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 This matter concerns the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Scott R. Brown, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $300,000.00 settlement from a third party. The Agency asserts that it is entitled to recover the full amount of its $112,500.00 lien. The incident that gave rise to this matter occurred on December 22, 2010. On that day, Petitioner, a Florida resident, was visiting relatives in Talladega County, Alabama. Petitioner was shot while sitting in the backseat of a car. The bullet struck Petitioner in his abdomen. Immediately following the incident, Petitioner was taken to UAB Hospital in Birmingham, Alabama. Petitioner received medical care and treatment from December 22, 2010, through January 27, 2011, which included surgical repair of his abdominal injuries. Following his release from UAB Hospital, Petitioner was admitted to Spain Rehabilitation on January 28, 2011. There, Petitioner was diagnosed with a T-10 ASIA-A spinal cord injury, which caused paralysis from the waist down, as well as: a T-12 vertebral fracture; L1 - 2 vertebral fracture; small bowel injury; pancreatic head laceration; and duodenal laceration. Petitioner was also noted to be incontinent and required assistance for all transfers and bed mobility. In short, the gunshot rendered Petitioner a paraplegic. He will continue to require medical treatment for the rest of his life. In June 2011, Petitioner brought a negligence lawsuit in Alabama against the two gunmen. Petitioner was represented by Michael J. Crow, Esquire. Mr. Crow litigated Petitioner’s case over the course of two years. In 2013, Mr. Crow was able to resolve the lawsuit for $300,000, which was the full amount of the gunmen’s homeowner’s insurance. At the final hearing, Mr. Crow testified that the homeowner’s insurance policy was the only available coverage or recoverable asset he identified that could be used to compensate Petitioner for his injuries. Consequently, Mr. Crow believed that it was in Petitioner’s best interests to settle the lawsuit for the policy limits. A portion of Petitioner’s medical care was paid for by the Medicaid programs in Alabama and Florida in the total amount of $262,536.95.2/ Following Petitioner’s settlement, the Alabama Medicaid Agency asserted a lien of $139,169.94 against Petitioner’s recovery. On November 21, 2013, Mr. Crow was able to settle the Alabama Medicaid lien for $6,000.00. This amount represents approximately 4.31 percent of the total Alabama Medicaid lien. Mr. Crow testified that he thought the settlement payment should have been lower based on the full value he placed on Petitioner’s damages (discussed below) versus the actual amount Petitioner recovered. However, he believed that it was in Petitioner’s best interests to settle the Alabama Medicaid lien to avert protracted litigation. The Agency, through the Florida Medicaid program, paid a total of $123,366.95 for Petitioner’s medical treatment from the gunshot injury. All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. No portion of the Agency’s Medicaid lien represents future medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $112,500.00 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed below, the formula in section 409.910(11)(f) allows the Agency to collect $112,500.00 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of the settlement than the amount it calculated using the section 409.910(11)(f) formula.3/ Petitioner specifically argues that the Agency’s Medicaid lien should be reduced proportionately, taking into account the full value of Petitioner’s damages. Otherwise, the application of the default statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner insists that reimbursement of the full lien amount violates the federal Medicaid law’s anti-lien provision (42 U.S.C. § 1396p(a)(1)) and Florida common law. Petitioner requests that the Agency’s allocation from Petitioner’s recovery be reduced to $1,389.00. To establish the value of his damages, Petitioner testified regarding the extent of, and the impact on his life from, the injuries he suffered from the gunshot wound. Petitioner relayed that he has received 18 surgeries on his stomach and intestines. Petitioner further described his future medical expenditures. Petitioner anticipates receiving a hernia operation. Petitioner also requires medication and medical supplies to address his pain and infections. In addition, Petitioner desires a handicap-equipped van that he can use for transportation to his medical visits. Petitioner would also like to install “trapeze” bars in his home to help him exercise. Mr. Crow also testified regarding the full value of Petitioner’s injuries. Mr. Crow has practiced law for 32 years and is a partner with the law firm of Beasley Allen in Montgomery, Alabama. In his practice, Mr. Crow handles serious personal injury and death cases involving car and truck litigation, premise liability cases, and brain injury cases. Mr. Crow has been involved in 15 to 25 lawsuits involving paralyzed clients. As part of his personal injury practice, Mr. Crow regularly evaluates damages similar to those Petitioner suffered. Mr. Crow asserted that the $300,000 settlement was far less than the true value of the injuries Petitioner suffered from this incident. Mr. Crow opined that the full value of Petitioner’s damages equals $26,639,170.00. Mr. Crow explained that this figure consists of $6.5 million present value for Petitioner’s future medical expenses, $5 million for pain and suffering, $10 million for mental anguish and loss of quality of life, $139,170 for the Alabama Medicaid lien, and $5 million in punitive damages. In deriving the value of Petitioner’s injuries, Mr. Crow considered that Petitioner is a younger individual suffering from paraplegia. Mr. Crow explained that Petitioner can live in his community with appropriate nursing support. However, he will require pain management on a monthly basis. His current medications include Baclofen, Colace, Cymbalta, Lopressor, Neurontin, Oxycodone, Senokot, and Glycerine suppositories. Petitioner will also need attendant care to help administer his medications, as well as with bathing, cooking, cleaning, dressing, grooming, and personal hygiene. In addition, Petitioner will require follow-up treatment involving physiatry, physical therapy, urology, and a wheelchair clinic. Furthermore, although Petitioner does not have sensory awareness from his waist down, he continues to experience severe pain in his back and legs. Mr. Crow represented that Petitioner is able to propel himself in a wheelchair, but he can only travel short distances due to fatigue and pain. Petitioner does not