The Issue The amount to be paid by Petitioners, Pedro Garcia, a minor by and through his parents and natural guardians, Jesus Garcia and Norma Cisneros ("Petitioners") to Respondent, Agency for Health Care Administration ("AHCA"), out of the settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact Pedro Garcia ("Pedro") was born on October 30, 2014. When he was two months old, he presented to the emergency room ("ER") with vomiting and excessive crying. The doctors failed to diagnose an intestinal blockage and discharged Pedro home. Pedro was taken again to the ER in dire distress. He was airlifted to a pediatric hospital where emergency surgery was performed to remove 90 percent of his intestine. Pedro now suffers from the effects of having 90 percent of his intestine removed, including: nutritional deficiencies, diarrhea, dehydration, and abdominal distress. He cannot play with exertion and his activities are limited. Pedro will suffer the effects of his injury for the remainder of his life. A portion of Pedro's medical care related to the injury was paid by AHCA through the Medicaid program and Medicaid, through AHCA, provided $71,230.43 in benefits. Pedro's parents and natural guardians, Jesus Garcia and Norma Cisneros, brought a medical malpractice action against the medical providers and staff responsible for Pedro's care ("Defendants") to recover all of Pedro's damages, as well as their individual damages associated with their son's injury. Because of uncertainty on issues of liability and only a $250,000 insurance policy on the most culpable defendant, Pedro's medical malpractice action against the Defendants was settled for a confidential unallocated lump sum of $2,000,000. During the pendency of Pedro's medical malpractice action, AHCA was notified of the action and AHCA asserted a $71,230.43 Medicaid lien against Pedro's cause of action and settlement of that action. The Medicaid program through AHCA, spent $71,230.43 on behalf of Pedro, all of which represents expenditures paid for Pedro's past medical expenses. Another non-AHCA Medicaid provider, Integral Quality Care, provided $223,089.26 in past medical expenses on behalf of Pedro. Another non-AHCA Medicaid provider, Department of Health, Child's Medical Services, provided $168,161.12 in past medical expenses on behalf of Pedro. Accordingly, a total of $462,480.81 was paid for Pedro's past medical expenses. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Pedro's action against the Defendants. By letter, AHCA was notified of Pedro's settlement. AHCA has not filed a motion to set-aside, void, or otherwise dispute Pedro's settlement. Application of the formula in section 409.910(11)(f) to Pedro's $2,000,000 settlement requires payment to AHCA of the full $71,230.43 Medicaid lien. At the hearing, Petitioners presented the expert testimony of attorney Edward H. Zebersky, who represented Pedro throughout the underlying medical malpractice action against the Defendants. Without objection, Mr. Zebersky was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney since 1991. Since 1992, Mr. Zebersky has been a plaintiff's trial lawyer, with a substantial portion of his practice devoted to personal injury cases, including medical malpractice matters. He is a partner with the law firm of Zebersky Payne Shaw Lewenz, LLP and AV rated by Martindale-Hubbell. Mr. Zebersky is a member of numerous trial attorney associations and has held leadership positions in several associations, including president of the Florida Justice Association in 2006 and serving on the Board of Governors of the American Association for Justice for the past ten years. Mr. Zebersky handles jury trials. He has secured multiple eight-figure verdicts and several seven-figure verdicts, and he stays abreast of jury verdicts on other cases in his area. As a routine part of his practice, Mr. Zebersky makes assessments concerning the value of damages suffered by his clients. Mr. Zebersky was accepted as an expert in a Medicaid lien dispute at DOAH in the case of Herrera v. Agency for Health Care Administration, Case No. 16-1270MTR, 2016 Fla. Div. Admin. Hear. LEXIS 493 (Fla. DOAH Oct. 11, 2016). Mr. Zebersky was familiar with the circumstances surrounding Pedro's injury and medical malpractice claims and gave a detailed explanation of them. Mr. Zebersky reviewed Pedro's life care plan, which details Pedro's future medical needs, and an economist report, which calculated the present value of Pedro's future medical care and present value of Pedro's lost future earnings. The economist placed the present value of Pedro's future medical expenses and lost future earnings at approximately $9,500,000. According to Mr. Zebersky, past medical expenses would also be added to arrive at the full value of Pedro's economic damages. Mr. Zebersky testified that in addition to economic damages, a jury would also be asked to assign a value to past and future noneconomic damages (i.e., pain and suffering and loss of enjoyment of life). Mr. Zebersky testified that Pedro's claim for noneconomic damages would have an exceedingly high number, which as a "rule of thumb" is three times the value of his economic damages. Mr. Zebersky persuasively and credibly testified that the total value of all of Pedro's damages would be in excess of $20,000,000, and that valuing Pedro's damages at $15,000,000 is a very conservative and low valuation of his damages. Mr. Zebersky persuasively and credibly testified that the $2,000,000 settlement did not fully compensate Pedro for the full value of his damages. Mr. Zebersky testified that based on a conservative value of all of Pedro's damages of $15,000,000, the $2,000,000 settlement represents a recovery of 13.33 percent of the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of damages. Mr. Zebersky's testimony regarding the total value of Pedro's damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2,000,000 does not fully compensate Pedro for the full value of his damages. Mr. Zebersky further testified that because Pedro only recovered in the settlement 13.33 percent of the full value of his damages, he only recovered 13.33 percent of AHCA's $71,230.43 Medicaid lien, or $9,495.01. Mr. Zebersky testified that it would be reasonable to allocate $9,495.01 of the settlement to past medical expenses paid by AHCA through the Medicaid program. Following the settlement, Mr. Zebersky negotiated the non-AHCA Integral Quality Care Medicaid lien from $233,089.26 to $18,737.00, and the non-AHCA Department of Health, Child's Medical Services lien from $168,161.12 to $22,415. On cross-examination, Mr. Zebersky acknowledged that the $233,089.26 and $168,161.12 from Integral Quality Care and Department of Health, Child's Medical Services are part of Pedro's claim for past medical expenses. However, Mr. Zebersky failed to include these past medical expenses in applying the ratio to reduce the Medicaid lien amount owed to AHCA. AHCA successfully contested the methodology used to calculate the allocation to past medical expenses based on Mr. Zebersky's failure to include these past medical expenses in applying the ratio. Accordingly, Petitioners proved by a preponderance of the evidence that 13.33 percent is the appropriate pro rata share of Pedro'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 $71,230.43, and the past medical expenses in the amounts of $233,089.26 and $168,161.12, which equals $462,480.81. Accordingly, following Mr. Zebersky's methodology and applying the $15,000,000 valuation to the proper amount of total past medical expenses of $462,480.81, the settlement portion properly allocable to Pedro's past medical expenses to satisfy AHCA's lien is $61,648.69 ($462,480.81 x 13.33 percent = $61,648.69).
