The Issue The issue to be determined is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration, from the proceeds of a 1 All references to Florida Statutes are to the 2019 version unless otherwise stated. third party settlement, in satisfaction of Respondent's Medicaid lien, pursuant to section 409.910(17)(b), Florida Statutes.
Findings Of Fact The Parties Petitioner, Mary Bishop, is a person for whom Medicaid paid medical care expenses for injuries that she suffered in an accident. Respondent, Agency for Health Care Administration, is the state agency that administers the Medicaid program in Florida. § 409.902, Fla. Stat. Stipulated Facts On June 25, 2014, Petitioner suffered catastrophic injuries when she fell from a moving vehicle while being transported between two medical facilities. In the accident, Petitioner suffered permanent catastrophic injuries, including severe brain damage, a broken shoulder, a broken arm, and a punctured lung. As a result of her injuries, Petitioner's leg was amputated below the knee. Medicaid paid for Petitioner's medical care related to the injury. Through Respondent, Medicaid provided $293,149.98 in benefits for Petitioner's medical care. This amount constitutes Petitioner's entire claim for past medical expenses. Petitioner's daughter, Nicole Milstead, was appointed Petitioner's guardian. Milstead, as Petitioner's guardian, pursued a personal injury claim against the parties allegedly liable ("Tortfeasors") for Petitioner's injuries to recover all of Petitioner's damages. Petitioner's personal injury claim was settled through a series of confidential settlements in a lump-sum of $2,000,000 ($2 million).2 During the pendency of Petitioner's personal injury claim, Respondent was notified of the claim and asserted a Medicaid lien in the amount of $293,149.98 against Petitioner's cause of action and settlement of that action. Respondent did not institute a civil action to enforce its rights under section 409.910, nor did it intervene or join in Petitioner's claim against the Tortfeasors. By letter, Respondent was notified of Petitioner's $2 million settlement with the Tortfeasors. 2 At the final hearing, testimony revealed that in addition to the $2 million settlement, there was a $100,000 settlement allocated to Petitioner's husband associated with his claims relative to Petitioner's injuries. The parties have agreed to address this $100,000 settlement separately, so this proceeding only concerns the $2 million settlement received by Petitioner. See Joint Stip., Aug. 17, 2020. Respondent has not filed a motion to set aside, void, or otherwise dispute Petitioner's settlement with the Tortfeasors. The Medicaid program, through Respondent, paid $293,149.98 on behalf of Petitioner, which represents the amount paid for her past medical expenses. If the formula in section 409.910(11)(f) is applied to Petitioner's $2 million settlement, then the full amount of the $293,149.98 Medicaid lien should be paid to Respondent. Petitioner deposited the $293,149.98 Medicaid lien amount into an interest-bearing account for the benefit of Respondent, pending the outcome of an administrative determination of Respondent's right regarding the Medicaid lien. Pursuant to section 409.910(17), such deposit constitutes "final agency action" under chapter 120. Facts Found Pursuant to Evidence Adduced at Final Hearing As stated above, on June 25, 2014, Petitioner, who had a long history of mental illness, leapt from a moving vehicle on I-95 while being transported between a mental health provider's office and the assisted living facility where she resided. As a result, Petitioner suffered severe injuries, including traumatic brain injury. She was in a coma; intubated; ventilated; suffered multiple fractures resulting in a right foot below-knee amputation; multiple upper right extremity injuries, including humeral and shoulder injuries; cervical and thoracic vertebrae fractures; fractured ribs; fractured fingers; and multiple-organ failure. She had open reduction and internal fixation surgery on her elbow and an exploratory laparotomy. In all, she was hospitalized for approximately eight months. As a result of the injuries she sustained, Petitioner is unable to bathe herself, dress herself, or cut her food without assistance. She has a prosthetic foot and uses a walker; has limited use of her arm, and is significantly scarred and disfigured. She suffers extreme pain in her upper right extremity, and as a result of her traumatic brain injury, experiences difficulty in problem-solving, which leads to her frustration. Petitioner requires attendant care 24 hours per day, seven days a week. Overbeck testified as a fact and expert witness on behalf of Petitioner. He is a Florida Bar Board-Certified attorney in civil trial practice, and has nearly 30 years of experience in a broad range of personal injury-related matters, including assessing the damages value of cases involving catastrophic injury, and the allocation of settlements in various contexts, including the Medicaid lien context. Overbeck represented Petitioner in her personal injury case against liable third parties, including the assisted living facility in which Petitioner resided; the mental health outpatient facility where she was receiving counseling at the time of her accident; the entity that was transporting Petitioner when she jumped from the moving vehicle; the driver of the vehicle from which Petitioner jumped; and the transport coordinator who arranged the vehicle transportation for Petitioner. Ultimately, Petitioner's claims against the liable third parties settled for a total of $2 million. Because Petitioner's case settled before trial, a life care plan and economist report was not prepared. However, based on Overbeck's experience regarding life care plans in similar cases, he opined that Petitioner's future medical needs would have a value of between $1 million and $3 million. Additionally, he testified, credibly and persuasively, that Petitioner's non-economic damages (i.e., pain and suffering) would constitute the greatest part of any jury verdict, and that, based on cases involving catastrophic injuries and other circumstances similar to Petitioner's, her non-economic damages would be valued on the order of $15 million to $18.5 million. Overbeck opined that Petitioner's damages had a value in excess of $8 million, which he described as a "conservative" valuation. Thus, the $2 million settlement did not fully compensate Petitioner for the full value of her damages. According to Overbeck, Petitioner's $2 million third-party recovery represents only 25% of the value of her damages, using the conservative $8 million valuation of those damages. Overbeck testified that because Petitioner recovered only 25% of her total damages, conservatively valued at $8 million, it is fair and reasonable that 25% of the $2 million third-party recovery be allocated for Petitioner's past medical expenses. This would amount to $73,287.50 to be paid to Respondent in satisfaction of its Medicaid lien. Barrett also testified as an expert witness on behalf of Petitioner. Barrett is a trial lawyer who has over 40 years of experience in personal injury law. His experience includes handling catastrophic injury cases, including those involving traumatic brain injury. As part of his practice, he stays abreast of jury verdict awards and routinely makes assessments regarding the value of damages suffered by injured parties. Barrett testified that based on his experience in cases involving parties who suffered catastrophic injuries similar to Petitioner's, he estimated the value of Petitioner's damages to be in the $8 million to $12 million range, with $8 million "being the basement." Based on his review of life care plans and economist reports for persons who suffered traumatic brain injury and needed "24/7" care, Barrett testified that Petitioner's claim for future medical expenses would be high. Additionally, he concurred with Overbeck that Petitioner's claim for non-economic damages would be very high and would comprise the greater part of any damages award. Based on cases he reviewed, Barrett valued Petitioner's non-economic damages alone at over $8 million. Barrett opined that the $2 million settlement amount did not fully compensate Petitioner for all of the damages she suffered, and represented 25% of the conservative $8 million valuation of her damages. He testified that because the $2 million third-party settlement amount that Petitioner recovered represented 25% of the total value of her damages, it was "very reasonable" for 25% of her third party recovery to be allocated to past medical expenses. Respondent did not call any witnesses or present any countervailing evidence regarding the value of Petitioner's damages. Thus, Petitioner's evidence in this proceeding is unrebutted.
