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 amount to be paid by Petitioners, Pedro Garcia, a minor by and through his parents and natural guardians, Jesus Garcia and Norma Cisneros ("Petitioners") to Respondent, Agency for Health Care Administration ("AHCA"), out of the settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact Pedro Garcia ("Pedro") was born on October 30, 2014. When he was two months old, he presented to the emergency room ("ER") with vomiting and excessive crying. The doctors failed to diagnose an intestinal blockage and discharged Pedro home. Pedro was taken again to the ER in dire distress. He was airlifted to a pediatric hospital where emergency surgery was performed to remove 90 percent of his intestine. Pedro now suffers from the effects of having 90 percent of his intestine removed, including: nutritional deficiencies, diarrhea, dehydration, and abdominal distress. He cannot play with exertion and his activities are limited. Pedro will suffer the effects of his injury for the remainder of his life. A portion of Pedro's medical care related to the injury was paid by AHCA through the Medicaid program and Medicaid, through AHCA, provided $71,230.43 in benefits. Pedro's parents and natural guardians, Jesus Garcia and Norma Cisneros, brought a medical malpractice action against the medical providers and staff responsible for Pedro's care ("Defendants") to recover all of Pedro's damages, as well as their individual damages associated with their son's injury. Because of uncertainty on issues of liability and only a $250,000 insurance policy on the most culpable defendant, Pedro's medical malpractice action against the Defendants was settled for a confidential unallocated lump sum of $2,000,000. During the pendency of Pedro's medical malpractice action, AHCA was notified of the action and AHCA asserted a $71,230.43 Medicaid lien against Pedro's cause of action and settlement of that action. The Medicaid program through AHCA, spent $71,230.43 on behalf of Pedro, all of which represents expenditures paid for Pedro's past medical expenses. Another non-AHCA Medicaid provider, Integral Quality Care, provided $223,089.26 in past medical expenses on behalf of Pedro. Another non-AHCA Medicaid provider, Department of Health, Child's Medical Services, provided $168,161.12 in past medical expenses on behalf of Pedro. Accordingly, a total of $462,480.81 was paid for Pedro's past medical expenses. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Pedro's action against the Defendants. By letter, AHCA was notified of Pedro's settlement. AHCA has not filed a motion to set-aside, void, or otherwise dispute Pedro's settlement. Application of the formula in section 409.910(11)(f) to Pedro's $2,000,000 settlement requires payment to AHCA of the full $71,230.43 Medicaid lien. At the hearing, Petitioners presented the expert testimony of attorney Edward H. Zebersky, who represented Pedro throughout the underlying medical malpractice action against the Defendants. Without objection, Mr. Zebersky was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney since 1991. Since 1992, Mr. Zebersky has been a plaintiff's trial lawyer, with a substantial portion of his practice devoted to personal injury cases, including medical malpractice matters. He is a partner with the law firm of Zebersky Payne Shaw Lewenz, LLP and AV rated by Martindale-Hubbell. Mr. Zebersky is a member of numerous trial attorney associations and has held leadership positions in several associations, including president of the Florida Justice Association in 2006 and serving on the Board of Governors of the American Association for Justice for the past ten years. Mr. Zebersky handles jury trials. He has secured multiple eight-figure verdicts and several seven-figure verdicts, and he stays abreast of jury verdicts on other cases in his area. As a routine part of his practice, Mr. Zebersky makes assessments concerning the value of damages suffered by his clients. Mr. Zebersky was accepted as an expert in a Medicaid lien dispute at DOAH in the case of