The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Genesis Belinaso (Petitioner), from a medical malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on August 29, 2011. At 11 months of age, Petitioner was diagnosed with Gaucher Disease, Type I. On September 21, 2012, when she was approximately 13 months of age, Petitioner was admitted to the hospital for the insertion of a central venous port (mediport) for treatment of her Gaucher Disease with Cerezyme infusions. The mediport insertion on the right side was unsuccessful, and it was inserted on the left side. Petitioner did not wake up from anesthesia and experienced seizure activity. Radiographic evaluation with CT and MRI of the brain revealed subarachnoid hemorrhage, cerebral edema, and herniation. Petitioner required an emergency craniotomy, duraplasty and partial right temporal lobectomy, with the operative note diagnosing a right internal carotid artery stroke and possible dissecting aneurysm of the internal carotid artery bifurcation. A post-operative CT revealed significant infarction of the right cerebral hemisphere. A subsequent intracranial hemorrhage resulted in recurrent/worsening of cerebral edema. Petitioner was transferred to Jackson Memorial Hospital where she underwent numerous neurological surgeries and procedures associated with catastrophic brain damage from the strokes suffered on September 21, 2012. As a result of the catastrophic brain damage, Petitioner suffers from left side hemiplegia and severe cognitive deficits. She is permanently disabled and unable to care for herself. She will need some form of care for the rest of her life. AHCA, through the Medicaid program, spent $301,085.18 on behalf of Petitioner, all of which represents expenditures paid for Petitioner’s past medical expenses. The $301,085.18 paid by Medicaid constituted Petitioner’s entire claim for past medical expenses. No portion of the $301,085.18 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Petitioner’s parents and natural guardians, Cintia Aquino and Jonas Belinaso, brought a medical malpractice claim against Petitioner’s medical providers, including the physician and the hospital, to recover Petitioner’s damages, as well as their damages associated with their child’s injury. The physician responsible for the unsuccessful mediport insertion (“Settling Tortfeasor”), maintained only an insurance policy with a policy limit of $250,000.00. Petitioner’s medical malpractice claim against the Settling Tortfeasor was settled during the pre-suit period for the insurance policy limit of $250,000.00. The Release of All Claims with the Settling Tortfeasor (“Release”) stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Genesis Belinaso and her parents for all of the damages that they have allegedly suffered, this settlement shall operate as a full and complete RELEASE as to RELEASEES without regard to this settlement only compensating Genesis Belinaso and her parents for a fraction of the total monetary value of their alleged damages. The parties agree that the alleged damages sustained by Genesis Belinaso and her parents, have a potential full value in excess of $25,000,000, of which $301,085.18 represents Genesis Belinaso’s claim for past medical expenses. Given the facts, circumstances, and nature of Genesis Belinaso’s injuries and this settlement, the parties have agreed to allocate $3,010.85 of this settlement to the 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 of the damage claims sustained by Genesis Belinaso and her parents. Further, the parties acknowledge that Genesis Belinaso may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Genesis Belinaso will incur in the future. However, the parties acknowledge that Genesis Belinaso, or others on her behalf, have not made payments in advance for Genesis Belinaso’s future medical care and Genesis Belinaso has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. The Release did not further differentiate or allocate the $250,000.00 total recovery. Thus, this proceeding was brought by Petitioner pursuant to section 409.910(17)(b) to establish “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph [409.910](11)(f).” The acceptance of the Settling Tortfeasor’s policy limits was expressly conditioned on all claims against the hospital being preserved. Because Petitioner was a minor, Court approval of the settlement was required. Accordingly, on July 29, 2015, Circuit Court Judge Maria M. Korvick entered an Order Approving Settlement. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. During the pendency of Petitioner’s medical malpractice claim, AHCA was notified of the claim. AHCA, through its collections contractor Xerox Recovery Services, asserted a Medicaid lien in the amount of $301,085.18 against any proceeds received from a third party as a result of Petitioner’s cause of action and settlement of that action. By letter of September 24, 2015, Petitioner’s medical malpractice attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of Petitioner’s $85,095.49 in litigation costs. The letter explained that the damages suffered had a value in excess of $25,000,000, and that the $250,000.00 settlement represented only a one-percent recovery of Petitioner’s $301,085.18 claim for past medical expenses. