The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds should be paid to Respondent, Agency for Health Care Administration (“AHCA”), to satisfy AHCA's Medicaid lien under section 409.910, Florida Statutes.1/
Findings Of Fact On the night of April 2, 2015, Mitchell Williams was riding his bicycle along a public sidewalk in Destin, Florida. The sidewalk intersected privately-owned driveways. At the north side of a privately-owned driveway at 239 Main Street, the concrete was broken at the point where the sidewalk and private driveway connected. The broken concrete created a dangerous condition to anyone riding along the sidewalk. Mr. Williams rode his bicycle into soft sand where the sidewalk should have been, causing his front wheel to bury into the sand before striking the leading edge of the undamaged portion of the sidewalk. Mr. Williams flipped over the handlebars of his bicycle and struck the concrete sidewalk face first. Mr. Williams underwent an anterior cervical discectomy and fusion (“ACDF”), placement of an inferior vena cava (“IVC”) filter, open reduction and internal fixation (“ORIF”) of a nasal maxillary fracture, and repair of facial lacerations. Mr. Williams was hospitalized for nine months. During his post- operative hospitalization, Mr. Williams developed stage IV decubitus ulcers that left him with significant scar tissue over his tailbone. The accident rendered Mr. Williams a partial quadriplegic from a cervical spinal cord injury. He remains confined to a wheelchair for mobility. Mr. Williams is totally dependent on others for his activities of daily living. Mr. Williams made a personal injury damages claim against the owner of the sidewalk, the City of Destin (“City”). On or about April 29, 2019, Mr. Williams entered into a pre-suit settlement of his tort claim against the City for $200,000, the statutory maximum provided by section 768.28(5), Florida Statutes. Because the City tendered the full amount for which it could be held liable, no express allocation for past medical expenses was made in the settlement. After settling with the City, Mr. Williams brought an action against Wagih Gargas, Gargas Commercial and City Produce of Fort Walton Beach, alleged as tortfeasors by virtue of their ownership and/or control of the private driveway where Mr. Williams was injured. The case against these parties remains pending with a very uncertain outcome as to liability. AHCA was properly notified of Mr. Williams’s personal injury action and indicated it had paid benefits related to his injuries in the amount of $70,460.35. AHCA’s payments were the only payments made for Mr. Williams’s past medical expenses. AHCA has asserted a lien for the full amount of $70,460.35 against Mr. Williams’s settlement proceeds. Mr. Williams will never fully recover from his injuries. He will require medical treatment and assistance with his activities of daily living for the rest of his life. Application of the formula in section 409.910(11)(f) would require Mr. Williams to pay back Medicaid all of its $70,460.35 lien. Mr. Williams contends that only a fraction of the settlement represents his recovery for past medical expenses. 10. Sections 409.910(11)(f) and 409.910(17)(b), as amended, provide for recovery by Medicaid for future medical expenses as well as past medical expenses. Section 409.910(17)(b) further imposes a clear and convincing burden of proof on a recipient attempting to show that the portion of the total recovery that should be allocated as past and future medical expenses is less than the amount calculated by AHCA. However, in Gallardo v. Dudek, 263 F. Supp. 3d 1247 (N.D. Fla. 2017), the court held that the provisions allowing Medicaid to recover future medical expenses and imposing a clear and convincing standard on recipients contesting AHCA’s calculations violate and are preempted by federal law. The parties have stipulated that Gallardo v. Dudek preempts the application of the future medical expenses provision and that Petitioner’s burden of proof in this section 409.910(17)(b) proceeding is a preponderance of the evidence. See also Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53 (Fla. 2018)(under federal law AHCA may only reach the past medical expenses portion of a Medicaid recipient's tort recovery to satisfy its Medicaid lien). At the hearing, Mr. Williams testified as to the extent of the injuries and damages he suffered in the April 2, 2015, bicycle accident. Mr. Williams testified persuasively as to the overwhelming impact of the injuries on his life. Prior to the accident, Mr. Williams made a good living as a skilled carpenter and enjoyed fishing and golfing in his spare time. None of these activities is possible now. He is an “incomplete” quadriplegic, meaning that he is confined to a wheelchair but has limited use of his arms. John Wesley is the attorney who represented Mr. Williams in his personal injury lawsuit. Mr. Wesley is an 18-year practicing attorney who is board certified in civil trial practice. He is a partner with Wesley, McGrail & Wesley in Ft. Walton Beach. Mr. Wesley testified that he handles catastrophic personal injury and death cases, including cases involving injuries similar to those suffered by Mr. Williams. Mr. Wesley regularly evaluates the damages suffered by injured people. He testified that he does all of his work on a contingency fee basis, which makes the valuation of cases critical to his livelihood. Mr. Wesley’s representation of Mr. Williams gave him intimate familiarity with his client’s injuries and damages. Mr. Wesley testified that there are two aspects to the valuation of a case: liability and damages. As to liability, the attorney must ask whether the potential client is partly or wholly responsible for his own injuries due to factors such as comparative negligence or alcohol intake, and whether the tortfeasor is shielded under a legal concept such as sovereign immunity. The attorney must then decide whether the damages are worth pursuing even if the tortfeasor’s liability is unquestioned. Mr. Wesley testified that there was no question in this case as to the damages, which were catastrophic. The problem in Mr. Williams’s case was liability, because of the presence of contributory negligence and alcohol defenses. The most significant factor limiting Mr. Williams’s recovery was the sovereign immunity cap on damages. The City of Destin tendered $200,000, the full limit it would be required to pay under the cap. To recover more would require passing a claim bill in the legislature, an unlikely outcome given Mr. Williams’s contributory negligence. Under the circumstances, Mr. Wesley determined that nothing further could be recovered from the City. Mr. Williams’s net recovery, after attorney’s fees, was $140,000. Mr. Wesley provided detailed testimony about how the accident occurred and the mechanism of injury. He credibly testified regarding the process he undertook in evaluating and arriving at his opinion related to the value of the damages suffered by Mr. Williams. He met with Mr. Williams, evaluated the facts of the case, reviewed all the medical information and all other records and reports regarding Mr. Williams’s injuries, analyzed liability issues and comparative fault, developed economic damages estimates, and valued non-economic damages such as past and future pain and suffering, loss of capacity to enjoy life, and mental anguish. Mr. Wesley testified that the full value of Mr. Williams’s damages was likely in excess of $19 million. That figure included Mr. Williams’s pain and suffering, mental anguish, loss of quality of life, and economic damages. Mr. Wesley testified that non-economic damages were the greatest element of the damages sustained by Mr. Williams, and therefore were the largest driver of the valuation and the greatest portion of damages recovered in the settlement. Mr. Wesley stated that he used a very conservative valuation figure of $6 million for the purpose of resolving Medicaid’s lien, rather than his actual valuation of more than $19 million. If the conservative valuation of $6 million is accepted, then the $200,000 recovery is only 3.33 percent of the value of the damages. Mr. Williams’s $140,000 net recovery amounted to only 2.33 percent of the full measure of his damages. Mr. Wesley’s testimony was uncontroverted, reasonable, and persuasive. Charles F. Beall, Jr., a member of the Pensacola firm Moore, Hill & Westmoreland, P.A., testified on behalf of Mr. Williams. Mr. Beall is board certified in both civil trial and appellate practice. His practice focuses on defending large scale personal liability and mass tort cases. Mr. Beall has handled more than 225 appellate cases in state and federal courts. His cases have resulted in over 60 published opinions. At the trial court level, Mr. Beall has represented hundreds of clients ranging from individual homeowners to multinational corporations in a wide variety of civil litigation, including product liability suits, contract claims, and insurance coverage disputes. He has tried more than a dozen civil jury trials to verdict as lead counsel and has served on the trial team for several multi-week trials. Mr. Beall was accepted without objection as an expert in the valuation of personal injury claims. Mr. Beall and his firm specialize in defending serious and catastrophic personal injury cases throughout Florida. Mr. Beall has reviewed thousands of personal injury cases and formally reported potential verdicts and valuations to insurance companies that have retained him to defend their insureds. Mr. Beall has worked closely with economists and life care planners to identify the relevant damages of persons suffering catastrophic injuries. Mr. Beall testified that he has handled cases involving catastrophic injuries similar to those suffered by Mr. Williams. Mr. Beall testified that he arrived at his valuation opinion by examining all the elements of damages suffered by Mr. Williams. He agreed with Mr. Wesley that Mr. Williams’s greatest element of loss was non-economic damages. Mr. Beall reviewed numerous verdicts that had been affirmed on appeal involving injuries similar to those suffered by Mr. Williams. Mr. Beall opined that the valuation of the total damages suffered by Mr. Williams was in excess of $10 million. He agreed that Mr. Wesley’s more conservative $6 million valuation was appropriate for purposes of the lien reduction formula. AHCA did not offer any witnesses or documentary evidence to question the credentials or opinions of either Mr. Wesley or Mr. Beall. AHCA did not offer testimony or documentary evidence to rebut the testimony of Mr. Wesley and Mr. Beall as to valuation or the reduction ratio. AHCA did not offer alternative opinions on the damage valuation method suggested by either Mr. Wesley or Mr. Beall, both of whom testified knowledgably and credibly as experienced practitioners. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $200,000 does not begin to fully compensate Mr. Williams for the full value of his damages. Petitioner asserts that the settlement allocation should be based on the ratio between the net settlement, $140,000, and the conservative valuation of $6 million, meaning that 2.33 percent of the settlement proceeds should be allocated to past medical expenses. Petitioner cited no authority and the undersigned is not otherwise persuaded that section 409.910 allows attorney’s fees to be deducted from the settlement prior to calculating the percentage of the settlement that should be allocated to past medical expenses. With that correction, the undersigned finds that Petitioner has proven by a preponderance of the evidence that 3.33 percent (the ratio that $200,000 bears to $6 million) is the appropriate pro rata share of Mr. Williams’s past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. ACHA’s lien for past medical expenses is $70,460.35. Applying the 3.33 percent pro rata ratio to this total yields $2,346.33, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue The issue in this case is the amount that must be paid to Respondent from the proceeds of Petitioner’s confidential settlement with one defendant to satisfy Respondent’s Medicaid lien against the proceeds.