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA), as reimbursement for medical expenses paid on behalf of Petitioner Kanesha Harley (Ms. Harley), pursuant to section 409.910, Florida Statutes (2019), from settlement proceeds Petitioner received from third parties.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. In October 2013, Ms. Harley, then 19 years old, was struck by a bullet while on the property of liable third parties (the Underlying Defendants). Ms. Harley testified that the shooting occurred when she was at a restaurant, which was connected to another business, with friends. While outside the restaurant to retrieve her wallet, two persons unknown to Ms. Harley began shooting at each other in the parking lot area. Ms. Harley initially avoided these shots, but after an employee of the restaurant announced that it was ok to go back outside, she was struck by a bullet. Ms. Harley received medical care as a result of her injuries, which included a diagnosis of being an incomplete paraplegic (meaning, among other things, that Ms. Harley is unable to walk and cannot feel the bottom of her legs). Ms. Harley underwent a prolonged hospitalization, is currently unable to work, and expects a lifetime of partial paralysis. Prior to her injury, Ms. Harley had completed the tenth grade, and had a part-time job earning minimum wage. Since her injury, Ms. Harley has been unable to work. She is partially paralyzed from the waist down, and relies on friends and family members for assistance. Ms. Harley’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $123,931.54. Another Medicaid entity, Equian, paid Ms. Harley $15,648.50 on her behalf as well. The undersigned finds that Ms. Harley’s past medical expenses total $139,580.04 (and notes that this figure is more than the lien amount claimed in the Petition). Petitioner filed a lawsuit against the Underlying Defendants, alleging negligent security and premises liability. During the pendency of Petitioner’s lawsuit, AHCA’s authorized agent, in a letter dated January 26, 2020, stated that “our office calculated Medicaid’s current and final lien in the amount of $123,931.54. Accordingly, payment of $123,931.54 will satisfy our lien.” More than seven years after Ms. Harley’s injury, Petitioner and the Underlying Defendants settled the lawsuit for a total of $370,000.00.1 A “Letter of Understanding” authored by Petitioner’s counsel, that he provided to the Underlying Defendants, states, in pertinent part: A[s] you know, we represent KANESHA HARLEY, in regards to the above referenced accident and this letter of understanding is to outline that the Plaintiff has allocated 5% of the total settlement of $370,000 or $18,500 of the total settlement amount for Kanesha Harley’s past medical bills, for any and all purposes, including Florida Medicaid liens and other liens. The basis for this reduction is simple equity. Ms. Harley, then 19, was diagnosed as an incomplete paraplegic after the subject incident in October of 2013. The Plaintiff filed suit against [the Underlying Defendants] and was able to obtain a total settlement of $370,000.00, which took into account the serious liability issues under Florida premises liability, negligent security standards. These facts, along with difficulty in prosecuting the case under COVID-19, other technical difficulties, the fact that the case is almost 8 years old, and the unknown affect [sic] COVID-19 may have on a jury is potentially fatal to Plaintiff’s cause of action, made this a fair and reasonable settlement, and makes this allocation necessary. In addition to the “Letter of Understanding,” Petitioner introduced two documents entitled draft closing statements, that reflect the total amount of the settlement, the amount of attorney’s fees ($148,000) and costs 1 Petitioner’s settlement with the Underlying Defendants requires that the identities of the Underlying Defendants remain confidential. Accordingly, the undersigned has not revealed their identities in this Final Order, and notes that Exhibits P1, P5, P6a, P6b, and P7—all of which reference the identities of the Underlying Defendants—shall remain confidential. ($21,434.33) incurred by Petitioner, the amount of a litigation loan incurred by Petitioner, and the amount of the Medicaid lien (in one copy, it contains the reduced amount requested by Petitioner, in the other, it contains no reduction of the lien). Other than these documents, Petitioner introduced no evidence as to how the parties allocated the settlement of the litigation with the Underlying Defendants. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioner’s lawsuit against the Underlying Defendants. Application of the formula set forth in section 409.910(11)(f) to Petitioner’s $370,000.00 settlement authorizes payment to AHCA of $128,032.84. The undersigned arrives at this calculation as follows: Settlement Amount $370,000.00 Attorneys’ Fees (capped at 25% pursuant to section 409.910(11)(f)3. $92,500.00 Taxable Costs $21,434.44 Remaining Recovery $256,065.67 Amount Recoverable (pursuant to section 409.910(11)(f)1., “one-half of the remaining recovery shall be paid to [AHCA] up to the total amount of medical assistance provided by Medicaid.”) $128.032.84 (this amount is one-half of the remaining recovery, which is lower than the Medicaid lien or total past medical expenses) Expert Witness Testimony of Mr. Holland Petitioner presented the testimony of Mr. Holland, a trial attorney who has handled in excess of 1,000 personal injury cases in the county, circuit, and federal courts of Florida. Mr. Holland has conducted numerous jury trials and has also resolved cases in mediation and arbitration. Petitioner moved, and the undersigned accepted, Mr. Holland as an expert in personal injury litigation. AHCA did not oppose Mr. Holland’s designation as an expert. Mr. Holland testified that he is familiar with the type of injury that Ms. Harley suffered. He is also familiar with the legal standards for premises liability and negligent security, and stated that he was familiar with judgments that include monetary awards “due to the actions of others.” Mr. Holland stated that there were various liability issues in Petitioner’s lawsuit. He testified that it is difficult to prove that a landowner knew of a dangerous condition, or that a landowner could anticipate a shooting, which is an intentional act. Mr. Holland opined that Petitioner had numerous challenges in holding either of the Underlying Defendants liable because it would be difficult to convince a jury that the cause of her injury was foreseeable. Mr. Holland opined, based on his experience, that an estimate of the overall value of the damages to Petitioner was in the $15 to $20 million range. Neither Petitioner nor Mr. Holland offered any evidence of similar jury verdicts or settlements to substantiate this opinion; rather, Mr. Holland’s opinion was based on his experience to arrive at this estimate. Mr. Holland further opined that allocating 5% of the settlement— which is $18,500.00—to Petitioner’s past medical expenses was a “reasonable allocation.” Mr. Holland’s opinion on the allocation of 5% of the settlement of Petitioner’s lawsuit to her past medical expenses was not based on the typical calculation of comparing the value of the damages in the lawsuit (which are often based on comparison to actual, similar verdicts or settlements) to the actual recovery in the settlement, and deriving a ratio or percentage from that calculation that could be used to reduce the amount of the Medicaid lien (the pro rata allocation methodology).2 In fact, Petitioner’s request to reduce the Medicaid lien, which Mr. Holland supported, is not based on the pro rata allocation methodology, but rather, based on Petitioner’s “Letter of Understanding,” which designated 2 See, e.g., Eady v. Ag. for Health Care Admin., 279 So. 3d 1249 (Fla. 1st DCA 2019) (explaining the pro rata allocation methodology). 5% of the entire settlement proceeds as an appropriate amount to satisfy the Medicaid lien, based on “simple equity.” On cross-examination, Mr. Holland stated that his opinion of $15 to $20 million in damages was not broken down by any specific category, but stated that Petitioner’s loss of wages over the course of her life, given her relatively long-life expectancy, as well as pain and suffering, loss of enjoyment of life, and possible loss of consortium claims, led him to his opinion. He further stated that based on his experience with this type of lawsuit, but where liability is clear, he would not recommend that a client accept less than $10 million in settlement. When asked on cross-examination specifically concerning the allocation of 5% of the settlement of Petitioner’s lawsuit to her past medical expenses, Mr. Holland stated that he had no personal knowledge of the parties’ decision to designate this percentage, but relied on the “Letter of Understanding” authored by Petitioner’s counsel, which he admitted relied on “equity.” However, Mr. Holland additionally opined that he was comfortable allocating 95% of the settlement to Petitioner’s noneconomic damages, as well as her work life expectancy earning minimum wage, although he admitted that he had not computed any of these figures. Ultimate Findings of Fact The undersigned finds that the opinion of Mr. Holland concerning the value of Petitioner’s lawsuit, which, after cross-examination, he admitted was $10 million, was not based upon sufficient facts or data, such as a comparison to actual similar verdicts or settlements of these types of lawsuit, but rather his personal estimate based on his experience. See § 90.702(1), Fla. Stat. (requiring that an expert, inter alia, base his or her opinion “upon sufficient facts or data.”). Further, Mr. Holland did not break down the basis for his valuation of the lawsuit into specific categories of damages and expenses (i.e., future medical expenses, pain