have access to a power wheelchair. Regarding transportation, Petitioner will need assistance to drive a van with a wheelchair lift. Finally, Petitioner offered the testimony of David A. Paul, Esquire. Mr. Paul has practiced law in Florida for 22 years as a plaintiff personal injury lawyer and is board- certified in Civil Trial Law by the Florida Bar. Mr. Paul handles catastrophic and serious personal injury cases involving birth injuries, medical malpractice, trucking accidents, and wrongful death. As part of his practice, Mr. Paul regularly evaluates catastrophic injuries. Mr. Paul testified that he has handled many cases with similar injuries to Petitioner. Mr. Paul was accepted as an expert regarding the value of personal injury damages and resolving liens in personal injury cases. At the final hearing, Mr. Paul supported Mr. Crow’s valuation of Petitioner’s injuries. Mr. Paul opined that a “fair full value” of Petitioner’s damages equals in excess of $26 million. In formulating his injury valuation, Mr. Paul considered Petitioner’s past medical expenses, anticipated future medical expenses, the cost of attendant care with daily living activities, past and future lost wages, pain and suffering, as well as mental anguish and loss of quality of life. Regarding the Medicaid liens, Mr. Paul relayed that the norm when resolving liens in Florida is to compare the total value of the injured party’s injuries to the amount of the actual recovery. The lien is then reduced proportionally by this ratio. Mr. Paul commented that he typically resolves Medicaid liens in workers compensation cases using this “equitable formula.” Based on the testimony from Mr. Crow and Mr. Paul that the $300,000 settlement did not fully compensate Petitioner for his damages, Petitioner argues that a lesser portion of the settlement should be allocated to reimburse Florida Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the ultimate value of Petitioner’s damages ($26,639,170.00) compared to the amount that Petitioner actually recovered ($300,000). Using these numbers, Petitioner’s settlement represents approximately a 1.126 percent recovery of the full value of Petitioner’s damages. In like manner, the Florida Medicaid lien should be reduced to 1.126 percent or approximately $1,389.00 ($123,366.95 times .01126). Therefore, Petitioner asserts that $1,389.00 is the portion of his third-party settlement that represents the equitable, fair, and reasonable amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to the Alabama wrongful injury lawsuit or Petitioner’s settlement. Petitioner was aware of both the Alabama and Florida Medicaid liens and past medical expense damages at the time he settled the lawsuit. No portion of the $300,000 settlement represents reimbursement for future medical expenses. The undersigned finds that Petitioner met his burden of proving, by a preponderance of the evidence, that the full value of his damages from this incident equals $21,639,170.00.4/ Further, based on the evidence in the record, Petitioner proved that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Finally, the undersigned finds that the evidence establishes that the Agency should be reimbursed in the amount of $5,317.95 from Petitioner’s recovery of $300,000 from a third party to satisfy the Florida Medicaid lien.
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 What amount from Petitioners’ settlement proceeds should be paid to satisfy Respondent’s Medicaid lien under section 409.910, Florida Statutes (2018)?1/
Findings Of Fact Stipulated Facts (near-verbatim) On February 13, 2017, Grace Provvedi (Mrs. Provvedi) underwent an outpatient surgical procedure. Post-surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the management of pain. Additionally, she was discharged home with a prescription for the oral pain medicines, Lorazepam and Robaxin. Mrs. Provvedi returned for a follow-up doctor’s visit on February 15, 2017. That same day, February 15, 2017, Mrs. Provvedi went into cardiopulmonary arrest at home. She was transported to the hospital where she was ultimately diagnosed with anoxic brain injury due to pain medicine overdose. Mrs. Provvedi remained in a vegetative state until her death on March 24, 2017. Mrs. Provvedi was survived by her husband Timothy Provvedi, their four-year-old child, B.P. and an adult child, Kyle Lima. Mrs. Provvedi’s medical care related to her injury was paid by Medicaid, and AHCA through the Medicaid program provided $54,071.79 in benefits associated with Mrs. Provvedi’s injury. This $54,071.79 represented the entire claim for past medical expenses. Mrs. Provvedi’s funeral bill totaled $11,422.97 and was paid by her surviving husband. Timothy Provvedi was appointed the personal representative of the Estate of Grace Provvedi. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, brought a wrongful death claim to recover both the individual statutory damages of Mrs. Provvedi’s surviving spouse and two surviving children, as well as the individual statutory damages of the Estate of Grace Provvedi against the doctor and physician’s group (Defendants) who prescribed the deadly combination of the Fentanyl patch and oral pain medication. Timothy Provvedi, as the personal representative of the Estate of Grace Provvedi, on behalf of Mrs. Provvedi’s surviving husband and two children, as well as on behalf of the Estate of Grace Provvedi, compromised and settled the wrongful death claim with the Defendants for the unallocated lump sum amount of $225,000. During the pendency of the wrongful death claim, AHCA was notified of the action and AHCA asserted a $54,071.79 Medicaid lien against the Estate of Grace Provvedi’s cause of action and settlement of that action. By letter, the attorney handling the wrongful death claim notified AHCA of the settlement. