The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent), from the proceeds of Petitioners’ confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2020).1
Findings Of Fact Paragraphs 1 through 10 are the enumerated stipulated facts admitted and agreed upon by the parties, and required no proof at hearing. Petitioners commenced a medical malpractice action in 2013 to recover damages related to the injuries sustained by Tavarion Sanders at the time of his birth in 2009. Tavarion Sanders was born September 16, 2009. Misty Mobley is Tavarion Sanders’ mother. The medical malpractice action contains a cause of action asserted on behalf of Tavarion Sanders’ parents, Misty Mobley and Tavaris Sanders, for their own injuries, including for the loss of services, earnings, companionship, society, and affection of the infant, and for the value and expense of the infant’s hospitalizations in the past and future. The injuries related to Tavarion Sanders’ medical malpractice claim include hypoxic brain damage, cerebral palsy with decreased muscle tone in all four extremities, global developmental delays, and a neurogenic bowel and bladder. As a result of these permanent injuries, Tavarion Sanders requires, for the rest of his life, total assistance with all of his activities of daily living, including dressing, feeding, grooming, bathing, and toileting. Medicaid first made payments for medical care on behalf of Tavarion Sanders in 2010. 4 Page one of the Transcript provides that “the Honorable Lawrence P. Stevenson, Administrative Law Judge” heard this case. That is inaccurate. The undersigned was assigned this case on September 9, 2020. As found on page four of the Transcript, the undersigned called this hearing to order and presided throughout the hearing. In 2020, the medical malpractice action settled for a confidential amount. Petitioners assert that the settlement amount was not for the full value of Petitioners’ claims because of the challenges with proving liability and the risk of litigating the case to trial. AHCA was properly notified of the medical malpractice action, and the instant Petition was timely commenced by Petitioners. AHCA has asserted a lien against Tavarion Sanders’ settlement proceeds in the amount of $129,939.87. AHCA paid $129,939.87 on behalf of Tavarion Sanders, related to his claim against the liable third parties in the Petitioners’ medical malpractice action. The amount of the settlement in the medical malpractice action, and the allocation of the proceeds of the settlement as between Tavarion Sanders and Misty Mobley, is identified in Petitioners’ Lien Allocation and Reduction Worksheet. (Petitioners’ Exhibit 25). Petitioners’ Exhibit 1 is an August 18, 2020, letter (lien letter) from Conduent Payment Integrity Solutions, a subcontractor to Health Management Systems, which is an authorized agent of AHCA “to operate the Florida Medicaid Casualty Recover Program.” In addition to directing Tavarion Sanders’ counsel to review section 409.910 to determine the “responsibilities to Florida Medicaid,” Mark Lyles, Conduent’s case manager and author of this letter also posted the amount of the lien asserted by AHCA: $129,939.87.6 Ms. Tejedor is a Florida board-certified civil trial lawyer with 23 years’ experience in personal injury law. She focuses on “birth-related injuries of 5 As noted in footnote 3 above, Petitioners’ Exhibit 2 was amended during the course of the hearing, and Exhibit 2a was filed at the conclusion of the hearing. 6 At some time during the course of this proceeding, Petitioners challenged approximately $3,000.00 of the stipulated amount. However, at hearing, Ms. Tejedor conceded and confirmed as correct the figure found in Petitioners’ Exhibit 2a: the stipulated amount, $129,939.87. children suffering birth injuries during delivery.” As part of her ongoing practice, she routinely evaluates the damages suffered by injured clients. Ms. Tejedor relies on her own experience including her daily legal practice, three of her most recent medical malpractice trials, plus her review of other jury verdicts to gauge any likely recovery. Ms. Tejedor continues to handle cases involving similar injuries suffered by Tavarion Sanders. Ms. Tejedor met and observed Tavarion Sanders; met with Tavarion Sanders’ family and discussed Tavarion Sanders’ condition with his parents and treating medical personnel; and reviewed Tavarion Sanders’ medical information, including the actual medical records of the treating physicians and the multiple MRI reports. Ms. Tejedor represented Petitioners in the civil litigation. She testified to the difficulties associated with this type of medical malpractice litigation in general, and then focused on the problematic causation and liability issues related to Tavarion Sanders and his injuries. Ms. Tejedor credibly testified regarding the evaluations she made of Tavarion Sanders’ injuries and the legal actions she orchestrated.7 In addition to the stipulated injuries listed in paragraph 4 above, Ms. Tejedor described, in laymen’s terms, Tavarion Sanders’ injuries based upon the evidence discovered in the civil litigation: Tavarion Sanders has a severe brain injury; a form of cerebral palsy with motor impairment and cognitive delays; significant mental retardation with seizure disorders; and he is essentially nonverbal. She also explained Tavarion Sanders’ current situation as he is “really not capable of learning;” will never be “gainfully employed any time in the future;” will “require 24/7 care;” and will never live alone. 