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 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/
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 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 determined is the amount payable to Respondent, Agency for Health Care Administration (“AHCA”), as reimbursement for medical expenses paid on behalf of David Brown (“Mr. Brown”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds he received from a third party.
Findings Of Fact The following Findings of Fact are based on exhibits accepted into evidence, testimony offered at the hearing, and admitted facts set forth in the pre-hearing stipulation. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Brown is the recipient of Medicaid for injuries he sustained in an automobile accident. AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On February 25, 2015, Mr. Brown, then 46 years old, was involved in a T-bone automobile accident. In the accident, Mr. Brown suffered a fractured wrist, torn shoulder, skin abrasions, a grade 4 bilateral pulmonary contusion, and a right middle cerebral artery infarct (commonly referred to as a stroke) with hemorrhagic contusion. Due to complications related to placement of a trachea, he underwent reconstructive surgery of his throat. Mr. Brown suffered permanent severe brain damage causing him to suffer left hemiparesis and difficulty swallowing or speaking. As a result of the accident, Mr. Brown is now disabled and has difficulty ambulating, eating, and caring for himself without assistance. Mr. Brown’s medical care related to the injury was paid by Medicaid. AHCA provided $181,975.75 in benefits. A Medicaid Manage Care Plan, known as WellCare, provided an additional $110,559.15 in benefits. The sum of these benefits, $292,534.90, constituted Mr. Brown’s entire claim for past medical expenses. Petitioners pursued a personal injury action against the owner and operator of the car that caused the accident (“Defendant”) to recover all their damages. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioners’ action against the Defendant. During the pendency of Mr. Brown’s personal injury action, AHCA was notified of the action and AHCA asserted a Medicaid lien of $181,975.75 against Petitioners’ cause of action and settlement of that action. There were liability issues with the case including the degree of comparative negligence that could be attributed to each driver. Specifically, there was a question of which driver had the green light. The personal injury claim ultimately settled for a lump-sum unallocated amount of $2,500,000. By letter, AHCA was notified of settlement of Petitioners’ claim. AHCA has not filed a motion to set-aside, void, or otherwise dispute Petitioners’ settlement. The Medicaid program through AHCA spent $181,975.75 for Mr. Brown’s past medical expenses. Application of the formula set forth in section 409.910(11)(f) to Petitioners’ $2,500,000 settlement authorizes payment to AHCA of the full $181,975.75 Medicaid lien. Petitioners have deposited AHCA’s full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights. As a condition of eligibility for Medicaid, Mr. Brown assigned AHCA his right to recover medical expenses paid by Medicaid from liable third parties Expert Witness Testimony Testimony of Brett Rosen Petitioners presented the testimony of Brett Rosen, the lead trial attorney who litigated the underlying personal injury claim. Mr. Rosen is a shareholder with the law firm of Goldberg and Rosen in Miami, Florida. Mr. Rosen has been a trial attorney for approximately 12 years and he specializes in representing parties in catastrophic injury, personal injury, and wrongful death cases. Mr. Rosen’s firm takes approximately eight to ten cases to trial each year. Since the firm routinely conducts civil jury trials, Mr. Rosen continuously educates himself on jury verdicts by reviewing the Florida Jury Verdict Reporter (a publication of jury verdict reports) and conducting roundtable discussions with other attorneys. Using information found in jury verdict reports, the Daily Business Review, and his experience, Mr. Rosen makes assessments concerning the value of damages sustained by individuals. Without objection, Mr. Rosen was accepted as an expert in the valuation of damages suffered by Petitioners. In addition to presenting testimony as an expert, Mr. Rosen also presented factual testimony regarding the underlying personal injury claim. As the lead attorney, Mr. Rosen met with Mr. Brown monthly on average during the two years that he represented him. Mr. Rosen also consulted with a neurologist and ENT physician who both treated Mr. Brown. Mr. Rosen testified that Mr. Brown’s vehicle was struck on the right side (commonly referred to as T-bone accident) by a vehicle, causing the vehicle he was driving to flip over onto its side. While Mr. Brown was able to get out of his vehicle, he suffered multiple injuries as further described in paragraph three herein. In addition to the brain injury, he had a tracheostomy that ultimately resulted in a bad outcome. As a result, he could not eat, speak, or drink for approximately two years. Mr. Rosen testified that Mr. Brown’s injuries had significant negative impact on Mr. Brown and his wife, Ms. Jenkins. Mr. Rosen