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $54,071.79 Medicaid lien. AHCA has not filed an action to set aside, void, or otherwise dispute the wrongful death settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. AHCA, through the Medicaid program, spent $54,071.79 on behalf of Mrs. Provvedi, all of which represents expenditures paid for Mrs. Provvedi’s past medical expenses. No portion of the $225,000 settlement represents reimbursement for future medical expenses. The formula at section 409.910(11)(f), as applied to the entire $225,000 settlement, requires payment of the full $54,071.79 Medicaid lien and AHCA is demanding payment of $54,071.79 from the $225,000 settlement. The 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 Statutues, pursuant to section 409.910(17). Additional Findings of Fact Mr. Provvedi, as surviving husband, and the two children of Mrs. Provvedi, suffered economic and non-economic damages. The Estate of Mrs. Provvedi suffered economic damages in the form of medical expenses resulting from the Defendant’s alleged negligence. Mrs. Provvedi’s funeral bill was paid by Mr. Provvedi. Pursuant to the Florida Wrongful Death Act, burial expenses are generally charged to the estate, unless, as in the present case, such expenses are paid by a surviving spouse and reimbursement of the same is not sought from the estate. Mrs. Provvedi, as a condition of eligibility for Medicaid, assigned to AHCA her right to recover medical expenses paid by Medicaid from liable third parties. Petitioners presented the testimony of Mr. John W. Pate, a trial attorney with the law firm of Haygood, Orr & Pearson in Irving, Texas. Mr. Pate has been a trial attorney for 14 years and he specializes in representing individuals in personal injury, medical malpractice, and wrongful death cases. Mr. Pate testified that during the last several years, his practice has focused extensively on litigating medical malpractice cases involving the wrongful administration of prescription medications, including opioids like Fentanyl, Oxycodone, Hydrocodone, and other drugs which impact an individual’s central nervous system (CNS). Such drugs are often referred to as CNS depressant drugs. Mr. Pate routinely conducts civil jury trials, and as a consequence thereof, he stays abreast of jury verdicts by reviewing jury verdict reporters and discussing cases with other trial attorneys. Although Mr. Pate is not a member of the Florida Bar, he represents injured parties in Florida which necessitates that he stays up-to-date with civil jury verdicts from the State of Florida. Mr. Pate testified that as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties and credibly explained his process for making such assessments. Without objection, Mr. Pate was recognized as an expert in the valuation of damages suffered by injured parties. Mr. Pate served as lead attorney in the litigation against the medical providers who treated Mrs. Provvedi. In his capacity as lead attorney, Mr. Pate reviewed Mrs. Provvedi’s medical records, consulted with an anesthesiology and pain management expert in North Carolina, consulted with a plastic surgery expert in Miami, met personally with Mr. Provvedi, and spoke with Mrs. Provvedi’s children. Mr. Pate, in explaining the circumstances that allegedly led to the death of Mrs. Provvedi, testified that on February 13, 2017, Mrs. Provvedi underwent an outpatient surgical procedure at a plastic surgery center. Soon after the surgery, a Fentanyl patch was applied to Mrs. Provvedi’s body for the treatment of pain. Ms. Provvedi was then discharged home with a prescription for Lorazepam and Robaxin, each of which is an oral pain medication. Mr. Pate testified that the federal Food and Drug Administration (FDA) warns against the use of Fentanyl patches post-surgery, and also warns against the combination of a Fentanyl patch with other CNS depressant drugs, such as Lorazepam and Robaxin. Mr. Pate explained, as to his theory of legal liability against Mrs. Provvedi’s medical providers, that over time the prescribed CNS depressants accumulated in Mrs. Provvedi’s body which resulted in her being found unresponsive two days after surgery. Mrs. Provvedi was transported by EMS to the hospital, where, upon arrival, the Fentanyl patch was removed. Mrs. Provvedi was diagnosed as having suffered from an acute anoxic brain injury and respiratory failure due to a pain medication overdose. Mrs. Provvedi never regained consciousness, and one month later was discharged from the hospital to hospice care where she died on March 24, 2017. Mr. Pate’s undisputed testimony was that his investigation revealed that Mr. and Mrs. Provvedi had a loving and devoted marriage, and that it was emotionally devastating to Mr. Provvedi to watch his wife die over the course of five weeks. Mr. Pate also testified that his investigation revealed that the Provvedi’s minor son, B.P., who was five at the time of Mrs. Provvedi’s death, was profoundly affected by the loss of his mother and that Ms. Provvedi’s adult son, who lived with the Provvedis prior to and at the time of his mother’s passing, was similarly devastated by the death of his mother. Mr. Pate credibly testified that based on his training and experience, the wrongful death damages recoverable in Mrs. Provvedi’s case had a conservative value of between $3,054,071.79 to $5,054,071.79. According to Mr. Pate’s undisputed testimony, Mrs. Provvedi’s estate had a claim for damages in the amount of $54,071.79, which is the amount of medical expenses that were paid, and resulted from Mrs. Provvedi’s injury and death. Mr. Pate excluded the funeral bill from the estate’s damages because the same bill was paid by Mr. Provvedi, as surviving husband. Mr. Pate also testified that the estate likely did not have a viable claim for net accumulations because Mrs. Provvedi did not work outside of the marital home. Mr. Pate testified that a wrongful death claim was brought against the plastic surgeon that operated on Mrs. Provvedi and the surgical facility where the procedure was performed. The basis of the claim was that the doctor violated the standard of care by prescribing the Fentanyl patch to Mrs. Provvedi in clear contravention of the FDA warnings, and it was error to prescribe the other oral pain medicines in conjunction with the Fentanyl patch. Mr. Pate testified that he expected the at-fault parties to dispute causation, but ultimately the main issue was that the alleged at-fault parties had only $250,000 in insurance coverage. Mr. Pate credibly testified that expenses associated with litigating the wrongful death case would be considerable and would significantly erode any likely net recovery. Given these concerns, the decision was made to settle the case pre-suit for $225,000. Utilizing the conservative value of $3,054,071.79, the $225,000 settlement represents a recovery of only 7.367214 percent of the value of all damages. Thus, only 7.367214 percent of the $54,071.79 claim for past medical expenses was recovered in the settlement, or $3,983.58. Based on the methodology of applying the same ratio the settlement bore to the total monetary value of all the damages to the estate, $3,983.58 of the settlement represents the estate’s compensation for past medical expenses. The allocation of $3,983.58 of the settlement to the estate’s claim for past medical expenses is reasonable and rational. Petitioners have proven by a preponderance of the evidence that $3,983.58 represents the portion of the $225,000 settlement recovered to compensate the estate for medical expenses necessitated by the alleged negligence of the tortfeasors.