and suffering, lost earning capacity, etc.), but opined that he considered many of these categories in arriving at his valuation of Petitioner’s lawsuit. Although Mr. Holland credibly testified concerning his considerable experience as a personal injury attorney, the undersigned cannot credit his opinion concerning the valuation of Petitioner’s damages. However, Mr. Holland’s opinion concerning the value of Petitioner’s lawsuit appears irrelevant to Petitioner’s theory of recovery. The undersigned finds that Petitioner did not, in any way, attempt to establish that the undersigned should reduce her Medicaid lien pursuant to the pro rata allocation methodology, which has been approved in numerous proceedings before the Division of Administrative Hearings (DOAH), as well as Florida’s appellate courts, as a reasonable, fair, and accurate methodology that is consistent with Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), for allocating the settlement proceeds when the underlying third-party action is settled for less than the full value of the case. Rather, Petitioner asks the undersigned to approve a 5% allocation of her entire settlement proceeds to satisfy her Medicaid lien, based on a “Letter of Understanding” between Petitioner and the Underlying Defendants, that states “[t]he basis for this reduction is simple equity[,]” and Mr. Holland’s testimony that relied on this “Letter of Understanding,” as well as his unsupported calculation that he would allocate 95% of the settlement proceeds to Petitioner’s noneconomic damages and lost earning capacity. Section 409.910(1) explicitly abrogates the application of principles of equity in this proceeding; further, DOAH is not a “court of equity.” The undersigned finds no basis, in fact or law, for such a reduction. The undersigned finds that Petitioner failed to establish, by either clear and convincing evidence, or a preponderance of the evidence, support for Petitioner’s allocation of 5% of the settlement proceeds ($18,500.00) to Petitioner’s past medical expenses as a basis for reducing the Medicaid lien. Accordingly, AHCA is entitled to payment of $128.032.84, pursuant to the formula set forth in section 409.910(11)(f).
The Issue The issue to be decided in this proceeding is the amount to be paid to Respondent, the Agency for Health Care Administration (Agency or AHCA), from the proceeds of a personal injury settlement received by Sergio Museguez to reimburse Medicaid for expenditures made on his behalf.
Findings Of Fact Sergio Museguez was catastrophically injured as a result of being struck by lightning on June 15, 2012. Mr. Museguez has been diagnosed with a traumatic brain injury and suffers from cognitive dysfunction, including, but not limited to, significant problems with memory, orientation, initiating and executive functions. Mr. Museguez is also incontinent as to bowel and bladder. The above-described conditions are permanent and will never resolve. Mr. Museguez’s employer, MG3 Developer Group (MG3), failed to carry workers’ compensation insurance or any other effective insurance coverage that would cover the injuries he sustained on June 2012, or that would cover his wife Leidi Hernandez’s loss of consortium suffered as a result of the accident. An action was filed in Miami-Dade County Circuit Court, Case No. 14-025861 CA 06, against MG3 for damages related to Mr. Museguez’s injuries and for Ms. Hernandez’s loss of consortium. MG3’s insurance carrier denied coverage and refused to defend the company because its insurance policy excluded coverage for employees. The Museguezes and MG3 entered into a settlement agreement in which they agreed to a judgment against MG3 in the amount of $5,000,000, but which included a payment schedule through which $1,000,000 would actually be paid to Petitioner by MG3. Only that $1,000,000 of the judgment has been or will be recovered by Mr. Museguez against MG3, because of MG3’s lack of available insurance coverage, and the lack of anticipated avenues of recovery pursuant to the terms of the settlement, dated June 16, 2016. The settlement agreement provided that the parties “acknowledge and agree that the One Million ($1,000,000) Dollar payment set forth above only represents twenty percent of the total injury/damage value of Museguez’s claim, and this fails to fully compensate Museguez for the injuries sustained in the incident at issue. Therefore, Museguez is specifically recovering only twenty percent (20%) of their damages for past medical expenses.” Ms. Hernandez waived her right to an apportionment of the recovery for her consortium claim in light of her husband’s condition and his need for extensive medical care and treatment for the rest of his life. She opted for any amount that would have been apportioned to her claim instead be apportioned directly to her husband. Mr. Museguez’s condition and need for continuing care is not in dispute. A life care plan identifying the goods and services necessary for Mr. Museguez was prepared by Lawrence S. Forman, an expert in rehabilitation life care planning. Mr. Forman has concluded that Mr. Museguez will require 24-hour attendant medical care for the rest of his life, in addition to a significant amount of future costs associated with his medical condition as a result of his injury. Mr. Forman’s opinions are outlined in his report dated April 8, 2016. Frederick A. Raffa, an economist, reviewed the life care plan for Mr. Museguez and determined that the present value of the anticipated medical expenses for Mr. Museguez is $7,943,963. He testified, unrebutted, that Mr. Museguez’s total losses were $8,424,028. In short, Mr. Museguez’s needs far outweigh the recovery received in this case. According to the United States Life Tables, 2012, Mr. Museguez is expected to live another 24.8 years. Todd Michaels is an attorney who was appointed as guardian ad litem for Mr. Museguez in the personal injury case. Mr. Michaels testified that he was appointed for the purpose of determining whether the settlement of Mr. Museguez’s claim was fair to him. Mr. Michaels concluded that the settlement was the product of an arm’s-length transaction and was a fair settlement of the claim. Mr. Michaels also was asked to provide an opinion regarding the value of Mr. Museguez’s claim. Mr. Michaels has practiced personal injury law for 15 years, and is generally familiar with the awards related to claims involving catastrophic injuries and, specifically, traumatic brain injuries. With respect to Mr. Museguez’s claim, Mr. Michaels described it as conservative but necessary given the lack of insurance coverage and significant possibility of insolvency should the case go to verdict. He noted that “without a settlement there was almost zero likelihood of recovery in that the issues of both the fact and law were hotly contested.” He acknowledged that the settlement was less than Mr. Museguez’s future medical needs, and ignored any claim for pain and suffering, as well as the consortium claim. He stated, “I understand what the situation was and they could have pushed forward and gotten a verdict of 30 million dollars and it would have been worth the paper it was printed on because of the circumstances.” Without the very real limitations provided in this case, where there was no insurance coverage, Mr. Michaels believed that the fair settlement value would be about $13 to $15 million. However, his explanation as to how he reached that range was conclusory at best. Mr. Michaels testified that he did not “physically parse it out.” He started with the number $8,424,000 and went from there. He did not consult other attorneys, or do specific jury verdict research, but simply relied on his knowledge from practicing in this area and reviewing jury verdicts on a regular basis. It seems that the “fair value” of a claim must by necessity consider not only the level of a plaintiff’s damages, but the likelihood of success and any issues of liability, comparative fault, collectability, and the like. Here, while Petitioner’s damages are unfortunately much higher than the settlement amount, Petitioner’s witness testified that under the circumstances of this case, the settlement was fair. The undersigned finds that the fair settlement value of this case, given all of the circumstances, is the amount reflected in the settlement, i.e., $5,000,000. The undersigned also finds, consistent with the language in the settlement agreement, that Petitioner recovered only 20 percent of his past medical expenses. The taxable costs associated with the action at law were $27,812.46. While the parties in this proceeding stipulated to the amount of these costs, they did not stipulate to the amount of the attorney’s fees related to the claim, and it does not appear that any evidence to substantiate the amount of attorney’s fees actually paid was included in this record. Mr. Museguez received medical services from Medicaid. On December 1, 2016, the Agency notified counsel for Mr. Museguez that Medicaid’s lien for medical expenses paid on his behalf was $116,032.84. There was no evidence presented to indicate that the Agency was a party to the settlement negotiations between Petitioner and MG3, or whether the Agency was notified of the litigation prior to the execution of the settlement. Petitioner deposited the amount of the Medicaid lien into an interest-bearing account for the benefit of the Agency in accordance with the requirements of section 409.910, and in compliance with the requirements of bringing an action to contest the amount of the lien before the Division of Administrative Hearings. Petitioner’s actions constitute “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17)(b). Application of the formula contained in section 409.910(11)(f) to Petitioner’s $1,000,000 settlement would require payment to the Agency in the amount of $116,032.84, the actual amount of the funds expended by Medicaid.