7 The medical malpractice action was initially brought through the “Neurological Impairment Compensation Association: fund and dismissed because the presiding ALJ found that Tavarion Sanders had not suffered a birth-related neurological injury. Following an appeal, the civil medical malpractice action was restarted, which resulted in a confidential settlement. Ms. Tejedor’s unrefuted testimony placed the total full value of Tavarion Sanders’ damages conservatively at $21,972,186.87. Included in this total value are: Tavarion Sanders’ future medical care, $14,516,878.00; Tavarion Sanders’ loss of earnings capacity, $2,325,369.00; Tavarion Sanders’ pain and suffering, $5,000,000.00; and the past medical expenses, stipulated to by Petitioners and AHCA, $129,939.87. Further, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Ms. Tejedor averred she used the same formula to determine that 6.8% is the ratio of the settlement to the full value of Tavarion Sanders’ claim. Ms. Tejedor followed the formula as set forth in: Valeria Alcala, a Minor, by Yobany E. Rodriguez- Camacho and Manuel E. Alcala, as Natural Guardians and next friends vs. Agency for Health Care Administration, Case No. 20-0605MTR, 2020 Florida Division of Administrative Hearings, 2020 WL 4934729 (Fla. DOAH August 18, 2020); and Amy Lopez, Individually and as Parent and Natural Guardian of A.F., a Minor, vs. Agency for Health Care Administration, Case No. 20-2124MTR (Fla. DOAH Sept. 3, 2020). Ms. Tejedor testified she used the “same formula that other jurisdictions in Florida have followed, which is the, you know, Ahlborn[8] decision, which basically ... lists out how you determine the percentage that ... the percentage of the value of the case that represents past medical expenses, and that’s exactly the way we did it in this case.” Ms. Tejedor’s testimony was competent, substantial, persuasive and uncontradicted on this point. Mr. Copeland is a Florida civil trial lawyer with 28 years’ experience in personal injury law, with an active civil trial practice. He has handled and continues to practice in the areas of products liability and medical malpractice litigation. As part of his every day practice, Mr. Copeland is involved in resolving liens. 8 Ark. Dept of Health & Human Serv. v. Ahlborn, 547 U.S. 268 (2006). In addition to serving as a witness for damage valuation cases and an expert in the reduction of liens, Mr. Copeland has worked with the legislation that deals with “damages, calculation of damages, and to some extent on occasion lien resolution was part of those calculations.” Mr. Copeland has “spent quite a bit of time testifying before committees in the House and Senate,” and on “Blue Ribbon panels appointed by governors that dealt in part with damages, and evaluating personal injury statutes.” Mr. Copeland’s expert testimony has always been accepted in evidence. Mr. Copeland was tendered and without objection was accepted as an “expert witness in the valuation of damages in medical malpractice actions and in the resolution of health care liens.” Mr. Copeland testified that Florida “courts generally are following the Ahlborn formula.” Mr. Copeland routinely works with life care planners and economists in his practice, and used the economic damage numbers provided to him for this case. Further, Mr. Copeland testified that he based his opinion on Tavarion Sanders’ future medical care expense, lost earnings capacity, the medical expenses identified in the lien letter, Tavarion Sanders’ loss of enjoyment for the capacity of life, and Tavarion Sanders’ pain and suffering (both past and future) “just like you’re going through a jury verdict form” in Florida. Mr. Copeland opined that the full value of Tavarion Sanders’ claim, using his conservative approach, was $21,972,186.87. Using the Ahlborn pro rata methodology or formula, that is, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Mr. Copeland testified that Tavarion Sanders recovered only 6.8% of the full measure of all his damages. Then, by applying that 6.8% to the full amount that Medicaid claimed of $129.939.87, the full satisfaction of the lien is $8,835.91. Mr. Copeland’s testimony was uncontradicted and persuasive on this point. The testimony of Petitioners’ expert regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioners proved that the confidential settlement does not fully compensate Tavarion Sanders for 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 methodology to the valuation of the damages. In short, Petitioners’ evidence was unrebutted. Respondent’s attempt to quibble with how many significant figures were used in determining the appropriate percentage for the pro rata methodology calculation is tenuous and unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $129,939.87. It is logical and rational to conclude that this figure is the amount expended for Tavarion Sanders’ past medical expenses. Respondent explored an additional past medical expense of $762.66, however the parties stipulated to the past medical expense figure. There is a lack of evidence to support this purported additional past medical expense, and the undersigned is not persuaded to amend the stipulated amount. Applying the 6.8% pro rata ratio to $129,939.87 equals $8,835.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioners proved by a preponderance of the evidence as set forth in section 409.910(11)(f) that AHCA should be reimbursed at the lesser amount: $8,835.91.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (sometimes referred to as "17b"), Respondent's recovery of medical assistance expenditures from $500,000 in proceeds from the settlement of a products liability action must be reduced from its allocation under section 409.910(11)(f) (sometimes referred to as "11f")1 to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)2; and, if so, the amount of Respondent's recovery.
