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 amount of Petitioners' $7,250,000.00 settlement related to personal injuries he received and also arising from a bad faith claim he intended to file, is payable to Respondent, Agency For Health Care Administration ("AHCA"), to satisfy AHCA's Medicaid lien totaling $356,714.94.
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: Stipulated Facts From the Parties On June 21, 2013, Wilsin Guzman ("Guzman"), who was then 22 years old, was involved in a motor vehicle accident when his motorcycle struck a car that did not yield the right-of-way and turned left into Guzman's lane. In the accident, Guzman suffered catastrophic and permanent injuries including fractures to his left and right femur, fractures to his left wrist, chest contusion, multiple facial fractures, and catastrophic brain damage. Guzman is now unable to ambulate, eat, toilet, or care for himself in any manner. JPHS p. 9 ¶1. Guzman's medical care related to the injuries was paid by Medicaid. Medicaid, through AHCA, provided $356,714.94 in benefits. This $356,714.94 constituted Guzman's entire claim for past medical expenses. JPHS p. 9 ¶2. Adela Mayra Aguila was appointed Guzman's guardian and she pursued a personal injury lawsuit against the driver/owner of the car that struck Guzman's motorcycle ("Defendants") to recover all Guzman's damages. JPHS p. 9 ¶3; Pet. Ex. 8 Guzman's personal injury action was settled through a series of confidential settlements in a lump-sum unallocated amount of $7,250,000.00. Because Guzman was incapacitated, court approval of the settlement was required and the circuit court, by order of December 5, 2019, approved the settlement. JPHS p. 9 ¶4. As a condition of Guzman's eligibility for Medicaid, Guzman assigned to AHCA his 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 Guzman's personal injury action, AHCA was notified of the action. JPHS p. 10 ¶5. AHCA did not "institute, intervene in, or join in" the personal injury action to enforce its rights as provided in section 409.910(11) or participate in any aspect of Guzman's personal injury action against the Defendants. JPHS p. 10 ¶6. Instead, AHCA asserted a $356,714.94 Medicaid lien against Guzman's cause of action and settlement of that action. JPHS p. 10 ¶5. By letter, AHCA was notified of Guzman's settlement. JPHS p. 10 ¶7. AHCA has not filed a motion to set-aside, void, or otherwise dispute Guzman's settlement. JPHS p. 10 ¶8. The Medicaid program through AHCA spent $356,714.94 on behalf of Guzman, all of which represents expenditures paid for Guzman's past medical expenses. JPHS p. 10 ¶9. Guzman's taxable costs incurred in securing the settlement totaled $281,958.20. JPHS p. 10 ¶10. Application of the formula at section 409.910(11)(f) to Guzman's $7,250,000.00 settlement requires payment to AHCA of the full $356,714.94 Medicaid lien. JPHS p. 10 ¶11. Petitioners have deposited the Medicaid lien amount in an interest- bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). JPHS p.10 ¶12. Evidence From the Hearing Testimony of Alejandro Garcia-Halenar, Esquire Alejandro Garcia-Halenar, Esquire ("Garcia"), has been a trial attorney for 20 years and practices with Steinger, Greene & Feiner in Fort Lauderdale, Florida. He is the head of his firm's Fort Lauderdale litigation department and handles four to six jury trials each year. Most of his cases involve traumatic catastrophic brain injury. He is familiar with reviewing medical records, life care plans, economist reports, and interviewing/deposing expert witnesses. Garcia stays abreast of jury verdicts by reviewing jury reports and discussing cases with other attorneys. Garcia is a member of a number of trial attorney associations, including the Florida Justice Association and the Broward County Justice Association. As a routine part of his law practice, he makes assessments concerning the value of damages suffered by injured clients and he explained his process for making these determinations. Garcia is familiar with, and routinely participates in, allocation of settlements in the context of health insurance liens, worker compensation liens, and Medicare set-asides, as well as, allocations of judgments made by trial judges, post-verdict. Garcia represented Guzman in his personal injury claim. Garcia reviewed the accident report, reviewed Guzman's medical records, reviewed the life care plan, reviewed the economist report, interviewed/deposed fact and expert witnesses, and met with Guzman and his family numerous times. On the day of the accident, Guzman left work around 3:00 p.m. on his motorcycle. A short distance from work, the defendant turned her Cadillac Escalade left in front of Guzman's motorcycle. Guzman laid-down