The Issue The amount to be reimbursed to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), for medical expenses paid on behalf of Petitioner, Mitchell Fowler, from settlement proceeds received by Petitioner from third parties.
Findings Of Fact On September 4, 2016, Mr. Fowler suffered a catastrophic and permanent spinal cord injury when he fell at a boat ramp. Mr. Fowler is now a paraplegic unable to walk, stand, or ambulate without assistance. Mr. Fowler’s medical care related to his injury was paid by Medicaid. Medicaid, through AHCA, provided $74,693.24 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Humana, provided $7,941.28 in benefits. The sum of these Medicaid benefits, $82,634.52, constituted Mr. Fowler’s entire claim for past medical expenses. Mr. Fowler pursued a personal injury action against the owner/operator of the boat ramp where the accident occurred (“Defendants”) to recover all his damages. The personal injury action settled through a series of confidential settlements in a lump-sum unallocated amount of $800,000. As a condition of Mr. Fowler’s eligibility for Medicaid, Mr. Fowler assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See § 409.910(6)(b), Fla. Stat. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $74,693.24 Medicaid lien associated with Mr. Fowler’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. By letter, AHCA was notified of the settlements. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlements. The Medicaid program through AHCA spent $74,693.24 on behalf of Mr. Fowler, all of which represents expenditures paid for past medical expenses. No portion of the $74,693.24 paid by AHCA through the Medicaid program on behalf of Mr. Fowler represented expenditures for future medical expenses. The $74,693.24 in Medicaid funds paid towards the care of Mr. Fowler by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Humana spent $7,941.28 on Mr. Fowler’s medical expenses. Thus, the total amount of past medical expenses incurred by Mr. Fowler is $82,634.52. The taxable costs incurred in securing the settlements totaled $45,995.89. Application of the formula at section 409.910(11)(f) to the $800,000 settlement requires payment to AHCA of the full $74,693.24 Medicaid lien. Petitioner deposited the full Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that the total of Mr. Fowler’s economic damages, including future medical expenses, were $5,652,761.00 which, added to the $82,634.52 in past medical expenses, results in a sum of $5,735,395.52 in economic damages. Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioner established, by clear and convincing evidence that was unrebutted by AHCA, that non-economic damages alone could reasonably be up to $26,000,000. When added to the economic damages, a value of Mr. Fowler’s total damages well in excess of $30,000,000 would not be unreasonable. However, in order to establish a very conservative figure against which to measure Mr. Fowler’s damages, both experts agreed that $15,000,000 would be a reasonable measure of Mr. Fowler’s damages for purposes of this proceeding. Based on the forgoing, it is found that $15,000,000, as a full measure of Mr. Fowler’s damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $800,000 settlement is 5.33 percent of the $15,000,000 conservative value of the claim.
Findings Of Fact Friendly Village of Brevard, Inc. d/b/a Washington Square (herein, Washington Square) is an intermediate care facility for the mentally retarded (ICF/MR), located at 2055 North U.S. 1, in Titusville, Florida. Friendly Village of Orange, Inc., d/b/a Lake View Court (herein, Lake View Court), is also an ICF/MR located at 920 W. Kennedy Boulevard, in Eatonville, Florida. Howell Branch Court is the same type of facility, located at 3664 Howell Branch Road, Winter Park, Florida. All three facilities are operated by Developmental Services, Inc. All are certified ICF/MR's participating in the Florida Medicaid Program. The Department of Health and Rehabilitative Services (HRS) is the state agency responsible for overseeing the ICF/MR Medicaid Program. Howell Branch entered the Florida Medicaid Program in July 1982; Washington Square entered the program on January 19, 1983; and Lake View Court entered the program on February 13, 1983. Prior to beginning operations, medicaid providers were requested to submit a budgeted cost report, a projection of what the provider anticipated spending during the coming year for services to its residents. HRS received those reports and established a per diem rate based on the costs and number of patients and arrived at a per patient, per day rate. Each month as services were provided, the ICF/MR billed the state Medicaid program for the number of patient days times the per diem. During the period in question, cost settlement would occur at the conclusion of the budgeted period. The provider would file his cost report detailing what was actually spent in Medicaid-allowable costs to provide the services, HRS would compare that amount with the amount budgeted and would settle with the provider. Prior to the July 1, 1984 ICF/MR Medicaid Reimbursement Plan, if a provider were under reimbursed (incurred allowable costs in excess of reimbursement) the provider would not receive additional reimbursement in the settlement. However, if the provider received reimbursement in excess of its allowed costs, the excess had to be paid back to HRS. This is called "one-way" cost settlement. Representatives of HRS and Florida's ICF/MR industry began negotiations on a new state reimbursement plan in 1982 and 1983. The participants in the negotiations sought to remove certain cost limitations and to insure that individual facilities would receive fair reimbursement of their Medicaid- allowable costs. The negotiations resulted in the Title XIX ICF/MR Reimbursement Plan dated July 1, 1984 (the 1984 Plan). The 1984 Plan was adopted as a rule by incorporation, in Rule 10C- 7.49(4)(a)2. Florida Administrative Code. The 1984 Plan contains a two-way cost settlement method to replace the one-way settlement method described above. This means that under the 1984 Plan, providers could receive additional reimbursement during settlement if their actual allowable costs exceeded reimbursement under the per diem rate. Washington Square and Lake View Court filed budgeted cost reports for the fiscal year ending February 19, 1984. HRS performed audits of these reports in 1985. The audits were issued in April and May 1988. The audits did not apply the two-way cost settlement method described in the 1984 Plan. Petitioners claim that a proper interpretation of the 1984 Plan is that two-way cost settlement is retroactive to January 1983 for new providers entering the program after January 1, 1983. That claim is based on the following language in the 1984 Plan and subsequent 1985 Plan: For a new provider entering the program subsequent to January 1, 1983, HRS will establish the cost basis for calculation of prospective rates using the first acceptable historical cost report covering at least a 12 month period submitted by the provider. (Petitioner's Exhibit 2, the 1984 Plan, pp 29-30. For a new provider entering the program subsequent to January 1, 1983, HRS will establish the cost basis for calculation of prospective rates using the first acceptable historical cost report covering at least a 12-month period submitted by the provider. Overpayment as a result of the difference between the approved budgeted interim rate and actual costs of the budgeted item shall be refunded to HRS. Underpayment as a result of the difference between the budgeted interim rate and actual allowable costs shall be refunded to the