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA or Respondent), as reimbursement for medical expenses paid on behalf of Petitioner pursuant to section 409.910, Florida Statutes (2020),1 from settlement proceeds he received from third parties.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 6, 2019, Mr. St. Surin was severely injured when his motorcycle struck a car. In this accident, Mr. St. Surin suffered severe and permanent injury to his back, neck, scapula, ribs, and knee. 1 All references to Florida Statutes are to the 2020 codification, unless otherwise indicated. Mr. St. Surin’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, provided $28,482.15 in benefits. In addition, Medicaid, through a Medicaid managed care organization known as WellCare of Florida, paid $7,278.25 in benefits. The combined total amount of these benefits, $35,760.40, constitutes Mr. St. Surin’s entire claim for past medical expenses. Mr. St. Surin pursued a personal injury claim against the owner and driver of the car who caused the accident (collectively the “Tortfeasors”) to recover all of his damages. The Tortfeasors’ insurance policy limits were $100,000, and the Tortfeasors had no other collectable assets. Mr. St. Surin’s personal injury claim was settled for the insurance policy limits of $100,000. During the pendency of Mr. St. Surin’s personal injury claim, AHCA was notified of the claim and AHCA asserted a Medicaid lien in the amount of $28,482.15 against Mr. St. Surin’s cause of action and the settlement proceeds. AHCA did not commence a civil action to enforce its rights under section 409.910, or intervene or join in Mr. St. Surin’s action against the Tortfeasors. AHCA was notified of Mr. St. Surin’s settlement by letter. AHCA has not filed a motion to set aside, void, or otherwise dispute Mr. St. Surin’s settlement. Application of the formula found in section 409.910(11)(f) would require payment to AHCA of the full $28,482.15 Medicaid lien given the $100,000 settlement. Petitioner has deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending a final administrative determination of AHCA’s rights. Petitioner presented testimony from Scott Kimmel, Esquire. Mr. Kimmel represented Mr. St. Surin in his personal injury claim against the Tortfeasors. Mr. Kimmel is a personal injury attorney and has practiced law for 30 years. Mr. Kimmel testified that he placed a conservative value of $1 million on Mr. St. Surin’s personal injury claim, but that the personal injury claim was settled for policy limits of $100,000 because the Tortfeasors had no other collectable assets. Using the pro rata allocation methodology, Mr. Kimmel testified that $3,576 of the $100,000 settlement proceeds should be allocated to past medical expenses because the personal injury claim was settled for ten percent of its conservative value. Mr. Kimmel’s testimony was credible, persuasive, and uncontradicted. AHCA did not challenge Mr. Kimmel’s valuation of the personal injury claim, or his use of the pro rata allocation methodology to determine the amount of settlement proceeds that should be allocated to past medical expenses, nor did AHCA offer any evidence from which the undersigned could arrive at a different valuation or allocation. There is no reasonable basis to reject Mr. Kimmel’s testimony, and it is accepted here in its entirety. The undersigned finds that the value of Mr. St. Surin’s personal injury claim is $1 million, and that $3,576.04 of the $100,000 settlement proceeds should be allocated to past medical expenses.
The Issue The issue in this matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Malk S. Sunwabeh, a Medicaid recipient, following a settlement recovered from a third party by the Personal Representative of the Mr. Sunwabeh’s estate.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $275,000 settlement from a third party. The Agency asserts that it is entitled to recover the full amount of its $85,279.65 lien. Malk S. Sunwabeh, the person who received the benefit of the Agency’s Medicaid payments, died as a result of a hit-and-run accident. Petitioner is the duly appointed Personal Representative of Mr. Sunwabeh’s estate and is authorized to bring this action on his behalf. The accident that gave rise to this matter occurred on October 29, 2013. Early that morning, in pre-dawn darkness, Mr. Sunwabeh left his residence to walk to his high school. The well-worn path he followed led him to a divided roadway that ran in front of his school. With no crosswalk or intersection nearby, Mr. Sunwabeh walked straight across the road. Just after Mr. Sunwabeh stepped into the road, he was struck from behind by a car driven by another student. As he lay sprawled on the pavement, a second vehicle (a gas truck) ran over his body. After the accident, Mr. Sunwabeh was transported by ambulance to Shands Hospital in Jacksonville. He immediately underwent surgery. Tragically, Mr. Sunwabeh died during surgery. He was 16 years old. The Agency, through the Medicaid program, paid Shands Hospital a total of $85,279.65 for Mr. Sunwabeh’s medical care, which was the full amount of his medical expenses following the accident.3/ All of the expenditures Medicaid spent on Mr. Sunwabeh’s behalf are attributed to past medical expenses. No portion of the $85,279.65 Medicaid lien represents future medical expenses. Mr. Sunwabeh’s aunt, Kapitola Morgan (Petitioner), was appointed Personal Representative of Mr. Sunwabeh’s estate. Petitioner brought a wrongful death action to recover both the damages of Mr. Sunwabeh’s estate, as well as the individual statutory damages of Mr. Sunwabeh’s mother, against both drivers who hit Mr. Sunwabeh. Johnny Pineyro, Esquire, represented Petitioner in the wrongful death lawsuit. On June 10, 2015, Mr. Pineyro negotiated a $275,000 settlement for Petitioner with the second driver. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the wrongful death settlement, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of the medical costs it paid on Mr. Sunwabeh’s behalf ($85,279.65). The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what Petitioner represents is the full value of the damages. (As discussed below, the formula in section 409.910(11)(f) allows the Agency to collect the full Medicaid lien.) Petitioner, on the other hand, asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of the settlement than the amount it calculated using the section 409.910(11)(f) formula. Petitioner specifically argues that the Agency’s Medicaid lien should be reduced proportionately, taking into account the “true” value of Petitioner’s damages. Otherwise, the application of the default statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents compensation for past medical expenses. Petitioner insists that such reimbursement violates the federal Medicaid law’s anti-lien provision (42 U.S.C. § 1396p(a)(1)) and Florida common law. Therefore, Petitioner requests that the Agency’s allocation from Petitioner’s recovery be reduced to the amount of $9,065.23. To establish the value of Petitioner’s damages, Petitioner presented the testimony of Mr. Pineyro. Mr. Pineyro heads the Florida Injury Law Firm in Celebration, Florida. He has practiced law for over 20 years and focuses on personal injury, wrongful death, and aviation law. Mr. Pineyro handles jury trials and cases involving catastrophic injury. In his practice, he regularly reviews accident reports, expert reports, and medical records. Mr. Pineyro stays abreast of jury verdicts. He also discusses jury results with members of his firm and other personal injury attorneys. Mr. Pineyro testified that as a routine part of his practice, he ascertains the value of damages suffered by injured parties, and he explained his process for making these determinations. Mr. Pineyro was accepted as an expert in the valuation of damages suffered by injured (and deceased) parties. Mr. Pineyro opined that the conservative value of Mr. Sunwabeh’s damages, as well as