The Issue What amount of Petitioner’s malpractice settlement must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $13,904.06 Medicaid Lien?1/
Findings Of Fact On September 12, 2015, [Petitioner] was a 28-year-old single male living alone in Tampa, Florida and enrolled as a student at the University of South Florida working on his master’s degree in education. Because he recently ceased his employment with the Hillsborough County School Board, [Petitioner] had no health insurance. He called 911 for emergency medical services due to severe abdominal pain and was taken by EMS to the Emergency Department at St. Joseph’s Hospital where he was diagnosed with acute pancreatitis and admitted. His condition worsened and was complicated by abdominal distention that made his breathing difficult. In the evening of September 13th, [Petitioner] was transferred to the Medical Intensive Care Unit (“ICU”) because of a rapidly worsening condition and need for close monitoring. Over the next several hours, vital sign monitoring showed high heart and respiratory rates. A consulting physician found “acute respiratory insufficiency likely developing ARDS,” and directed he be “monitor closely, may need to be on mechanical ventilation, his work of breathing is hard to keep current sats [sic]”. During the early morning of September 14, [Petitioner’s] heart rate and respiratory rates remained high, he was short of breath, and given multiple doses of Morphine for severe pain and Ativan for agitation/anxiety, which drugs are known to suppress respiratory function. Throughout the morning, [Petitioner] was in a perilous condition due to a combination of his prolonged efforts to breathe, suppressive medications, and systemic complications of acute pancreatitis including electronical abnormalities associated with hypokalemia and hypocalcemia, and with electrocardiographic changes resulting in arrhythmia, conduction abnormalities and changes in cardiac T wave and QT period. At around 11:30, [Petitioner] attempted to perform a breathing exercise as instructed earlier that morning which required him to get on his hand and knees to relieve the pressure on his chest. [Petitioner’s mother], a licensed and practicing RN herself, was present and attempted to help him when his cardiac monitoring leads became disconnected. At this time, the attending RN was on break. An unknown RN reported [Petitioner] to have a change in the condition “with increased confusion and restlessness” and a call was made to the ICU specialist who issued verbal orders for Haldol, a medication used for sedation but in combination with the Morphine, Ativan and Labetatol, further lowers blood pressure and is contraindicated for cardiac arrhythmias. Without informing [Petitioner or his mother], the nursing staff mistakenly issued a "code grey" to control [Petitioner] and the nursing supervisor approved the administration of the Haldol without any physician assessment or knowing his cardiac status because the monitor was not connected. The ICU specialist who ordered the Haldol was close by in the ICU area but did not evaluate [Petitioner] or assess his condition, cardiac status and need for mechanical ventilation before the Haldol was administered. Immediately upon administration of the Haldol, [Petitioner] became “agonal” and his heart was thrown into a cardiac arrhythmia (PEA) causing a prolonged time period where his brain was deprived of oxygen that resulted in permanent hypoxic encephalopathy so that [Petitioner] now lives in a persistent minimally conscious state. The acute pancreatitis which [Petitioner] initially sought treatment resolved without further complications. His current medical condition is only complicated by the sequelae of his hypoxic encephalopathy and persistent minimally conscious state. Petitioner complied with all requirements of Chapter 766, Florida Statutes, including, all pre-suit requirements and presuit investigation of claims against the treating Hospital, the ICU Specialist and her employer that were corroborated by an expert witness, which were rejected. On October 27, 2017, Petitioner filed a lawsuit in the Circuit Court for Hillsborough County Florida, Case No. 17-CA-009829, against the treating Hospital and the ICU Specialist asserting claims for medical negligence. Based on the foregoing limitations, the medical malpractice claims were settled for a total of $1,975,000, which was approved by the Court to be in the best interest of [Petitioner]. [The Agency], through its Medicaid program, provided medical assistance to [Petitioner] in the amount of $13,904.36. During the pendency of the medical negligence case, [the Agency] was notified of the action and asserted a $13,904.06 Medicaid lien against Petitioner's cause of action and settlement. [The Agency] did not commence a civil action to enforce its rights under §409.910 or intervene or join in [Petitioner’s] action against Defendants. [The Agency] did not file a motion to set-aside, void or otherwise dispute Petitioner's settlement with Defendants. Application of the formula at §409.910(1l)(f) to the settlement requires payment to [the Agency] in the amount of the full $13,904.06 Medicaid lien. Petitioner deposited the full Medicaid lien amount in an interest-bearing account for the benefit of [the Agency] pending an administrative determination of [the Agency’s] rights, and this constitutes "final agency action" for purposes of chapter 120, pursuant to §409.910(17). Credible, Unimpeached, and Unrebutted Testimony Mr. Tonelli is the only person who testified about the value of the various elements of damages making up Petitioner’s malpractice claim. Mr. Tonelli has practiced law for 44 years. He has practiced in Tampa, Florida, the venue where Petitioner’s case would have been tried if it had not settled. He first practiced primarily in the area of personal injury defense. Presently, Mr. Tonelli spends over 25 percent of his time as a mediator. Since 1985, he has mediated many medical negligence cases. Mr. Tonelli also serves as a guardian ad litem in approximately 50 cases per year. Usually two to five of the cases involve catastrophic injury. Mr. Tonelli has served as counsel in 50 to 75 civil trials. Approximately 20 were jury trials. Mr. Tonelli’s practice includes review of medical records and life care plans. He also consults with economists about lost wage claims and works with doctors to identify the nature and extent of injuries and costs of medical services for injured persons. Mr. Tonelli participates in regular intake review of personal injury cases for his firm. The review includes evaluating the recoverable damages. He informs himself about jury awards and settlement amounts through his firm work, his participation in the American Board of Trial Attorneys, and his mediation practice. Mr. Tonelli was Petitioner’s Guardian Ad Litem. He reviewed the case and the proposed settlement and reported to the court about whether the settlement was in Petitioner’s best interests. Mr. Tonelli’s knowledge, skill, and experience qualify him to provide an opinion about the value of the elements of the damages for Petitioner’s malpractice claims against the hospital and the physician. Mr. Tonelli reviewed Petitioner’s hospital and physician medical records. He also reviewed the deposition of Roland Snyder, M.D., who prepared the life care plans admitted into evidence. Between Mr. Tonelli’s service as Guardian Ad Litem for Petitioner and his record review to prepare for his testimony, he had sufficient facts and data to form an opinion about the value of elements of damages of Petitioner’s malpractice claims. Also, he reasonably and reliably applied principles and methods based upon his knowledge, skill, and experience to provide a credible and conservative determination of the value of each element of damages that make up Petitioner’s malpractice claim. His testimony was unrebutted, unimpeached, credible, and persuasive. Injuries and Negligence Petitioner suffers from profound anoxic encephalopathy. This brain damage leaves him in a permanent, minimally conscious state, just barely more conscious than a patient in a vegetative state. He cannot speak, walk, or care for himself. Petitioner lives in pain. He breathes and eats only with the assistance of a tracheostomy. He takes nourishment through a “G-tube.” This is a gastrojejunostomy tube that delivers nutrients directly to the stomach. Petitioner requires daily care and assistance in every task of life from eating to waste elimination. His condition will not change for his estimated 20-year remaining life span. Petitioner’s multiple, severe medical conditions require that he live those 20 years in a long-term care facility with medical services, such as a skilled nursing home. This condition resulted from treatment he received for pancreatitis, a condition from which he fully recovered. While in the hospital, Petitioner developed cardiac and respiratory problems. A cascading series of improper prescriptions exacerbated Petitioner’s medical problems leading to catastrophic injuries resulting in his current condition. Damages The elements of damages for Petitioner’s malpractice claims are past medical expenses, future medical expenses, loss of current income, loss of future income, pain and suffering, and loss of enjoyment of life. The value of the damages in Petitioner’s malpractice claims falls within a range of $25,000,000 to $35,000,000. The amount of $25,000,000 is a reasonable, conservative value to place on Petitioner’s damage claims. The only evidence of past medical expenses is the stipulation that Medicaid paid $13,904.36. Consequently, that is the amount of past medical expenses. Future medical expenses in the form of costs for continued treatment and supports necessary to maintain Petitioner’s existence are a significant part of the damages. As explicated in two detailed life care plans, those expenses will range from $14,535,508.26, for residence in a modified home with supportive caregivers, to $31,082,301.36, for residence in a skilled long-term nursing facility. Loss of current income, comparatively, is not a major factor in this case. Loss of future income is. Petitioner was 30 years old earning $34,000 per year teaching “at-risk” children who would have otherwise been suspended from school. He was dedicated to his profession, volunteered at Boys and Girls Clubs, and had just been accepted to a master’s degree program. Petitioner’s lost future income ranges between $750,000 to $1,000,000. Petitioner’s injuries and resulting conditions are catastrophic. Pain and suffering damages and loss of enjoyment of life damages easily range between 10 and 20 million dollars. They could reasonably exceed 50 million dollars. Consideration of the value of the elements of damages affirms that the total damages that would have been proven if Petitioner’s claims had been tried would have been at least $25,000,000. Settlement Realities Petitioner’s claims were not tried. Petitioner had a strong malpractice claim against the doctor. The doctor, however, had only $500,000 worth of insurance coverage. There is no evidence of assets of the doctor that could have been reached to enforce a judgment. Petitioner’s claim against the hospital was not as strong. The hospital had significant liability and causation defenses. The doctor was not an employee or agent of the hospital. Hospital employees in most instances were following the doctor’s instructions, including when administering the medications that caused the damages. The limits of the doctor’s insurance coverage and the liability and causation issues of the claim against the hospital resulted in the decision to settle. Uncertainty about the provability or amount of damages was not a factor. The trial court approved the settlement. The settlement amount is 7.9 percent of the value of Petitioner’s claims. The stipulated amount of medical expenses the Agency paid through the Medicaid program is $13,904.36. The reasonable inference from the record in this case is that applying the 7.9 percent ratio of claims value to settlement recovery to the stipulated amount of medical expenses paid by the Medicaid program demonstrates that $1,098.44 of Petitioner’s settlement recovery was for past medical expenses. The Agency did not call witnesses, present evidence of the value of damages, or propose an alternative way to value damages.