provider. The basis for calculating prospective rates will be the first year settled cost report. (Petitioner's Exhibit 3, the 1985 Plan, p. 31.) Neither the above, nor any other language in the plans indicate that the 1984 Plan would become effective for any providers prior to July 1, 1984. HRS intended that the plan be prospectively applied. Francis "Skip" Martin was employed in HRS' Medicaid Cost Reimbursement Planning and Analysis Unit and was involved in negotiating and drafting the 1984 plan for the agency. He remembers no discussions of retroactive application of the plan. Nor could Petitioners' witnesses expressly recall that the negotiations included retroactive application of the "two- way" settlement method. Instead, they were aware that the department was working with them to establish a more acceptable reimbursement plan and they assumed that retroactivity was part of the plan. (transcript pp 95-98, 126.) Skip Martin explained that the January 1, 1983 date was arrived at by working backwards from July 1, 1984, the date of the plan. The intent was to establish a cutoff point for providers entering the program as to whether they would be considered under prospective rates or be given an interim rate and still be considered a new provider when the plan was implemented. The January 1, 1983, cutoff allowed for a year's worth of reporting history plus sufficient time for the provider to compile his cost report and submit it to the department, and time for the department to have received the cost report and have it included in the calculations that would be used on July 1, 1984. ICF/MR's entering the program after January 1, 1983, would not have had sufficient cost history for rate setting, and as "new providers" would come under a separate rate setting provisions in the plan. Carlton Dyke Snipes has worked in HRS' Medicaid Cost Reimbursement Analysis Section since 1983, and in November 1985, he became the section Administrator. He explained that the language cited above from page 31 of the 1985 Plan was a clarification of the intent that the two-way cost settlement implemented on July 1, 1984, apply to new providers, as well as existing providers. The method had not been expressly addressed in the July 1, 1984 plan in that section relating to new providers. As an alternative to retroactive application of the two-way cost settlement provision in the July 1, 1984 Plan, Petitioners contend that they should be allowed a waiver of class ceilings as provided in the plan in effect in 1983. This issue was raised in this proceeding for the first time at the final hearing. The 1983 ICF/MR Medicaid Reimbursement Plan includes this provision regarding waivers: The class ceiling under paragraph c above may be exceeded provided; the period of the limits shall not exceed six (6) months. The HCFA Regional Office will be notified in writing at least 10 days in advance in all situations to which this exception is to be applied and will be advised of the rationale for the decision, the financial impact, including the proposed rate and the number of facilities and patients involved. (Petitioners' Exhibit #7, p. 15) In one case discussed at hearing, HRS granted an exemption under this provision. The facility was an ICF/MR cluster facility, Sunrise Cape Coral. The application by the facility was cleared in advance by the federal agency, Health Care Financing Administration (HCFA). The 1983 Plan is no longer in effect and was superceded by the July 1, 1984 Plan. Petitioners did not apply for a waiver when the 1983 Plan was in effect. Instead, they claim that they did not know such an opportunity existed until discovery for this proceeding uncovered the Sunrise case. The issue with regard to Petitioner's Howell Branch facility differs from the audit issues affecting Washington Square and Lake View Court addressed above. HRS' audit of Howell Branch in 1988 includes an overpayment to the facility of approximately $115,000.00. Petitioners claim that Howell Branch should not have to reimburse those funds because during a portion of the eighteen-month cost reporting period Howell Branch was underpaid for an amount which should more than offset the overpayment. According to the provisions of the reimbursement plan which was in effect during the relevant period, July 1982 (when Howell Branch opened) through December 1983, HRS cost settled based on the lesser of: class ceilings in effect during the period, actual costs, or the budgeted interim rate. Class ceilings are established by HRS for various levels of care required by ICF/MR residents. These ceilings are based on cost reports received by HRS as of each June 30 and go into effect on October 1st of each year. Howell Branch, therefore, experienced three class ceilings during its July 1982 through December 1982 reporting period. HRS applied those three cost ceiling periods to Howell Branch, rather than monthly periods, as contended by Petitioners. As described by Carlton Dyke Snipes, MRS took the average cost determined by an audit report and every rate than had been in effect during that cost reporting period and, for every period that rate was in effect, applied the lesser of the average audited cost or the budgeted rate that was paid or the ceiling that was in effect and reprocessed the claims that had been made. This resulted in the $115,000.00 overpayment. If MRS had used average costs and average rates for the entire eighteen- month period, as advocated by Petitioners, the result would have been that ceilings would be exceeded during a portion of the eighteen month period.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order denying the petitions of Washington Square, Lake View Court and Howell Branch. DONE and ENTERED this 14th day of June, 1989 in Tallahassee, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-2939 The following constitute specific rulings on the findings of fact proposed by the parties: Petitioners' Proposed Findings of Fact 1 and 2. Included in Preliminary Statement. 3 through 6. Adopted in Paragraph 1. 7. Adopted in Paragraph 2. 8 through 10. Adopted in Paragraph 3. 11 and 12. Adopted in Paragraph 5. 13 and 14. Adopted in Paragraph 6. Adopted in Paragraph 7. Rejected as unnecessary. 17 and 18. Adopted in Paragraphs 8 and 9, except for the implication that two- way reimbursement applied retroactively to January 1, 1983. Adopted in part in Paragraph 9, but the retroactive application of the methodology is rejected as inconsistent with the evidence. Adopted in Paragraph 11. Adopted in part in Paragraph 10, the statement of entitlement to two-way settlement is rejected as inconsistent with the evidence. Adopted in Paragraph 15. Rejected as argument. Adopted in part in Paragraph 16, otherwise rejected as argument. Rejected as inconsistent with the evidence. Rejected as contrary to the evidence. HAS' method of cost settlement was not inappropriate. Adopted in substances in Paragraph 19. Rejected as unnecessary 29 and 30. Rejected as argument and unnecessary. Respondent's Proposed Findings of Fact Adopted in Paragraph 1. Adopted in Paragraphs 2 and 3 Adopted in Paragraph 8. 4 and 5. Adopted in Paragraphs 4 and 5. Adopted in Paragraph 6. Adopted in Paragraph 10. Adopted in Paragraphs 10 and 11. Adopted in Paragraph 17. COPIES FURNISHED: Michael Bittman, and Karen L. Goldsmith P.O. Box 1980 Orlando, Florida 32802 Carl Bruce Morstadt and Kenneth Muszynski 1323 Winewood Boulevard, Bldg. One Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 R.S. Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
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, Patrick Osmond (Petitioner), from settlement proceeds received by Petitioner from third parties.
