The Issue The issue to be determined is the amount payable to the Agency for Health Care Administration (AHCA or Respondent) in satisfaction of its $157,983.63 Medicaid lien asserted against medical malpractice settlement proceeds received by Hunter Lamendola (Hunter), a minor, by and through his mother and natural guardian, Ashley Lamendola (Petitioner).
Findings Of Fact On June 26, 2012, Petitioner presented to the hospital with a history of contractions for six hours prior to her arrival at the hospital. She had been placed on bed rest for gestational hypertension five days prior to arriving at the hospital. When she arrived, she had hypertension. Petitioner was admitted to the labor and delivery unit at 8:33 p.m. Petitioner was placed on a fetal monitor and progressed through her course of labor. Her initial fetal monitoring showed the baby was healthy and well-oxygenated, however, throughout the course of labor, the fetal monitor exhibited signs that the baby was in significant distress. At 4:01 a.m. on June 27, 2012, Petitioner was given an epidural, and after a course of labor, Hunter was delivered at 3:47 p.m. through an operative vaginal delivery. Hunter suffered permanent and catastrophic brain damage during his birth. As a result, Hunter is unable to eat, speak, toilet, ambulate, or care for himself in any manner. Hunter’s medical care related to the delivery was paid by Medicaid. The Medicaid program through AHCA provided $157,983.63 in benefits. The Medicaid program through the Department of Health Children’s Medical Services Title XIX MMA – Pedicare (DOH), provided $26,189.66 in benefits; the Medicaid program through a Medicaid-managed care organization, known as Amerigroup Community Care (Amerigroup), provided $51,696.99 in benefits; and the Medicaid program through a Medicaid-managed care organization, known as WellCare of Florida (WellCare), provided $13,239.19 in benefits. Accordingly, the sum of these Medicaid benefits, $249,109.47, constituted Hunter’s entire claim for past medical expenses. Petitioner brought a medical malpractice action against the medical providers and staff responsible for Hunter’s care (Defendant medical providers) to recover all of Hunter’s damages, as well as her own individual damages associated with Hunter’s injuries. The medical malpractice lawsuit was settled through a series of confidential settlements totaling $10,000,000 and this settlement was approved by the Court. During the pendency of Hunter’s medical malpractice action, AHCA was notified of the action, and AHCA asserted a $157,983.63 Medicaid lien against Hunter’s cause of action and settlement of that action. AHCA, through the Medicaid program, spent $157,983.63 on behalf of Hunter, all of which represents expenditures paid for Hunter’s past medical expenses. No portion of the $157,983.63 paid through the Medicaid program on behalf of Hunter represent expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Application of the formula set forth in section 409.910(11)(f), Florida Statutes, to Hunter’s settlement requires payment to AHCA of the full $157,983.63 Medicaid lien. Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Mr. Harwin, who represented Hunter and his family in the underlying medical malpractice action, testified, and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Harwin is a member of several trial attorney associations, stays abreast of jury verdicts relative to birth injuries, and ascertains the value of damages suffered by injured parties as a routine part of his practice. Mr. Harwin was familiar with and explained Hunter’s catastrophic brain injury giving rise to Petitioner’s claim. He also explained that, as a result of Hunter’s injury, Hunter is blind, fed through a feeding tube, unable to control his arms, legs or head, and suffers between six to eight seizures per day. Mr. Harwin testified that Hunter’s injury has also had a devastating impact on Hunter’s mother, Ashley Lamendola. According Mr. Harwin, considering Hunter’s past medical expenses, a life care plan for Hunter’s care prepared by an economist, and the extent of non-economic damages, and in light of determinations of mock juries and a jury consultant in this case, as well as Mr. Harwin’s familiarity with jury verdicts reached in similar cases, Hunter and his mother’s damages have a value in excess of $35,000,000. Mr. Harwin’s testimony as to the value of Petitioner’s claim was credible and is accepted. Petitioner also presented the testimony of Mr. Barrett, who was accepted as an expert in the valuation of damages. Mr. Barrett has been accepted as an expert in valuation of damages in a number of other Medicaid lien cases before DOAH. Mr. Barrett has been a trial attorney for 41 years, with a primary focus on plaintiff personal injury cases, including medical malpractice, medical products liability, and pharmaceutical products liability. Mr. Barrett stays abreast of jury verdicts and often makes assessments concerning the value of damages suffered by injured parties. After familiarizing himself with Hunter’s injuries through review of pertinent medical records and Petitioner’s exhibits, Mr. Barrett offered his opinion, based upon his professional training and experience, as well as review of comparable jury verdicts, that a conservative value of the damages suffered would be “$35,000,000 to $50,000,000.” Mr. Barrett’s testimony as to the value of Petitioner’s claim was credible and is accepted. AHCA did not call any witnesses, present any evidence as to the value of Petitioner’s claim, or propose a differing valuation of the damages. Based upon the unrebutted evidence presented by Petitioner’s experts, it is found that a conservative value of Petitioner’s claim is $35,000,000. Attorney’s fees for the underlying medical malpractice case leading to Petitioner’s $10,000,000.00 settlement totaled $4,500,000.00, with costs of $490,486.33. While the formula under section 409.910(11)(f) determines amounts distributable to Medicaid after attorney’s fees and taxable costs, there is no language in section 409.910(17)(b) suggesting that attorney’s fees or costs should be subtracted from settlement proceeds in determining whether a lesser portion of the total recovery should be allocated to reimburse Medicaid. Costs and attorney’s fees are not an element of Petitioner’s damages and were not subtracted from the settlement proceeds in determining whether a lesser portion of the total recovery should be allocated to AHCA’s Medicaid lien. Considering the valuation of Petitioner’s claim at $35,000,000.00, Petitioner’s $10,000,000.00 settlement represents only a 10/35ths recovery of Petitioner’s damages. Multiplying that same 10/35 fraction to the $157,983.63 paid by AHCA through the Medicaid program for past medical expenses results in the proportional sum of $45,138.18 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Derek Matson (“Petitioner” or “Mr. Matson”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, admitted facts set forth in the Pre- hearing Stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Matson was 25 years old in November of 2017, and employed as an executive chef responsible for managing a restaurant’s cooking operations. His annual salary was approximately $61,000.00. On November 5, 2017, Mr. Matson was drinking and having brunch with his girlfriend. He met a friend, and they decided to take the friend’s boat out that afternoon. Mr. Matson was already very intoxicated by the time he arrived at the dock and continued to drink after the boat left the dock. While the boat was anchored in very shallow water, Mr. Matson dove from the boat, struck his head on the seafloor, and suffered a catastrophic spinal cord injury. Mr. Matson is now unable to walk, ambulate, eat, toilet, or care for himself in any manner. He has no use of his legs and extremely limited use of his upper extremities. Mr. Matson spends his waking hours in a wheelchair, requires continuous care, and must be repositioned every two hours in order to prevent pressure sores. Mr. Matson frequently suffers from depression. Medicaid, through AHCA, paid $85,896.60 for Mr. Matson’s care. Via a Medicaid managed care plan known as Optum, Medicaid paid an additional $32,167.31 in benefits. The sum of these benefits, $118,063.91, constituted Mr. Matson’s entire claim for past medical expenses. Mr. Matson pursued a personal injury claim against the boat’s owner and operator. The boat owner’s insurance policy was limited to $305,000.00, and