The Issue The issue to be determined in this case is the amount to be paid to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), to reimburse Medicaid for medical expenses paid on behalf of Petitioner from proceeds of a personal injury settlement received by Petitioner.
Findings Of Fact The following findings of fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the prehearing stipulation. Petitioner, William O’Malley, is the recipient of Medicaid for injuries he sustained in an automobile accident. Respondent is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 9, 2009, Petitioner, William O’Malley, lost control of his vehicle when it hydroplaned across three lanes of traffic. Mr. O’Malley’s vehicle left the roadway and struck a tree. While he was restrained with a seat belt, Mr. O’Malley suffered a severe brain injury, fractured skull, injury to his neck at the C6-C7 level, numerous fractured ribs, shattered spleen, lacerated liver, abdominal bleeding, a fractured ankle and other serious injuries. He remained in a coma for a number of weeks undergoing extensive surgical procedures to save his life. As a result of his severe and permanent injuries, Mr. O’Malley now suffers from cognitive deficits, is disfigured, and is unable to work. He receives disability payments due to his injuries. A portion of Mr. O’Malley’s past medical expenses related to his injuries was paid by Medicaid, in the amount of $196,125.72. Mr. O’Malley initiated a personal injury civil action to recover all his damages associated with his injuries against the construction companies who allegedly designed and constructed the roadway in a defective manner (“Defendants”). During the pendency of Mr. O’Malley’s personal injury action, AHCA was notified of the action, and asserted a $196,125.72 Medicaid lien against any damages received by Mr. O’Malley. AHCA was not otherwise involved in the personal injury action or settlement. In October 2016, Mr. O’Malley’s personal injury action settled for the gross amount of $1,750,000. The General Release memorializing the settlement agreement provides as follows: Although it is acknowledged that this settlement does not fully compensate William O’Malley for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating William O’Malley for a fraction of the total monetary value of his alleged damages. The parties agree that William O’Malley’s alleged damages have a value in excess of $20,000,000.00, of which $379,874.27 represents William O’Malley’s claim for past medical expenses. Given the facts, circumstances, and nature of William O’Malley’s injuries and this settlement, the parties have agreed to allocate $33,239.00 of this settlement to William O’Malley’s claim for past medical expenses and allocate the remainder of the settlement 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 William O’Malley’s damages. Further, the parties acknowledge that William O’Malley may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses William O’Malley will incur in the future. However, the parties acknowledge that William O’Malley, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and William O’Malley 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 future medical expenses. By letter of October 13, 2016, Mr. O’Malley’s attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of $123,699.86 in litigation costs. This letter explained that Mr. O’Malley’s damages had a value in excess of $20 million and the settlement represented only 8.75 percent of the recovery of Mr. O’Malley’s $379,874.27 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $196,125.72 Medicaid lien. AHCA responded to Mr. O’Malley’s attorney’s letter and demanded full payment of the entire $196,125.72 Medicaid lien from the settlement. AHCA, through the Medicaid program, spent $196,125.72 on behalf of Mr. O’Malley, all of which represents expenditures paid for Mr. O’Malley’s past medical expenses. No portion of the $196,125.72 paid by AHCA represented expenditures for future medical expenses. Application of the formula at section 409.910(11)(f) to Mr. O’Malley’s settlement requires payment to AHCA of $196,125.72, the actual amount of the medical expenses paid by Medicaid. Petitioner disputes that $196,125.72 is the amount of recovered medical expenses payable to Respondent, and instead asserts that $33,239.00 in medical expenses are payable to Respondent. Notwithstanding Petitioner’s dispute, 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). In support of his position, Mr. O’Malley presented the testimony of two experts, Steven Browning, Esquire, and Vinson Barrett, Esquire. Mr. Browning represented Mr. O’Malley in the personal injury action. He testified as an expert regarding the valuation of Mr. O’Malley’s personal injury claim. Mr. Browning has practiced law for 31 years, primarily representing plaintiffs. He is a partner of his law firm and handles serious personal injury, wrongful death, and catastrophic injury cases. Mr. Browning handles cases that result in jury trials and, thus, he routinely researches jury verdicts to determine potential value of cases. In the litigation of civil actions, he also prepares mediation statements regarding the value of cases. He reviews life care plans, economic reports, and past jury verdicts to determine the value of a case. Mr. Browning opined that $20 million constituted a very conservative valuation of damages suffered by Mr. O’Malley. He based this opinion on having represented Mr. O’Malley in the underlying personal injury action and on his knowledge of jury verdicts and settlements in recent Florida cases involving awards of damages to individuals with similar injuries as Mr. O’Malley. He emphasized that his valuation was far more conservative than many comparable cases that resulted in substantially higher verdicts or settlements. Mr. Browning concluded that the $1,750,000 settlement amount represented 8.75 percent of the damages suffered by Mr. O’Malley. He also opined that only 8.75 percent of the $196,125.72, the past medical expenses paid by Respondent, was recovered. Mr. Browning was accepted as an expert in this matter and his testimony was found to be persuasive. Mr. O’Malley also presented the testimony of Mr. Barrett regarding the valuation of Petitioner’s claim. Mr. Barrett has practiced law for approximately 35 years. He primarily practices in the areas of medical malpractice, pharmaceutical liability, and catastrophic injuries resulting from automobile accidents. Mr. Barrett routinely handles jury trials. Thus, he routinely monitors jury verdicts and determines the value of damages suffered in personal injury actions. He reviewed recent jury verdicts and the life care plan for Mr. O’Malley to formulate his opinion regarding the valuation of Mr. O’Malley’s claim. Mr. Barrett testified that $20 million to $25 million was the estimated value of Mr. O’Malley’s claim. He testified that the amount was a very conservative estimate of damages suffered by Mr. O’Malley. Similar to Mr. Browning, Mr. Barrett opined that allocating 8.75 percent to past medical expenses in the amount of $196,125.72 was a reasonable allocation of past medical expenses and reflected the amount recovered by Mr. O’Malley for past medical expenses. Respondent also presented an expert regarding the valuation of Mr. O’ Malley’s claim, Steven Carter. Mr. Carter has been licensed to practice law for 23 years. He is the managing shareholder of his law firm. He has handled catastrophic injury cases in which he determined the value of the claim. He has conducted 35 to 40 jury or bench trials. Mr. Carter was accepted as an expert regarding valuation of Mr. O’Malley’s claim. Mr. Carter testified that the value of Mr. O’Malley’s damages was the actual settlement amount of $1,757,000. Ultimate Finding of Fact The undersigned finds that the testimony of Mr. Browning and Mr. Barrett was more persuasive regarding valuation of Mr. O’Malley’s claim than the testimony of Respondent’s expert witness. Mr. Browning and Mr. Barrett’s number of years of experience with handling catastrophic personal injury cases, and the fact that they had the benefit of the life care plan when evaluating the case, make their testimony more persuasive regarding the valuation of damages suffered by Mr. O’Malley in this case.