his mother’s claim for pain, suffering, and loss of her son’s companionship under the Florida Wrongful Death Act, at between $2,500,000 and $5,000,000.4/ In deriving this figure, Mr. Pineyro considered the accident and homicide reports, the medical examiner’s report, and Petitioner’s medical records. Regarding Mr. Sunwabeh’s mother’s damages, Mr. Pineyro described comparable jury verdicts which involved the death of a child. Mr. Pineyro also testified regarding the significant obstacles Petitioner faced to recovering the full amount of damages in the wrongful death lawsuit based on the disputed facts and circumstances of the accident, as well as insurance policy limits. As part of his representation of Petitioner, Mr. Pineyro deposed several fact and expert witnesses and visited the accident scene. Mr. Pineyro conveyed that the first driver who hit Mr. Sunwabeh was not covered by bodily injury insurance, nor did she possess recoverable assets. Therefore, collecting a full damages award against her would prove challenging. Furthermore, Mr. Pineyro expressed that Petitioner did not have a strong liability case against the second driver based on causation and comparative negligence issues. (Mr. Sunwabeh was wearing all black clothes which concealed his fallen body on the road in the early morning gloom.) Mr. Pineyro was prepared to argue a negligence theory asserting that the second driver failed to use reasonable caution and react in time to avoid driving over Mr. Sunwabeh. However, during his testimony, Mr. Pineyro conceded that a defense verdict in favor of the second driver was a real possibility. Consequently, Mr. Pineyro believed that it was in Petitioner’s best interests to settle the lawsuit. Based on Mr. Pineyro’s testimony that the $275,000 settlement did not fully compensate Ms. Sunwabeh’s estate or his mother for their damages, Petitioner argues that a lesser portion of the settlement should be allocated to reimburse Medicaid instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the “true” value of Petitioner’s damage claim ($2,585,279) compared to the amount that was actually recovered ($275,000). Using these numbers, the settlement represents a 10.63 percent recovery of the total value of Petitioner’s damages. In like manner, the amount of the Medicaid lien should also be reduced to 10.63 percent or approximately $9,065.23. Therefore, Petitioner asserts that $9,065.23 is the portion of the third-party settlement that represents the fair and reasonable reimbursement of the amount Medicaid paid for Mr. Sunwabeh’s medical care. The Agency was not a party to the wrongful death lawsuit or Petitioner’s settlement. Petitioner was aware of the Medicaid lien and past medical expense damages at the time she settled the lawsuit. No portion of the $275,000 settlement represents reimbursement for future medical expenses. The undersigned finds that Petitioner did not meet her burden of proving that the “true” value of Petitioner’s damages from this accident equaled $2,585,279.65. Further, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s total 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 $85,279.65 from Petitioner’s recovery of $275,000 from a third party to satisfy its Medicaid lien.
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 decided is the amount payable to Respondent in satisfaction of the Agency’s Medicaid lien from a settlement, judgment, or award received by Petitioner from a third-party under section 409.910(17), Florida Statutes.
Findings Of Fact On June 7, 2005, 14-year-old Michael Mobley attended a beach party. The party occurred on, near, or about the beach premises of a hotel. Michael became intoxicated through consumption of alcohol, and drowned in the Gulf of Mexico. He was revived but suffered brain damage, leaving him unable to communicate, ambulate, eat, toilet, or care for himself in any manner. Michael is now dependent on his father for all aspects of his daily life. As a result of this incident, Michael suffered both economic and noneconomic damages. These damages included, at least, physical and mental pain and suffering, past and future medical expenses, disability, impairment in earning capacity, and loss of quality and enjoyment of life. Michael’s parents also suffered damages. Michael’s father’s employer maintained a self-funded Employee Benefit Plan governed by the Employee Retirement Income Security Act (ERISA Plan). The Florida Statutes provide that Respondent, Agency for Health Care Administration (AHCA), is the Florida state agency authorized to administer Florida’s Medicaid program. § 409.902, Fla. Stat.1/ Michael’s past medical care related to his injury was provided through health benefits from the ERISA Plan administered through CIGNA HealthCare and Horizon Blue Cross Blue Shield of New Jersey, and the Florida Medicaid program. The health benefits extended to Michael through his father’s employer totaled $515,860.29. The Florida Medicaid program provided $111,943.89 in benefits. The combined amount of medical benefits Michael received as a result of his injury is $627,804.18. The ERISA Plan provided the employer (through its administrators CIGNA and Horizon Blue Cross Blue Shield), with subrogation and reimbursement rights which provided entitlement to reimbursement from any settlement of 100 percent of what the plan had paid. ACS Recovery Services represented CIGNA and Horizon Blue Cross Blue Shield, the administrators of the Employee Benefit Plan, and on behalf of these clients ACS Recovery Services asserted a $515,860.29 claim against any settlement Michael received. The Florida Statutes provide that Medicaid shall also be reimbursed for medical assistance that it has provided if resources of a liable third party become available. § 409.910(1), Fla. Stat. In 2006, Michael’s parents, David Mobley and Brenda Allerheiligen, brought a lawsuit in Okaloosa County Circuit Court to recover all of Michael’s damages. By letter dated May 24, 2011, Petitioner’s attorney sent AHCA a Letter of Representation requesting the amount of any Medicaid lien and the itemization of charges. The letter also invited AHCA to participate in litigation of the claim or in settlement negotiations. AHCA through ACS Recovery Services by letter of June 9, 2011, asserted a Medicaid lien against any settlement in the amount of $111,943.89. Testimony at hearing established that a conservative “pure value” of Michael’s economic damage claims in the case, before consideration of such factors as comparative fault, application of the alcohol statute, a defendant’s bankruptcy, and the novel theories of legal liability, was $15 million. A Joint Petition for Approval of Settlement was filed in the Circuit Court in and for Okaloosa County, Florida, on or about June 14, 2012. It stated that although the damages Michael received far exceeded the sum of $500,000, the parties had agreed to fully resolve the action for that amount in light of the parties’ respective assessments of the strengths and weaknesses of their cases. The Petition specifically alluded to pending bankruptcy proceedings, summary judgment dismissal of claims premised upon a duty to provide lifeguarding services, Plaintiff’s remaining theories of liability, available defenses, specifically including the statutory “alcohol defense” as interpreted by the Florida courts, and anticipated costs of trial and appeal. The Petition also stated: “Plaintiff’s claim for past medical expenses related to the incident total $627,804.18. This claim consists of $515,860.29 paid by a self-funded ERISA plan and $111,943.89 paid by Medicaid.” As an attached exhibit, the Petition incorporated a Distribution Sheet/Closing Statement which allocated the $500,000 total recovery among the categories of attorneys’ fees, costs, outside attorneys’ fees, lien/subrogation/medical expenses, and net proceeds to client. The Distribution Sheet allocated $140,717.54 to “lien/subrogation/medical expenses,” subdivided into $120,000.00 to Blue