Findings Of Fact As a result of a motor vehicle accident that took place on May 27, 2012, Petitioner sustained grave personal injuries, including damage to his spinal cord that has left him a paraplegic incapable of self-ambulation of more than a few steps, except by means of a wheelchair or rolling walker. Petitioner was a passenger in a 2003 extended-cab Ford F-150 pickup truck that was driven at a high rate of speed by his brother, who lost control of the vehicle in a curve, over-corrected, and caused the vehicle to rollover three times, ejecting Petitioner with such force that he traveled a distance of 150 feet in the air. The force of the rollovers crushed the vehicle's roof, which caused Petitioner's door latch to fail, allowing Petitioner's door to open and Petitioner to be expelled from the relative safety of the passenger compartment. In settlement negotiations, Petitioner's trial counsel claimed that Ford F-150s of the relevant vintage suffered from deficient door latches, but the forces to which the latch were subjected were overwhelming and well beyond reasonable design limits: the truck's door could not have resisted these forces unless it had been welded to the frame. The one-vehicle accident was substantially, if not entirely, caused by Petitioner's brother, who was intoxicated and is now serving a five-year sentence in prison for his role in the crash. Petitioner shared some responsibility because he likely was not wearing a seatbelt when the truck rolled over. Petitioner's brother and another passenger who were not ejected from the vehicle sustained minor injuries. Petitioner commenced a products liability action against Ford Motor Company and the manufacturer of the door latch. Ford Motor Company defended the case vigorously. Expert witnesses were unable to find any federal safety standards that had been violated in connection with the vehicle, the door latch, or the performance of the vehicle and door latch during the rollovers. The manufacturer of the door latch raised a substantial defense of a lack of personal jurisdiction. At the time of the incident, Petitioner was a 25-year-old plumber and construction worker. He was the sole means of support for his three young children. He has undergone an arduous course of rehabilitation to gain wheelchair-dependent self-autonomy. At the time of the settlement, which appears to have resolved the products liability action, the putative true value of Petitioner's case was $6 million, consisting of $154,219 of past medical expenses, $2.1 million of future medical expenses, $800,000 of lost wages and loss of future earning capacity, and about $2.95 million of noneconomic damages, including pain and suffering and loss of consortium. Petitioner has proved each of these damages components, so the putative true value is the true value (sometimes referred to as the "actual true value"). Petitioner settled the case for $500,000, representing a settlement discount of 91.7% from the true value of $6 million (Settlement Discount). Petitioner has paid or incurred $147,000 in attorneys' fees and about $123,000 in recoverable costs in prosecuting the products liability action. Respondent has expended $154,219 of medical assistance. Under the 11f formula, which is described in the Conclusions of Law, Respondent would recover approximately $126,000 from the $500,000 settlement. This provisional 11f allocation provides the point of reference for determining whether Petitioner has proved in this 17b proceeding a reduced recovery amount for Respondent. Having proved the Settlement Discount of 91.7% from the actual, not putative, true value to the settled value, Petitioner has proved that each damages component of the true value, including past medical expenses, must be proportionately reduced by 91.7% to identify the portion of the settlement proceeds representing past medical expenses, which, as discussed in the Conclusions of Law, is the only portion of the proceeds subject to the Medicaid lien. Reducing the past medical expenses of $154,219 by 91.7% yields about $12,800, which is Respondent's tentative 17b recovery. As mentioned in the Conclusions of Law, Respondent's recovery must bear its pro rata share of the attorneys' fees and costs paid or incurred to produce the settlement. The total fees and costs of $270,000 represent 54% of the settlement. The record provides no reason to find that these fees and costs are unreasonable in amount or were not reasonably expended to produce the $500,000 settlement. Reducing Respondent's recovery of $12,800 by 54% yields $5888, which is Respondent's 17b recovery.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Micaiah McCray, from a medical-malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on November 11, 2008. In the months following birth, Petitioner underwent several surgeries and procedures including a percutaneous endoscopic gastrostomy tube placement on January 26, 2009, a repair of incomplete atrioventricular canal defect on April 15, 2009, and Nissen Fundoplication and revision of gastrostomy tube on July 8, 2009. On July 23, 2009, Petitioner was admitted to St. Mary’s Medical Center with suspected bronchitis and exacerbation of reactive airway distress. During this hospitalization, on or about August 15, 2009, Petitioner suffered a stroke involving the right hand and part of the right leg. A CT scan of Petitioner’s brain revealed a left middle cerebral artery distribution infarction suggesting a large ischemic infarct. Petitioner’s condition stabilized and Petitioner was released from the hospital on August 27, 2009, with the following discharge summary: Exacerbation of reactive airway disease Bronchitis Mitral stenosis Mild pulmonary hypertension Hypersecretory upper airway Pansinusitis Clostridium difficile colitis Hypoxemia with oxygen dependency Gastroesophageal reflux disease, status post fundoplication Left cerebral infarction of unknown etiology Endocardial cushion defect status post atrioventricular canal repair Bilateral optic nerve colobomas Rule out CHARGE association/Goletz syndrome On September 21, 2009, Petitioner was admitted to Palms West Hospital with a diagnosis of respiratory distress. Petitioner’s condition improved and he was discharged home on September 25, 2009. Subsequent to that hospitalization, an MRI performed on October 19, 2009, revealed new acute strokes. In the years following Petitioner’s strokes, he underwent numerous surgeries, procedures, and therapies for a multitude of medical conditions. Petitioner’s past medical expenses related to his injuries were paid by