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $301,085.18 Medicaid lien. AHCA responded to the September 24, 2015, letter on November 2, 2015. AHCA indicated that it had calculated the section 409.910(11)(f) formula amount owed from the $250,000.00 settlement and, under the formula, $74,735.15 was owed to AHCA in satisfaction of its Medicaid lien. AHCA requested a “check made payable to ‘Agency for Health Care Administration’ in the amount of $74,735.15.” AHCA correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee of $62,500.00 from the $250,000.00 recovery left a sum of $187,500.00. AHCA then deducted $38,029.71 in approved taxable costs, which left a sum of $149,470.29, half of which is $74,735.15. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds from the settlement proceeds to satisfy the Medicaid lien amount of $74,735.15. AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner’s settlement, nor has it commenced a civil action to enforce its rights under section 409.910. Petitioner 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, pursuant to section 409.910(17). At the final hearing, Petitioner presented the expert testimony of Mr. Rossman. Mr. Rossman, who is board-certified in civil trial practice, demonstrated considerable experience handing personal injury and medical malpractice cases in the Miami area. Mr. Rossman testified that the standard of care in his field of practice requires a careful evaluation of a case from the time of intake through the trial. That evaluation, which includes an assessment of the value of the damages, includes a comparison of other jury verdicts in comparable cases as “the barometer of what is happening.” In assessing the value and worth of a case, it is common practice for counsel to retain a life care planner and an economist, and information provided by such persons is reasonably relied upon by persons in Mr. Rossman’s field of expertise. Mr. Rossman had extensive knowledge of the nature and extent of the injuries suffered by Petitioner, and was familiar with the information provided in Petitioner’s Habilitation Assessment and Present Value Analysis. Mr. Rossman testified that Petitioner’s total economic damages were $8,367,417.18, which included $301,085.18 in past medical expenses; $1,330,634.00 in lost earning capacity over Petitioner’s lifetime; and $6,735,698.00 for future life care needs. The future life care costs included those for future medical, surgical, diagnostic, and therapeutic needs, specialized equipment and supplies, attendant care, and related needs. The $6,735,698.00 amount estimated for future life care needs was the most conservative figure among the scenarios presented in the Present Value Analysis. Mr. Rossman also estimated the non-economic damages associated with Petitioner’s claim to be in the range of $12 million for Petitioner, and $3 million each for Petitioner’s parents, for a total of $18 million. His assessment of non- economic damages was based not only on his own knowledge and experience, but included an analysis of comparable jury verdicts, which is information reasonably relied upon by persons in Mr. Rossman’s field of expertise. As a result of his expert analysis, Mr. Rossman testified that, as a case of absolute liability with full damages awarded, Petitioner’s claim had a minimum value of $25 million dollars. Mr. Rossman’s testimony was credible, and is accepted. At the final hearing, Petitioner also presented the expert testimony of Mr. Barrett. Mr. Barrett has focused his practice for the past 30 years on personal injury cases, with the past 10 years devoted to medical malpractice and pharmaceutical products liability cases. Evaluation of personal injury cases and medical malpractice cases is a daily component of his practice. In preparation for his testimony, Mr. Barrett reviewed the reports of Petitioner’s life care planner and economist, Petitioner’s medical records, and other materials that are included in the record of this proceeding. Mr. Barrett routinely reviews jury verdict reports, and applied his knowledge and experience to Petitioner’s claim. Based on his review, Mr. Barrett concurred that the overall value of Petitioner’s claim was, conservatively, in the $25 million range, with the same general breakdown for economic and non- economic damages. Mr. Barrett’s testimony was credible, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner’s injury was, conservatively, $25 million, and that the settlement amount was one percent of the total value. The evidence was equally clear and convincing that the allocation for past medical expenses reflected in the court-approved Release was of the same ratio to the total past medical expenses as was the settlement amount to the reasonable value of the claim. There was no evidence that the allocation was subject to any form of manipulation to increase or decrease the accounting of past medical expenses.
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 to be determined is the amount payable to Respondent, Agency for Health Care Administration (“AHCA”), as reimbursement for medical expenses paid on behalf of David Brown (“Mr. Brown”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds he received from a third party.