Cross Blue Shield of Florida/CIGNA and $20,717.54 to Medicaid Lien. The proposed settlement did not further describe the $331,365.65 amount identified as “net proceeds to client,” or allocate that amount among distinct claims or categories of damages, such as physical or mental pain and suffering, future medical costs discounted to present value, disability, impairment in earning capacity, or loss of quality and enjoyment of life. Under the Joint Petition for Approval of Settlement, most of the total recovery thus remains uncategorized as to the type of damages it represents. The Joint Petition for Approval of Settlement was submitted on behalf of the Defendants and Plaintiffs in the lawsuit, including Michael Mobley, Petitioner here. Respondent did not participate in settlement negotiations or join in the Release, and no one represented its interests in the negotiations. The Agency has not otherwise executed a release of the lien. A Release was signed by the Plaintiffs contingent upon court approval of the Petition for Approval of Settlement. The court approved the settlement, with the exception of the Medicaid lien, pending an administrative determination of the amount of the lien to be paid. This $500,000 settlement is the only settlement received and is the subject of AHCA’s claim lien. In regard to the $500,000 settlement: Michael’s parents, Brenda Allerheiligen and David Mobley waived any claim to the settlement funds in compensation for their individual claims associated with their son’s injuries; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to waive its fees associated with its representation of Michael and his parents; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to reduce its reimbursement of the $60,541.22 in costs it advanced in the litigation of the case by 75% and accept $15,135.31 in full payment of its advanced costs; and ACS Recovery Services on behalf of CIGNA and Horizon Blue Cross Blue Shield agreed to reduce its $515,860.29 ERISA reimbursement claim asserted against the settlement and accept $120,000 in satisfaction of its $515,860.29 claim. AHCA is seeking reimbursement of $111,943.89 from the $500,000 settlement in satisfaction of its $111,943.89 Medicaid lien. AHCA correctly computed the lien amount pursuant to statutory formula. Deducting 25 percent for attorney’s fees and $60,541.22 taxable costs from the $500,000.00 recovery leaves a sum of $314,458.78, half of which is $157,229.39. In this case, application of the formula therefore results in a statutory lien amount of $111.943.89, the amount actually paid. § 409.910(17), Fla. Stat. The settlement agreement allocated $120,000.00 to be paid to the ERISA plan in partial reimbursement of the $515,860.29 it had paid for medical expenses. This amount must be added to the amount of $20,717.54 allocated for other medical expenses paid by Medicaid, to reflect a total amount of $140,717.54 allocated for past medical expenses in the settlement. The $500,000 total recovery represents approximately 3.3 percent of the $15 million total economic damages. The $20,717.54 allocated to “Medicaid Lien” in the distribution sheet of the settlement represents approximately 3.3 percent of the $627,804.18 of total past medical expenses. The sum of $3,694.15 represents approximately 3.3 percent of the $111,943.89 in medical costs paid by Medicaid. The Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’S rights. The parties have stipulated that this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17). Petitioner filed his Petition on December 13, 2013, within 21 days after the Medicaid lien amount was deposited in an interest-bearing account for the benefit of AHCA. While the evidence presented as to the settlement agreement was not sufficient to show the full amount allocated to medical expenses, the evidence does show that the total recovery includes at least $140,717.54 allocated as reimbursement for past medical expenses, which was to be divided unevenly between the ERISA plan and Medicaid. Petitioner failed to prove by clear and convincing evidence that the statutory lien amount of $111,943.89 exceeds the amount actually recovered in the settlement for medical expenses.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioners, Devyn Jeffries (Devyn) and Makayla Jeffries (Makayla), minors, by and through their parents and natural guardians, Theresa Jeffries and Christopher Jeffries, (collectively Petitioners), from settlement proceeds received by Petitioners from third parties.
Findings Of Fact On January 24, 2010, Devyn and Makayla were born via emergency C-Section at 27 weeks gestation. During the birthing process, both children suffered severe and permanent brain damage. As a result, Devyn suffers from Cerebral Palsy with spastic paralysis and cognitive developmental disabilities, and Makayla suffers from Cerebral Palsy, failure to thrive, feeding difficulties, and cognitive deficits. Devyn and Makayla’s medical care related to their birth injuries was paid by Medicaid in the following amounts: 1 Respondent’s Proposed Final Order was served by email and received by DOAH at 9:50 p.m. on October 21, 2020. It was, therefore, “filed” at 8:00 a.m. on October 22, 2020, in accordance with Florida Administrative Code Rule 28-106.104(3). However, it is accepted and considered as though timely filed. In regard to Devyn, Medicaid, through AHCA, provided $108,068.58 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $25,087.08 in benefits. The sum of these Medicaid benefits, $133,155.66, constituted Devyn’s entire claim for past medical expenses. In regard to Makayla, Medicaid, through AHCA, provided $107,912.33 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $13,915.84 in benefits. The sum of these Medicaid benefits, $121,828.17, constituted Makayla’s entire claim for past medical expenses. Devyn and Makayla’s parents and natural guardians, Theresa and Christopher Jeffries, pursued a medical malpractice lawsuit against the medical providers responsible for Devyn and Makayla’s care (“Defendants”) to recover all of Devyn and Makayla’s damages, as well as their own individual damages associated with their children’s injuries. The medical malpractice action settled through a series of confidential settlements, which were approved by the court on February 21, 2020. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $108,068.58 Medicaid lien associated with Devyn’s cause of action and settlement of that action and a $107,912.33 Medicaid lien associated with Makayla’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. By letter, AHCA was notified of the settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlement. The Medicaid program through AHCA spent $108,068.58 on behalf of Devyn and $107,912.33 on behalf of Makayla, all of which represents expenditures paid for past medical expenses. No portion of the $215,980.91 paid by AHCA through the Medicaid program on behalf of Petitioners represented expenditures for future medical expenses. The $215,980.91 combined total in Medicaid funds paid towards the care of Devyn and Makayla by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Simply Health spent $39,002.92 on Petitioners’ medical expenses. Thus, the total amount of past medical expenses incurred by Petitioners is $254,983.83. The taxable costs incurred in securing the settlement totaled $109,701.62. Application of the formula at section 409.910(11)(f) to the settlement requires payment to AHCA of the full $108,068.58 Medicaid lien associated with Devyn and the full $107,912.33 Medicaid lien associated with Makayla. Petitioners have deposited the full Medicaid lien amounts in interest- bearing accounts for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). This case is somewhat unique in that it involves two petitioners, with separate injuries and separate Medicaid expenditures. However, the incident causing the injuries was singular, and resulted in a total settlement of all claims asserted by Devyn, Makayla, and their parents of $2,650,000. Therefore, for purpose of determining the appropriate amount of reimbursement for the Medicaid lien, it is reasonable and appropriate to aggregate the amounts paid in past medical expenses on behalf of Devyn and Makayla, and the economic and non-economic damages suffered by them. There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that the total of Devyn’s and Makayla’s economic damages, consisting of lost future earnings, past medical expenses, and future medical expenses were, at the conservative low end, roughly $4,400,000 for Devyn and $2,400,000 for Makayla, for a sum of $6,800,000 in economic damages.2 Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioners established that non- economic damages would reasonably be in the range of $10,000,000 to $15,000,000 for each of the children. Based on the forgoing, it is found that $15,000,000, as a full measure of Petitioners’ combined damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $2,650,000 settlement is 17.67 percent of the $15,000,000 conservative value of the claim.3