The Issue This matter concerns the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Gregory McElveen, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $240,000.00 settlement from a third party. The Agency asserts that it is entitled to recover the full amount of its $72,907.93 lien. The incident that gave rise to this matter resulted from alleged medical malpractice. In 2016, Mr. McElveen saw his primary care physician complaining of pain and redness in his hand. The pain was ultimately traced to a metal shaving that had lodged in his finger. Despite repeated visits complaining of pain and swelling, however, Mr. McElveen’s physician failed to locate and remove the foreign object. In the meantime, his health worsened. On July 17, 2017, Mr. McElveen was admitted to the hospital, and was found to be critically ill with septic emboli. On August 15, 2017, Mr. McElveen died as a result of a systemic infection. He was survived by his wife and three daughters.3 2 By requesting a deadline for filing post-hearing submissions beyond ten days after receipt of the Transcript at DOAH, the 30-day time period for filing the Final Order was waived. See Fla. Admin. Code R. 28-106.216(2). 3 Although Mr. McElveen’s three daughters survived his death, in his subsequent wrongful death lawsuit, only one of his daughters was considered a “minor child” under the Florida Wrongful Death Act, because the other two were over the age of 25. § 768.18, Fla. Stat. The Agency, through the Medicaid program, paid a total of $72,907.93 for Mr. McElveen’s medical care, which was the full amount of his past medical expenses. In 2019, Mr. McElveen’s estate brought a wrongful death action against his treating physician.4 Charles T. Moore, Esquire, represented Petitioner’s estate and was the primary attorney handling the litigation. Ultimately, Mr. Moore was able to settle the wrongful death action for $240,000. The Agency was not a party to, nor did it intervene in, Petitioner’s wrongful death lawsuit. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency asserts that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $72,907.93 to satisfy the medical costs it paid on Petitioner’s behalf. The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, argues that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of the settlement than the amount the Agency calculated pursuant to the section 409.910(11)(f) formula. Petitioner specifically asserts that the Medicaid lien should be reduced proportionately, taking into account the full value of Petitioner’s damages. Otherwise, the application of the statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for medical expenses. Petitioner insists that reimbursement of the full lien amount violates the federal Medicaid law’s anti-lien provision (42 U.S.C. § 1396p(a)(1)) and 4 Petitioner Daniel Hallup was appointed Personal Representative of Mr. McElveen’s estate. Florida common law. Petitioner requests that the Agency’s allocation from Petitioner’s recovery be reduced to $5,832.63. To establish the value of Mr. McElveen’s damages, Petitioner offered the testimony of Mr. Moore. Mr. Moore has practiced law for 24 years and is a partner with the law firm of Morgan & Morgan in Tampa, Florida. In his practice, Mr. Moore focuses exclusively on medical malpractice causes of action. Mr. Moore represented that he has taken a number of his cases to jury. As part of his practice, Mr. Moore routinely evaluates damages similar to those Petitioner suffered. This activity includes analyzing jury verdicts to keep current on case values, as well as discussing cases with other attorneys. In calculating the value of Mr. McElveen’s wrongful death claim, Mr. Moore reviewed Mr. McElveen’s medical records. Mr. Moore stated that, based on his professional assessment and experience, Mr. McElveen’s damages equaled between three to five million dollars which is the total monetary value of the survivors’ and estate’s wrongful death damages. Therefore, Mr. Moore opined that a conservative value of Mr. McElveen’s damages is $3,000,000. Based on his evaluation, Mr. Moore asserted that the $240,000 settlement was far less than the value of the actual damages Mr. McElveen suffered. Mr. Moore explained that Petitioner settled for a much lower amount because his potential recovery was limited due to the fact that the one potential defendant (Mr. McElveen’s physician) was retiring and carried minimal insurance coverage ($250,000). Mr. Moore also felt that the other possible liable parties (including the hospital) had met the appropriate standard of medical care when treating Mr. McElveen. Therefore, Mr. Moore believed that he had settled for the best deal he could under the circumstances, and Mr. McElveen’s estate was not likely to recover more. Finally, to support the Petition to reduce the amount of the Medicaid lien, Mr. Moore explained that Petitioner’s estate received only eight percent of the true value of Mr. McElveen’s damages ($3,000,000 divided by $240,000). Because only eight percent of the damages were recovered, in like manner, the $72,907.93 Medicaid lien should be reduced to eight percent, or $5,832.63, as a fair and reasonable allocation of the amount of Petitioner’s past medical expenses recovered the $240,000 settlement. The Agency did not present evidence or testimony disputing Mr. Moore’s valuation of the “true” value of Petitioner’s damages or his calculation of the amount of the settlement that should be allocated as Petitioner’s past medical expenses. Petitioner also offered the testimony of R. Vinson Barrett, Esquire, to established the value of Mr. McElveen’s damages. Mr. Barrett is a trial attorney with over 40 years’ experience. Mr. Barrett works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. He has also handled wrongful death cases. Mr. Barrett expressed that, as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties. In addition, not only does he have personal experience with jury trials, but he stays current in recent jury verdicts and regularly discusses jury results with other attorneys. Mr. Barrett was accepted as an expert in the valuation of damages suffered by injured persons. Prior to testifying, Mr. Barrett familiarized himself with the facts and circumstances of Mr. McElveen’s injuries and death. He reviewed Petitioner’s exhibits, including Petitioner’s medical records. He also reviewed the sample jury verdicts Petitioner introduced as Petitioner’s Exhibit 8. Based on his valuation of Petitioner’s injuries, as well as his professional training and experience, Mr. Barrett placed a “very conservative value” on Petitioner’s injuries at $3,000,000. Mr. Barrett explained that injuries similar to Petitioner’s would result in jury awards averaging approximately $3.5 million dollars. Mr. Barrett supported Mr. Moore’s pro rata methodology of calculating a reduced portion of Petitioner’s $240,000 settlement to equitably and fairly represent past medical expenses. With injuries valued at $3,000,000, the $240,000 settlement only compensated Petitioner for eight percent of the total value of his damages. Therefore, the most “fair” and “reasonable” manner to apportion the $240,000 settlement is to apply that same percentage to determine Petitioner’s recovery of medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces the definitive value of that portion of Petitioner’s $240,000 settlement that represents compensation for past medical expenses, i.e., $5,823.63 ($72,907.93 times eight percent). Similar to Mr. Moore’s testimony, Mr. Barrett’s expert testimony was unrebutted. Further, the Agency did not offer evidence or testimony proposing a more appropriate or different valuation of Mr. McElveen’s total damages, or contesting the methodology Petitioner used to calculate the portion of the $240,000 settlement fairly allocable to Petitioner’s past medical expenses. Based on the testimony from Mr. Moore and Mr. Barrett that the $240,000 settlement does not fully compensate Petitioner for Mr. McElveen’s damages, Petitioner argues that a lesser portion of the medical costs should be calculated to reimburse Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio be applied based on the true value of Petitioner’s damages ($3,000,000) compared to the amount that Petitioner actually recovered ($240,000). Using these numbers, Petitioner’s settlement represents approximately an eight percent recovery of the full value of Petitioner’s damages. In similar fashion, the Medicaid lien should be reduced to eight percent or approximately $5,832.63 ($72,907.93 times .08). Therefore, Petitioner asserts that $5,832.63 is the portion of his third-party settlement that represents the equitable, fair, and reasonable amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. All of the expenditures Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. No portion of the $72,907.93 Medicaid lien represents future medical expenses. The undersigned finds that the unrebutted testimony at the final hearing demonstrates that the full value of Petitioner’s damages from this incident equals $3,000,000. Further, based on the evidence in the record, Petitioner met his burden of proving, by clear and convincing evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated using the formula set forth in section 409.910(11)(f).5 Accordingly, the undersigned finds that the competent substantial evidence adduced at the final hearing establishes that the Agency should be reimbursed in the amount of $5,832.63 from Petitioner’s recovery of $240,000 from a third party to satisfy the Medicaid lien.