Findings Of Fact The following Findings of Fact are based on exhibits accepted into evidence, testimony offered at the hearing, and admitted facts set forth in the pre-hearing stipulation. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Brown is the recipient of Medicaid for injuries he sustained in an automobile accident. AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On February 25, 2015, Mr. Brown, then 46 years old, was involved in a T-bone automobile accident. In the accident, Mr. Brown suffered a fractured wrist, torn shoulder, skin abrasions, a grade 4 bilateral pulmonary contusion, and a right middle cerebral artery infarct (commonly referred to as a stroke) with hemorrhagic contusion. Due to complications related to placement of a trachea, he underwent reconstructive surgery of his throat. Mr. Brown suffered permanent severe brain damage causing him to suffer left hemiparesis and difficulty swallowing or speaking. As a result of the accident, Mr. Brown is now disabled and has difficulty ambulating, eating, and caring for himself without assistance. Mr. Brown’s medical care related to the injury was paid by Medicaid. AHCA provided $181,975.75 in benefits. A Medicaid Manage Care Plan, known as WellCare, provided an additional $110,559.15 in benefits. The sum of these benefits, $292,534.90, constituted Mr. Brown’s entire claim for past medical expenses. Petitioners pursued a personal injury action against the owner and operator of the car that caused the accident (“Defendant”) to recover all their damages. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioners’ action against the Defendant. During the pendency of Mr. Brown’s personal injury action, AHCA was notified of the action and AHCA asserted a Medicaid lien of $181,975.75 against Petitioners’ cause of action and settlement of that action. There were liability issues with the case including the degree of comparative negligence that could be attributed to each driver. Specifically, there was a question of which driver had the green light. The personal injury claim ultimately settled for a lump-sum unallocated amount of $2,500,000. By letter, AHCA was notified of settlement of Petitioners’ claim. AHCA has not filed a motion to set-aside, void, or otherwise dispute Petitioners’ settlement. The Medicaid program through AHCA spent $181,975.75 for Mr. Brown’s past medical expenses. Application of the formula set forth in section 409.910(11)(f) to Petitioners’ $2,500,000 settlement authorizes payment to AHCA of the full $181,975.75 Medicaid lien. Petitioners have deposited AHCA’s full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights. As a condition of eligibility for Medicaid, Mr. Brown assigned AHCA his right to recover medical expenses paid by Medicaid from liable third parties Expert Witness Testimony Testimony of Brett Rosen Petitioners presented the testimony of Brett Rosen, the lead trial attorney who litigated the underlying personal injury claim. Mr. Rosen is a shareholder with the law firm of Goldberg and Rosen in Miami, Florida. Mr. Rosen has been a trial attorney for approximately 12 years and he specializes in representing parties in catastrophic injury, personal injury, and wrongful death cases. Mr. Rosen’s firm takes approximately eight to ten cases to trial each year. Since the firm routinely conducts civil jury trials, Mr. Rosen continuously educates himself on jury verdicts by reviewing the Florida Jury Verdict Reporter (a publication of jury verdict reports) and conducting roundtable discussions with other attorneys. Using information found in jury verdict reports, the Daily Business Review, and his experience, Mr. Rosen makes assessments concerning the value of damages sustained by individuals. Without objection, Mr. Rosen was accepted as an expert in the valuation of damages suffered by Petitioners. In addition to presenting testimony as an expert, Mr. Rosen also presented factual testimony regarding the underlying personal injury claim. As the lead attorney, Mr. Rosen met with Mr. Brown monthly on average during the two years that he represented him. Mr. Rosen also consulted with a neurologist and ENT physician who both treated Mr. Brown. Mr. Rosen testified that Mr. Brown’s vehicle was struck on the right side (commonly referred to as T-bone accident) by a vehicle, causing the vehicle he was driving to flip over onto its side. While Mr. Brown was able to get out of his vehicle, he suffered multiple injuries as further described in paragraph three herein. In addition to the brain injury, he had a tracheostomy that ultimately resulted in a bad outcome. As a result, he could not eat, speak, or drink for approximately two years. Mr. Rosen testified that Mr. Brown’s injuries had significant negative impact on Mr. Brown and his wife, Ms. Jenkins. Mr. Rosen testified that Ms. Jenkins resigned from her job to take care of her husband and assist with his recovery. Ms. Jenkins also suffered loss of consortium damages resulting from Mr. Brown’s injuries. The couple was forced to live with relatives when they could not afford rent. Overall, Mr. Rosen testified that the injuries negatively impacted Mr. Brown’s ability to lead a normal life. Mr. Rosen testified that the litigation of the case involved factual, causation, and legal disputes. There were no eyewitnesses, and the question remained regarding which driver had the green light. In addition, the insurance policy was limited to $50,000. Mr. Rosen later brought a bad faith claim against the insurance company due to their failure to timely tender the policy limits. After fully evaluating the risks, the parties settled the case for $2,500,000. Mr. Rosen testified that the full value of the claim is $10,500,000. However, Petitioners settled the claim for $2,500,000, which represents 23.8 percent of the value of their damages. Mr. Rosen testified that since Mr. Brown only recovered 23.8 percent of his total damages, he recovered in the settlement only 23.8 percent of his $292,534.90 claim for past medical expenses, which amounts to $69,623.38. Mr. Rosen testified that it would be reasonable to allocate $69,623.38 of the settlement to past medical expenses. Testimony of Vinson Barrett Vinson Barrett was also identified as Petitioners’ expert witness. Mr. Barrett, a trial attorney with 40 years of experience, is a partner with the law firm of Barrett, Nonni and Homola. His firm represents clients in medical malpractice, automobile, premise liability, and pharmaceutical products liability cases. Mr. Barrett has conducted numerous jury trials and has handled cases involving catastrophic injuries. Mr. Barrett routinely reviews jury verdict reports, discusses cases with other lawyers, and makes assessments concerning the value of damages suffered by injured persons. Mr. Barrett has also served as an expert in a number of cases regarding evaluation of damages. Mr. Barrett was recognized as an expert in the area of evaluation of damages. To evaluate the medical damages suffered by Mr. Brown, Mr. Barrett reviewed the police report, medical records, and the amended life care plan for Mr. Brown. Mr. Barrett also considered the overall level of pain and suffering Mr. Brown would suffer throughout the remainder of his life. Mr. Barrett testified that when compared to other traumatic brain cases, Mr. Brown is a little better off than other traumatic cases he has reviewed because he is able to ambulate using assistive devices and his mental abilities have not been compromised significantly. Mr. Barrett opined that the overall value of the damages would be more than $10,500,000. Mr. Barrett testified that his estimate was a conservative valuation of damages. Mr. Barrett concluded that, accepting Mr. Rosen’s even more conservative valuation, the $2,500,000 settlement constituted 23.8 percent of the full value of Petitioners’ damages. Mr. Barrett testified that allocation of $69,623.38 of the settlement would be a reasonable allocation of damages to the past medical expenses. Ultimate Findings of Fact The undersigned finds that the testimony of Mr. Rosen and Mr. Barrett was credible and persuasive as to the total damages incurred by Petitioners. While assigning a value to the damages that plaintiffs could reasonably expect to receive from a jury is not an exact science, Mr. Rosen’s extensive experience with litigating personal injury lawsuits makes him a very compelling witness regarding the valuation of damages suffered by Petitioners. As a trial lawyer who has testified in nearly 20 cases regarding valuation and allocation of damages, and 40 years of experience handling personal injury matters involving catastrophic injuries, Mr. Barrett is also a credible witness regarding the valuation and allocation of damages in a case such as Mr. Brown’s. The undersigned also finds that Mr. Barrett was qualified to present expert testimony as to how a damages award should be allocated among its components, such as past medical expenses, economic damages, and noneconomic damages. AHCA offered no evidence to counter the expert opinions regarding Petitioners’ total damages or the past medical expenses they recovered. Accordingly, it is found that the preponderance of the evidence demonstrates that the total value of Petitioners’ personal injury claim is $10,500,000 and that the $2,500,000 settlement resulted in Petitioners recovering 23.8 percent of Mr. Brown’s past medical expenses. In addition, the preponderance of the evidence demonstrates that $69,623.38 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
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, Joni M. Doheny, from a settlement received by Petitioner from a third party.
Findings Of Fact On July 7, 2014, Ms. Doheny, who was then 57 years old, was a passenger on a motorcycle whose drunk driver veered into oncoming traffic and was struck by a sports utility vehicle (SUV), ejecting her from the point of impact approximately 100 feet through the air and over pavement. As a result of the accident, Ms. Doheny suffered severe, catastrophic and horrible injuries with wounds to her head, wounds to her arms, wounds to her hands and her left leg almost ripped from her body at the knee. Ms. Doheny was intubated at the scene and airlifted to Tampa General Hospital. She was diagnosed with compound fractures of her left tibia and fibula, puncture wound of her right knee, severe injury to her left arm and hand resulting in amputation of her left ring finger, a laceration to her forehead, and a traumatic brain injury. Amputation of her leg was recommended, but Petitioner elected to save her leg. She underwent numerous surgeries associated with her leg and other extensive injuries and was in the hospital until September 12, 2014. Ms. Doheny was again admitted to the hospital for treatment of her injuries on December 2 through 9, 2014, and January 21 through February 5, 2015. Throughout the process, she was in extreme pain and remains in pain to date. Currently, Petitioner cannot walk and requires a wheelchair for mobility. She has no significant function of her left hand and no significant function in her left leg. She is dependent on others for activities of daily living. She also has severe impacts to her emotional well-being and suffers from depression, anxiety and pain. Her condition is permanent and she most likely will not be able to obtain employment sufficient to support herself or replace the income/earning capacity she had as a realtor prior to her injuries. She is no longer a Medicaid recipient. Petitioner’s past medical expenses related to her injuries were paid by both personal funds and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $257,640.53. Unpaid out-of-pocket expenses totaled $119,926.41. Thus, total past healthcare expenses incurred for Petitioner’s injuries was $377,566.94. Ms. Doheny brought a personal injury claim to recover all her damages against the driver of the SUV (Driver) who struck the motorcycle Ms. Doheny was riding, her Uninsured/Underinsured Motorist Policy (UM Policy), and the restaurant which had served alcohol to the driver of the motorcycle (Restaurant). Towards that end, Petitioner retained James D. Gordon, III, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in her negligence action against the Defendants. The Driver maintained a $10,000 insurance policy. On November 10, 2014, prior to suit being filed, Ms. Doheny settled her claim against the Driver for an unallocated $10,000. Ms. Doheny’s UM Policy had a policy limit of $300,000. Likewise, on November 10, 2014, Ms. Doheny settled her claim against her UM Policy for an unallocated $300,000. The Restaurant maintained a $1,000,000 liquor liability insurance policy. On September 2, 2015, and again prior to suit being filed, Ms. Doheny settled her claim against the Restaurant for $1,000,000. The settlements totaled $1,310,000.00 and do not fully compensate Petitioner for the total value of her damages. As indicated, $310,000.00 of the settlements was not apportioned to specific types of damages, such as economic or non-economic, past or future. One million dollars of the settlements was apportioned with 20 percent of those funds allocated to past medical expenses. No dollar amount was assigned to Ms. Doheny’s future medical care needs, and there remains uncertainty as to what those needs will be. Additionally, neither Petitioner nor others on her behalf made payments in the past or in advance for her future medical care, and no claim for reimbursement, restitution or indemnification was made for such damages or included in the settlement. However, 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 Ms. Doheny. Respondent was notified of Petitioner’s negligence action, around September 3, 2015. Thereafter, Respondent asserted a Medicaid lien in the amount of $257,640.53 against the proceeds of any award or settlement arising out of that action. Respondent was not a party to the 2015 settlements and did not execute any of the applicable releases. Mr. Gordon’s expert very conservative valuation of the total damages suffered by Petitioner is at least $5 million. In arriving at this valuation, Mr. Gordon 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 $6,779,214 for total damages and $4,725,000 for non-economic damages (past and future pain and suffering). Mr. Gordon’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. Gordon. Mr. Barrett agreed with the $5 million valuation of Petitioner’s total damages and thought it could likely have been higher. The settlement amount of $1,310,000 is 26.2 percent of the total value ($5 million) of Petitioner’s damages. By the same token, 26.2 percent of $377,566.54 (Petitioner’s past medical expenses paid in part by Medicaid) is $98,922.54. Both experts testified that $98,922.54 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. Further, the unrebutted evidence demonstrated that $98,922.54 is a reasonable and rational reimbursement for past medical expenses since Petitioner recovered only 26.2 percent of her damages thereby reducing all of the categories of damages associated with her 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 $98,922.54.
The Issue Is proposed rule 59G-3.010(4)(b)2.c. an invalid exercise of delegated legislative authority, for reasons described in the respective petitions that formed the basis of this dispute? See Section 120.56(2), Florida Statutes.
Findings Of Fact The party Florida Medical Association, Inc., a not for profit corporation is organized and maintained for the benefit of approximately 17,000 licensed physicians who are its members. It represents the common interests of those members. Some of its members provide services under the terms contemplated by proposed rule 59G-3.010(4)(b)2.c. Likewise, Robert Anthony Savona, D.O.; John F. Hull, D.O.; and Robert Kagan, M.D., as licensed physicians, provide services contemplated by a proposed rule 59G- 3.010(4)(b)2.c. Respondent is the agency responsible for administering the state Medicaid Program under Title XIX of the Social Security Act, 42 U.S.C. Section 1396 et seq. and Section 409.901, et seq. Florida Statutes. This responsibility includes reimbursement of Medicaid providers. Respondent offered the proposed rule for adoption. The services contemplated by proposed rule 59G- 3.010(4)(b)2.c., in which the rule describes a payment mechanism, are in association with patients who are Medicare and Medicaid eligible. The arrangement contemplated by the proposed rule is in relation to Medicaid reimbursable services which complement Medicare. Under the proposed rule, Medicare Supplemental Insurance (Part B) is paid for the deductible and coinsurance for the Medicare and Medicaid eligible recipients by the Medicaid fiscal agent, in accordance with a rate identified in the proposed rule. The recipients of the services from physicians under the proposed rule, eligible for both Medicare and Medicaid benefits, are also referred to as Qualified Medicare Beneficiaries (QMBs). QMBs are described as poor, elderly and disabled persons. In pertinent part the proposed rule states: 59G-3.010 Medicaid Services Complementing Medicare. * * * (4) Medicaid Reimbursable Services which Complement Medicare. * * * (b) Medicare Supplemental Insurance (Part B). * * * 2. The Medicare Part B deductible and coinsurance is paid for the Medicare and Medicaid eligible recipient by the Medicaid fiscal agent at the following rates: * * * c. Physician services, including doctors of medicine, doctors of osteopathy, and providers of chiropractic and podiatric services are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment received does not exceed the Medicaid fee for the service provided. If there is no comparable Medicaid fee for the service, the Medicaid fee is calculated to be 50 percent of the Medicare approved charge for the service provided. In these situations, whether the physician did or did not receive a payment from Medicaid, by billing Medicaid he is bound to the Medicaid payment schedule as payment in full. Other parts of proposed rule 59G-3.010(4)(b)2. at a., b., d., and e. address Medicare Part B deductibles and coinsurance for other providers as follows: Part B patient hospital services are reimbursed 100 percent of the deductible and coinsurance. Rural health centers, federally qualified health centers and county health departments are reimbursed their encounter rate minus the amount of Medicare's payment. * * * Pharmacy providers are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment does not exceed the Medicaid fee for the service provided. Other Part B suppliers are reimbursed 100 percent of the coinsurance and 100 percent of deductible. Under Medicare Part B, 80 percent of reasonable costs or charges for the delivery of health