The Issue The issue to determine in this matter is the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Petitioner, a Medicaid recipient, following Petitioner’s recovery from a third party.
Findings Of Fact This administrative matter centers on the amount the Agency is entitled to be paid to satisfy its Medicaid lien following Petitioner’s recovery of a $700,000 settlement from a third party. On November 7, 2010, Petitioner was involved in a devastating automobile accident. While stopped awaiting for oncoming traffic to pass, another vehicle, driven by Nahun Garcia, struck Petitioner from behind at a high rate of speed. Mr. Garcia was cited for careless 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. Immediately following the accident, Petitioner was transported to St. Joseph’s Hospital in Tampa, Florida. There, Petitioner was diagnosed with fractures of his C4-C5 vertebra. Petitioner is now quadriplegic. Petitioner was 26 years old on the date of the incident. Because of the automobile accident, Petitioner is severely disabled and totally dependent on others for his care and well-being. Petitioner’s injuries are continuing and permanent. In addition, Petitioner is no longer able to care for his minor daughter. Petitioner’s medical expenses from the accident equal $264,541.69. Of this amount, the Agency, through the Medicaid program, paid a total of $249,197.80 for Petitioner’s past medical care. Petitioner pursued a personal injury claim against Mr. Garcia. Weldon (“Web”) E. Brennan, Esquire, represented Petitioner in the lawsuit. According to Mr. Brennan’s testimony at the final hearing, initially, Petitioner recovered $10,000 from Mr. Garcia’s automobile insurance company, Progressive Insurance, which was the limit of the property damage liability insurance policy. However, Mr. Brennan was not able to identify any other source of insurance to cover Petitioner’s injuries. Mr. Garcia had no collectible assets. Because the only available insurance was the property damage liability policy, Mr. Brennan evaluated the possibility of pursuing a bad faith claim against Progressive. Mr. Brennan concluded that, based on the circumstances of Petitioner’s initial coverage demand to Progressive, a bad faith claim was a viable option. Therefore, Mr. Brennan’s litigation strategy shifted. First, he would obtain a judgment against the tortfeasor (Mr. Garcia) in trial court. Then, he would seek to impose responsibility for the verdict on Progressive, including an assessment of punitive damages. In May 2017, following six years of litigation, Mr. Brennan was able to negotiate a $700,000 settlement with Progressive. Mr. Brennan represented that Progressive tendered the amount to avoid the risk of a successful bad faith claim.2/ Mr. Brennan explained that in finalizing the settlement with Progressive, he recognized that obtaining additional funds, by fully litigating the bad faith claim, would involve lengthy and intensive litigation. Consequently, Mr. Brennan believed that it was in his client’s best interests to timely settle his lawsuit. On May 9, 2017, Petitioner and Progressive executed a Release of All Claims (the “Release”) formalizing the settlement. In the course of the settlement negotiations, Petitioner and Progressive agreed that the true value for Petitioner’s injuries equaled at least $15 million. The Release specifically stated: The parties were both willing to agree to a consent judgment for $15,000,000 prior to settlement and so they therefore agree that [Petitioner’s] alleged damages have a value in excess of $15,000,000, of which $264,541.69 represents [Petitioner’s] claim for past medical expenses. Given the facts, circumstances, and nature of [Petitioner’s] alleged injuries and this settlement, the parties have agreed to allocate $12,354.10 of this settlement to [Petitioner’s] claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures from any recovery from liable third parties. Accordingly, when the Agency was notified of Petitioner’s personal injury settlement, 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 the full amount of the medical costs it paid on Petitioner’s behalf ($249,197.80). The Agency maintains that it should receive the full amount of its lien regardless of the fact that Petitioner settled for less than what he represents is the full value of his damages. (As discussed below, the formula in section 409.910(11)(f) allows the Agency to collect the full Medicaid lien.) Petitioner asserts that pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s settlement than the amount it calculated using the section 409.910(11)(f) formula. Petitioner specifically argues that the Agency’s Medicaid lien should be reduced proportionately, taking into account the full value of Petitioner’s likely recovery in the underlying negligence and bad faith lawsuits. Otherwise, the application of the default statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents compensation for past 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 $11,637.54. To establish the full value of Petitioner’s injuries, Petitioner presented the testimony of Mr. Brennan, as well as Vinson Barrett, Esquire. Mr. Brennan opined on what he considered to be the “true” value of Petitioner’s damages. Mr. Brennan heads a plaintiff’s injury firm and has represented plaintiffs in personal injury cases for over 28 years. Mr. Brennan has extensive experience handling cases involving automobile accidents, including catastrophic injury claims and spinal cord injuries. Mr. Brennan expressed that he routinely evaluates damages suffered by injured parties as part of his practice. He stays current on jury verdicts and settlements throughout Florida and the United States. Mr. Brennan was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Brennan valued Petitioner’s damages conservatively at $15 million, and possibly as high as $45 million. In deriving this figure, Mr. Brennan considered Petitioner’s medical expenses, his lost wage capacity, his past and future pain and suffering, and his life expectancy. Finally, Mr. Brennan testified that, in placing a dollar value on Petitioner’s injuries, he reviewed a number of jury verdicts involving catastrophic injuries similar to Petitioner’s. Mr. Brennan commented that Petitioner faces a meager future. Other than slight movement in his left arm, he is paralyzed from the neck down. Mr. Brennan relayed how the injuries have caused Petitioner to experience depression. He cannot eat independently, nor can he control his bodily functions. Neither is Petitioner able to care for or support his daughter. Mr. Brennan testified that the $700,000 settlement did not fully or fairly compensate Petitioner for his injuries. Therefore, he urged that a lesser portion of Petitioner’s settlement be allocated to reimburse Medicaid instead of the full amount of the lien ($249,197.80). Mr. Brennan proposed applying a ratio based on the true value of Petitioner’s injuries ($15 million) compared to the amount Petitioner actually recovered ($700,000). Using his estimate of $15 million, the settlement represents a 4.67 percent recovery of the total value of all Petitioner’s damages. In like manner, the amount of medical expenses should also be reduced to 4.67 percent or approximately $11,637.54. Therefore, in Mr. Brennan’s professional judgment, $11,637.54 is the portion of Petitioner’s settlement that represents his compensation for past medical expenses. Mr. Brennan expressed that allocating $11,637.54 for Petitioner’s past medical expenses is “logical,” “rational,” and “reasonable” under the circumstances. Mr. Barrett also testified on Petitioner’s behalf. Mr. Barrett is a trial attorney with over 40 years’ experience and works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. Mr. Barrett has handled a number of catastrophic injury matters involving traumatic spinal cord injuries. Mr. Barrett commented that, as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties. Mr. Barrett was accepted as an expert in the valuation of damages suffered by injured persons. Prior to the final hearing, Mr. Barrett reviewed Petitioner’s exhibits, including Petitioner’s medical records, the accident report, and Petitioner’s Release of All Claims executed with Progressive. He also reviewed the sample jury verdicts Petitioner presented at the final hearing as Exhibit 13. Based on his valuation of Petitioner’s injuries and his professional training and experience, Mr. Barrett expressed that injuries similar to Petitioner’s would result in jury awards averaging between $15 and $30 million dollars. In light of Petitioner’s horrific injuries, Mr. Barrett conservatively valued Petitioner’s injuries at $15 million. Mr. Barrett opined that Mr. Brennan’s valuation of $15 million was appropriate, if not undervalued. Mr. Barrett supported Mr. Brennan’s pro rata methodology of calculating a reduced portion of Petitioner’s $700,000 settlement to equitably and fairly represent past medical expenses. With injuries valued at $15 million, the $700,000 settlement only compensated Petitioner for 4.67 percent of the total value of his damages. Therefore, because Petitioner only recovered 4.67 percent of his damages, the most “reasonable” and “rational” manner to apportion the $700,000 settlement is to apply that same percentage to determine Petitioner’s recovery for past medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces the definitive value of that portion of Petitioner’s $700,000 settlement that represents compensation for past medical expenses, i.e., $11,637.54 ($249,197.80 times 4.67 percent). The Agency was not a party to Petitioner’s negligence lawsuit or Petitioner’s Release with Progressive. All of the expenditures Medicaid spent on Petitioner’s behalf is attributed to past medical expenses. No portion of the $249,197.80 Medicaid lien represents future medical expenses. The undersigned finds that the competent substantial evidence establishes the value of Petitioner’s injuries from his auto accident at $15 million. However, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the 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 $249,197.80 from Petitioner’s recovery of $700,000 from a third party to satisfy its Medicaid lien.