Findings Of Fact On September 12, 2010, Petitioner, then 19 years old, was thrown from his all-terrain vehicle (ATV) when the rubber portion of one tire separated from the rim, and the ATV rolled over. Petitioner was taken by air ambulance to Orlando Regional Medical Center, a trauma center in the area, where it was determined that Petitioner suffered a burst fracture of the eighth and ninth thoracic vertebrae (T-8 and T-9). The nature of this injury was described in layman’s terms by Petitioner’s trial counsel in the pending personal injury lawsuit as follows: In a burst fracture, the vertebra literally bursts, breaking into small bone fragments; in Petitioner’s case, one of the bone fragments sliced through the spinal cord at the T-8/T-9 level, resulting in complete paraplegia with zero function below that level. Two days later, Petitioner underwent surgery that involved putting in rods and bone grafts, and performing a spinal fusion. Three weeks later, Petitioner was transferred to ORMC Lucerne Rehabilitation Hospital, where he received care in the Brain Injury Rehabilitation Center. He was discharged on November 10, 2010. After his discharge, Petitioner had outpatient physical therapy and occupational therapy for several weeks. Petitioner developed complications that required readmission to the hospital on February 18, 2011. He was admitted initially with a kidney stone and pyelonephritis. He was placed in an induced coma, became septic, developed respiratory distress, and was placed on a ventilator. He remained hospitalized until March 28, 2011. Petitioner then restarted outpatient physical therapy and occupational therapy, which continued for several months. Petitioner was paralyzed from the chest down, and has been determined to be disabled by the Social Security Office. Nearly all of Petitioner’s past medical expenses following the ATV incident were paid for by Medicaid. As of March 2, 2015, the total amount of medical assistance provided by the Medicaid program was $322,222.27, representing over 92 percent of the $347,044.67 paid in total for past medical expenses. The rest of Petitioner’s medical expenses were paid for by United HealthCare ($1,457.40) and Medicare ($23,365.00). Petitioner brought a lawsuit to recover his damages against multiple defendants who are allegedly liable for his injuries under tort theories of products liability and negligence (tort lawsuit). The date on which the tort lawsuit was filed was not established in the record; the third amended complaint, in evidence, was filed on March 12, 2015. Petitioner’s lead counsel, Manuel Reboso, testified at hearing that the tort lawsuit was pending and set for trial in February 2016. Discovery was ongoing, but no expert witness depositions had been taken yet. AHCA is not a party in Petitioner’s tort lawsuit, but was notified of the action at some point after it was filed. By letter dated March 2, 2015, AHCA asserted a $322,222.27 Medicaid lien against Petitioner’s cause of action and any future settlement of, or recovery from, that action. Thereafter, AHCA updated the Medicaid lien amount to $324,607.25. On April 8, 2015, Petitioner reached a settlement with one defendant. The terms are reduced to writing in a document called “Confidential Settlement Agreement, General Release, and Indemnity Agreement” (settlement agreement). The settlement agreement is executed by Petitioner, one defendant, and the defendant’s insurer. The settlement did not resolve the tort lawsuit. The other parties to the tort lawsuit were not parties to the settlement. The settlement agreement was not presented to or reviewed by the trial court for approval. Instead, the settlement agreement is confidential, and the tort lawsuit continues. To the extent possible, the confidentiality will be protected, as set forth in a Protective Order that seals and restricts the disclosure of specified exhibits. The settlement agreement is an “undifferentiated settlement”; that is, “[t]here is no section of the release that goes through and itemizes the different elements of damage.” (Tr. at 93). Although the settlement agreement does not itemize the different elements of damage, one provision sets forth the agreement between Petitioner and the settling defendant that Petitioner’s “alleged damages have a value in excess of $25,000,000” (emphasis added), and that Petitioner and the settling defendant “have agreed to allocate $4,817.56 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.” Mr. Reboso testified at hearing that the amount allocated in the settlement agreement to past medical expenses is incorrect. When asked why the parties allocated that amount in the settlement agreement, Mr. Reboso candidly admitted, “Because math is not my forte. I calculated it wrong. . . . Had I done the math correctly, that would be the correct number, $13,881.79.” (Tr. at 71-72). He admitted that he drafted this provision, and intended to put in the amount that bears the same proportion to the total past medical expenses as the settlement amount bears to the total value of Petitioner’s damages. Accordingly, by his testimony, he offered a “correction” to the settlement agreement’s allocation for past medical expenses, from $4,817.56 to $13,881.79. According to Mr. Reboso’s own testimony, then, the settlement agreement’s “agreed” allocation of $4,817.56 for past medical expenses is unreasonable. By letter dated April 24, 2015, Mr. Reboso notified AHCA of the settlement and provided AHCA with a copy of the executed settlement agreement, along with an itemization of Petitioner’s litigation costs in the tort lawsuit. The letter requested AHCA to advise Petitioner of the amount AHCA would accept from the settlement proceeds. AHCA responded by letter dated July 6, 2015, setting forth its calculation of the amount payable pursuant to the statutory formula in section 409.910(11)(f). As set forth in AHCA’s letter, the statutory formula first deducts from the settlement proceeds a 25 percent allowance for attorney’s fees. Next, the remaining proceeds are further reduced by $106,559.62, as the taxable costs incurred in connection with the tort lawsuit. After deducting the attorney fee allowance and the taxable costs, the remainder is then divided by two. The result of the statutory formula calculation is that the amount of settlement proceeds payable to AHCA is $321,720.16. The parties stipulated that AHCA’s July 6, 2015, letter accurately sets forth the calculation of the statutory formula amount. Petitioner does not dispute AHCA’s calculation of the attorney fee allowance, nor does Petitioner dispute the amount of taxable costs determined by AHCA and used in the statutory formula calculation. There is also no dispute that AHCA has spent more than $321,720.16 in payments through the Medicaid program for past medical assistance provided to Petitioner as a result of injuries sustained in the September 2010 ATV incident. As of the March 2, 2015, AHCA letter, the medical assistance provided by Medicaid totaled $322,222.27. The parties stipulated that “[n]o portion of the $322,222.27 paid by AHCA through the Medicaid program on behalf of Mr. Villa represent expenditures for future medical expenses, and AHCA did not make payments in advance for [future] medical care.” By the same token, there was no showing that the Medicaid program would ever pay in advance, or prepay, future medical expenses of current Medicaid beneficiaries. As authorized by section 409.910(17)(b), Petitioner initiated this proceeding to “contest the amount designated as recovered medical expense damages” payable to AHCA pursuant to the statutory formula. Accordingly, Petitioner endeavored to prove “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated” pursuant to the statutory formula. Petitioner attempted to prove that the settlement agreement’s provision regarding total damages and allocation to past medical expenses should be accepted as reasonable and adopted. However, neither the agreed total value of “alleged” damages nor the agreed allocation of settlement proceeds to compensate for past medical expenses in Petitioner’s settlement agreement with one defendant can be credited as reasonable products of arms-length adversarial negotiation. Instead, the partial allocation to just one part of one category of damages (medical expenses) was admittedly prepared by Mr. Reboso shortly after notice of the Medicaid lien, and appears pointedly designed for use in this proceeding to support Petitioner’s positions. No other purpose for the limited allocation to only past medical expenses was suggested. And Mr. Reboso expressly opined that the limited allocation stated in the settlement agreement is not a reasonable allocation; instead, he supports an allocation that is three times the number in the settlement agreement. The one- sided nature of this provision in the settlement agreement could not be more clearly revealed than by Mr. Reboso’s concession that the settling parties “agreed” to an incorrect allocation to past medical expenses because Mr. Reboso made a math error in drafting the provision. A more reasonable inference is that the settling defendant, unaffected by this provision, apparently ceded authority to Petitioner to put into the agreement whatever the Petitioner drafted, error and all. As an alternative to relying on the settlement agreement’s partial allocation (in an unreasonably low amount) to past medical expenses, Petitioner attempted to prove the total value of Petitioner’s damages that would be proven to and awarded by a jury if/when the tort lawsuit goes to trial. Petitioner’s position is that the percentage derived from dividing the settlement proceeds by the total damages should be multiplied by the past medical expenses to determine AHCA’s share of the settlement proceeds. In preparation for the trial in the pending tort lawsuit, Petitioner retained experts to evaluate and quantify the economic damages to Petitioner by reason of the injuries from the September 2010 ATV incident. Paul M. Deutsch, Ph.D., a life care planner and vocational rehabilitation specialist with Paul M. Deutsch and Associates, P.A., was retained to prepare a life care plan for Petitioner.5/ Dr. Deutsch also developed some information about Petitioner’s future capacity to work. Dr. Deutsch did not testify in this proceeding. Petitioner also retained F.A. Raffa, Ph.D., an economist with Raffa Consulting Economist, Inc., to develop projections of Petitioner’s damages due to lost income and lost future earning capacity, reduced to present value. Dr. Raffa also reduced to present value the life care plan cost projections developed by Dr. Deutsch. Dr. Raffa did not testify in this proceeding. Both the life care plan and economic report, acknowledged to be hearsay, were admitted for the limited purpose of showing material relied on by Petitioner’s damage valuation experts in formulating their opinions offered at hearing. Mr. Reboso, lead counsel in Petitioner’s tort lawsuit, was accepted as an expert in valuation of damages. He testified that he relied on the Deutsch life care plan and Raffa economic report to gauge Petitioner’s economic damages, and that he relied on his own experience and his review of other jury verdicts to gauge Petitioner’s likely recovery for noneconomic damages. Considering these factors, he offered his opinion that as of the October 5, 2015, hearing date, the total value of Petitioner’s damages is estimated to be $25,000,000. The economic damage estimate is somewhat dated, however; the life care plan indicates that it was prepared on July 11, 2013, more than two years ago; and the economic report is dated October 17, 2013, nearly two years ago. The life care plan also appears to be incomplete.6/ Neither report has been sponsored and defended by its author in testimony, either in this proceeding or in depositions in the pending tort lawsuit in which experts have not yet been deposed. One would expect that both the life care plan and the economic report will be updated before the authors are deposed in the tort lawsuit. That assumption was likely true before Petitioner died on October 31, 2015, given the caveats in the reports regarding changing facts. The life care plan is self- described as a “dynamic document,” while the cover letter to the economic report states: “Please note that this analysis is based upon the best information currently available and is subject to change should additional information be received.” Petitioner’s unfortunate death on October 31, 2015, will alter the tort lawsuit and the expert evidence and opinions offered regarding Petitioner’s damages. Petitioner’s death surely constitutes a change in information that undermines the legitimacy of both the life care plan and the economic report as reasonable predicates for an assessment of Petitioner’s damages. Using two-year-old expert reports that have not been updated or defended in an adversarial proceeding as the sole predicate for offering an opinion as to the total value of Petitioner’s economic damages would have been questionable without consideration of Petitioner’s death. Yet Petitioner’s experts offered their opinions as to what Petitioner’s total damages were as of the October 5, 2015, hearing, relying solely on the two-year-old reports for the projected future economic damages. At hearing, Petitioner’s two experts described the same approach for reaching their identical opinions. As Mr. Reboso explained, he reached his total damage value estimate by taking the mid-point of the range of economic damages identified in the Deutsch and Raffa reports, and adding to that “eight to ten million dollars” for past and future noneconomic damages. He explained that past noneconomic damages would be awarded by a jury for pain and suffering from the date of the incident to the date of the trial, and an additional amount would be awarded by a jury for future pain and suffering from the trial date forward. Mr. Reboso testified that his opinion as to the amount Petitioner is expected to be awarded in a jury trial of his case is supported by comparisons with jury verdicts in other cases. In describing his comparisons, he highlighted such factors as the relative ages and life expectancies of the victims. He offered his opinion that a large noneconomic damage award is likely for Petitioner because he is young. Neither expert offered an opinion as to how much of the total damages amount to which they opined is attributable to future medical expenses. No non-hearsay evidence was offered to prove the amount of future medical expenses, with the exception of Mr. Reboso’s testimony that Petitioner’s future medical expenses would be $9.1 million at the low end. In fairness, however, Mr. Reboso was relying solely on hearsay, and he retreated from that testimony by later admitting uncertainty as to how much of the life care plan cost projections (which are hearsay) were future medical expenses.
The Issue At issue in this proceeding is whether the infant, gacob Tomlian, has suffered an injury for which compensation should be awarded under the Florida Birth-Related Neurological Injury compensation Plan.