the boat owner had no other recoverable assets. Ultimately, Mr. Matson’s personal injury claim settled for an unallocated lump sum2/ of $305,000.00. During the pendency of Mr. Matson’s personal injury claim, AHCA was notified of the action and asserted an $85,896.00 lien against Mr. Matson’s recovery from the personal injury claim. AHCA did not move to intervene or join in Mr. Matson’s personal injury case. AHCA received notice of Mr. Matson’s settlement and has not moved to set-aside, void, or otherwise dispute the settlement. As noted above, Medicaid spent $85,896.60 on Mr. Matson’s behalf. Application of the formula in section 409.910(11)(f) requires that all of AHCA’s $85,896.60 lien be satisfied.3/ Mr. Matson has deposited $85,896.60 in an interest bearing account pending an administrative determination of AHCA’s rights. Valuation of the Personal Injury Claim Jack Hill represented Mr. Matson during the personal injury action. Mr. Hill has practiced law since 2002 and been employed with the law firm of Searcy, Denney, Scarola, Barnhart, and Shipley in West Palm Beach, Florida, since August of 2004. Mr. Hill is board certified in civil trial law by the Florida Bar and has handled personal injury cases for approximately 15 years. Mr. Hill is a member of several trial attorney associations such as the American Justice Association, the Florida Justice Association, the Palm Beach Justice Association, and AIG, a products liability plaintiffs’ organization. Mr. Hill routinely evaluates the monetary value of damages suffered by his clients. That process involves discussing individual cases with the 28 other members of his law firm and then forming a consensus regarding a case’s settlement value and the damages a jury would likely award in the event of a trial. Without objection from AHCA, Mr. Hill was accepted as an expert regarding the evaluation of damages. If Mr. Matson’s personal injury action had gone to trial, Mr. Hill is confident that a jury would have returned a verdict of at least $20 million. As for the discreet aspects of Mr. Matson’s total damages, Mr. Hill testified that Mr. Matson’s economic damages exceed $20 million and that his noneconomic damages, such as pain and suffering, are $20 million. Mr. Hill testified that “$305,000 was a grossly inadequate recovery for Derek, considering his injuries.” If one assumes that a jury would have returned a $20 million verdict, then the $305,000.00 settlement represents a 1.52 percent recovery of Mr. Matson’s total damages. If one applies that same percentage to the individual components of the personal injury claim, then it would be determined that Mr. Matson only recovered 1.52 percent or $1,794.57 of the $118,063.91 in past medical expenses. This computational method shall be referred to herein as “the pro rata formula.” Mr. Hill testified that the pro rata formula was a reasonable methodology to ascertain how much of Mr. Matson’s past medical expenses were recovered via the $305,000.00 settlement: Q: Mr. Hill, based on a $20 million value of all damages, the $305,000 settlement represents a recovery of 1.25% of the value of the damages. Would you agree with that? A: 1.52%. Q: All right. And accordingly, in this settlement, Mr. Matson recovered 1.52% of his claim for past medical expenses? A: Yes. He would have recovered 1.52% of all aspects of his damages, including those for past medicals that were paid on his behalf. So, yes. Q: And this is similar to how a jury verdict would work, is that correct? So the jury would assign a value to each category of damages. But if it was determined that the defendant, the jury determined that the defendant was only 1.52% liable for those damages – the jury, the judge, in entering the judgment, would reduce each element of damages to that 1.52% amount. Is that correct? A: That’s the way it works, yes. Q: All right. So 1.52% of the $118,063.91 claim for past medical expenses, that comes out to $1,794.57. Is that your math? A: It is – that there was $32,167.31 paid by private health insurance, and the Medicaid paid $85,896.60. And so you take 1.52% of $118,063.91, you get a total past recovery for medical expenses of $1,794.57. Q: All right. And that’s the amount you believe should be allocated to past medical expenses? A: It is. Yes, Sir. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Hill was compelling and persuasive as to: (a) the total damages incurred by Mr. Matson; (b) that Mr. Matson only recovered 1.52 percent of his total damages; and (c) that Mr. Matson only recovered 1.52 percent of his past medical expenses. Using the pro rata formula, the ratio that results from dividing the settlement amount by total damages, is a reasonable method to determine how much of a party’s past medical expenses were recovered through the settlement. AHCA offered no evidence to counter Mr. Hill’s opinions regarding Mr. Matson’s total damages or the past medical expenses he recovered. Accordingly, the preponderance of the evidence demonstrates that the total value of Mr. Matson’s personal injury claim is no less than $20 million and that the $305,000.00 settlement resulted in him recovering no more than 1.52 percent of his past medical expenses. In addition, the preponderance of the evidence demonstrates that $1,794.57 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Matson and payable to AHCA.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), from settlement proceeds received from third parties by Petitioners, Ray A. Siewert and Rose E. Siewert, for medical expenses paid on behalf of Petitioner, Mr. Siewert.
Findings Of Fact Stipulated Findings of Fact On October 15, 2017, the Siewerts were involved in a motorcycle versus automobile crash, which required extensive hospital, skilled nursing, therapy, and other medical treatment including, but not limited to, a four- level spinal fusion procedure and rehabilitative care and services for Mr. Siewert and multiple leg surgeries for Mrs. Siewert, that ultimately led to an above-the-knee amputation (hereinafter referred to as the “auto claims”). On January 3, 2018, Mr. Siewert was discharged from a rehabilitation facility to his home, where he began receiving home health nursing, physician, and therapy services. On January 22, 2018, Mr. Siewert was diagnosed with an abscess near his surgical site, which was allegedly not properly addressed in the days that followed. On January 31, 2018, Mr. Siewert was hospitalized due to worsening neurological deficits, namely in his lower body, and he was transferred to the hospital that had performed his prior spinal surgery. On February 1, 2018, Mr. Siewert had another spinal surgery to address an abscess compressing on his spinal cord, leading to the decreased neurological function. The damage done to his spinal cord preoperatively was significant enough that he has been unable to walk since January 31, 2018, and remains bedbound to present. Mr. Siewert has a neurogenic bladder/bowel, wears diapers, has to be catheterized multiple times per day,1 and is unable to ambulate. To date, he is living with his wife in a single room residence at a skilled nursing facility in the Orlando area, where he is expected to remain.2 The Siewerts brought the following claims: negligence claims relating to the auto claims; nursing home neglect claims under chapter 400, Florida Statutes; and medical malpractice claims under chapter 766, Florida Statutes, each of which were pursued against several companies/entities, individuals, and healthcare providers, seeking, in part, compensable damages to the Siewerts for past bills and future economic needs as well as noneconomic mental pain and suffering and consortium claims for their injuries and losses. In April 2021, the Siewerts settled one of the medical malpractice claims for a limited confidential amount. The Siewerts have had a health plan with Aetna Better Health of Florida, which is a Medicaid plan through AHCA, that has retained the services of Equain relating to the settlement of part of the Siewerts’ medical malpractice claims (referred to below as “Aetna”). Aetna was properly notified of the Siewert’s medical malpractice claims against those defendants and indicated it had paid benefits related to the injuries from the incident in the amount of $75,923.82, as it relates to the settlement at issue. Through their counsel, the Siewerts have asked Aetna to accept a reduced lien amount given the other claims still pending and large 1 The evidence adduced at hearing indicates that Mr. Siewert has now been fitted with a permanent abdominal suprapubic catheter. 