The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds should be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), to satisfy AHCA's Medicaid lien under section 409.910, Florida Statutes, from settlement proceeds he received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, and admitted facts stated in the Joint Pre-Hearing Stipulation. Facts Concerning Underlying Personal Injury Matter and Giving Rise to Medicaid Lien On January 6, 2012, Arnie Solheim, a then 15-year-old boy, ran away from his group home and was struck by a vehicle while walking up an interstate ramp. Mr. Solheim had a history of running away from his group home residence. As a result of the incident, Mr. Solheim suffered permanent and severe injuries including brain damage, blindness in one eye, and paralysis. Due to his injuries, Mr. Solheim will require 24 hours-a-day supervision for the remainder of his life. Mr. Solheim’s medical care related to the injury was paid by Medicaid, and Medicaid through AHCA provided $187,302.46 in benefits. Accordingly, $187,302.46 constituted Mr. Solheim’s full claim for past medical expenses. Mr. Solheim’s mother, Rosepatrice Solheim, was appointed Mr. Solheim’s Plenary Guardian. Rosepatrice Solheim, as Mr. Solheim’s Guardian, filed a personal injury action against the parties allegedly liable for Mr. Solheim’s injuries (“Defendants”) to recover all of Mr. Solheim’s damages, as well as her and her husband’s individual damages associated with their son’s injuries. Mr. Solheim’s personal injury action was settled through a series of confidential settlements in a lump-sum unallocated amount. This settlement was approved by the circuit court. During the pendency of Mr. Solheim’s personal injury action, AHCA was notified of the action and AHCA asserted a Medicaid lien of $187,302.46 against Mr. Solheim’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Mr. Solheim’s action against the Defendants. By letter dated October 9, 2019, AHCA was notified of Mr. Solheim’s settlement. To date, AHCA has not filed a motion to set-aside, void, or otherwise dispute Mr. Solheim’s settlement. The Medicaid program through AHCA spent $187,302.46 on behalf of Mr. Solheim, all of which represents expenditures paid for Mr. Solheim’s past medical expenses. Mr. Solheim’s taxable costs incurred in securing the settlement totaled $76,229.38. Application of the formula at section 409.910(11)(f) to Mr. Solheim’s settlement requires payment to AHCA of the full $187,302.46 Medicaid lien. Expert Testimony Petitioner called two experts to testify on his behalf pertaining to valuation of Petitioner’s damages, Richard Filson and Karen Gievers. Mr. Filson, an attorney practicing law at Filson and Fenge law firm in Sarasota, Florida, has been practicing law for 36 years. He represented Mr. Solheim in the underlying case. In addition to Petitioner’s case, he has represented clients in personal injury matters representing children and childrens’ rights cases, including cases involving brain injury and paralysis. Mr. Filson evaluated Petitioner’s case and opined that $10 million was a conservative valuation of the case. The valuation of the case encompasses past medical expenses, future medical expenses, economic damages, and pain and suffering. Mr. Filson pursued the action against three defendants. He testified that there would be no admission of liability. The group home was alleged to have failed to appropriately evaluate the risk and placement of Mr. Solheim, including placing Mr. Solheim in a locked unit to maintain his safety. However, there were issues with recovering from the facility. There was a dispute regarding the director’s degree of responsibility for Mr. Solheim’s elopement. As a result, Mr. Filson opined that Petitioner settled the case for a lower amount because of liability and collectability issues with the group home. Mr. Filson opined that Mr. Solheim’s $1,150,00.00 settlement represented 11.5 percent of the full $10 million value of his claim, including past medical expenses. He relied upon the comprehensive plan and the extent of Mr. Solheim’s catastrophic injuries to assess the value of the case. Mr. Filson opined that the allocation formula is 11.5 percent. The past medical expenses totaled $187,302.46. That figure multiplied by 11.5 percent would result in recovery of $21,539.78 of the settlement proceeds allocated to past medical expenses. Karen Gievers also testified as an expert regarding valuation of Mr. Solheim’s claim. Ms. Gievers, a licensed attorney for 42 years and a former circuit court judge, focuses her practice on civil litigation. In her practice as an attorney, she has handled personal injury cases involving catastrophic injuries similar to Mr. Solheim’s injuries. Like Mr. Filson, she has also represented children in her practice. Ms. Gievers opined that the value of Mr. Solheim’s case was conservatively estimated at $10 million. She opined that Mr. Solheim’s settlement amount of $1,150,000.00 resulted in a recovery of 11.5 percent of the full value of his claim. She opined that applying the 11.5 percent to each damage category is the appropriate way to allocate the amount of damages across all categories. Thus, applying the allocation formula of 11.5 percent to the $187,302.46 claim for past medical expenses would be $21,539.78. Ms. Gievers looked at Mr. Solheim’s economic and noneconomic damages in her valuation of the case. She reviewed the comprehensive care plan and noted that all costs were not included, which would add to the value of the case being greater than Mr. Solheim’s actual recovery. Petitioner asserted that the $1,150,000.00 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Mr. Solheim for his full value of damages. Therefore, a lesser portion of the settlement should be allocated to reimburse AHCA, instead of the full amount of the lien. Ultimate Findings of Fact Mr. Filson and Ms. Gievers credibly opined that a ratio should be applied based on the full value of Petitioner’s damages, $10,000,000.00, compared to the amount that Petitioner actually recovered, $1,150,000.00. Based on this formula, Petitioner’s settlement represents an 11.5 percent recovery of Petitioner’s full value of damages. Similarly, the AHCA lien should be reduced and the amount of reimbursement to AHCA should be 11.5 percent of the Medicaid lien. Therefore, $21,539.78 is the portion of the third- party settlement that represents the amount AHCA should recover for its payments for Mr. Solheim’s past medical care. The expert witnesses’ testimony was supported by their extensive experience in valuing damages and their knowledge of Mr. Solheim’s injuries. AHCA, on the other hand, did not offer any witnesses or documentary evidence to question the credentials or opinions of either Mr. Filson or Ms. Gievers. AHCA did not offer testimony or documentary evidence to rebut the testimony of Mr. Filson or Ms. Gievers as to valuation or the reduction ratio. AHCA did not offer alternative opinions on the damage valuation method suggested by either Mr. Filson or Ms. Gievers. Based on the record, the testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Based on the evidence in the record, the undersigned finds that, Petitioner proved by a preponderance of the evidence that a lesser portion of Mr. Solheim’s settlement should be allocated as reimbursement for past medical expenses than the amount AHCA calculated. Accordingly, AHCA is entitled to recover $21,539.78 from Petitioner’s recovery of $1,150,000.00 to satisfy the Medicaid lien.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration ("Respondent" or "AHCA"), in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioners, from a third party, pursuant to section 409.910, Florida Statutes (2016).