Findings Of Fact Petitioner was injured in a single-vehicle collision after he and several underage friends were served alcoholic beverages at an Applebee’s restaurant, owned by Neighborhood Restaurant Partners, LLC (Applebee’s). As a result of his injuries, Petitioner brought suit against Applebee’s, for dram shop liability, and against Joseph Raub, the driver of the vehicle in which Petitioner was a passenger, for negligence. The Complaint also included a claim against the bartender from Applebee’s, however, she was eventually dropped from the lawsuit. After a two-week jury trial, the jury returned a verdict in favor of Petitioner, awarding a total of $41,956,473.73 in damages, allocated as follows: Past Medical Expenses: $436,473.73 Future Medical Expenses: $15,000,000.00 Past Lost Wages: $20,000.00 Future Loss of Earning Capacity: $1,500,000.00 Past Non-Economic Damages: $5,000,000.00 Future Non-Economic Damages: $20,000,000.00 The past medical expenses included $303,757.77 for payments made by Medicaid through AHCA, $13,985.96 for payments administered through the Rawlings Company, and $118,730.00 which represented an outstanding bill from Petitioner’s neurosurgeon. After the verdict, Petitioner reached a settlement agreement with Applebee’s, whereby Applebee’s agreed to pay the sum of $4,300,000.00 to Petitioner. As a condition of the settlement with Applebee’s, the parties executed a Release that included the following language: 1.6 The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One Million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents)[1/] represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $35,568.73 (Thirty-Five Thousand, Five Hundred Sixty-Eight Dollars and Seventy-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the jury verdict was rendered, Petitioner recovered $25,000.00 in settlement from Joseph Raub and his insurers. As a condition of the settlement with Mr. Raub, the parties executed a Release that included the following language: The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents) represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $190.43 (One Hundred ninety Dollars and Forty-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the verdict, Petitioner’s insurer, Geico General Insurance Company (“Geico”), paid its policy limits of $10,000.00 to Petitioner under his Uninsured and/or Underinsured Motorist Coverage. The documentary evidence did not reflect that payment, but its existence was acknowledged by both parties during the argument, and is accepted as a stipulation. The purpose for the payment was not disclosed. The burden in this case is on Petitioner to prove “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses.” There is no proof that the Geico settlement should be excluded from the amount available to satisfy the Medicaid lien. The $303,757.77 in Medicaid funds paid by AHCA is the maximum amount that may be recovered by AHCA. There was no evidence to suggest that statutory conditions precedent to AHCA asserting its claim or Petitioner bringing this action were not met. The Pre-hearing Stipulation, Respondent’s statement, the stipulation of facts, and the statement of issues of fact that remained to be litigated, indicate clearly that the issue of allocation of the settlement proceeds under sections 409.910(11)(f) and 409.910(17)(b) were the only issues in dispute remaining for disposition. There was 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. However, an issue remains as to the correct amount of “past medical expenses” to be used in establishing the proportional amount of those expenses vís-a-vís the total settlement. No portion of the $303,757.77 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, with all amounts reflected in its Provider Processing System Report being for past medical expenses incurred.
The Issue The issue to be determined is the amount payable under section 409.910, Florida Statutes,1/ in satisfaction of Respondent's Medicaid lien on settlement proceeds received by Petitioner, Victor Hugo Herrera, Sr., from a third party.
Findings Of Fact On July 29, 2014, unbeknownst to Mr. Herrera, an individual (hereinafter Assailant) entered the common area where Mr. Herrera rented an office. The Assailant stalked Mr. Herrera and forced his way into Mr. Herrera’s office. The Assailant attacked Mr. Herrera in his office and shot Mr. Herrera in the leg. As a result of being shot in the leg, Mr. Herrera had his leg medically amputated above the knee, suffered a collapsed lung, and was comatose for nearly two months. As a result of his severe injuries, Mr. Herrera is now permanently disabled, disfigured, and wheelchair-bound, unable to walk. Mr. Herrera’s medical expenses related to his injuries were paid by Medicaid, which provided $271,344.06 in benefits. Mr. Herrera brought a personal injury lawsuit to recover all of his damages associated with his injuries against the owner of the office and security company responsible for providing security (Defendants). The $271,344.06 paid by Medicaid constituted Mr. Herrera’s entire claim for past medical expenses. On December 11, 2015, Mr. Herrera compromised and settled his personal injury action against the Defendants for $925,000. The General Release of Claims memorializing the settlement with the Defendants stated, inter alia: The First Party, the Second Party and their respective counsel acknowledge that this settlement does not fully compensate the First Party for the damages he has allegedly suffered, but as provided herein this settlement shall operate as a full and complete release as to all claims against Second Party, without regard to this settlement only compensating the First Party for a fraction of the total monetary value of his alleged damages. These parties agree that the damages suffered by the First Party have a value in excess of $5,000,000.00, of which $271,344.06 represents First Party’s claim for past medical expenses. Given the facts, circumstances, and nature of the First Party’s alleged injuries and this settlement, $50,198.65 of this settlement has been allocated to the First Party’s claim for past medical expenses and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the First Party’s alleged damages. Further, the parties acknowledge that the First Party may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for those future medical expenses the First Party may incur in the future. However, the parties acknowledge that the First Party, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and the First Party has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for payments made to secure future medical care. During the pendency of Mr. Herrera’s personal injury lawsuit, the Agency for Health Care Administration (AHCA) was notified of the lawsuit and AHCA, through its collections contractor Xerox Recovery Services, asserted a $271,344.06 Medicaid lien against Mr. Herrera’s cause of action and settlement of that action. By letter of January 22, 2016, AHCA was notified by Mr. Herrera’s personal injury attorney of the settlement and provided a copy of the executed release and itemization of Mr. Herrera’s $10,114.38 in litigation costs. This letter explained that Mr. Herrera’s damages had a value in excess of $5,000,000, and the $925,000 settlement represented only an 18.5 percent recovery of Mr. Herrera’s damages. Accordingly, he had recovered only 18.5 percent of his $271,344.06 claim for past medical expenses, or $50,198.65. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $271,344.06 Medicaid lien. AHCA did not respond to Mr. Herrera’s attorney’s letter of January 22, 2016. AHCA has not filed an action to set aside, void, or otherwise dispute Mr. Herrera’s settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. The Medicaid program spent $271,344.06 on behalf of Mr. Herrera, all of which represents expenditures paid for Mr. Herrera’s past medical expenses. No portion of the $271,344.06 paid by the Medicaid program on behalf of Mr. Herrera represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Mr. Herrera and AHCA agree that application of the formula at section 409.910(11)(f) to Mr. Herrera’s $925,000 settlement would require payment to AHCA of the full $271,344.06 Medicaid lien. Petitioner has deposited the full Medicaid lien amount into an interest-bearing account pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Mr. Zebersky, who represented Mr. Herrera in his underlying personal injury action, testified and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney for 27 years and has demonstrated considerable experience in handling plaintiffs’ personal injury and insurance class action claims in South Florida. In rendering his opinion as to the value of Mr. Herrera’s claim, Mr. Zebersky explained that, as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties and he explained his process for making these determinations. Mr. Zebersky was familiar with and gave a detailed explanation of the circumstances giving rise to Mr. Herrera’s claim. In making his valuation determination, Mr. Zebersky reviewed the police report, the State Attorney’s file on the shooting, all of Mr. Herrera’s medical records, and met numerous times with Mr. Herrera and his family. Mr. Zebersky testified that through his representation of Mr. Herrera, review of Mr. Herrera’s file, and based on his training and experience, he had developed the opinion that the value of Mr. Herrera’s damages was $5,000,000. Mr. Zebersky suggested that the $5,000,000 amount was conservative, by testifying that “five million dollars, you know, is probably what the pain and suffering value is especially in Broward County.” In addition to his first-hand experience with Mr. Herrera’s claim, Mr. Zebersky further supported his valuation opinion by explaining that he had “round-tabled” the case with other experienced attorneys and they agreed that the value of Mr. Herrera’s damages was $5,000,000. Further, Mr. Zebersky testified that he had reviewed jury verdicts in developing his opinion and the jury verdicts in Petitioner’s Exhibit 12 were comparable to Mr. Herrera’s case and support the valuation of Mr. Herrera’s damages at $5,000,000. Mr. Zebersky’s testimony was credible and is accepted. Petitioner also presented the testimony of Mr. Barrett, who was accepted as an expert in the valuation of damages. Mr. Barrett has been accepted as an expert in valuation of damages in a number of other Medicaid lien cases before DOAH. Mr. Barrett has been a trial attorney for 40 years, with a primary focus on plaintiff personal injury cases, including medical malpractice, medical products liability, and pharmaceutical products liability. Mr. Barrett stays abreast of jury verdicts and often makes assessments concerning the value of damages suffered by injured parties. After familiarizing himself with Mr. Herrera’s injuries through review of pertinent medical records and Petitioner’s Exhibits, including the police report, pictures of Mr. Herrera, Mr. Herrera’s complaint and Mr. Herrera’s General Release of Claims, Mr. Barrett offered his opinion, based upon his professional training and experience, that “five million was a conservative estimate” for the value of Mr. Herrera’s damages and that Mr. Herrera’s damages were “undoubtedly at least five million dollars.” Mr. Barrett also reviewed the jury verdicts in Petitioner’s Exhibit 12 and opined that those verdicts were comparable and supported his valuation of Mr. Herrera’s damages. Mr. Barrett’s testimony was credible and is accepted. AHCA’s designated expert, Mr. Bruner, was not available for testimony at the final hearing. Instead of asking for a continuance, the parties agreed to take Mr. Bruner’s deposition after the final hearing and then file the transcript with DOAH. Further, during the final hearing, AHCA agreed that Mr. Bruner would not be testifying as to the value of Mr. Herrera’s damages. In accordance with that agreement, Mr. Brunner’s deposition was subsequently taken and his deposition transcript was filed on August 3, 2016. At Mr. Bruner’s deposition, AHCA proffered Mr. Bruner as an expert in evaluation of cases and settlements. Petitioner objected on the grounds that Mr. Bruner lacked experience or expertise in personal injury cases and should not be allowed to testify as an expert. Further, Petitioner objected to the relevance of Mr. Bruner’s testimony based on AHCA’s earlier agreement that he would not be testifying concerning the value of the damages suffered. Counsel for AHCA responded to Petitioner’s objection to the relevance of Mr. Bruner’s testimony by agreeing that AHCA would not be seeking any “expert testimony as to evaluation of damages,” but would only be using Mr. Bruner’s testimony to “evaluate” the jury verdicts in Petitioner’s Exhibit 12. While Mr. Bruner does not have the same level of experience in personal injury claims as the experts offered by Petitioner, Mr. Bruner has sufficient experience to offer an opinion on the jury verdicts set forth in Petitioner’s Exhibit 12, and to that extent, his expertise in the evaluation of cases is accepted. However, because of his lack of recent experience in settling personal injury claims, Mr. Brunner is not accepted as an expert in personal injury settlements.2/ In his deposition testimony, Mr. Bruner criticized the relevance of the 12 verdicts in Petitioner’s Exhibit 12 on the grounds that, while the verdicts involved amputations of legs, there were factual differences in the mechanism of injury. Mr. Bruner further asserted that, to the extent the verdicts in Petitioner’s Exhibit 12 included awards for future medical expenses, they should not be considered because, according to Mr. Bruner’s understanding, Mr. Herrera did not recover any future medical expenses in the settlement. Finally, while the juries in the 12 jury verdicts had determined the value of the damages, Mr. Bruner criticized the verdicts because he asserted that it was possible that the cases may have settled post-verdict for less, or that the injured parties may have received less, due to reductions for comparative negligence. On this last point, it appears that Mr. Bruner confused the issue of the value of the damages with the settlement value of the case. The value of the damages is the estimation of the monetary value a jury would assign to the damages. On the other hand, the settlement value of the case is the amount it settled for with the considerations of liability, causation, the Defendant’s ability to pay, risk of trial, and other limiting factors, which are a calculus in every settlement. Despite Mr. Bruner’s criticisms of the jury verdicts in Petitioner’s Exhibit 12, the undersigned finds those verdicts supportive of the valuation opinions offered by Petitioner’s experts. Further, Petitioner’s experts’ opinions were not primarily reliant on those 12 verdicts, but were rather based upon their knowledge of Mr. Herrera’s injury and their extensive experience in handling cases involving catastrophic injury, including jury trial experience. Mr. Bruner’s testimony did not provide an alternative value of the damages suffered by Petitioner. The value of $5,000,000 for Mr. Herrera’s claim opined by Petitioner’s experts is unrebutted. Considering the valuation of Mr. Herrera’s claim in the amount of $5,000,000, his $925,000 settlement represents only an 18.5 percent recovery of Mr. Herrera’s damages. Applying that same 18.5 percent to the $271,344.06 paid by Medicaid for past medical expenses results in the sum $50,198.65 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
The Issue The issue to be determined in this matter is the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Amora Gonzalez, a Medicaid recipient, following Petitioner’s recovery from a third party.