2 Though Mrs. Siewert could manage in an assisted living facility, Mr. Siewert could not. Thus, Mrs. Siewert has chosen to stay in the skilled nursing facility to be with her husband. total case value. Nonetheless, Aetna has continued to assert a lien, for the amount of $75,923.82, against the Siewerts’ settlement proceeds relating to the single settlement. Aetna has maintained that it is entitled to application of section 409.910’s formula to determine the lien amount. Applying the statutory reduction formula to this particular settlement would result in no reduction of this lien given the amount of the settlement. The Siewerts also have been covered by AHCA’s fee-for-service Medicaid program. AHCA has contracted with Health Management Systems and Conduent to run its recovery program. AHCA was properly notified of the Siewerts’ medical malpractice claims against those defendants. AHCA provided medical assistance benefits related to the injuries from the incident in the amount of $33,836.09. Through their counsel, the Siewerts have asked AHCA to accept a reduced lien amount. AHCA has continued to assert a lien for the amount of $33,836.09, against the Siewerts’ settlement proceeds relating to the single settlement. AHCA has maintained that it is entitled to application of section 409.910’s formula to determine the lien amount. Applying the statutory reduction formula to this particular settlement would result in no reduction of this lien given the amount of the settlement. AHCA’s $33,836.09 payment and Aetna’s $75,923.82 payment total $109,759.91, and this amount constitutes Mr. Siewert’s claim for past medical expense damages. There remain claims against numerous other defendants which also relate to the AHCA and Aetna liens at issue, including all remaining defendants in the auto and medical malpractice claims. Repayment to AHCA’s Medicaid program is prioritized by law and contract over Medicaid-managed care plans Facts Adduced at Hearing During the pendency of the medical malpractice action, AHCA was notified of the action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlement. The Medicaid program, through AHCA, spent $33,836.09 on behalf of Mr. Siewert, all of which represents expenditures paid for past medical expenses. No portion of the $33,836.09 paid by AHCA through the Medicaid program on behalf of Mr. Siewert represented expenditures for future medical expenses. The $33,836.09 in Medicaid funds paid by AHCA is the maximum amount that may be recovered by AHCA. There was no evidence of the taxable costs incurred in securing the settlement. Application of the formula at section 409.910(11)(f) to the settlement requires payment to AHCA of the full $33,836.09 Medicaid lien asserted by AHCA, and the full $75,923.82 Medicaid lien asserted by Aetna. Petitioners have deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that Mr. Siewert incurred economic damages, consisting of lost future earnings, past medical expenses, and future medical expenses. Mr. Gilbert and Mr. Marx testified that those economic damages totaled roughly $2,000,000. However, the economic loss analysis upon which their testimony was based showed a total of $1,770,775 in future life care needs for Mr. Siewert, reduced to present value.3 The only direct evidence of past medical expenses was the $109,759.91 in Medicaid expenditures. There was no evidence of other economic damages. Thus, the evidence established that economic damages total $1,880,534.90. The total amount of damages for Mr. Siewert was calculated to be $10,000,000, which was described as a conservative figure based on the knowledge and experience of Mr. Gilbert and Mr. Marx, and based on an analysis of representative jury verdicts involving comparable facts and damages. However, Mr. Gilbert engaged in a more detailed analysis of Mr. Siewert’s non-economic damages, which requires review. Although comparable jury verdicts suggest that it could be considerably more, Mr. Gilbert testified that his calculation, though subjective, would include $3,000,000 in non-economic damages in the past three years, and an additional $4,000,000 in non-economic damages into the future based upon a projected 12-year life expectancy, for a total amount of non-economic damages of $7,000,000. That figure was accepted by both of the testifying experts. As part of Petitioners’ calculation of the total value of the claim was $1,000,000 in loss-of-consortium damages incurred by Mrs. Siewert. Although the loss of consortium technically applies to the loss of the full marital relationship previously enjoyed by Mrs. Siewert, who is not the Medicaid recipient, that value was included as an element of the claim and settlement. Based on the forgoing, the evidence supports, and it is found that $9,880,534.90, as a full measure of Petitioners’ combined damages, is a conservative and appropriate figure against which to calculate any lesser 3 Respondent objected to the life care plan on the basis of hearsay. However, the plan was not being offered for the truth of the matter asserted, i.e., that Mr. Siewert would be expected to incur $1,770,775 for future care, but was offered as evidence of the more general value of a claim in litigation. Furthermore, the life care plan, even if inadmissible, could be used as support of an expert opinion as to claim valuation “when those underlying facts are of a type relied upon by experts in the subject to support the opinions expressed.” Charles W. Ehrhardt, Florida Evidence, § 704.1 (2020 Edition). A life care plan is evidence that, for that purpose, would “be sufficiently trustworthy to make the reliance reasonable.” Id. portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The full value of the settlement is 5.06 percent of the $9,880,534.90 value of the claim.
The Issue The issue in this proceeding is the amount payable to the Agency for Health Care Administration (AHCA) to satisfy a Medicaid lien under section 409.910, Florida Statutes (2015).1/
Findings Of Fact On November 2, 2012, the Petitioner, then 20 years old, was a restrained passenger in his girlfriend's Ford Mustang when it was t-boned on the passenger side by a Chevy pickup truck operated by Eddie Ellison. On November 2, 2012, immediately prior to the collision, Eddie Ellison, who was driving eastbound on Harney Road in Hillsborough County, Florida, failed to stop at the stop sign at Williams Road. Eddie Ellison was negligent in the operation of his Chevy Truck on November 2, 2012, and caused it to strike the Ford Mustang occupied by the Petitioner. Eddie Ellison's wife, Alberta Ellison, was the co-owner of the Chevy truck. The Petitioner was wearing his seatbelt at the time of the collision, and there was no negligence on the part of the Petitioner that was a proximate cause of any injury suffered by him as a result of the motor vehicle collision. There was no negligence on the part of any person other than Eddie Ellison that was a proximate cause of the motor vehicle collision on November 2, 2012. When the Hillsborough County Fire and Rescue team arrived at the accident scene at approximately 8:20 p.m., the Petitioner was unresponsive and exhibiting decorticate posturing. He was extricated from the vehicle, intubated at the scene and immediately transported via ambulance to Tampa General Hospital (TGH). The Petitioner arrived at TGH by approximately 8:39 p.m., presenting in critical condition. He was admitted to the Intensive Care Unit (ICU), where he remained for 11 days. The Petitioner suffered serious injuries as a result of the collision, including: injuries to the brain; multiple fractures to the skull, face, jaw, and other head injuries; multiple pelvic fractures; pulmonary contusions; acute respiratory failure; dysphagia; and splenic lacerations. On November 3, 2012, Stephen Reintjes, M.D., performed a ventriculostomy, wherein he drilled through the right parietal region of the Petitioner's skull and placed an external ventricular drain (EVD) into the right lateral ventricle to relieve the Petitioner's elevated intracranial pressure. The EVD was removed on November 12, 2012. On November 6, 2012, David Ciesla, M.D., and a TGH resident, performed a percutaneous tracheostomy, wherein he created an opening through the Petitioner's neck and placed a windpipe because of the Petitioner's prolonged respiratory failure. That same day, John Cha, M.D., performed a percutaneous endoscopic gastrostomy (PEG), wherein