The Issue Is proposed rule 59G-3.010(4)(b)2.c. an invalid exercise of delegated legislative authority, for reasons described in the respective petitions that formed the basis of this dispute? See Section 120.56(2), Florida Statutes.
Findings Of Fact The party Florida Medical Association, Inc., a not for profit corporation is organized and maintained for the benefit of approximately 17,000 licensed physicians who are its members. It represents the common interests of those members. Some of its members provide services under the terms contemplated by proposed rule 59G-3.010(4)(b)2.c. Likewise, Robert Anthony Savona, D.O.; John F. Hull, D.O.; and Robert Kagan, M.D., as licensed physicians, provide services contemplated by a proposed rule 59G- 3.010(4)(b)2.c. Respondent is the agency responsible for administering the state Medicaid Program under Title XIX of the Social Security Act, 42 U.S.C. Section 1396 et seq. and Section 409.901, et seq. Florida Statutes. This responsibility includes reimbursement of Medicaid providers. Respondent offered the proposed rule for adoption. The services contemplated by proposed rule 59G- 3.010(4)(b)2.c., in which the rule describes a payment mechanism, are in association with patients who are Medicare and Medicaid eligible. The arrangement contemplated by the proposed rule is in relation to Medicaid reimbursable services which complement Medicare. Under the proposed rule, Medicare Supplemental Insurance (Part B) is paid for the deductible and coinsurance for the Medicare and Medicaid eligible recipients by the Medicaid fiscal agent, in accordance with a rate identified in the proposed rule. The recipients of the services from physicians under the proposed rule, eligible for both Medicare and Medicaid benefits, are also referred to as Qualified Medicare Beneficiaries (QMBs). QMBs are described as poor, elderly and disabled persons. In pertinent part the proposed rule states: 59G-3.010 Medicaid Services Complementing Medicare. * * * (4) Medicaid Reimbursable Services which Complement Medicare. * * * (b) Medicare Supplemental Insurance (Part B). * * * 2. The Medicare Part B deductible and coinsurance is paid for the Medicare and Medicaid eligible recipient by the Medicaid fiscal agent at the following rates: * * * c. Physician services, including doctors of medicine, doctors of osteopathy, and providers of chiropractic and podiatric services are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment received does not exceed the Medicaid fee for the service provided. If there is no comparable Medicaid fee for the service, the Medicaid fee is calculated to be 50 percent of the Medicare approved charge for the service provided. In these situations, whether the physician did or did not receive a payment from Medicaid, by billing Medicaid he is bound to the Medicaid payment schedule as payment in full. Other parts of proposed rule 59G-3.010(4)(b)2. at a., b., d., and e. address Medicare Part B deductibles and coinsurance for other providers as follows: Part B patient hospital services are reimbursed 100 percent of the deductible and coinsurance. Rural health centers, federally qualified health centers and county health departments are reimbursed their encounter rate minus the amount of Medicare's payment. * * * Pharmacy providers are reimbursed 100 percent of the deductible and 100 percent of the coinsurance only to the extent that the total payment does not exceed the Medicaid fee for the service provided. Other Part B suppliers are reimbursed 100 percent of the coinsurance and 100 percent of deductible. Under Medicare Part B, 80 percent of reasonable costs or charges for the delivery of health care to Medicare eligible patient is paid through the Medicare program as a premium. That program is administered by the federal government under Title XVIII of the Social Security Act, 42 U.S.C., Section 1395 et seq. That payment is a form of insurance. The remaining 20 percent is anticipated to be paid by the patient as copayments or coinsurance, in addition to an annual deductible. The proposed rule in relation to physician services addresses the manner in which some portion of the 20 percent is "crossed-over" to be paid for potential payment through the Medicaid program administered by Respondent using federal and state funding, pursuant to Title XIX of the Social Security Act, 42 U.S.C., Section 1396 et seq. and Section 409.901 et seq., Florida Statutes. Payment to the physicians for their services in relation to the deductible and coinsurance depends upon the application of the formula in the proposed rule. The formula contemplates reimbursement to the physicians at less than 100 percent of the deductible and 100 percent of the coinsurance because the Medicaid fee schedule is generally lower than the federal Medicare fee schedule for the same services. In fact, in most cases the physicians will receive no payment for the deductible or coinsurance above the 80 percent payment under the Medicare fee structure in relation to the basic Medicare premium. By comparison to other health care and service providers discussed in the proposed rule, some other individuals and entities are reimbursed at 100 percent of the deductible and coinsurance and others are not guaranteed reimbursement at 100 percent. The formulas for reimbursement for services provided under the proposed rule related to Medicare Part B deductible and coinsurance are influenced by the results of quarterly estimating conferences held between legislative and executive branch staff. Those estimators, within respective categories of services, examine the performance of the various categories of services concerning fiscal impact through a comparison of available revenues against expenditures. This assists in the preparation of future budgets upon the recommendation of the governor to be passed by the legislature. Respondent assists in preparation of budget requests, to include recommendation for policy changes related to the amount of expenditures for the various services performed for the benefit of Medicare and Medicaid eligible recipients, QMBs, who are entitled to the payment of their deductible and coinsurance under Medicare Part B. However, the impetus for the reimbursement formula for physician services described in the proposed rule has a more precise origin, for reasons now explained. A prior version of Rule 59G-3.010(4), Florida Administrative Code in effect on April 8, 1996, was challenged in an administrative proceeding before the Division of Administrative Hearings. That version limited the amount of reimbursement for physician services associated with Medicare Part B deductible and coinsurance in a different manner than the proposed rule. In the decision of Reynolds v. Agency for Health Care Administration, 18 F.A.L.R. 3474 (Fla. DOAH 1996) the rule was held invalid. Among the cases cited for this decision was Pennsylvania Medical Society v. Snider, 29 F.3d 886 (3d Cir. 1994) and Haynes Ambulance Service, Inc. v. State of Alabama, 36 F.3d 1974 (11th Cir. 1994). The federal court cases refer to the recipients of cost reimbursement for deductibles and coinsurance as QMBs. Essentially, they are the same persons who are described in the proposed rule as Medicare and Medicaid eligible. Although the rule had been declared invalid, Respondent continued to exercise the policy of denying payment of Medicare deductibles and coinsurance on physician crossover claims at 100 percent of the deductible and 100 percent of the coinsurance as contemplated by the federal court cases. Following Respondent's return to the policy of not paying the deductible and coinsurance at 100 percent for physician services, Petitioner's Savona, Hull, and Kagan brought a lawsuit in federal count to compel payment for physician services to QMBs at the Medicare rate. On March 3, 1997, the United States District Court for the Northern District of Florida granted a final injunction that required Respondents to pay the physician class in the lawsuit at the Medicare rate for services provided to QMBs. See Savona v. Cook, Case No. 