both private health insurance and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $217,545.58. United Healthcare and Aetna provided $37,090.17 and $3,231.72 in benefits, respectively. Total healthcare expense incurred for Petitioner’s injuries was $257,867.47. Petitioner is developmentally delayed and cannot walk or crawl. Petitioner requires a wheelchair or stroller for mobility and requires positioning and trunk support to maintain a seated position. His ability to independently explore his environment is severely restricted. Petitioner is completely dependent on others for activities of daily living. He cannot bathe, dress, or eat on his own. He requires a feeding tube, and receives professional in-home services to monitor his respiration and heartrate, manage his GJ tube, administer medication, and monitor bowel and bladder function. Petitioner does not vocalize words and has limited communication. He has no function of his right hand and has tightness in the right leg below the knee. Petitioner’s condition is permanent. Petitioner’s parents brought a medical malpractice action on his behalf in the Circuit Court of the 15th Judicial Circuit Court in and for Palm Beach County against Tenet St. Mary’s Inc., d/b/a St. Mary’s Medical Center; Palms West Hospital Limited Partnership, d/b/a Palms West Hospital; David Evan Mound Drucker, M.D.; South Florida Pediatric Surgeons, P.A.; Physicians Professional Liability Risk Retention Group; Alberto Antonio Marante, M.D.; Florida Pediatric Critical Care, P.A.; Diego Maurcio Diaz, M.D.; Gerard Minor, P.A.-C; Children’s Center Gastroenterology & Nutrition, P.A.; Chartis Claims, Inc.; Lexington Insurance Company; Eunice Cordoba, M.D; and Edwin Liu, M.D., P.A., d/b/a Pediatric Neurologist of Palm Beach (Defendants). Petitioner’s action alleged, among other theories, that the Defendants failed to recognize in Petitioner a sickle cell trait and properly treat Petitioner’s dehydration, a factor contributing to Petitioner’s strokes. Petitioner’s parents retained Scott Marlowe Newmark, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in the medical malpractice action against Defendants. In preparation for litigation, Stephanie P. Chalfin, M.S., prepared a life care plan for Petitioner. The plan sets out the need for future medical care, equipment, hospitalizations, surgeries, medications, and attendant care, through Petitioner’s expected life span. In this case, Petitioner’s life expectancy is an additional 66.9 years. During the pendency of the medical malpractice action, J. Rody Borg, Ph.D., an economist, prepared a report assigning a present value between $24,373,828 and $29,065,995 for the future costs of Petitioner’s life care plan, lost benefits, and lost earning capacity. Mr. Newmark’s expert valuation of the total damages suffered by Petitioner is at least $30 million. Mr. Newmark considered the life care plan and Dr. Borg’s report in arriving at the value of total economic damages. Mr. Newmark then examined jury verdicts in similar cases involving catastrophic injury to value non-economic damages. Of the nine jury verdicts examined, Mr. Newmark highlighted three as particularly relevant because they involved young children with brain injuries similar to Petitioner’s injury and who required life-long care. The nine cases had an average award of $12 million for non-economic damages (past and future pain and suffering). Mr. Newmark arrived at his valuation of Petitioner’s damages at $30 million by considering the low-end of Dr. Borg’s economic damages estimate, $24 million, along with the average jury award for non-economic damages in similar cases. Mr. Newmark’s testimony was credible, reliable and persuasive. Mr. Newmark’s valuation of total damages was supported by the testimony of two additional personal injury attorneys, Mark Finklestein and R. Vinson Barrett, both of whom have practiced personal injury law for more than 30 years and were accepted as experts in valuation of damages (in personal injury cases). Mr. Finkelstein served as Petitioner’s guardian ad litem in the underlying medical malpractice action and agreed with the valuation of total damages at $30 million. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations, the life care plan, Dr. Borg’s report, and a day-in-the-life video of Petitioner. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Newmark. Mr. Barrett likewise agreed with the $30 million valuation of Petitioner’s total damages. Respondent was notified of Petitioner’s medical malpractice action during its pendency. Respondent asserted a Medicaid lien in the amount of $217,545.58 against the proceeds of any award or settlement arising out of that action. In 2012 and again in 2015, Petitioner received a series of settlements from the Defendants. The settlements totaled $2,450,000. The settlements do not fully compensate Petitioner for the total value of his damages. The settlements are undifferentiated, meaning they are not apportioned to specific types of damages, such as economic or non-economic, past or future. In all of the releases signed by the parties thereto, the parties agreed that, “if an allocation of this settlement is necessary in the future, this allocation should be made by applying the same ratio this settlement bears to the total monetary value of all [Petitioner’s] damages to the specific damage claim.” Respondent was not a party to the 2012 and 2015 settlements and did not execute any of the applicable releases. Respondent’s position is that it should be reimbursed for its Medicaid expenditures on behalf of Petitioner pursuant to the formula set forth in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting a 25 percent attorney’s fee and taxable costs (in this case, $613,131) from the $2,450,000 recovery, which yields a sum of $1,836,869 then dividing that amount by two, which yields $918,434.50. 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. In the case at hand, Respondent may recover under the statute the full amount of its lien. 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 urges Respondent should be reimbursed $21,067.77 in satisfaction of its Medicaid lien. The settlement amount of $2,450,000 is 8.17 percent of the total value ($30 million) of Petitioner’s damages. By the same token, 8.17 percent of $257,867.47 (Petitioner’s past medical expenses paid by both Medicaid and private insurance) is $21,067.77. Both Mr. Finklestein and Mr. Barrett testified that $21,067.77 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. 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).