The Issue The issue to be determined is the amount payable to Respondent, Agency for Health Care Administration (“AHCA”), as reimbursement for medical expenses paid on behalf of David Brown (“Mr. Brown”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds he received from a third party.
Findings Of Fact The following Findings of Fact are based on exhibits accepted into evidence, testimony offered at the hearing, and admitted facts set forth in the pre-hearing stipulation. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Brown is the recipient of Medicaid for injuries he sustained in an automobile accident. AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On February 25, 2015, Mr. Brown, then 46 years old, was involved in a T-bone automobile accident. In the accident, Mr. Brown suffered a fractured wrist, torn shoulder, skin abrasions, a grade 4 bilateral pulmonary contusion, and a right middle cerebral artery infarct (commonly referred to as a stroke) with hemorrhagic contusion. Due to complications related to placement of a trachea, he underwent reconstructive surgery of his throat. Mr. Brown suffered permanent severe brain damage causing him to suffer left hemiparesis and difficulty swallowing or speaking. As a result of the accident, Mr. Brown is now disabled and has difficulty ambulating, eating, and caring for himself without assistance. Mr. Brown’s medical care related to the injury was paid by Medicaid. AHCA provided $181,975.75 in benefits. A Medicaid Manage Care Plan, known as WellCare, provided an additional $110,559.15 in benefits. The sum of these benefits, $292,534.90, constituted Mr. Brown’s entire claim for past medical expenses. Petitioners pursued a personal injury action against the owner and operator of the car that caused the accident (“Defendant”) to recover all their damages. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene in Petitioners’ action against the Defendant. During the pendency of Mr. Brown’s personal injury action, AHCA was notified of the action and AHCA asserted a Medicaid lien of $181,975.75 against Petitioners’ cause of action and settlement of that action. There were liability issues with the case including the degree of comparative negligence that could be attributed to each driver. Specifically, there was a question of which driver had the green light. The personal injury claim ultimately settled for a lump-sum unallocated amount of $2,500,000. By letter, AHCA was notified of settlement of Petitioners’ claim. AHCA has not filed a motion to set-aside, void, or otherwise dispute Petitioners’ settlement. The Medicaid program through AHCA spent $181,975.75 for Mr. Brown’s past medical expenses. Application of the formula set forth in section 409.910(11)(f) to Petitioners’ $2,500,000 settlement authorizes payment to AHCA of the full $181,975.75 Medicaid lien. Petitioners have deposited AHCA’s full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights. As a condition of eligibility for Medicaid, Mr. Brown assigned AHCA his right to recover medical expenses paid by Medicaid from liable third parties Expert Witness Testimony Testimony of Brett Rosen Petitioners presented the testimony of Brett Rosen, the lead trial attorney who litigated the underlying personal injury claim. Mr. Rosen is a shareholder with the law firm of Goldberg and Rosen in Miami, Florida. Mr. Rosen has been a trial attorney for approximately 12 years and he specializes in representing parties in catastrophic injury, personal injury, and wrongful death cases. Mr. Rosen’s firm takes approximately eight to ten cases to trial each year. Since the firm routinely conducts civil jury trials, Mr. Rosen continuously educates himself on jury verdicts by reviewing the Florida Jury Verdict Reporter (a publication of jury verdict reports) and conducting roundtable discussions with other attorneys. Using information found in jury verdict reports, the Daily Business Review, and his experience, Mr. Rosen makes assessments concerning the value of damages sustained by individuals. Without objection, Mr. Rosen was accepted as an expert in the valuation of damages suffered by Petitioners. In addition to presenting testimony as an expert, Mr. Rosen also presented factual testimony regarding the underlying personal injury claim. As the lead attorney, Mr. Rosen met with Mr. Brown monthly on average during the two years that he represented him. Mr. Rosen also consulted with a neurologist and ENT physician who both treated Mr. Brown. Mr. Rosen testified that Mr. Brown’s vehicle was struck on the right side (commonly referred to as T-bone accident) by a vehicle, causing the vehicle he was driving to flip over onto its side. While Mr. Brown was able to get out of his vehicle, he suffered multiple injuries as further described in paragraph three herein. In addition to the brain injury, he had a tracheostomy that ultimately resulted in a bad outcome. As a result, he could not eat, speak, or drink for approximately two years. Mr. Rosen testified that Mr. Brown’s injuries had significant negative impact on Mr. Brown and his wife, Ms. Jenkins. Mr. Rosen testified that Ms. Jenkins resigned from her job to take care of her husband and assist with his recovery. Ms. Jenkins also suffered loss of consortium damages resulting from Mr. Brown’s injuries. The couple was forced to live with relatives when they could not afford rent. Overall, Mr. Rosen testified that the injuries negatively impacted Mr. Brown’s ability to lead a normal life. Mr. Rosen testified that the litigation of the case involved factual, causation, and legal disputes. There were no eyewitnesses, and the question remained regarding which driver had the green light. In addition, the insurance policy was limited to $50,000. Mr. Rosen later brought a bad faith claim against the insurance company due to their failure to timely tender the policy limits. After fully evaluating the risks, the parties settled the case for $2,500,000. Mr. Rosen testified that the full value of the claim is $10,500,000. However, Petitioners settled the claim for $2,500,000, which represents 23.8 percent of the value of their damages. Mr. Rosen testified that since Mr. Brown only recovered 23.8 percent of his total damages, he recovered in the settlement only 23.8 percent of his $292,534.90 claim for past medical expenses, which amounts to $69,623.38. Mr. Rosen testified that it would be reasonable to allocate $69,623.38 of the settlement to past medical expenses. Testimony of Vinson Barrett Vinson Barrett was also identified as Petitioners’ expert witness. Mr. Barrett, a trial attorney with 40 years of experience, is a partner with the law firm of Barrett, Nonni and Homola. His firm represents clients in medical malpractice, automobile, premise liability, and pharmaceutical products liability cases. Mr. Barrett has conducted numerous jury trials and