The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration (Agency), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On August 11, 2014, Amanda Baker, then 15 years old, was transferred from a medical center to a specialty pediatric hospital where she presented with complaints and symptoms of back pain, weakness, and paresthesia in her lower extremities. Over the next few days, she underwent examinations and assessments, but no steps were taken to prevent her development of blood clots/embolisms due to her immobility nor were signs and symptoms of her development of blood clots/embolisms recognized. On August 13, 2014, Amanda suffered two cardiac arrests due to blood clots/embolisms traveling to her heart and lungs. She was resuscitated, but due to a lack of oxygen to her brain, Amanda suffered a catastrophic hypoxic brain injury. She is now in a persistent vegetative state. The Agency provided $162,146.65 in Medicaid benefits associated with Amanda's injuries, all of which represent expenditures paid for her past medical expenses. Amanda's parents brought a medical malpractice action against the medical providers responsible for her care to recover all of the damages associated with her injuries, as well as their individual damages associated with their daughter's injuries. Seven defendants maintained insurance policies with a policy limit of $250,000. The medical malpractice action was settled for each of the insurance policy limits, resulting in a lump sum unallocated settlement of $1,750,000. This settlement was approved by the court. During the pendency of the malpractice action, the Agency was notified of the action. It asserted a $162,146.65 Medicaid lien against the Bakers' cause of action and settlement of that action. However, it did not institute, intervene in, or join in the action to enforce its rights, as provided in section 409.910(11), or participate in any aspect of the litigation. Application of the formula in section 409.910(11)(f) to Amanda's $1,750,000 settlement requires full payment of the Medicaid lien. Petitioner presented the testimony of Daniel Moody, Esquire, a Lakeland attorney with 30 years' experience in personal injury law, including medical malpractice. He represented Amanda and her family in the medical malpractice action. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He also stays abreast of jury verdicts in his area by reviewing jury verdict reporters and discussing cases with other trial attorneys. He has been accepted as an expert in valuation of damages. Based on his training and experience, Mr. Moody opined that the damages recoverable in Amanda's case had a conservative value of $30 million. Petitioner also presented the testimony of R. Vinson Barrett, Esquire, a Tallahassee trial attorney with more than 40 years' experience. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice, medical products liability, and pharmaceutical products liability. He routinely makes assessments concerning the value of damages suffered by injured parties. He was accepted as an expert in the valuation of damages. Based on his training and experience, Mr. Barrett opined that Amanda's damages are "worth at a bare minimum – and we're talking very conservatively here -- $30,000,000." Both experts testified that using $30,000,000 as the value of all damages, Amanda only recovered 5.83 percent of the value of her damages. Accordingly, they opined that it would be reasonable, rational, and conservative to allocate 5.83 percent of the settlement, or $9,453.15, to past medical expenses paid by the Agency through the Medicaid program. The Agency did not call any witnesses, present any evidence as to the value of damages, propose a different valuation of the damages, or contest the methodology used to calculate the allocation to past medical expenses. In short, Petitioner's evidence was unrebutted. The testimony from Mr. Moody and Mr. Barrett is compelling and persuasive. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that $9,453.15 of the settlement represents reimbursement for past medical expenses.
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 to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Genesis Belinaso (Petitioner), from a medical malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on August 29, 2011. At 11 months of age, Petitioner was diagnosed with Gaucher Disease, Type I. On September 21, 2012, when she was approximately 13 months of age, Petitioner was admitted to the hospital for the insertion of a central venous port (mediport) for treatment of her Gaucher Disease with Cerezyme infusions. The mediport insertion on the right side was unsuccessful, and it was inserted on the left side. Petitioner did not wake up from anesthesia and experienced seizure activity. Radiographic evaluation with CT and MRI of the brain revealed subarachnoid hemorrhage, cerebral edema, and herniation. Petitioner required an emergency craniotomy, duraplasty and partial right temporal lobectomy, with the operative note diagnosing a right internal carotid artery stroke and possible dissecting aneurysm of the internal carotid artery bifurcation. A post-operative CT revealed significant infarction of the right cerebral hemisphere. A subsequent intracranial hemorrhage resulted in recurrent/worsening of cerebral edema. Petitioner was transferred to Jackson Memorial Hospital where she underwent numerous neurological surgeries and procedures associated with catastrophic brain damage from the strokes suffered on September 21, 2012. As a result of the catastrophic brain damage, Petitioner suffers from left side hemiplegia and severe cognitive deficits. She is permanently disabled and unable to care for herself. She will need some form of care for the rest of her life. AHCA, through the Medicaid program, spent $301,085.18 on behalf of Petitioner, all of which represents expenditures paid for Petitioner’s past medical expenses. The $301,085.18 paid by Medicaid constituted Petitioner’s entire claim for past medical expenses. No portion of the $301,085.18 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Petitioner’s parents and natural guardians, Cintia Aquino and Jonas Belinaso, brought a medical malpractice claim against Petitioner’s medical providers, including the physician and the hospital, to recover Petitioner’s damages, as well as their damages associated with their child’s injury. The physician responsible for the unsuccessful mediport insertion (“Settling Tortfeasor”), maintained only an insurance policy with a policy limit of $250,000.00. Petitioner’s medical malpractice claim against the Settling Tortfeasor was settled during the pre-suit period for the insurance policy limit of $250,000.00. The Release of All Claims with the Settling Tortfeasor (“Release”) stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Genesis Belinaso and her parents for all of the damages that they have allegedly suffered, this settlement shall operate as a full and complete RELEASE as to RELEASEES without regard to this settlement only compensating Genesis Belinaso and her parents for a fraction of the total monetary value of their alleged damages. The parties agree