a feeding tube was placed into the Petitioner's stomach due to the Petitioner's dysphagia. The Petitioner's PEG tube was removed on January 3, 2013. On November 9, 2012, Michael Harrington, M.D., performed an open reduction and internal fixation (ORIF) of the Petitioner's right zygomaticomaxillary fracture, and a closed reduction with maxillomandibular fixation (MMF) of the Petitioner's right zygomatic arch fracture. Essentially, screws and plates were implanted into the Petitioner's right cheekbone and then his jaw was wired shut to facilitate healing. The Petitioner's jaw remained wired shut until December 3, 2012, and the MMF hardware was surgically removed on December 20, 2012. On November 13, 2012, the Petitioner was transferred from the ICU to a surgical trauma unit. Once the Petitioner became medically stable on December 6, 2012, he was transferred to the Tampa General Rehabilitation Center (TGRC). There, the Petitioner received intensive physical and occupational therapy, speech and swallow therapy, psychological services, and 24/7 rehabilitation nursing care. The Petitioner remained at TGRC until January 16, 2013, 75 days after the crash, when he was discharged to his home. Medicaid paid a total of $147,019.61 for the Petitioner's past medical expenses. For nearly two years following his discharge, the Petitioner was unable to perform the tasks of daily living and was completely dependent on his parents and girlfriend for his care and supervision. The Petitioner was toileted, bathed, and dressed by his parents and his girlfriend. The Petitioner could not walk without assistance. All of the Petitioner's meals were prepared for him. The Petitioner would become obsessive over minor things, easily agitated, and frequently combative. The Petitioner had violent outbursts which required all three of his caretakers to physically restrain him. If left unattended at meals, the Petitioner would overeat until he would vomit. The Petitioner gained a life-threatening 100 pounds over this period. Beyond the most basic level, the Petitioner could not use a computer, play video games, or engage in an active social life, much less skateboard or participate in any of the other physical activities he once enjoyed. The Petitioner spent the majority of his time at home with his parents and girlfriend watching television, with occasional supervised trips outside the home. On June 12, 2013, the Petitioner filed suit against Eddie Ellison and Alberta Ellison in the Circuit Court of the Thirteenth Judicial Circuit, in and for Hillsborough County, Florida, Case No: 13-CA-008277 ("the underlying lawsuit"), seeking to recover damages in excess of $15,000. In the underlying lawsuit, the Petitioner seeks to recover damages for the following: medical expenses incurred in the past; medical expenses to be incurred in the future; lost earnings incurred in the past; loss of earning capacity in the future; property damage incurred in the past; pain, suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect, and loss of capacity for the enjoyment of life sustained in the past; and pain, suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect, and loss of capacity for the enjoyment of life to be sustained in the future. The Petitioner also seeks to recover costs incurred by the Petitioner in the underlying lawsuit, pre-judgment interest at the statutory rate for actual, out-of-pocket pecuniary losses from the date of the loss, and attorney's fees to the extent allowed by law. In the underlying lawsuit, the Petitioner sued his uninsured motorist carrier, 21st Century Centennial Insurance Company (21st Century), seeking to recover $10,000 in uninsured motorist benefits owed to the Petitioner under an automobile insurance policy paid for by the Petitioner's parents, Richard and Linda Willoughby. The insurer denied coverage and refused to pay the uninsured motorist benefits. In the underlying lawsuit, the Petitioner also sued 21st Century for violation of section 624.155, Florida Statutes, seeking to recover the total amount of the Petitioner's damages from 21st Century as provided in section 627.727(10), Florida Statutes. The Petitioner also sought to recover from 21st Century applicable pre-judgment interest, attorneys' fees pursuant to sections 624.155, 627.727(10), and 627.428 and taxable costs. On February 13, 2015, the Petitioner agreed to settle his claims against 21st Century for $4,000,000. The Petitioner received the settlement proceeds from 21st Century on March 16, 2015. On March 20, 2015, the Petitioner and 21st Century filed a joint stipulation to dismiss the Petitioner’s claims against 21st Century with prejudice. As of March 20, 2015, the Petitioner had incurred a total of $50,375.32 in taxable costs, which the Petitioner repaid to the Petitioner's counsel out of the 21st Century settlement proceeds. On May 14, 2015, a total of $147,844.16 was transferred into an interest-bearing trust account for the benefit of AHCA pending an administrative determination of the agency's right to benefits under section 409.910. The parties to this proceeding stipulated that, of the $4 million paid by 21st Century, $3.99 million was “bad faith damages,” paid to settle the Petitioner's claim for damages under section 627.727(10), on account of 21st Century's wrongful failure to pay the Petitioner's uninsured motorist claim and other violations of section 624.155. The settlement agreement between the Petitioner and 21st Century does not specifically attribute any of the $4 million settlement amount to “bad faith” and states that “all sums set forth herein constitute damages on account of personal injuries or sickness.” The settlement agreement further states as follows: The parties agree and acknowledge that this agreement is a settlement of claims which are contested and disputed. Any payments are not to be construed as an admission of liability on the part of 21st Century, which expressly denies any liability for this action. The Petitioner also received a total of $20,000 from Esurance Property and Casualty Insurance Company, reflecting the $10,000 limit of bodily injury liability insurance and $10,000 limit of uninsured motorist coverage under the automobile insurance policy that insured the driver of the Ford Mustang, Kayliegh Lewis, at the time of the crash. The Petitioner's claims against Eddie Ellison and Alberta S. Ellison remain pending in the underlying lawsuit. As of the July 30, 2015, filing of the Pre-hearing Stipulation, the Ellisons' insurer has only offered the $100,000 limit of bodily injury liability insurance to settle all of the Petitioner's claims against the Ellisons. The $4,020,000 paid to the Petitioner does not fully compensate him for the full monetary value of all of his damages. The full monetary value of all of the Petitioner's damages is at least $10 million. At the time of the settlement with 21st Century, the full monetary value of all of the Petitioner's damages was at least $10 million. At the time of the settlement with 21st Century, the Petitioner had suffered not less than $23,800 in lost wages. At the time of the settlement with 21st Century, the Petitioner's work life expectancy through age 67 was 45 years. At the time of the settlement with 21st Century, the Petitioner's loss of future earning capacity was within the range of $794,135.92 and $2,093,950.12. At the time of the settlement with 21st Century, the Petitioner's future medical expenses were projected to exceed $5 million. At the time of the settlement with 21st Century, the Petitioner's past non-economic damages exceeded $1 million. At the time of the settlement with 21st Century, the Petitioner's life expectancy was 59.7 years. At the time of the settlement with 21st Century, the Petitioner's future non-economic damages were within the range of $5 million to $10 million. Although the parties to this proceeding stipulated that the Petitioner has recovered less than $147,019.61 as payment for past medical expenses, the settlement agreement between the Petitioner and 21st Century states that “all sums set forth herein constitute damages on account of personal injuries or sickness.” The Petitioner is no longer eligible for Medicaid. Medicaid has not paid or committed to pay any funds for the Petitioner's future medical care.
The Issue The issue to be determined in this matter is the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Petitioner, John Gray, a Medicaid recipient, following Petitioner’s recovery from a third-party.
