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 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 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 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 Whether a valid Medicaid lien exists, and, if so, what is the amount payable to Respondent pursuant to section 409.910(17), Florida Statutes, in satisfaction of the lien from a settlement received by Petitioners from a third-party.1/
Findings Of Fact Ethan Hunt (Ethan), was born on January 7, 2003, and died on May 31, 2006, from complications arising from his birth- related catastrophic neurological injury and severe disabilities. Petitioners, Elsa and Eric Hunt (the Hunts), individually, as parents of Ethan, and as the Co-Personal Representatives of the Estate of Ethan Hunt (Estate), brought a wrongful death lawsuit against the hospital where Ethan was born, a physician, and an Advanced Registered Nurse Practitioner (ARNP), to recover their individual damages as the surviving parents of Ethan, as well as the individual claim for damages of the Estate. In accordance with the limitation on damages recoverable in wrongful death actions contained in section 768.21, Florida Statutes, the Hunts' wrongful death lawsuit specifically sought the individual damages of each parent for their "mental pain and suffering and loss of companionship" of their deceased son. Further, the wrongful death action sought, on behalf of the Estate, recovery of "medical and funeral expenses." Ethan was a Medicaid recipient and a portion of his medical care was paid for by Medicaid. Respondent, Agency for Health Care Administration (AHCA), through the Medicaid program, paid $315,632.17 in benefits on behalf of Ethan for medical benefits related to the alleged negligent medical care received by Ethan. Ethan first received medical treatments for which Medicaid was obligated to make payments on June 11, 2003, and AHCA, through the Medicaid program, made its last payment for Ethan's medical care on May 29, 2006. As a condition of Ethan's eligibility for Medicaid, Ethan's right to recover from liable third-parties medical expenses paid by Medicaid was assigned to AHCA. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. Pursuant to section 409.910(6)(c), Florida Statutes, AHCA's Medicaid lien attached and was perfected on June 11, 2003, when Ethan first received medical care for which Medicaid was obligated to make payments. On May 25, 2005, AHCA recorded in the Miami-Dade County public record its Claim of Lien and Notice of Assignment and Other Statutory Rights (Lien), Book 23409, pages 2856-2858. By letter dated May 28, 2008, to an attorney representing the Hunts and the Estate, from AHCA’s contracted vendor, Health Management Systems (HMS), AHCA indicated that the Medicaid lien was in the amount of $315,632.17. On July 11, 2008, the Hunts, on behalf of themselves and Ethan's Estate, submitted to all defendants in the wrongful death action, Plaintiffs’ Proposal for Settlement to All Defendants (Proposal). The Proposal offered a settlement of $7,250,000.00 to be allocated as follows: Elsa Hunt $3,300,000.00 45.5% Eric Hunt $3,300,000.00 45.5% Estate of Ethan Hunt $650,000.00 9.0% The Hunts' July 11, 2008, Proposal was rejected, and a mediation of the wrongful death lawsuit was held on May 12, 2009. By letter dated May 4, 2009, to HMS, the attorney representing the Hunts in the wrongful death action notified AHCA's designated vendor of the May 12, 2009, mediation and provided a copy of the notice of mediation. AHCA did not attend or participate in the mediation. A global settlement was reached at the May 12, 2009, mediation for the total amount of $1,800,000.00. As part of the mediated settlement, the parties made an allocation of the settlement proceeds between individual claims of the surviving parents and the individual claim of the Estate. This allocation was memorialized in the Addendum to Mediation Settlement Agreement Allocation of Settlement (Addendum). Each parent was allocated a total amount of $819,000.00 "in satisfaction of their individual claims for mental pain and suffering and loss of companionship." The Estate was allocated a total of $162,000.00 "in satisfaction of its claims for medical expenses and funeral expenses." The parties allocated these amounts in accordance with the percentages as presented in the prior Proposal. By letter dated May 20, 2009, AHCA received notice that the case settled at the May 12, 2009, mediation and of the intent to issue a dismissal of the defendants in the case. On June 9, 2009, the court entered a Final Judgment of Dismissal with Prejudice. AHCA took no action to intervene in the wrongful death action or to seek relief from the settlement reached by the parties. Upon receipt of the settlement proceeds, the amount of $315,632.17 was placed into a trust account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action and notice thereof" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Pursuant to 42 U.S.C. section 1396a(a)(25)(A), (B), and (H), section 1396k(a), and section 1396p(a), AHCA