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 in this proceeding is the amount payable to Respondent in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioner from a third party, pursuant to section 409.910(17), Florida Statutes.
Findings Of Fact Petitioner is a 35-year-old female who currently resides in Homestead, Florida. Respondent is the state agency authorized to administer Florida's Medicaid program. § 409.902, Fla. Stat. On or about February 15, 2012, Petitioner was struck by a motor vehicle and severely injured while attempting to rescue her young son, who had run into a busy street in front of her home in Hollywood, Florida. Petitioner suffered a fractured skull and broken leg. She was hospitalized and received medical care for her injuries. Subsequently, she was treated by an orthopedic physician and a neurologist. She estimated that she last received care or treatment from these physicians in August 2013. The Florida Medicaid program paid $35,952.47 in medical assistance benefits on behalf of Petitioner. Petitioner filed a lawsuit against the owners of the vehicle that struck her. On January 11, 2013, Petitioner and the owners of the vehicle that struck Petitioner ("Releasees") entered into a "Release and Hold Harmless Agreement" ("Settlement") under which the Releasees agreed to pay Petitioner $150,000 to settle any and all claims Petitioner had against them. Attached to the Settlement was a document titled "Addendum to Release Signed 1/11/13" ("Addendum"), which allocated liability between Petitioner and the Releasees and provided a commensurate allocation of the Settlement proceeds for past and future medical expense claims. The Addendum stated in pertinent part: The parties agree that a fair assessment of liability is 90% on the Releasor, Mirta B. Agras, and 10% on the Releasees. Furthermore, the parties agree that based upon these injuries, and the serious nature of the injuries suffered by the Releasor, Mirta B. Agras, that $15,000.00 represents a fair allocation of the settlement proceeds for her claim for past and future medical expenses. Petitioner testified that she primarily was at fault in the accident. She acknowledged that the statement in the Addendum that she was 90% at fault for the accident and the Releasees were 10% at fault was an estimate that she formulated entirely on her own, without obtaining any legal or other informed opinion regarding the apportionment of respective fault. Petitioner is not a physician, registered nurse, or licensed practical nurse. There was no evidence presented establishing that she has any medical training or expertise. Thus, there is no professional basis for Petitioner's position that 10% of the Settlement proceeds represents a fair, accurate, or reasonable allocation for her medical expenses. Rather, her position appears to be based on the intent to maximize the Settlement proceeds that are allocated to non-medical expenses, so that she is able to retain a larger portion of the Settlement proceeds. Respondent did not participate in discussions regarding the Settlement or Addendum and was not a party to the Settlement. Petitioner acknowledged that she still receives medical bills related to the injuries she suffered as a result of the accident, and that she still owes money for ambulance transportation and physician treatment. She was unable to recall or estimate the amount she owes. No evidence was presented regarding the actual amount of Petitioner's medical expenses incurred due to her injury. Petitioner has not paid any of her own money for medical treatment, and no entities other than Medicaid have paid for her medical treatment. Since being injured, Petitioner continues to experience medical problems, including pain, dizziness, memory loss, difficulty in walking or standing for extended periods, inability to ride in vehicles for extended periods, balance problems, and difficulty watching television or staring at a computer screen for extended periods. Petitioner claims that, nonetheless, she has not been told that she would need additional medical care or treatment. On or about January 31, 2013, Respondent, through ACS, asserted a Medicaid claim pursuant to section 409.910(17), seeking reimbursement of the $35,952.47 in medical assistance benefits it paid on behalf of Petitioner. Petitioner instead sought to reimburse Respondent $15,000, the amount that Petitioner and Releasees agreed in the Addendum represented a fair allocation of the Settlement proceeds for Petitioner's claim for past and future medical expenses. When Petitioner and Respondent were unable to agree on the amount Petitioner owed Respondent in satisfaction of its Medicaid lien, Petitioner paid ACS the $35,952.47 alleged to be owed Respondent and filed the Petition initiating this proceeding.
The Issue The issue to be decided in this proceeding is the amount to be paid to Respondent, the Agency for Health Care Administration (Agency or AHCA), from the proceeds of a personal injury settlement received by Sergio Museguez to reimburse Medicaid for expenditures made on his behalf.