has handled cases involving catastrophic injuries. Mr. Barrett routinely reviews jury verdict reports, discusses cases with other lawyers, and makes assessments concerning the value of damages suffered by injured persons. Mr. Barrett has also served as an expert in a number of cases regarding evaluation of damages. Mr. Barrett was recognized as an expert in the area of evaluation of damages. To evaluate the medical damages suffered by Mr. Brown, Mr. Barrett reviewed the police report, medical records, and the amended life care plan for Mr. Brown. Mr. Barrett also considered the overall level of pain and suffering Mr. Brown would suffer throughout the remainder of his life. Mr. Barrett testified that when compared to other traumatic brain cases, Mr. Brown is a little better off than other traumatic cases he has reviewed because he is able to ambulate using assistive devices and his mental abilities have not been compromised significantly. Mr. Barrett opined that the overall value of the damages would be more than $10,500,000. Mr. Barrett testified that his estimate was a conservative valuation of damages. Mr. Barrett concluded that, accepting Mr. Rosen’s even more conservative valuation, the $2,500,000 settlement constituted 23.8 percent of the full value of Petitioners’ damages. Mr. Barrett testified that allocation of $69,623.38 of the settlement would be a reasonable allocation of damages to the past medical expenses. Ultimate Findings of Fact The undersigned finds that the testimony of Mr. Rosen and Mr. Barrett was credible and persuasive as to the total damages incurred by Petitioners. While assigning a value to the damages that plaintiffs could reasonably expect to receive from a jury is not an exact science, Mr. Rosen’s extensive experience with litigating personal injury lawsuits makes him a very compelling witness regarding the valuation of damages suffered by Petitioners. As a trial lawyer who has testified in nearly 20 cases regarding valuation and allocation of damages, and 40 years of experience handling personal injury matters involving catastrophic injuries, Mr. Barrett is also a credible witness regarding the valuation and allocation of damages in a case such as Mr. Brown’s. The undersigned also finds that Mr. Barrett was qualified to present expert testimony as to how a damages award should be allocated among its components, such as past medical expenses, economic damages, and noneconomic damages. AHCA offered no evidence to counter the expert opinions regarding Petitioners’ total damages or the past medical expenses they recovered. Accordingly, it is found that the preponderance of the evidence demonstrates that the total value of Petitioners’ personal injury claim is $10,500,000 and that the $2,500,000 settlement resulted in Petitioners recovering 23.8 percent of Mr. Brown’s past medical expenses. In addition, the preponderance of the evidence demonstrates that $69,623.38 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
The Issue The issue 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 is whether Petitioner overpaid Respondent Medicaid funds, for which Section 409.913(10), Florida Statutes (2002), authorizes Petitioner to seek repayment from Respondent.
Findings Of Fact During 1998, Respondent was an authorized Medicaid provider, pursuant to Medicaid provider number 105425200, and was a party to a valid Medicaid Provider Agreement with Petitioner. Respondent filed claims with Petitioner for payment, under the Medicaid program, for the goods and services that are the subject of the audit described below, and Petitioner paid Respondent for these claims. The audit period in this case is 1998. During 1998, Respondent submitted to Petitioner 36,257 claims for nearly 5.5 million units of over one thousand types of drugs. These claims totaled $3,075,449.88, which Petitioner paid Respondent. On June 2, 1999, Petitioner sent a letter to Respondent informing it of a review of its pharmacy claims for 1998. The letter requests documentation of all purchases of 12 named drugs for 1998 and documentation of all credits for these drugs during the same period. The letter states that acceptable documentation includes itemized wholesaler sales history reports, itemized manufacturer sales history reports, itemized invoices, and credit return receipts. By letter dated June 5, 1999, Respondent provided the requested information. By letter dated June 23, 2000, Petitioner advised Respondent that it had examined the paid Medicaid claims for 1998 and the acquisition documentation that Respondent had provided in June 1999. The letter states: "You have failed to provide adequate documentation to the effect that the available quantity of certain drugs of given strength was as great as the quantity of those drugs billed to and reimbursed by Medicaid.” Thus, Petitioner made a "provisional" determination that it had overpaid Respondent $1,092,205.32. The letter invites Respondent to provide additional information to reduce the overpayment determination. The June 23 letter contains an Overpayment Attachment that lists ten of the twelve drugs for which Petitioner had sought documentation in its earlier letter. For each of these ten drugs, the Overpayment Attachment lists the generic code, number of units for which Medicaid paid, the total amount of Medicaid payments, the total units documented by Respondent to have been available during the relevant period, and the number of units for which Respondent provided no availability documentation. The Overpayment Attachment also calculates the amount of Medicaid payments attributable to the unavailable units and the total overpayment, which is $1,092,205.32. The overpayment calculations described in the preceding paragraph assume that all available units of the audited drugs were sold to Medicaid patients. The effect of this improbable scenario reduces the amount of the overpayment. The overpayment calculations attempt no extrapolation of overpayments on the over 10,000 other drugs for which Respondent received Medicaid payments during 1998. The effect of limiting the overpayment calculation to the ten listed drugs reduces the amount of the overpayment. However, the ten listed drugs are the drugs that generated the most Medicaid payments to Respondent and account for over one-third of the total Medicaid payments during the relevant period. Respondent provided additional information to Petitioner on August 30 and November 3, 2000. However, after examining the information, Petitioner advised Respondent, by letter dated April 8, 2002, that its final determination was that Respondent owed $1,096,489.77 due to its receipt of Medicaid overpayments. The overpayment increased by over $4000 due to the determination that Respondent's records documented 1000 fewer available units of two dosages of Risperdone than Petitioner had previously determined.