Findings Of Fact On June 4, 2015, at approximately 11:36 p.m., Rodriguez- Gomez was struck by a car while lawfully walking across the street at the intersection of Hollywood Boulevard and North 62nd Avenue in Hollywood, Florida. During the accident, Rodriguez-Gomez suffered catastrophic physical and neurological injuries. Rodriguez- Gomez's injuries included an open skull fracture, left pelvis fracture, and right fibula and tibia fractures. He was transported to the hospital where he underwent extensive medical intervention to save his life. On June 11, 2015, seven days after the accident, Rodriguez-Gomez died as a result of his injuries. Rodriguez-Gomez was survived by his three adult sons and three minor children. Rodriguez-Gomez's medical care related to his injury was paid by Medicaid, and the Medicaid program provided $49,115.61 in benefits associated with his injury. The $49,115.61 represented the entire claim for past medical expenses. Rodriguez-Gomez's funeral bill totaled $3,250.00 and was paid by his surviving children. Armando Rodriguez-Gomez was appointed the personal representative of the Estate of Santos Rodriguez-Gomez ("Estate"). Armando Rodriguez-Gomez, as personal representative ("Personal Representative") of the Estate, brought a wrongful death action to recover both the individual statutory damages of Rodriguez-Gomez's six surviving children, as well as the individual statutory damages of the Estate against the driver and owner ("Defendant") of the vehicle that caused the accident. Joseph Abdallah ("Abdallah"), a civil trial attorney with the law firm of Kanner & Pintaluga in Boca Raton, Florida, represented the Personal Representative and Estate in the wrongful death action. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA asserted a $49,115.61 Medicaid lien against the Estate cause of action and settlement of that action. The Personal Representative, on behalf of Rodriguez- Gomez's six surviving children, as well as on behalf of the Estate, compromised and settled the wrongful death action with Defendant for the available insurance policy limits of $100,000.00. By letter, Abdallah as the Estate's attorney handling the wrongful death claim notified AHCA of the settlement. The letter requested that AHCA advise as to the amount AHCA would accept in satisfaction of the $49,115.61 Medicaid lien. AHCA has neither filed an action to set aside, void, or otherwise dispute the wrongful death settlement nor started a civil action to enforce its rights under section 409.910. AHCA, through its Medicaid program, spent $49,115.61 on behalf of Rodriguez-Gomez, all of which represents expenditures paid for Rodriguez-Gomez's past medical expenses. No portion of the $100,000.00 settlement represents reimbursement for future medical expenses. The taxable costs incurred in pursuing Defendant totaled $2,086.68. The formula at section 409.910(11)(f), as applied to the entire $100,000.00 settlement, requires payment of $36,456.66 and AHCA is demanding payment of $36,456.66 from the $100,000.00 settlement. Petitioners have deposited the section 409.910(11)(f) formula amount in an interest-bearing account for the benefit of AHCA, pending an administrative determination of AHCA's rights; and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Petitioners presented, without objection, the expert valuation of damages testimony of Abdallah. Abdallah is a trial attorney in both Florida and New York who practices exclusively personal injury law and handles cases involving wrongful death, catastrophic injury, and other types of negligence involving injury. Abdallah's expertise also encompasses evaluation of personal injury cases based on staying abreast of all State of Florida jury verdicts. At hearing, Abdallah explained that he served as lead counsel during Petitioners' proceeding, and, during his representation of the Estate, he met with the Personal Representative numerous times and reviewed Rodriguez-Gomez's accident report and medical records before he filed the lawsuit and amended complaint in this matter. Abdallah testified that Rodriguez-Gomez had a very close relationship with his children. Abdallah credibly explained the process he took to develop an opinion concerning the value for the damages suffered in this case. He started by looking at the wrongful death statute, section 768.21, Florida Statutes, to determine what damages could be recovered. Petitioners established through unrebutted testimony of their trial attorney and expert witness that personal injury actions can be grouped in the following categories: medical expenses; net accumulations; funeral expenses; loss of parental companionship and instruction; and mental pain and suffering. Abdallah testified that since Rodriguez-Gomez was a day laborer, there was not a claim for net accumulations of the Estate. He concluded that the compensable damages were limited to past medical expenses, loss of parental companionship, instruction, guidance, and mental pain and suffering from the date of the injury for each of the six sibling children. Abdallah evaluated jury verdicts of recent cases involving wrongful death and surviving children to determine what the valuation of the claim for the loss of parental companionship, instruction, guidance, and mental pain and suffering would be for Rodriguez-Gomez's six surviving children. Abdallah also researched circuit court cases to determine appropriate allocation amounts for Medicaid liens. At hearing, Abdallah testified specifically about two comparable jury verdicts involving wrongful death and surviving children that he researched and used to support his valuation, Melissa Corsini, Individually and as Personal Representative of the Estate of Andrew Corsini, Jr., Deceased v. Carlos Riol, Case 09-5397-CA, 11FJVR 3-3, 2011 WL 845897 (Fla. Cir. Ct. Collier Jan. 13, 2011)1/; and Thomas Christopher Heike v. Sr. Singh Enterprises, LLC., Case No. CACE 16011472, 28 Fla. JVRA 3:22, 2017 WL 9286313 (Fla. Cir. Ct. Broward Nov. 26, 2017),2/ circuit court orders that were entered regarding allocation regarding Medicaid liens. In Corsini, each surviving child received $460,000.00 and in Heike each surviving child received $500,000.00 for their damages associated with their father's death. Abdallah's review of comparable jury verdicts revealed that each of Rodriguez- Gomez's six children's claim for losses associated with their father's death would have a very conservative value between $200,000.00 and $800,000.00 each. Abdallah also round-tabled the cases with other experienced attorneys and partners in his law firm to determine the value, and they each agreed that the $200,000.00 to $800,000.00 is a conservative valuation to use for each of the surviving children when determining the value of the Estate's wrongful death case. Based on his review to determine the value of Petitioners' claim, Abdallah credibly and persuasively put all the numbers together and opined that the valuation of the Estate's damages of $49,115.61 paid by Medicaid and the six surviving children's damages of $200,000.00 to $800,000.000 each totaled conservatively $1,200,000.00 to $4,800,000.00, and the conservative total value of all damages recoverable in the wrongful death lawsuit is $1,249,115.61 to $4,849,115.61. Abdallah testified that $1,249,115.61 is the conservative value to use for the damages. Abdallah's compelling and credible testimony further explained that the $100,000.00 settlement constituted a recovery of approximately eight percent of the $1,249,115.61 value of the damages. Abdallah determined that eight percent should be applied to each damage category and should be reduced based on the ultimate settlement. He then went on to apply the eight percent to the total medical expenses that were paid and further testified that a recovery of $3,929.25 in past medical expenses is eight percent of the $49,115.61 claim for past medical expenses. Abdallah's testimony was credible, persuasive, and is accepted. The evidence demonstrates that the total value of the damages related to Rodriguez-Gomez's injury was $1,249,115.61 and that the settlement amount, $100,000.00 was eight percent of the total value. The $100,000.00 settlement does not fully compensate Petitioners for the total value of their damages. Petitioners have established that the $100,000.00 settlement amount is eight percent of the total value ($1,249,115.61) of Petitioners' damages. Using the same calculation, Petitioners correctly showed that eight percent of $49,115.61 (Petitioners' amount allocated in the settlement for past medical expenses), $3,929.25, should be the portion of the Medicaid lien paid. Petitioners proved by a preponderance of the evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue The issue in this proceeding is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner from a settlement received by Petitioner from a third party.
Findings Of Fact On October 18, 2013, Jose Fourcoy, who was then 39 years old, was on the premises of an air-conditioning shop that refurbished air-conditioners, waiting for them to discard their scrap metal. While there, an employee who was disassembling an air conditioner with a blowtorch ignited a gas tank and caused an explosion and fire. The fire spread across the floor engulfing Mr. Fourcoy in flames. The fire was extinguished and Mr. Fourcoy’s long-term girlfriend/common law wife and young child, who were waiting for Mr. Fourcoy and witnessed the event, immediately took Mr. Fourcoy to the hospital. As a result of the accident, Petitioner suffered severe, catastrophic and very painful injuries with 2nd, 3rd and 4th degree burns to about 17 percent of his body, including both his legs, his right arm and the right side of his face, mouth and throat. He was admitted to the hospital on two occasions. Amputation of both legs was recommended but rejected by Petitioner. Eventually, Mr. Fourcoy spent one and a half months undergoing numerous surgeries and skin grafts first with pig skin and then with his own skin from other parts of his body. Throughout the process he was in extreme pain. Currently and as a result of the burn injury, he has neurological problems with his legs and other areas of his body including constrictions and chronic pain syndrome in both legs. Additionally, he has post-traumatic stress disorder, moderate to severe anxiety with flashbacks, irritability, forgetfulness and reduced self-regulation. The pain Mr. Fourcoy suffers is chronic and will be with him the rest of his life. His injuries have resulted in a 50-percent impairment of his whole body. Further, his chronic pain, anxiety and post-traumatic stress disorders have caused him not to be able to do the things he used to do, including loss of consortium, inability to enjoy playing with his young son, inability to play sports, and general inability to enjoy life. Mr. Fourcoy’s legs are deformed and disfigured and he cannot straighten them without severe pain. He is unable to wear long pants due to the pain they cause. Petitioner cannot walk and requires a wheelchair/rolling chair for mobility. He is dependent on others for activities of daily living. His condition is permanent and he most likely will not be able to obtain employment sufficient to support himself or replace the income/earning capacity he had as a scrap metal recycler prior to his injuries, which income could have provided for him during the 35.1 years he is expected to live. Petitioner is no longer a Medicaid recipient. Petitioner’s past medical expenses related to his injuries were paid by both personal funds and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $119,673.33. Unpaid out-of-pocket expenses totaled $36,423.04. Thus, total past healthcare expenses incurred for Petitioner’s injuries was $156,096.37. Petitioner brought a personal injury claim to recover all his damages against the owner of the air-conditioning shop and premises where the accident occurred (Defendants). Towards that end, Petitioner retained Stuart H. Share, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in his negligence action against the Defendants. Ultimately, Petitioner settled his personal injury action for $850,000, which did not fully compensate Petitioner for the total value of his damages. The settlement was allocated and the settling parties agreed that: 1) Mr. Fourcoy’s damages had a value in excess of $3,400,000, of which $156,096.37 represented his claim for past medical expenses; and 2) allocation of $39,024.09 of the $850,000 settlement to Mr. Fourcoy’s claim for past medical expenses was reasonable and proportionate based on the same ratio the settlement bears to the total monetary value of all Mr. Fourcoy’s damages. The General Release stated, in pertinent part: JOSE FOURCOY, has claimed damages in excess of $3,400,000, of which $156,096.37 represents JOSE FOURCOY’s claim for past medical expenses. Given the facts, circumstances, and nature of JOSE FOURCOY’s injuries and this settlement $39,024.09 has been allocated to JOSE FOURCOY’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 JOSE FOURCOY’s damages. Further, JOSE FOURCOY may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses JOSE FOURCOY will incur in the future. However, JOSE FOURCOY, or others on his behalf, have not made payments in the past or in advance for JOSE FOURCOY’s future medical care and JOSE FOURCOY 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. No dollar amount was assigned to Petitioner’s future medical care needs, and there remains uncertainty as to what those needs will be. Additionally, neither Petitioner nor others on his behalf made payments in the past or in advance for his future medical care, and no claim for reimbursement, restitution or indemnification was made for such damages or included in the settlement. On the other hand, given the loss of earning capacity and the past and present level of pain and suffering, the bulk of the settlement was clearly intended to provide future support for Petitioner. Respondent was notified of Petitioner’s negligence action around July 13, 2015. Thereafter, Respondent asserted a Medicaid lien in the amount of $119,673.33 against the proceeds of any award or settlement arising out of that action. No portion of the $119,673.33 paid by AHCA through the Medicaid program on behalf of Mr. Fourcoy represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Respondent was not a party to the 2015 settlement and did not execute any of the applicable releases. Mr. Share’s expert and conservative valuation of the total damages suffered by Petitioner is at least $3,400,000. In arriving at this valuation, Mr. Share reviewed the facts of Petitioner’s personal injury claim, vetted the claim with experienced members in his law firm, and examined jury verdicts in similar cases involving catastrophic injury. The reviewed cases had an average award of $3,639,577.62 for total damages and $2,418,390.31 for non- economic damages (past and future pain and suffering). Mr. Share’s valuation of total damages was supported by the testimony of one additional personal injury attorney, R. Vinson Barrett, who has practiced personal injury law for more than 30 years. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Share. Mr. Barrett agreed with the $3.4 million valuation of Petitioner’s total damages and thought it could likely have been higher. The settlement amount of $850,000 is 25 percent of the total value ($3.4 million) of Petitioner’s damages. By the same token, 25 percent of $156,096.37 (Petitioner’s past medical expenses paid in part by Medicaid) is $39,024.09. Both experts testified that $39,024.09 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. Further, the unrebutted evidence demonstrated that $39,024.09 is a reasonable and rational reimbursement for past medical expenses since Petitioner recovered only 25 percent of his damages, thereby reducing all of the categories of damages associated with his claim. Given these facts, 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). Therefore, the amount of the Medicaid lien should be $39,024.09.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby ORDERED that the Agency for Health Care Administration is entitled to $39,024.09 in satisfaction of its Medicaid lien. DONE AND ORDERED this 27th day of April, 2016, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2016. COPIES FURNISHED: Alexander R. Boler, Esquire Xerox Recovery Services Group 2073 Summit Lake Drive, Suite 300 Tallahassee, Florida 32317 (eServed) Floyd B. Faglie, Esquire Staunton and Faglie, P.L. 189 East Walnut Street Monticello, Florida 32344 (eServed) Elizabeth Dudek, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 (eServed) Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed) Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed)
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (17b), Petitioner1 has proved that Respondent's recovery, under section 409.910(11)(f) (11f), of $685,615 in medical assistance expenditures2 from $10.4 million in proceeds from the settlement of a personal injury action must be reduced to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)3 ; and, if so, what is the maximum allowable amount of Respondent's recovery.
Findings Of Fact Shortly before midnight, on January 20, 2015, Petitioner, then 11 years old, suffered catastrophic injuries when she was ejected from a vehicle that rolled over on Interstate 75 near Micanopy. Petitioner has been left in a persistent vegetative state after suffering a traumatic brain injury, malignant cerebral edema, a depressed skull fracture, a contrecoup subdural hematoma, bilateral pulmonary hemorrhage, and fractured ribs. The vehicle, a 2003 Ford Expedition, was driven by its owner, a 42-year-old woman who was a friend of a cousin of one of Petitioner's family members. The driver had transported Petitioner, her brother, and two other persons from Tampa to Gainesville. After attending a college basketball game, the driver discovered that the right rear tire was flat, so she called a national automobile service company to install the spare tire. Even though the spare tire was 11 years old, the person whom the company dispatched on the service call replaced the flat tire with the spare tire. While driving south on Interstate 75 in the left lane, the installed spare tire blew out. The driver lost control of the vehicle, which rolled over once, hurdled the guardrail, and came to rest, upright, in the emergency lane adjacent to the left lane of the northbound lanes. The primary liability for the accident was borne by the driver. Two of the tires on the vehicle were so worn as to reveal their steel belts. The driver had ignored a warning five months earlier to replace at least two of the vehicle's tires. Additionally, expert witnesses testified that the driver could have controlled the vehicle after the blowout, so as to avoid the rollover. Due to the age of the tire, it is difficult to find fault with the manufacturer of the vehicle or the manufacturer or vendors of the tire. The automobile service company and the technician bore more blame than the manufacturers, although there was a factual dispute about whether, prior to changing the tire, the technician had warned the driver that it was unsafe. Petitioner herself bore considerable responsibility for her injuries because she was not wearing a seat belt at the time of the blowout. The other passengers were belted, remained within the vehicle, and suffered no more than minor injuries. The roof over Petitioner's seat survived the wreck intact, so she likely would have suffered no more than minor injuries if she had been wearing her seatbelt. Petitioner filed a personal injury action against the manufacturers of the vehicle and the failed tire, vendors of the failed tire, companies responsible for changing the tire, and driver of the vehicle. In confidential settlements, Petitioner obtained $10.4 million, which was unallocated among the damages components. Claiming a true value of $40 million for the case, Petitioner accurately calculates a 74% settlement discount.5 The driver was unable to satisfy a large judgment. The driver carried liability insurance with a policy limit of $25,000, which the insurer immediately offered to avoid a bad-faith claim. The record is silent as to the creditworthiness of the other, less-liable parties. The parties agree that the past medical expenses component of the settlement proceeds was $685,614. This sum represents the total medical assistance expenditures made by Respondent and another agency. 5 From the settlement proceeds, Petitioner's attorneys collected $4 million in attorneys' fees and $400,000 in costs, leaving Petitioner with a net recovery of $6 million, but Petitioner has not sought to reduce Respondent's recovery by a proportional share of these fees and costs. A conservative estimate of the loss of future earning capacity was $1.3 million. These sums support about $2 million of the $40 million putative true value of the case. The question is thus whether another $38 million in damages was supported by other damages components--mostly future medical expenses and past and future noneconomic damages, such as pain and suffering. The 1st Update of the Life Care Plan, dated November 5, 2018 (Life Care Plan), includes all applicable treatments, except the cost of hyperbaric oxygen therapy, which is $7150 per set of 26 sessions. Treatments include periodic evaluations by a neuropsychologist, physiatrist, physical therapist, occupational therapist, speech therapist, pediatric pulmonary consultant, pulmonary consultant, pediatric ear, nose and throat consultant, pediatric gastroenterology consultant, pediatric neurologist, and multidisciplinary team. Other listed expenses include pharmaceuticals; periodic diagnostic services, such as imaging studies and lab work; the preparation and maintenance of orthiotics and durable medical equipment, such as wheelchairs, hospital and shower beds, lifts, suction machines, oxygenation equipment, a home generator, and an augmentive communication device; feeding and incontinence equipment and supplies; in-home skilled care on a continual basis; adaptive vans and medical transportation services; architectural modifications to the home; the installation of a special in-home ventilation system; annual hospitalizations of one-week duration each; and various surgeries. The components of the Life Care Plan, including the costs of the goods and services and the stated intervals on which they are to be provided, all appear to be reasonable and necessary. An important issue regarding the Life Care Plan is the number of years that these costs are reasonably expected to be incurred. The evidentiary record provides no basis to find that Petitioner will recover significant function, so the question is whether the Life Care Plan has incorporated a reasonable remaining life expectancy in light of the catastrophic injuries that Petitioner has suffered. Having progressed from a coma to a minimally conscious state, Petitioner exhibits some awareness of her surroundings and her mother and father, who report that she has verbalized once or twice in the past two years, although she is incapable of speech. Petitioner's youth at the time of the accident may have helped her avoid organic decline, at least over the first five years after the accident. She is now five feet, nine inches tall and weighs 163 pounds. Her height prior to the accident is unavailable, but she weighed 110 to 115 pounds. Petitioner cannot walk or assist with transfer, but she can stand without assistance and can move her limbs. Petitioner no longer is fed by a PEG tube and her ability to swallow is slowly improving. She can open her mouth in response to the sight of a spoon and is able to eat puréed food. Petitioner requires oxygenation and suffers from sleep apnea, but needed a ventilator only for the first six months after the accident. She has had only an occasional respiratory infection and has suffered no seizures. On these facts, the Life Care Plan reasonably projected Petitioner's remaining life expectancy to be slightly in excess of 30 years. Thus, the Life Care Plan conservatively estimates the present value of the future medical expenses at not less than $37 million. The pain and suffering that Petitioner has suffered are considerable, as are other noneconomic damages. Given the relatively short span between the accident and the settlement and the longer span between the settlement and the projected end of Petitioner's life, the greater amount of these noneconomic damages probably will relate to the future. Based on comparable jury verdicts, a reasonable estimate of past and future noneconomic damages is not less than $10 million. The presentation of damages to a jury would not have been impeded by extrinsic factors. Petitioner's family would have made excellent witnesses to support the damages claims. Petitioner's lead trial counsel is experienced in personal injury cases, has produced numerous large verdicts and settlements, and presented himself at hearing as a thoughtful, patient, and effective communicator with a firm grasp of the facts and law--in sum, an attorney who would have maximized Petitioner's chances for a good damages verdict. The settlement discount was partly explained by the family's need for funds to care for Petitioner. Medicaid has not paid for the hyperbaric oxygen treatments that have proven somewhat efficacious, nor for renovations to the family home necessitated by Petitioner's disabilities. Petitioner's family lacks the financial means to pay these expenses on their own. At the time of the accident, Petitioner's father was on full disability due to back injuries, her mother worked as an administrative assistant, and the family's home had been constructed by Habitat for Humanity. The sooner the family received the settlement proceeds, the sooner they could obtain additional goods and services for Petitioner. Petitioner has proved by any standard of proof that the true value of the case exceeds $40 million. Applying the settlement discount of 74% to the past medical expenses component of the settlement proceeds, Respondent's recovery is limited to 26% of $685,614, or $178,260, as Petitioner contends. For the benefit of Respondent, Petitioner has deposited into an interest-bearing account an amount equal to the Medicaid lien, pending a determination of Respondent's proper recovery amount.