may only assert a lien against, and seek recovery from, the portion of a Medicaid recipient’s settlement representing the Medicaid recipient’s compensation for medical expenses paid by Medicaid. The Hunts requested that AHCA calculate the amount owed in satisfaction of the lien pursuant to the statutory formula set forth in section 409.910(11)(f).2/ The Hunts requested that this calculation be based on the Estate’s recovery of $162,000.00, minus the Estate's share of attorneys' fees and the Estate’s $15,559.01 share of the litigation costs (which represents the Estate’s 9% proportionate share of the gross $172,877.87 in litigation cost). AHCA refused to calculate the amount payable to AHCA in accordance with section 409.910(11)(f), Florida Statutes, and continues to seek payment of its full $315,632.17 Lien from the gross settlement award, including those funds allocated to the parents for their individual claims. Pursuant to section 409.910(6)(c)9., a Medicaid lien exists for seven years after it is recorded, and the lien may be extended for one additional period of seven years by AHCA recording a Claim of Lien within the 90-day period preceding the expiration of the original lien. In the instant case, AHCA recorded its Lien on May 25, 2005. By operation of law, this Lien ceased to exist on May 25, 2012 (seven years after it was recorded on May 25, 2005). AHCA did not extend the existence of the Lien by again recording it within the 90-day time period preceding its expiration on May 25, 2012. Accordingly, AHCA’s Lien no longer exists. In addition to the Lien, AHCA has subrogation and assignment rights to collect third-party benefits for the amount of medical assistance provided by Medicaid. § 409.910(6)(a) and (b), Fla. Stat. Actions to enforce the rights of AHCA must be commenced within five years after the date a cause of action accrues, with the period running from the later of the date of discovery by AHCA of the case filed by recipient or his or her legal representative, or of discovery of any judgment, award, or settlement contemplated in the section, or of discovery of facts giving rise to a cause of action. § 409.910(11)(h), Fla. Stat. By May 20, 2009, at the latest, AHCA was aware of the settlement between the Hunts and the Estate, with Ethan's physician, ARNP, and the hospital at which he was born. As of the date of the final hearing, May 13, 2014, AHCA had not exercised any subrogation or assignment rights. Accordingly, AHCA's ability to pursue subrogation and assignment rights has expired. Based on the undersigned's finding that no enforceable Lien exists, and that AHCA's subrogation and assignment rights are extinguished, as discussed more fully in the Conclusions of Law, there is no need to address any of the other factual contentions of the parties.3/
Findings Of Fact The Petition named Dr. Castellon as the physician providing obstetric services at Jayden's birth on October 2, 2010. Attached to the motion is an affidavit of NICA's custodian of records, Tim Daughtry, attesting to the following, which has not been refuted: One of my official duties as Custodian of Records is to maintain NICA's official records relative to the status of physicians as participating physicians in the Florida Birth-Related Neurological Injury Compensation Plan who have timely paid the Five Thousand Dollar ($5,000) assessment prescribed in Section 766.314(4)(c), Florida Statutes, and the status of physicians who may be exempt from payment of the Five Thousand Dollar ($5,000) assessment pursuant to Section 766.314(4)(c), Florida Statutes. I maintain NICA's official records with respect to the payment of the Two Hundred Fifty Dollar ($250.00) assessment required by Section 766.314(4)(b)1., Florida Statutes, by all non-participating, non- exempt physicians. * * * As payments of the requisite assessments are received, NICA compiles data in the "NICA CARES" database for each physician. The "NICA CARES physician payment history/report" attached hereto for Dr. Celestino Castellon indicates that in the year 2010, the year in which Dr. Castellon participated in the delivery of Jayden Dewayne Norris, as indicated in the Petitioners' Petition for Benefits, Dr. Castellon did not pay the Five Thousand Dollar ($5,000) assessment required for participation in the Florida Birth-Related Neurological Injury Compensation Plan. Further, it is NICA's policy that if a physician falls within the exemption from payment of the Five Thousand Dollar ($5,000) assessment due to their status as a resident physician, assistant resident physician or intern as provided in Section 766.314(4)(c), Florida Statutes, annual documentation as to such exempt status is required to be provided to NICA. NICA has no records with respect to Dr. Castellon in relation to an exempt status for the year 2010. To the contrary, the attached "NICA CARES physician payment history/report" shows that in 2010, Dr. Castellon paid the Two Hundred and Fifty Dollar ($250) assessment required by Section 766.314(4)(b)1., Florida Statutes, for non- participating, non-exempt physicians. The NICA CARES statement attached to the affidavit of Mr. Daughtry supports the representations made in the affidavit. Petitioners have not offered any exhibits, affidavits or any other evidence refuting the affidavit of Mr. Daughtry, which shows that Dr. Castellon was not a participating physician in the Plan at the time of Jayden's birth. In her response to the Order to Show Cause, Ms. Louis did not dispute that Dr. Castellon did not participate in the Plan in 2010, but argued that his non-participating status should not be a bar to finding that the claim is compensable. Dr. Castellon was not a participating physician at the time of Jayden's birth on October 2, 2010.