Cruz’s behalf. The Agency asserted a lien for the reduced amount of $111,078.65 against Cruz’s settlement proceeds, pursuant to the formula found in section 409.910(11)(f). In their Joint Pre-hearing Stipulation, the parties stipulated to certain facts “which are admitted and require no proof at hearing,” including that the “application of the formula in [section] 409.910(11)(f) requires Mr. Cruz to pay back Medicaid $111,078.65 on its $220,210.98 lien … .” Given that Cruz’s litigation costs totaled $2,842.70, it is mathematically indisputable, based on the section 409.910(11)(f) equation, that the parties used the sum of $300,000 as Cruz’s gross settlement recovery.1 Therefore, although the evidence shows that Cruz’s Gross Recovery was, in fact, $220,210.98, his gross “Stipulated Recovery” is $300,000.2 The Medicaid payments for Cruz’s immediate, post-injury care comprise the lion’s share of his past medical expenses, there being, in addition, only the negligible sum of approximately $2,000, which was paid to the University of Miami Medical Group (“UMMG”). Thus, it is reasonable to treat the Medicaid payments of $220,210.98 as Cruz’s past medical expense damages, as Cruz has done without the Agency’s objection, for simplicity’s sake.3 There is no dispute that, under the anti-lien provision in the federal 1 [(300,000 × 0.75) - 2,842.70)] ÷ 2 = 111,078.65. 2 Had the Gross Recovery, rather than the Stipulated Recovery, been used as the value of the settlement for purposes of computing the default allocation under section 409.910(11)(f), the Agency’s statutory lien would have been reduced further, to $81,157.77. 3 Any difference, mathematically, in the lien amount which would result from adding in the UMMG payment is de minimus, in any event. Medicaid statute, the Agency’s lien attaches only to the portion of Cruz’s recovery attributable to past medical expenses. The ultimate question presented is whether the Agency’s default distribution, in the stipulated amount of $111,078.65, reflects “the portion of the total recovery which should be allocated”4 to Cruz’s recovery of past medical damages, or whether a lesser sum, from the total settlement, “should be allocated” to the recovery of past medical damages. It is Cruz’s burden to prove that the statutory allocation is greater than the amount which “should be” distributed to the Agency, and that the Agency’s default lien amount “should be” adjusted to better reflect the portion of his total recovery attributable to past medical expenses. For purposes of determining the portion of the “total recovery” that “should be allocated” to past medical expense damages, the undersigned will use the Stipulated Recovery as the value of the “total recovery,” even though that figure is greater than Cruz’s actual Gross Recovery, because the parties stipulated to a “total recovery” value of $300,000. To meet his burden, Cruz presented evidence at hearing, as is now typically done in cases such as this, with the goal of establishing the “true value” of his damages. Usually, and again as here, this evidence comes in the form of opinion testimony, from a trial attorney who specializes in personal injury law and represents plaintiffs in negligence actions. Cruz called two experienced plaintiff’s personal injury lawyers, one of whom is also a medical doctor, to give opinions on the valuation of his damages. The undersigned finds their opinions in this regard to be credible and persuasive. Moreover, the Agency did not offer any evidence to challenge Cruz’s valuation; no expert testimony was given, for example, by an attorney specializing in personal injury defense, which might have provided a different perspective on the value of Cruz’s case. Having no evidential basis for discounting or 4 See § 409.910(17)(b), Fla. Stat. disregarding the opinions of Cruz’s expert witnesses, the undersigned bases the findings on valuation that follow upon their unchallenged testimony. Cruz is requesting—and his expert witnesses opined that—the Medicaid lien should be adjusted according to a method that will be referred to herein as a “proportional reduction.” A proportional reduction adjusts the lien so that the Agency’s recovery is discounted in the same measure as the plaintiff’s recovery. In other words, if the plaintiff recovered 25% of the “true value” of his damages, then, under a proportional reduction, the Medicaid lien is adjusted so that the Agency recovers 25% of the medical assistance expenditures. The mathematical operation behind a basic proportional reduction is simple and requires no expertise. Using “r” to signify the plaintiff’s recovery; “v” to represent the “value” of his damages; “m” for medical assistance expenditures; and “x” as the variable for the adjusted lien amount, the equation is: (r ÷ v) × m = x. In these cases, the only unknown number (usually) is v,” i.e., the “value” of the plaintiff’s total damages. “True value,” sometimes also called “full value” or “total value,” is an elusive concept, given that the true value of damages which have not been liquidated by a judgment is not, and cannot be, known in a case that settles before the entry of a judgment. For purposes of this discussion, the undersigned will hereafter use the term “true value” to mean liquidated damages, i.e., damages reduced to judgment. To be clear, this is not how Cruz’s expert witnesses used the term. They used the term to refer to the amount that, had the personal injury case been tried to conclusion, Cruz’s attorneys would have “boarded” for the jury at trial and argued, in closing, that the jury should award the plaintiff for his total damages. For purposes of this discussion, the undersigned will use the term “plaintiff’s best-case value,” or “PBCv” for short, instead of “true value,” to refer to the amount that the plaintiff would have requested at trial in closing argument. Naturally, where there is a PBCv, there is also a “defendant’s best- case value,” or “DBCv.” In a jury trial, DBCv might well be $0, if the defendant is contesting liability, and it will