Findings Of Fact On January 18, 2007, Petitioner was involved in a devastating automobile accident. Another vehicle, driven by Damil Belizaire, crossed a median and collided head-on into the car Petitioner was driving. No evidence indicates that any negligence on the part of Petitioner caused or contributed to the accident or his injury. Petitioner suffered catastrophic injuries from the collision, including a spinal cord injury resulting in paraplegia. Following the accident, Petitioner was transported to UF Health Shands Hospital (“Shands”) in Jacksonville, Florida. Petitioner remained in Shands receiving medical treatment for 77 days. Once Petitioner became medically stable, he was transferred to the Brooks Rehabilitation Center (“Brooks”) in Jacksonville, Florida. There, Petitioner received intensive physical and occupational therapy care. Petitioner remained at Brooks until June 1, 2007, when he was discharged. Petitioner is permanently paraplegic. On April 7, 2008, Petitioner sued Mr. Belizaire seeking to recover his damages from the automobile accident. Petitioner’s lawsuit was filed in the Circuit Court of the Fourth Judicial Circuit, in Duval County, Case No. 16-2008-CA-004366. On April 1, 2013, Petitioner received a jury verdict in his favor and was awarded a Final Judgment against Mr. Belizaire in the amount of $2,859,120.56, including statutory interest. The damages award was allocated as follows: $128,760.56 for past medical expenses; $1,301,268.00 for future medical expenses; $202,670.00 for the loss of earnings in the past; $916,422.00 for loss of earning capacity in the future; $50,000.00 for pain and suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, and loss of capacity for the enjoyment of life in the past; and $260,000.00 for pain and suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, and loss of capacity for the enjoyment of life in the future. Despite his verdict awarding damages, Petitioner has only been able to recover $10,000.00 from Mr. Belizaire. Mr. Belizaire’s automobile liability insurance company paid Petitioner $10,000, which was the limit of his bodily injury liability insurance policy. The Agency, through its Medicaid program, paid a total of $65,615.05 for Petitioner’s medical care resulting from the 2007 automobile accident.2/ This administrative matter centers on the amount the Agency is entitled to be paid to satisfy its Medicaid lien following Petitioner’s recovery of $10,000 from a third-party. Under section 409.910, the Agency may be repaid for its Medicaid expenditures from any recovery from liable third-parties. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $3,750 regardless of the full value of Petitioner’s damages. (The Agency subtracted a statutorily recognized attorney fee of $2,500 from $10,000 leaving $7,500. One-half of $7,500 is $3,750.) Petitioner asserts that pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s recovery than the amount it calculated using the section 409.910(11)(f) formula. Petitioner specifically argues that the Agency’s Medicaid lien must be reduced pro rata, taking into account the full value of Petitioner’s personal injury claim as determined by the Final Judgment entered in the underlying negligence lawsuit. Otherwise, application of the default statutory formula under section 409.910(11)(f) would permit the Agency to collect more than that portion of the settlement representing compensation for medical expenses. Petitioner maintains that such reimbursement violates the federal Medicaid law’s anti-lien provision, 42 U.S.C. § 1396p(a)(1), and Florida common law. Petitioner contends that the Agency’s allocation from Petitioner’s recovery should be reduced to the amount of $230.00. Based on the evidence in the record, Petitioner failed to prove, by clear and convincing evidence, that a lesser portion of Petitioner’s total recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $3,750.00 from Petitioner’s recovery of $10,000 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 ("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 is the amount of money, if any, that must be paid to the Agency for Health Care Administration (AHCA) to satisfy its Medicaid lien under section 409.910, Florida Statutes (2013).
Findings Of Fact Harry Silnicki, at age 52, suffered devastating brain injuries when a ladder on which he was standing collapsed. Mr. Silnicki, now age 59, has required, and will for the remainder of his life require, constant custodial care as a result of his injuries. He has been, and will be into the indefinite future, a resident of the Florida Institute of Neurological Rehabilitation (FINR) or a similar facility that provides full nursing care. Debra Silnicki is the wife and guardian of Mr. Silnicki. Mr. Silnicki, through his guardian, brought a personal injury lawsuit in Broward County, Florida, against several defendants, including the manufacturer of the ladder, the seller of the ladder, and two insurance companies (Defendants), contending that Mr. Silnicki's injuries were caused by a defective design of the ladder. The lawsuit sought compensation for all of Mr. Silnicki's damages as well as his wife's individual claim for damages associated with Mr. Silnicki's damages. When referring to the personal injury lawsuit, Mr. and Mrs. Silnicki will be referred to as Plaintiffs. During the course of the trial, before the jury reached its verdict, the Plaintiffs entered into a High-Low Agreement (HLA) with the Defendants by which the parties agreed that, regardless of the jury verdict, the Defendants would pay to the Plaintiffs $3,000,000 if the Plaintiffs lost the case, but would pay at most $9,000,000 if the Plaintiffs won the case. After a lengthy trial, on March 27, 2013, the jury returned a verdict finding no liability on the part of the manufacturer or any other defendants. Consequently, the jury awarded the Plaintiffs no damages. The Defendants have paid to the Plaintiffs the sum of $3,000,000 pursuant to the HLA (the HLA funds). The HLA constitutes a settlement of the claims the Plaintiffs had against the Defendants.1/ As shown in their Closing Statement (Petitioners' Exhibit 7), dated September 23, 2013, the Silnickis' attorneys have disbursed $1,100,000 of the HLA funds as attorney's fees and $588,167.40 as costs. The sum of $1,011,832.602/ was paid under the heading "Medical Liens/Bills to be Paid/Waived/Reduced by Agreement Pending Court Approval." Included in that sum were payments to Memorial Regional Hospital in the amount of $406,464.49 and a payment to FINR in the amount of $600,000.00. Also included was the sum of $245,648.57, which was to be deposited in an interest-bearing account. Subject to court approval, the Closing Statement earmarked, among other payments, $100,000 for a special needs trust for Mr. Silnicki and a $100,000 payment to Mrs. Silnicki for her loss of consortium claim. AHCA has provided $245,648.57 in Medicaid benefits to Mr. Silnicki. AHCA has asserted a Medicaid lien against the HLA funds in the amount of $245,648.57. As required by section 409.910(17)(a), the amount of the Medicaid lien has been placed in an interest-bearing account. The Closing Statement reflects that should Petitioners prevail in this proceeding by reducing or precluding the Medicaid lien, any amounts returned to Petitioners will be split 50% to FINR, 25% to attorney's fees, and 25% to the Petitioners. Section 409.910(11)(f) provides as follows: (f) Notwithstanding any provision in this section to the contrary, in the event of an action in tort against a third party in which the recipient or his or her legal representative is a party which results in a judgment, award, or settlement from a third party, the amount recovered shall be distributed as follows: After attorney's fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid. The remaining amount of the recovery shall be paid to the recipient. For purposes of calculating the agency's recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25 percent of the judgment, award, or settlement. The parties stipulated that the amount of Petitioners' "taxable costs as defined by the Florida Rules of Civil Procedure" is $347,747.05. The parties have also stipulated that if the section 409.910(11)(f) formula is applied to the $3,000,000 settlement funds received by Mr. and Mrs. Silnicki, the resulting product would be greater than the amount of AHCA's Medicaid lien of $245,648.57. That amount is calculated by deducting 25% of the $3,000,000 for attorneys' fees, which leaves $2,250,000. Deducting taxable costs in the amount of $347,747.05 from $2,250,000 leaves $1,902,352.95. Half of $1,902,352.95 equals $951,176.48 (the net amount). The net amount exceeds the amount of the Medicaid lien. Section 409.910(17)(b) provides the method by which a recipient can challenge the amount of a Medicaid lien as follows: (b) A recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula specified in paragraph (11)(f) by filing a petition under chapter 120 within 21 days after the date of payment of funds to the agency or after the date of placing the full amount of the third-party benefits in the trust account for the benefit of the agency pursuant to paragraph (a). The petition shall be filed with the Division of Administrative Hearings. For purposes of chapter 120, the payment of funds to the agency or the placement of the full amount of the third-party benefits in the trust account for the benefit of the agency constitutes final agency action and notice thereof. Final order authority for the proceedings specified in this subsection rests with the Division of Administrative Hearings. This procedure is the exclusive method for challenging the amount of third-party benefits payable to the agency. In order to successfully challenge the amount payable to the agency, the recipient must prove, by clear and convincing evidence, 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 (11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency. Scott Henratty and his firm represented the Plaintiffs in the underlying personal injury case. Mr. Henratty is an experienced personal injury attorney. Mr. Henratty testified that the Plaintiffs asked the jury for a verdict in the amount of $50,000,000 for Mr. Silnicki for his total damages, not including his wife's consortium claim. Mr. Henratty valued the claim at between $30,000,000 and $50,000,000. There was no clear and convincing evidence that the total value of Mr. Silnicki's claim exceeded $30,000,000. Mr. Henratty testified that Plaintiffs presented evidence to the jury that Mr. Silnicki's past medical expenses equaled $3,366,267, and his future medical expenses, reduced to present value, equaled $8,906,114, for a total of $12,272,381. Those two elements of damages equal approximately 40.9% of the total value of the claim if $30,000,000 is accepted as the total value of the claim.3/ The Closing Statement reflects that more than the amount of the claimed Medicaid lien was to be used to pay past medical expenses. Petitioners assert in their Petition and Amended Petition three alternatives to determine what should be paid in satisfaction of the Medicaid lien in the event it is determined that the HLA funds are subject to the lien. All three alternatives are premised on the total value of Mr. Silnicki's recovery being $30,000,000 (total value) and compare that to the recovery under the HLA of $3,000,000, which is one-tenth of the total value. All three methods arrive at the figure of $24,564.86 as being the most that can be recovered by the Medicaid lien, which is one-tenth of the Medicaid lien. Future medical expenses is not a component in these calculations. The portion of the HLA funds that should be allocated to past and future medical expenses is, at a minimum, 30% of the recovery.4/
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA), as reimbursement for medical expenses paid on behalf of Petitioner Elisha Loebell, deceased, by and through Sylvia Loebell, as administrator of the estate of Elisha Loebell (Petitioner), pursuant to section 409.910, Florida Statutes (2018), from settlement proceeds Petitioner received from a third party.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On March 12, 2012, Sylvia Loebell (Sylvia), who was 37 weeks pregnant with Elisha Loebell (Elisha), was traveling with her husband through Virginia. Sylvia began experiencing severe back, left flank, and abdominal pain and presented to the emergency room. She was transferred to a hospital where she was given morphine, antibiotics for a suspended kidney infection, and anti-nausea medicine. On or about March 15, 2012, delivery was induced. During the early morning hours of March 16, 2012, extreme difficulty was experienced in the delivery and a vacuum was applied to Elisha’s head. During this time, Sylvia requested delivery via C-section, but the request was ignored. Further, during the delivery process, the medical staff failed to monitor or recognize extreme fetal distress. Eventually, at 5:07 a.m., Elisha was delivered. Elisha’s head was severely bruised, swollen, bleeding, and blistered. She was not breathing and required resuscitation. Elisha was taken to the Neonatal Intensive Care Unit (NICU), but the pediatrician on duty did not arrive in the NICU until over four hours after Elisha was born, and a neonatologist was not consulted until 24 hours after birth. Elisha was diagnosed with catastrophic brain damage due to a lack of oxygen to the brain during and after birth. Due to this catastrophic brain damage, Elisha suffered from quadriplegic cerebral palsy, seizures, global development delay, bilateral cervical blindness, temperature instability, and microcephaly. Elisha was G-tube dependent and required a tracheostomy. After three years of suffering from her extensive birth injuries, Elisha died on April 2, 2015. Elisha was survived by her mother, Sylvia, and her father, Matthew Loebell, who are married and who reside in Florida. Elisha’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $372,654.53 in benefits associated with her injury. This $372,654.54 represents the entire claim for past medical expenses. The costs associated with Elisha’s funeral totaled $3,000.00, which her surviving parents paid. Sylvia was appointed the administrator of the estate of Elisha. Petitioner filed a lawsuit for medical malpractice and wrongful death in Virginia to recover both the individual damages of Elisha’s surviving parents and the individual damages of Petitioner against the medical providers and staff who were responsible for Elisha’s care at the time of her birth (Virginia Defendants). During the pendency of Petitioner’s lawsuit against the Virginia Defendants, Petitioner notified AHCA of the lawsuit, and AHCA asserted a Medicaid lien of $372,654.53 against Petitioner’s lawsuit and settlement of that action. Petitioner settled the lawsuit for medical malpractice and wrongful death with the Virginia Defendants for $1,000,000.00. Those parties executed a Settlement Agreement and Full and Final Release (Release), which stated, in part: Although it is acknowledged that this settlement does not fully compensate Elisha Loebell for all of the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to Releases without regard to this settlement only compensating Elisha Loebell for a fraction of the total monetary value of her alleged damages. The parties agree that Elisha Loebell’s alleged damages have a value in excess of $6,372,654.53, of which $372,654.54 represents Elisha Loebell’s claim for past medical expenses. Given the facts, circumstances, and nature of Elisha Loebell’s injuries and this settlement, the parties have agreed to allocate $58,506.76 of this settlement to Elisha Loebell’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the claimed total monetary value of all [of] Elisha Loebell’s alleged damages. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioner’s lawsuit against the Virginia Defendants. AHCA has not sought to set aside, void, or otherwise dispute the settlement of Petitioner’s lawsuit. Application of the formula set forth in section 409.910(11)(f) to Petitioner’s $1,000,000.00 settlement authorizes payment to AHCA of $331,682.12. Expert Witness Testimony Testimony of Charles J. Zauzig, III Petitioner presented the testimony of Charles J. Zauzig, III, the lead trial attorney who litigated Petitioner’s lawsuit against the Virginia Defendants. Mr. Zauzig is a partner with the law firm of Nichols Zauzig in Woodbridge, Virginia. Mr. Zauzig has been a trial attorney for 40 years and focuses his practice on representing parties in medical malpractice cases involving catastrophic injuries and death. Mr. Zauzig tries, on average, three to four jury trials, per year, that result in a verdict. He testified that he is familiar with meeting with injured clients, reviewing medical records, reviewing expert reports, interviewing and deposing fact witnesses, and preparing cases for trial. He further testified that he regularly reviews jury verdict reports in Virginia, and discusses cases, including valuation and jury verdicts, with other attorneys. Mr. Zauzig testified that as a routine part of his practice, he