that the alleged damages sustained by Genesis Belinaso and her parents, have a potential full value in excess of $25,000,000, of which $301,085.18 represents Genesis Belinaso’s claim for past medical expenses. Given the facts, circumstances, and nature of Genesis Belinaso’s injuries and this settlement, the parties have agreed to allocate $3,010.85 of this settlement to the claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the damage claims sustained by Genesis Belinaso and her parents. Further, the parties acknowledge that Genesis Belinaso may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Genesis Belinaso will incur in the future. However, the parties acknowledge that Genesis Belinaso, or others on her behalf, have not made payments in advance for Genesis Belinaso’s future medical care and Genesis Belinaso has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. The Release did not further differentiate or allocate the $250,000.00 total recovery. Thus, this proceeding was brought by Petitioner pursuant to section 409.910(17)(b) to establish “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph [409.910](11)(f).” The acceptance of the Settling Tortfeasor’s policy limits was expressly conditioned on all claims against the hospital being preserved. Because Petitioner was a minor, Court approval of the settlement was required. Accordingly, on July 29, 2015, Circuit Court Judge Maria M. Korvick entered an Order Approving Settlement. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. During the pendency of Petitioner’s medical malpractice claim, AHCA was notified of the claim. AHCA, through its collections contractor Xerox Recovery Services, asserted a Medicaid lien in the amount of $301,085.18 against any proceeds received from a third party as a result of Petitioner’s cause of action and settlement of that action. By letter of September 24, 2015, Petitioner’s medical malpractice attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of Petitioner’s $85,095.49 in litigation costs. The letter explained that the damages suffered had a value in excess of $25,000,000, and that the $250,000.00 settlement represented only a one-percent recovery of Petitioner’s $301,085.18 claim for past medical expenses. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $301,085.18 Medicaid lien. AHCA responded to the September 24, 2015, letter on November 2, 2015. AHCA indicated that it had calculated the section 409.910(11)(f) formula amount owed from the $250,000.00 settlement and, under the formula, $74,735.15 was owed to AHCA in satisfaction of its Medicaid lien. AHCA requested a “check made payable to ‘Agency for Health Care Administration’ in the amount of $74,735.15.” AHCA correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee of $62,500.00 from the $250,000.00 recovery left a sum of $187,500.00. AHCA then deducted $38,029.71 in approved taxable costs, which left a sum of $149,470.29, half of which is $74,735.15. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds from the settlement proceeds to satisfy the Medicaid lien amount of $74,735.15. AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner’s settlement, nor has it commenced a civil action to enforce its rights under section 409.910. Petitioner deposited the section 409.910(11)(f) formula amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17). At the final hearing, Petitioner presented the expert testimony of Mr. Rossman. Mr. Rossman, who is board-certified in civil trial practice, demonstrated considerable experience handing personal injury and medical malpractice cases in the Miami area. Mr. Rossman testified that the standard of care in his field of practice requires a careful evaluation of a case from the time of intake through the trial. That evaluation, which includes an assessment of the value of the damages, includes a comparison of other jury verdicts in comparable cases as “the barometer of what is happening.” In assessing the value and worth of a case, it is common practice for counsel to retain a life care planner and an economist, and information provided by such persons is reasonably relied upon by persons in Mr. Rossman’s field of expertise. Mr. Rossman had extensive knowledge of the nature and extent of the injuries suffered by Petitioner, and was familiar with the information provided in Petitioner’s Habilitation Assessment and Present Value Analysis. Mr. Rossman testified that Petitioner’s total economic damages were $8,367,417.18, which included $301,085.18 in past medical expenses; $1,330,634.00 in lost earning capacity over Petitioner’s lifetime; and $6,735,698.00 for future life care needs. The future life care costs included those for future medical, surgical, diagnostic, and therapeutic needs, specialized equipment and supplies, attendant care, and related needs. The $6,735,698.00 amount estimated for future life care needs was the most conservative figure among the scenarios presented in the Present Value Analysis. Mr. Rossman also estimated the non-economic damages associated with Petitioner’s claim to be in the range of $12 million for Petitioner, and $3 million each for Petitioner’s parents, for a total of $18 million. His assessment of non- economic damages was based not only on his own knowledge and experience, but included an analysis of comparable jury verdicts, which is information reasonably relied upon by persons in Mr. Rossman’s field of expertise. As a result of his expert analysis, Mr. Rossman testified that, as a case of absolute liability with full damages awarded, Petitioner’s claim had a minimum value of $25 million dollars. Mr. Rossman’s testimony was credible, and is accepted. At the final hearing, Petitioner also presented the expert testimony of Mr. Barrett. Mr. Barrett has focused his practice for the past 30 years on personal injury cases, with the past 10 years devoted to medical malpractice and pharmaceutical products liability cases. Evaluation of personal injury cases and medical malpractice cases is a daily component of his practice. In preparation for his testimony, Mr. Barrett reviewed the reports of Petitioner’s life care planner and economist, Petitioner’s medical records, and other materials that are included in the record of this proceeding. Mr. Barrett routinely reviews jury verdict reports, and applied his knowledge and experience to Petitioner’s claim. Based on his review, Mr. Barrett concurred that the overall value of Petitioner’s claim was, conservatively, in the $25 million range, with the same general breakdown for economic and non- economic damages. Mr. Barrett’s testimony was credible, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner’s injury was, conservatively, $25 million, and that the settlement amount was one percent of the total value. The evidence was equally clear and convincing that the allocation for past medical expenses reflected in the court-approved Release was of the same ratio to the total past medical expenses as was the settlement amount to the reasonable value of the claim. There was no evidence that the allocation was subject to any form of manipulation to increase or decrease the accounting of past medical expenses.