Recommendation It is RECOMMENDED that the Agency for Health Care Administration enter a final order directing Respondent to pay Petitioner $1,096,489.77, plus interest, to repay overpayments that it received from the Medicaid program for the sale of drugs in 1998. DONE AND ENTERED this 3rd day of November, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 2003. COPIES FURNISHED: Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Grant P. Dearborn Assistant General Counsel Building 3, Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308-5407 Jose M. Herrera Jose M. Herrera, P.A. 1401 Ponce de Leon Boulevard Suite 200 Coral Gables, Florida 33134
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioners, Devyn Jeffries (Devyn) and Makayla Jeffries (Makayla), minors, by and through their parents and natural guardians, Theresa Jeffries and Christopher Jeffries, (collectively Petitioners), from settlement proceeds received by Petitioners from third parties.
Findings Of Fact On January 24, 2010, Devyn and Makayla were born via emergency C-Section at 27 weeks gestation. During the birthing process, both children suffered severe and permanent brain damage. As a result, Devyn suffers from Cerebral Palsy with spastic paralysis and cognitive developmental disabilities, and Makayla suffers from Cerebral Palsy, failure to thrive, feeding difficulties, and cognitive deficits. Devyn and Makayla’s medical care related to their birth injuries was paid by Medicaid in the following amounts: 1 Respondent’s Proposed Final Order was served by email and received by DOAH at 9:50 p.m. on October 21, 2020. It was, therefore, “filed” at 8:00 a.m. on October 22, 2020, in accordance with Florida Administrative Code Rule 28-106.104(3). However, it is accepted and considered as though timely filed. In regard to Devyn, Medicaid, through AHCA, provided $108,068.58 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $25,087.08 in benefits. The sum of these Medicaid benefits, $133,155.66, constituted Devyn’s entire claim for past medical expenses. In regard to Makayla, Medicaid, through AHCA, provided $107,912.33 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $13,915.84 in benefits. The sum of these Medicaid benefits, $121,828.17, constituted Makayla’s entire claim for past medical expenses. Devyn and Makayla’s parents and natural guardians, Theresa and Christopher Jeffries, pursued a medical malpractice lawsuit against the medical providers responsible for Devyn and Makayla’s care (“Defendants”) to recover all of Devyn and Makayla’s damages, as well as their own individual damages associated with their children’s injuries. The medical malpractice action settled through a series of confidential settlements, which were approved by the court on February 21, 2020. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $108,068.58 Medicaid lien associated with Devyn’s cause of action and settlement of that action and a $107,912.33 Medicaid lien associated with Makayla’s cause of action and settlement of that 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. By letter, AHCA was notified of the settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlement. The Medicaid program through AHCA spent $108,068.58 on behalf of Devyn and $107,912.33 on behalf of Makayla, all of which represents expenditures paid for past medical expenses. No portion of the $215,980.91 paid by AHCA through the Medicaid program on behalf of Petitioners represented expenditures for future medical expenses. The $215,980.91 combined total in Medicaid funds paid towards the care of Devyn and Makayla by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Simply Health spent $39,002.92 on Petitioners’ medical expenses. Thus, the total amount of past medical expenses incurred by Petitioners is $254,983.83. The taxable costs incurred in securing the settlement totaled $109,701.62. Application of the formula at section 409.910(11)(f) to the settlement requires payment to AHCA of the full $108,068.58 Medicaid lien associated with Devyn and the full $107,912.33 Medicaid lien associated with Makayla. Petitioners have deposited the full Medicaid lien amounts in interest- bearing accounts 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). This case is somewhat unique in that it involves two petitioners, with separate injuries and separate Medicaid expenditures. However, the incident causing the injuries was singular, and resulted in a total settlement of all claims asserted by Devyn, Makayla, and their parents of $2,650,000. Therefore, for purpose of determining the appropriate amount of reimbursement for the Medicaid lien, it is reasonable and appropriate to aggregate the amounts paid in past medical expenses on behalf of Devyn and Makayla, and the economic and non-economic damages suffered by them. 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 the total of Devyn’s and Makayla’s economic damages, consisting of lost future earnings, past medical expenses, and future medical expenses were, at the conservative low end, roughly $4,400,000 for Devyn and $2,400,000 for Makayla, for a sum of $6,800,000 in economic damages.2 Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioners established that non- economic damages would reasonably be in the range of $10,000,000 to $15,000,000 for each of the children. Based on the forgoing, it is found that $15,000,000, as a full measure of Petitioners’ combined damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $2,650,000 settlement is 17.67 percent of the $15,000,000 conservative value of the claim.3
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 On or about September 17, 2007, Alicia M. Fallon ("Alicia"), then 17 years old, drove to the mall to meet friends and became involved in an impromptu street race. Alicia lost control of the vehicle she was driving, crossed the median into oncoming traffic, and was involved in a motor vehicle crash. Her injuries consisted of traumatic brain injury ("TBI") with moderate hydrocephalus, right subdural hemorrhage, left pubic ramus fracture, pulmonary contusions (bilateral), and a clavicle fracture. Since the time of her accident, she has undergone various surgical procedures including the insertion of a gastrostomy tube, bilateral frontoparietal craniotomies, insertion of a ventriculoperitoneal shunt, and bifrontal cranioplasties. As a result of the accident, in addition to the physical injuries described above, Alicia suffered major depressive disorder, and Post-Traumatic Stress Disorder injuries. She is confined to a wheelchair for mobility, has no bowel or bladder control, and suffers from cognitive dysfunction. Alicia is totally dependent on others for activities of daily living and must be supervised 24 hours a day, every day of the week. A lawsuit was brought against the driver of the other car in the race, as well as the driver's mother, the owner of the vehicle. It could not be established that the tortfeasor driver hit Alicia's car in the race, or that he cut her off. The theory of liability was only that because Alicia and the other driver in the race were racing together, that the tortfeasor was at least partially responsible for what happened. It was viewed that there was no liability on the part of the driver of the third vehicle. The tortfeasor only had $100,000 in insurance policy limits, but the insurance company did not timely offer payment. The tortfeasor had no pursuable assets. The lawsuit was bifurcated and the issue of liability alone was tried. The jury determined that the tortfeasor driver was 40 percent liable for Alicia's damages. Because of the risk of a bad faith judgment, the insurance company for the tortfeasor settled for the gross sum of $2.5 million. AHCA, through its Medicaid program, provided medical assistance to Ms. Fallon in the amount of $608,795.49. AHCA was properly notified of the lawsuit against the tortfeasors, and after settlement, asserted a lien for the full amount it paid, $608,795.49, against the settlement proceeds. 