The Issue At issue are the actual expenses, if any, for medically necessary and reasonable medical and hospital, habilitative and training, residential, and custodial care and service, for medically necessary drugs, special equipment, and facilities and for related travel currently required for the infant, and the reasonable expenses, if any, incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees.
Findings Of Fact Background Michael Lebrun (Michael) is the natural son of Barnabas Lebrun and Rolande Lebrun, and was born October 9, 1990, at Jackson Memorial Hospital, Dade County, Florida. At birth, Michael suffered a "birth-related neurological injury," as that term is defined by Section 766.302(2), Florida Statutes, and he was accepted by respondent, Florida Birth- Related Neurological Injury Compensation Association (NICA) for coverage under the Florida-Birth Related Neurological Injury Compensation Plan (the Plan). Section 766.301, et seq., Florida Statutes. Consistent with Section 766.305(6), Florida Statutes, NICA's acceptance of the claim was approved by final order of March 30, 1994, and NICA was directed to pay "past medical expenses, a reasonable attorney's fee, and . . . future expenses as incurred" in accordance with Section 766.31, Florida Statutes. The order further reserved jurisdiction to resolve "any disputes, should they arise, regarding petitioners' entitlement to past medical expenses, a reasonable attorney's fee, and subsequently incurred expenses." At petitioners' request, a hearing was held to address, pertinent to this order, medically necessary and reasonable expenses alleged to be currently required by the infant, and the reasonable expenses incurred in connection with the filing of the claim for compensation, including reasonable attorney's fees. Petitioners did not, however, at any time prior to hearing, present any requests for compensation to NICA which identified any specific needs of the infant which they felt should be covered by the Plan, but were currently unmet. 2/ Notably, the parties' stipulation, which resolved that Michael was covered under the Plan, approved by order of March 30, 1994, provided: 8. The Claimants and the Association hereby agree as follows: * * * The Association will pay all benefits, past and future, as authorized by Section 766.31, Florida Statutes. The Association and Alan Goldfarb, Esquire, the attorney for the Claimants, agree that a reasonable sum for attorneys fees and services and certain expenses incurred in the representation of the Claimant in this case will be determined at a future date. In absence of an agreement for a specific amount, either party may request a hearing for determination. * * * 11. The Parties agree that the issues of the actual expenses for medically necessary and reasonable medical and hospital, habilitative and training, residential and custodial care and service, for medically necessary drugs, special equipment and facilities, and for related travel as per Florida Statute 766.31 and for a reasonable attorney's fee and expenses, may be determined by the Hearing Officer if a dispute arises regarding the same. The association is not aware of any specific disputes regarding the services being provided to Michael Lebrun but acknowledges that petitioners have requested a hearing regarding the same. . . . * * * 16. In order for the Association to carry out its responsibility as provided in this stipulation, the Claimants shall provide within thirty (30) days of the date of approval of this stipulation, the following: A complete list (with copies, invoices, addresses, etc.) of all known past expenses for which the Claimants seek reimbursement in accordance with the terms and provisions of this stipulation document for medical and related expenses previously incurred; and A fully executed authorization of release of any and all medical records, insurance program records, and such other authorization as may, from time to time, reasonably be required by the Associa- tion to complete its duties hereunder; and Such other reasonable information as may be required by the Association, which relates to the provision of Michael [sic] [medical] or habilitative care or the payment of Michael's bills. Petitioners' failure to file a claim with NICA for benefits they were of the opinion that Michael currently required, but had not received, or supply NICA with the requested information to evaluate any request for benefits, was contrary to their obligation, as evidenced by the forgoing stipulation. Such failing was not, however, raised by NICA prior to hearing, nor did it object to such failing during the course of hearing. Accordingly, while, if timely raised, petitioners' failure to first provide NICA an opportunity to address the specifics of a claim for benefits prior to hearing could have been appropriately addressed, such failure is not a bar to the resolution of the issues presented. 3/ Michael's past and current history Following six months of life, Michael was referred to the Department of Health and Rehabilitative Services (DHRS), Children's Medical Services, Early Intervention program. Through his Early Intervention coordinator, Michael was initially provided services, at public expense, through what is known as the "Birth through Two" ("B-2") services program. That program is a public service program for handicapped children through 36 months of age, or until their transition to the Dade County Public Schools Special Education Pre-K Program, and is jointly funded by DHRS and the Dade County Public Schools. As of the date of hearing, Michael had been receiving, and was scheduled to continue to receive until his transition into the Pre-K Program, physical therapy three times a week at forty-five minutes a session and occupational therapy four times a week at forty-five minutes a session, including oral stimulation, through United Cerebral Palsy. Such other services or items of special equipment that Michael needed were also ordered or provided, at public expense, through the auspice of his Early Intervention coordinator. As of July 5, 1994, some two weeks following the hearing in this case, Michael was scheduled to transition from the B-2 Program into the Pre-Kindergarten Exceptional Education Program (Pre-K program), where he would receive a different level of rehabilitative services. According to the proof, once he transitions into the Pre-K program, Michael will receive sixty minutes per week of physical therapy and thirty to forty-five minutes of occupational therapy, during the course of the school day. Such therapies are not quantified by frequency or duration of a therapy session predicated on the well founded belief that a child's responsiveness to therapy will vary from day to day and, accordingly, the frequency of delivery is left to the discretion of the individual therapist. As provided by the School Board, physical therapy primarily deals with the functional mobility, positioning and musculoskeletal "status" of the lower extremity of the student, and occupational therapy primarily addresses the functioning of the upper extremities, classroom positioning and improvement of visual and perceptual motor skills to function in an educational program. Although available, the School Board does not propose to offer speech therapy to Michael since it has concluded, based upon evaluations and observations, that his speech development is commensurate with his present level of cognitive functioning and that no developmental deficiency exists. As noted, the physical therapy and occupational therapy provided by the School Board during the school year is predicated on what it perceives is necessary for the student to profit from the educational program. Under the circumstances, the services provided are not necessarily an objective evaluation of the medically necessary and reasonable habilitative services the infant may need for treatment; 4/ however, in some cases they may be. Whether the services to be provided the infant in this case will meet such standard can not, based on the record in this case, be resolved; however, if not, such services should be available, subject to available appropriations, through the Department of Health and Rehabilitative Services. Section 409.905, Florida Statutes. In addition to his apparent need for physical and occupational therapy, Michael also exhibits various self-abusive behaviors which require therapeutic correction. Such treatment was requested by Michael's Early Intervention coordinator, through Developmental Services, on February 18, 1994. As of the date of hearing, it was not shown whether Michael had or had not begun to receive such services. The subject claim At hearing, petitioners offered no proof of any expenses previously incurred for which they sought reimbursement, 5/ and their claim, relative to the current needs of Michael, was limited to certain equipment, therapy and attendant care which Paul M. Deutsch, Ph.D. ("Mr. Deutsch"), perceived was required for Michael. 