The Issue The issue is the amount of Petitioner’s personal injury settlement proceeds that should be paid to Respondent, Agency for Health Care Administration (AHCA), to satisfy its Medicaid lien under section 409.910, Florida Statutes (2016).1/
Findings Of Fact AHCA is the state agency authorized to administer Florida’s Medicaid program. See § 409.902, Fla Stat. On July 6, 2011, Petitioner suffered a catastrophic injury to his spinal cord as a passenger in a car involved in a single-car accident. Petitioner was permanently rendered an incomplete quadriplegic unable to walk (for more than 10 to 15 steps), stand, ambulate, eat or toilet without assistance. Prior to the accident, Petitioner was a senior at the University of South Florida, who intended to become a physical therapist. Additionally, he was heavily involved in mixed martial arts and won amateur of the year in 2010. Petitioner’s medical care related to the car accident was paid by Medicaid. Medicaid provided $177,747.91 in benefits associated with Petitioner’s car accident. This amount, $177,747.91, represents the past medical expenses paid on behalf of Petitioner, and for which AHCA seeks reimbursement. There is no dispute that Medicaid paid $177,747.91 for Petitioner’s past medical expenses. Petitioner brought a PI action against the driver of the car, the owner of the car and the insurance carrier providing uninsured/underinsured motorist insurance covering the accident. This PI action sought to recover all of Petitioner’s damages associated with his injuries. During the pendency of Petitioner’s PI action, AHCA was notified of the action. On April 25, 2014, AHCA notified Petitioner’s then counsel (Gene Odom, Esquire) that a preliminary lien of $177,747.91 was in place, and that an itemized accounting would be provided. It was unknown if the defendants, in the PI case, knew of the Medicaid lien during the negotiations. There was no evidence presented that AHCA participated in the PI action, any settlement negotiations, agreed to any settlement(s), or executed the actual settlements. The PI lawsuit was settled in 2017 through a series of confidential settlement(s) totaling $1,000,000.3/ The total settlement was comprised of $100,000 in uninsured/underinsured motorist coverage, $100,000 in bodily injury coverage, $500,000 in coverage from the leased vehicle, and $300,000 in settlement of a bad faith claim. Petitioner’s condition and his need for continuing care are not in dispute. A life-care plan (Petitioner’s Exhibit 2) identifying the “medical basis for life-care planning” for Petitioner was prepared by John L. Merritt, M.D. Dr. Merritt did not testify at hearing. Application of the formula in section 409.910(11)(f) to Petitioner’s settlement requires payment to AHCA of the full $177,747.91 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 constituted “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). The Medicaid program spent $177,747.91 towards Petitioner’s past medical expenses. There was no testimony that any portion of this amount was paid for Mr. Eady’s future medical expenses. No testimony was received as to any taxable costs associated with the action at law. The parties did not stipulate to the amount of any attorneys’ fees related to the settlement(s). The parties did not divulge an amount (if any) designated in the settlement(s) to pay for Petitioner’s past medical expenses. Mr. Guito is a PI attorney and Petitioner’s step- father. Mr. Guito is employed by McIntyre, Thanasides, Bringgold, Elliott, Grimaldi and Guito. He has practiced law for 29 years and, in addition to the PI work, handles cases involving civil litigation, medical malpractice, and catastrophic injury. Mr. Guito has tried numerous jury trials and represented individuals who have suffered spinal cord injuries. Mr. Guito stays abreast of jury verdicts as it is important to understand what types of damages juries are awarding, whether they are more conservative or liberal in damages, and how the juries view evidence. As a routine part of his practice, Mr. Guito evaluates the damages suffered by injured people. He has experience in dealing with life-care planners, vocational rehabilitative experts, economists, and other lawyers involved with claims for significant injuries and damages. Mr. Guito assisted attorneys in prosecuting Mr. Eady’s case in order to maximize his recovery.4/ Mr. Guito reviewed the accident report, various engineering expert reports, Mr. Eady’s medical records and his life-care plan. Mr. Guito opined that Mr. Eady’s damages are in excess of $15,000,000. Mr. Barrett is a PI attorney with experience in medical malpractice, medical products and pharmaceutical products liability, and catastrophic injury cases. Mr. Barrett is a seasoned trial attorney. However, “as of a couple of months ago,” he is “in-between law firms” deciding whether to form a new firm or “quit it [the practice of law] all together.” In response to a question about reviewing medical records and life-care plans, Mr. Barrett testified that because these types of cases are handled on a contingency fee basis, he has to evaluate each case to determine whether the contingent fee is enough to “pay a staff of -- in my case, 20 or so employees. Pay a lease, pay for a building, pay for all the things, all the overhead, [and] pay a salary.” Mr. Barrett did not “honestly . . . remember how the tender was stated” when asked if he was tendered specifically as an expert in the allocation of settlements in a Division hearing. When asked if it mattered how damages are allocated in a settlement, Mr. Barrett provided there might be tax consequences because in punitive damages “you don’t get the same percentages,” which “could have an affect [sic] on lien recoveries.” He further qualified his answer by stating “you’ve already . . . won the case because you’ve got an allocation in the jury verdict.” This case is based on confidential settlements, not a jury verdict. Mr. Barrett explained Mr. Eady’s damages: [Mr. Eady] was a passenger in a Jaguar, which, I took from the complaint, was a new car or a car that belonged to an agency. And it was driven by an employee, or Bailee, or something of that agency. Who took too tight a turn and rolled the car. And, apparently, there was some intrusion from the top of the car, from the ceiling of the car. And from the nature of the damage, it’s almost certain that he hit his head on the top of the car and broke, or dislocated several vertebrae in his neck. Such that his fourth cervical vertebrae was – well, I would call it a crush or a burst fracture, down to where it intruded on the fifth cervical vertebrae. And there was extreme, not total, damage to his spinal cord, in the area of the fourth and fifth cervical vertebrae, such that he became what’s called a partial quadriplegic. By “partial,” we can firmly define and say that he had, initially, no feeling or use at all in his lower extremities, with a lot of pain and some partial movement of his upper extremities. *** [H]e was very motivated to recover. . . . [H]e was still striving to get better. And he had made some progress, he was able to -- some use of his arms. Mr. Barrett “paid most attention to . . . [Mr. Eady’s] life care plan,” which Mr. Barrett thought was a “preliminary” plan. Mr. Barrett acknowledged the $1,000,000 settlement, but opined that the settlement did “not in any way” fully compensate Mr. Eady for the full amount of his damages. Mr. Barrett suggested that Petitioner’s damages were in the range of $25,000,000 to $35,000,000. There was no suggestion that the settlement was forced upon Petitioner. Mr. Guito and Mr. Barrett spoke in generalities, speculations, and reasonableness as to the settlement in relation to the Medicaid lien. Each suggested what they thought a jury would do, if presented with the facts in this case. Their testimony suggested that a lesser amount of the total recovery should be allocated for Mr. Eady’s past medical expenses in this instance. Mr. Barrett accepted Mr. Guito’s suggestion that $15,000,000 was a conservative damage estimate. They postulated that because Petitioner only received $1,000,000 in settlement of what should have been at least a $15,000,000 award (or 6.66 percent of the $1,000,000 settlement), then Medicaid should only recover 6.66 percent from the settlement. The witnesses asserted that AHCA’s reimbursement for Petitioner’s past medical expenses should only be $11,838.01, or 6.66 percent of the $1,000,000 settlement amount. This is often referred to as the “proportionality test” or “pro-rata test.” For the reasons set forth below, the undersigned does not agree with Petitioner’s position. Application of the formula contained in section 409.910(11)(f) to Petitioner’s $1,000,000 settlements would require payment to ACHA in the amount of $177,747.91, the actual amount of the funds expended by Medicaid.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration ("Respondent" or "ACHA"), in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioner, Jonathan Velez ("Petitioner" or "Velez"), from a third party, pursuant to section 409.910, Florida Statutes (2015).