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), for medical expenses paid on behalf of Ashley Nunez pursuant to section 409.910, Florida Statutes (2016),1/ from settlement proceeds received by Petitioners from third parties.
Findings Of Fact Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On February 13, 2010, Ashley Nunez (“Ashley”), who was three years old at the time, presented to a hospital emergency room with a fever. A chest X-ray indicated that Ashley had left lobe pneumonia. The hospital ordered no blood work or blood cultures and did not investigate the cause of Ashley’s pneumonia. The hospital discharged Ashley with a prescription for Azithromycin. By February 14, 2010, Ashley’s fever was 102.9 degrees, and Ashley’s mother took her to a pediatrician. Rather than attempting to discover the cause of the fever, the pediatrician instructed Ashley’s mother that the prescription needed time to work and instructed her to bring Ashley back if the fever persisted. On February 16, 2010, Ashley’s aunt returned her to the pediatrician because Ashley’s fever was persisting and she had developed abdominal pain. Due to a concern that Ashley was suffering from appendicitis, the pediatrician referred her to an emergency room. Later that day, Ashley’s mother returned her to the emergency room that had treated Ashley on February 13, 2010. A second chest x-ray revealed that Ashley’s pneumonia had gotten much worse, and the hospital admitted her. Ashley’s respiratory condition continued to deteriorate, and blood cultures confirmed that she had streptococcus pneumonia. Two days after her admission, the hospital decided to transfer Ashley to a hospital that could provide a higher level of care. On February 18, 2010, an ambulance transferred Ashley to a second hospital. Even though Ashley’s respiratory condition continued to deteriorate, the paramedics and hospital transport team did not intubate her. Upon her arrival at the second hospital, Ashley had suffered a cardiopulmonary arrest and had to be resuscitated with CPR and medication. The lack of oxygen to Ashley’s brain and other organs resulted in catastrophic harm leading Ashley to be intubated, placed on a ventilator, fed through a gastric feeding tube, and placed on dialysis. The second hospital discharged Ashley two and a half months later. While she no longer required a ventilator or dialysis, the hypoxic brain injury and cardiopulmonary arrest left Ashley in a severely compromised medical condition. Ashley was unable to perform any activities of daily living and was unable to stand, speak, walk, eat, or see. Following her discharge from the second hospital, Ashley required continuous care. She was under a nurse’s care for 12 hours a day, and Ashley’s mother (Anna Patricia Delgado) cared for her during the remaining 12 hours each day. On February 23, 2011, Ashley died due to complications resulting from the hypoxic brain injury. Ashley was survived by her parents, Ms. Delgado and John Nunez. Medicaid (through AHCA) paid $357,407.05 for the medical care related to Ashley’s injury. Ashley’s parents paid $5,805.00 for her funeral. As the Personal Representative of Ashley’s Estate, Ms. Delgado brought a wrongful death action against the first emergency room doctor who treated Ashley, the pediatrician, a pediatric critical care intensivist who treated Ashley after her admission to the first hospital, the two hospitals that treated Ashley, and the ambulance company that transported Ashley to the second hospital. AHCA received notice of the wrongful death action and asserted a Medicaid lien against Ashley’s Estate in order to recover the $357,407.05 paid for Ashley’s past medical expenses. See § 409.910(6)(b), Fla. Stat. (providing that “[b]y applying for or accepting medical assistance, an applicant, recipient, or legal representative automatically assigns to [AHCA] any right, title, and interest such person has to any third party benefit ”). Ms. Delgado ultimately settled the wrongful death action through a series of confidential settlements totaling $2,250,000. No portion of that settlement represents reimbursements for future medical expenses. AHCA has not moved to set aside, void, or otherwise dispute those settlements. Section 409.910(11)(f) sets forth a formula for calculating the amount that AHCA shall recover in the event that a Medicaid recipient or his or her personal representative