testified that Ms. Jenkins resigned from her job to take care of her husband and assist with his recovery. Ms. Jenkins also suffered loss of consortium damages resulting from Mr. Brown’s injuries. The couple was forced to live with relatives when they could not afford rent. Overall, Mr. Rosen testified that the injuries negatively impacted Mr. Brown’s ability to lead a normal life. Mr. Rosen testified that the litigation of the case involved factual, causation, and legal disputes. There were no eyewitnesses, and the question remained regarding which driver had the green light. In addition, the insurance policy was limited to $50,000. Mr. Rosen later brought a bad faith claim against the insurance company due to their failure to timely tender the policy limits. After fully evaluating the risks, the parties settled the case for $2,500,000. Mr. Rosen testified that the full value of the claim is $10,500,000. However, Petitioners settled the claim for $2,500,000, which represents 23.8 percent of the value of their damages. Mr. Rosen testified that since Mr. Brown only recovered 23.8 percent of his total damages, he recovered in the settlement only 23.8 percent of his $292,534.90 claim for past medical expenses, which amounts to $69,623.38. Mr. Rosen testified that it would be reasonable to allocate $69,623.38 of the settlement to past medical expenses. Testimony of Vinson Barrett Vinson Barrett was also identified as Petitioners’ expert witness. Mr. Barrett, a trial attorney with 40 years of experience, is a partner with the law firm of Barrett, Nonni and Homola. His firm represents clients in medical malpractice, automobile, premise liability, and pharmaceutical products liability cases. Mr. Barrett has conducted numerous jury trials and has handled cases involving catastrophic injuries. Mr. Barrett routinely reviews jury verdict reports, discusses cases with other lawyers, and makes assessments concerning the value of damages suffered by injured persons. Mr. Barrett has also served as an expert in a number of cases regarding evaluation of damages. Mr. Barrett was recognized as an expert in the area of evaluation of damages. To evaluate the medical damages suffered by Mr. Brown, Mr. Barrett reviewed the police report, medical records, and the amended life care plan for Mr. Brown. Mr. Barrett also considered the overall level of pain and suffering Mr. Brown would suffer throughout the remainder of his life. Mr. Barrett testified that when compared to other traumatic brain cases, Mr. Brown is a little better off than other traumatic cases he has reviewed because he is able to ambulate using assistive devices and his mental abilities have not been compromised significantly. Mr. Barrett opined that the overall value of the damages would be more than $10,500,000. Mr. Barrett testified that his estimate was a conservative valuation of damages. Mr. Barrett concluded that, accepting Mr. Rosen’s even more conservative valuation, the $2,500,000 settlement constituted 23.8 percent of the full value of Petitioners’ damages. Mr. Barrett testified that allocation of $69,623.38 of the settlement would be a reasonable allocation of damages to the past medical expenses. Ultimate Findings of Fact The undersigned finds that the testimony of Mr. Rosen and Mr. Barrett was credible and persuasive as to the total damages incurred by Petitioners. While assigning a value to the damages that plaintiffs could reasonably expect to receive from a jury is not an exact science, Mr. Rosen’s extensive experience with litigating personal injury lawsuits makes him a very compelling witness regarding the valuation of damages suffered by Petitioners. As a trial lawyer who has testified in nearly 20 cases regarding valuation and allocation of damages, and 40 years of experience handling personal injury matters involving catastrophic injuries, Mr. Barrett is also a credible witness regarding the valuation and allocation of damages in a case such as Mr. Brown’s. The undersigned also finds that Mr. Barrett was qualified to present expert testimony as to how a damages award should be allocated among its components, such as past medical expenses, economic damages, and noneconomic damages. AHCA offered no evidence to counter the expert opinions regarding Petitioners’ total damages or the past medical expenses they recovered. Accordingly, it is found that the preponderance of the evidence demonstrates that the total value of Petitioners’ personal injury claim is $10,500,000 and that the $2,500,000 settlement resulted in Petitioners recovering 23.8 percent of Mr. Brown’s past medical expenses. In addition, the preponderance of the evidence demonstrates that $69,623.38 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