Findings Of Fact Fundamental findings 1. Jacob Tomlian (Jacob) is the natural son of Dora Lee and Kevin James Tomlian. He was born a live infant on May 11, 1991, at Humana Hospital-Bennett n/k/a Westside Regional Medical Center, a hospital located in Broward County, Florida, and his birth weight was in excess of 2500 grams. 2. The physician providing obstetrical services during the birth of Jacob was Mark S. Grenitz, M.D., who was, at all times material hereto, a “participating physician" in the Florida Birth-Related Neurological Injury Compensation Plan (the Plan), as defined by Section 766.302(7), Florida Statutes. The birth of Jacob Tomlian 3. At or about 6:28 a.m., May 11, 1991, Dora Lee Tomlian was admitted to Humana Hospital-Bennett for induction of labor. At the time, Jacob was post-term, with a gestational age of approximately 42 weeks and Mrs. Tomlian’s obstetrician, Mark S. Grenitz, M.D., proposed, the cervix being favorable, to attempt a vaginal birth after a cesarean section (a "VBAC"). 4. Upon admission, a vaginal exam revealed dilation of the cervix at 1-2 centimeters, effacement at 50 percent, and the fetus at station -3. Fetal monitoring was commenced at 7:30 a.m. and continued throughout labor until 4:16 p.m., shortly before Mrs. Tomlian was taken to an operating room for a cesarean section, discussed infra.? During the entire time, as evidenced by the fetal monitor strips, the fetal heart tone was completely normal, with no evidence of fetal compromise or oxygen deprivation. 5. At 7:50 a.m., a second vaginal exam revealed dilation of the cervix at 2 centimeters, effacement at 80 percent and the fetus at station -2. Dr. Grenitz performed an amniotomy (an artificial rupture of the fetal membrane) to induce labor, and a large amount of clear amniotic fluid was observed. Labor ensued, and Mrs. Tomlian slowly progressed through labor until her cervix was dilated to 3 centimeters. Thereafter, labor failed to progress and Dr. Grenitz, diagnosing an arrest in the active phase of labor, proposed to proceed with a cesarean section. 6. At or about 4:20 p.m., Mrs. Tomlian was taken to the operating room, and at 4:44 p.m., Jacob was delivered by cesarean section. During delivery two loops of the nuchal cord were observed around Jacob’s neck, but upon delivery he exhibited a cry and no meconium was present. Jacob's Apgar scores were 7 at one minute and 8 at five minutes. 7. The Apgar scores assigned Jacob are a numerical expression of the condition of a newborn infant, and reflect the sum points gained on assessment of heart. rate, respiratory effort, muscle tone, reflex irritability, and color, with each category being assigned a score ranging from the lowest score of 0 through a maximum score of 2. As noted, at one minute Jacob’s Apgar score totaled 7, with heart rate, respiratory effort and reflex irritability being graded at 2 each, muscle tone being graded at 1, and color being graded at 0. At five minutes, Jacob's Apgar score totaled 8, with heart rate, respiratory effort and reflex irritability being graded at 2 each, and muscle tone and color being graded at 1 each. Such scores would be characterized by an obstetrician as "normal", and are inconsistent with those that would normally be expected of an infant who developed fetal compromise or hypoxic insult during labor or delivery.? 8. Following delivery, Jacob was administered oxygen by mask for about one minute. Physical examination was essentially normal, with the exception that Jacob was noted to have a large head for his age, equinovarus positioning of both feet and diminished tone (hypotonia/limpness). Consequently, Jacob was admitted to the newborn nursery with the recommendation that he undergo an orthopedic consultation. 9. On May 12, 1991, Jacob had an orthopedic consultation. Upon examination, the physician M.A., Hajianpout, M.D., observed that "[b]loth feet seem to easily go to neutral rotation", diagnosed a mild positional deformity of both feet, concluded that Jacob "will correct without any problem", and proposed a follow-up consult following his discharge. 10. On May 13, 1991, a cranial ultrasound was performed to address the observation that Jacob had a large head for his age at birth. That examination concluded: Through an anterior fontanelle approach, coronal and sagittal views of the neonatal brain were obtained showing the ventricles to be normal in size and configuration. There is no evidence of an intracranial hemorrhage. The echotexture of the brain parenchyma is normal. No masses or deviation of the midline structures was seen. IMPRESSION: NORMAL NEONATAL CRANIAL ULTRASOUND. 11. The remainder of Jacob’s neonatal course was uneventful, and on May 15, 1991, he and his mother were discharged from the hospital. Subsequent. developments 12. Following discharge, Jacob continued to be followed orthopaedically by Dr. Hajianpour. According to his records, Dr. Hajianpour treated Jacob from May 28, 1991 through October 1992. 13. The records basically reveal that Dr. Hajianpour initially diagnosed Jacob with a mild positional deformity and started Jacob with "straight last shoes" with a monthly follow- up. In July 1991, Dr. Hajianpour again diagnosed a mild deformity of both feet, but also observed metatarsus adductus with internal torsion of tibia bilaterally. Accordingly, he switched Jacob to a "Miami brace" to correct the internal tibial torsion. The "Miami brace" was continued through January 1992, at which time it appeared to Dr. Hajianpour that the feet were normal and the internal tibial torsion had resolved. Accordingly, Dr. Hajianpour rejected further use of the "Miami brace", proposed that Jacob use high top sneakers, and that he return in 3 months for a follow-up visit. 14. Dr. Hajianpour continued to follow Jacob for developmental stages (i.e., every 3 months) and Jacob demonstrated a fairly normal developmental pattern until his last evaluation in October 1992. At that time, Dr. Hajianpour noted the return of some tibial torsion. Specifically, the examination revealed: EXAMINATION: Today he comes in. He has started standing and taking a few steps. However, both feet can go to neutral position and even to about 30 degrees of external rotation. He sits with his knees internally rotated. I discussed with the mother that this should not be allowed; and he should sit like an Indian. As far as the feet are concerned, both of them look good. The foot- thigh angle seems to be within normal limits. There is some degree of tibial torsion. However, I think I can still wait for a few more months and see how he does. PLAN: If he continues having a problem, then we will put him in a Miami brace. 15. On January 14, 1993, Jacob’s parents took him to Michael A. Tidwell, M.D., for a second opinion regarding his bilateral foot deformity. After taking a history from the parents, reviewing Dr. Hajianpour’s records, and examining Jacob, Dr. Tidwell concluded: IMPRESSION: 1. Mild postural deformity of both feet. RECOMMENDATIONS : It would appear that the feet have responded well to the treatment Dr. Hajianpour initiated. The current state of development there seems to be some residual postural problems, but nothing that would need be treated. I anticipate the child will continue to walk totally normally and develop at his own rate. At the present time, I do not see any need for orthopedic intervention. 16. On February 2, 1993, following a referral from Jacob's pediatrician, Ivan Fandel, M.p.,4 Jacob was examined by Stuart B. Brown, M.D., a pediatric neurologist. Dr. Brown's report of that examination, dated February 4, 1993, concluded that Jacob "has a spastic diplegia of the lower extremities and is delayed in his speech and language production from an expressive standpoint. His gait is awkward and dynamically spastic."° Dr. Brown did not, however, identify the cause of Jacob’s condition. 17. Finally, Jacob was examined by Michael S. Duchowny, M.D., a pediatric neurologist, on May 17, 1994. Dr. Duchowny concluded that: In summary, Jacob’s neurologic examination reveals evidence of marked motor delay for both axial and appendicular musculature. He demonstrates generalized hypotonia with hyperreflexia and pyramidal signs suggesting that the motor findings are on a central basis. There is also an element of ataxia. Jacob has oromotor problems and an obvious and marked speech delay. I regard Jacob’s neurologic problems to involve both motor and mental status. I believe that they are both quite substantial and in all likelihood are permanent. The postures of the lower extremities are likely to reflect deformity rather than spasticity. Dr. Duchowny, like Dr. Brown, did not address the cause of Jacob’s condition. 18. Based on the proof, the record supports the conclusion that Jacob suffers from a condition that has rendered him permanently and substantially mentally and physically impaired. What remains to be resolved is the genesis of that condition or , more pertinent to these proceedings, whether the proof supports the conclusion that such condition was caused by "oxygen deprivation or mechanical injury occurring in the course of labor, delivery, or resuscitation in the immediate post-delivery period in a hospital," as required by Section 766.302(2), Florida Statutes. The cause of Jacob's condition 19. As to whether Jacob’s condition was caused by "oxygen deprivation or mechanical injury occurring in the course of labor, delivery, or resuscitation in the immediate post-delivery period in a hospital," petitioners offered the deposition testimony of Larry Schneck, M.D., a pediatric neurologist. It was Dr. Schneck’s opinion that Jacob suffered a substantial and permanent mental and physical impairment as a consequence of an injury to the brain caused by oxygen deprivation during the course of labor and delivery. Such opinion was, however, rendered as an ultimate conclusion, and no information or insight as to the basis of his conclusions was offered.°® 20. Compared with the opinion of Dr. Schneck, respondent offered the testimony of Charles Kalstone, M.D., an obstetrician and gynecologist.’ It was Dr. Kalstone’s opinion that Jacob did not suffer any oxygen deprivation during the course of labor and delivery and, consequently, he did not suffer any injury through those mechanisms which could account for his current condition. ® 21. As the predicate for his opinion, Dr. Kalstone observed that the fetal heart monitoring was completely normal, with no evidence to suggest there was any fetal compromise or oxygen deprivation; that the infant was delivered by cesarean section, which is associated with less trauma than natural child birth; that upon delivery Jacob’s Apgars were normal and there was no meconium present; and, that Jacob's neonatal course was otherwise atypical for birth trauma or hypoxia because there were no neonatal seizures or evidence of acidosis or renal failure. 22. Here, I accept the testimony and opinions of Dr. Kalstone as being the more credible and substantial as to whether Jacob’s condition can reasonably be attributed to oxygen deprivation during the course of labor or delivery. Indeed, given the relatively uneventful labor and delivery, as well as Jacob’s postnatal presentation, Dr. Kalstone’s opinions are most consistent with the proof in this case.
Conclusions SSSRARANCES For Petitioner: Scott Mm, Newmark, Esq. 1212 Southeast Third Avenue Fort Lauderdale, Florida 33316 For Respondent; W. Douglas Moody, ur., Esq. Bateman Graham 300 Fast Park Avenue Tallahassee, Florida 32301 For Intervenor: Todd S. Payne, Esq. Tripp, Scott, Conklin & smith Post Office Box 14245 Fort Lauderdale, Florida 33302
Other Judicial Opinions A party who is adversely affected by this final order is entitled to judicial review pursuant to Sections 120.68 and 766.311, Florida Statutes. Review proceedings are governed by the Florida Rules Of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the Agency Clerk Of The Division Of Administrative Hearings and a_ second copy, accompanied by filing fees prescribed by law, with the appropriate District Court Of Appeal. See, Section 120.68(2), Florida Statutes, and Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 598 So.2d 299 (Fla. ist DCA 1992). The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. 18
The Issue What is the proper amount of Petitioners' personal injury settlement payable to Respondent, Agency for Health Care Administration ("AHCA"), to satisfy AHCA's $51,130.05 Medicaid lien under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulations of the parties, the evidence presented at the hearing, and the record as a whole, the following findings of fact are made: On January 31, 2007, Rickey D. ("Rickey"), who was then four years old, was struck by a car outside an apartment complex. Rickey suffered severe life-threatening injuries, including a fractured femur, fractured skull, and a closed head injury with traumatic brain damage. JPHS, pp. 9 and 10, ¶ 1. Rickey's medical care related to the injury was paid by Medicaid. Medicaid provided $51,130.05 in benefits associated with Rickey's injury. The $51,130.05 constituted Rickey's entire claim for past medical expenses. JPHS, p. 10, ¶ 2. Rickey's parents and natural guardians, Lolita D. and Rickey O.D., brought a personal injury claim against the driver/owner of the car that caused the accident and the apartment complex where the accident occurred ("Defendants"). They sought recovery of all of Rickey's damages associated with his injuries, as well as their own individual damages associated with their son's injuries. JPHS, p. 10, ¶ 3; Pet. Ex. 4. The personal injury action was settled for a lump sum, unallocated amount of $285,000.00, which consisted of $275,000.00 paid by the apartment complex and $10,000.00 in bodily injury/uninsured motorist ("BI/UM") insurance policy limits paid by the driver.1/ The circuit court in Miami-Dade County approved the minor's settlement by entry of an Order Approving Settlement, dated February 2, 2014. 2/ JPHS, p. 10, ¶ 4 and ¶ 5; Pet. Ex. 5. As a condition of Rickey's eligibility for Medicaid, Petitioners' assigned to AHCA their right to recover from liable third parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. During the pendency of Petitioners' lawsuit, AHCA was notified of the court action. JPHS, p. 10, ¶ 6. AHCA did not commence a civil action to enforce its rights under section 409.910, or intervene or join in Petitioners' court action against the Defendants.3/ JPHS, p. 10, ¶ 7. Instead, AHCA asserted a $51,130.05 Medicaid lien against Petitioners' cause of action and settlement of that action. JPHS, p. 10, ¶ 6. AHCA did not file a motion to set aside, void, or otherwise dispute Petitioners' settlement with the Defendants. JPHS, p. 10, ¶ 8. The Medicaid program spent $51,130.05 on behalf of Rickey, all of which represents expenditures paid for Rickey's past medical expenses. JPHS, p. 10, ¶ 9. Application of the formula at section 409.910(11)(f) to Rickey's $285,000.00 settlement requires payment to AHCA of the full $51,130.05 Medicaid lien. JPHS, p. 10, ¶ 10. As ordered by the circuit court, Petitioners deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights. This constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). JPHS, p. 11, ¶ 11. Testimony of Jorge C. Borron, Esquire The only witness called during the hearing was Borron. He has been a trial attorney for 32 years and is a sole practitioner at his Coral Gables law office, Jorge C. Borron, LLC. The majority of Borron's practice is personal injury litigation with a focus on car accidents. He has handled cases involving injuries to children. He routinely handles jury trials, and depending on the year, will have two to four jury trials each year. Borron stays current regarding personal injury verdicts by reviewing jury verdict reporters and discussing personal injury verdicts and valuations with other attorneys in his geographical area. After taking a case, Borron regularly reviews and studies his client's medical records and deposes/interviews doctors and other experts concerning his client's injuries. Borron testified that as a routine part of his practice he makes assessments concerning the value of personal injury damages suffered by his clients. Petitioners proffered Borron as an expert in the valuation of damages. It is worth noting that AHCA did not voir dire Borron and did not object to his tender as an expert in the valuation of personal injury damages.4/ The undersigned ruled that he would consider Borron's opinion testimony on the subject of the valuation of damages.5/ Borron represented Rickey and his family in the underlying personal injury lawsuit. Originally, Attorney Knecht represented Rickey and his family, but Knecht brought Borron into the case in 2013 to handle the jury trial due to Knecht's advanced age. As a part of his representation, Borron reviewed and familiarized himself with the accident report and Rickey's medical