assesses the value of damages that injured clients have suffered. Mr. Zauzig is a member of several trial attorney associations, including the Virginia Trial Lawyers Association, American College of Trial Lawyers, American Association of Justice, Southern Trial Lawyers Association, American Board of Trial Advocacy, and the International Academy of Trial Lawyers. Mr. Zauzig served on the American Association of Justice’s Board of Governors and chaired its Medical Negligence Group. Petitioners moved, and the undersigned accepted, Mr. Zauzig as an expert in the valuation of damages. AHCA did not oppose Mr. Zauzig’s designation as an expert. As part of his representation of Petitioner in the lawsuit against the Virginia Defendants, Mr. Zauzig met with Elisha’s parents, reviewed Elisha’s medical records, and met with fact and expert witnesses concerning her care. Mr. Zauzig explained that during birth, Elisha suffered catastrophic brain damage as a result of being forced into her mother’s pelvis repeatedly during contractions, which were induced through administration of drugs. He further explained that Elisha suffered catastrophic brain damage that resulted in Elisha having severe cerebral palsy, with additional issues such as blindness, respiratory failure, inability to regulate her body temperature, seizures, and difficulties with feeding that required the use of a G-tube. Because of this catastrophic brain damage and resulting issues, Elisha required constant care, much of which her parents provided. Mr. Zauzig testified that after three years, Elisha passed away as a result of her birth injuries. Mr. Zauzig stated that Elisha’s parents suffered deeply during Elisha’s life and as a result of her death. Mr. Zauzig testified that under the Virginia Wrongful Death Act, damages may include the parents’ mental pain and suffering from the date of injury through death of their child, as well as sorrow thereafter, and medical expenses. See Va. Code Ann. §§ 8.01-50 through 8.01-95 (2018). He testified that based on his professional training and experience, including a review of comparable Virginia jury verdicts, the damages suffered in the Petitioner’s lawsuit against the Virginia Defendants had a value in excess of $6,372,654.53. Mr. Zauzig noted that one of his first medical malpractice trials involving a brain injury at birth resulted in a $6,000,000.00 verdict, in which each parent received a $3,000,000.00 verdict. Mr. Zauzig also testified that in 2002, a jury returned a verdict of $6,000,000.00 to the surviving parents of an infant wrongful death in a comparable venue in Virginia. Mr. Zauzig stated that these comparable verdicts supported his valuation of Petitioner’s damages being in excess of $6,000,000.00. Mr. Zauzig testified that Petitioner could also recover, under the Virginia Wrongful Death Act, Elisha’s past medical expenses, which totaled $372,654.53. Thus, he concluded that it would be reasonable to value the combined damages at $6,372,654.53. Mr. Zauzig admitted that the theory of liability and causation in the Petitioner’s lawsuit—that the medical professionals should have stopped the drugs given to induce delivery when they determined the baby was in distress and should have instead performed a caesarian section—was novel and controversial. He testified that many experts disagree over whether this theory of liability was the cause of the injuries Elisha suffered. Mr. Zauzig believed that the Virginia Defendants would vigorously defend this case on the issues of causation and standard of care, and that he expected that they would attack these issues in pre-trial motions. Mr. Zauzig testified that based on these concerns, the parties settled this lawsuit for $1,000,000.00. He further testified that this settlement did not fully compensate Elisha’s parents and Petitioner for the full value of damages. He testified that based on a valuation of all damages of $6,372,654.53, the $1,000,000.00 settlement represented a recovery of 15.7 percent of the value of the damages recovered in the $1,000,000.00 settlement. According to Mr. Zauzig, as Elisha’s parents and Petitioner only recovered 15.7 percent of the value of the damages, it would be reasonable to allocate 15.7 percent of the claim for past medical expenses ($372,654.53), or $58,506.76. Mr. Zauzig noted that in the Release, the Virginia Defendants agreed that the damages had a value in excess of $6,372,654.53, of which $372,654.53 represented the claim for past medical expenses. He further noted that the parties to the Release agreed to allocate $58,506.76 of the settlement to past medical expenses, which he further testified was reasonable. Testimony of R. Vinson Barrett Petitioner also presented the testimony of Mr. Barrett, a trial attorney with over 40 years of experience, who is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee. Mr. Barrett dedicates his legal practice to representing plaintiffs in personal injury and wrongful death lawsuits. Mr. Barrett has conducted numerous jury trials and has represented clients with catastrophic brain injuries. Mr. Barrett testified that he routinely reviews jury verdict reports and makes assessments concerning the value of damages that injured parties have suffered. He also explained the process for making these assessments. He further testified that he is familiar with settlement allocation in the context of health insurance liens, Medicare set-asides, and workers’ compensation liens. The Division and other courts have accepted Mr. Barrett as an expert in the evaluation and valuation of damages. Petitioners moved, and the undersigned accepted, Mr. Barrett as an expert in the valuation of damages. AHCA did not oppose Mr. Barrett’s designation as an expert. Mr. Barrett testified that he was familiar with Elisha’s injuries and Petitioner’s lawsuit for medical malpractice and wrongful death against the Virginia Defendants. He detailed the cause of her injury, the level of round-the-clock care Elisha required for her short life, and the impact and trauma her parents suffered as a result of her injuries and death. Mr. Barrett opined, based on his review of Virginia and Florida jury verdicts, that a conservative estimate of the overall value of the damages would be $3,000,000.00 per parent, along with the past medical expenses of $372,654.53, for a total valuation of $6,372,654.53. Mr. Barrett testified that Petitioner and the Virginia Defendants settled the lawsuit for $1,000,000.00, which did not fully compensate Elisha’s parents. Mr. Barrett opined that using his conservative valuation of $6,372,654.53, the $1,000,000.00 settlement represented a 15.7 percent recovery of the value of the damages. Mr. Barrett further testified that because the settlement represented 15.7 percent of the damages, an allocation of 15.7 percent of the claim for past medical expenses, or $58,506.76, was reasonable and appropriate. Ultimate Findings of Fact The undersigned finds that the testimony of Mr. Zauzig and Mr. Barrett was credible and persuasive as to the total damages incurred by Petitioner. Mr. Zauzig’s extensive experience in litigating catastrophic injuries and death, and medical malpractice actions, along with his experience as the lead trial counsel in Petitioner’s lawsuit against the Virginia Defendants, made him a compelling witness regarding the valuation of damages that Petitioner suffered, and the allocation of damages. Mr. Barrett’s vast experience as a trial lawyer, who has previously testified numerous times before the Division and other courts regarding valuation and allocation of damages, similarly made him a credible witness regarding the valuation and allocation of damages in Petitioner’s lawsuit against the Virginia Defendants. AHCA’s attorney cross-examined Mr. Zauzig and Mr. Barrett on some of the underpinnings of how each reached their opinions, but ultimately offered no evidence to counter these expert opinions regarding Petitioner’s total damages or the past medical expenses recovered. Accordingly, the undersigned finds that the preponderance of the evidence establishes that the total value of Petitioner’s medical malpractice and wrongful death claim is $6,372,654.53, and that the $1,000,000.00 settlement resulted in Petitioner recovering 15.7 percent of Elisha’s past medical expenses. In addition, the preponderance of the evidence establishes that $58,506.76 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
The Issue The issue in this proceeding is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Joni M. Doheny, from a settlement received by Petitioner from a third party.