4:96CV14-WS (N.D. Fla. 1997). After the decision in Savona, Respondent pursued a policy of paying the deductible and coinsurance at 100 percent of the Medicare rate. This policy lasted from March 3, 1997 until October 1, 1997. To facilitate the payment for physician services at 100 percent of the Medicare rate for the crossover claims related to the deductible and coinsurance, Respondent amended its state Medicaid plan, with the federal Health Care Financing Administration (HCFA). In addition, Respondent sought an appropriation through the legislature to fund the increase in copayments to assure that physician services were reimbursed at 100 percent of the Medicare rate for the deductible and coinsurance. This led to the passage of Chapter 97-152, Laws of Florida, Item 248, the 1997-98 General Appropriations Act, which set aside monies from the General Revenue Fund and from the Medical Care Trust Fund, totaling $87 million for Medicare Part B copayment for reimbursement of physician services for the dually eligible recipients. This refers to recipients eligible for services under Medicare and Medicaid. The 1997-98 fiscal year for that appropriation began July 1, 1997, and continues until June 30, 1998. The amount appropriated has proven more than adequate to meet the copayment for physician services at the 100 percent Medicare rate. Another document, prepared by persons unknown, was associated with the appropriations process for 1997-98. That document is referred to as Respondent's Ex No. 1 and is entitled 1997-98 General Appropriations and Summary Statement of Intent. It sets out the exact language in Chapter 97-152, Laws of Florida, Item 248, related to the $87 million for full Medicare Part B copayment for physician services. It also sets out a summary statement of intent that is not found within the General Appropriations Act. The language in that summary statement of intent is as follows: It is the intent of the Legislature that the funds in Specific Appropriation 248 which are provided to pay the full Medicare part B co- payment for physician services to clients who are dually eligible for Medicare and Medicaid, be expended only to the extent currently required by federal law. In the event that changes in federal law relating to reimbursement for these services occurs, the Agency for Health Care Administration shall directly submit to the federal Health Care Financing Administration any amendments to the state Medicaid Plan which are necessary to realize cost savings options permitted by and in compliance with federal law. As anticipated by the summary statement of intent, federal law relating to reimbursement for physician services did change in August of 1997 when Congress enacted the Congressional Balanced Budget Act of 1997, Section 4714. In pertinent part it stated: * * * (2) In carrying out paragraph (1), a State is not required to provide any payment for any expenses incurred relating to payment for deductibles, coinsurance or copayments for medicare cost-sharing to extent that payment under title XVIII for the service would exceed the payment amount that otherwise would be made under the State plan under this title for such service if provided to an eligible recipient other than a medicare beneficiary. That law became effective October 1, 1997. By its terms it created the option for states to reduce payments on crossover claims to the state Medicaid rate, although it did not mandate that outcome. The payment option created by the congressional enactment had application to all categories of providers. In view of the Congressional Balanced Budget Act of 1997, Respondent decided to change its payment policy to disallow payment for physician services at the 100 percent Medicare rate in all instances for physician services related to the deductible and coinsurance for dually eligible recipients. The effective date of the change in policy was October 1, 1997, coinciding with the effective date of the Congressional Budget Act. Respondent implemented its policy change without the benefit of rule adoption. The failure to implement the payment policy by rule adoption was challenged in the case of Savona v. Agency for Health Care Administration, DOAH Case No. 97-5909RU (Fla. DOAH 1998). On January 16, 1998, Respondent gave notice of rule development, to include the preliminary text of the rule. For this reason, the February 12, 1998, order entered in DOAH Case No. 97-5909RU denied the petition for determination of invalidity of the non-rule policy brought in accordance with Section 120.56(4), Florida Statutes. Consistent with its notice of rule development, Respondent published notice of proposed rulemaking pertaining to the rule under challenge here. That publication was made on February 13, 1998, through the Florida Administrative Weekly, Volume 24, No. 7. The specific authority for rule promulgation was Section 409.919, Florida Statutes, and the law to be implemented was Section 409.908, Florida Statutes. No mention was made of the summary statement of intent associated with the 1997-98 General Appropriations Act in Florida and the Congressional Balanced Budget Act of 1997. The testimony of Richard T. Lutz, Director of the Division of State Health Purchasing, Agency for Health Care Administration, at hearing established his reliance upon those latter two items as authority for promulgating the proposed rule in relation to the copayment for physician services under Medicare Part B, for the deductible and coinsurance. Mr. Lutz was principally responsible for the promulgation of the rule as policymaker for the Respondent. In addressing the difference in the reimbursement policies for physician services, contrasted with other services detailed in the proposed rule, Mr. Lutz indicated that changes in relation to reimbursement policies, other than for physicians, would be the product of an estimating conference showing the financial impact of the changes, followed by a budget item to effect the changes. In the absence of that impetus, Mr. Lutz described that he had been instructed that the methodologies that were in place for various services under Medicare Part B utilizing established methodologies for the reimbursement practices would remain in effect. Unlike the circumstances existing in the proposed rule, for classes of providers other than physicians, Mr. Lutz in behalf of Respondent took the initiative in dealing with reimbursement for physicians care under Medicare Part B when promulgating the proposed rule. He concluded that the terms of the federal court order in Savona were subject to the language in the summary statement of intent, and with the advent of the Congressional Balanced Budget Act of 1997 Respondent was at liberty to change its reimbursement scheme for physician services effective October 1, 1997. In making the policy choice to promulgate the proposed rule, Mr. Lutz recognized the option which Florida had to either limit copayments or continue copayments at the Medicare rate for physician services under Medicare Part B. In promulgating the proposed rule Mr. Lutz identified that the Agency did not consider language in Section 409.908(13), Florida Statutes. He did indicate in his testimony the belief that the preamble to Section 409.908, Florida Statutes, creates authority for promulgation of the proposed rule in its comment about the Respondent's ability to make payments in accordance with methodologies that are set forth in its rules, manuals, and handbooks, consistent with limitations placed in the General Appropriations Act and any statement of legislative intent. Mr. Lutz in promulgating the proposed rule recognized that the physician services under Medicare Part B copayment for deductible and coinsurance would eventuate in no payment beyond the 80 percent premium in many instances. Although Mr. Lutz expresses the opinion that the proposed rule for payment of physician services under Medicare Part B has retroactive application to October 1, 1997, he acknowledges that the language in the proposed rule makes no reference to its retroactivity to that date.