his motorcycle in an attempt to avoid hitting the defendant's vehicle, but ultimately struck the side of her vehicle. There were no line of sight issues or anything blocking her view, and the defendant was cited by law enforcement for making an illegal left turn and reckless driving. Guzman was taken to the hospital where it was determined that he had multiple broken bones, internal injuries, and catastrophic brain damage. It was questionable if Guzman was going to survive and he remained in a coma for over two months and in the ICU for some time longer. Garcia felt that Guzman's injuries profoundly and negatively impacted his life. Due to the catastrophic brain damage, Guzman is unable to walk, feed himself, bathe, and requires 24-hour-a-day care. He has limited speech and only short-term memory. Guzman's mother quit her job as a home health aide to stay home and care for Guzman 24/7. Further, Guzman's fiancée moved out of her parents' home and into Guzman's parents' home to help care for Guzman. Based on his professional training and experience, Garcia testified that Guzman's total damages have a value in excess of $50 to $60 million. Garcia explained that during the litigation of the case, a life care plan and economist report was prepared calculating the present value of Guzman's past and future lost wages and future medicals. The economist report provided a low and a high valuation based on whether Guzman remained in-home or was transferred to a nursing home. The lower calculation placed a value of past lost wages at $28,208.00, future lost wages at $194,761.00, and future medicals at $15,160,055.00. The higher calculation valued past lost wages at $28,208.00, future lost wages at $240,814.00, and future medicals at $30,664,888.00. Garcia explained that taking these numbers and adding them to the $356,714.94 claim for past medical expenses, Guzman's total claim for economic damages would be between $15,739,738.00 and $31,290,624.00. Garcia opined that Guzman's life care plan and economist report were consistent with life care plans and economist reports he had seen in other cases involving catastrophic brain damage. He concluded that the calculation of Guzman's economic damages was conservative. Garcia explained that added to the estimated $15 million to $31 million in economic damages, would be Guzman's claim for noneconomic damages. This added amount was necessary to calculate the full value of Guzman's damages. Garcia testified that typically the noneconomic damages awarded by a jury alone are in excess of the value of the economic damages. Garcia explained that his law firm routinely presents cases to focus groups and mock juries to gauge the potential reaction of a jury. Garcia testified that in Guzman's case, the focus groups and mock juries consistently placed a high value on Guzman's noneconomic damages, and that each focus group assessed noneconomic damages with numbers ranging from $50 million, up to as high as $100 million. Garcia testified that the jury verdicts in Petitioners' Exhibit 12 were comparable to Guzman's case and supported his valuation of Guzman's damages. Garcia testified that Guzman's noneconomic damages could have been in this $22 to 39 million range, based on the focus groups and mock jury results for noneconomic damages. Adding the $15 to $31 million in economic damages to the noneconomic damages, Garcia testified that Guzman's damages had a total value in excess of $50 to $60 million. Garcia testified that it is a routine part of his practice to round-table cases with other attorneys. His discussions regarding Guzman's case with attorneys in his firm, as well as with the law firm handling the potential insurance bad faith claim, resulted in a consensus that Guzman's total damages had a value in excess of $50 to $60 million. Garcia recapped his total damage valuation and concluded that it would be extremely conservative to value all of Guzman's damages at $30 million. Garcia testified that after his evaluation and investigation of the case, a personal injury lawsuit was filed against the owner and driver of the vehicle. He explained that prior to filing the suit, a demand was made for the defendant/owner's $30,000.00 insurance policy limits in settlement of the personal injury claim because there was no other insurance available. The insurance company did not appropriately tender the $30,000.00 in a timely manner. In Garcia's professional opinion, this gave rise to a potential claim for bad faith against the driver's insurance company, making it potentially liable for all personal injury damages suffered by Guzman. Garcia summarized the procedures related to a bad faith claim brought against an insurance company. He explained that in such