Findings Of Fact On August 14, 2015, Amora, who was then five years old, was the backseat passenger in a car driven by her mother, Nicalea R. Gonzalez. Amora was secured in a child seat. While Ms. Gonzalez was stopped at a traffic light, a commercial cargo van collided directly into the rear end of her car at a speed of approximately 50 to 60 miles per hour. The impact crumpled the back of Ms. Gonzalez’s vehicle. The collision also severed the seat belt securing Amora’s child seat. Amora was thrown violently forward. Following the accident, Amora was found lying on the back floor of the vehicle, wedged between the front seats. When emergency services personnel arrived, Amora was found lying on the ground exhibiting signs of a severe brain injury. Subsequent CT scans and an MRI revealed that Amora had suffered diffuse axonal injury to her corpus callosum region of the brain, a temporal lobe hematoma, and a subdural hematoma in her right tentorial region. Due to elevated cranial pressure, Amora underwent neurosurgery for placement of an external ventricular drain, and she was placed in a medically induced coma. Amora also underwent a decompressive craniotomy due to continued intracranial pressure. Amora was diagnosed with a neuro cognitive disorder due to traumatic brain injury with a behavioral disorder. As a result of her brain injury, Amora suffers from serious cognitive impairment, executive functioning level disabilities, and behavioral disturbances. Amora’s past medical expenses related to the 2015 automobile accident total $108,725.29. Of that amount, the Agency, through the Medicaid program, paid $108,656.31 for Petitioner’s medical care and services. Petitioner did not make any payments on Amora’s behalf for past medical care or in advance for Amora’s future medical care. Ms. Gonzalez pursued a personal injury claim as Natural Guardian and Legal Guardian of the Property of Amora to recover all of Amora’s damages against the driver/owner of the vehicle that caused the car accident (the “Tortfeasor”). The Tortfeasor maintained an insurance policy with limits of $1,000,000 and had no other collectable assets. Prior to filing the lawsuit, the Tortfeasor tendered the $1,000,000 insurance policy limit in compromise and settlement of Amora’s claim for damages. No evidence or testimony was presented at the final hearing indicating that a specific portion of the $1,000,000 settlement was designated to cover past medical expenses. Neither was there any evidence or testimony offered segregating the $1,000,000 settlement between medical and non-medical expenses. The Agency was not a party to the settlement or settlement agreement. When notified of Ms. Gonzalez’s recovery on behalf of Amora, the Agency asserted a Medicaid lien for $108,656.31, the full amount of its medical expenses paid for Amora’s medical costs and services. This administrative proceeding centers on the amount the Agency should be reimbursed to satisfy its Medicaid lien following Petitioner’s recovery of $1,000,000 from a settlement with a third party. Under section 409.910, the Agency may be repaid for its Medicaid expenditures from any recovery from liable third parties. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of its Medicaid lien ($108,656.31) regardless of the actual value of Petitioner’s damages. Using the section 409.910(11)(f) formula, the Agency subtracted a statutorily recognized attorney fee of $250,000 from $1,000,000 leaving $750,000. One-half of $750,000 is $375,000. Because the $375,000 formula amount exceeds the Medicaid lien, the Agency seeks the full $108,656.31. Petitioner asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s recovery than the amount it calculated under section 409.910(11)(f). Petitioner specifically argues that the Medicaid lien must be reduced pro rata, taking into account the full value of Amora’s injuries which Petitioner calculates as $8,000,000. Otherwise, application of the default statutory formula under section 409.910(11)(f) would permit the Agency to collect more than that portion of the settlement representing compensation for medical expenses. Petitioner maintains that such reimbursement violates the federal Medicaid law’s anti-lien provision, 42 U.S.C. § 1396p(a)(1). Petitioner contends that the Agency’s allocation from Petitioner’s recovery should be reduced to the amount of $13,590.66. To establish the full value of Amora’s injuries, Petitioner presented the testimony of attorneys Paul Catania and Vince Barrett. Mr. Catania represented Petitioner in the underlying personal injury claim and obtained the $1,000,000 settlement for Amora. Mr. Catania explained that prior to finalizing the settlement, he explored the possibility of collecting a verdict in excess of the policy limits. Mr. Catania concluded that not only were the defendants uncollectable, but multiple claimants were going after the same insurance proceeds. Consequently, Mr. Catania believed that it was in his clients’ best interest to settle expeditiously for the tendered insurance policy limits. Mr. Catania also opined on what he considered to be the actual value of Amora’s damages. Mr. Catania heads a plaintiff’s injury firm and has represented plaintiffs in personal injury cases for over 28 years. Mr. Catania has extensive experience handling cases involving automobile accidents, including catastrophic injury claims and traumatic brain injuries to children. Mr. Catania expressed that he routinely evaluates damages suffered by injured parties as part of his practice. He stays current on jury verdicts throughout Florida and the United States. Mr. Catania was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Catania valued Amora’s damages as conservatively between $8,000,000 and $10,000,000. In deriving this figure, Mr. Catania reviewed the neuro psychological report in Amora’s discharge summary, as well as the subsequent neuro psychological updates that were performed on Amora approximately one year later. Mr. Catania noted Amora’s memory problems, inattention, hyperactivity, and behavioral issues. Mr. Catania relayed how these deficits will affect Amora’s ability to learn and be gainfully employed over her lifetime. Amora will need ongoing speech and occupational therapy. Mr. Catania also considered Amora’s past medical expenses, her wage loss or lost wage capacity, and her past and future pain and suffering. Finally, Mr. Catania testified that, in placing a dollar value on Amora’s injuries, he reviewed nine jury verdicts involving catastrophic injuries similar to Amora’s. Based on these sample results, Mr. Catania was comfortable valuing Amora’s damages conservatively in the $8 million to $10 million range given her injuries and her life expectancy. Mr. Catania testified that the $1,000,000 settlement did not fully or fairly compensate Amora for her injuries. Therefore, Mr. Catania urged that a lesser portion of Petitioner’s settlement be allocated to reimburse the Agency instead of the section 409.910(11)(f) formula amount of $108,656.31. Mr. Catania proposed applying a ratio based on the true value of Amora’s injuries ($8,000,000) compared to the amount Petitioner actual recovered ($1,000,000). Using his estimate of $8 million, the settlement represents a 12.5 percent recovery of the total value of all Amora’s damages. In like manner, the amount of medical expenses should also be reduced to 12.5 percent or $13,590.66. Therefore, in Mr. Catania’s professional judgment, $13,590.66 is the portion of Amora’s settlement that represents her compensation for past medical expenses. Mr. Catania testified that no portion of the settlement represents future medical expenses.2/ Mr. Catania expressed that allocating $13,590.66 for Amora’s past medical expenses is “reasonable” and “rational” under the circumstances. Mr. Barrett also testified on behalf of Petitioner. Mr. Barrett is a trial attorney with almost 40 years’ experience and works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. Mr. Barrett has handled many catastrophic injury matters involving catastrophic injuries and traumatic brain injury to children. Mr. Barrett was accepted as an expert in valuation of damages in personal injury cases. Prior to the final hearing, Mr. Barrett had reviewed Amora’s medical records, as well as Petitioner’s exhibits. He also reviewed the sample jury verdicts Petitioner presented at the final hearing as Exhibit 14. Based on his valuation of Amora’s injuries and his professional training and experience, Mr. Barrett expressed that injuries similar to Amora’s would result in jury awards averaging between $8 and $20 million dollars. In light of Amora’s “catastrophic” injuries, Mr. Barrett valued Amora’s