The Issue The matter concerns the amount of the money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Mark Crain, a Medicaid recipient, following a settlement recovered from a third party.
Findings Of Fact This proceeding determines the amount the Agency should be paid to satisfy a Medicaid lien following Petitioner’s recovery of a $100,000 settlement from a third party. The Agency asserts that it is entitled to recover $35,700, which is the amount it calculated using the formula set forth in section 409.410(11)(f). The facts that gave rise to this matter are found pursuant to a stipulation of the parties.3/ On June 23, 2016, Petitioner was working for a tree pruning company. Petitioner’s employer assigned him to remove several branches from a tree. As directed, Petitioner climbed to the top of the tree and secured himself with one rope lanyard. Unfortunately, after he began pruning, Petitioner cut through the rope lanyard, lost his balance, and plummeted 30 feet to the ground. As a result of the fall, Petitioner suffered significant physical and neurological injuries. Petitioner underwent multiple surgeries. His medical procedures included an open reduction with internal fixation on his right wrist, lumbar fusion surgery, and a lumbar laminectomy. At the final hearing, Petitioner’s counsel represented that Petitioner’s medical prognosis is not fully known at this time. However, what is known is that Petitioner will continue to experience serious neurologic deficits. Petitioner’s injuries have left him with overall mobility issues and have affected his ability to walk normally. He suffers from a right foot drop and has limited feeling below his waist. The parties also stipulated that Petitioner has completed all medical treatment and therapy related to his accident. However, Petitioner is uncertain whether or not he will be able to return to normal activities in the future. Petitioner incurred sizable medical expenses due to his injuries. The charges for Petitioner’s medical procedures totaled approximately $375,000. However, only $62,067.28 has actually been paid for his medical care. Of this amount, the Florida Medicaid program paid $41,992.33. (In addition to the $41,992.22 paid by Medicaid, other health insurance covered $20,075.06.) Petitioner did not present evidence of monetary damages other than his past medical expenses. Petitioner subsequently initiated a civil cause of action for negligence against his (former) employer. Petitioner alleged that he was not properly trained how to safely secure himself to the tree. According to Petitioner’s counsel, Petitioner’s employer should have instructed him to use two lanyards instead of one. After two years of litigation, Petitioner settled his negligence action for $100,000. The settlement did not allocate Petitioner’s award between past medical expenses and other damage categories. The Agency, through the Florida Medicaid program, paid a total of $41,992.33 for Petitioner’s medical treatment resulting from the accident.4/ All of the expenditures that Florida Medicaid spent on Petitioner’s behalf are attributed to past medical expenses. Under section 409.910, the Agency is to be repaid for its Medicaid expenditures out of any recovery from liable third parties. Accordingly, when the Agency was notified of the settlement of Petitioner’s lawsuit, it asserted a Medicaid lien against the amount Petitioner recovered. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect $37,500 to satisfy the medical costs it paid on Petitioner’s behalf. (As discussed in endnote 7, the “default” formula in section 409.910(11)(f) allows the Agency to collect $37,500 to satisfy its Medicaid lien.) The Agency maintains that it should receive the full amount of its lien regardless of whether Petitioner settled for less than what Petitioner believes is the full value of his damages. Petitioner, on the other hand, asserts that the Agency should be reimbursed a lesser portion of the settlement than the amount calculated using the section 409.910(11)(f) formula. Exercising its right to challenge the Medicaid lien pursuant to section 409.910(17)(b), Petitioner specifically argues that, taking into account the full value of Petitioner’s damages, the Agency’s Medicaid lien should be reduced proportionately. Otherwise, the application of the statutory formula would permit the Agency to collect more than that portion of the settlement that fairly represents Petitioner’s compensation for past medical expenses. Petitioner requests the Agency’s allocation from Petitioner’s third-party recovery be reduced to $4,199.23. To establish the value of his damages, Petitioner submitted the medical bills from his accident, as well as relied upon the stipulated facts. Petitioner’s medical bills show that he sustained the injuries identified above, as well as underwent surgery on his spine and wrist. To place a monetary value on Petitioner’s injuries, Petitioner’s counsel represented that his law firm appraised Petitioner’s injuries at no less than $1 to 2 million. However, Petitioner did not introduce any evidence or testimony corroborating this injury valuation or substantiating an amount Petitioner might have recovered at trial in his personal injury cause of action.5/ Neither did Petitioner offer evidence of additional damages Petitioner might be facing from his accident, such as future medical expenses, loss of quality of life, loss of employment or wages, or pain and suffering. Based on his estimate, Petitioner’s counsel asserted that the $100,000 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Petitioner for his damages. Therefore, a lesser portion of the settlement should be allocated to reimburse Medicaid, instead of the full amount of the lien. Petitioner proposes that a ratio should be applied based on the full value of Petitioner’s damages (conservatively estimated at $1,000,000) compared to the amount that Petitioner actually recovered ($100,000). Using these numbers, Petitioner’s settlement represents a 10 percent recovery of Petitioner’s damages. In like manner, the Medicaid lien should be reduced to 10 percent or $4,199.23 ($41,992.33 times .10). Therefore, Petitioner asserts that $4,199.23 is the portion of his third- party settlement that represents the equitable and fair amount the Florida Medicaid program should recoup for its payments for Petitioner’s medical care. The Agency was not a party to Petitioner’s negligence action or Petitioner’s $100,000 settlement. No portion of the $100,000 settlement represents reimbursement for future medical expenses. The undersigned finds that, based on the evidence in the record, Petitioner failed to prove, by a preponderance of the evidence, that a lesser portion of Petitioner’s settlement should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $37,500 from Petitioner’s recovery of $100,000 from a third party to satisfy its Medicaid lien.
The Issue The issue 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 is the amount payable to Respondent in satisfaction of the Agency’s Medicaid lien from a settlement, judgment, or award received by Petitioner from a third-party under section 409.910(17), Florida Statutes.