Findings Of Fact On September 3, 2008, Velez, then a 14-year-old adolescent child was injured while playing football in Clewiston, Florida. On the date of the accident, Petitioner had a helmet to helmet (face to face) collision with another football participant. The collision caused a hyper-extended injury and Velez immediately fell to the ground and lost consciousness. Velez suffered a C5 burst fracture, a spinal cord injury, anterior cord syndrome and subsequent injuries originating from this accident, initially rendering him paralyzed. As a result of the injuries, and subsequent ramifications from said injuries, Velez suffered extensive permanent injuries and required extensive medical treatment in Miami, Florida, from September 3, 2008, through October 28, 2013. Petitioner sued numerous defendants for his injuries, but because of waiver and release forms signed by his guardian, the parties settled the case to avoid the possibility of summary judgment against Petitioner. Petitioner recovered $430,000.00 from a settlement against defendants. The settlement's allocation included: attorney's fees (40 percent) in the amount of $172,000.00; costs in the amount of $4,789.72; past medicals in the amount of $60,000.00; and future medicals in the amount of $20,000.00.1/ ACHA, through the Medicaid program, paid $142,855.89 on behalf of Petitioner for medical benefits related to the injuries sustained by Petitioner. Xerox Recovery Services, Respondent's collection's contractor, notified Petitioner that he owed $142,855.89 to satisfy a Medicaid lien claim from the medical benefits paid to him from the proceeds received from the third-party settlement. Petitioner contested the lien amount. At the final hearing, Petitioner presented, without objection, the expert valuation of damages testimony of Donna Waters-Romero ("Waters-Romero"). Waters-Romero has 30 years' experience in both state and federal courts and has solely practiced in the area of personal injury defense, including cases with similar injuries specific to this type of case. Waters-Romero's experience also encompasses evaluation of personal injury cases based on the review of medical records, case law, and injuries. In preparation for her testimony, Waters-Romero reviewed the pleadings, depositions, answers to interrogatories, evaluations, medical records, and defendant's motion for summary judgment along with the attached documents. She also met with Petitioner's attorneys and reviewed the mediation summary, exhibits, case law on Medicaid liens, letter of discharge, and release and settlement agreement. Waters-Romero also specifically researched three circuit court orders that were entered regarding allocation regarding Medicaid liens. To determine how to value Petitioner's claim, Waters-Romero relied on Wos v. E.M.A., 133 S. Ct. 1391(2013), a United States Supreme Court case, and on the circuit court cases as guidance. She determined that every category of the settlement should be reduced based on the ultimate settlement. During her evaluation, Waters-Romero also acknowledged the litigation risk in Velez's case due to the issues with the liability and the waiver and release. Based on her review, Waters-Romero opined that the overall value of Petitioner's claim was valued conservatively at $2,000,000.00, which was unrebutted. Waters-Romero's testimony was credible, persuasive, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner's injury was $2,000,000.00 and that the settlement amount, $430,000.00 was 21.5 percent of the total value. The settlement does not fully compensate Petitioner for the total value of his damages. ACHA's position is that it should be reimbursed for its Medicaid expenditures pursuant to the statutory formula in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting 25 percent attorney's fee of $107,500.00 from the $430,000.00 recovery, which yields a sum of $322,500.00. In this matter, ACHA then deducted zero in taxable costs, which left a sum of $322,500.00, then divided that amount by two, which yields $161,250.00. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of its lien, whichever is less. Petitioner's position is that reimbursement for past medical expenses should be limited to the same ratio as Petitioner's recovery amount to the total value of damages. Petitioner has established that the settlement amount of $430,000.00 is 21.5 percent of the total value ($2,000,000.00) of Petitioner's damages. Using the same calculation, Petitioner advances that 21.5 percent of $60,000.00 (Petitioner's amount allocated in the settlement for past medical expenses), $12,900.00, should be the portion of the Medicaid lien paid. Petitioner proved by clear and convincing evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Derek Matson (“Petitioner” or “Mr. Matson”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, admitted facts set forth in the Pre- hearing Stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Matson was 25 years old in November of 2017, and employed as an executive chef responsible for managing a restaurant’s cooking operations. His annual salary was approximately $61,000.00. On November 5, 2017, Mr. Matson was drinking and having brunch with his girlfriend. He met a friend, and they decided to take the friend’s boat out that afternoon. Mr. Matson was already very intoxicated by the time he arrived at the dock and continued to drink after the boat left the dock. While the boat was anchored in very shallow water, Mr. Matson dove from the boat, struck his head on the seafloor, and suffered a catastrophic spinal cord injury. Mr. Matson is now unable to walk, ambulate, eat, toilet, or care for himself in any manner. He has no use of his legs and extremely limited use of his upper extremities. Mr. Matson spends his waking hours in a wheelchair, requires continuous care, and must be repositioned every two hours in order to prevent pressure sores. Mr. Matson frequently suffers from depression. Medicaid, through AHCA, paid $85,896.60 for Mr. Matson’s care. Via a Medicaid managed care plan known as Optum, Medicaid paid an additional $32,167.31 in benefits. The sum of these benefits, $118,063.91, constituted Mr. Matson’s entire claim for past medical expenses. Mr. Matson pursued a personal injury claim against the boat’s owner and operator. The boat owner’s insurance policy was limited to $305,000.00, and the boat owner had no other recoverable assets. Ultimately, Mr. Matson’s personal injury claim settled for an unallocated lump sum2/ of $305,000.00. During the pendency of Mr. Matson’s personal injury claim, AHCA was notified of the action and asserted an $85,896.00 lien against Mr. Matson’s recovery from the personal injury claim. AHCA did not move to intervene or join in Mr. Matson’s personal injury case. AHCA received notice of Mr. Matson’s settlement and has not moved to set-aside, void, or otherwise dispute the settlement. As noted above, Medicaid spent $85,896.60 on Mr. Matson’s behalf. Application of the formula in section 409.910(11)(f) requires that all of AHCA’s $85,896.60 lien be satisfied.3/ Mr. Matson has deposited $85,896.60 in an interest bearing account pending an administrative determination of AHCA’s rights. Valuation of the Personal Injury Claim Jack Hill represented Mr. Matson during the personal injury action. Mr. Hill has practiced law since 2002 and been employed with the law firm of Searcy, Denney, Scarola, Barnhart, and Shipley in West Palm Beach, Florida, since August of 2004. Mr. Hill is board certified in civil trial law by the Florida Bar and has handled personal injury cases for approximately 15 years. Mr. Hill is a member of several trial attorney associations such as the American Justice Association, the Florida Justice Association, the Palm Beach Justice Association, and AIG, a products liability plaintiffs’ organization. Mr. Hill routinely evaluates the monetary value of damages suffered by his clients. That process involves discussing individual cases with the 28 other members of his law firm and then forming a consensus regarding a case’s settlement value and the damages a jury would likely award in the event of a