records, deposed/interviewed experts and fact witnesses, and met with Rickey and his family numerous times. Rickey's Accident, Injuries, and Prognosis On January 31, 2007, young Rickey followed his older sister out of the apartment where they lived with their parents. He walked between two cars in the parking lot and darted out in front of a car, which struck him. In the accident, Rickey suffered a compound fracture of his femur, a skull fracture, a traumatic brain injury, and lost consciousness. Rickey was transported to Jackson Memorial Hospital where he received medical treatment until he was discharged on February 22, 2007. At the hospital, his discharge papers diagnosed him with a left comminuted femur fracture and a nondisplaced skull fracture. Pet. Ex. 2. Rickey's injury had a tremendous impact on his life. Besides the adverse physical effects from his femur fracture, Rickey suffers from the effects of a traumatic brain injury with cognitive deficits, abnormal behavior issues, and an attention deficit disorder. During his representation of Rickey, Borron sent his client to two neurologists. They both separately diagnosed Rickey with problems associated with the executive function in the frontal lobe of his brain. Dr. Jorge A. Herrara issued a detailed report and concluded, among other things, that Rickey's condition points "to the presence of impairments in the executive functions mediated by the frontal lobes (referring to Rickey's brain)." Pet. Ex. 2, p. 14. The other neurologist, Dr. Ross, conducted an electrocardiograph with abnormal results. The uncontroverted evidence revealed that Rickey's traumatic brain injury is permanent and he will suffer its adverse effects and certain health and emotional-related issues for the remainder of his life. Based on his training, experience, and knowledge of the case, it was Borron's opinion that Rickey's personal injury damages had a value of between $1,500,000.00 to $2,500,000.00. In preparation for settlement mediation in the underlying personal injury case, Borron undertook to estimate the value of Petitioners' claim for future medical expenses as well. He consulted with Rickey's neurologists concerning his prognosis to determine what kind of medical treatment he would need in the future. Based on these discussions, Borron estimated that Rickey would need $815,000.00 in medical care from age nine (his age at the time of mediation) until age 22. In Borron's opinion, adding the $815,000.00 for future medical expenses to Rickey's $51,130.05 claim for past medical expenses would constitute Rickey's total economic damages. Borron opined that the claim for economic damages added to Petitioners' claim for noneconomic damages would push the full value of Rickey's personal injury damages to the range of $1,500,000.00 to $2,500,000.00. Had the case not settled and a trial taken place, Borron testified that he would have expected a jury to determine the value of Rickey's damages to be at, or between, $1,500,000.00 to $2,500,000.00. Borron discussed Petitioners' case with Attorney Knecht and consulted with several other attorneys. They concurred that Rickey's personal injury damages had a value of between $1,500,000.00 to $2,500,000.00. Borron testified that using $1,250,000.00 as the estimated value of all Rickey's personal injury damages would be a conservative value. Due to defenses raised and issues of disputed liability with the apartment complex, the case against the apartment complex settled just prior to trial for $275,000.00, plus a $10,000.00 settlement with the insurance company for uninsured motorist coverage, for a total settlement of $285,000.00. The uncontroverted evidence revealed that the combined settlement of $285,000.00 received by Petitioners did not fully compensate Rickey for the value of his damages. Borron opined that in using the value of all Rickey's damages of $1,250,000.00 compared to the $285,000.00 settlement, that the total settlement amount recovered represented a proportional recovery of 22.8 percent of the true value of all Rickey's personal injury damages. Borron testified that because Rickey only recovered 22.8 percent of the true value of his damages in the global settlement, that Petitioners had likewise recovered only 22.8 percent of Rickey's claim for past medical expenses in the settlement agreement, or $11,657.66. Borron testified that an allocation of $11,657.66 of the $285,000.00 settlement as recovery for Rickey's past medical expenses would be a reasonable and fair allocation. Of particular consequence to this case, AHCA did not call any expert witnesses nor did it present any evidence to rebut Petitioners' presentation, proof, or proposed allocation of $11,657.66 to past medical expenses. AHCA did not dispute or present any persuasive evidence or arguments that Rickey's injuries were overstated or incorrectly described by Borron. On AHCA's cross-examination of Borron, the methodology used by Borron to arrive at his opinion concerning a fair allocation of past medical expenses was not challenged or persuasively overcome by AHCA. Simply put, the amount of $11,657.66 proposed by Petitioners as a fair allocation of past medical expenses from the settlement agreement was unrefuted and unchallenged by AHCA. Petitioners proved by a preponderance of the evidence that $11,657.66 was a fair allocation of the total settlement amount to past medical expenses. There was no basis or evidence in the record to reject Borron's opinion or reach any other conclusion concerning a fair allocation other than the amount of $11,657.66 proposed by Petitioners.
The Issue On the merits, the issues for determination are, first, whether a lesser portion of Petitioner's total recovery from a third-party tortfeasor should be designated as recovered medical expenses than the share presumed by statute; if so, then the amount of Petitioner's recovery to which Respondent's Medicaid lien may attach must be determined. Before the merits may be addressed, however, it will be necessary to decide whether, in light of the recent judicial invalidation of portions of the Medicaid Third-Party Liability Act, an administrative remedy remains available to Petitioner.
Findings Of Fact On June 1, 2012, Petitioner Michael Lee Smathers, II ("Smathers"), was shot two times while sitting in a vehicle parked outside of Club Lexx, a nightclub in Miami-Dade County. The shooter was a security guard who worked for Force Security, LLC ("Force"), which provided security for Club Lexx as an independent contractor. The guard also shot Smathers's friend, the driver of the vehicle, who died as a result of his injuries. The record is silent as to the circumstances giving rise to this violence. One bullet struck Smathers in the arm, the other in the stomach, which caused life-threatening injuries. Smathers received aggressive emergency medical care and survived, but he is permanently and severely disabled. Bullet and bone fragments damaged his spinal cord, leaving Smathers paralyzed from the waist down. He is incontinent, has serious gastric difficulties, experiences constant pain, cannot have sex or reproduce, and suffers from chronic depression, among other conditions. Because it is undisputed that Smathers's injuries are severe, permanent, and indeed catastrophic, there is no need to catalogue them all here. Smathers requires round-the-clock care and will never return to the workforce due to his impairments and chronic pain. He will incur medical expenses stemming from the gunshot wounds for the rest of his life. At all relevant times, Smathers's health insurance was provided, at least in part, by Medicaid. Medicaid is a program "which provides for payments for medical items or services, or both, on behalf of any person who is determined by the Department of Children and Families . . . to be eligible on the date of service for Medicaid assistance." § 409.901(16), Fla. Stat. Medicaid is jointly funded by the federal government and the states that have elected to participate in the program, which include Florida. Respondent Agency for Health Care Administration ("AHCA") is the agency responsible for administering Medicaid in the state of Florida. It is undisputed that Medicaid provided $206,445.41 in medical assistance on Smathers's behalf as a result of the injuries he sustained in the attack at Club Lexx. Unfortunately for Smathers, the Club Lexx shooting gave him many causes of action but no deep-pocket defendants to sue for damages. He brought suit, nonetheless, against Force and others in the state circuit court (the "Smathers Lawsuit"). Force, it happened, was insured against general liability, but only up to $1 million per occurrence, which obviously would be woefully inadequate to compensate Smathers. Force's insurer ("Evanston") sought a judicial declaration in the U.S. district court that its policy did not provide coverage for the allegations made against Force in the Smathers Lawsuit. The federal court rejected Evanston's coverage position and held that the insurer had a duty to defend Force. Evanston appealed the decision. While this appeal was pending, Evanston, Force, and Smathers entered into a settlement agreement, pursuant to which Evanston paid the policy limit of $1 million to Smathers in exchange for the usual releases. (Smathers did not release the other defendants in the Smathers Lawsuit.) The settlement is undifferentiated——that is, no attempt was made therein to apportion the proceeds between the various elements of compensatory damages potentially available to Smathers. After deducting attorney's fees and costs, Smathers's net recovery from the settlement was $546,894.15. Upon learning of the settlement, AHCA asserted its rights under the Medicaid Third-Party Liability Act (the "Act"), section 409.910, which grants AHCA an automatic lien upon "collateral" such as settlements and settlement agreements for the full amount of medical assistance provided by Medicaid to a recipient for which a third party might be liable. There is, however, an important limitation on AHCA's right of repayment from liable third parties: Because federal law prohibits a state from attaching a Medicaid lien to any part of a recipient's tort recovery not designated as payments for medical care, the lien can encumber only the portion of a settlement or recovery that represents compensation for medical expenses. As a means of complying with this anti-lien law, section 409.910(11)(f) prescribes a formula for determining how the proceeds of a settlement or other recovery from a third-party tortfeasor should be divided between medical expense damages and all other (i.e., nonmedical) compensatory damages, and it directs that the portion attributable to payments for medical care be paid to AHCA up to the total amount spent by Medicaid. The parties agree that, under this statutory formula, AHCA is entitled to be reimbursed in full for Medicaid's outlays on Smathers's behalf ($206,445.41) because that amount, which represents approximately 20.6% of Smathers's gross settlement proceeds ("GSP"), is less than the portion of his GSP that paragraph (11)(f) otherwise presumptively designates as recovered medical expense damages. Exercising his rights under section 409.910(17)(b), which provides the "exclusive method for challenging the amount of third-party benefits payable to" AHCA, Smathers initiated this proceeding to contest the statutory designation of $206,445.41 as payments for medical care. Paragraph (17)(b) confers upon DOAH final order authority over this administrative remedy. Smathers presented evidence regarding his total provable damages ("TPD"),1/ which he asserts are between $16 million and $22 million. Smathers's TPD includes past medical expenses of $2.7 million and future medical expenses of $5.7 million, for a total of $8.4 million in medical expense damages.2/ Medical expense damages and general damages comprising injury, pain, disability, disfigurement, and loss of capacity for enjoyment of life (collectively, "pain and suffering") constitute, effectively, the entirety of Smathers's TPD.3/ Smathers contends that the amount of his settlement that should be allocated as reimbursement for medical expense damages, and thus become subject to the Medicaid lien, is $12,903. Smathers arrives at this figure as follows. He reasons that because he recovered just 6.25% of his TPD ($1 million is 6.25% of $16 million), AHCA likewise should be paid just 6.25% of its total expenditures, which works out to $12,903. (That sum is 1.29% of $1 million.) For ease of discussion, this approach will be referred to as the settlement- ?????? to-value ratio method, expressed as ?????? (??), where ?? = actual Medicaid expenditures. The amount payable to AHCA pursuant to the formula set forth in section 409.910(11)(f) (the "Statutory Distribution") is either (a) an amount equal to .75 times the gross settlement, minus taxable costs, divided by 2 (hereafter, the "Presumed Recovered Medical Expense Damages" or "PRMED"); or (b) the total dollar amount of medical assistance that Medicaid actually has provided (hereafter, the "Actual Expenditure"), whichever is lower. The ratio of PRMED to GSP reflects the portion of the GSP that the statutory formula allocates by default as reimbursement to the injured party for both past and future medical expenses (hereafter collectively referred to as "Medical Damages"). ?????? The statute, it will be seen, presumes that a uniformly calculable percentage (i.e., ??????????) of any recipient's undifferentiated GSP constitutes compensation for Medical Damages. In the run of cases, this percentage likely will be somewhere in the neighborhood of one-third, although in particular cases, as here, the percentage——which cannot exceed 37.5%——can be smaller.4/ Section 409.910(17)(b), Florida Statutes (2017), provides that "[i]n order to successfully challenge the amount designated as recovered medical expenses, the recipient must prove, by clear and convincing evidence, that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f)."5/ Thus, the presumption regarding the allocation of the recipient's recovery to Medical Damages is one which affects the burden of proof. See §§ 90.302(2) and 90.304, Fla. Stat. To elaborate, paragraphs (11)(f) and (17)(b) operate in tandem to create the rebuttable presumption that a certain percentage of the recipient's GSP is attributable to Medical Damages (the presumed fact), and paragraph (17)(b) makes plain that the recipient has the burden of proving, by clear and convincing evidence, the nonexistence of the presumed fact. The presumption at issue, according to paragraph (17)(b), is not a "bursting bubble" presumption that vanishes upon the introduction of credible evidence contrary to the presumed fact, see section 90.302(1), Florida Statutes, but rather it imposes upon the recipient the burden to prove that a smaller portion of the settlement is attributable to Medical Damages. On April 18, 2017, the U.S. District Court for the Northern District of Florida entered a Final Judgment in Gallardo v. Dudek, No. 4:16-cv-116, 2017 U.S. Dist. LEXIS 59848 (N.D. Fla. Apr. 18, 2017), which declared that section 409.910(17)(b) is preempted by federal law (and thus unconstitutional under the Supremacy Clause) at least insofar as the statute authorizes AHCA to "seek[] reimbursement of past Medicaid payments from portions of a recipient's recovery that represents [sic] future medical expenses." Id. at *31. The court enjoined AHCA from "enforcing that statute in its current form" and specifically forbade AHCA from "requiring a Medicaid recipient to affirmatively disprove" the statutory allocation of third-party recoveries as reimbursement for past and future medical expenses "where . . . that allocation is arbitrary." Id. Three months later, on AHCA's motion, the court amended its judgment, slightly, to read as follows: [P]ortions of § 409.910(11)(f), Fla. Stat. (2016) and § 409.901(17)(b), Fla. Stat. (2016) are preempted by federal law. It is declared that the federal Medicaid Act prohibits the State of Florida Agency for Health Care Administration from seeking reimbursement of past Medicaid payments from portions of a recipient's recovery that represents [sic] future medical expenses. The State of Florida Agency for Health Care Administration is therefore enjoined from doing just that: seeking reimbursement of past Medicaid payments from portions of a recipient's recovery that represents [sic] future medical expenses. It is also declared that the federal Medicaid Act prohibits the State of Florida from requiring a Medicaid recipient to affirmatively disprove § 409.910(17)(b)'s formula-based allocation with clear and convincing evidence to successfully challenge it where, as here, that allocation is arbitrary and there is no evidence that it is likely to yield reasonable results in the mine run of cases. Gallardo v. Senior, 2017 U.S. Dist. LEXIS 112448, *24 (N.D. Fla. July 18, 2017).