Findings Of Fact Sergio Museguez was catastrophically injured as a result of being struck by lightning on June 15, 2012. Mr. Museguez has been diagnosed with a traumatic brain injury and suffers from cognitive dysfunction, including, but not limited to, significant problems with memory, orientation, initiating and executive functions. Mr. Museguez is also incontinent as to bowel and bladder. The above-described conditions are permanent and will never resolve. Mr. Museguez’s employer, MG3 Developer Group (MG3), failed to carry workers’ compensation insurance or any other effective insurance coverage that would cover the injuries he sustained on June 2012, or that would cover his wife Leidi Hernandez’s loss of consortium suffered as a result of the accident. An action was filed in Miami-Dade County Circuit Court, Case No. 14-025861 CA 06, against MG3 for damages related to Mr. Museguez’s injuries and for Ms. Hernandez’s loss of consortium. MG3’s insurance carrier denied coverage and refused to defend the company because its insurance policy excluded coverage for employees. The Museguezes and MG3 entered into a settlement agreement in which they agreed to a judgment against MG3 in the amount of $5,000,000, but which included a payment schedule through which $1,000,000 would actually be paid to Petitioner by MG3. Only that $1,000,000 of the judgment has been or will be recovered by Mr. Museguez against MG3, because of MG3’s lack of available insurance coverage, and the lack of anticipated avenues of recovery pursuant to the terms of the settlement, dated June 16, 2016. The settlement agreement provided that the parties “acknowledge and agree that the One Million ($1,000,000) Dollar payment set forth above only represents twenty percent of the total injury/damage value of Museguez’s claim, and this fails to fully compensate Museguez for the injuries sustained in the incident at issue. Therefore, Museguez is specifically recovering only twenty percent (20%) of their damages for past medical expenses.” Ms. Hernandez waived her right to an apportionment of the recovery for her consortium claim in light of her husband’s condition and his need for extensive medical care and treatment for the rest of his life. She opted for any amount that would have been apportioned to her claim instead be apportioned directly to her husband. Mr. Museguez’s condition and need for continuing care is not in dispute. A life care plan identifying the goods and services necessary for Mr. Museguez was prepared by Lawrence S. Forman, an expert in rehabilitation life care planning. Mr. Forman has concluded that Mr. Museguez will require 24-hour attendant medical care for the rest of his life, in addition to a significant amount of future costs associated with his medical condition as a result of his injury. Mr. Forman’s opinions are outlined in his report dated April 8, 2016. Frederick A. Raffa, an economist, reviewed the life care plan for Mr. Museguez and determined that the present value of the anticipated medical expenses for Mr. Museguez is $7,943,963. He testified, unrebutted, that Mr. Museguez’s total losses were $8,424,028. In short, Mr. Museguez’s needs far outweigh the recovery received in this case. According to the United States Life Tables, 2012, Mr. Museguez is expected to live another 24.8 years. Todd Michaels is an attorney who was appointed as guardian ad litem for Mr. Museguez in the personal injury case. Mr. Michaels testified that he was appointed for the purpose of determining whether the settlement of Mr. Museguez’s claim was fair to him. Mr. Michaels concluded that the settlement was the product of an arm’s-length transaction and was a fair settlement of the claim. Mr. Michaels also was asked to provide an opinion regarding the value of Mr. Museguez’s claim. Mr. Michaels has practiced personal injury law for 15 years, and is generally familiar with the awards related to claims involving catastrophic injuries and, specifically, traumatic brain injuries. With respect to Mr. Museguez’s claim, Mr. Michaels described it as conservative but necessary given the lack of insurance coverage and significant possibility of insolvency should the case go to verdict. He noted that “without a settlement there was almost zero likelihood of recovery in that the issues of both the fact and law were hotly contested.” He acknowledged that the settlement was less than Mr. Museguez’s future medical needs, and ignored any claim for pain and suffering, as well as the consortium claim. He stated, “I understand what the situation was and they could have pushed forward and gotten a verdict of 30 million dollars and it would have been worth the paper it was printed on because of the circumstances.” Without the very real limitations provided in this case, where there was no insurance coverage, Mr. Michaels believed that the fair settlement value would be about $13 to $15 million. However, his explanation as to how he reached that range was conclusory at best. Mr. Michaels testified that he did not “physically parse it out.” He started with the number $8,424,000 and went from there. He did not consult other attorneys, or do specific jury verdict research, but simply relied on his knowledge from practicing in this area and reviewing jury verdicts on a regular basis. It seems that the “fair value” of a claim must by necessity consider not only the level of a plaintiff’s damages, but the likelihood of success and any issues of liability, comparative fault, collectability, and the like. Here, while Petitioner’s damages are unfortunately much higher than the settlement amount, Petitioner’s witness testified that under the circumstances of this case, the settlement was fair. The undersigned finds that the fair settlement value of this case, given all of the circumstances, is the amount reflected in the settlement, i.e., $5,000,000. The undersigned also finds, consistent with the language in the settlement agreement, that Petitioner recovered only 20 percent of his past medical expenses. The taxable costs associated with the action at law were $27,812.46. While the parties in this proceeding stipulated to the amount of these costs, they did not stipulate to the amount of the attorney’s fees related to the claim, and it does not appear that any evidence to substantiate the amount of attorney’s fees actually paid was included in this record. Mr. Museguez received medical services from Medicaid. On December 1, 2016, the Agency notified counsel for Mr. Museguez that Medicaid’s lien for medical expenses paid on his behalf was $116,032.84. There was no evidence presented to indicate that the Agency was a party to the settlement negotiations between Petitioner and MG3, or whether the Agency was notified of the litigation prior to the execution of the settlement. Petitioner deposited the amount of the Medicaid lien into an interest-bearing account for the benefit of the Agency in accordance with the requirements of section 409.910, and in compliance with the requirements of bringing an action to contest the amount of the lien before the Division of Administrative Hearings. Petitioner’s actions constitute “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17)(b). Application of the formula contained in section 409.910(11)(f) to Petitioner’s $1,000,000 settlement would require payment to the Agency in the amount of $116,032.84, the actual amount of the funds expended by Medicaid.