initiates a tort action against a third party that results in a judgment, award, or settlement from a third party. Applying the formula in section 409.910(11)(f) to the $2,250,000 settlement, results in AHCA being owed $791,814.84 in order to satisfy its lien.2/ Because Ashley’s medical expenses of $357,407.05 were less than the amount produced by the section 409.910(11)(f) formula, AHCA is seeking to recover $357,407.05 in satisfaction of its Medicaid lien. See § 409.910(11)(f)4., Fla. Stat. (providing that “[n]otwithstanding any provision in this section to the contrary, [AHCA] shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid.”). Valuation of the Personal Injury Claim Tomas Gamba represented Petitioners during their wrongful death action. Mr. Gamba has practiced law since 1976 and is a partner with Gamba, Lombana and Herrera-Mezzanine, P.A., in Coral Gables, Florida. Mr. Gamba has been Board Certified in Civil Trial Law by the Florida Bar since 1986. Since the mid-1990s, 90 percent of Mr. Gamba’s practice has been devoted to medical malpractice. Over the course of his career, Mr. Gamba has handled 60 to 70 jury trials as first chair, including catastrophic injury cases involving children. In 2015, the Florida Chapter of the American Board of Trial Advocates named Mr. Gamba its Trial Lawyer of the Year. Mr. Gamba is a member of several professional organizations, such as the American Board of Trial Advocates, the American Association for Justice, the Florida Board of Trial Advocates, the Florida Justice Association, and the Miami-Dade County Justice Association. Mr. Gamba was accepted in this proceeding as an expert regarding the valuation of damages suffered by injured parties. Mr. Gamba testified that Petitioners elected against proceeding to a jury trial (in part) because of the family’s need for closure and the stress associated with a trial that could last up to three weeks. Mr. Gamba also noted that the two hospitals that treated Ashley had sovereign immunity, and (at the time pertinent to the instant case) their damages were capped at $200,000 each. In order to collect any damages above the statutory cap, Petitioners would have had to file a claims bill with the Florida Legislature, and Mr. Gamba testified that “the legislature would be very difficult.” As for the three treating physicians who were defendants in the suit, Mr. Gamba testified that Petitioners achieved a favorable settlement by agreeing to accept $2 million when the physicians’ combined insurance coverage was only $3 million. The decision to settle was also influenced by the fact that Ashley had a pre-existing condition known as hemolytic uremic syndrome, a blood disorder. During discovery, Mr. Gamba learned that the defense was prepared to present expert testimony that the aforementioned condition made it impossible for the defendants to save Ashley. Finally, Mr. Gamba testified that 75 percent of medical malpractice cases heard by juries result in defense verdicts. As for whether the $2,250,000 settlement fully compensated Ashley’s estate and her parents for the full value of their damages, Mr. Gamba was adamant that the aforementioned sum was “a small percentage of what we call the full measure of damages in this particular case.” Mr. Gamba opined that $8,857,407.05 was the total value of the damages that Ashley’s parents and her Estate could have reasonably expected to recover if the wrongful death action had proceeded to a jury trial. Mr. Gamba explained that Florida’s Wrongful Death Act enabled Ashley’s parents to recover for the death of their child and for the pain and suffering they incurred from the date of Ashley’s injury. According to Mr. Gamba, $4,250,000 represented a “conservative” estimate of each parent’s individual claim, and the sum of their claims would be $8,500,000. Mr. Gamba further explained that Ashley’s Estate’s claim would consist of the $357,407.05 in medical expenses paid by Medicaid, resulting in an estimate for total damages of $8,857,407.05. Mr. Gamba’s opinion regarding the value of Petitioners’ damages was based on “roundtable” discussions with members of his firm and discussions with several attorneys outside his firm who practice in the personal injury field. Mr. Gamba’s opinion was also based on 10 reported cases contained in Petitioners’ Exhibit 9. According to Mr. Gamba, each of those reported cases involve fact patterns similar to that of the instant case. Therefore, Gamba testified that the jury verdicts in those cases are instructive for formulating an expectation as to what a jury would have awarded if Ashley’s case had proceeded to trial. In sum, Mr. Gamba testified that the $2,250,000 settlement represents a 25.4 percent recovery of the $8,857.407.05 of damages that Ashley’s parents and Ashley’s Estate actually incurred. Therefore, only 25.4 percent (i.e, $90,781.30) of the $357,407.05 in Medicaid payments for Ashley’s care was recovered. Mr. Gamba opined that allocating $90,781.39 of the total settlement to compensate Medicaid for past medical expenses would be reasonable and rational. In doing