The Issue What amount from Petitioners’ settlement proceeds should be paid to satisfy Respondent’s Medicaid lien under section 409.910, Florida Statutes (2018)?1/
Findings Of Fact Stipulated Facts (near-verbatim) On February 13, 2017, Grace Provvedi (Mrs. Provvedi) underwent an outpatient surgical procedure. Post-surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the management of pain. Additionally, she was discharged home with a prescription for the oral pain medicines, Lorazepam and Robaxin. Mrs. Provvedi returned for a follow-up doctor’s visit on February 15, 2017. That same day, February 15, 2017, Mrs. Provvedi went into cardiopulmonary arrest at home. She was transported to the hospital where she was ultimately diagnosed with anoxic brain injury due to pain medicine overdose. Mrs. Provvedi remained in a vegetative state until her death on March 24, 2017. Mrs. Provvedi was survived by her husband Timothy Provvedi, their four-year-old child, B.P. and an adult child, Kyle Lima. Mrs. Provvedi’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $54,071.79 in benefits associated with Mrs. Provvedi’s injury. This $54,071.79 represented the entire claim for past medical expenses. Mrs. Provvedi’s funeral bill totaled $11,422.97 and was paid by her surviving husband. Timothy Provvedi was appointed the personal representative of the Estate of Grace Provvedi. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, brought a wrongful death claim to recover both the individual statutory damages of Mrs. Provvedi’s surviving spouse and two surviving children, as well as the individual statutory damages of the Estate of Grace Provvedi against the doctor and physician’s group (Defendants) who prescribed the deadly combination of the Fentanyl patch and oral pain medication. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, on behalf of Mrs. Provvedi’s surviving husband and two children, as well as on behalf of the Estate of Grace Provvedi, compromised and settled the wrongful death claim with the Defendants for the unallocated lump sum amount of $225,000. During the pendency of the wrongful death claim, AHCA was notified of the action and AHCA asserted a $54,071.79 Medicaid lien against the Estate of Grace Provvedi’s cause of action and settlement of that action. By letter, the attorney handling the wrongful death claim notified AHCA of the settlement. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $54,071.79 Medicaid lien. AHCA has not filed an action to set aside, void, or otherwise dispute the wrongful death settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. AHCA, through the Medicaid program, spent $54,071.79 on behalf of Mrs. Provvedi, all of which represents expenditures paid for Mrs. Provvedi’s past medical expenses. No portion of the $225,000 settlement represents reimbursement for future medical expenses. The formula at section 409.910(11)(f), as applied to the entire $225,000 settlement, requires payment of the full $54,071.79 Medicaid lien and AHCA is demanding payment of $54,071.79 from the $225,000 settlement. The Petitioners have 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 Statutues, pursuant to section 409.910(17). Additional Findings of Fact Mr. Provvedi, as surviving husband, and the two children of Mrs. Provvedi, suffered economic and non-economic damages. The Estate of Mrs. Provvedi suffered economic damages in the form of medical expenses resulting from the Defendant’s alleged negligence. Mrs. Provvedi’s funeral bill was paid by Mr. Provvedi. Pursuant to the Florida Wrongful Death Act, burial expenses are generally charged to the estate, unless, as in the present case, such expenses are paid by a surviving spouse and reimbursement of the same is not sought from the estate. Mrs. Provvedi, as a condition of eligibility for Medicaid, assigned to AHCA her right to recover medical expenses paid by Medicaid from liable third parties. Petitioners presented the testimony of Mr. John W. Pate, a trial attorney with the law firm of Haygood, Orr & Pearson in Irving, Texas. Mr. Pate has been a trial attorney for 14 years and he specializes in representing individuals in personal injury, medical malpractice, and wrongful death cases. Mr. Pate testified that during the last several years, his practice has focused extensively on litigating medical malpractice cases involving the wrongful administration of prescription medications, including opioids like Fentanyl, Oxycodone, Hydrocodone, and other drugs which impact an individual’s central nervous system (CNS). Such drugs are often referred to as CNS depressant drugs. Mr. Pate routinely conducts civil jury trials, and as a consequence thereof, he stays abreast of jury verdicts by reviewing jury verdict reporters and discussing cases with other trial attorneys. Although Mr. Pate is not a member of the Florida Bar, he represents injured parties in Florida which necessitates that he stays up-to-date with civil jury verdicts from the State of Florida. Mr. Pate testified that as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties and credibly explained his process for making such assessments. Without objection, Mr. Pate was recognized as an expert in the valuation of damages suffered by injured parties. Mr. Pate served as lead attorney in the litigation against the medical providers who treated Mrs. Provvedi. In his capacity as lead attorney, Mr. Pate reviewed Mrs. Provvedi’s medical records, consulted with an anesthesiology and pain management expert in North Carolina, consulted with a plastic surgery expert in Miami, met personally with Mr. Provvedi, and spoke with Mrs. Provvedi’s children. Mr. Pate, in explaining the circumstances that allegedly led to the death of Mrs. Provvedi, testified that on February 13, 2017, Mrs. Provvedi underwent an outpatient surgical procedure at a plastic surgery center. Soon after the surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the treatment of pain. Ms. Provvedi was then discharged home with a prescription for Lorazepam and Robaxin, each of which is an oral pain medication. Mr. Pate testified that the federal Food and Drug Administration (FDA) warns against the use of Fentanyl patches post-surgery, and also warns against the combination of a Fentanyl patch with other CNS depressant drugs, such as Lorazepam and Robaxin. Mr. Pate explained, as to his theory of legal liability against Mrs. Provvedi’s medical providers, that over time the prescribed CNS depressants accumulated in Mrs. Provvedi’s body which resulted in her being found unresponsive two days after surgery. Mrs. Provvedi was transported by EMS to the hospital, where, upon arrival, the Fentanyl patch was removed. Mrs. Provvedi was diagnosed as having suffered from an acute anoxic brain injury and respiratory failure due to a pain medication overdose. Mrs. Provvedi never regained consciousness, and one month later was discharged from the