nearly always be, in any event, less than PBCv. As mentioned above, the Agency chose not to present expert witness testimony as to DBCv, or any value. There are other constructs that might be considered in regard to value, such as, for example, the “fair market value” of the plaintiff’s case, or “MKTv” for short. As the undersigned will use the term herein, MKTv means the theoretical amount upon which the plaintiff and a solvent defendant, negotiating at arm’s length and without the constraint of an arbitrary financial cap on the defendant’s ability to pay, such as insurance policy limits or sovereign immunity, would agree to settle the case. MKTv reflects the strengths and weakness of the plaintiff’s case, both legal and factual, the strengths and weaknesses of the defendant’s case, both legal and factual, and all of the other considerations and motives driving the parties to reach a settlement agreement, except the defendant’s ability to pay. Generally speaking, MKTv should be a number greater than DBCv and less than PBCv. A plaintiff who has settled for MKTv effectively has made a full recovery. As the undersigned is using the term, MKTv is similar, but not identical, to the term “settlement value” as described in Mojica v. State, Agency for Health Care Administration, 285 So. 3d 393, 395 (Fla. 1st DCA 2019), which is yet another value construct. “Settlement value,” in the Mojica sense, which is how the undersigned will use the term herein, takes into account, among other factors, the “defendant’s ability to pay.” Id. Because a personal injury plaintiff does not have the option of negotiating with someone other than the potentially liable defendant to get a better deal, however, the “defendant’s ability to pay” does not seem like an appropriate factor to consider in establishing the MKTv of the plaintiff’s case. Put differently, while a settlement for MKTv can fairly be considered a full recovery, a settlement for “settlement value” would arguably not be a full recovery, if the plaintiff were required to accept a settlement discount attributable, in part, to the defendant’s ability to pay. This distinction makes no difference in this case, because Cruz did not recover even the “settlement value” of his case; he had no alternative but to accept the defendant’s limited insurance coverage as payment in full. In other words, in Cruz’s situation, the defendant’s ability to pay was not merely a factor in determining settlement value, it was the only factor. Cruz’s recovery, thus, was arbitrarily capped at $300,000, the coverage limit of the defendant’s only available insurance policy. For purposes of this discussion, the undersigned will refer to a settlement such as Cruz’s as an “arbitrary discount settlement.” An arbitrary discount settlement is “arbitrary” in the sense that the amount of the settlement bears no relationship to MKTv; the plaintiff is simply forced to accept what is, for him, a random haircut owing to a hard limit on the defendant’s ability to pay, which has nothing to do with the plaintiff’s damages or the defendant’s liability therefor.5 The uncontested and unimpeached expert testimony in this case establishes, by any standard of proof, that Cruz’s PBCv is no less than $6 million, which is the conservative figure presented by Cruz’s witnesses. The undersigned, frankly, would not have hesitated to find that Cruz’s noneconomic damages for past and future pain and suffering, alone, should be valued at $6 million, at a minimum, given the severity of the bodily destruction involved here. With respect to the economic damages of lost earning capacity and future medical expenses, Cruz’s evidence persuasively established significant losses, albeit without exactitude. Before his accident, Cruz had been earning 5 The amount of an arbitrary discount settlement should ordinarily be less than the settlement value of the plaintiff’s case, because the defendant’s limited ability to pay is the only relevant factor in determining the amount of an arbitrary discount settlement, whereas settlement value takes other factors into account, including but not limited to the defendant’s ability to pay. approximately $20 per hour as an HVAC technician. Assuming he were able to work full time at the same rate, without a raise, for the next 35 years, his wages would total $1.4 million, more or less. A sophisticated economic analysis would take into account wage growth over time, and it would discount future earnings to present value. As Cruz’s lawyers testified at hearing, however, money was simply not available, given Fonseca’s extremely limited insurance for Cruz’s substantial losses, to justify the expense of hiring an economist to perform such an analysis. The undersigned finds that the evidence is sufficient to prove that the present value of Cruz’s lost wages is at least $1 million, conservatively calculated, in view of the relatively young age (28) at which this previously fit working man became permanently disabled. Specificity in this regard is unnecessary in any event, because Cruz’s pain and suffering damages are easily $6 million. Similarly, Cruz’s evidence proves that he will incur future medical expenses “over six figures.” There is no genuine dispute about this, the Agency having offered no evidence to the contrary. It is undisputed that Cruz will require ongoing medical care, for the rest of his life, to treat complications arising from his severe injuries. To take just one example, the evidence shows that Cruz has yet to undergo a final surgical repair of his rectum. To be sure, in an ideal case, Cruz would have presented a life care plan developed by a suitable expert, cataloguing his future medical needs and estimated expenses, aggregated to a specific dollar amount, reduced to present value, and calculated to a reasonable degree of economic certainty. Unfortunately, paying such an expert for this kind of analysis would further have reduced Cruz’s already limited Net Recovery. The undersigned cannot fault Cruz’s attorneys for electing to forego such an