Findings Of Fact On June 7, 2005, 14-year-old Michael Mobley attended a beach party. The party occurred on, near, or about the beach premises of a hotel. Michael became intoxicated through consumption of alcohol, and drowned in the Gulf of Mexico. He was revived but suffered brain damage, leaving him unable to communicate, ambulate, eat, toilet, or care for himself in any manner. Michael is now dependent on his father for all aspects of his daily life. As a result of this incident, Michael suffered both economic and noneconomic damages. These damages included, at least, physical and mental pain and suffering, past and future medical expenses, disability, impairment in earning capacity, and loss of quality and enjoyment of life. Michael’s parents also suffered damages. Michael’s father’s employer maintained a self-funded Employee Benefit Plan governed by the Employee Retirement Income Security Act (ERISA Plan). The Florida Statutes provide that Respondent, Agency for Health Care Administration (AHCA), is the Florida state agency authorized to administer Florida’s Medicaid program. § 409.902, Fla. Stat.1/ Michael’s past medical care related to his injury was provided through health benefits from the ERISA Plan administered through CIGNA HealthCare and Horizon Blue Cross Blue Shield of New Jersey, and the Florida Medicaid program. The health benefits extended to Michael through his father’s employer totaled $515,860.29. The Florida Medicaid program provided $111,943.89 in benefits. The combined amount of medical benefits Michael received as a result of his injury is $627,804.18. The ERISA Plan provided the employer (through its administrators CIGNA and Horizon Blue Cross Blue Shield), with subrogation and reimbursement rights which provided entitlement to reimbursement from any settlement of 100 percent of what the plan had paid. ACS Recovery Services represented CIGNA and Horizon Blue Cross Blue Shield, the administrators of the Employee Benefit Plan, and on behalf of these clients ACS Recovery Services asserted a $515,860.29 claim against any settlement Michael received. The Florida Statutes provide that Medicaid shall also be reimbursed for medical assistance that it has provided if resources of a liable third party become available. § 409.910(1), Fla. Stat. In 2006, Michael’s parents, David Mobley and Brenda Allerheiligen, brought a lawsuit in Okaloosa County Circuit Court to recover all of Michael’s damages. By letter dated May 24, 2011, Petitioner’s attorney sent AHCA a Letter of Representation requesting the amount of any Medicaid lien and the itemization of charges. The letter also invited AHCA to participate in litigation of the claim or in settlement negotiations. AHCA through ACS Recovery Services by letter of June 9, 2011, asserted a Medicaid lien against any settlement in the amount of $111,943.89. Testimony at hearing established that a conservative “pure value” of Michael’s economic damage claims in the case, before consideration of such factors as comparative fault, application of the alcohol statute, a defendant’s bankruptcy, and the novel theories of legal liability, was $15 million. A Joint Petition for Approval of Settlement was filed in the Circuit Court in and for Okaloosa County, Florida, on or about June 14, 2012. It stated that although the damages Michael received far exceeded the sum of $500,000, the parties had agreed to fully resolve the action for that amount in light of the parties’ respective assessments of the strengths and weaknesses of their cases. The Petition specifically alluded to pending bankruptcy proceedings, summary judgment dismissal of claims premised upon a duty to provide lifeguarding services, Plaintiff’s remaining theories of liability, available defenses, specifically including the statutory “alcohol defense” as interpreted by the Florida courts, and anticipated costs of trial and appeal. The Petition also stated: “Plaintiff’s claim for past medical expenses related to the incident total $627,804.18. This claim consists of $515,860.29 paid by a self-funded ERISA plan and $111,943.89 paid by Medicaid.” As an attached exhibit, the Petition incorporated a Distribution Sheet/Closing Statement which allocated the $500,000 total recovery among the categories of attorneys’ fees, costs, outside attorneys’ fees, lien/subrogation/medical expenses, and net proceeds to client. The Distribution Sheet allocated $140,717.54 to “lien/subrogation/medical expenses,” subdivided into $120,000.00 to Blue Cross Blue Shield of Florida/CIGNA and $20,717.54 to Medicaid Lien. The proposed settlement did not further describe the $331,365.65 amount identified as “net proceeds to client,” or allocate that amount among distinct claims or categories of damages, such as physical or mental pain and suffering, future medical costs discounted to present value, disability, impairment in earning capacity, or loss of quality and enjoyment of life. Under the Joint Petition for Approval of Settlement, most of the total recovery thus remains uncategorized as to the type of damages it represents. The Joint Petition for Approval of Settlement was submitted on behalf of the Defendants and Plaintiffs in the lawsuit, including Michael Mobley, Petitioner here. Respondent did not participate in settlement negotiations or join in the Release, and no one represented its interests in the negotiations. The Agency has not otherwise executed a release of the lien. A Release was signed by the Plaintiffs contingent upon court approval of the Petition for Approval of Settlement. The court approved the settlement, with the exception of the Medicaid lien, pending an administrative determination of the amount of the lien to be paid. This $500,000 settlement is the only settlement received and is the subject of AHCA’s claim lien. In regard to the $500,000 settlement: Michael’s parents, Brenda Allerheiligen and David Mobley waived any claim to the settlement funds in compensation for their individual claims associated with their son’s injuries; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to waive its fees associated with its representation of Michael and his parents; The law firm of Levin, Papantonio, Mitchell, Rafferty & Proctor, P.A., agreed to reduce its reimbursement of the $60,541.22 in costs it advanced in the litigation of the case by 75% and accept $15,135.31 in full payment of its advanced costs; and ACS Recovery Services on behalf of CIGNA and Horizon Blue Cross Blue Shield agreed to reduce its $515,860.29 ERISA reimbursement claim asserted against the settlement and accept $120,000 in satisfaction of its $515,860.29 claim. AHCA is seeking reimbursement of $111,943.89 from the $500,000 settlement in satisfaction of its $111,943.89 Medicaid lien. AHCA correctly computed the lien amount pursuant to statutory formula. Deducting 25 percent for attorney’s fees and $60,541.22 taxable costs from the $500,000.00 recovery leaves a sum of $314,458.78, half of which is $157,229.39. In this case, application of the formula therefore results in a statutory lien amount of $111.943.89, the amount actually paid. § 409.910(17), Fla. Stat. The settlement agreement allocated $120,000.00 to be paid to the ERISA plan in partial reimbursement of the $515,860.29 it had paid for medical expenses. This amount must be added to the amount of $20,717.54 allocated for other medical expenses paid by Medicaid, to reflect a total amount of $140,717.54 allocated for past medical expenses in the settlement. The $500,000 total recovery represents approximately 3.3 percent of the $15 million total economic damages. The $20,717.54 allocated to “Medicaid Lien” in the distribution sheet of the settlement represents approximately 3.3 percent of the $627,804.18 of total past medical expenses. The sum of $3,694.15 represents approximately 3.3 percent of the $111,943.89 in medical costs paid by Medicaid. The 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. The parties have stipulated that this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17). Petitioner filed his Petition on December 13, 2013, within 21 days after the Medicaid lien amount was deposited in an interest-bearing account for the benefit of AHCA. While the evidence presented as to the settlement agreement was not sufficient to show the full amount allocated to medical expenses, the evidence does show that the total recovery includes at least $140,717.54 allocated as reimbursement for past medical expenses, which was to be divided unevenly between the ERISA plan and Medicaid. Petitioner failed to prove by clear and convincing evidence that the statutory lien amount of $111,943.89 exceeds the amount actually recovered in the settlement for medical expenses.