Herrera v. Agency for Health Care Administration, Case No. 16-1270MTR, 2016 Fla. Div. Admin. Hear. LEXIS 493 (Fla. DOAH Oct. 11, 2016). Mr. Zebersky was familiar with the circumstances surrounding Pedro's injury and medical malpractice claims and gave a detailed explanation of them. Mr. Zebersky reviewed Pedro's life care plan, which details Pedro's future medical needs, and an economist report, which calculated the present value of Pedro's future medical care and present value of Pedro's lost future earnings. The economist placed the present value of Pedro's future medical expenses and lost future earnings at approximately $9,500,000. According to Mr. Zebersky, past medical expenses would also be added to arrive at the full value of Pedro's economic damages. Mr. Zebersky testified that in addition to economic damages, a jury would also be asked to assign a value to past and future noneconomic damages (i.e., pain and suffering and loss of enjoyment of life). Mr. Zebersky testified that Pedro's claim for noneconomic damages would have an exceedingly high number, which as a "rule of thumb" is three times the value of his economic damages. Mr. Zebersky persuasively and credibly testified that the total value of all of Pedro's damages would be in excess of $20,000,000, and that valuing Pedro's damages at $15,000,000 is a very conservative and low valuation of his damages. Mr. Zebersky persuasively and credibly testified that the $2,000,000 settlement did not fully compensate Pedro for the full value of his damages. Mr. Zebersky testified that based on a conservative value of all of Pedro's damages of $15,000,000, the $2,000,000 settlement represents a recovery of 13.33 percent of the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of damages. Mr. Zebersky's testimony regarding the total value of Pedro's damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2,000,000 does not fully compensate Pedro for the full value of his damages. Mr. Zebersky further testified that because Pedro only recovered in the settlement 13.33 percent of the full value of his damages, he only recovered 13.33 percent of AHCA's $71,230.43 Medicaid lien, or $9,495.01. Mr. Zebersky testified that it would be reasonable to allocate $9,495.01 of the settlement to past medical expenses paid by AHCA through the Medicaid program. Following the settlement, Mr. Zebersky negotiated the non-AHCA Integral Quality Care Medicaid lien from $233,089.26 to $18,737.00, and the non-AHCA Department of Health, Child's Medical Services lien from $168,161.12 to $22,415. On cross-examination, Mr. Zebersky acknowledged that the $233,089.26 and $168,161.12 from Integral Quality Care and Department of Health, Child's Medical Services are part of Pedro's claim for past medical expenses. However, Mr. Zebersky failed to include these past medical expenses in applying the ratio to reduce the Medicaid lien amount owed to AHCA. AHCA successfully contested the methodology used to calculate the allocation to past medical expenses based on Mr. Zebersky's failure to include these past medical expenses in applying the ratio. Accordingly, Petitioners proved by a preponderance of the evidence that 13.33 percent is the appropriate pro rata share of Pedro's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $71,230.43, and the past medical expenses in the amounts of $233,089.26 and $168,161.12, which equals $462,480.81. Accordingly, following Mr. Zebersky's methodology and applying the $15,000,000 valuation to the proper amount of total past medical expenses of $462,480.81, the settlement portion properly allocable to Pedro's past medical expenses to satisfy AHCA's lien is $61,648.69 ($462,480.81 x 13.33 percent = $61,648.69).
The Issue The issue 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 what amount of the $10,652.23 Medicaid lien held by Respondent, Agency for Health Care Administration ("Respondent" or "Agency"), is recoverable by Respondent from the $65,000.00 settlement reached by Petitioner, Tya-Marie Savain ("Petitioner" or "Savain"), in her related personal injury action.