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 Alicia's claim against the tortfeasors or their insurance company. Application of the formula at section 409.910(11)(f), to the settlement amount requires payment to AHCA in the amount of $608,795.49. Another provider, Optum, provided $592,554.18 in past medical expense benefits on behalf of Ms. Fallon. However, that amount was reduced through negotiation to a lien in the amount of $22,220.78.1/ Petitioner deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner, Donna Fallon, the mother of Alicia, testified regarding the care that was and is continuing to be provided to Alicia after the accident. She is a single parent, and with only the assistance of an aide during the day, she is responsible for Alicia's care. Alicia must be fed, changed, bathed, and turned every few hours to avoid bed sores. Alicia can communicate minimally by using an electronic device and by making noises that are usually only discernable by her mother. Although she needs ongoing physical therapy and rehabilitation services, the family cannot afford this level of care. Petitioner presented the testimony of Sean Domnick, Esquire, a Florida attorney with 30 years' experience in personal injury law, including catastrophic injury and death cases, medical malpractice, and brain injury cases. Mr. Domnick is board certified in Civil Trial by the Florida Bar. He represented Alicia and her mother in the litigation against the tortfeasors and their insurance company. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He was accepted, without objection, as an expert in valuation of damages. Mr. Domnick testified that Alicia's injuries are as catastrophic as he has handled. Alicia has no strength, suffers contractions and spasms, and is in constant pain. Alicia has impaired speech, limited gross and fine motor skills, is unable to transfer, walk, or use a wheelchair independently. Alicia is unable to self-feed. All of her food must be cooked and cut up for her. Alicia is unable to perform self-hygiene and has no ability to help herself in an emergency and therefore requires constant monitoring. As part of his work-up of the case, Mr. Domnick had a life care plan prepared by Mary Salerno, a rehabilitation expert, which exceeded $15 million on the low side, and $18 million on the high side, in future medical expenses alone for Alicia's care. Mr. Domnick testified that the conservative full value of Alicia's damages was $45 million. That figure included $30 million for Alicia's pain and suffering, mental anguish and loss of quality of life, disability, and disfigurement, extrapolated for her life expectancy, plus the low end of economic damages of $15 million. Petitioner also presented the testimony of James Nosich, Esquire, a lawyer who has practiced primarily personal injury defense for 29 years. Mr. Nosich and his firm specialize in defending serious and catastrophic personal injury/medical malpractice cases throughout Florida. As part of his practice, Mr. Nosich has reviewed more than 1,000 cases of personal injury/medical malpractice cases and formally reported the potential verdict and full value to insurance companies that retained him to defend their insureds. Mr. Nosich has worked closely with economists and life care planners to identify the relevant damages of those catastrophically injured in his representation of his clients. Mr. Nosich has also tried over 30 cases in Broward County in which a plaintiff suffered catastrophic injuries similar to those of Alicia. Mr. Nosich was tendered and accepted, without objection, as an expert in the evaluation of damages in catastrophic injury cases. In formulating his expert opinion with regard to this case, Mr. Nosich reviewed: Alicia's medical records and expenses; her life care plan prepared by Ms. Salerno; and the economist's report. He took into consideration the reputation of Alicia's lawyer (Mr. Domnick); and the venue in which the case would be tried. Mr. Nosich opined that Broward County is known for liberal juries who tend to award high amounts in catastrophic cases. He also testified that Mr. Domnick is known as a lawyer with extreme capability and who has an excellent rapport with juries and the ability to get higher dollar verdicts. Mr. Nosich agreed with Mr. Domnick that the estimated $45 million figure for the total value of Alicia's case was conservative. He agreed with Ms. Salerno's estimated economic damages of $15 million and a doubling of that amount ($30 million) for Alicia's noneconomic damages. Mr. Nosich credibly explained that the $45 million total value was very conservative in his opinion based on Alicia's very high past medical bills and the fact that she will never be able to work. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2.5 million does not fully compensate Alicia for the full value of her damages. As testified to by Mr. Domnick, Alicia's recovery represents only 5.55 percent of the total value of her claim. However, in applying a ratio to reduce the Medicaid lien amount owed to AHCA, both experts erroneously subtracted attorney's fees and costs of $1.1 million from Alicia's $2.5 million settlement to come up with a ratio of 3 percent to be applied to reduce AHCA's lien.2/ Further, in determining the past medical expenses recovered, Petitioner's experts also failed to include the Optum past medical expenses in the amount of $592,554.18. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner's evidence was unrebutted. However, through cross-examination, AHCA properly contested the methodology used to calculate the allocation to past medical expenses. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that 5.55 percent is the appropriate pro rata share of Alicia's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $608,795.49, plus the Optum past medicals in the amount of $592,554.18, which equals $1,201,349.67. Applying the 5.55 percent pro rata ratio to this total equals $66,674.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration (Agency), out of her settlement proceeds as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes (2018).