care to Medicare eligible patient is paid through the Medicare program as a premium. That program is administered by the federal government under Title XVIII of the Social Security Act, 42 U.S.C., Section 1395 et seq. That payment is a form of insurance. The remaining 20 percent is anticipated to be paid by the patient as copayments or coinsurance, in addition to an annual deductible. The proposed rule in relation to physician services addresses the manner in which some portion of the 20 percent is "crossed-over" to be paid for potential payment through the Medicaid program administered by Respondent using federal and state funding, pursuant to Title XIX of the Social Security Act, 42 U.S.C., Section 1396 et seq. and Section 409.901 et seq., Florida Statutes. Payment to the physicians for their services in relation to the deductible and coinsurance depends upon the application of the formula in the proposed rule. The formula contemplates reimbursement to the physicians at less than 100 percent of the deductible and 100 percent of the coinsurance because the Medicaid fee schedule is generally lower than the federal Medicare fee schedule for the same services. In fact, in most cases the physicians will receive no payment for the deductible or coinsurance above the 80 percent payment under the Medicare fee structure in relation to the basic Medicare premium. By comparison to other health care and service providers discussed in the proposed rule, some other individuals and entities are reimbursed at 100 percent of the deductible and coinsurance and others are not guaranteed reimbursement at 100 percent. The formulas for reimbursement for services provided under the proposed rule related to Medicare Part B deductible and coinsurance are influenced by the results of quarterly estimating conferences held between legislative and executive branch staff. Those estimators, within respective categories of services, examine the performance of the various categories of services concerning fiscal impact through a comparison of available revenues against expenditures. This assists in the preparation of future budgets upon the recommendation of the governor to be passed by the legislature. Respondent assists in preparation of budget requests, to include recommendation for policy changes related to the amount of expenditures for the various services performed for the benefit of Medicare and Medicaid eligible recipients, QMBs, who are entitled to the payment of their deductible and coinsurance under Medicare Part B. However, the impetus for the reimbursement formula for physician services described in the proposed rule has a more precise origin, for reasons now explained. A prior version of Rule 59G-3.010(4), Florida Administrative Code in effect on April 8, 1996, was challenged in an administrative proceeding before the Division of Administrative Hearings. That version limited the amount of reimbursement for physician services associated with Medicare Part B deductible and coinsurance in a different manner than the proposed rule. In the decision of Reynolds v. Agency for Health Care Administration, 18 F.A.L.R. 3474 (Fla. DOAH 1996) the rule was held invalid. Among the cases cited for this decision was Pennsylvania Medical Society v. Snider, 29 F.3d 886 (3d Cir. 1994) and Haynes Ambulance Service, Inc. v. State of Alabama, 36 F.3d 1974 (11th Cir. 1994). The federal court cases refer to the recipients of cost reimbursement for deductibles and coinsurance as QMBs. Essentially, they are the same persons who are described in the proposed rule as Medicare and Medicaid eligible. Although the rule had been declared invalid, Respondent continued to exercise the policy of denying payment of Medicare deductibles and coinsurance on physician crossover claims at 100 percent of the deductible and 100 percent of the coinsurance as contemplated by the federal court cases. Following Respondent's return to the policy of not paying the deductible and coinsurance at 100 percent for physician services, Petitioner's Savona, Hull, and Kagan brought a lawsuit in federal count to compel payment for physician services to QMBs at the Medicare rate. On March 3, 1997, the United States District Court for the Northern District of Florida granted a final injunction that required Respondents to pay the physician class in the lawsuit at the Medicare rate for services provided to QMBs. See Savona v. Cook, Case No. 4:96CV14-WS (N.D. Fla. 1997). After the decision in Savona, Respondent pursued a policy of paying the deductible and coinsurance at 100 percent of the Medicare rate. This policy lasted from March 3, 1997 until October 1, 1997. To facilitate the payment for physician services at 100 percent of the Medicare rate for the crossover claims related to the deductible and coinsurance, Respondent amended its state Medicaid plan, with the federal Health Care Financing Administration (HCFA). In addition, Respondent sought an appropriation through the legislature to fund the increase in copayments to assure that physician services were reimbursed at 100 percent of the Medicare rate for the deductible and coinsurance. This led to the passage of Chapter 97-152, Laws of Florida, Item 248, the 1997-98 General Appropriations Act, which set aside monies from the General Revenue Fund and from the Medical Care Trust Fund, totaling $87 million for Medicare Part B copayment for reimbursement of physician services for the dually eligible recipients. This refers to recipients eligible for services under Medicare and Medicaid. The 1997-98 fiscal year for that appropriation began July 1, 1997, and continues until June 30, 1998. The amount appropriated has proven more than adequate to meet the copayment for physician services at the 100 percent Medicare rate. Another document, prepared by persons unknown, was associated with the appropriations process for 1997-98. That document is referred to as Respondent's Ex No. 1 and is entitled 1997-98 General Appropriations and Summary Statement of Intent. It sets out the exact language in Chapter 97-152, Laws of Florida, Item 248, related to the $87 million for full Medicare Part B copayment for physician services. It also sets out a summary statement of intent that is not found within the General