Findings Of Fact Based on the stipulation between the parties, the evidence presented and the record as a whole, the undersigned makes the following findings of fact: On the afternoon of May 27, 2015, Petitioner, who was 19 years of age, was a pedestrian walking northbound across Forrest Hill Boulevard in West Palm Beach, Florida. As she was crossing the road in daylight, she was hit by a vehicle operated by Kenneth Knowles. (JPHS p. 5, ¶ 1). As a result of the collision, Petitioner suffered a fractured femur requiring open reduction internal fixation to repair her leg and a second surgery to remove the medical hardware. Petitioner suffered additional injuries (during the accident), including a left eye laceration, and road rash with scarring on her hands, elbows, chin, ears, forehead, mouth, and other body parts. (JPHS p. 5, ¶ 2). Respondent expended $10,652.23 in medical assistance through its Medicaid program for the benefit of Petitioner related to her fractured femur and the two resulting surgeries caused in the accident. (JPHS p. 5, ¶ 4). Petitioner’s extensive injuries necessitated surgery and resulted in significant medical treatment and related medical expenses (see, e.g., Pet. Exs. 2-12, 23). Petitioner brought a personal injury action for negligence against the liable third party and driver, Kenneth Knowles, in Palm Beach County, Florida. Kenneth Knowles had bodily injury coverage with Allstate Insurance Company in the amount of $15,000.00. Knowles paid an additional $50,000.00 out of his pocket resulting in a gross settlement of $65,000.00 for the personal injury claim brought by Savain.4/ (JPHS p. 5, ¶ 3). Following resolution of Petitioner’s personal injury action, her counsel advised the Agency of the settlement through correspondence dated April 10, 2017. Counsel explained to the Agency that Savain would not be recovering the full value of her damages and requested that Respondent accept a reduced amount in full satisfaction of its Medicaid lien. (JPHS p. 5, ¶ 6). Respondent replied to Petitioner’s counsel in writing on June 22, 2017, and stated that Medicaid would not accept any reduction from the full lien amount of $10,652.23. (JPHS p. 6, ¶ 8). There was no evidence that the Agency participated in, approved of, or was consulted concerning Petitioner’s settlement with Kenneth Knowles. In addition to the Medicaid lien, Petitioner had total medical bills of $182,660.42, and has outstanding bills and liens (excluding Respondent’s Medicaid lien) totaling $38,899.51. Accordingly, Petitioner’s total outstanding past medical expenses, including the Agency’s Medicaid lien is $49,551.74. (JPHS p. 6, ¶ 7). Both parties stipulated that the application of the formula at section 409.910(11)(f) to Petitioner’s $65,000.00 settlement requires payment to the Agency in the amount of $10,652.23 in satisfaction of its Medicaid lien. (JPHS p. 5, ¶ 5). There was no evidence presented to prove or suggest that the Agency provided a lesser amount of medical assistance than the $10,652.23 it asserted it had expended. Further, there was no evidence presented to prove what portion of the $65,000.00 settlement was allocated by Petitioner and Kenneth Knowles to her past medical expenses.5/ The affidavit of Attorney Eric Morales, proffered by Petitioner, opined that the "value" of Petitioner’s claim was between $550,000.00 and $750,000.00. (Pet. Ex. 24). These figures supposedly represent the total sum of Petitioner’s range of damages. Morales was of the opinion that the settlement reached by Petitioner represented five percent, on the high end, and 3.6 percent, on the low end, of the actual value of her claim.6/ The undersigned finds and concludes that the affidavit is an out-of-court statement used to prove the truth of the matters asserted in it. It does not supplement or explain other admissible evidence, and Petitioner has advanced no case authority or exception to the hearsay rule which would permit its use or consideration by the undersigned. Morales’s affidavit is classic hearsay. See Fortune v. Fortune, 61 So. 3d 441 (Fla. 2d DCA 2011); and B.C.S., S.R.L. v. Wise, 910 So. 2d 871, 874 (Fla. 5th DCA 2005). As such, it cannot be considered or used by the undersigned to establish or support any findings of fact in this case and is stricken from consideration or use by the undersigned. Petitioner, therefore, did not present any admissible evidence to support a finding of the actual value of her personal injury claim or to support the "pro-rata" or "proportionality" formula she advanced through her counsel’s arguments.7/ To reiterate, there was no evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the Agency, or (2) that Medicaid provided a lesser amount of medical assistance than the $10,652.23 asserted by the Agency.