The Issue The issue 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 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 to be determined is the amount payable under section 409.910, Florida Statutes,1/ in satisfaction of Respondent's Medicaid lien on settlement proceeds received by Petitioner, Victor Hugo Herrera, Sr., from a third party.
Findings Of Fact On July 29, 2014, unbeknownst to Mr. Herrera, an individual (hereinafter Assailant) entered the common area where Mr. Herrera rented an office. The Assailant stalked Mr. Herrera and forced his way into Mr. Herrera’s office. The Assailant attacked Mr. Herrera in his office and shot Mr. Herrera in the leg. As a result of being shot in the leg, Mr. Herrera had his leg medically amputated above the knee, suffered a collapsed lung, and was comatose for nearly two months. As a result of his severe injuries, Mr. Herrera is now permanently disabled, disfigured, and wheelchair-bound, unable to walk. Mr. Herrera’s medical expenses related to his injuries were paid by Medicaid, which provided $271,344.06 in benefits. Mr. Herrera brought a personal injury lawsuit to recover all of his damages associated with his injuries against the owner of the office and security company responsible for providing security (Defendants). The $271,344.06 paid by Medicaid constituted Mr. Herrera’s entire claim for past medical expenses. On December 11, 2015, Mr. Herrera compromised and settled his personal injury action against the Defendants for $925,000. The General Release of Claims memorializing the settlement with the Defendants stated, inter alia: The First Party, the Second Party and their respective counsel acknowledge that this settlement does not fully compensate the First Party for the damages he has allegedly suffered, but as provided herein this settlement shall operate as a full and complete release as to all claims against Second Party, without regard to this settlement only compensating the First Party for a fraction of the total monetary value of his alleged damages. These parties agree that the damages suffered by the First Party have a value in excess of $5,000,000.00, of which $271,344.06 represents First Party’s claim for past medical expenses. Given the facts, circumstances, and nature of the First Party’s alleged injuries and this settlement, $50,198.65 of this settlement has been allocated to the First Party’s claim for past medical expenses and the remainder of the settlement has been allocated toward 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 First Party’s alleged damages. Further, the parties acknowledge that the First Party may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for those future medical expenses the First Party may incur in the future. However, the parties acknowledge that the First Party, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and the First Party has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for payments made to secure future medical care. During the pendency of Mr. Herrera’s personal injury lawsuit, the Agency for Health Care Administration (AHCA) was notified of the lawsuit and AHCA, through its collections contractor Xerox Recovery Services, asserted a $271,344.06 Medicaid lien against Mr. Herrera’s cause of action and settlement of that action. By letter of January 22, 2016, AHCA was notified by Mr. Herrera’s personal injury attorney of the settlement and provided a copy of the executed release and itemization of Mr. Herrera’s $10,114.38 in litigation costs. This letter explained that Mr. Herrera’s damages had a value in excess of $5,000,000, and the $925,000 settlement represented only an 18.5 percent recovery of Mr. Herrera’s damages. Accordingly, he had recovered only 18.5 percent of his $271,344.06 claim for past medical expenses, or $50,198.65. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $271,344.06 Medicaid lien. AHCA did not respond to Mr. Herrera’s attorney’s letter of January 22, 2016. AHCA has not filed an action to set aside, void, or otherwise dispute Mr. Herrera’s settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. The Medicaid program spent $271,344.06 on behalf of Mr. Herrera, all of which represents expenditures paid for Mr. Herrera’s past medical expenses. No portion of the $271,344.06 paid by the Medicaid program on behalf of Mr. Herrera represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Mr. Herrera and AHCA agree that application of the formula at section 409.910(11)(f) to Mr. Herrera’s $925,000 settlement would require payment to AHCA of the full $271,344.06 Medicaid lien. Petitioner has deposited the full Medicaid lien amount into an interest-bearing account 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. Zebersky, who represented Mr. Herrera in his underlying personal injury action, testified and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney for 27 years and has demonstrated considerable experience in handling plaintiffs’ personal injury and insurance class action claims in South Florida. In rendering his opinion as to the value of Mr. Herrera’s claim, Mr. Zebersky explained that, as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties and he explained his process for making these determinations. Mr. Zebersky was familiar with and gave a detailed explanation of the circumstances giving rise to Mr. Herrera’s claim. In making his valuation determination, Mr. Zebersky reviewed the police report, the State Attorney’s file on the shooting, all of Mr. Herrera’s medical records, and met numerous times with Mr. Herrera and his family. Mr. Zebersky testified that through his representation of Mr. Herrera, review of Mr. Herrera’s file, and based on his