Appropriations Act. The language in that summary statement of intent is as follows: It is the intent of the Legislature that the funds in Specific Appropriation 248 which are provided to pay the full Medicare part B co- payment for physician services to clients who are dually eligible for Medicare and Medicaid, be expended only to the extent currently required by federal law. In the event that changes in federal law relating to reimbursement for these services occurs, the Agency for Health Care Administration shall directly submit to the federal Health Care Financing Administration any amendments to the state Medicaid Plan which are necessary to realize cost savings options permitted by and in compliance with federal law. As anticipated by the summary statement of intent, federal law relating to reimbursement for physician services did change in August of 1997 when Congress enacted the Congressional Balanced Budget Act of 1997, Section 4714. In pertinent part it stated: * * * (2) In carrying out paragraph (1), a State is not required to provide any payment for any expenses incurred relating to payment for deductibles, coinsurance or copayments for medicare cost-sharing to extent that payment under title XVIII for the service would exceed the payment amount that otherwise would be made under the State plan under this title for such service if provided to an eligible recipient other than a medicare beneficiary. That law became effective October 1, 1997. By its terms it created the option for states to reduce payments on crossover claims to the state Medicaid rate, although it did not mandate that outcome. The payment option created by the congressional enactment had application to all categories of providers. In view of the Congressional Balanced Budget Act of 1997, Respondent decided to change its payment policy to disallow payment for physician services at the 100 percent Medicare rate in all instances for physician services related to the deductible and coinsurance for dually eligible recipients. The effective date of the change in policy was October 1, 1997, coinciding with the effective date of the Congressional Budget Act. Respondent implemented its policy change without the benefit of rule adoption. The failure to implement the payment policy by rule adoption was challenged in the case of Savona v. Agency for Health Care Administration, DOAH Case No. 97-5909RU (Fla. DOAH 1998). On January 16, 1998, Respondent gave notice of rule development, to include the preliminary text of the rule. For this reason, the February 12, 1998, order entered in DOAH Case No. 97-5909RU denied the petition for determination of invalidity of the non-rule policy brought in accordance with Section 120.56(4), Florida Statutes. Consistent with its notice of rule development, Respondent published notice of proposed rulemaking pertaining to the rule under challenge here. That publication was made on February 13, 1998, through the Florida Administrative Weekly, Volume 24, No. 7. The specific authority for rule promulgation was Section 409.919, Florida Statutes, and the law to be implemented was Section 409.908, Florida Statutes. No mention was made of the summary statement of intent associated with the 1997-98 General Appropriations Act in Florida and the Congressional Balanced Budget Act of 1997. The testimony of Richard T. Lutz, Director of the Division of State Health Purchasing, Agency for Health Care Administration, at hearing established his reliance upon those latter two items as authority for promulgating the proposed rule in relation to the copayment for physician services under Medicare Part B, for the deductible and coinsurance. Mr. Lutz was principally responsible for the promulgation of the rule as policymaker for the Respondent. In addressing the difference in the reimbursement policies for physician services, contrasted with other services detailed in the proposed rule, Mr. Lutz indicated that changes in relation to reimbursement policies, other than for physicians, would be the product of an estimating conference showing the financial impact of the changes, followed by a budget item to effect the changes. In the absence of that impetus, Mr. Lutz described that he had been instructed that the methodologies that were in place for various services under Medicare Part B utilizing established methodologies for the reimbursement practices would remain in effect. Unlike the circumstances existing in the proposed rule, for classes of providers other than physicians, Mr. Lutz in behalf of Respondent took the initiative in dealing with reimbursement for physicians care under Medicare Part B when promulgating the proposed rule. He concluded that the terms of the federal court order in Savona were subject to the language in the summary statement of intent, and with the advent of the Congressional Balanced Budget Act of 1997 Respondent was at liberty to change its reimbursement scheme for physician services effective October 1, 1997. In making the policy choice to promulgate the proposed rule, Mr. Lutz recognized the option which Florida had to either limit copayments or continue copayments at the Medicare rate for physician services under Medicare Part B. In promulgating the proposed rule Mr. Lutz identified that the Agency did not consider language in Section 409.908(13), Florida Statutes. He did indicate in his testimony the belief that the preamble to Section 409.908, Florida Statutes, creates authority for promulgation of the proposed rule in its comment about the Respondent's ability to make payments in accordance with methodologies that are set forth in its rules, manuals, and handbooks, consistent with limitations placed in the General Appropriations Act and any statement of legislative intent. Mr. Lutz in promulgating the proposed rule recognized that the physician services under Medicare Part B copayment for deductible and coinsurance would eventuate in no payment beyond the 80 percent premium in many instances. Although Mr. Lutz expresses the opinion that the proposed rule for payment of physician services under Medicare Part B has retroactive application to October 1, 1997, he acknowledges that the language in the proposed rule makes no reference to its retroactivity to that date.