circumstances the initial lawsuit for personal injuries is brought against the underlying at-fault party, in this case, the driver. If and when a judgment is entered against the at-fault party, a separate bad faith lawsuit is ripe and may be brought against the insurance company to recover on the judgment. In Garcia's opinion, a bad faith claim against an insurance company and related litigation, can be a lengthy process and is extremely complicated with mixed results. In this case, the initial lawsuit was brought against the owner and driver of the vehicle. The insurance company was notified of the lawsuit against the driver and was aware of its potential bad faith liability if a judgment was entered against the Defendants.1 After five years of litigation, the personal injury case settled on the eve of trial for $7,250,000.00. Garcia testified that the settlement was based, in part, on the risk of proceeding forward with a future complicated bad faith lawsuit and the extensive time involved in such a proceeding.2 Garcia testified that the $7,250,000.00 settlement did not fully compensate Guzman for the total or full value of his damages arising from the accident. He opined that based on a conservative value of total damages of $30 million, Guzman recovered only 24.16% of the total value of his damages in the settlement. He further explained that because Guzman recovered only 24.16% of his total damages, he recovered only 24.16% of his $356,714.94 claim for past medical expenses in the settlement, or $86,182.33. Garcia concluded, without objection, that it would be reasonable and fair to allocate $86,182.33 of the settlement to past medical expenses. Garcia also testified that because the allocation to past medical expenses was based on a conservative value of all damages at $30 million, the allocation of $86,182.33 of the settlement to past medical expenses was conservative as well. 1 Guzman had attorneys working on his personal injury case who specialized in bad faith litigation. The insurance company participated in the litigation of the personal injury lawsuit. 2 Regardless of what considerations drove the settlement amount, the evidence showed that Petitioners' experts still valued Guzman’s total damages at $30 million. Testimony of R. Vinson Barrett, Esquire Barrett has been a trial attorney for over 40 years and is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee, Florida. His practice is dedicated to plaintiff's personal injury and wrongful death cases. He has handled cases involving catastrophic brain injury and routinely handles jury trials. Barrett is familiar with reviewing medical records, life care plans, and economist reports. Barrett stays abreast of jury verdicts by reviewing jury verdict reports and discussing cases with other trial attorneys. He is a member of the Florida Justice Association and the Capital City Justice Association. As a regular part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. He explained his process for making these assessments. Barrett testified that he is familiar with settlement allocation in the context of health insurance liens, Medicare set-asides, and workers' compensation liens. He is familiar with the process of allocating settlements in the context of Medicaid liens and described that process. Barrett has been accepted as an expert in the valuation of damages in federal court as well as numerous Medicaid lien hearings at DOAH. Barrett reviewed the exhibits filed in this proceeding, the JPHS, and listened to Garcia's testimony. He was familiar with Guzman's injuries. Barrett detailed the extensive nature of Guzman's injuries and the impact Guzman's injuries had on his life. Barrett commented that Guzman had suffered as catastrophic an injury as you can possibly suffer, and he could not imagine how an individual could be hurt much worse. In Guzman's case, the injuries were made worse by the fact that Guzman was not just in a coma or "completely out of it." Guzman had enough mental capacity remaining to realize that his life, as he would have hoped for it, was over. Based on his professional training and experience, Barrett believed Guzman's total damages had a conservative value between $30 and $50 million. Barrett outlined that the economist report placed the present value of Guzman's economic damages at between $15 and $31 million. Barrett testified that this present valuation of the economic damages was very similar to valuations he had seen in other economic reports involving catastrophic brain damage, and he believed the valuations were reasonable. He believed that in addition to the $15 to $31 million in economic damages, he would add Guzman's claim for noneconomic damages. According to Barrett, Guzman's