expense, especially since, again, specificity in regard to future medical damages is unnecessary because Cruz’s noneconomic losses, without more, meet or exceed $6 million. Once Cruz made a prima facie showing of PBCv by adducing competent substantial evidence thereof, the Agency, if it wanted to prove that the PBCv in question, $6 million, is an inflated figure, needed to adduce some evidence that would have given the fact-finder an evidentiary basis for discounting or rejecting this value.6 Here, the Agency elected not to present evidence of value, but instead it chose to argue that Cruz has failed to prove that the particular medical-expense allocation he advocates should be made, and that, as a result, the default, statutory allocation should be made. As far as the evidence goes, therefore, the undersigned has no reasonable basis for rejecting the value of $6 million that Cruz’s witnesses testified was a conservative appraisal of Cruz’s total damages. Fonseca’s negligence was likely the sole proximate cause of the accident; there are, accordingly, no obvious weaknesses in Cruz’s case from the standpoint of establishing liability. Cruz testified ably in this proceeding and likely would have proved an excellent witness in the personal injury action, had it gone to trial. The ghastly nature of Cruz’s injuries, and Fonseca’s rather obvious liability for those injuries, likely would have resulted in a substantial plaintiff’s verdict, likely not less than $6 million, as the evidence persuasively shows. The undersigned finds, based on the unrebutted and unimpeached expert testimony adduced, that a proportional reduction methodology identifies the “portion of the total recovery which should be allocated” in this 6 To be clear, the undersigned is not shifting the burden of proof to the Agency. A petitioner, however, does not have the initial burden of putting on the personal injury defense case, in order to prove DBCv, nor does the petitioner have the initial burden of establishing matters, such as comparative negligence, which the defense might have relied upon in an arms-length negotiation to settle the case for value. Defense arguments are matters that the Agency may address in its case, if it wants to show that PBCv is inflated. But the Agency is not required to put on any such evidence. The Agency is free to present no evidence, rely solely on cross- examination of the petitioner’s witnesses to undermine the testimony elicited by the petitioner on direct, and then argue that the petitioner has failed to meet his burden of proof—as the Agency has done in this case. If the Agency takes this approach, however, it loses the opportunity affirmatively to prove that PBCv is too high, and it risks a finding that the unrebutted evidence of PBCv is a fair reflection of value. If, however, the Agency presents evidence of DBCv, MKTv, settlement value, or some alternative value, then the petitioner must rebut the evidence and try to overcome it, for the petitioner bears the ultimate burden of persuasion with regard to establishing the value of the petitioner’s damages. case as past medical expense damages. The undersigned considers Cruz’s unchallenged proof of PBCv sufficient to establish the probable “value” of his case, i.e., v in the proportional reduction formula, where, as here, such evidence, in addition to being unchallenged and unimpeached, is otherwise persuasive to the fact-finder. Although the use of a proportional reduction to determine the portion of the total recovery that “should be allocated” to past medical expenses is justified by the competent substantial evidence presented in this case, it is found that Cruz has advocated using an incorrect value in the proportional reduction formula. Cruz would apply the following values to the variables in the equation: r = $300,000; v = $6 million; and m = $111,078.65. Using these numbers results in a value of $5,553.93 for x, which is the amount of his recovery Cruz would allocate to past medical expense damages and thereby expose to the Medicaid lien. It is incorrect, however, to use the sum of $111,078.65 as the value for m, as Cruz urges. This figure is the amount produced by the statutory formula, which reduces the Agency’s recovery of actual Medicaid expenditures, by default. To use this figure in the proportional reduction formula would impose a double reduction on the Agency—an obvious injustice. The correct number for m is $220,210.98, the amount that Medicaid actually expended on Cruz’s behalf, without reduction. The undersigned finds, based on the evidence presented, including the stipulation as to Cruz’s total settlement recovery, that the correct values for the variables in the proportional reduction equation are: r = $300,000; v = $6 million; and m = $220,210.98. Using these numbers, the value of x is $11,010.55—or, 5% of $220,210.98.7 7 The ratio of 300,000 to 6,000,000 is 0.05. Because the unchallenged expert testimony persuasively shows that a proportional reduction is the appropriate method of adjusting the lien in this case; and because Cruz’s mistaken use of $111,078.65 as the value of m does not undermine the validity of the methodology, which is merely the mathematical expression of an analytical framework whose existence and underlying logic are independent of any specific values for r, v, m, and x, the undersigned does not believe that he must “throw out the baby with the bathwater” and make no lien adjustment simply because Cruz used the wrong value for m. This mistake may easily be corrected based on the evidence of record; and, ordinarily, evidence-based adjustments of a factual nature would be within the province of the fact-finder to make.8 The undersigned determines as a matter of ultimate fact, therefore, that the portion of the Stipulated Recovery that “should be allocated” to past medical expense damages is $11,010.55.
The Issue The amount of Petitioner’s medical malpractice settlement payable to Respondent, Agency for Health Care Administration (AHCA), to satisfy AHCA’s $322,048.83 Medicaid lien.