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), for medical expenses paid on behalf of Clifford J. Deyampert (“Petitioner” or “Mr. Deyampert”) pursuant to section 409.910, Florida Statutes (2015),1/ from settlement proceeds received by Mr. Deyampert from a third party.
Findings Of Fact The following findings of fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On July 25, 2015, Mr. Deyampert was attending a party held at a friend’s house and was shot in the throat by another guest. The bullet traveled down Mr. Deyampert’s throat, struck his spinal cord, and caused Mr. Deyampert to be paralyzed from the chest down. As a result, Mr. Deyampert is permanently disabled, disfigured, and wheelchair-bound. In addition, Mr. Deyampert is bowel and bladder incontinent.2/ Medicaid paid $76,944.67 in order to cover Mr. Deyampert’s past medical expenses. No portion of the $76,944.67 paid by Medicaid on Mr. Deyampert’s behalf represents expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Mr. Deyampert initiated a personnel injury lawsuit by making a claim against a homeowner’s insurance policy that covered the shooter. Mr. Deyampert’s personal injury action settled for $305,000, and that was the limit of an aforementioned insurance policy.3/ The General Release memorializing the settlement stated the following: Although it is acknowledged that this settlement does not fully compensate Clifford Deyampert 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 Clifford Deyampert for a fraction of the total monetary value of his alleged damages. The parties agree that Clifford Deyampert’s alleged damages have a value in excess of $6,000,000, of which $76,944.67 represents Clifford Deyampert’s claim for past medical expenses. Given the facts, circumstances, and nature of Clifford Deyampert’s injuries and this settlement, the parties have agreed to allocate $3,847.23 of this settlement to Clifford Deyampert’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 Clifford Deyampert’s damages. Further, the parties acknowledge that Clifford Deyampert may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses Clifford Deyampert will incur in the future. However, the parties acknowledge that Clifford Deyampert, or others on his behalf, have not made payments in the past or in advance for Clifford Deyampert’s future medical care and Clifford Deyampert 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. During the pendency of Mr. Deyampert’s personal injury action, AHCA was notified of the suit and asserted a Medicaid lien in the amount of $76,944.67 against any damages received by Mr. Deyampert. Via a letter issued on July 24, 2017, Mr. Deyampert’s attorney notified AHCA that Mr. Deyampert’s personal injury action had settled. The letter asked AHCA to specify what amount it would accept in satisfaction of the $76,944.67 Medicaid lien. AHCA responded by demanding full payment of the lien. Section 409.910(11)(f) sets forth a formula for calculating the amount that AHCA shall recover in the event that a Medicaid recipient or his or her personal representative initiates a tort action against a third party that results in a judgment, award, or settlement from a third party.4/ AHCA is seeking to recover $76,944.67 in satisfaction of its Medicaid lien. See § 409.910(11)(f)4., Fla. Stat. (providing that “[n]otwithstanding any provision in this section to the contrary, [AHCA] shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid.”). Valuation of the Personal Injury Claim F. Emory Springfield represented Mr. Deyampert during the personal injury action and testified during the final hearing. Mr. Springfield has practiced law for 32 years. He owns his own law firm and handles cases involving personal injury, workers’ compensation, and social security disability. Mr. Springfield has experience with jury trials and monitors jury verdicts issued in his fields of practice. Mr. Springfield routinely assesses the value of damages suffered by injured parties. He makes those assessments by determining the injured person’s life expectancy, evaluating the injuries, and conferring with lifecare planners about the injured party’s need for future care. In addition, Mr. Springfield learns as much as possible about the injured party’s past life activities and compares those activities to what the injured party is presently capable of doing. Mr. Springfield also assesses an injured party’s damages by examining jury verdicts from other cases. Mr. Springfield was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Springfield is of the opinion that Mr. Deyampert’s damages (including damages for pain and suffering and economic damages) are well in excess of $6 million. According to Mr. Springfield, the $305,000 settlement does not “come close” to fully compensating Mr. Deyampert for all of his damages. Furthermore, the $305,000 settlement only represents a five percent recovery of the more than $6 million in damages incurred by Mr. Deyampert. Therefore, in Mr. Springfield’s opinion, only five percent (i.e., $3,847.23) of the $76,944.67 in Medicaid payments for Mr. Deyampert’s past medical expenses were recovered. Mr. Deyampert also presented the testimony of R. Vinson Barrett, Esquire, during the final hearing. Mr. Barrett is a trial attorney who has been practicing in North Florida since the mid 1970s. Over the last 30 years, he has focused his practice on the areas of medical malpractice, medical products liability, and pharmaceutical liability. Mr. Barrett routinely handles jury trials and monitors jury verdicts issued in his practice areas. Mr. Barrett routinely assesses the value of damages suffered by injured parties. According to Mr. Barrett, a personal injury attorney must be skilled at estimating the value of a client’s claim. Otherwise, the high cost of bringing a case to trial can result in a personal injury attorney losing money and going bankrupt. Mr. Barrett was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Barrett gave the following testimony regarding Mr. Deyampert’s damages: This man not only is a paraplegic, but during all this, and I couldn’t really tell from the records I read whether the bullet caused this or some intubation in the hospital, but he got air into the space between his lung and his diaphragm, which can be a very painful problem, he had to be intubated to get that out. He developed, I believe, sepsis, at some point in his -- in his treatment; and it’s already evidence early on in his situation that he’s going to be, and is very susceptible to pressure ulcers on his skin. His skin is going to be prone to breakdown from prolonged periods of sitting in the same position and that sort of thing. Fortunately, he has enough strength left in his upper body that he’s able to ameliorate that somewhat. He’s able actually, on his own, and after a lot of rehab, to roll over in his bed to different positions even though his lower extremities are not working at all. He’s able to -- he’s able to reposition himself in his chair using the strength of his arms, so that will cut down a little bit on that. But he had already developed a pressure ulcer or two by the time he got into rehab in this case. He – so, he’s got no use at all, it appears, of his lower extremities. He had a number of complications that had to be dealt with. He was in the hospital a long time. His overall prospects after rehabilitation -– and he was still in some rehabilitation as early as about February of this year, so I’m not totally sure he’s through all his rehab yet. He has to take rehabilitation courses to learn -– relearn how to do things. He’ll need his home made wheelchair accessible, cabinets, and thing[s] like that, all the things that a person normally does without thinking about, are going to be challenges for him just in daily household stuff. He will have to have modifications, most likely, of his kitchen, his bathroom, that sort of thing. And so, yeah, there’s quite a bit to work within this case to come up with an evaluation. Mr. Barrett opined that $6 million was a “very conservative” estimate of the damages suffered by Mr. Deyampert. Mr. Barrett also opined that allocating five percent of the $76,000 claim (i.e., $3,847.23) to past medical expenses was a reasonable and rational allocation to past medical expenses and reflected the ratio of the amount recovered to the actual value of Mr. Deyampert’s damages. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Springfield and Mr. Barrett was compelling and persuasive. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Springfield’s and Mr. Barrett’s decades of experience with litigating personal injury lawsuits make them very compelling witnesses regarding the valuation of damages suffered by injured parties such as Mr. Deyampert.5/ Accordingly, the undersigned finds that Mr. Deyampert proved by a preponderance of the evidence that $3,847.23 constitutes a fair and reasonable recovery for past medical expenses actually paid by Medicaid.
The Issue The issue to be decided is the amount payable to Respondent in satisfaction of the Agency’s Medicaid lien from a settlement received by Petitioners from a third party, pursuant to section 409.910(17), Florida Statutes.1/
Findings Of Fact Nazyrah Jones was born May 13, 2008, at North Florida Regional Hospital. The attending physician was Dr. Anthony Agrios.2/ During her birth, Nazyrah suffered an anoxic brain injury, a deprivation of oxygen to her brain. As a result, Nazyrah is totally disabled, unable to sit up, stand, crawl, walk, speak, or feed herself. Nazyrah is unable to swallow and requires frequent suctioning of her airway to remove substances which are, or may become, aspirated. Nazyrah’s condition is permanent. Nazyrah’s mother, Callena Jones, lives alone with Nazyrah and is Nazyrah’s primary care-giver. Ms. Jones relies upon a home-health care agency, to assist with Nazyrah’s daily care. Ms. Jones currently attends Webster University where she is working toward a master’s degree in mental health counseling. No evidence was introduced upon which to base a finding that Ms. Jones is employed. Claims for compensation for birth-related neurological injuries alleging medical malpractice are governed by Florida’s Neurological Injury Compensation Plan administered by the Florida Birth-Related Neurological Injury Compensation Association (NICA), pursuant to sections 766.301 through 766.316, Florida Statutes. NICA is the exclusive remedy for such medical malpractice claims, except that a civil action “shall not be foreclosed where there is clear and convincing evidence of bad faith or malicious purpose or willful and wanton disregard of human rights, safety, or property[.]” § 766.303(2), Fla. Stat. Ms. Jones filed a civil medical malpractice lawsuit on her behalf and on behalf of Nazyrah, against both North Florida Regional Hospital and Dr. Agrios, alleging “willful and wanton misconduct” on behalf of the medical providers. Petitioners obtained a settlement of $825,000.003/ from the medical providers related to Nazyrah’s injuries. Petitioners presented no evidence as to what portion of the $825,000.00 total settlement was designated by the parties as compensation to Petitioners for medical expenses, or conversely, for various other types of damages either Nazyrah or her mother may have suffered, such as pain and suffering, loss of enjoyment of life, or loss of future earnings. Neither the settlement agreement itself, nor any documents prepared in connection therewith, was introduced into evidence. No witness offered any testimony on this issue. Based upon the evidence presented at hearing, all of the settlement might have been apportioned to medical care, or none of it might have been. Petitioners offered the testimony of Richard Kolodinsky, a civil trial lawyer who has practiced since 1978, has been board certified in civil trial law for approximately 20 years, and is a member of the American Board of Trial Advocates, among other professional distinctions. Mr. Kolodinsky was retained by Petitioners to review the case and offer his opinion on the full value, or total damages, of the underlying medical malpractice claim. In preparation for his testimony, Mr. Kolodinsky reviewed Petitioners’ medical records, the Life Care Plan for Nazyrah Jones, the pleadings filed in the underlying medical malpractice lawsuit, a list of payments by Medicaid on behalf of Nazyrah Jones, the NICA statute, the settlement in the underlying medical malpractice lawsuit, the Guardian ad Litem report to the court evaluating the settlement, the court order approving the settlement, and a “tender” from Dr. Agrios. Mr. Kolodinsky testified that, in his opinion, the full value of the underlying medical malpractice claim was at least $25 million. Mr. Kolodinsky testified that his opinion was “based primarily on the Life Care Plan . . . in summary . . . that provided for costs of about $11 million over the child’s lifetime[.]”4/ Further, he testified that it’s my understanding that Ms. Jones is a college graduate and may have a master’s degree, if I’m remembering correctly, and so I looked at the potential for lost earnings that was also mentioned in the Life Care Plan. And for a college graduate, lifetime earnings are in the range of 2.1 million.5/ The Life Care Plan was not introduced into evidence. Mr. Kolodinsky testified, generally, that a Life Care Plan is usually prepared as evidence in a personal-injury case by a life care planner who evaluates the cost of services, as determined by a physician after examination of the injured party, to be needed by the injured party over his or her lifetime. Mr. Kolodinsky testified that, together, the expenses for Nazyrah’s ongoing care plus Ms. Jones’ potential lost earnings “brings us to a special damages number of about $13 million.”6/ Mr. Kolodinsky next testified as to his opinion of the full value of non-economic damages in the underlying case. His explanation was as follows: And so on top of that, you know, you have of course the noneconomic damages component . . . for a profoundly injured, profoundly handicapped child, that is a life of constant care and deprivation that this child suffers minute to minute and the mother deals with minute to minute and will deal with for the rest of their lives. So, you know, these are big numbers. You know, the valuation on personal injury and medical malpractice claims, you know, there was sort of a rule of thumb that people talk about three times the specials, but that really is a rule of thumb that almost never is accurately applied, and as we all know that is very difficult to predict what a jury would do in any particular cases but you have to think that when you have special damages in the $13 million range that the damages for the child could easily be another $10 million on top of that and for the mom somewhere in