claim for noneconomic damages would have a significantly high value. He felt that it would be extremely unlikely for a jury to award less than $15 million to Guzman for his noneconomic damages. Barrett noted that the jury verdicts included in Petitioners' Exhibit 12 were comparable to Guzman's case--noting that the average award for pain and suffering in those verdicts was $24.7 million. The $24.7 million value of noneconomic damages was in-line with his opinion that Guzman's noneconomic damages alone would be in the same range as Guzman's economic damages--$15 to $31 million. Barrett testified that, in light of the fact that he believed Guzman's damages would have a total combined value of between $30 and 50 million, a total value of $30 million was extremely conservative. Barrett was aware that the case settled for $7,250,000.00. He concluded that this settlement amount did not fully compensate Guzman for all the damages he had suffered. Using a value of total damages of $30 million, the $7,250,000.00 settlement represented a recovery of 24.16% of the value of the damages. Because only 24.16% of the total damages were recovered by Guzman, only 24.16% of the $356,714.94 claim for past medical expenses was recovered in the settlement, or $86,182.33.3 Barrett concluded that it was reasonable and conservative to allocate $86,182.33 of the settlement to past medical expenses. AHCA did not call any witnesses, present any evidence regarding a different value of the damages or utilize experts to propose a different way or method to value the total damages suffered by Guzman. Nor did AHCA persuasively contest the experts' valuation of Petitioners' total damages or the methodology used to calculate the $86,182.33 allocation to past medical expenses. As a result, Petitioners' testimony and evidence presented regarding his total damages was essentially unrebutted and uncontradicted. To recap the evidence, Petitioners presented the unrebutted expert testimony of two trial lawyers who made projections as to the amount of total damages suffered by Guzman. This evidence, in turn, adequately proved what portion of Guzman's undifferentiated settlement was "fairly allocable to past medical expenses." More specifically, and in "doing the math" under the proportionality methodology--the $7,250,000.00 settlement represents a 24.16% recovery of all damages. ($7,250,000.0 is 24.16% of $30 million). Applying the same ratio of 24.16% to the $356,714.94 in past medical expenses paid by AHCA, the undersigned finds that $86,182.33 in the settlement agreement is "fairly allocable" to past medical expenses.
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 At issue is the amount and manner of payment of the parental award, the reasonable expenses incurred in connection with the filing of the claim, including reasonable attorney's fees, and the amount owing for expenses previously incurred.
Findings Of Fact Stipulated facts regarding compensability and notice Cassandra Robles and Marlando Falconer are the parents and natural guardian of Mia Falconer. Mia was born May 18, 2002, at Broward General Medical Center, and suffered a "birth- related neurological injury" during the course of labor, delivery, or resuscitation in the immediate postdelivery period in the hospital. Obstetrical services were delivered at Mia's birth by Winston O. Bliss, M.D., who, at all times material hereto was a "participating physician" in the Plan. The participating physicians and hospital complied with the notice provisions of the Plan. Findings related to the parental award and past expenses At hearing, the parties stipulated that there were no monies owing for past expenses, as they had been paid by collateral sources. § 766.31(1)(a), Fla. Stat. The parties further agreed that Petitioners receive a parental award of $100,000.00, and that such award be payable to a "special needs" trust to be created for such purpose. § 766.31(1)(b), Fla. Stat. It was further agreed that once the "special needs" trust was established, Petitioners would advise NICA of the particulars and NICA would make payment of the $100,000.00 award to the "special needs" trust. The award provisions of the Plan relating to attorney's fees and costs Pertinent to this case, Section 766.31(1)(c), Florida Statutes, provides for an award of attorney's fees and other expenses, as follows: (c) Reasonable expenses incurred in connection with the filing of a claim under ss. 766.301-766.316, including reasonable attorney's fees, which shall be subject to the approval and award of the administrative law judge. In determining an award for attorney's fees, the administrative law judge shall consider the following factors: The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly. The