Findings Of Fact On November 14, 2013, Petitioner Angela Mojica (Petitioner), who was then eight years old, suffered catastrophic brain damage during a tonsillectomy. As a result of this permanent and catastrophic brain damage, Petitioner is unable to eat, speak, toilet, ambulate, or care for herself in any manner. Petitioner’s medical care related to the accident was paid by Medicaid. The Medicaid program through AHCA provided $322,048.83 in benefits. The Medicaid program through the Department of Health Children’s Medical Services Title XIX MMA – Pedicare (DOH), provided $195,207.33 in benefits, and the Medicaid program through a Medicaid Managed Care Organization known as Amerigroup Community Care (Amerigroup) provided $77,821.29 in benefits. As a condition of Petitioner’s eligibility for Medicaid, Petitioner assigned to AHCA her right to recover from liable third parties’ medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. Petitioner’s mother, Glexys Mojica, brought a medical malpractice action against the hospital and medical staff responsible for Petitioner’s care (Defendant medical providers) to recover all of Petitioner’s damages, as well as her own individual damages associated with Petitioner’s injuries. During the pendency of Petitioner’s medical malpractice action, AHCA was notified of the action and AHCA asserted a $322,048.83 Medicaid lien against Petitioner’s cause of action and settlement of that action. Petitioner’s mother settled all her claims through a series of settlements with the Defendant medical providers totaling $8.8 million.2/ Petitioner’s claims against the hospital were settled by execution of a “Settlement Agreement and Release” in the amount of $7 million. The hospital release contains the following language: The parties agree that ANGELA MOJICA and her mother’s alleged damages have a value in excess of $25,000,000, of which $595,077.45 represents ANGELA MOJICA’s claim for past medical expenses. Given the facts, circumstances and nature of ANGELA MOJICA’s injuries and this settlement, the parties have agreed to allocate $166,621.68 of this settlement to ANGELA MOJICA’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 ANGELA MOJICA and her mother’s damages. The hospital release contains no signature line for, and was not executed by, AHCA. Petitioner’s claims against the medical staff were resolved by Petitioner’s mother’s execution of a “Release of Claims” in the amount of $800,000 (medical practice release). The medical practice release includes the following language: The undersigned specifically warrants and represents that at the time of the signing of this General Release, there are no liens or claims related to the treatment of Angela Mojica, from MEDICARE or MEDICAID . . . . To the extent that MEDICARE and MEDICAID may have paid medical expenses for or on behalf of injured party Angela Mojica, the undersigned warrants and represents that MEDICARE and MEDICAID have been notified of this settlement and that any claims or liens have been satisfied or in the alternative, MEDICARE or MEDICAID have waived said claims or liens, or in the alternative, MEDICARE and MEDICAID have given written consent and authorization for Releasor to enter into this settlement and sign this General Release. The medical practice release contains no signature line for, and is not executed by, AHCA. A third Defendant medical provider tendered his insurance policy in the amount of $1 million without requiring a release. By letter of August 19, 2016, Petitioner’s attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release, a copy of the Final Order Approving Settlement of Minor’s Claim, and itemization of $84,480.85 in litigation costs. This letter explained that Petitioner’s damages had a value in excess of $25 million and the settlement represented only a 35.2% recovery of Petitioner’s $595,077.45 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of its Medicaid lien. AHCA, through the Medicaid program, spent $322,048.83 on behalf of Petitioner, all of which represents expenditures paid for Petitioner’s past medical expenses. Application of the formula at section 409.910(11)(f) to Petitioner’s settlement requires payment to AHCA of the full $322,048.83 Medicaid lien. The Petitioner has deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner underwent a routine tonsillectomy/adenoidectomy at a surgery center. During this surgical procedure, Petitioner suffered an arrest causing a lack of oxygen to her brain and resulting in catastrophic brain damage. Prior to the incident, Petitioner was an eight year old who enjoyed life and was an excellent student. Subsequent to the accident, Petitioner is unable to speak, ambulate, and requires assistance in all aspects of daily life. Petitioner’s injury has had a devastating impact on Petitioner’s mother, who had difficulty becoming pregnant with Petitioner. Petitioner’s mother has suffered damages due to her daughter’s requirement for round-the-clock assistance with every activity of daily living, her daughter’s inability to communicate, as well as her daughter’s inability to attend school and associate with friends. Hector More represented Petitioner and her mother from the initial investigation to the final settlement of the medical malpractice claim. During his representation, he reviewed Petitioner’s extensive medical records, met with her doctors, ordered and reviewed her Life Care Plan, reviewed the Economist Report, and met with Petitioner and her mother numerous times. Petitioner’s experts testified, convincingly, that her damages have a value far in excess of $25 million. Petitioner’s Life Care Plan was prepared projecting Petitioner’s future needs and providing an assessment that Petitioner would never be able to be gainfully employed. Petitioner’s Life Care Plan was not introduced in evidence. An economist reviewed Petitioner’s Life Care Plan and prepared an Economist Report calculating the present value of Petitioner’s future needs and lost earning capacity. The economist placed the present value of Petitioner’s future needs, lost earning capacity, and claim for past medical expenses at above $25 million. Neither party introduced testimony documenting the specific cost projections establishing Petitioner’s economic damages, other than past medical expenses. Petitioner’s non-economic damages have a value between $15 to $25 million. In arriving at his valuation of Petitioner’s non-economic damages, Mr. More compared Petitioner’s case to a similar case his firm handled where an eight year old with a brain injury was awarded $16 million in non-economic damages. Further, Mr. More reviewed the jury verdicts in Petitioner’s Exhibit 12, which he described as comparable to Petitioner’s case and supportive of his valuation of Petitioner’s non-economic damages. Mr. More consulted with other attorneys in his law firm and they agreed with his assessment of the value of Petitioner’s damages. Mr. More’s valuation of Petitioner’s total damages at $25 