the couple million to 5 million range. So, that brings us up to in the 25 million plus range, and if there were no damage caps, if there were no limitations on insurance, if there was no NICA, if there were no problems with the case, and you were looking at, okay, what are the full damages for this case absence of any of those other issues, that’s what I would think that that would be worth.7/ On cross-examination, when questioned whether he had tried cases similar to Nazyrah’s, Mr. Kolodinsky testified, “I don’t do NICA cases and in part because of the limitations on damages,”8/ and that he has never tried a case involving an anoxic injury at birth “because of NICA.”9/ Mr. Kolodinsky has tried cases in which a child was a victim of medical malpractice, and has tried cases which involve Medicaid and Medicare liens. Mr. Kolodinsky conducted no jury verdict research and did not compare this case to any case tried to verdict. Mr. Kolodinsky’s testimony regarding Petitioners’ economic damages was imprecise, utilizing hedging language such as costs “of about $11 million” and earnings “in the range of $2.1 million.” Mr. Kolodinsky provided no basis for his opinions other than the Life Care Plan, which was not introduced into evidence and the genesis and role of which was explained only in the most general terms. Mr. Kolodinsky’s testimony regarding Petitioners’ non- economic damages was lacking in detail, failed to establish the basis for his opinion, and was unpersuasive. No other evidence was introduced as to the basis for Mr. Kolodinsky’s opinion on the full value of the non-economic damages in the underlying medical malpractice claim. Mr. Kolodinsky’s opinion was the only evidence introduced on the issue of valuing the total damages in the underlying medical malpractice claim. Respondent, Agency for Health Care Administration (AHCA), is the Florida state agency authorized to administer Florida’s Medicaid program. § 409.902, Fla. Stat. The Florida Statutes provide that Medicaid shall be reimbursed for medical assistance that it has provided if resources of a liable third party become available. § 409.910(1), Fla. Stat. Florida Medicaid, through AHCA, paid $172,890.44 for Nazyrah’s medical expenses. Thus, Respondent has asserted a Medicaid lien in the amount of $172,890.44 against any proceeds received from a third party. The amount to be recovered for Medicaid medical expenses from a judgment, award, or settlement from a third party is determined by the formula in section 409.910(11)(f), which establishes the amount at one-half of the total recovery, after deducting attorney’s fees of 25% of the recovery and all taxable costs, up to the total amount actually paid by Medicaid on the recipient’s behalf. The parties stipulated that application of the formula in section 409.910(11)(f) to the entire proceeds of the settlement yields $172,890.44.10/ Petitioners argued that the Agency should be reimbursed a lesser amount than the lien of $172,890.44. Petitioners offered two theories for calculating the correct amount to be reimbursed to the Agency. The first theory, and the one advanced by Petitioners’ expert, is that the Agency should recover from its lien in the same proportion that Petitioners’ recovered from the full value of the damages in the underlying case. Petitioners again relied upon Mr. Kolodinsky to establish the proportion of the Medicaid lien which the Agency should be reimbursed under this theory. In this regard, Mr. Kolodinsky testified as follows: So then you look at what proportion the settlement is to the 25 million and you get I think it’s like 3 or 4 percent. We can do the math and determine correctly. Then you apply the percentage, the 3 or 4 percent, to the $172,000 that Medicaid is seeking and that’s the net that Medicaid gets; 4 percent, 3 percent of 172,000, because that is the proportion that the settlement was of the total value of the case.11/ Mr. Kolodinky’s testimony, again, was imprecise and unpersuasive. Assuming the full value of the damages at $25 million, Petitioners recovered 3.3% of the full value of their claim in the $825,000 settlement. Under Petitioners’ first theory, the Agency should be reimbursed 3.3% of its lien for medical expenses, or $5,705.38.12/ Under an alternate theory, advanced for the first time in Petitioners’ Proposed Final Order, Petitioners maintain the Agency should recover in the same proportion that past medical expenses are to the full value of the damages in the underlying case. Under this theory, Petitioners designate the amount paid by Medicaid, $172,890.44, as Petitioners’ past medical expenses. Petitioners introduced no direct evidence to establish the amount to be recovered by the Agency under this theory. Petitioners posit, correctly, that $172,890.44 is .69% of $25 million. Applying that percentage to the settlement amount returns a figure of $5,692.50, which Petitioners claim is due to the Agency in satisfaction of its lien.13/ Both theories rely upon establishing the full value of damages in the underlying medical malpractice claim at $25 million. Petitioners did not prove the value of the damages in underlying medical malpractice by clear and convincing evidence. Petitioners failed to prove by clear and convincing evidence that the statutory lien amount of $172,890.44 exceeds the amount actually recovered in the settlement for medical expenses.
The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent) from the proceeds of Petitioner’s confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2019).1
Findings Of Fact Paragraphs 1 through 9 are the facts admitted8 and agreed upon by the parties, and required no proof at hearing. On December 7, 2012, A.F., an eight-year-old female, underwent an initial psychiatric evaluation. Following this assessment, A.F. was started on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD). A.F. was 4 Respondent’s Proposed Final Order provided that “Petitioner presented two witnesses: Andrew Needle, Esq., and Kenneth Bush, Esq.” The undersigned did not hear any testimony from Mr. Needle or Mr. Bush. 5 Respondent’s Exhibit 1, a “Provider Processing System Report,” contained a different “Total Claims” amount than the amount of A.F.’s medical expenses paid by AHCA to which the parties stipulated. Without testimony this exhibit is hearsay, and cannot support a finding of fact. As discussed at hearing, the parties agreed to use the stipulated amount: $261,334.61. 6 Although Petitioner’s PFO recites that Petitioner “did not order a transcript of the proceedings,” a review of the filed transcript shows otherwise. See Hearing Tran, pg. 10, lines 4–7. 7 The Hearing Transcript was electronically filed with DOAH on August 3, 2020; the hard– copy original Transcript was filed with DOAH on August 14, 2020. 8 Statement 3 has been reworded for clarity purposes. prescribed 18mg of the ADHD drug9 that was the subject of the personal injury litigation. On March 30, 2013, at the age of nine, and shortly after her ADHD medication was uptitrated from 18mg to 27mg daily, A.F. attempted suicide by way of hanging with a scarf fastened to her bunk bed. That action detrimentally impeded oxygen flow to A.F.’s brain for a dangerously prolonged period of time, resulting in extensive neurological damage and substantial motor impairment; ultimately leaving A.F. in a permanent vegetative state. Ms. Lopez, on behalf of A.F., brought a product liability and medical malpractice action to recover all of A.F.’s damages related to her prescription of the ADHD drug. This action was brought against various pharmaceutical and medical malpractice defendants. As a result of the alleged medical malpractice and pharmaceutical product liability claims, A.F. suffered a massive hypoxic brain injury. Since this incident and the resulting hypoxic brain injury, A.F. has been in a permanent vegetative state requiring 24/7 skilled nursing care. In 2020, Ms. Lopez, on behalf of A.F., settled her tort action for a limited confidential amount, due to significant liability challenges with her claims; even though she believed that A.F.’s injuries were tens of millions of dollars in excess of the recovery. AHCA was properly notified of A.F.’s lawsuit against the defendants and indicated it had paid benefits related to the injuries from the incident in the amount of $261,334.61. AHCA has asserted a lien for the full amount it paid, $261,334.61, against A.F.’s settlement proceeds. AHCA has maintained that it is entitled to application of section 409.910’s formula to determine the lien amount. Applying the statutory 9 The name of the drug is not being used based on the terms in the confidential settlement. reduction formula to this particular settlement would result in no reduction of the lien given the amount of the settlement. AHCA paid $261,334.61 on behalf of A.F., related to her claim against the liable third parties. The parties stipulated that AHCA is limited by section 409.910(17)(b) to the past medical expense portion of the recovery and that a preponderance of the evidence standard should be used in rendering this Final Order. There were two settlements regarding A.F.’s care and treatment: one with the doctor(s) who allegedly committed medical malpractice; and the second involving the pharmaceutical maker of the ADHD drug prescribed to A.F. Although AHCA was notified when the medical malpractice case was settled, AHCA did not file a lien on any of the recovery from the medical malpractice settlement. Limited information about the medical malpractice settlement was discussed, but the medical malpractice settlement is not considered in this Final Order. Petitioner’s Exhibit 1 is a February 16, 2019, letter (lien letter) from Conduent Payment Integrity Solutions, a subcontractor to Health Management Systems which is an authorized agent of AHCA “to operate the Florida Medicaid Casualty Recover Program.” In addition to directing A.F.’s counsel to review section 409.910, to determine the “responsibilities to Florida Medicaid,” Mark Lyles, Conduent’s case manager and author of this letter also posted the amount of the lien asserted by AHCA: $261,334.61. A.F. lives with her mother, sister, grandmother, and Ms. Lopez’s significant other. Everyone in the household can and does provide care and assistance to A.F. when necessary. Ms. Lopez rarely leaves A.F. in someone else’s care. A.F. is unable to speak and requires total care. Ms. Lopez described the injuries sustained by A.F. Ms. Lopez also detailed the care she has provided and is continuing to provide to A.F. since the event. A.F.’s activities of daily living (ADLs) must be met with assistance in every aspect of her being. When A.F. wakes up each morning: she is given all her medications; her diaper is changed; she is fed via a feeding tube; she is given lung treatments each morning; her trachea tube is cleaned and changed at times; and she is turned or moved every two hours to prevent sores forming on her skin. A.F. is on a ventilator at night and every four hours she is catheterized because she stopped urinating. In October 2019, A.F. started having seizures. Ms. Lopez testified that A.F.’s care is mentally and emotionally draining, and very tiring. She further added A.F.’s care is very repetitive and the “best way to describe it [each day] is the movie GROUNDHOG DAY,” (Columbia Pictures 1993); the same thing, every day. A.F. is confined to her hospital bed, a wheelchair, or a chair to which she can be secured. Although Ms. Lopez testified that A.F. is “entitled” to skilled nursing care 24/7, Ms. Lopez has learned how to care for A.F. because “they can’t staff me” with a skilled nurse (presumably referring to a Medicaid standard for care). Mr. Rafferty is a Florida board-certified civil trial lawyer with 26 years’ experience in personal injury law. He concentrates and specializes in pharmaceutical cases, including defective drug cases involving catastrophic injury, throughout Florida and the United States. As part of his ongoing practice, he routinely evaluates the damages suffered by injured clients, and relies on his own experience and his review of other jury verdicts to gauge any likely recovery for non-economic damages. Mr. Rafferty continues to handle cases involving similar injuries suffered by A.F. Mr. Rafferty was tendered and without objection was accepted as an expert regarding valuation of personal injury damages. Mr. Rafferty, along with Nathan Carter as co-counsel, represented A.F. and her mother in the civil litigation. He testified to the difficulties associated with pharmaceutical litigation in general, and then focused on the problematic causation and liability issues related to A.F. and her injuries. Mr. Rafferty met with the family; observed A.F. can no longer perform her ADLs; reviewed all of A.F.’s medical information; evaluated how the medication was uptitrated causing A.F.’s injury; analyzed the causation, liability issues, and fault; developed economic damages figures; and valued non-economic damages. Mr. Rafferty credibly testified regarding the evaluations he made regarding A.F.’s injuries and the pharmaceutical product prescribed. The non-economic damages included A.F.’s pain and suffering, both future and past, her loss of capacity to enjoy life, and her mental anguish. Mr. Rafferty explained the importance of assessing all of the elements of damages A.F. suffered as a result of her catastrophic injuries. Mr. Rafferty’s unrefuted testimony placed the total full value of A.F.’s damages conservatively in excess of $100,000,000.00.10 Mr. Rafferty included A.F.’s pain and suffering, mental anguish, and loss of quality of life, plus the economic damages. Further, using the $100,000,000.00 valuation amount and the confidential settlement proceeds, Mr. Rafferty opined that A.F. recovered only 4.75% of the full measure of all her damages. Mr. Rafferty reviewed Petitioner’s Exhibit 1, and as an experienced trial attorney understood the letter to contain the “lien for past medical” expenses of $261,334.61. Mr. Rafferty added that he routinely uses this type of approach with lien holders in his practice. Mr. Rafferty’s testimony was uncontradicted and persuasive on this point. Mr. Carter is an AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, with an active civil trial practice. He has always handled plaintiff’s medical malpractice, product liability, and car accident-type litigation. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients, including the liability, causation, and possible damages. Mr. Carter 10 For ease of discussion, the conservative total amount, $100,000,000.00 will be used. All the witnesses agreed that the economic value of the case was above $70 million and the non- economic damages were at least $30 million. confirmed that it is essential to have every element (liability, causation, and damages) evaluated because these types of cases are expensive in both time and money. Mr. Carter specifically looks at the injuries sustained, who the plaintiff is, how the injuries have affected their life, and the permanency of those injuries. He continues to handles cases with catastrophic injuries. Mr. Carter testified that the injuries suffered by A.F. were “worse than almost, almost any case … handled.” He added that A.F.’s damages were “catastrophic” and “one of the worst damage cases [he had] ever seen.” Mr. Carter was tendered and without objection was accepted as an expert regarding valuation of medical malpractice damages.11 Mr. Carter testified that “as a matter of course, [we] put every lienholder on notice as soon as we learn about them” and “then throughout the case.” Mr. Carter was in regular contact with Mr. Lyles. The medical malpractice case was settled before the pharmaceutical action. After the medical malpractice case was settled, Mr. Carter understood that AHCA would not negotiate on the medical malpractice settlement. When the “entire case” was completed, Mr. Carter notified Mr. Lyles, and then received the lien letter. As an experienced trial attorney he understood the letter to contain the “final lien figure:” $261,334.61. Mr. Carter also met with the family, reviewed all of A.F.’s medical information and records, and evaluated the medication that was uptitrated. Mr. Carter utilized a similar detailed analysis of A.F.’s injuries and her current condition. Mr. Carter also described the severity of A.F.’s injuries that entered into his decision to pursue the civil case and to testify in this proceeding. Mr. Carter analyzed the causation, liability issues, and fault. He evaluated the economic damages figures and valued non-economic damages 11 Mr. Carter was offered as an expert in medical malpractice damages. His insight in the combined totality of the medical malpractice and pharmaceutical product litigation warranted consideration, but AHCA’s failure to include the medical malpractice settlement precluded any consideration of that settlement. Without a more decisive understanding of what “pretty significant” means, ACHA’s attempt to question Mr. Carter’s knowledge of A.F.’s past medical expenses is unpersuasive. such as pain and suffering, both future and past, loss of capacity to enjoy life, scarring and disfigurement, and mental anguish. Mr. Carter opined A.F.’s damages could have easily been in excess of $100,000,000.00. Mr. Carter further opined that A.F.’s non-economic damages were “very significant” and “could have driven the total value of damages in excess of the $100,000,000.00.” However, Mr. Carter testified he used $100,000,000.00 in order to resolve the Medicaid lien. Mr. Carter used the same mathematical approach he has used in other lien issues: he divided the confidential settlement amount by the conservative full value of damages ($100,000,000.00) and arrived at a recovery of 4.75% of the full measure of her damages. Mr. Carter’s testimony was uncontradicted and persuasive on this point. Mr. McKenna is a board-certified, AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, who maintains an active civil trial practice. He has always practiced plaintiff’s work, and has tried between 40 and 50 cases to verdict. In the last 15 years, Mr. McKenna testified that “at least half … focused on … catastrophic cases either from the medical malpractice arena or from general liability trucking arena.” Mr. McKenna has reviewed thousands of personal injury cases relative to damages, and provided a detailed explanation of how he evaluates damages of catastrophic injury cases. He further provided that half of his cases were wrongful death cases and the other half were physical or brain injury cases. Mr. McKenna also provided the various resources he uses to keep abreast of personal injury verdicts and settlements. Mr. McKenna was tendered as “an independent expert attorney as to valuation of damages.” Mr. McKenna was not involved in the underlying civil litigation, but became A.F.’s guardian ad litem, appointed by the trial judge, to offer his “opinions regarding the reasonableness of the potential medical malpractice settlement, and ... the pharmaceutical settlement” which is the subject of this Final Order. Respondent did not object to Mr. McKenna’s tender and he was accepted as an expert in the valuation of damages. Mr. McKenna testified that he reviewed the facts and circumstances of both the medical malpractice and the pharmaceutical sides and the chronologies of A.F.’s medical records. He acquired an “intimate understanding” of A.F’s on going care and treatment in light of the injuries she sustained. Mr. McKenna agreed with Messrs. Rafferty and Carter that the non-economic damages in this case were very significant, and he agreed with their conservative $100,000,000.00 valuation of her total damages. Further, Mr. McKenna testified that the normal course for resolving liens in Florida was to look at the total value of damages in relation to the recovery to get a ratio by which to reduce the lien amount. Based on his past experiences in resolving Medicaid liens, other courts have resolved such liens using the formula from the Arkansas Department of Health & Human Services. v. Ahlborn, 547 U.S. 268 (2006), with the only other alternative formula found in section 409.910. The testimony of Petitioner’s three experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the confidential settlement does not fully compensate A.F. for the full value of her damages. As testified to by the experts, A.F.’s recovery represents only 4.75% of the total value of her claim. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner’s evidence was unrebutted. AHCA did, however, contest the methodology used to calculate the allocation of past medical expenses, but was unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $261,334.61. It is logical and rational to conclude that this figure is the amount expended for A.F.’s past medical expenses. Applying the 4.75% pro rata ratio to $261,334.61 equals $12,413.39, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioner proved by a preponderance of the evidence as set forth in section 409.910(11)(f) that AHCA should be reimbursed at the lesser amount: $12,413.39.
The Issue What amount of the personal injury settlement recovered by Petitioner, Weslen Bastien as mother and natural guardian of T.S.J., a minor (“T.S.J.” or “Petitioner”), must be paid to Respondent, Agency for Health Care Administration (“AHCA” or “Agency”), pursuant to section 409.910, Florida Statutes (2019), to fully satisfy the Agency's Medicaid lien totaling $279,299.76.
Findings Of Fact The undersigned makes the following findings of fact based on the stipulations of the parties and other evidence presented at the hearing. PARTIES’ STIPULATED FACTS AND LAW Weslen Bastien (“Ms. Bastien”) is the mother and natural guardian of T.S.J., a minor. On July 4, 2015, T.S.J. suffered permanent and catastrophic brain damage during her birth. She has been diagnosed with hypoxic-ischemic encephalopathy and resulting cerebral palsy. She cannot ambulate, roll-over, speak more than a few simple words, or perform any of the activities of daily living. She will always be totally dependent on others. In November 2016, Ms. Bastien served the required Notices of Intent to Initiate Medical Malpractice Litigation on the hospital and the delivering obstetrician. That initiated the statutorily mandated 90-day presuit screening period, which concluded in February 2017. At the conclusion of the presuit screening period, the hospital and the obstetrician denied the claim. In addition to denying negligence and causation, they asserted that the Florida Birth-Related Neurological Injury Compensation Plan (“NICA”) remedy was exclusive and barred a civil action for T.S.J.’s neurological injuries. On March 8, 2017, Ms. Bastien filed a petition pursuant to section 766.301, Florida Statutes, et seq., with DOAH seeking a determination that the notice requirements of section 766.316 were not met and that the NICA remedy was not exclusive and did not bar a civil action. The final hearing was held before the ALJ on December 19, 2017. The Final Order on Notice was entered on February 16, 2018. The Final Order on Notice acknowledged that the obstetrician did not provide NICA notice to Ms. Bastien on July 4, 2015. However, the parties stipulated, and the ALJ found, that he was excused from providing NICA notice on July 4, 2015, as Ms. Bastien presented in an emergency medical condition due to the onset and persistence of uterine contractions. Therefore, the obstetrician did not waive NICA exclusivity, and a civil action against him is barred. The ALJ found that the hospital did not provide NICA notice to Ms. Bastien in accordance with section 766.316. Therefore, NICA exclusivity does not apply to the hospital, and a civil action against the hospital is not barred. Ms. Bastien brought a medical malpractice lawsuit against the hospital to recover all of T.S.J.’s damages, as well as her individual damages associated with her daughter’s injuries. During the pendency of T.S.J.'s medical malpractice action, AHCA was notified of the action, and AHCA, though its authorized agent, Conduent Payment Integrity Solutions, asserted a $279,299.76 Medicaid lien against T.S.J.'s cause of action and settlement of that action. The Medicaid program, through AHCA, spent $279,299.76 on behalf of T.S.J., all of which represents expenditures paid for T.S.J.'s past medical expenses. A non-AHCA Medicaid provider, Prestige Health Choice, provided $30,430.54 in past medical expenses on behalf of T.S.J. Another non-AHCA Medicaid provider, WellCare, provided $58,034.25 in past medical expenses on behalf of T.S.J. Finally, one other non-AHCA provider, Miami Children’s Health Plan, provided $8,562.65 in past medical expenses on behalf of T.S.J. Accordingly, a total of $376,327.20 was paid for T.S.J.'s past medical expenses. The medical malpractice case was resolved by way of a confidential settlement. As a condition of T.S.J.’s eligibility for Medicaid, T.S.J. assigned to AHCA her right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. Petitioner has agreed to hold the Medicaid lien amount in trust pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner and AHCA agree that application of the formula in section 409.910(11)(f) to the $8 million-dollar settlement recovery requires payment to AHCA in the full $279,299.76 amount of the Medicaid lien. Petitioner and AHCA agreed that the 2020 version of section 409.910 controls jurisdiction of DOAH in this case. Petitioner and AHCA agreed that the burden of proof at the hearing for Petitioner in contesting the amount payable to AHCA is clear and convincing evidence. § 409.910(17)(b), Fla. Stat. Petitioner and AHCA agreed that DOAH has jurisdiction under section 409.910(17)(b) to determine the portion of a total recovery which should be allocated as past medical expenses. The parties stipulated that AHCA is limited in the section 409.910(17)(b) procedure to the past medical expense portion of the recovery. See Giraldo v. Ag. for Health Care Admin., 248 So. 3d 53, 56 (Fla. 2018). EVIDENCE AT HEARING At the final hearing, Petitioner presented the testimony of two witnesses: Robert T. Bergin, Jr., Esquire (“Bergin”), Petitioner’s personal injury attorney, and R. Vinson Barrett, Esquire (“Barrett”), an experienced trial lawyer who handles catastrophic personal injury cases. Over AHCA’s objections, both Bergin and Barrett were accepted as experts on the valuation of personal injury damages for an individual. Barrett has practiced law since 1977 and is currently a partner with the firm of Barrett, Nonni and Homola. He handles medical malpractice and catastrophic personal injury cases. Barrett stays current with jury verdicts. As part of his work, Barrett routinely assesses the value of damages suffered by injured parties. The valuation of personal injury cases has been a necessary and ongoing part of his practice since 1978. Barrett testified that he has been recognized as an expert in the valuation of catastrophic personal injury cases at DOAH over 30 times. Barrett reviewed all the exhibits in this case. To come to a valuation determination in any given case, he related that he looks at medical records and reports of other experts who have given impairment ratings and other assessment reports. In this case, he reviewed a habitation assessment preliminary report prepared by Susan K. McKenzie, MS. Barrett also reviews life care and continuation of care reports for future medical needs. In this case, he reviewed a report prepared by Dr. Craig H. Lichtblau, and an economist’s report regarding the present value of economic damages prepared by Bernard F. Pettingill, Jr., Ph.D. Barrett was tendered as an expert regarding valuation of personal injury damages and resolution of liens in personal injury cases. The Agency objected for lack of foundation. The undersigned found that Petitioner had set forth an adequate basis and predicate, and permitted Barrett to give his opinion as to the valuation of the underlying personal injury claim by Petitioner. Barrett testified that, in his opinion, the total damages suffered by T.S.J. were valued at $40 million. This was based on the fact that T.S.J.’s economic damages were over $27 million. Added to this were her non- economic damages for such things as loss of enjoyment of life and pain and suffering, which he valued at another $25 million. Barrett based his opinion, in part, on several other comparable personal injury cases he studied resulting in damages in the range of $40 million. In comparing the $40 million to the settlement proceeds of $8 million, Barrett concluded that T.S.J. recovered only 20 percent of her total damages. The 20 percent would apply to each element of damages, including past medical expenses. Barrett concluded that if she only recovered 20 percent of her total damages, then likewise only 20 percent of her past medical expenses were recovered in the confidential settlement. As a result, he concluded that AHCA’s Medicaid lien should be reduced proportionately to 20 percent of $376,327.20, or $75,265.44. On cross-examination, however, Barrett was unable to clearly or convincingly break down or list out with any specificity the amounts he felt would have been contained in the confidential settlement of $8 million for each type of damage. This included what the damages would have been for economic, non-economic or the past medical expense portions of the confidential settlement.1 Nonetheless, Barrett’s testimony concerning (1) the value of the case and (2) the use of the pro rata or proportionality methodology was not persuasively rebutted or contradicted by AHCA's counsel on cross- examination, or by any other evidence. Bergin is a 44-year practicing attorney, who is a sole practitioner in West Palm Beach, Florida. He testified regarding his representation of T.S.J. and her family. 