trial. Without objection from AHCA, Mr. Hill was accepted as an expert regarding the evaluation of damages. If Mr. Matson’s personal injury action had gone to trial, Mr. Hill is confident that a jury would have returned a verdict of at least $20 million. As for the discreet aspects of Mr. Matson’s total damages, Mr. Hill testified that Mr. Matson’s economic damages exceed $20 million and that his noneconomic damages, such as pain and suffering, are $20 million. Mr. Hill testified that “$305,000 was a grossly inadequate recovery for Derek, considering his injuries.” If one assumes that a jury would have returned a $20 million verdict, then the $305,000.00 settlement represents a 1.52 percent recovery of Mr. Matson’s total damages. If one applies that same percentage to the individual components of the personal injury claim, then it would be determined that Mr. Matson only recovered 1.52 percent or $1,794.57 of the $118,063.91 in past medical expenses. This computational method shall be referred to herein as “the pro rata formula.” Mr. Hill testified that the pro rata formula was a reasonable methodology to ascertain how much of Mr. Matson’s past medical expenses were recovered via the $305,000.00 settlement: Q: Mr. Hill, based on a $20 million value of all damages, the $305,000 settlement represents a recovery of 1.25% of the value of the damages. Would you agree with that? A: 1.52%. Q: All right. And accordingly, in this settlement, Mr. Matson recovered 1.52% of his claim for past medical expenses? A: Yes. He would have recovered 1.52% of all aspects of his damages, including those for past medicals that were paid on his behalf. So, yes. Q: And this is similar to how a jury verdict would work, is that correct? So the jury would assign a value to each category of damages. But if it was determined that the defendant, the jury determined that the defendant was only 1.52% liable for those damages – the jury, the judge, in entering the judgment, would reduce each element of damages to that 1.52% amount. Is that correct? A: That’s the way it works, yes. Q: All right. So 1.52% of the $118,063.91 claim for past medical expenses, that comes out to $1,794.57. Is that your math? A: It is – that there was $32,167.31 paid by private health insurance, and the Medicaid paid $85,896.60. And so you take 1.52% of $118,063.91, you get a total past recovery for medical expenses of $1,794.57. Q: All right. And that’s the amount you believe should be allocated to past medical expenses? A: It is. Yes, Sir. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Hill was compelling and persuasive as to: (a) the total damages incurred by Mr. Matson; (b) that Mr. Matson only recovered 1.52 percent of his total damages; and (c) that Mr. Matson only recovered 1.52 percent of his past medical expenses. Using the pro rata formula, the ratio that results from dividing the settlement amount by total damages, is a reasonable method to determine how much of a party’s past medical expenses were recovered through the settlement. AHCA offered no evidence to counter Mr. Hill’s opinions regarding Mr. Matson’s total damages or the past medical expenses he recovered. Accordingly, the preponderance of the evidence demonstrates that the total value of Mr. Matson’s personal injury claim is no less than $20 million and that the $305,000.00 settlement resulted in him recovering no more than 1.52 percent of his past medical expenses. In addition, the preponderance of the evidence demonstrates that $1,794.57 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Matson and payable to AHCA.
The Issue The issue to be determined is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration, from the proceeds of a 1 All references to Florida Statutes are to the 2019 version unless otherwise stated. third party settlement, in satisfaction of Respondent's Medicaid lien, pursuant to section 409.910(17)(b), Florida Statutes.
Findings Of Fact The Parties Petitioner, Mary Bishop, is a person for whom Medicaid paid medical care expenses for injuries that she suffered in an accident. Respondent, Agency for Health Care Administration, is the state agency that administers the Medicaid program in Florida. § 409.902, Fla. Stat. Stipulated Facts On June 25, 2014, Petitioner suffered catastrophic injuries when she fell from a moving vehicle while being transported between two medical facilities. In the accident, Petitioner suffered permanent catastrophic injuries, including severe brain damage, a broken shoulder, a broken arm, and a punctured lung. As a result of her injuries, Petitioner's leg was amputated below the knee. Medicaid paid for Petitioner's medical care related to the injury. Through Respondent, Medicaid provided $293,149.98 in benefits for Petitioner's medical care. This amount constitutes Petitioner's entire claim for past medical expenses. Petitioner's daughter, Nicole Milstead, was appointed Petitioner's guardian. Milstead, as Petitioner's guardian, pursued a personal injury claim against the parties allegedly liable ("Tortfeasors") for Petitioner's injuries to recover all of Petitioner's damages. Petitioner's personal injury claim was settled through a series of confidential settlements in a lump-sum of $2,000,000 ($2 million).2 During the pendency of Petitioner's personal injury claim, Respondent was notified of the claim and asserted a Medicaid lien in the amount of $293,149.98 against Petitioner's cause of action and settlement of that action. Respondent did not institute a civil action to enforce its rights under section 409.910, nor did it intervene or join in Petitioner's claim against the Tortfeasors. By letter, Respondent was notified of Petitioner's $2 million settlement with the Tortfeasors. 2 At the final hearing, testimony revealed that in addition to the $2 million settlement, there was a $100,000 settlement allocated to Petitioner's husband associated with his claims relative to Petitioner's injuries. The parties have agreed to address this $100,000 settlement separately, so this proceeding only concerns the $2 million settlement received by Petitioner. See Joint Stip., Aug. 17, 2020. Respondent has not filed a motion to set aside, void, or otherwise dispute Petitioner's settlement with the Tortfeasors. The Medicaid program, through Respondent, paid $293,149.98 on behalf of Petitioner, which represents the amount paid for her past medical expenses. If the formula in section 409.910(11)(f) is applied to Petitioner's $2 million settlement, then the full amount of the $293,149.98 Medicaid lien should be paid to Respondent. Petitioner deposited the $293,149.98 Medicaid lien amount into an interest-bearing account for the benefit of Respondent, pending the outcome of an administrative determination of Respondent's right regarding the Medicaid lien. Pursuant to section 409.910(17), such deposit constitutes "final agency action" under chapter 120. Facts Found Pursuant to Evidence Adduced at Final Hearing As stated above, on June 25, 2014, Petitioner, who had a long history of mental illness, leapt from a moving vehicle on I-95 while being transported between a mental health provider's office and the assisted living facility where she resided. As a result, Petitioner suffered severe injuries, including traumatic brain injury. She was in a coma; intubated; ventilated; suffered multiple fractures resulting in a right foot below-knee amputation; multiple upper right extremity injuries, including humeral and shoulder injuries; cervical and thoracic vertebrae fractures; fractured ribs; fractured fingers; and multiple-organ failure. She had open reduction and internal fixation surgery on her elbow and an exploratory laparotomy. In all, she was hospitalized for approximately eight months. As a result of the injuries she sustained, Petitioner is unable to bathe herself, dress herself, or cut her food without assistance. She has a prosthetic foot and uses a walker; has limited use of her arm, and is significantly scarred and disfigured. She suffers extreme pain in her upper right extremity, and as a result of her traumatic brain injury, experiences difficulty in problem-solving, which leads to