injuries as at least $8 million. Mr. Barrett opined that Mr. Catania’s valuation of $8 million to $10 million was appropriate, if conservative. Mr. Barrett supported Mr. Catania’s proposed method of calculating a reduced portion of Petitioner’s $1,000,000 to represent past medical expenses. With injuries valued at $8 million, the $1,000,000 settlement only compensated Amora for 12.5 percent of the total value of her damages. Therefore, because Amora only recovered 12.5 percent of her damages, the most “reasonable and rational” manner to apportion the $1,000,000 settlement is to apply that same percentage to determine Amora’s recovery for past medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces a definitive value of that portion of Petitioner’s $1,000,000 settlement that represents compensation for past medical expenses, i.e., $13,590.66 ($108,725.29 times 12.5 percent). The undersigned finds that the competent substantial evidence in the record establishes, clearly and convincingly, that the full value of Amora’s injuries is $8 million. However, the evidence in the record is not sufficient to prove that a lesser portion of Petitioner’s $1,000,000 settlement recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $108,656.31 from Petitioner’s recovery from a third party to satisfy its Medicaid lien.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (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 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 issue in this proceeding is the amount payable to the Agency for Health Care Administration (AHCA) to satisfy a Medicaid lien under section 409.910, Florida Statutes (2015).1/
Findings Of Fact On November 2, 2012, the Petitioner, then 20 years old, was a restrained passenger in his girlfriend's Ford Mustang when it was t-boned on the passenger side by a Chevy pickup truck operated by Eddie Ellison. On November 2, 2012, immediately prior to the collision, Eddie Ellison, who was driving eastbound on Harney Road in Hillsborough County, Florida, failed to stop at the stop sign at Williams Road. Eddie Ellison was negligent in the operation of his Chevy Truck on November 2, 2012, and caused it to strike the Ford Mustang occupied by the Petitioner. Eddie Ellison's wife, Alberta Ellison, was the co-owner of the Chevy truck. The Petitioner was wearing his seatbelt at the time of the collision, and there was no negligence on the part of the Petitioner that was a proximate cause of any injury suffered by him as a result of the motor vehicle collision. There was no negligence on the part of any person other than Eddie Ellison that was a proximate cause of the motor vehicle collision on November 2, 2012. When the Hillsborough County Fire and Rescue team arrived at the accident scene at approximately 8:20 p.m., the Petitioner was unresponsive and exhibiting decorticate posturing. He was extricated from the vehicle, intubated at the scene and immediately transported via ambulance to Tampa General Hospital (TGH). The Petitioner arrived at TGH by approximately 8:39 p.m., presenting in critical condition. He was admitted to the Intensive Care Unit (ICU), where he remained for 11 days. The Petitioner suffered serious injuries as a result of the collision, including: injuries to the brain; multiple fractures to the skull, face, jaw, and other head injuries; multiple pelvic fractures; pulmonary contusions; acute respiratory failure; dysphagia; and splenic lacerations. On November 3, 2012, Stephen Reintjes, M.D., performed a ventriculostomy, wherein he drilled through the right parietal region of the Petitioner's skull and placed an external ventricular drain (EVD) into the right lateral ventricle to relieve the Petitioner's elevated intracranial pressure. The EVD was removed on November 12, 2012. On November 6, 2012, David Ciesla, M.D., and a TGH resident, performed a percutaneous tracheostomy, wherein he created an opening through the Petitioner's neck and placed a windpipe because of the Petitioner's prolonged respiratory failure. That same day, John Cha, M.D., performed a percutaneous endoscopic gastrostomy (PEG), wherein a feeding tube was placed into the Petitioner's stomach due to the Petitioner's dysphagia. The Petitioner's PEG tube was removed on January 3, 2013. On November 9, 2012, Michael Harrington, M.D., performed an open reduction and internal fixation (ORIF) of the Petitioner's right zygomaticomaxillary fracture, and a closed reduction with maxillomandibular fixation (MMF) of the Petitioner's right zygomatic arch fracture. Essentially, screws and plates were implanted into the Petitioner's right cheekbone and then his jaw was wired shut to facilitate healing. The Petitioner's jaw remained wired shut until December 3, 2012, and the MMF hardware was surgically removed on December 20, 2012. On November 13, 2012, the Petitioner was transferred from the ICU to a surgical trauma unit. Once the Petitioner became medically stable on December 6, 2012, he was transferred to the Tampa General Rehabilitation Center (TGRC). There, the Petitioner received intensive physical and occupational therapy, speech and swallow therapy, psychological services, and 24/7 rehabilitation nursing care. The Petitioner remained at TGRC until January 16, 2013, 75 days after the crash, when he was discharged to his home. Medicaid paid a total of $147,019.61 for the Petitioner's past medical expenses. For nearly two years following his discharge, the Petitioner was unable to perform the tasks of daily living and was completely dependent on his parents and girlfriend for his care and supervision. The Petitioner was toileted, bathed, and dressed by his parents and his girlfriend. The Petitioner could not walk without assistance. All of the Petitioner's meals were prepared for him. The Petitioner would become obsessive over minor things, easily agitated, and frequently combative. The Petitioner had violent outbursts which required all three of his caretakers to physically restrain him. If left unattended at meals, the Petitioner would overeat until he would vomit. The Petitioner gained a life-threatening 100 pounds over this period. Beyond the most basic level, the Petitioner could not use a computer, play video games, or engage in an active social life, much less skateboard or participate in any of the other physical activities he once enjoyed. The Petitioner spent the majority of his time at home with his parents and girlfriend watching television, with occasional supervised trips outside the home. On June 12, 2013, the Petitioner filed suit against Eddie Ellison and Alberta Ellison in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Case No: 13-CA-008277 ("the underlying lawsuit"), seeking to recover damages in excess of $15,000. In the underlying lawsuit, the Petitioner seeks to recover damages for the following: medical expenses incurred in the past; medical expenses to be incurred in the future; lost earnings incurred in the past; loss of earning capacity in the future; property damage incurred in the past; pain, suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect, and loss of capacity for the enjoyment of life sustained in the past; and pain, suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect, and loss of capacity for the enjoyment of life to be sustained in the future. The Petitioner also seeks to recover costs incurred by the Petitioner in the underlying lawsuit, pre-judgment interest at the statutory rate for actual, out-of-pocket pecuniary losses from the date of the loss, and attorney's fees to the extent allowed by law. In the underlying lawsuit, the Petitioner sued his uninsured motorist carrier, 21st Century Centennial Insurance Company (21st Century), seeking to recover $10,000 in uninsured motorist benefits owed to the Petitioner under an automobile insurance policy paid for by the Petitioner's parents, Richard and Linda Willoughby. The insurer denied coverage and refused to pay the uninsured motorist benefits. In the underlying lawsuit, the Petitioner also sued 21st Century for violation of section 624.155, Florida Statutes, seeking to recover the total amount of the Petitioner's damages from 21st Century as provided in section 627.727(10), Florida Statutes. The Petitioner also sought to recover from 21st Century applicable pre-judgment interest, attorneys' fees pursuant to sections 624.155, 627.727(10), and 627.428 and taxable costs. On February 13, 2015, the Petitioner agreed to settle his claims against 21st Century for $4,000,000. The Petitioner received the settlement proceeds from 21st Century on March 16, 2015. On March 20, 2015, the Petitioner and 21st Century filed a joint stipulation to dismiss the Petitioner’s claims