hospital to hospice care where she died on March 24, 2017. Mr. Pate’s undisputed testimony was that his investigation revealed that Mr. and Mrs. Provvedi had a loving and devoted marriage, and that it was emotionally devastating to Mr. Provvedi to watch his wife die over the course of five weeks. Mr. Pate also testified that his investigation revealed that the Provvedi’s minor son, B.P., who was five at the time of Mrs. Provvedi’s death, was profoundly affected by the loss of his mother and that Ms. Provvedi’s adult son, who lived with the Provvedis prior to and at the time of his mother’s passing, was similarly devastated by the death of his mother. Mr. Pate credibly testified that based on his training and experience, the wrongful death damages recoverable in Mrs. Provvedi’s case had a conservative value of between $3,054,071.79 to $5,054,071.79. According to Mr. Pate’s undisputed testimony, Mrs. Provvedi’s estate had a claim for damages in the amount of $54,071.79, which is the amount of medical expenses that were paid, and resulted from Mrs. Provvedi’s injury and death. Mr. Pate excluded the funeral bill from the estate’s damages because the same bill was paid by Mr. Provvedi, as surviving husband. Mr. Pate also testified that the estate likely did not have a viable claim for net accumulations because Mrs. Provvedi did not work outside of the marital home. Mr. Pate testified that a wrongful death claim was brought against the plastic surgeon that operated on Mrs. Provvedi and the surgical facility where the procedure was performed. The basis of the claim was that the doctor violated the standard of care by prescribing the Fentanyl patch to Mrs. Provvedi in clear contravention of the FDA warnings, and it was error to prescribe the other oral pain medicines in conjunction with the Fentanyl patch. Mr. Pate testified that he expected the at-fault parties to dispute causation, but ultimately the main issue was that the alleged at-fault parties had only $250,000 in insurance coverage. Mr. Pate credibly testified that expenses associated with litigating the wrongful death case would be considerable and would significantly erode any likely net recovery. Given these concerns, the decision was made to settle the case pre-suit for $225,000. Utilizing the conservative value of $3,054,071.79, the $225,000 settlement represents a recovery of only 7.367214 percent of the value of all damages. Thus, only 7.367214 percent of the $54,071.79 claim for past medical expenses was recovered in the settlement, or $3,983.58. Based on the methodology of applying the same ratio the settlement bore to the total monetary value of all the damages to the estate, $3,983.58 of the settlement represents the estate’s compensation for past medical expenses. The allocation of $3,983.58 of the settlement to the estate’s claim for past medical expenses is reasonable and rational. Petitioners have proven by a preponderance of the evidence that $3,983.58 represents the portion of the $225,000 settlement recovered to compensate the estate for medical expenses necessitated by the alleged negligence of the tortfeasors.
The Issue What amount from Petitioner’s settlement proceeds should be paid to satisfy Respondents’ Medicaid liens under section 409.910, Florida Statutes (2020)?1
Findings Of Fact On January 28, 2018, Mr. Sciesinski[,] who was then 43 years old, was admitted to the Hospital with an epidural abscess and a[n] oral abscess. He was treated with antibiotics and had his oral abscess lysed and molars removed. In February 2018[,] he presented to the Hospital with shaking, chills, fevers[,] and malaise. His antibiotics were changed and he was discharged home. On May 30, 2018[,] Mr. Sciesinski again presented to the [H]ospital with increasing neck pain. He was diagnosed with a retropharyngeal abscess and underwent surgery. During surgery[,] Mr. Sciesinski suffered a spinal cord injury permanently rendering Mr. Sciesinski a quadriplegic. Mr. Sciesinski is now unable to stand, walk, ambulate, eat, toilet, or care for himself in any manner. Mr. Sciesinski’s medical care related to the injury was paid by Medicaid. AHCA through the Medicaid program provided $56,838.94 in Medicaid benefits related to the injury and Sunshine through the Medicaid program provided $78,957.18 in Medicaid benefits related to the injuries. The sum of these benefits, $135,796.12, constituted Mr. Sciesinski’s claim for past medical expenses. Mr. Sciesinski pursued a medical malpractice action against the parties allegedly liable for his injuries (Defendants) to recover all his damages associated with his injuries. Mr. Sciesinski’s medical malpractice action was settled through a series of confidential settlements in a lump-sum unallocated amount of $1,725,000. During the pendency of Mr. Sciesinski’s medical malpractice action, AHCA and Sunshine were notified of the action. AHCA asserted a $56,838.94 Medicaid lien and Sunshine asserted a $78,957.18 lien against Mr. Sciesinski’s cause of action and settlement of that action. AHCA and Sunshine did not commence a civil action to enforce [their] rights under [section] 409.910 or intervene or join in Mr. Sciesinski’s action against the Defendants. By letter, AHCA and Sunshine were notified of Mr. Sciesinski’s settlement. AHCA and Sunshine have not filed a motion to set-aside, void[,] or otherwise dispute Mr. Sciesinski’s settlement. The Medicaid program through AHCA and AHCA’s contractor[,] Sunshine[,] spent $135,796.12 on behalf of Mr. Sciesinski, all of which represents expenditures paid for Mr. Sciesinski’s past medical expenses. Mr. Sciesinski’s taxable costs incurred in securing the settlement totaled $48,943.00. Application of the formula at [section] 409.910(11)(f) to Mr. Sciesinski’s $1,725,000 settlement requires full payment of AHCA’s $56,838.94 Medicaid lien and Sunshine’s $78,957.18 Medicaid lien. The Petitioner has deposited the 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). Sunshine is under contract with AHCA to provide Medicaid benefits to Medicaid beneficiaries. Pursuant to AHCA’s contract with Sunshine, AHCA’s Medicaid lien takes priority and must be paid first from the amount of the settlement allocated to past medical expenses. As previously noted, Petitioner presented testimony from Scott Borders, Esquire, and Karen Gievers, Esquire. Mr. Borders represented Petitioner in his personal injury claim against the tortfeasors, and Ms. Gievers and Mr. Borders both offered opinion testimony regarding the value of Petitioner’s underlying personal injury claim(s). Mr. Borders has been a trial attorney for 32 years, and he practices exclusively in the area of medical malpractice law. Mr. Borders has been Florida Bar Board Certified in the area of “civil trial” since 1997. Mr. Borders credibly testified that based on his professional training and experience, Petitioner’s claim(s) were valued at between $27 and $41 million. Ms. Gievers has been a member of The Florida Bar since 1978, and has been Florida Bar Board Certified in the area of “civil trial” since 1985. From 1978 until 2010, Ms. Gievers practiced in the area of personal injury law. In 2010 she was elected Circuit Judge of the Second Judicial Circuit for the State of Florida. As a Circuit Judge, Ms. Gievers presided over all manner of civil matters, including personal injury lawsuits. Ms. Gievers retired from the bench in April 2019, and has returned to the practice of law. Ms. Gievers credibly testified that based on her professional training and experience, Petitioner’s claim(s) had a value of at least $25 million, and that this amount is “very conservative.” Using the pro rata allocation methodology, Ms. Gievers and Mr. Borders testified that $9,369.93 of the $1,725,000 settlement proceeds should be allocated to past medical expenses because the personal injury claims were settled for 6.9 percent of its conservative value. The testimony of Ms. Gievers and Mr. Borders was credible, persuasive, and uncontradicted by Respondents.