million was conservative. The $8.8 million settlement did not fully compensate Petitioner and her mother for the full value of their damages and in the settlement they only recovered a fraction of the total monetary value of their damages. Based on a valuation of all damages of $25 million, the $8.8 million settlement represented a recovery of 35.2% of the value of all damages. Mr. More testified that because Petitioner and her mother recovered only 35.2% of the value of their damages, they recovered only 35.2% of each element of damages including only 35.2% of the $595,077.45 claim for past medical expenses, or $209,467.26. Petitioner did not establish the value of any element of damages other than past medical expenses. The record does not support a finding of the individual value of Petitioner’s damages for other economic damages (e.g., lost earning capacity, future medical expenses) or non-economic damages (e.g., pain and suffering, loss of consortium). Mr. More outlined that if the case had gone to a jury verdict, and the jury had determined the value of all damages was $25 million with a line item of $595,077.45 for past medical expenses, but determined one of the Defendant medical providers was only 35.2% liable, that Defendant medical provider would only be liable for paying 35.2% of each line item of damage including only 35.2% of the claim for past medical expenses, or $209,467.26. Mr. More testified that it would be reasonable to allocate $209,467.26 of the settlement to past medical expenses. He testified that because the allocation is based on a conservative valuation of all damages of $25 million, the allocation of $209,467.27 to past medical expenses is very conservative. Because the record contains no valuation of the damages other than past medical expenses, there is no evidence of the recovery for “each line item of damage” other than past medical expenses. The record does not support a finding of how the remaining $8.5 million of the recovery was allocated among the other elements of damages. The hospital, which tendered the majority of the settlement ($7 million), agreed to an allocation to past medical expenses as part of the settlement. The hospital agreed that Petitioner and her mother’s damages had a value in excess of $25 million, of which $595,077.45 represented the claim for past medical expenses. The hospital agreed to allocate $116,621.68 of the settlement to past medical expenses because that $7 million settlement represented a 28% recovery of the $25 Million value of all damages. The hospital’s allocation to past medical expenses was memorialized in the Release. The remaining Defendant medical providers made no allocation from their settlements to any element of damages. R. Vinson Barrett testified in support of Petitioner’s allocation of damages. In support of Petitioner’s method of allocation of the settlement, Mr. Barrett outlined that if a jury had determined the value of damages at $25 million, but found the Defendant medical providers were only 35.2% liable for these damages, the judge would award only 35.2% of each line item on the jury verdict form, including only 35.2% of the line item for past medical expenses. Mr. Barrett testified that method is “the method that I’ve seen in practice used and, really, the most accurate and fair method of doing it that I can think of.” Mr. Barrett testified that allocation of $209,467.26 of the settlement to past medical expenses would be reasonable, rational, and conservative. AHCA introduced the testimony of Jesse Suber, a medical malpractice attorney of some 30 years. Mr. Suber’s testimony was that the settlement amount represents the value of the case “considering the limitations of liability, causation, the defendant’s ability to pay, risk of trial, and other limiting factors.” Mr. Suber did not provide an opinion of the value of Petitioner’s damages. Based on the methodology of applying the same ratio the settlement bore to the total monetary value of all the damages to the $595,077.45 claim for past medical expenses, $209,467.26 of the settlement represents compensation for past medical expenses. However, the methodology fails to establish the amount actually recovered by Petitioner for her past medical expenses. The testimony is insufficient to support a finding that the amount allocated to past medical expenses is the amount Petitioner recovered for past medical expenses. Without a breakout of the allocation of the settlement to other elements of damages, the undersigned cannot determine that the amount allocated to past medical expenses is reasonable. The undersigned respects the experts’ valuation of the total amount of Petitioner’s damages, but is not persuaded by their conclusory testimony that the allocation of 35.2% of Petitioner’s total payment for past medical expenses is reasonable. The only other evidence supporting the reasonableness of that allocation was the agreement between Petitioner and the hospital in the Release of claims that the allocation of $166,621.68 of the settlement to Petitioner’s claim for past medical expenses was reasonable. The hospital had no interest in the allocation of portions of the settlement to any specific element of damages. The only advantage of that clause in the settlement was to afford Petitioner’s retainer of more of the settlement amount. Following Petitioner’s theory out to its logical conclusion, Petitioner would have received only 35.2%, or $6.8 million, of her $19.4 million claim for non-economic damages; leaving roughly $1.7 million of the settlement allocable to Petitioner’s other economic damages, including future medical care and lost earning potential. $1.7 million is 35.2% of roughly $5 million. Under Petitioner’s theory of allocating damages, the value of Petitioner’s economic damages would have been around $5 million. Given the expert testimony of the extent of Petitioner’s injuries, her need for round-the-clock assistance with all activities of daily living, the costs of future doctor visits, attendant care, and other considerations factored into Petitioner’s Life Care Plan, it is not reasonable that Petitioner’s economic damages (other than past medical expenses) would have been valued at a mere $5 million. In fact, this flies in the face of the economist’s determination, based on the Life Care Plan, that the present value of Petitioner’s economic damages was in excess of $25 million. This exposes the flaw in Petitioner’s method of allocating damages.3/ Petitioner did not prove that allocation of $209,467.26 to Petitioner’s past medical expenses was reasonable. Petitioner did not prove that the portion of the total amount of recovery which should be allocated to past medical expenses is less than AHCA’s Medicaid lien of $322,048.83.
The Issue The issue to be determined is the amount payable under section 409.910, Florida Statutes,1/ in satisfaction of Respondent's Medicaid lien on settlement proceeds received by Petitioner, Victor Hugo Herrera, Sr., from a third party.