Findings Of Fact On July 7, 2014, Ms. Doheny, who was then 57 years old, was a passenger on a motorcycle whose drunk driver veered into oncoming traffic and was struck by a sports utility vehicle (SUV), ejecting her from the point of impact approximately 100 feet through the air and over pavement. As a result of the accident, Ms. Doheny suffered severe, catastrophic and horrible injuries with wounds to her head, wounds to her arms, wounds to her hands and her left leg almost ripped from her body at the knee. Ms. Doheny was intubated at the scene and airlifted to Tampa General Hospital. She was diagnosed with compound fractures of her left tibia and fibula, puncture wound of her right knee, severe injury to her left arm and hand resulting in amputation of her left ring finger, a laceration to her forehead, and a traumatic brain injury. Amputation of her leg was recommended, but Petitioner elected to save her leg. She underwent numerous surgeries associated with her leg and other extensive injuries and was in the hospital until September 12, 2014. Ms. Doheny was again admitted to the hospital for treatment of her injuries on December 2 through 9, 2014, and January 21 through February 5, 2015. Throughout the process, she was in extreme pain and remains in pain to date. Currently, Petitioner cannot walk and requires a wheelchair for mobility. She has no significant function of her left hand and no significant function in her left leg. She is dependent on others for activities of daily living. She also has severe impacts to her emotional well-being and suffers from depression, anxiety and pain. Her condition is permanent and she most likely will not be able to obtain employment sufficient to support herself or replace the income/earning capacity she had as a realtor prior to her injuries. She is no longer a Medicaid recipient. Petitioner’s past medical expenses related to her injuries were paid by both personal funds and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $257,640.53. Unpaid out-of-pocket expenses totaled $119,926.41. Thus, total past healthcare expenses incurred for Petitioner’s injuries was $377,566.94. Ms. Doheny brought a personal injury claim to recover all her damages against the driver of the SUV (Driver) who struck the motorcycle Ms. Doheny was riding, her Uninsured/Underinsured Motorist Policy (UM Policy), and the restaurant which had served alcohol to the driver of the motorcycle (Restaurant). Towards that end, Petitioner retained James D. Gordon, III, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in her negligence action against the Defendants. The Driver maintained a $10,000 insurance policy. On November 10, 2014, prior to suit being filed, Ms. Doheny settled her claim against the Driver for an unallocated $10,000. Ms. Doheny’s UM Policy had a policy limit of $300,000. Likewise, on November 10, 2014, Ms. Doheny settled her claim against her UM Policy for an unallocated $300,000. The Restaurant maintained a $1,000,000 liquor liability insurance policy. On September 2, 2015, and again prior to suit being filed, Ms. Doheny settled her claim against the Restaurant for $1,000,000. The settlements totaled $1,310,000.00 and do not fully compensate Petitioner for the total value of her damages. As indicated, $310,000.00 of the settlements was not apportioned to specific types of damages, such as economic or non-economic, past or future. One million dollars of the settlements was apportioned with 20 percent of those funds allocated to past medical expenses. No dollar amount was assigned to Ms. Doheny’s future medical care needs, and there remains uncertainty as to what those needs will be. Additionally, neither Petitioner nor others on her behalf made payments in the past or in advance for her future medical care, and no claim for reimbursement, restitution or indemnification was made for such damages or included in the settlement. However, given the loss of earning capacity and the past and present level of pain and suffering, the bulk of the settlement was clearly intended to provide future support for Ms. Doheny. Respondent was notified of Petitioner’s negligence action, around September 3, 2015. Thereafter, Respondent asserted a Medicaid lien in the amount of $257,640.53 against the proceeds of any award or settlement arising out of that action. Respondent was not a party to the 2015 settlements and did not execute any of the applicable releases. Mr. Gordon’s expert very conservative valuation of the total damages suffered by Petitioner is at least $5 million. In arriving at this valuation, Mr. Gordon reviewed the facts of Petitioner’s personal injury claim, vetted the claim with experienced members in his law firm and examined jury verdicts in similar cases involving catastrophic injury. The reviewed cases had an average award of $6,779,214 for total damages and $4,725,000 for non-economic damages (past and future pain and suffering). Mr. Gordon’s valuation of total damages was supported by the testimony of one additional personal injury attorney, R. Vinson Barrett, who has practiced personal injury law for more than 30 years. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Gordon. Mr. Barrett agreed with the $5 million valuation of Petitioner’s total damages and thought it could likely have been higher. The settlement amount of $1,310,000 is 26.2 percent of the total value ($5 million) of Petitioner’s damages. By the same token, 26.2 percent of $377,566.54 (Petitioner’s past medical expenses paid in part by Medicaid) is $98,922.54. Both experts testified that $98,922.54 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. Further, the unrebutted evidence demonstrated that $98,922.54 is a reasonable and rational reimbursement for past medical expenses since Petitioner recovered only 26.2 percent of her damages thereby reducing all of the categories of damages associated with her claim. Given these facts, Petitioner proved by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f). Therefore, the amount of the Medicaid lien should be $98,922.54.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration (AHCA), in satisfaction of Respondent’s Medicaid lien from a settlement received by Petitioner, James T. Stirk, from a third party pursuant to section 409.910, Florida Statutes (2015).
Findings Of Fact On January 24, 2014, Petitioner, then 25 years old, was involved in a serious motorcycle accident. Petitioner struck the rear of a truck with a trailer near mile marker 129 on I-75 in Lee County, Florida. Petitioner was taken to Lee Memorial Hospital where he remained in a coma for a couple of months. He sustained a broken back at T-4 level, two broken arms, a fractured neck and internal injuries. As a result of his injuries, Petitioner is now a paraplegic from the chest down and confined to a wheelchair. Respondent is the state agency authorized to administer Florida’s Medicaid program. See § 409.902, Fla. Stat. Prior to the accident, Petitioner worked as an appliance and air conditioning repairman, earning $16 an hour. After the accident and his recovery, Petitioner has been unable to work and his only source of income is through a Social Security disability check of approximately $1,083 monthly. He believes he is now eligible for Medicare, which should start “next month” (August 2016). He rents a home ($750 monthly) and lives there with his four-year-old son. Petitioner brought a negligence claim against the truck driver to recover his damages sustained in the crash. Petitioner settled his negligence claim for $95,000.00. During the pendency of Petitioner’s claim, AHCA was notified of the third-party negligence claim. AHCA has not filed an action to set aside or otherwise object to Petitioner’s $95,000.00 settlement. Petitioner’s past medical care related to his motorcycle accident totaled approximately $929,589.46. Petitioner was insured under a Florida Blue ERISA Health Insurance Plan (Florida Blue) for a portion of the time he received medical treatment. He subsequently became eligible for Medicaid after being unable to work after the accident. Florida Blue paid approximately $501,487.30 towards Petitioner’s medical care. Medicaid paid $47,008.81 towards Petitioner’s medical care. No portion of this amount was paid for future medical expenses and no payments were made in advance for medical care. By letter dated January 20, 2016, AHCA, through its contractor Xerox Recovery Services, asserted a lien of $47,008.81 against Petitioner’s third-party negligence claim and settlement thereof. By letter dated January 21, 2016, Petitioner’s counsel provided Xerox Recovery Services the settlement information and requested the Medicaid lien be proportionally reduced to $714.05, 1.9 percent of the total value of Petitioner’s claim. By letter dated February 18, 2016, AHCA, through its contractor, applied the statutory formula to Petitioner’s gross settlement and requested a check in the amount of $32,062.25 for full satisfaction of its lien. Petitioner’s attorney forwarded payment of $32,062.25 from Petitioner’s settlement proceeds. The payment of these funds to AHCA constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Section 409.910(11)(f), provides, in pertinent part, as follows: (f) [I]n the event of an action in tort against a third party in which the recipient or his or her legal representative is a party which results in a judgment, award, or settlement from a third party, the amount recovered shall be distributed as follows: After attorney’s fees and taxable costs . . . one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid. The remaining amount of the recovery shall be paid to the recipient. For purposes of calculating the agency’s recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient . . . shall be calculated at 25 percent of the judgement, award, or settlement. Pursuant to the formula set forth in 409.910(11)(f), Respondent should be reimbursed $32,062.25, the amount set forth in the February 18, 2016, letter. However, the statute provides a method by which a recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula set forth in subsection (11)(f). “In order to successfully challenge the amount payable to the agency, the recipient must prove, by clear and convincing evidence, 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. § 409.910(17)(b), Fla. Stat. The testimony spoke in generalities and global assessments. The testimony did not explicitly disclose that a lesser amount of the total recovery should be allocated for past and future medical expenses in this instance. Ty Roland is an attorney with over 20 years’ experience representing plaintiffs in personal injury and wrongful death claims. The majority of Mr. Roland’s cases have been in the Fort Myers area. Mr. Roland was accepted as an expert in the valuation of the damages (in personal injury cases), and testified as to his opinion of the total value of damages in Petitioner’s underlying action. In formulating his opinion of the total value of Petitioner’s damages, Mr. Roland considered cases he has previously tried. Petitioner’s suit demanded $5 million; however, Mr. Roland estimated the value of Petitioner’s suit at $10 million. There were no specifics as to the elements of damages. Total recovery for Petitioner’s damages through settlement was $95,000, roughly 1.9 percent of the estimated total value of his damages. The parties stipulated the amount due under section 409.910(11)(f) is $32,062.25.