so, he stated that, “And I think both – if the parents are not getting their full measure of damages, I don’t think the health care provider, in this case Medicaid, that made the payment should get, you know, every cent that they paid out, when mother and father are getting but a small percentage of the value of their claim.” Petitioners also presented the testimony of Herman J. Russomanno. Mr. Russomanno has practiced law since 1976 and is a senior partner with the Miami law firm of Russomanno and Borrello, P.A. Mr. Russomanno has been Board Certified in Civil Trial Law by the Florida Bar since 1986, and he has served as the Chairman of the Florida Bar’s Civil Trial Certification Committee. Mr. Russomanno is also certified in Civil Trial Practice by the National Board of Trial Advocates and has taught trial advocacy and ethics for 33 years as an adjunct professor at the St. Thomas University School of Law. Mr. Russomanno is a past president of the Florida Bar and belongs to several professional organizations, such as the Florida Board of Trial Advocates, the American Board of Trial Advocates, the Dade County Bar Association, and the Miami-Dade County Trial Lawyers Association. Since 1980, Mr. Russomanno’s practice has been focused on medical malpractice, and he has represented hundreds of children who suffered catastrophic injuries. Mr. Russomanno was accepted in the instant case as an expert in the evaluation of damages suffered by injured parties. Prior to his testimony at the final hearing, Mr. Russomanno reviewed Ashley’s medical records, the hospital discharge summaries, and the Joint Pre-hearing Stipulation filed in this proceeding. He also discussed Ashley’s case with Mr. Gamba and reviewed Mr. Gamba’s file from the wrongful death action. Mr. Russomanno also viewed videos of Ashley taken before and after her injury so he could gain an understanding of the severity of Ashley’s injury and the suffering experienced by her parents. Mr. Russomanno credibly testified that the damages incurred by Ashley’s parents were between $4,250,000 and $7,500,000 for each parent. Mr. Russomanno echoed Mr. Gamba’s testimony by stating that the $2,250,000 settlement did not fully compensate Ashley’s parents and her Estate for their damages. AHCA presented the testimony of James H.K. Bruner. Mr. Bruner has practiced law since 1983 and is licensed to practice law in Florida, New York, Maine, and Massachusetts. Mr. Bruner is a member of professional organizations such as the American Health Lawyers Association and the Trial Lawyers Sections of the Florida Bar. Between 2003 and 2005, Mr. Bruner served as the Department of Children and Families’ risk attorney. That position required him to evaluate personal injury actions filed against the Department and assess the Department’s exposure to liability. Based on his experience in evaluating approximately 200 cases for the Department, Mr. Bruner authored the Department’s manual on risk management and provided training to Department employees on risk management issues. Mr. Bruner has served as the Director of AHCA’s Bureau of Strategy and Compliance. In that position, he dealt specifically with third-party liability collections and Medicaid liens. Beginning in 2008, Mr. Bruner worked for ACS (now known as Xerox Recovery Services) and was engaged in attempting to recover Medicaid liens from personal injury settlements. Over the last several years, Mr. Bruner has spoken at seminars about Medicaid lien resolution and authored publications on that topic. Since April of 2013, Mr. Bruner has been in private legal practice as a solo practitioner. He describes himself as a “jack of all trades” who engages in a “general practice.” Over the last 20 years, Mr. Bruner has not handled a jury trial involving personal injury; and, over the last four years, he has not negotiated a personal injury settlement. The undersigned accepted Mr. Bruner as an expert witness for evaluating the cases contained in Petitioners’ Exhibit 9 and pointing out distinctions between those cases and the instant case. Mr. Bruner did not offer testimony regarding the specific value of the damages suffered by Petitioners. Findings Regarding the Testimony Presented at the Final Hearing Regardless of whether the reported cases in Petitioners’ Exhibit 9 are analogous to or distinguishable from the instant case, the undersigned finds that the testimony from Mr. Gamba and Mr. Russomanno was compelling and persuasive. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Gamba and Russomanno’s substantial credentials and their decades of experience with litigating personal injury lawsuits make them very compelling witnesses regarding the valuation of damages suffered by injured parties such as Petitioners. Accordingly, the undersigned finds that Petitioners proved by clear and convincing evidence that $90,781.39 constitutes a fair and reasonable recovery for past medical expenses actually paid by Medicaid. However, and as discussed below, AHCA (as a matter of law) is entitled to recover $357,407.05 in satisfaction of its Medicaid lien.3/