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 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 Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration ("AHCA"), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact Alia Juarez ("Alia") was born on September 12, 2016. A few hours after birth, Alia was found, in the arms of a relative in her mother's hospital room, to be unresponsive and not breathing. She was resuscitated, but suffered catastrophic brain damage as a result of lack of oxygen. Due to the catastrophic and permanent brain damage, Alia is unable to ambulate, communicate, toilet, eat or care for herself in any manner. She is completely dependent on others for every aspect of her daily life. Alia's medical care related to the injury was paid by Medicaid and Medicaid provided $168,054.34 in benefits. Accordingly, Alia's entire claim for past medical expenses was in the amount of $168,054.34. Alia's parents and natural guardians, Sandra Perez Luna and Jose Luis Juarez, brought a medical malpractice claim against the medical providers responsible for Alia's care ("Defendants") to recover all of Alia's damages associated with her injuries, as well as their own damages associated with their daughter's injuries. The medical malpractice claim against the Defendants was settled for a lump sum unallocated settlement of $925,000. Due to Alia being a minor, court approval of the settlement was required and the court approved the settlement by Order of November 26, 2018. As a condition of Alia's eligibility for Medicaid, Alia assigned to AHCA her right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. During the pendency of Alia's medical malpractice claim, AHCA was notified of the claim. AHCA did not "institute, intervene in, or join in" the medical malpractice action to enforce its rights as provided in section 409.910(11), or participate in any aspect of Alia's medical malpractice claim against the Defendants. Instead, AHCA asserted a $168,054.34 Medicaid lien against Alia's cause of action and settlement of that action. Application of the formula at section 409.910(11)(f) to Alia's $925,000 settlement requires payment to AHCA of the full $168,054.34 Medicaid lien. Petitioner presented the testimony of Alfred R. Bell, Jr., Esquire, a Florida attorney with 22 years' experience in personal injury law, including medical malpractice. Mr. Bell is board-certified in Civil Trial by the Florida Bar. He represented Alia 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 was accepted as an expert in valuation of damages without objection. Mr. Bell explained the seriousness of Alia's injuries, stating that within a few hours of being born, Alia went from a healthy baby to a child who will never have a normal life. Mr. Bell testified that Alia is unable to swallow and requires suction every five to 15 minutes and will be dependent on others for her care for the remainder of her life. "I can't think of much worse to have happened to a child than the damages that she suffered," said Mr. Bell. The damages of Alia's parents are similarly catastrophic. Mr. Bell testified that he had reviewed life care plans and economist reports in cases involving similar injuries to children and the present value of Alia's future needs would approach $20 million. Further, her lost ability to earn money in the future would have a present value of $1.7 million. Mr. Bell testified that to these economic damages, the value of Alia's noneconomic damages would be added. Mr. Bell outlined that the "worst damage in my opinion that she sustained isn't an economic damage, it's the damage to the person because that's something that you can't give them back what's been taken away." Mr. Bell testified that Alia's noneconomic damages would have a similar significant value. Based on his training and experience, including the review of jury verdicts in comparable cases, Mr. Bell opined that the damages recoverable in Alia's case had a conservative value of $20 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 has handled cases involving catastrophic brain injury to children and handles jury trials. He routinely makes assessments concerning the value of damages suffered by injured parties. He was accepted as an expert in the valuation of damages without objection. Based on his training and experience, Mr. Barrett opined that Alia's damages are conservatively valued in excess of $20 million. He testified that Alia's economic damages alone would have a value of $20 million and then, her noneconomic damages would also have a value of $20 million alone. In regard to the noneconomic damages, Mr. Barrett testified that the jury verdicts in cases comparable to that of Alia's case support his valuation of Alia's damages--noting that the average noneconomic award alone in those comparable verdicts was $19.4 million. Both experts testified that using $20 million as the value of all damages, Alia only recovered 4.63 percent of the value of her damages. Accordingly, they opined that it would be reasonable, rational, and conservative to allocate 4.63 percent of the settlement, or $7,780.92, to past medical expenses paid by AHCA through the Medicaid program. AHCA 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. Bell and Mr. Barrett is compelling and persuasive. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that $7,780.92 of the settlement represents reimbursement for past medical expenses.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Patrick Osmond (Petitioner), from settlement proceeds received by Petitioner from third parties.