Findings Of Fact On July 29, 2014, unbeknownst to Mr. Herrera, an individual (hereinafter Assailant) entered the common area where Mr. Herrera rented an office. The Assailant stalked Mr. Herrera and forced his way into Mr. Herrera’s office. The Assailant attacked Mr. Herrera in his office and shot Mr. Herrera in the leg. As a result of being shot in the leg, Mr. Herrera had his leg medically amputated above the knee, suffered a collapsed lung, and was comatose for nearly two months. As a result of his severe injuries, Mr. Herrera is now permanently disabled, disfigured, and wheelchair-bound, unable to walk. Mr. Herrera’s medical expenses related to his injuries were paid by Medicaid, which provided $271,344.06 in benefits. Mr. Herrera brought a personal injury lawsuit to recover all of his damages associated with his injuries against the owner of the office and security company responsible for providing security (Defendants). The $271,344.06 paid by Medicaid constituted Mr. Herrera’s entire claim for past medical expenses. On December 11, 2015, Mr. Herrera compromised and settled his personal injury action against the Defendants for $925,000. The General Release of Claims memorializing the settlement with the Defendants stated, inter alia: The First Party, the Second Party and their respective counsel acknowledge that this settlement does not fully compensate the First Party for the damages he has allegedly suffered, but as provided herein this settlement shall operate as a full and complete release as to all claims against Second Party, without regard to this settlement only compensating the First Party for a fraction of the total monetary value of his alleged damages. These parties agree that the damages suffered by the First Party have a value in excess of $5,000,000.00, of which $271,344.06 represents First Party’s claim for past medical expenses. Given the facts, circumstances, and nature of the First Party’s alleged injuries and this settlement, $50,198.65 of this settlement has been allocated to the First Party’s claim for past medical expenses and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the First Party’s alleged damages. Further, the parties acknowledge that the First Party may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for those future medical expenses the First Party may incur in the future. However, the parties acknowledge that the First Party, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and the First Party has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for payments made to secure future medical care. During the pendency of Mr. Herrera’s personal injury lawsuit, the Agency for Health Care Administration (AHCA) was notified of the lawsuit and AHCA, through its collections contractor Xerox Recovery Services, asserted a $271,344.06 Medicaid lien against Mr. Herrera’s cause of action and settlement of that action. By letter of January 22, 2016, AHCA was notified by Mr. Herrera’s personal injury attorney of the settlement and provided a copy of the executed release and itemization of Mr. Herrera’s $10,114.38 in litigation costs. This letter explained that Mr. Herrera’s damages had a value in excess of $5,000,000, and the $925,000 settlement represented only an 18.5 percent recovery of Mr. Herrera’s damages. Accordingly, he had recovered only 18.5 percent of his $271,344.06 claim for past medical expenses, or $50,198.65. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $271,344.06 Medicaid lien. AHCA did not respond to Mr. Herrera’s attorney’s letter of January 22, 2016. AHCA has not filed an action to set aside, void, or otherwise dispute Mr. Herrera’s settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. The Medicaid program spent $271,344.06 on behalf of Mr. Herrera, all of which represents expenditures paid for Mr. Herrera’s past medical expenses. No portion of the $271,344.06 paid by the Medicaid program on behalf of Mr. Herrera represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Mr. Herrera and AHCA agree that application of the formula at section 409.910(11)(f) to Mr. Herrera’s $925,000 settlement would require payment to AHCA of the full $271,344.06 Medicaid lien. Petitioner has deposited the full Medicaid lien amount into an interest-bearing account pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Mr. Zebersky, who represented Mr. Herrera in his underlying personal injury action, testified and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney for 27 years and has demonstrated considerable experience in handling plaintiffs’ personal injury and insurance class action claims in South Florida. In rendering his opinion as to the value of Mr. Herrera’s claim, Mr. Zebersky explained that, as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties and he explained his process for making these determinations. Mr. Zebersky was familiar with and gave a detailed explanation of the circumstances giving rise to Mr. Herrera’s claim. In making his valuation determination, Mr. Zebersky reviewed the police report, the State Attorney’s file on the shooting, all of Mr. Herrera’s medical records, and met numerous times with Mr. Herrera and his family. Mr. Zebersky testified that through his representation of Mr. Herrera, review of Mr. Herrera’s file, and based on his training and experience, he had developed the opinion that the value of Mr. Herrera’s damages was $5,000,000. Mr. Zebersky suggested that the $5,000,000 amount was conservative, by testifying that “five million dollars, you know, is probably what the pain and suffering value is especially in Broward County.” In addition to his first-hand experience with Mr. Herrera’s claim, Mr. Zebersky further supported his valuation opinion by explaining that he had “round-tabled” the case with other experienced attorneys and they agreed that the value of Mr. Herrera’s damages was $5,000,000. Further, Mr. Zebersky