6/ As to the items of equipment recommended by Mr. Deutsch, many were age specific and no longer required or had otherwise been provided through a public assistance program. Currently, according to Mr. Deutsch, Michael is in need of the following equipment: (1) TLC bath seat; (2) prone stander; (3) exercise mat; (4) hand-held shower; (5) wheelchair backpack; and, (6) Rifton pottychair. At the time of final hearing, the prone stander had been ordered through Children's Medical Services, but a TLC bath seat and hand-held shower had not. There was, however, no showing that the Lebruns desired such items or that the TLC bath seat and held-held shower were needed for Michael's care. Indeed, Michael can sit in the bathtub where he is regularly bathed by his parents without a TLC bath seat or hand-held shower. Should the Lebruns decide in the future that such items would be beneficial to them in the care of Michael, they are certainly able to ask NICA for such items; however, currently, they have demonstrated no desire or need for them. As to the wheelchair backpack, the proof fails to demonstrate that Michael needs such item because he does not suffer from any medical condition that requires the transport of special medical equipment. Likewise, Michael does not currently require a Rifton pottychair since he is not currently being "potty trained" nor is there any expressed expectation to begin such training in the known future. Michael also does not currently require an exercise mat since he is not receiving any home therapy. As for rehabilitative services, Mr. Deutsch recommends that in addition to the services that Michael is to receive through the Dade County Public School system that he receive two physical therapy sessions, two occupational therapy sessions, and two speech therapy sessions each week. Given that Mr. Deutsch was not specifically aware of the therapies Michael was receiving and was to soon receive, that he had never participated or observed any therapy sessions with Michael, and offered no specific reasons as to why these additional therapies were necessary to treat Michael's condition, Mr. Deutsch's opinion is rejected. Indeed, Mr. Deutsch's recommendations appear to be little more than a generic model, without specific reference to the needs of Michael and the benefits that might reasonably be expected from additional therapies, if any. Notably, Mr. Deutsch's life care plan recommends an annual evaluation by health care specialists to address Michael's specific needs for physical, occupational and speech therapy. That recommendation is a tacit recognition of the fact that each disabled child does not require the same services, and recognizes that the need for services is appropriately left to health care professionals involved with Michael's care. Significantly, the record is devoid of any proof, apart from public services, that petitioners or their counsel ever acted on Mr. Deutsch's recommendation, made May 27, 1993, that Michael receive an annual evaluation by health care specialists to address his need for such services. While the nature and frequency of services requested were not shown to be medically necessary or reasonable at the time of hearing, the record does demonstrate that Michael requires rehabilitative services and special equipment, which, although ordered through public service programs, may not have been provided or may not be adequate. Given the circumstances, it would be appropriate for NICA to continue its coordination with public service agencies, as discussed infra, to assure that Michael receives the services and special equipment he requires in a timely manner. 7/ Moreoever, since the proof fails to demonstrate whether a medical assessment has been made, it would be appropriate and in the best interests of the child for NICA to coordinate with the public service agencies to assure a comprehensive medical assessment is made of Michael's current need for speech therapy and to determine whether additional physical and occupational therapy may be warranted. Should there currently exist no obligation or ability, because of lack of funding or otherwise, for the public service agencies to provide a medical evaluation, therapy as needed, or special equipment, or should the agencies fail to timely provide a medical evaluation, therapy or special equipment, though required by law to do so, it would be appropriate for NICA, with the parents' consent, to provide those services or equipment until the appropriate pulbic service agency accepts responsibility for the provision of those services and equipment. Finally, Mr. Deutsch has recommended that "attendant care" be provided to the Lebrun family at the rate of two to four hours a day to provide consistency in the care of Michael while allowing the parents a respite. Notably, the Lebruns, who speak regularly with NICA, have never made such a request, and there was no showing that such services are necessary at this time. 8/ Attendant care is generally provided in the home to assist with an individual's daily living skills, such as bathing, moving the individual in and out of a wheelchair or repositioning. Attendant care is not necessary at this time as Michael is still quite small and he is mobile. Indeed, there was no proof at hearing that the Lebruns were incapable, by virtue of any circumstance, to care for Michael, or that he required inordinate care. NICA's activities NICA, consistent with its obligations under law, has maintained communication with Michael's Early Intervention coordinator at the Department of Health and Rehabilitative Services, Children's Medical Services, as well as Michael's staffing specialist with the Dade County Public Schools, to monitor Medicaid services to Michael and, if necessary, provide any services those agencies are unable to provide. NICA, through its Executive Director, Lynn Dickinson, has met personally with the Lebruns on numerous occasions, and has routinely spoken with them by telephone, regarding Michael's care and any perceived needs they may have had for his care. At no time, during the course of any of those conversations, did the Lebruns ever request any attendant care or any other service or equipment recommended by Mr. Deutsch. 9/ Attorney's fees and costs Although duly noticed at petitioners' request, as an issue to be heard, petitioners offered no proof, as required by Section 766.31(1)(c), Florida Statutes, to support their claim for an award of reasonable attorney's fees. As for costs, the only proof offered concerned an agreed fee arrangement with Mr. Deutsch. According to Mr. Deutsch, he agreed to a cap of $3,000 just to cover expenses. What those expenses were, are or will be, was not, however, explained of record, and it cannot be concluded, based on the proof, that such $3,000 cap is reasonable or recoverable.
The Issue 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 in this proceeding is how much of Petitioner’s settlement proceeds should be paid to Respondent, Agency for Health Care Administration (“AHCA”), to satisfy AHCA's Medicaid lien under section 409.910, Florida Statutes, from settlement proceeds he received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, and admitted facts stated in the Joint Pre-Hearing Stipulation. Facts Concerning Underlying Personal Injury Matter and Giving Rise to Medicaid Lien On August 29, 2011, Brody Hurd, a male child who was then 2.7 years old, suffered injuries after a child gate gave way causing him to fall down a flight of stairs. Brody was taken to the Emergency Room (“ER”) where ER staff failed to identify a visible cerebral bleed on the cervical CT scan. Brody was discharged home where his condition worsened. The next day he was taken to his pediatrician who reviewed the CT scan and correctly noted the cerebral bleed. Thereafter, Brody was admitted to the hospital where he underwent numerous surgeries, including a significant laminectomy. After the surgery, Brody’s parents took Brody to Scottish Rite Hospital in Atlanta for recovery and he received treatment for several months. Brody is now wheelchair bound, unable to stand, walk, toilet, bathe, or care for himself in any manner. Based on his current condition, it is anticipated that Brody will require treatment and be confined to a wheelchair for the rest of his life. As a result of the delay in proper diagnosis and treatment of the cerebral bleed, Brody was permanently rendered an incomplete quadriplegic. Brody has a life expectancy of approximately 78 years of age. Brody’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, paid $266,092.46 in benefits; Medicaid, through the Department of Health Children’s Medical Services, paid $73,253.94 in benefits; and the Brain and Spinal Cord Injury Program paid $5,504.31 in benefits. The sum of benefits totaling $344,850.71 represents the amount Medicaid paid on Brody’s behalf, which are attributed to past medical expenses. Brody’s parents and natural guardians, Nicholas and Brittany Hurd, pursued a medical malpractice lawsuit against the parties allegedly liable for Brody’s injuries (“Defendants”) to recover all of Brody’s damages, as well as their own individual damages associated with their son’s injuries. After nearly five years of litigation, Petitioner settled the medical malpractice action for a lump-sum amount of $2,875,000.00. The settlement did not allocate Petitioner’s award between past medical and other damage categories. During the pendency of Brody’s medical malpractice action, AHCA was notified of the action and AHCA asserted a $266,092.46 Medicaid lien against Brody’s cause of action and settlement of that action. The Medicaid program through AHCA spent $266,092.46 on behalf of Brody, all of which represents expenditures paid for Brody’s past medical expenses. By letter dated January 26, 2020, AHCA was notified of Brody’s settlement. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Brody’s action against the Defendants. AHCA has not filed a motion to set-aside, void, or otherwise dispute Brody’s settlement. Brody’s taxable costs incurred in securing the settlement totaled $68,087.32. Application of the formula at section 409.910(11)(f) to Brody’s $2,875,000.00 settlement requires payment to AHCA of the full $266,092.46 Medicaid lien. Petitioner offered Brody’s life care plan and economist report as evidence of future medical expenses and loss of employment or wages. Expert Testimony Petitioner called two experts to testify on his behalf pertaining to valuation of Petitioner’s damages, Henry Lawrence Perry and Karen Gievers. Mr. Perry, a founding partner of the Perry and Young Law Firm in Panama City Beach, Florida, has been practicing law for 29 years. He served as the lead attorney for the underlying case. In addition to Petitioner’s case, he has represented clients in personal injury matters, including many cases involving catastrophic injuries similar to that of Brody. Mr. Perry evaluated Petitioner’s case and opined that $25 million was a conservative valuation of the case. The valuation of the case encompasses past medical expenses, future medical expenses, economic damages, and pain and suffering. Mr. Perry opined that there would be no admission of liability, so no cap on medical malpractice would be applicable. Mr. Perry opined that Petitioner settled the case for the lower amount because of issues with medical causation. Since Petitioner filed his action against the radiologist group and the hospital, the defense also raised an issue of the pediatrician being a Fabre defendant.1 As a result, Brody’s recovery could have been reduced based on the liability issues related to the claim. Mr. Perry opined that Brody’s settlement represented 11.5 percent of the full value of his claim, including past medical expenses. Mr. Perry opined that the allocation formula is 11.5 percent. The past medical expenses recovered as part of the settlement resulted in a total of $344,850.71. That figure multiplied by 11.5 percent would result in recovery of $39,657.83 allocated to past medical expenses. Karen Gievers also testified as an expert regarding valuation of Brody’s claim. Ms. Gievers, a licensed attorney for 42 years and a former 1 A Fabre defendant is a defendant that is not named in a lawsuit, but which can still be assigned liability by a jury. See Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993). circuit court judge, focuses her practice on civil litigation. In her practice as an attorney, she has handled personal injury cases involving catastrophic injuries. She has also represented children in her practice. Similar to Mr. Perry, she opined that the value of Brody’s case was conservatively estimated at $25 million. She opined that Brody’s settlement amount of $2,875,000.00 resulted in a recovery of 11.5 percent of the full value of his claim. She opined that applying the 11.5 percent to each damage category is the appropriate way to allocate the amount of damages across all categories. Thus, applying the allocation formula of 11.5 percent of the $344,850.71 claim for past medical expenses would be $39,657.83. Ms. Gievers looked at Brody’s economic and noneconomic damages in her valuation of the case. Petitioner asserted that the $2,875,000.00 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Brody for his full value of damages. Therefore, a lesser portion of the settlement should be allocated to reimburse AHCA, instead of the full amount of the lien. Ultimate Findings of Fact Mr. Perry and Ms. Gievers credibly opined that a ratio should be applied based on the full value of Petitioner’s damages, $25,000,000.00, compared to the amount that Petitioner actually recovered, $2,875,000.00. Based on this formula, Petitioner’s settlement represents an 11.5 percent recovery of Petitioner’s full value of damages. Similarly, the AHCA lien should be reduced by 11.5 percent. Therefore, $39,657.83 is the portion of the third-party settlement that represents the amount AHCA should recover for its payments for Brody’s past medical care. The expert witnesses’ testimony was supported by their extensive experience in valuing damages and their knowledge of Brody’s injuries. AHCA, on the other hand, did not offer any witnesses or documentary evidence to question the credentials or opinions of either Mr. Perry or Ms. Gievers. AHCA did not offer testimony or documentary evidence to rebut the testimony of Mr. Perry or Ms. Gievers as to valuation or the reduction ratio. AHCA did not offer alternative opinions on the damage valuation method suggested by either Mr. Perry or Ms. Gievers. Based on the record, the testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Based on the evidence in the record, the undersigned finds that, Petitioner proved by a preponderance of the evidence that a lesser portion of Brody’s settlement should be allocated as reimbursement for past medical expenses than the amount AHCA calculated. Accordingly, AHCA is entitled to recover $39,657.83 from Petitioner’s recovery of $2,875,000.00 to satisfy the Medicaid lien.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration (Respondent or AHCA), in satisfaction of Respondent's Medicaid lien from a settlement offer received on behalf of Petitioner, Ciara Thomas.
Findings Of Fact Ciara Thomas is a six-year-old female who currently resides in St. Petersburg, Florida. Respondent is the state agency authorized to administer Florida's Medicaid program. See § 409.902, Fla. Stat. On October 18, 2012, Ciara, then two and one-half weeks shy of her third birthday, was severely injured when she fell into a bathtub and was scalded by hot water. At that time, Ciara, her mother, and a brother were tenants of a residential dwelling located at 8181 91st Terrace, Seminole, Florida, which was owned by Selvie Berberi, the landlord. Ciara suffered from second- and third-degree burns over 65 percent of her total body surface area, and in particular, to her back, buttocks, chest, bilateral tower extremities, bilateral upper extremities, and genitals. Ciara received extensive medical care and treatment for her scald burns at Tampa General Hospital, where she was hospitalized from October 18, 2012, through January 9, 2013. The parties have stipulated that through the Medicaid program, AHCA spent $174,675.05 on behalf of Ciara. Because of the extensive nature of the burns on her lower extremities and entire back, Ciara has undergone five skin grafts. She has completed physical therapy in the burn center and does not anticipate any further medical treatment until she is fully grown. Ciara has very visible scars over much of her body, which will not likely improve over time. The skin feels rubbery, with no smooth texture, and it is affected by the weather. Whenever she is outside, Ciara must be completely covered with clothing. She attends school but cannot play outdoors due to potential injury or infection. Because of the condition of her skin, she is subjected to stares by other persons and students, causing her to be extremely self- conscious. Petitioner filed suit in Pinellas County Circuit Court against the landlord in negligence for her failure to provide safe and proper working plumbing to the rental home. Among other things, the water heater had been set far above the legal limits of 120 degrees. During the pendency of that litigation, the landlord's homeowner's insurance company offered payment in settlement in the amount of $101,000.00, representing the $100,000.00 coverage limit for bodily injury liability, and $1,000.00 as payment of the coverage limit of the policy's medical payments provisions. At hearing, Ciara's mother indicated that she intends to accept the offer if it is approved by the court. AHCA contends it should be reimbursed for Medicaid expenditures on behalf of Petitioner pursuant to the formula set forth in section 409.910(11)(f). Under the formula, the lien amount is computed by deducting a 25 percent attorney's fee ($25,250.00) and taxable costs ($879.59) from the $101,000.00 recovery, which yields a sum of $74,870.41. This amount is then divided by two, which yields $37,435.21. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of the lien, whichever is less. Petitioner agrees that under the statutory default allocation, AHCA would be entitled to $37,435.21. Section 409.910(17)(b) provides that a Medicaid recipient has a right to rebut the default allocation described above. Utilizing that provision, Petitioner asserts that reimbursement should be limited to the same ratio as her recovery amount is to the full or total value of her damages. Under this theory, Petitioner contends that had her case gone to trial, a jury would have awarded at least $3.5 million, or the mid-point between $3 million and $4 million. Because the settlement represents a recovery of 2.9 percent of the valuation of her total damages, Petitioner contends she should pay 2.9 percent of AHCA's past medical expenses, or $5,066.00, to satisfy the Medicaid lien. The statute requires that Petitioner substantiate her position by clear and convincing evidence. To support the proposed full value of damages, Petitioner presented the testimony of Keith Ligori, a trial attorney in Tampa for the last 15 years, who specializes in all types of personal injury cases. Mr. Ligori has handled similar cases "numerous times," and on a daily basis he makes assessments of the valuation of potential claims. He is familiar with the reasonable valuation of personal injury cases in the greater Tampa Bay area, including Pinellas County. Mr. Ligori presented fact and opinion testimony on the issue of valuation of damages. Before forming his opinion on damages in this case, Mr. Ligori reviewed the medical records, including photographs of Ciara, interviewed the child and her mother, and discussed the case with her trial counsel. He also relied on his training and experience and familiarity with other cases in the Tampa Bay area. Based on his review of the case, Mr. Ligori valued total damages, conservatively, at $3.5 million. This figure took into account non-economic factors, including mental anguish, loss of ability or capacity to enjoy life, disability, and scarring and disfigurement, and economic damages consisting of the medical expenses paid by AHCA. Mr. Ligori testified that if he was actually trying the case before a jury, he would seek damages of between $5 million and $10 million. The undersigned finds the valuation of damages at $3.5 million to be credible and persuasive and is hereby accepted. In summary, by clear and convincing evidence, Petitioner has demonstrated that, conservatively, the full value of her damages is $3.5 million. The settlement amount of $101,000.00 is 2.9 percent of the total value of Petitioner's damages. The application of this factor to total medical expenses incurred by AHCA results in an allocation of $5,066.00 as a reasonable payment of the Medicaid lien.