her frustration. Petitioner requires attendant care 24 hours per day, seven days a week. Overbeck testified as a fact and expert witness on behalf of Petitioner. He is a Florida Bar Board-Certified attorney in civil trial practice, and has nearly 30 years of experience in a broad range of personal injury-related matters, including assessing the damages value of cases involving catastrophic injury, and the allocation of settlements in various contexts, including the Medicaid lien context. Overbeck represented Petitioner in her personal injury case against liable third parties, including the assisted living facility in which Petitioner resided; the mental health outpatient facility where she was receiving counseling at the time of her accident; the entity that was transporting Petitioner when she jumped from the moving vehicle; the driver of the vehicle from which Petitioner jumped; and the transport coordinator who arranged the vehicle transportation for Petitioner. Ultimately, Petitioner's claims against the liable third parties settled for a total of $2 million. Because Petitioner's case settled before trial, a life care plan and economist report was not prepared. However, based on Overbeck's experience regarding life care plans in similar cases, he opined that Petitioner's future medical needs would have a value of between $1 million and $3 million. Additionally, he testified, credibly and persuasively, that Petitioner's non-economic damages (i.e., pain and suffering) would constitute the greatest part of any jury verdict, and that, based on cases involving catastrophic injuries and other circumstances similar to Petitioner's, her non-economic damages would be valued on the order of $15 million to $18.5 million. Overbeck opined that Petitioner's damages had a value in excess of $8 million, which he described as a "conservative" valuation. Thus, the $2 million settlement did not fully compensate Petitioner for the full value of her damages. According to Overbeck, Petitioner's $2 million third-party recovery represents only 25% of the value of her damages, using the conservative $8 million valuation of those damages. Overbeck testified that because Petitioner recovered only 25% of her total damages, conservatively valued at $8 million, it is fair and reasonable that 25% of the $2 million third-party recovery be allocated for Petitioner's past medical expenses. This would amount to $73,287.50 to be paid to Respondent in satisfaction of its Medicaid lien. Barrett also testified as an expert witness on behalf of Petitioner. Barrett is a trial lawyer who has over 40 years of experience in personal injury law. His experience includes handling catastrophic injury cases, including those involving traumatic brain injury. As part of his practice, he stays abreast of jury verdict awards and routinely makes assessments regarding the value of damages suffered by injured parties. Barrett testified that based on his experience in cases involving parties who suffered catastrophic injuries similar to Petitioner's, he estimated the value of Petitioner's damages to be in the $8 million to $12 million range, with $8 million "being the basement." Based on his review of life care plans and economist reports for persons who suffered traumatic brain injury and needed "24/7" care, Barrett testified that Petitioner's claim for future medical expenses would be high. Additionally, he concurred with Overbeck that Petitioner's claim for non-economic damages would be very high and would comprise the greater part of any damages award. Based on cases he reviewed, Barrett valued Petitioner's non-economic damages alone at over $8 million. Barrett opined that the $2 million settlement amount did not fully compensate Petitioner for all of the damages she suffered, and represented 25% of the conservative $8 million valuation of her damages. He testified that because the $2 million third-party settlement amount that Petitioner recovered represented 25% of the total value of her damages, it was "very reasonable" for 25% of her third party recovery to be allocated to past medical expenses. Respondent did not call any witnesses or present any countervailing evidence regarding the value of Petitioner's damages. Thus, Petitioner's evidence in this proceeding is unrebutted.
The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Markus Smith (“Petitioner” or “Mr. Smith”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds he received from a third party.
Findings Of Fact The following Findings of Fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On February 12, 2018, Mr. Smith was 26 years old and working for $11.00 an hour as a custodian for E&A Cleaning at All Saints Academy, in Winter Haven, Florida. While leaving the school just before 9:00 a.m., Mr. Smith came to a traffic light at the school’s entrance. When the light turned green and Mr. Smith moved into the intersection, another car ran the red light and slammed into the driver’s side of Mr. Smith’s vehicle. Mr. Smith was severely injured and transported to Lakeland Regional Medical Center where he stayed until approximately April 13, 2019. Mr. Smith’s injuries included, but were not limited to, a collapsed lung, altered mental state, intracerebral hemorrhage, traumatic subdural hematoma, traumatic subarachnoid hemorrhage with loss of consciousness, traumatic intraventricular hemorrhage, lumbar transverse process fracture, and a left ankle fracture. Mr. Smith required surgery to repair his left ankle, and he now walks with a severe limp. He experiences a constant, dull ache in his left ankle and is unable to walk any significant distance without experiencing severe pain. It is very difficult for Mr. Smith to stand, and he has a constant fear of falling because his balance is “terrible.” Mr. Smith is left-handed, and the accident left him with very limited use of his left hand. Since the accident, Mr. Smith’s vision has been blurry, and he suffers from double vision. He believes that his impaired vision would prevent him from obtaining a driver’s license. As described above in paragraph 3, Mr. Smith suffered a brain injury during the accident, and there was some bleeding inside his skull. He now has difficulty forming long-term memories and often records conversations so that he has a record of what was said. Since the accident, Mr. Smith has been struggling with anger and depression. He has difficulty controlling his anger and is prone to random outbursts of rage. He has experienced suicidal thoughts and asked his current caretaker if she would kill him, if he gave her a knife. Since being released from the hospital, Mr. Smith has not received any physical or occupational therapy. He was receiving some mental health treatment and taking medicine to treat his depression and memory issues. However, he cites a lack of transportation as to why he is no longer receiving any care. Mr. Smith has not worked since the accident, and the Social Security Administration has determined that he is disabled. After leaving the hospital, Mr. Smith stayed with his girlfriend. After they separated, Mr. Smith lived with his father. Since November of 2018, he has been living with his father’s ex-wife in Georgia. Mr. Smith, through counsel, filed a lawsuit against the driver and owner of the car that slammed into him. They settled Mr. Smith’s claims for the available policy limits of $100,000.00. There was no other liable person or other insurance available to Mr. Smith to compensate him for his injuries. AHCA provided $74,312.38 in Medicaid benefits to Mr. Smith and determined through the formula in section 409.910(11)(f), that $36,596.54 of Ms. Smith’s settlement proceeds was subject to the Medicaid lien. Mr. Smith, through counsel, deposited the entire settlement proceeds of $100,000.00 into an interest bearing account pending resolution of AHCA’s interest. Valuation of the Personal Injury Claim David Dismuke was identified as Mr. Smith’s expert witness. Since 2012, Mr. Dismuke has been a board-certified trial lawyer, and approximately one percent of attorneys in Florida possess that credential. That designation essentially means that an