testified that he had reviewed jury verdicts in developing his opinion and the jury verdicts in Petitioner’s Exhibit 12 were comparable to Mr. Herrera’s case and support the valuation of Mr. Herrera’s damages at $5,000,000. Mr. Zebersky’s testimony was credible and is accepted. Petitioner also presented the testimony of Mr. Barrett, who was accepted as an expert in the valuation of damages. Mr. Barrett has been accepted as an expert in valuation of damages in a number of other Medicaid lien cases before DOAH. Mr. Barrett has been a trial attorney for 40 years, with a primary focus on plaintiff personal injury cases, including medical malpractice, medical products liability, and pharmaceutical products liability. Mr. Barrett stays abreast of jury verdicts and often makes assessments concerning the value of damages suffered by injured parties. After familiarizing himself with Mr. Herrera’s injuries through review of pertinent medical records and Petitioner’s Exhibits, including the police report, pictures of Mr. Herrera, Mr. Herrera’s complaint and Mr. Herrera’s General Release of Claims, Mr. Barrett offered his opinion, based upon his professional training and experience, that “five million was a conservative estimate” for the value of Mr. Herrera’s damages and that Mr. Herrera’s damages were “undoubtedly at least five million dollars.” Mr. Barrett also reviewed the jury verdicts in Petitioner’s Exhibit 12 and opined that those verdicts were comparable and supported his valuation of Mr. Herrera’s damages. Mr. Barrett’s testimony was credible and is accepted. AHCA’s designated expert, Mr. Bruner, was not available for testimony at the final hearing. Instead of asking for a continuance, the parties agreed to take Mr. Bruner’s deposition after the final hearing and then file the transcript with DOAH. Further, during the final hearing, AHCA agreed that Mr. Bruner would not be testifying as to the value of Mr. Herrera’s damages. In accordance with that agreement, Mr. Brunner’s deposition was subsequently taken and his deposition transcript was filed on August 3, 2016. At Mr. Bruner’s deposition, AHCA proffered Mr. Bruner as an expert in evaluation of cases and settlements. Petitioner objected on the grounds that Mr. Bruner lacked experience or expertise in personal injury cases and should not be allowed to testify as an expert. Further, Petitioner objected to the relevance of Mr. Bruner’s testimony based on AHCA’s earlier agreement that he would not be testifying concerning the value of the damages suffered. Counsel for AHCA responded to Petitioner’s objection to the relevance of Mr. Bruner’s testimony by agreeing that AHCA would not be seeking any “expert testimony as to evaluation of damages,” but would only be using Mr. Bruner’s testimony to “evaluate” the jury verdicts in Petitioner’s Exhibit 12. While Mr. Bruner does not have the same level of experience in personal injury claims as the experts offered by Petitioner, Mr. Bruner has sufficient experience to offer an opinion on the jury verdicts set forth in Petitioner’s Exhibit 12, and to that extent, his expertise in the evaluation of cases is accepted. However, because of his lack of recent experience in settling personal injury claims, Mr. Brunner is not accepted as an expert in personal injury settlements.2/ In his deposition testimony, Mr. Bruner criticized the relevance of the 12 verdicts in Petitioner’s Exhibit 12 on the grounds that, while the verdicts involved amputations of legs, there were factual differences in the mechanism of injury. Mr. Bruner further asserted that, to the extent the verdicts in Petitioner’s Exhibit 12 included awards for future medical expenses, they should not be considered because, according to Mr. Bruner’s understanding, Mr. Herrera did not recover any future medical expenses in the settlement. Finally, while the juries in the 12 jury verdicts had determined the value of the damages, Mr. Bruner criticized the verdicts because he asserted that it was possible that the cases may have settled post-verdict for less, or that the injured parties may have received less, due to reductions for comparative negligence. On this last point, it appears that Mr. Bruner confused the issue of the value of the damages with the settlement value of the case. The value of the damages is the estimation of the monetary value a jury would assign to the damages. On the other hand, the settlement value of the case is the amount it settled for with the considerations of liability, causation, the Defendant’s ability to pay, risk of trial, and other limiting factors, which are a calculus in every settlement. Despite Mr. Bruner’s criticisms of the jury verdicts in Petitioner’s Exhibit 12, the undersigned finds those verdicts supportive of the valuation opinions offered by Petitioner’s experts. Further, Petitioner’s experts’ opinions were not primarily reliant on those 12 verdicts, but were rather based upon their knowledge of Mr. Herrera’s injury and their extensive experience in handling cases involving catastrophic injury, including jury trial experience. Mr. Bruner’s testimony did not provide an alternative value of the damages suffered by Petitioner. The value of $5,000,000 for Mr. Herrera’s claim opined by Petitioner’s experts is unrebutted. Considering the valuation of Mr. Herrera’s claim in the amount of $5,000,000, his $925,000 settlement represents only an 18.5 percent recovery of Mr. Herrera’s damages. Applying that same 18.5 percent to the $271,344.06 paid by Medicaid for past medical expenses results in the sum $50,198.65 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
The Issue The issue to be determined in this case is the amount to be paid to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), to reimburse Medicaid for medical expenses paid on behalf of Petitioner from proceeds of a personal injury settlement received by Petitioner.