1 Regardless, as will be noted herein, this evidence was not essential to the viability or use of the proportionality formula approved in Eady v. Agency for Health Care Administration, 279 So. 3d 1249 (Fla. 1st DCA 2019), and subsequent cases. Bergin handles serious/catastrophic medical malpractice injury cases, exclusively for plaintiffs. He specializes in handling complex medical malpractice claims. Bergin was admitted to the Florida Bar in 1977 and began an active trial practice with an insurance defense firm. He maintained a very active medical malpractice defense practice until the mid-1980s. He tried cases involving catastrophic brain injuries to infants and quadriplegics. As defense counsel, he was required to evaluate cases and provide his valuation to the insurance companies so they could set their accounting reserves. Since the mid-1980s, Bergin has exclusively represented plaintiffs in personal injury cases. He primarily handles complex medical malpractice cases. He has been board certified in civil trial law since 1983. In his practice, he has handled cases with personal injuries similar to those suffered by T.S.J. Bergin regularly evaluates the damages suffered by injured people such as T.S.J. He was familiar with T.S.J.’s damages from his representation of T.S.J. in the personal injury lawsuit. Bergin was tendered as an expert regarding the valuation of personal injury damages. The Agency objected on the grounds that there was an insufficient basis to find that Bergin has experience with valuation of damages. Bergin went on to testify, in part, that the valuation of damages was necessary to properly represent a personal injury plaintiff and that he has been evaluating damages on personal injury cases since 1977. After counsel elicited further evidence concerning Bergin’s background and experience, AHCA had no further objection to Bergin’s additional qualifications. The undersigned allowed Bergin to provide his expert opinion on the valuation of catastrophic personal injury cases, including T.S.J.’s. Bergin testified as to the nature of the litigation on behalf of T.S.J. and the difficult liability issues related to T.S.J. and her injuries. As part of his work-up of this case, he concluded that the full value of the case was $40 million and made an initial demand for that amount. After litigating the case for several years, Bergin negotiated a confidential settlement of $8 million.2 He testified that at the outset he did a thorough evaluation of the case. He was familiar with the issues, having handled similar cases. The neuroradiology report identified an injury to T.S.J.’s thalamus, which is indicative of an acute near total asphyxia. This was consistent with the difficulties experienced during T.S.J.’s birth. Bergin testified that he also retained damage experts to assist him in determining T.S.J.’s economic losses, reduced to present money value. The economic losses were calculated by his experts to be in excess of $27 million. Bergin testified, without objection, that if the default formula in section 409.910 was used, it would run afoul of the Federal anti-lien law. He also testified that the pro rata (proportionality) methodology was an approved and appropriate method to determine the amount of damages fairly allocable to past medical expenses in an undifferentiated settlement agreement. Applying the proportionality ratio and methodology, Bergin opinied that T.S.J. recovered 20 percent of her past medical expenses in the confidential settlement and that AHCA’s recoverable Medicaid lien should be limited by that percentage as well. On cross-examination by AHCA’s counsel, however, Bergin, like Barrett, was unable to clearly or convincingly break down or list out the 2 It is worth noting that Bergin did not directly opine at hearing that the total value of the case was $40 million. Rather, he relied upon his initial demand as evidence concerning his opinion of the value. specific amounts he felt would have been contained in the final settlement of $8 million for each type of damage. This included what the breakdown of damages would have been for economic, non-economic, or the past medical expense portion of the confidential settlement. Nonetheless, Bergin’s testimony concerning the value of the case and the use of the proportionality methodology and resulting allocation was not persuasively rebutted or contradicted by AHCA's counsel on cross- examination or by any other evidence offered by AHCA. Both witnesses reviewed adequate portions of T.S.J.’s medical information and other information before offering their opinions regarding the amount fairly allocable to past medical expenses in the settlement. AHCA did not offer any evidence to rebut the credentials or testimony of Bergin or Barrett regarding the total value of T.S.J.’s claim, or the proportionality methodology they proposed to reduce AHCA’s lien. Likewise, AHCA did not offer any alternative expert opinions on the damage valuation or allocation method proposed by Bergin or Barrett. The undersigned finds that Petitioner has established by clear and convincing evidence that the $8 million-dollar recovery is 20 percent of the total value of Petitioner’s damages totaling $40 million. Using that same 20 percent and applying the current proportionality methodology approved by the First District Court of Appeal in Eady, Petitioner has established that 20 percent of $376,327.20, or $75,265.44, is the amount of the confidential settlement fairly allocable to past medical expenses and is the portion of the Medicaid lien payable to AHCA.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration ("Respondent" or "AHCA"), in satisfaction of Respondent's Medicaid lien from a settlement received by Petitioners, from a third party, pursuant to section 409.910, Florida Statutes (2016).
Findings Of Fact On June 4, 2015, at approximately 11:36 p.m., Rodriguez- Gomez was struck by a car while lawfully walking across the street at the intersection of Hollywood Boulevard and North 62nd Avenue in Hollywood, Florida. During the accident, Rodriguez-Gomez suffered catastrophic physical and neurological injuries. Rodriguez- Gomez's injuries included an open skull fracture, left pelvis fracture, and right fibula and tibia fractures. He was transported to the hospital where he underwent extensive medical intervention to save his life. On June 11, 2015, seven days after the accident, Rodriguez-Gomez died as a result of his injuries. Rodriguez-Gomez was survived by his three adult sons and three minor children. Rodriguez-Gomez's medical care related to his injury was paid by Medicaid, and the Medicaid program provided $49,115.61 in benefits associated with his injury. The $49,115.61 represented the entire claim for past medical expenses. Rodriguez-Gomez's funeral bill totaled $3,250.00 and was paid by his surviving children. Armando Rodriguez-Gomez was appointed the personal representative of the Estate of Santos Rodriguez-Gomez ("Estate"). Armando Rodriguez-Gomez, as personal representative ("Personal Representative") of the Estate, brought a wrongful death action to recover both the individual statutory damages of Rodriguez-Gomez's six surviving children, as well as the individual statutory damages of the Estate against the driver and owner ("Defendant") of the vehicle that caused the accident. Joseph Abdallah ("Abdallah"), a civil trial attorney with the law firm of Kanner & Pintaluga in Boca Raton, Florida, represented the Personal Representative and Estate in the wrongful death action. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA asserted a $49,115.61 Medicaid lien against the Estate cause of action and settlement of that action. The Personal Representative, on behalf of Rodriguez- Gomez's six surviving children, as well as on behalf of the Estate, compromised and settled the wrongful death action with Defendant for the available insurance policy limits of $100,000.00. By letter, Abdallah as the Estate's attorney handling the wrongful death claim notified AHCA of the settlement. The letter requested that AHCA advise as to the amount AHCA would accept in satisfaction of the $49,115.61 Medicaid lien. AHCA has neither filed an action to set aside, void, or otherwise dispute the wrongful death settlement nor started a civil action to enforce its rights under section 409.910. AHCA, through its Medicaid program, spent $49,115.61 on behalf of Rodriguez-Gomez, all of which represents expenditures paid for Rodriguez-Gomez's past medical expenses. No portion of the $100,000.00 settlement represents reimbursement for future medical expenses. The taxable costs incurred in pursuing Defendant totaled $2,086.68. The formula at section 409.910(11)(f), as applied to the entire $100,000.00 settlement, requires payment of $36,456.66 and AHCA is demanding payment of $36,456.66 from the $100,000.00 settlement. Petitioners have deposited the section 409.910(11)(f) formula amount in an interest-bearing account for the benefit of AHCA, pending an administrative determination of AHCA's rights; and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Petitioners presented, without objection, the expert valuation of damages testimony of Abdallah. Abdallah is a trial attorney in both Florida and New York who practices exclusively personal injury law and handles cases involving wrongful death, catastrophic injury, and other types of negligence involving injury. Abdallah's expertise also encompasses evaluation of personal injury cases based on staying abreast of all State of Florida jury verdicts. At hearing, Abdallah explained that he served as lead counsel during Petitioners' proceeding, and, during his representation of the Estate, he met with the Personal Representative numerous times and reviewed Rodriguez-Gomez's accident report and medical records before he filed the lawsuit and amended complaint in this matter. Abdallah testified that Rodriguez-Gomez had a very close relationship with his children. Abdallah credibly explained the process he took to develop an opinion concerning the value for the damages suffered in this case. He started by looking at the wrongful death statute, section 768.21, Florida Statutes, to determine what damages could be recovered. Petitioners established through unrebutted testimony of their trial attorney and expert witness that personal injury actions can be grouped in the following categories: medical expenses; net accumulations; funeral expenses; loss of parental companionship and instruction; and mental pain and suffering. Abdallah testified that since Rodriguez-Gomez was a day laborer, there was not a claim for net accumulations of the Estate. He concluded that the compensable damages were limited to past medical expenses, loss of parental companionship, instruction, guidance, and mental pain and suffering from the date of the injury for each of the six sibling children. Abdallah evaluated jury verdicts of recent cases involving wrongful death and surviving children to determine what the valuation of the claim for the loss of parental companionship, instruction, guidance, and mental pain and suffering would be for Rodriguez-Gomez's six surviving children. Abdallah also researched circuit court cases to determine appropriate allocation amounts for Medicaid liens. At hearing, Abdallah testified specifically about two comparable jury verdicts involving wrongful death and surviving children that he researched and used to support his valuation, Melissa Corsini, Individually and as Personal Representative of the Estate of Andrew Corsini, Jr., Deceased v. Carlos Riol, Case 09-5397-CA, 11FJVR 3-3, 2011 WL 845897 (Fla. Cir. Ct. Collier Jan. 13, 2011)1/; and Thomas Christopher Heike v. Sr. Singh Enterprises, LLC., Case No. CACE 16011472, 28 Fla. JVRA 3:22, 2017 WL 9286313 (Fla. Cir. Ct. Broward Nov. 26, 2017),2/ circuit court orders that were entered regarding allocation regarding Medicaid liens. In Corsini, each surviving child received $460,000.00 and in Heike each surviving child received $500,000.00 for their damages associated with their father's death. Abdallah's review of comparable jury verdicts revealed that each of Rodriguez- Gomez's six children's claim for losses associated with their father's death would have a very conservative value between $200,000.00 and $800,000.00 each. Abdallah also round-tabled the cases with other experienced attorneys and partners in his law firm to determine the value, and they each agreed that the $200,000.00 to $800,000.00 is a conservative valuation to use for each of the surviving children when determining the value of the Estate's wrongful death case. Based on his review to determine the value of Petitioners' claim, Abdallah credibly and persuasively put all the numbers together and opined that the valuation of the Estate's damages of $49,115.61 paid by Medicaid and the six surviving children's damages of $200,000.00 to $800,000.000 each totaled conservatively $1,200,000.00 to $4,800,000.00, and the conservative total value of all damages recoverable in the wrongful death lawsuit is $1,249,115.61 to $4,849,115.61. Abdallah testified that $1,249,115.61 is the conservative value to use for the damages. Abdallah's compelling and credible testimony further explained that the $100,000.00 settlement constituted a recovery of approximately eight percent of the $1,249,115.61 value of the damages. Abdallah determined that eight percent should be applied to each damage category and should be reduced based on the ultimate settlement. He then went on to apply the eight percent to the total medical expenses that were paid and further testified that a recovery of $3,929.25 in past medical expenses is eight percent of the $49,115.61 claim for past medical expenses. Abdallah's testimony was credible, persuasive, and is accepted. The evidence demonstrates that the total value of the damages related to Rodriguez-Gomez's injury was $1,249,115.61 and that the settlement amount, $100,000.00 was eight percent of the total value. The $100,000.00 settlement does not fully compensate Petitioners for the total value of their damages. Petitioners have established that the $100,000.00 settlement amount is eight percent of the total value ($1,249,115.61) of Petitioners' damages. Using the same calculation, Petitioners correctly showed that eight percent of $49,115.61 (Petitioners' amount allocated in the settlement for past medical expenses), $3,929.25, should be the portion of the Medicaid lien paid. Petitioners proved by a preponderance of the evidence that Respondent should be reimbursed for its Medicaid lien in a lesser amount than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