The Issue The issue 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 matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Mark Crain, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $100,000 settlement from a third party. The Agency asserts that it is entitled to recover $35,700, which is the amount it calculated using the formula set forth in section 409.410(11)(f). The facts that gave rise to this matter are found pursuant to a stipulation of the parties.3/ On June 23, 2016, Petitioner was working for a tree pruning company. Petitioner’s employer assigned him to remove several branches from a tree. As directed, Petitioner climbed to the top of the tree and secured himself with one rope lanyard. Unfortunately, after he began pruning, Petitioner cut through the rope lanyard, lost his balance, and plummeted 30 feet to the ground. As a result of the fall, Petitioner suffered significant physical and neurological injuries. Petitioner underwent multiple surgeries. His medical procedures included an open reduction with internal fixation on his right wrist, lumbar fusion surgery, and a lumbar laminectomy. At the final hearing, Petitioner’s counsel represented that Petitioner’s medical prognosis is not fully known at this time. However, what is known is that Petitioner will continue to experience serious neurologic deficits. Petitioner’s injuries have left him with overall mobility issues and have affected his ability to walk normally. He suffers from a right foot drop and has limited feeling below his waist. The parties also stipulated that Petitioner has completed all medical treatment and therapy related to his accident. However, Petitioner is uncertain whether or not he will be able to return to normal activities in the future. Petitioner incurred sizable medical expenses due to his injuries. The charges for Petitioner’s medical procedures totaled approximately $375,000. However, only $62,067.28 has actually been paid for his medical care. Of this amount, the Florida Medicaid program paid $41,992.33. (In addition to the $41,992.22 paid by Medicaid, other health insurance covered $20,075.06.) Petitioner did not present evidence of monetary damages other than his past medical expenses. Petitioner subsequently initiated a civil cause of action for negligence against his (former) employer. Petitioner alleged that he was not properly trained how to safely secure himself to the tree. According to Petitioner’s counsel, Petitioner’s employer should have instructed him to use two lanyards instead of one. After two years of litigation, Petitioner settled his negligence action for $100,000. The settlement did not allocate Petitioner’s award between past medical expenses and other damage categories. The Agency, through the Florida Medicaid program, paid a total of $41,992.33 for Petitioner’s medical treatment resulting from the accident.4/ All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $37,500 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed in endnote 7, the “default” formula in section 409.910(11)(f) allows the Agency to collect $37,500 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of whether Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that the Agency should be reimbursed a lesser portion of the settlement than the amount calculated using the section 409.910(11)(f) formula. Exercising its right to challenge the Medicaid lien pursuant to section 409.910(17)(b), Petitioner specifically argues that, taking into account the full value of Petitioner’s damages, the Agency’s Medicaid lien should be reduced proportionately. Otherwise, the application of the statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner requests the Agency’s allocation from Petitioner’s third-party recovery be reduced to $4,199.23. To establish the value of his damages, Petitioner submitted the medical bills from his accident, as well as relied upon the stipulated facts. Petitioner’s medical bills show that he sustained the injuries identified above, as well as underwent surgery on his spine and wrist. To place a monetary value on Petitioner’s injuries, Petitioner’s counsel represented that his law firm appraised Petitioner’s injuries at no less than $1 to 2 million. However, Petitioner did not introduce any evidence or testimony corroborating this injury valuation or substantiating an amount Petitioner might have recovered at trial in his personal injury cause of action.5/ Neither did Petitioner offer evidence of additional damages Petitioner might be facing from his accident, such as future medical expenses, loss of quality of life, loss of employment or wages, or pain and suffering. Based on his estimate, Petitioner’s counsel asserted that the $100,000 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Petitioner for his damages. Therefore, a lesser portion of the settlement should be allocated to reimburse Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the full value of Petitioner’s damages (conservatively estimated at $1,000,000) compared to the amount that Petitioner actually recovered ($100,000). Using these numbers, Petitioner’s settlement represents a 10 percent recovery of Petitioner’s damages. In like manner, the Medicaid lien should be reduced to 10 percent or $4,199.23 ($41,992.33 times .10). Therefore, Petitioner asserts that $4,199.23 is the portion of his third- party settlement that represents the equitable and fair amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to Petitioner’s negligence action or Petitioner’s $100,000 settlement. No portion of the $100,000 settlement represents reimbursement for future medical expenses. The undersigned finds that, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $37,500 from Petitioner’s recovery of $100,000 from a third party to satisfy its Medicaid lien.