attorney can represent that he or she is an expert in civil trial practice. Mr. Dismuke has his own law practice and has handled at least 34 civil jury trials. Over the course of his 18-year legal career, he has assessed the value of at least 2,000 personal injury cases, including ones involving brain injuries. Mr. Dismuke also has extensive experience in valuing the individual components of a damages award: Q: Before we get to this final opinion, Mr. Dismuke, in your practice, have you had to allocate portions of settlements between past medical expenses, usual medical expenses, and the other elements of damages? A: Many times. Q: And for what purpose would you do that sort of allocation? A: We do it, we do it frequently. We do it often times in situations just like this, where we’re trying to determine what an appropriate amount would be for either a Medicare or Medicaid lien, health insurance liens, we deal with it in situations, and we have lien issues on almost every case. Q: And do you also do it when you are trying to help clients figure out how, and in what manner, to structure their settlements, so they can have enough money for their future medical expenses and pay their old medical expenses? A: Yes, we do. And in fact to make another point, every single case I have to allocate [] the value [of past medical expenses], that’s one element of damages, what the value of future [medical expenses] is, that’s another element of damages, past lost wages, another element of damages, future lost wages, another element of damages, pain and suffering, inconvenience, you know, the noneconomic stuff. Every case we make these, we make these determinations. That’s how we come to total value on every case that we settle or get a verdict on. Q: And even on the ones that you settle for less than full value, are you still performing that same evaluation of the allocation of the various elements of damages? A: Yes sir. Mr. Dismuke has similar experience with Medicare set asides: Q: Now, another area where you allocate between elements of damages is where you require a Medicare set aside, isn’t that true? A: That’s correct. Q: Now, tell the court what a Medicare set aside is? A: A Medicare set aside is something that we put in place to protect the future interest of Medicare for when there’s a settlement. So we receive a large settlement that the person is still going to require future medical care, so we have to evaluate what is a reasonable amount of that settlement to set aside to protect Medicare’s future interests, so the client doesn’t just get a windfall from the settlement. Q: And have you done that? A: Multiple times. Q: And that requires you to evaluate the total settlement and allocate between past medical expenses, future medical expenses, pain and suffering and other elements of damages? A: That’s correct. In Mr. Dismuke’s opinion, Mr. Smith’s total damages easily amount to $1 million and could be as high as $2 to $3 million. Mr. Dismuke values Mr. Smith’s lost wages at no less than $750,000.00. While Mr. Smith is not currently receiving medical treatment, Mr. Dismuke believes those expenses would amount to hundreds of thousands of dollars and possibly millions of dollars. However, the damages resulting from Mr. Smith’s pain and suffering would be the largest component of his total damages. Mr. Dismuke believes that Mr. Smith’s past medical expenses would be the smallest component of his total damages given Mr. Smith’s age, future needs, and lost wages. With regard to allocating $10,000.00 of Mr. Smith’s total recovery to past medical expenses, Mr. Dismuke testified that a “$10,000 allocation of the $100,000 settlement is perfectly reasonable if not, more than generous, given the past [medical expenses] in this case of around $70,000. So setting forth ten percent of that is a generous allocation for past medical expenses.” Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Dismuke was compelling and persuasive as to the total damages incurred by Mr. Smith. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Dismuke’s considerable experience with litigating personal injury lawsuits makes him a very compelling witness regarding the valuation of damages suffered by an injured party such as Mr. Smith. The undersigned also finds that Mr. Dismuke was qualified to present expert testimony as to how a damages award should be allocated among its components, such as past medical expenses, economic damages, and noneconomic damages.2/ AHCA offered no evidence to counter Mr. Dismuke’s opinions regarding Mr. Smith’s total damages or the past medical expenses he recovered. Accordingly, it is found that the preponderance of the evidence demonstrates that the total value of Mr. Smith’s personal injury claim is no less than $1 million and that the $100,000.00 settlement resulted in him recovering no more than 10 percent of his past medical expenses. In addition, the preponderance of the evidence demonstrates that $10,000.00 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Smith and payable to AHCA.
The Issue The issue is the amount of the Petitioner’s personal injury settlement proceeds that should be paid to the Agency for Health Care Administration (AHCA) to satisfy its Medicaid lien under section 409.910, Florida Statutes (2016).1/
Findings Of Fact The Petitioner’s right hand and wrist were cut by glass in the bathroom of her apartment in March 2012. Her injuries included damage to the tendons and nerves. She was hospitalized and received medical care and treatment, which Medicaid paid in the amount of $4,348.45. The Petitioner also personally owes $123 for physical therapy she received. The Petitioner sued the owner of the apartment, who vigorously contested liability and raised several affirmative defenses alleging that the Petitioner’s negligence or recklessness was wholly or partially responsible for her injuries and that she assumed the risk. The Petitioner’s damages were substantial because she lost the effective use of her right hand. She applied and was approved for Social Security supplemental security income benefits, subject to periodic reviews of her disability status. She presented evidence in the form of her and her attorney’s testimony and a report prepared by a vocational evaluation expert that she will suffer lost wages in the amount of approximately a million dollars, calculated by assuming she would have worked full-time earning $12-15 an hour until age 70, but for her accident, and assuming she cannot be gainfully employed in any capacity as a result of her injury. While that amount of lost wages might be overstated, the Petitioner presented evidence in the form of her attorney’s testimony and a supporting affidavit of another attorney with experience in personal injury case valuations that the monetary value of her damages was no less than approximately $550,000.2/ AHCA’s cross-examination did not reduce the persuasiveness of the Petitioner’s evidence, and AHCA presented no contrary evidence. In March 2017, the Petitioner settled her lawsuit for a mere $55,000 because of her concern that a jury would find for the defendant or reduce the recoverable damages due to comparative negligence. The Petitioner knew at the time of her settlement that AHCA was claiming a $4,348.45 Medicaid lien on the settlement proceeds. The Petitioner offered AHCA $434.85 in full satisfaction of the Medicaid lien claim. AHCA declined and asserts its entitlement to the full amount of the lien claim. The Petitioner’s settlement agreement included an allocation of $434.85 to AHCA’s Medicaid lien, $123 to the other past medical expenses, and the rest to other components of damages (which did not include any future medical expenses). AHCA was not a party to the settlement and did not agree to that allocation. The Petitioner’s attorney testified that the Petitioner’s proposed allocation is fair and reasonable and introduced the concurring affidavit of another attorney. AHCA did not present any evidence but argued that the Petitioner did not prove that AHCA’s Medicaid lien should be reduced and that, as a matter of law, AHCA was entitled to the claimed lien.