against 21st Century with prejudice. As of March 20, 2015, the Petitioner had incurred a total of $50,375.32 in taxable costs, which the Petitioner repaid to the Petitioner's counsel out of the 21st Century settlement proceeds. On May 14, 2015, a total of $147,844.16 was transferred into an interest-bearing trust account for the benefit of AHCA pending an administrative determination of the agency's right to benefits under section 409.910. The parties to this proceeding stipulated that, of the $4 million paid by 21st Century, $3.99 million was “bad faith damages,” paid to settle the Petitioner's claim for damages under section 627.727(10), on account of 21st Century's wrongful failure to pay the Petitioner's uninsured motorist claim and other violations of section 624.155. The settlement agreement between the Petitioner and 21st Century does not specifically attribute any of the $4 million settlement amount to “bad faith” and states that “all sums set forth herein constitute damages on account of personal injuries or sickness.” The settlement agreement further states as follows: The parties agree and acknowledge that this agreement is a settlement of claims which are contested and disputed. Any payments are not to be construed as an admission of liability on the part of 21st Century, which expressly denies any liability for this action. The Petitioner also received a total of $20,000 from Esurance Property and Casualty Insurance Company, reflecting the $10,000 limit of bodily injury liability insurance and $10,000 limit of uninsured motorist coverage under the automobile insurance policy that insured the driver of the Ford Mustang, Kayliegh Lewis, at the time of the crash. The Petitioner's claims against Eddie Ellison and Alberta S. Ellison remain pending in the underlying lawsuit. As of the July 30, 2015, filing of the Pre-hearing Stipulation, the Ellisons' insurer has only offered the $100,000 limit of bodily injury liability insurance to settle all of the Petitioner's claims against the Ellisons. The $4,020,000 paid to the Petitioner does not fully compensate him for the full monetary value of all of his damages. The full monetary value of all of the Petitioner's damages is at least $10 million. At the time of the settlement with 21st Century, the full monetary value of all of the Petitioner's damages was at least $10 million. At the time of the settlement with 21st Century, the Petitioner had suffered not less than $23,800 in lost wages. At the time of the settlement with 21st Century, the Petitioner's work life expectancy through age 67 was 45 years. At the time of the settlement with 21st Century, the Petitioner's loss of future earning capacity was within the range of $794,135.92 and $2,093,950.12. At the time of the settlement with 21st Century, the Petitioner's future medical expenses were projected to exceed $5 million. At the time of the settlement with 21st Century, the Petitioner's past non-economic damages exceeded $1 million. At the time of the settlement with 21st Century, the Petitioner's life expectancy was 59.7 years. At the time of the settlement with 21st Century, the Petitioner's future non-economic damages were within the range of $5 million to $10 million. Although the parties to this proceeding stipulated that the Petitioner has recovered less than $147,019.61 as payment for past medical expenses, the settlement agreement between the Petitioner and 21st Century states that “all sums set forth herein constitute damages on account of personal injuries or sickness.” The Petitioner is no longer eligible for Medicaid. Medicaid has not paid or committed to pay any funds for the Petitioner's future medical care.
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration ("AHCA"), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On or about September 17, 2007, Alicia M. Fallon ("Alicia"), then 17 years old, drove to the mall to meet friends and became involved in an impromptu street race. Alicia lost control of the vehicle she was driving, crossed the median into oncoming traffic, and was involved in a motor vehicle crash. Her injuries consisted of traumatic brain injury ("TBI") with moderate hydrocephalus, right subdural hemorrhage, left pubic ramus fracture, pulmonary contusions (bilateral), and a clavicle fracture. Since the time of her accident, she has undergone various surgical procedures including the insertion of a gastrostomy tube, bilateral frontoparietal craniotomies, insertion of a ventriculoperitoneal shunt, and bifrontal cranioplasties. As a result of the accident, in addition to the physical injuries described above, Alicia suffered major depressive disorder, and Post-Traumatic Stress Disorder injuries. She is confined to a wheelchair for mobility, has no bowel or bladder control, and suffers from cognitive dysfunction. Alicia is totally dependent on others for activities of daily living and must be supervised 24 hours a day, every day of the week. A lawsuit was brought against the driver of the other car in the race, as well as the driver's mother, the owner of the vehicle. It could not be established that the tortfeasor driver hit Alicia's car in the race, or that he cut her off. The theory of liability was only that because Alicia and the other driver in the race were racing together, that the tortfeasor was at least partially responsible for what happened. It was viewed that there was no liability on the part of the driver of the third vehicle. The tortfeasor only had $100,000 in insurance policy limits, but the insurance company did not timely offer payment. The tortfeasor had no pursuable assets. The lawsuit was bifurcated and the issue of liability alone was tried. The jury determined that the tortfeasor driver was 40 percent liable for Alicia's damages. Because of the risk of a bad faith judgment, the insurance company for the tortfeasor settled for the gross sum of $2.5 million. AHCA, through its Medicaid program, provided medical assistance to Ms. Fallon in the amount of $608,795.49. AHCA was properly notified of the lawsuit against the tortfeasors, and after settlement, asserted a lien for the full amount it paid, $608,795.49, against the settlement proceeds. AHCA did not "institute, intervene in, or join in" the medical malpractice action to enforce its rights as provided in section 409.910(11), or participate in any aspect of Alicia's claim against the tortfeasors or their insurance company. Application of the formula at section 409.910(11)(f), to the settlement amount requires payment to AHCA in the amount of $608,795.49. Another provider, Optum, provided $592,554.18 in past medical expense benefits on behalf of Ms. Fallon. However, that amount was reduced through negotiation to a lien in the amount of $22,220.78.1/ Petitioner deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner, Donna Fallon, the mother of Alicia, testified regarding the care that was and is continuing to be provided to Alicia after the accident. She is a single parent, and with only the assistance of an aide during the day, she is responsible for Alicia's care. Alicia must be fed, changed, bathed, and turned every few hours to avoid bed sores. Alicia can communicate minimally by using an electronic device and by making noises that are usually only discernable by her mother. Although she needs ongoing physical therapy and rehabilitation services, the family cannot afford this level of care. Petitioner presented the testimony of Sean Domnick, Esquire, a Florida attorney with 30 years' experience in personal injury law, including catastrophic injury and death cases, medical malpractice, and brain injury cases. Mr. Domnick is board certified in Civil Trial by the Florida Bar. He represented Alicia and her mother in the litigation against the tortfeasors and their insurance company. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He was accepted, without objection, as an expert in valuation of damages. Mr. Domnick testified that Alicia's injuries are as catastrophic as he has handled. Alicia has no strength, suffers contractions and spasms, and is in constant pain. Alicia has impaired speech, limited gross and fine motor skills, is unable to transfer, walk, or use a wheelchair independently. Alicia is unable to self-feed. All of her food must be cooked and cut up for her. Alicia is unable to perform self-hygiene and has no ability to help herself in an emergency and therefore requires constant monitoring. As part of his work-up of the case, Mr. Domnick had a life care plan prepared by Mary Salerno, a rehabilitation expert, which exceeded $15 million on the low side, and $18 million on the high side, in future medical expenses alone for Alicia's care. Mr. Domnick testified that the conservative full value of Alicia's damages was $45 million. That figure included $30 million for Alicia's pain and suffering, mental anguish and loss of quality of life, disability, and disfigurement, extrapolated for her life expectancy, plus the low end of economic damages of $15 million. Petitioner also presented the testimony of James Nosich, Esquire, a lawyer who has practiced primarily personal injury defense for 29 years. Mr. Nosich and his firm specialize in defending serious and catastrophic personal injury/medical malpractice cases throughout Florida. As part of his practice, Mr. Nosich has reviewed more than 1,000 cases of personal injury/medical malpractice cases and formally reported the potential verdict and full value to insurance companies that retained him to defend their insureds. Mr. Nosich has worked closely with economists and life care planners to identify the relevant damages of those catastrophically injured in his representation of his clients. Mr. Nosich has also tried over 30 cases in Broward County in which a plaintiff suffered catastrophic injuries similar to those of Alicia. Mr. Nosich was tendered and accepted, without objection, as an expert in the evaluation of damages in catastrophic injury cases. In formulating his expert opinion with regard to this case, Mr. Nosich reviewed: Alicia's medical records and expenses; her life care plan prepared by Ms. Salerno; and the economist's report. He took into consideration the reputation of Alicia's lawyer (Mr. Domnick); and the venue in which the case would be tried. Mr. Nosich opined that Broward County is known for liberal juries who tend to award high amounts in catastrophic cases. He also testified that Mr. Domnick is known as a lawyer with extreme capability and who has an excellent rapport with juries and the ability to get higher dollar verdicts. Mr. Nosich agreed with Mr. Domnick that the estimated $45 million figure for the total value of Alicia's case was conservative. He agreed with Ms. Salerno's estimated economic damages of $15 million and a doubling of that amount ($30 million) for Alicia's noneconomic damages. Mr. Nosich credibly explained that the $45 million total value was very conservative in his opinion based on Alicia's very high past medical bills and the fact that she will never be able to work. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2.5 million does not fully compensate Alicia for the full value of her damages. As testified to by Mr. Domnick, Alicia's recovery represents only 5.55 percent of the total value of her claim. However, in applying a ratio to reduce the Medicaid lien amount owed to AHCA, both experts erroneously subtracted attorney's fees and costs of $1.1 million from Alicia's $2.5 million settlement to come up with a ratio of 3 percent to be applied to reduce AHCA's lien.2/ Further, in determining the past medical expenses recovered, Petitioner's experts also failed to include the Optum past medical expenses in the amount of $592,554.18. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner's evidence was unrebutted. However, through cross-examination, AHCA properly contested the methodology used to calculate the allocation to past medical expenses. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that 5.55 percent is the appropriate pro rata share of Alicia's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $608,795.49, plus the Optum past medicals in the amount of $592,554.18, which equals $1,201,349.67. Applying the 5.55 percent pro rata ratio to this total equals $66,674.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue The issue is whether, pursuant to section 409.910(17)(b), Florida Statutes (2015), Respondent's recovery of medical assistance expenditures from Petitioner's settlement proceeds must be reduced from the amount calculated by the statutory formula contained in section 409.910(11)(f) (Statutory Formula).
Findings Of Fact On March 14, 2015, Petitioner lost control of his motorcycle while on the premises of a Chevron station in Cutler Bay, Florida. Skidding on a greasy or oily surface, the motorcycle fell onto Petitioner, badly injuring a lower extremity. Petitioner was transported to a hospital where he was diagnosed with fractures of the ankle, tibia, and fibula. He underwent surgery to repair the fractures. Released from the hospital after several days, Petitioner was seen by his surgeon on an outpatient basis during numerous office visits from March 19 through September 17, 2015. In July 2015, Petitioner commenced a tort action against the operator of the gas station. In February 2016, Petitioner settled the case for $192,500. The settlement agreement makes no allocation among various items of damages. Applying the Statutory Formula to the $192,500 settlement, 25 percent is reserved for attorneys' fees, leaving a net of $144,375, which is divided equally between Respondent and Petitioner. This would allow Respondent to lien a maximum of $72,187 or, in this case, the actual medical assistance expenditures of $12,643. Petitioner's expert witness, a personal injury attorney, established that a jury likely would have found Petitioner about 50-70 percent liable, ultimately projecting a halving of the damages due to comparative negligence. The witness also established that there was a "high likelihood" that a jury might have returned a zero verdict due to the resistance of some juries to award damages in any motorcycle case. The expert witness established that the past medical expenses totaled $25,822. This figure consists of $13,179 billed by the surgeon's orthopedic group, which did not accept Medicaid, and Respondent's medical assistance payments of $12,643, which equals the amount of the Medicaid lien. The expert witness testified to a loss of earning capacity of $80,000 to $140,000. The $80,000 figure is credited due to the lack of evidence of the effect of Petitioner's injuries on his ability to perform the duties of his job as an air-conditioning technician, as well as the absence of future medical expenses in this case. The expert witness testified to $23,000 in lost wages, which is credited. Petitioner's economic damages thus totaled about $138,000. The expert testified that noneconomic damages would amount to double or triple the amount of economic damages. Again, absent affirmative evidence of pain and suffering, Petitioner has established pain and suffering damages in an amount no greater than double the amount of economic damages, or about $276,000 in noneconomic damages. The total of economic and noneconomic damages would thus approximate $414,000. Discounting this projection to $192,500 was reasonable. For example, a finding of 50 percent comparative negligence would reduce the award to $207,000, and the risk of a zero verdict could be valued at another reduction of about $25,000. Alternatively, a finding of 70 percent comparative negligence would reduce the award to about $124,000. Petitioner's attorney was entitled to a contingent attorneys' fee. Under Florida Rules of Professional Conduct Rule 4-1.5(4)(B)(i)b.1., maximum reasonable attorneys' fees under these circumstances would be 40 percent, leaving a net recovery of $115,500. There would be no settlement proceeds whatsoever without the prosecution of the case by Petitioner's counsel, so the settlement proceeds must first be reduced by the 40-percent contingency fee, leaving a remainder of $115,500, in determining Respondent's recovery amount. The fraction of $115,500 divided by $414,000 is the ratio of the settlement to the full value of the case (Full Value Ratio). The portion of the settlement proceeds representing a specific item of damages may be determined by multiplying the item of damages by this ratio: for the portion of the net settlement proceeds allocable to past medical expenses, $25,000 is multiplied by 115,500 and divided by 414,000 to yield $6975. But Respondent's lien does not extend to all of the past medical expenses. Respondent expended medical assistance for a little less than half of these medical expenses. The rest were not paid by Respondent, and Respondent has no more interest in this portion of this damages item than it has in Petitioner's pain and suffering, lost wages, or loss of future earning capacity. This necessitates a further reduction of the $6975 by multiplying it by a second ratio consisting of Respondent's medical assistance expenditures of $12,643 divided by the total medical expenses of about $25,822. This yields $3415, which, as discussed in the Conclusions of Law, represents the maximum amount of the settlement proceeds subject to Respondent's Medicaid lien without violating the Anti-Lien Statute.