The Issue The amount to be paid by Petitioners, Pedro Garcia, a minor by and through his parents and natural guardians, Jesus Garcia and Norma Cisneros ("Petitioners") to Respondent, Agency for Health Care Administration ("AHCA"), out of the settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact Pedro Garcia ("Pedro") was born on October 30, 2014. When he was two months old, he presented to the emergency room ("ER") with vomiting and excessive crying. The doctors failed to diagnose an intestinal blockage and discharged Pedro home. Pedro was taken again to the ER in dire distress. He was airlifted to a pediatric hospital where emergency surgery was performed to remove 90 percent of his intestine. Pedro now suffers from the effects of having 90 percent of his intestine removed, including: nutritional deficiencies, diarrhea, dehydration, and abdominal distress. He cannot play with exertion and his activities are limited. Pedro will suffer the effects of his injury for the remainder of his life. A portion of Pedro's medical care related to the injury was paid by AHCA through the Medicaid program and Medicaid, through AHCA, provided $71,230.43 in benefits. Pedro's parents and natural guardians, Jesus Garcia and Norma Cisneros, brought a medical malpractice action against the medical providers and staff responsible for Pedro's care ("Defendants") to recover all of Pedro's damages, as well as their individual damages associated with their son's injury. Because of uncertainty on issues of liability and only a $250,000 insurance policy on the most culpable defendant, Pedro's medical malpractice action against the Defendants was settled for a confidential unallocated lump sum of $2,000,000. During the pendency of Pedro's medical malpractice action, AHCA was notified of the action and AHCA asserted a $71,230.43 Medicaid lien against Pedro's cause of action and settlement of that action. The Medicaid program through AHCA, spent $71,230.43 on behalf of Pedro, all of which represents expenditures paid for Pedro's past medical expenses. Another non-AHCA Medicaid provider, Integral Quality Care, provided $223,089.26 in past medical expenses on behalf of Pedro. Another non-AHCA Medicaid provider, Department of Health, Child's Medical Services, provided $168,161.12 in past medical expenses on behalf of Pedro. Accordingly, a total of $462,480.81 was paid for Pedro's past medical expenses. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Pedro's action against the Defendants. By letter, AHCA was notified of Pedro's settlement. AHCA has not filed a motion to set-aside, void, or otherwise dispute Pedro's settlement. Application of the formula in section 409.910(11)(f) to Pedro's $2,000,000 settlement requires payment to AHCA of the full $71,230.43 Medicaid lien. At the hearing, Petitioners presented the expert testimony of attorney Edward H. Zebersky, who represented Pedro throughout the underlying medical malpractice action against the Defendants. Without objection, Mr. Zebersky was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney since 1991. Since 1992, Mr. Zebersky has been a plaintiff's trial lawyer, with a substantial portion of his practice devoted to personal injury cases, including medical malpractice matters. He is a partner with the law firm of Zebersky Payne Shaw Lewenz, LLP and AV rated by Martindale-Hubbell. Mr. Zebersky is a member of numerous trial attorney associations and has held leadership positions in several associations, including president of the Florida Justice Association in 2006 and serving on the Board of Governors of the American Association for Justice for the past ten years. Mr. Zebersky handles jury trials. He has secured multiple eight-figure verdicts and several seven-figure verdicts, and he stays abreast of jury verdicts on other cases in his area. As a routine part of his practice, Mr. Zebersky makes assessments concerning the value of damages suffered by his clients. Mr. Zebersky was accepted as an expert in a Medicaid lien dispute at DOAH in the case of Herrera v. Agency for Health Care Administration, Case No. 16-1270MTR, 2016 Fla. Div. Admin. Hear. LEXIS 493 (Fla. DOAH Oct. 11, 2016). Mr. Zebersky was familiar with the circumstances surrounding Pedro's injury and medical malpractice claims and gave a detailed explanation of them. Mr. Zebersky reviewed Pedro's life care plan, which details Pedro's future medical needs, and an economist report, which calculated the present value of Pedro's future medical care and present value of Pedro's lost future earnings. The economist placed the present value of Pedro's future medical expenses and lost future earnings at approximately $9,500,000. According to Mr. Zebersky, past medical expenses would also be added to arrive at the full value of Pedro's economic damages. Mr. Zebersky testified that in addition to economic damages, a jury would also be asked to assign a value to past and future noneconomic damages (i.e., pain and suffering and loss of enjoyment of life). Mr. Zebersky testified that Pedro's claim for noneconomic damages would have an exceedingly high number, which as a "rule of thumb" is three times the value of his economic damages. Mr. Zebersky persuasively and credibly testified that the total value of all of Pedro's damages would be in excess of $20,000,000, and that valuing Pedro's damages at $15,000,000 is a very conservative and low valuation of his damages. Mr. Zebersky persuasively and credibly testified that the $2,000,000 settlement did not fully compensate Pedro for the full value of his damages. Mr. Zebersky testified that based on a conservative value of all of Pedro's damages of $15,000,000, the $2,000,000 settlement represents a recovery of 13.33 percent of the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of damages. Mr. Zebersky's testimony regarding the total value of Pedro's damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2,000,000 does not fully compensate Pedro for the full value of his damages. Mr. Zebersky further testified that because Pedro only recovered in the settlement 13.33 percent of the full value of his damages, he only recovered 13.33 percent of AHCA's $71,230.43 Medicaid lien, or $9,495.01. Mr. Zebersky testified that it would be reasonable to allocate $9,495.01 of the settlement to past medical expenses paid by AHCA through the Medicaid program. Following the settlement, Mr. Zebersky negotiated the non-AHCA Integral Quality Care Medicaid lien from $233,089.26 to $18,737.00, and the non-AHCA Department of Health, Child's Medical Services lien from $168,161.12 to $22,415. On cross-examination, Mr. Zebersky acknowledged that the $233,089.26 and $168,161.12 from Integral Quality Care and Department of Health, Child's Medical Services are part of Pedro's claim for past medical expenses. However, Mr. Zebersky failed to include these past medical expenses in applying the ratio to reduce the Medicaid lien amount owed to AHCA. AHCA successfully contested the methodology used to calculate the allocation to past medical expenses based on Mr. Zebersky's failure to include these past medical expenses in applying the ratio. Accordingly, Petitioners proved by a preponderance of the evidence that 13.33 percent is the appropriate pro rata share of Pedro's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $71,230.43, and the past medical expenses in the amounts of $233,089.26 and $168,161.12, which equals $462,480.81. Accordingly, following Mr. Zebersky's methodology and applying the $15,000,000 valuation to the proper amount of total past medical expenses of $462,480.81, the settlement portion properly allocable to Pedro's past medical expenses to satisfy AHCA's lien is $61,648.69 ($462,480.81 x 13.33 percent = $61,648.69).
The Issue The issue 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.