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 What is the amount from Petitioners' settlement proceeds that should be paid to satisfy Respondent's Medicaid lien under section 409.910, Florida Statutes (2013)?1/
Findings Of Fact By Order entered August 15, 2013, the Circuit Court of the Twelfth Judicial Circuit, in and for Manatee County, Florida, appointed Robert Gibbons and Robert Gibbons, Jr., as joint plenary guardians of Georgia-Rose Gibbons. On April 6, 2012, Georgia-Rose Gibbons (Ms. Gibbons), who was a college freshman at the time, sustained numerous severe and permanent injuries, including a traumatic head injury, when she was struck by a motor vehicle while walking across a multi-lane road. Ms. Gibbons is totally incapacitated and currently resides in a nursing home. As of the date of this Order, Ms. Gibbons has a rated life expectancy of approximately 47 additional years. At the final hearing, Petitioners presented the testimony of Jeffrey A. Luhrsen, an attorney with extensive experience representing injured claimants in personal injury litigation. Mr. Luhrsen has practiced law in the State of Florida for more than twenty years and has tried multiple personal injury cases to jury verdict. Mr. Luhrsen opined that based upon a reasonable degree of certainty, and taking into consideration issues of comparative fault, $20,000,000 is the value of Ms. Gibbons' claim. AHCA did not offer evidence to the contrary. Mr. Luhrsen also credibly opined that the $400,000 settlement (explained below), which Ms. Gibbons received as a consequence of her injuries, did not fully compensate Ms. Gibbons for her damages. Mr. Luhrsen's opinions are accepted. The operator of the vehicle that collided with Ms. Gibbons was uninsured. Pursuant to an automobile insurance policy with AAA Auto Club South Insurance Company, Ms. Gibbons was insured in the amount of $400,000.00 against personal injury resulting from the negligent operation of a motor vehicle by an uninsured motorist. By correspondence dated September 19, 2013, Respondent informed Petitioners' personal injury attorney (PI attorney) that $220,519.42 is the amount of Respondent's Medicaid lien. In response, Petitioners' PI attorney, by correspondence dated October 3, 2013, advised Respondent that Ms. Gibbon's uninsured motorist claim against AAA was settled, pending approval of the Circuit Court, for $400,000. A copy of the proposed limited release and settlement agreement was included with the correspondence. The Circuit Court approved the settlement agreement on October 4, 2013. On October 17, 2013, Petitioners' PI attorney provided Respondent with copies of the Circuit Court's Order Granting Authority to Settle Claim on Behalf of Ward, and the executed Limited Release and Settlement Agreement. Respondent neither joined in the settlement nor participated in any way in settlement negotiations. The Limited Release and Settlement Agreement provides in part as follows: For and in consideration of the payment of $400,000, the receipt of which is hereby acknowledged, the Releasors being of lawful age, do hereby release, acquit and forever discharge, AAA AUTO CLUB, limited to the uninsured/underinsured liability limits of the Subject Policy, of or in any way growing out of any and all known or unknown personal injuries result[ing] from, related to and/or arising out of the Subject Accident. The Releasors acknowledge that the damages sustained as a result of the Subject Accident are permanent and that recovery therefrom is uncertain and indefinite. * * * 8. It is understood and agreed that this is a partial release and settlement agreement and that the payment referenced herein does not fully compensate the Releasors for the damages arising out of or related to the Subject Accident. . . . * * * 11. Although this settlement does not fully compensate GEORGIA ROSE GIBBONS for all the damages she has suffered, this settlement shall operate as a full and complete Release as to the Releasees without regard to this settlement only compensating GEORGIA ROSE GIBBONS for a fraction of the total monetary value of her damages. The Releasees in this settlement are specifically not compensating one element of damage disproportionately from any other element of damage. Given the nature of the injuries suffered by GEORGIA ROSE GIBBONS, the value of the damages associated with those injuries, and the limited ability of this settlement to compensate even a fraction of GEORGIA ROSE GIBBONS' damages, the parties have agreed to an allocation of the settlement. The parties agree that a fair assessment would place 20% of her total claim for damages as past and future medical expenses, and the remaining 80% of her total claim for damages for other economic damages and non-economic damages. Accordingly, the parties have allocated 20% of the settlement, $80,000, to past and future medical expenses and the remainder of the settlement, $320,000, towards satisfaction of other damages.2/ Respondent, pursuant to section 409.910(11)(f), calculates the amount that it is to be paid to satisfy its lien as follows: $400,000 less 25% (attorney fees) is $300,000; $300,000 less $11,029.89 in taxable costs is $288,970.01; $288,970.01 divided by 2 is $144,485.01, which is less than Respondent paid for Ms. Gibbons' treatment. Accordingly, Respondent seeks $144,485.01 in satisfaction of its Medicaid lien.3/ For the period mid-September 2013 through January 5, 2014, Medicaid paid $14,402.94 in additional medical assistance benefits on behalf of Ms. Gibbons. There is no evidence of record indicating that Respondent amended its lien to reflect the additional benefits paid.