Findings Of Fact The following findings of fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the prehearing stipulation. Petitioner, William O’Malley, is the recipient of Medicaid for injuries he sustained in an automobile accident. Respondent is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 9, 2009, Petitioner, William O’Malley, lost control of his vehicle when it hydroplaned across three lanes of traffic. Mr. O’Malley’s vehicle left the roadway and struck a tree. While he was restrained with a seat belt, Mr. O’Malley suffered a severe brain injury, fractured skull, injury to his neck at the C6-C7 level, numerous fractured ribs, shattered spleen, lacerated liver, abdominal bleeding, a fractured ankle and other serious injuries. He remained in a coma for a number of weeks undergoing extensive surgical procedures to save his life. As a result of his severe and permanent injuries, Mr. O’Malley now suffers from cognitive deficits, is disfigured, and is unable to work. He receives disability payments due to his injuries. A portion of Mr. O’Malley’s past medical expenses related to his injuries was paid by Medicaid, in the amount of $196,125.72. Mr. O’Malley initiated a personal injury civil action to recover all his damages associated with his injuries against the construction companies who allegedly designed and constructed the roadway in a defective manner (“Defendants”). During the pendency of Mr. O’Malley’s personal injury action, AHCA was notified of the action, and asserted a $196,125.72 Medicaid lien against any damages received by Mr. O’Malley. AHCA was not otherwise involved in the personal injury action or settlement. In October 2016, Mr. O’Malley’s personal injury action settled for the gross amount of $1,750,000. The General Release memorializing the settlement agreement provides as follows: Although it is acknowledged that this settlement does not fully compensate William O’Malley 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 William O’Malley for a fraction of the total monetary value of his alleged damages. The parties agree that William O’Malley’s alleged damages have a value in excess of $20,000,000.00, of which $379,874.27 represents William O’Malley’s claim for past medical expenses. Given the facts, circumstances, and nature of William O’Malley’s injuries and this settlement, the parties have agreed to allocate $33,239.00 of this settlement to William O’Malley’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 William O’Malley’s damages. Further, the parties acknowledge that William O’Malley may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses William O’Malley will incur in the future. However, the parties acknowledge that William O’Malley, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and William O’Malley 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. By letter of October 13, 2016, Mr. O’Malley’s attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of $123,699.86 in litigation costs. This letter explained that Mr. O’Malley’s damages had a value in excess of $20 million and the settlement represented only 8.75 percent of the recovery of Mr. O’Malley’s $379,874.27 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $196,125.72 Medicaid lien. AHCA responded to Mr. O’Malley’s attorney’s letter and demanded full payment of the entire $196,125.72 Medicaid lien from the settlement. AHCA, through the Medicaid program, spent $196,125.72 on behalf of Mr. O’Malley, all of which represents expenditures paid for Mr. O’Malley’s past medical expenses. No portion of the $196,125.72 paid by AHCA represented expenditures for future medical expenses. Application of the formula at section 409.910(11)(f) to Mr. O’Malley’s settlement requires payment to AHCA of $196,125.72, the actual amount of the medical expenses paid by Medicaid. Petitioner disputes that $196,125.72 is the amount of recovered medical expenses payable to Respondent, and instead asserts that $33,239.00 in medical expenses are payable to Respondent. Notwithstanding Petitioner’s dispute, Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). In support of his position, Mr. O’Malley presented the testimony of two experts, Steven Browning, Esquire, and Vinson Barrett, Esquire. Mr. Browning represented Mr. O’Malley in the personal injury action. He testified as an expert regarding the valuation of Mr. O’Malley’s personal injury claim. Mr. Browning has practiced law for 31 years, primarily representing plaintiffs. He is a partner of his law firm and handles serious personal injury, wrongful death, and catastrophic injury cases. Mr. Browning handles cases that result in jury trials and, thus, he routinely researches jury verdicts to determine potential value of cases. In the litigation of civil actions, he also prepares mediation statements regarding the value of cases. He reviews life care plans, economic reports, and past jury verdicts to determine the value of a case. Mr. Browning opined that $20 million constituted a very conservative valuation of damages suffered by Mr. O’Malley. He based this opinion on having represented Mr. O’Malley in the underlying personal injury action and on his knowledge of jury verdicts and settlements in recent Florida cases involving awards of damages to individuals with similar injuries as Mr. O’Malley. He emphasized that his valuation was far more conservative than many comparable cases that resulted in substantially higher verdicts or settlements. Mr. Browning concluded that the $1,750,000 settlement amount represented 8.75 percent of the damages suffered by Mr. O’Malley. He also opined that only 8.75 percent of the $196,125.72, the past medical expenses paid by Respondent, was recovered. Mr. Browning was accepted as an expert in this matter and his testimony was found to be persuasive. Mr. O’Malley also presented the testimony of Mr. Barrett regarding the valuation of Petitioner’s claim. Mr. Barrett has practiced law for approximately 35 years. He primarily practices in the areas of medical malpractice, pharmaceutical liability, and catastrophic injuries resulting from automobile accidents. Mr. Barrett routinely handles jury trials. Thus, he routinely monitors jury verdicts and determines the value of damages suffered in personal injury actions. He reviewed recent jury verdicts and the life care plan for Mr. O’Malley to formulate his opinion regarding the valuation of Mr. O’Malley’s claim. Mr. Barrett testified that $20 million to $25 million was the estimated value of Mr. O’Malley’s claim. He testified that the amount was a very conservative estimate of damages suffered by Mr. O’Malley. Similar to Mr. Browning, Mr. Barrett opined that allocating 8.75 percent to past medical expenses in the amount of $196,125.72 was a reasonable allocation of past medical expenses and reflected the amount recovered by Mr. O’Malley for past medical expenses. Respondent also presented an expert regarding the valuation of Mr. O’ Malley’s claim, Steven Carter. Mr. Carter has been licensed to practice law for 23 years. He is the managing shareholder of his law firm. He has handled catastrophic injury cases in which he determined the value of the claim. He has conducted 35 to 40 jury or bench trials. Mr. Carter was accepted as an expert regarding valuation of Mr. O’Malley’s claim. Mr. Carter testified that the value of Mr. O’Malley’s damages was the actual settlement amount of $1,757,000. Ultimate Finding of Fact The undersigned finds that the testimony of Mr. Browning and Mr. Barrett was more persuasive regarding valuation of Mr. O’Malley’s claim than the testimony of Respondent’s expert witness. Mr. Browning and Mr. Barrett’s number of years of experience with handling catastrophic personal injury cases, and the fact that they had the benefit of the life care plan when evaluating the case, make their testimony more persuasive regarding the valuation of damages suffered by Mr. O’Malley in this case.
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.