The Issue On October 3, 2016, Petitioners, Ammar Al Batha, as Personal Representative of the Estate of Abdel-Kader Al Batha, deceased, and Shahira Alshami, individually, filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien (Petition) with the Division of Administrative Hearings (DOAH) pursuant to section 409.910(17)(b), Florida Statutes (2016).1/ The final hearing was scheduled for December 14, 2016. On November 30, 2016, Respondent filed a Motion for Summary Final Order. In the Motion for Summary Final Order, Respondent asserted that Petitioners, as a matter of law, cannot successfully challenge the amount payable to AHCA under section 409.910(17)(b) because Petitioners are not the Medicaid recipients. On December 2, 2016, Petitioners filed a Motion for Continuance and Extension of Time to Respond to Motion for Summary Final Order. That motion was granted by the undersigned on December 6, 2016, and the hearing scheduled for December 14, 2016, was canceled. On December 12, 2016, Petitioners filed an Objection to Respondent’s Motion for Summary Final Order, asserting that a Medicaid recipient’s right to challenge the payment of a Medicaid lien through DOAH does not die with the recipient, and the recipient’s representative is entitled to challenge the amount payable to AHCA under the procedure in section 409.910(17)(b). Both Respondent’s Motion for Summary Final Order and Petitioners’ Objection to Respondent’s Motion for Summary Final Order have been duly considered in preparation of this Summary Final Order.
Findings Of Fact Based on the record as a whole, the following Findings of Fact are made: On July 2, 2015, Abdel-Kader Al Batha (Mr. Al Batha) was involved in a car accident in Broward County, Florida. In this accident, Mr. Al Batha suffered catastrophic physical and neurological injuries, and, as a result, died on July 20, 2015. Mr. Al Batha was survived by his spouse, Shahira Alshami (Ms. Alshami). Mr. Al Batha’s medical care related to his injury was paid by Medicaid, and AHCA, through the Medicaid program. Medicaid provided $143,663.18 in benefits associated with Mr. Al Batha’s injury. This $143,663.18 represented the entire claim for past medical expenses. Mr. Al Batha’s funeral expenses were in the amount of $3,850. As a result of Mr. Al Batha’s injury and death, Ms. Alshami suffered economic and non-economic damages, which are defined and limited by the Florida Wrongful Death Act to loss of support, services, companionship, and protection from the date of injury, as well as her mental pain and suffering from the date of injury per section 768.21, Florida Statutes. In addition, the Estate of Abdel-Kader Al Batha (the Estate) suffered economic damages, which are defined and limited, by the Florida Wrongful Death Act, to medical expenses, funeral expenses, and loss of net accumulations per section 768.21(6). Altogether, the total combined monetary value of Ms. Alshami and the Estate’s individual damages, and the value a jury would assign to these damages, are no less than $2,500,000 to $5,000,000. Ammar Al Batha, as the Personal Representative of the Estate, brought a wrongful death action to recover both the individual statutory damages of Ms. Alshami, as well as the individual statutory damages of the Estate, against the driver/owner of the vehicle that caused the accident (Defendant). While Ms. Alshami and the Estate’s damages have an exceedingly high monetary value in excess of $2,500,000 to $5,000,000, there were significant limitations to recovering the full value of these damages from the Defendant associated with disputed facts, liability, and policy insurance limits of the primary responsible parties. Based on these significant limiting factors, the wrongful death action was settled through a confidential settlement. While settlement was appropriate given the limiting factors, that does not negate that in the settlement, Ms. Alshami and the Estate are not being fully compensated for all their damages, and they are only receiving a fraction of the total monetary value of all their damages. Understanding that the settlement does not fully compensate Ms. Alshami and the Estate for all their damages, and in the settlement they are only receiving a fraction of the total monetary value of all the damages, including only a fraction of the $143,663.18 claim for past medical expenses, the parties to the settlement made an allocation to the claim for past medical expenses. This allocation was based on the calculation of the ratio the settlement bore to the total monetary value of all damages. Using the conservative valuation of all damages of $2,500,000, the parties calculated that Ms. Alshami and the Estate were receiving 44.5 percent of the total monetary value of all their damages in the settlement, and accordingly they were receiving in the settlement 44.5 percent, or $63,930.12, of their $143,663.18 claim for past medical expenses. In making this allocation, the parties agreed that: The settlement does not fully compensate Mr. Al Batha’s surviving spouse and the Estate of Abdel-Kader Al Batha for all the damages they have suffered and the settlement only compensates them for a fraction of the total monetary value of all the damages; The damages have a value in excess of $2,500,000; The claim for past medical expenses was $143,663.18; and Allocation of the $63,930.12 of the settlement to past medical expenses, and the remainder of the settlement toward the satisfaction of claims other than the past medical expenses, is reasonable and proportionate based on the same ratio this settlement bears to the total monetary value of all the damages. The parties memorialized the allocation of $63,930.12 of the settlement to past medical expenses in the General Release (Release). The Release stated: Although it is acknowledged that this settlement may not fully compensate Releasing Party for all of the damages they have allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Releasing Party for a fraction of the total claimed monetary value of their alleged damages. The parties agree that Releasing Party’s alleged damages may have a value in excess of $2,500,000, of which approximately $143,663.18 represents the claimed amount for past medical expenses. Given the facts, circumstances, and nature of Releasing Party’s damages and this settlement, the parties have agreed to allocate $63,930.12 of this settlement to Releasing Party’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the claimed total monetary value of all Releasing Party’s damages. As a condition of Mr. Al Batha’s eligibility for Medicaid, Mr. Al Batha, before his death, assigned to AHCA his right to recover from liable third parties, medical expenses paid by Medicaid. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA, through its collections contractor, Xerox Recovery Services, asserted a $143,663.18 Medicaid lien against the Estate’s cause of action and settlement of that action. The attorney handling the wrongful death claim notified AHCA of the settlement by letter and provided AHCA with a copy of the executed General Release. The letter explained that the damages had a value in excess of $2,500,000, and the settlement represented only a 44.5 percent recovery of the $143,663.18 claim for past medical expenses, or $63,930.12. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $143,663.18 Medicaid lien. AHCA calculated its payment pursuant to the formula in section 409.910(11)(f) based on the gross settlement, which includes those funds compensating Ms. Alshami for her individual claim for pain and suffering and loss of support, services, and companionship. This resulted in AHCA demanding payment for the full amount of the Medicaid lien, or $143,663.18.