The Issue Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Mark Crain, 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 $100,000 settlement from a third party. The Agency asserts that it is entitled to recover $35,700, which is the amount it calculated using the formula set forth in section 409.410(11)(f). The facts that gave rise to this matter are found pursuant to a stipulation of the parties.3/ On June 23, 2016, Petitioner was working for a tree pruning company. Petitioner’s employer assigned him to remove several branches from a tree. As directed, Petitioner climbed to the top of the tree and secured himself with one rope lanyard. Unfortunately, after he began pruning, Petitioner cut through the rope lanyard, lost his balance, and plummeted 30 feet to the ground. As a result of the fall, Petitioner suffered significant physical and neurological injuries. Petitioner underwent multiple surgeries. His medical procedures included an open reduction with internal fixation on his right wrist, lumbar fusion surgery, and a lumbar laminectomy. At the final hearing, Petitioner’s counsel represented that Petitioner’s medical prognosis is not fully known at this time. However, what is known is that Petitioner will continue to experience serious neurologic deficits. Petitioner’s injuries have left him with overall mobility issues and have affected his ability to walk normally. He suffers from a right foot drop and has limited feeling below his waist. The parties also stipulated that Petitioner has completed all medical treatment and therapy related to his accident. However, Petitioner is uncertain whether or not he will be able to return to normal activities in the future. Petitioner incurred sizable medical expenses due to his injuries. The charges for Petitioner’s medical procedures totaled approximately $375,000. However, only $62,067.28 has actually been paid for his medical care. Of this amount, the Florida Medicaid program paid $41,992.33. (In addition to the $41,992.22 paid by Medicaid, other health insurance covered $20,075.06.) Petitioner did not present evidence of monetary damages other than his past medical expenses. Petitioner subsequently initiated a civil cause of action for negligence against his (former) employer. Petitioner alleged that he was not properly trained how to safely secure himself to the tree. According to Petitioner’s counsel, Petitioner’s employer should have instructed him to use two lanyards instead of one. After two years of litigation, Petitioner settled his negligence action for $100,000. The settlement did not allocate Petitioner’s award between past medical expenses and other damage categories. The Agency, through the Florida Medicaid program, paid a total of $41,992.33 for Petitioner’s medical treatment resulting from the accident.4/ All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. 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 claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $37,500 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed in endnote 7, the “default” formula in section 409.910(11)(f) allows the Agency to collect $37,500 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of whether Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that the Agency should be reimbursed a lesser portion of the settlement than the amount calculated using the section 409.910(11)(f) formula. Exercising its right to challenge the Medicaid lien pursuant to section 409.910(17)(b), Petitioner specifically argues that, taking into account the full value of Petitioner’s damages, the Agency’s Medicaid lien should be reduced proportionately. 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 past medical expenses. Petitioner requests the Agency’s allocation from Petitioner’s third-party recovery be reduced to $4,199.23. To establish the value of his damages, Petitioner submitted the medical bills from his accident, as well as relied upon the stipulated facts. Petitioner’s medical bills show that he sustained the injuries identified above, as well as underwent surgery on his spine and wrist. To place a monetary value on Petitioner’s injuries, Petitioner’s counsel represented that his law firm appraised Petitioner’s injuries at no less than $1 to 2 million. However, Petitioner did not introduce any evidence or testimony corroborating this injury valuation or substantiating an amount Petitioner might have recovered at trial in his personal injury cause of action.5/ Neither did Petitioner offer evidence of additional damages Petitioner might be facing from his accident, such as future medical expenses, loss of quality of life, loss of employment or wages, or pain and suffering. Based on his estimate, Petitioner’s counsel asserted that the $100,000 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Petitioner for his damages. Therefore, a lesser portion of the settlement should be allocated to reimburse Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the full value of Petitioner’s damages (conservatively estimated at $1,000,000) compared to the amount that Petitioner actually recovered ($100,000). Using these numbers, Petitioner’s settlement represents a 10 percent recovery of Petitioner’s damages. In like manner, the Medicaid lien should be reduced to 10 percent or $4,199.23 ($41,992.33 times .10). Therefore, Petitioner asserts that $4,199.23 is the portion of his third- party settlement that represents the equitable and fair amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to Petitioner’s negligence action or Petitioner’s $100,000 settlement. No portion of the $100,000 settlement represents reimbursement for future medical expenses. The undersigned finds that, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $37,500 from Petitioner’s recovery of $100,000 from a third party to satisfy its Medicaid lien.