Findings Of Fact Petitioner was injured in a single-vehicle collision after he and several underage friends were served alcoholic beverages at an Applebee’s restaurant, owned by Neighborhood Restaurant Partners, LLC (Applebee’s). As a result of his injuries, Petitioner brought suit against Applebee’s, for dram shop liability, and against Joseph Raub, the driver of the vehicle in which Petitioner was a passenger, for negligence. The Complaint also included a claim against the bartender from Applebee’s, however, she was eventually dropped from the lawsuit. After a two-week jury trial, the jury returned a verdict in favor of Petitioner, awarding a total of $41,956,473.73 in damages, allocated as follows: Past Medical Expenses: $436,473.73 Future Medical Expenses: $15,000,000.00 Past Lost Wages: $20,000.00 Future Loss of Earning Capacity: $1,500,000.00 Past Non-Economic Damages: $5,000,000.00 Future Non-Economic Damages: $20,000,000.00 The past medical expenses included $303,757.77 for payments made by Medicaid through AHCA, $13,985.96 for payments administered through the Rawlings Company, and $118,730.00 which represented an outstanding bill from Petitioner’s neurosurgeon. After the verdict, Petitioner reached a settlement agreement with Applebee’s, whereby Applebee’s agreed to pay the sum of $4,300,000.00 to Petitioner. As a condition of the settlement with Applebee’s, the parties executed a Release that included the following language: 1.6 The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One Million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents)[1/] represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $35,568.73 (Thirty-Five Thousand, Five Hundred Sixty-Eight Dollars and Seventy-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the jury verdict was rendered, Petitioner recovered $25,000.00 in settlement from Joseph Raub and his insurers. As a condition of the settlement with Mr. Raub, the parties executed a Release that included the following language: The parties agree that Patrick Osmond’s damages have a total value of $41,956,473.73 (Forty-One million, Nine Hundred Fifty-Six Thousand, Four Hundred Seventy-Three Dollars and Seventy-Three Cents), of which $317,743.73 (Three Hundred Seventeen Thousand, Seven Hundred Forty-Three Dollars and Seventy-Three Cents) represents the past medical expenses paid for by Medicaid. Given the facts, circumstances and nature of Patrick Osmond’s injuries and this settlement, $190.43 (One Hundred ninety Dollars and Forty-Three Cents) of this settlement has been allocated to Patrick Osmond’s claim for past medical expenses paid by Medicaid and the remainder of the settlement has been allocated toward the satisfaction of claims other than past medical expenses paid by Medicaid. After the verdict, Petitioner’s insurer, Geico General Insurance Company (“Geico”), paid its policy limits of $10,000.00 to Petitioner under his Uninsured and/or Underinsured Motorist Coverage. The documentary evidence did not reflect that payment, but its existence was acknowledged by both parties during the argument, and is accepted as a stipulation. The purpose for the payment was not disclosed. The burden in this case is on Petitioner to prove “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses.” There is no proof that the Geico settlement should be excluded from the amount available to satisfy the Medicaid lien. The $303,757.77 in Medicaid funds paid by AHCA is the maximum amount that may be recovered by AHCA. There was no evidence to suggest that statutory conditions precedent to AHCA asserting its claim or Petitioner bringing this action were not met. The Pre-hearing Stipulation, Respondent’s statement, the stipulation of facts, and the statement of issues of fact that remained to be litigated, indicate clearly that the issue of allocation of the settlement proceeds under sections 409.910(11)(f) and 409.910(17)(b) were the only issues in dispute remaining for disposition. There was no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. However, an issue remains as to the correct amount of “past medical expenses” to be used in establishing the proportional amount of those expenses vís-a-vís the total settlement. No portion of the $303,757.77 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, with all amounts reflected in its Provider Processing System Report being for past medical expenses incurred.
The Issue 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.