training and experience, he had developed the opinion that the value of Mr. Herrera’s damages was $5,000,000. Mr. Zebersky suggested that the $5,000,000 amount was conservative, by testifying that “five million dollars, you know, is probably what the pain and suffering value is especially in Broward County.” In addition to his first-hand experience with Mr. Herrera’s claim, Mr. Zebersky further supported his valuation opinion by explaining that he had “round-tabled” the case with other experienced attorneys and they agreed that the value of Mr. Herrera’s damages was $5,000,000. Further, Mr. Zebersky testified that he had reviewed jury verdicts in developing his opinion and the jury verdicts in Petitioner’s Exhibit 12 were comparable to Mr. Herrera’s case and support the valuation of Mr. Herrera’s damages at $5,000,000. Mr. Zebersky’s testimony 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 40 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 Mr. Herrera’s injuries through review of pertinent medical records and Petitioner’s Exhibits, including the police report, pictures of Mr. Herrera, Mr. Herrera’s complaint and Mr. Herrera’s General Release of Claims, Mr. Barrett offered his opinion, based upon his professional training and experience, that “five million was a conservative estimate” for the value of Mr. Herrera’s damages and that Mr. Herrera’s damages were “undoubtedly at least five million dollars.” Mr. Barrett also reviewed the jury verdicts in Petitioner’s Exhibit 12 and opined that those verdicts were comparable and supported his valuation of Mr. Herrera’s damages. Mr. Barrett’s testimony was credible and is accepted. AHCA’s designated expert, Mr. Bruner, was not available for testimony at the final hearing. Instead of asking for a continuance, the parties agreed to take Mr. Bruner’s deposition after the final hearing and then file the transcript with DOAH. Further, during the final hearing, AHCA agreed that Mr. Bruner would not be testifying as to the value of Mr. Herrera’s damages. In accordance with that agreement, Mr. Brunner’s deposition was subsequently taken and his deposition transcript was filed on August 3, 2016. At Mr. Bruner’s deposition, AHCA proffered Mr. Bruner as an expert in evaluation of cases and settlements. Petitioner objected on the grounds that Mr. Bruner lacked experience or expertise in personal injury cases and should not be allowed to testify as an expert. Further, Petitioner objected to the relevance of Mr. Bruner’s testimony based on AHCA’s earlier agreement that he would not be testifying concerning the value of the damages suffered. Counsel for AHCA responded to Petitioner’s objection to the relevance of Mr. Bruner’s testimony by agreeing that AHCA would not be seeking any “expert testimony as to evaluation of damages,” but would only be using Mr. Bruner’s testimony to “evaluate” the jury verdicts in Petitioner’s Exhibit 12. While Mr. Bruner does not have the same level of experience in personal injury claims as the experts offered by Petitioner, Mr. Bruner has sufficient experience to offer an opinion on the jury verdicts set forth in Petitioner’s Exhibit 12, and to that extent, his expertise in the evaluation of cases is accepted. However, because of his lack of recent experience in settling personal injury claims, Mr. Brunner is not accepted as an expert in personal injury settlements.2/ In his deposition testimony, Mr. Bruner criticized the relevance of the 12 verdicts in Petitioner’s Exhibit 12 on the grounds that, while the verdicts involved amputations of legs, there were factual differences in the mechanism of injury. Mr. Bruner further asserted that, to the extent the verdicts in Petitioner’s Exhibit 12 included awards for future medical expenses, they should not be considered because, according to Mr. Bruner’s understanding, Mr. Herrera did not recover any future medical expenses in the settlement. Finally, while the juries in the 12 jury verdicts had determined the value of the damages, Mr. Bruner criticized the verdicts because he asserted that it was possible that the cases may have settled post-verdict for less, or that the injured parties may have received less, due to reductions for comparative negligence. On this last point, it appears that Mr. Bruner confused the issue of the value of the damages with the settlement value of the case. The value of the damages is the estimation of the monetary value a jury would assign to the damages. On the other hand, the settlement value of the case is the amount it settled for with the considerations of liability, causation, the Defendant’s ability to pay, risk of trial, and other limiting factors, which are a calculus in every settlement. Despite Mr. Bruner’s criticisms of the jury verdicts in Petitioner’s Exhibit 12, the undersigned finds those verdicts supportive of the valuation opinions offered by Petitioner’s experts. Further, Petitioner’s experts’ opinions were not primarily reliant on those 12 verdicts, but were rather based upon their knowledge of Mr. Herrera’s injury and their extensive experience in handling cases involving catastrophic injury, including jury trial experience. Mr. Bruner’s testimony did not provide an alternative value of the damages suffered by Petitioner. The value of $5,000,000 for Mr. Herrera’s claim opined by Petitioner’s experts is unrebutted. Considering the valuation of Mr. Herrera’s claim in the amount of $5,000,000, his $925,000 settlement represents only an 18.5 percent recovery of Mr. Herrera’s damages. Applying that same 18.5 percent to the $271,344.06 paid by Medicaid for past medical expenses results in the sum $50,198.65 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