Findings Of Fact On April 21, 2011, Ms. Puzanskas gave birth to her son. After birth, Ms. Puzanskas began experiencing symptoms of nervousness, panic attacks, and being overwhelmed. On June 21, 2011, she called her doctor's office and described her symptoms to her midwife. Her midwife concluded that Ms. Puzanskas was depressed or experiencing "baby blues." Based on this telephonic diagnosis, the midwife arranged for a prescription of the anti-depressant psychotropic drug, Zoloft, to be called into Ms. Puzanskas' pharmacy. The next day after taking the Zoloft, Ms. Puzanskas again called her doctor's office with complaints that the Zoloft was causing her to feel strange and jittery. Ms. Puzanskas was instructed to continue taking the medication. On June 24, 2011, Ms. Puzanskas began suffering from severe depression and hallucinations. That same day, she went into her back yard and doused herself with gasoline and set herself on fire. She suffered third-degree full thickness burns over 30 percent of her body requiring multiple skin grafts, with scarring over 60 percent of her body from all burns and grafts. Ms. Puzanskas' medical care for the injuries was paid by Medicaid, which provided $54,171.70 in benefits associated with her injuries. This amount constituted her entire claim for past medical expenses. As a condition of her eligibility for Medicaid, Ms. Puzanskas assigned to the Agency her right to recover from liable third-party medical expenses paid by Medicaid. Ms. Puzanskas brought a medical malpractice action against the medical staff responsible for her care to recover all of her damages associated with her injuries. During the pendency of the lawsuit, the Agency was notified of the action. Although it did not dispute the ultimate settlement received by Petitioner or otherwise participate in any aspect of the litigation, the Agency asserted a $54,171.70 Medicaid lien against Ms. Puzanskas' cause of action and settlement of the action. In preparation for the trial, Petitioner's counsel used mock jury panels to evaluate their trial strategies, value of damages, and the likelihood of a defense verdict. Mock jurors split. Some would have returned a verdict for the defense, finding no liability, while others would have returned a verdict for Ms. Puzanskas and given her some limited damages. Still others would have given her a very high amount of damages. See Pet'r Ex. 9. Eleven mock jurors provided verdicts from approximately $16,554,000 down to approximately $554,000. The remaining six jurors would have returned zero-dollar verdicts. The average award in the 17 verdicts was $3,741,000. Nine of the 11 jurors who produced a verdict for Petitioner included approximately $54,000 in their verdict, and then added amounts ranging from $500,000 to $16,500,000. The $54,000 is representative of Petitioner's rounded hospital bills. The insurance policy covering the incident had limits of $250,000 and the medical providers had no collectable assets. After the first day of trial, the medical providers offered $500,000 to settle the case, and this was accepted. However, this amount did not fully compensate Petitioner for her injuries. Mr. Moore, an experienced trial attorney who represented Petitioner, testified that based on his training and experience, Petitioner's damages had a value in excess of $3,700,000. However, using a conservative number for purposes of this case, he valued her damages at $3,000,000. Thus, the $500,000 settlement represented a recovery of 16.6 percent of the value of her damages, and a similar percentage for past medical expenses. Therefore, he testified that an allocation of $8,992.50, or 16.6 percent of $54,171.70, would be a reasonable and conservative portion of the settlement for past medical expenses. Based on his training and experience and review of the medical records and file, Mr. Barrett, a trial attorney, valued Petitioner's damages between three and five million dollars. He also opined that $3,000,000 would be a very conservative figure. Using the same allocation method advocated by trial counsel, Mr. Barrett applied a 16.6 percent ratio to the Medicaid expenses, and concluded that an allocation of $8,992.50 of the settlement to past medical expenses is reasonable, rational, and appropriate. This testimony was not rebutted by the Agency, and the Agency did not present any evidence proposing a differing valuation of damages or contest the methodology used to calculate the $8,992.50 allocation to past medical expenses. The testimony from Mr. Moore and Mr. Barrett is compelling and persuasive. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that $8,992.50 of the settlement represents reimbursement for past medical expenses.