fee customarily charged in the locality for similar legal services. The time limitations imposed by the claimant or the circumstances. The nature and length of the professional relationship with the claimant. The experience, reputation, and ability of the lawyer or lawyers performing services. The contingency or certainty of a fee. The claim for attorney's fees To calculate a reasonable attorney's fee, the first step is to determine the number of hours reasonably expended pursuing the claim. See Standard Guarantee Insurance Co. v. Quanstrom, 555 So. 2d 828 (Fla. 1990); Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985); Florida Birth-Related Neurological Injury Compensation Association v. Carreras, 633 So. 2d 1103 (Fla. 3d DCA 1994). Notably, "[u]nder the 'hour-setting' portion of the lodestar computation, it is important to distinguish between 'hours actually worked' versus 'hours reasonably expended'." Carreras, 633 So. 2d at 1110. . . . "Hours actually worked" is not the issue. The objective instead is for the trier of fact to determine the number of hours reasonably expended in providing the service. 'Reasonably expended' means the time that ordinarily would be spent by lawyers in the community to resolve this particular type of dispute. It is not necessarily the number of hours actually expended by counsel in the case. Rather, the court must consider the number of hours that should reasonably have been expended in that particular case. The court is not required to accept the hours stated by counsel. In re Estate of Platt, 586 So. 2d 333-34 (emphasis in original). The trier of fact must determine a reasonable time allowance for the work performed-which allowance may be less than the number of hours actually worked. Such a reduction does not reflect a judgment that the hours were not worked, but instead reflects a determination that a fair hourly allowance is lower than the time put in. Id. Moreover, only time incurred pursuing the claim is compensable, not time incurred exploring civil remedies or opportunities to opt out of the Plan through lack of notice or otherwise. Carreras, 633 So. 2d at 1109. See also Braniff v. Galen of Florida, Inc., 669 So. 2d 1051, 1053 (Fla. 1st DCA 1995)("The presence or absence of notice will neither advance nor defeat the claim of an eligible NICA claimant who has decided to invoke the NICA remedy . . .; thus, there is no reason to inquire whether proper notice was given to an individual who has decided to proceed under NICA. Notice is only relevant to the defendants' assertion of NICA exclusivity where the individual attempts to invoke a civil remedy."). Accord, O'Leary v. Florida Birth-Related Neurological Injury Compensation Plan, 757 So. 2d 624, 627 (Fla. 5th DCA 2000)("We recognize that lack of notice does not affect a claimant's ability to obtain compensation from the Plan."). Finally, a fee award must be supported with expert testimony, and cannot be based entirely on the testimony of the claimant's attorney. Palmetto Federal Savings and Loan Association v. Day, 512 So. 2d 332 (Fla. 3d DCA 1987); Fitzgerald v. State of Florida, 756 So. 2d 110 (Fla. 2d DCA 1999). See Nants v. Griffin, 783 So. 2d 363, 366 (Fla. 5th DCA 2001)("To support a fee award, there must be evidence detailing the services performed and expert testimony as to the reasonableness of the fee Expert testimony is required to determine both the reasonableness of the hours and reasonable hour rate."). To support the claim for attorney's fees, Petitioners offered a "Timesheet," which reflects a claim for 55.9 hours Petitioners' counsel, Julio Jaramillo and Charles Mustell, claim they dedicated to the claim. (Petitioners' Exhibit 1). Notably, the time sheet is not a business record, since Mr. Jaramillo and Mr. Mustell did not, and do not in the ordinary course of their practice, maintain time records. Rather, the statement represents an effort to construct a time record to support Petitioners' claim for fees, and provides a summary of activities performed, by date, with an estimate of time expended for each activity. Where, as here, "attorneys have not kept contemporaneous time records, it is permissible for a reconstruction of time to be prepared." Brake v. Murphy, 736 So. 2d 745, 747 (Fla. 3d DCA 1999). However, the attorney must present evidence of his services in "sufficient . . . detail to allow a determination of whether each activity was reasonably necessary and whether the time allocation for each was reasonable." Id. at 747 (Emphasis omitted). Here, from April 9, 2007, shortly before the petition was filed (on May 14, 2007) until August 17, 2007, when NICA responded to the petition and acknowledged the claim was compensable, counsel claims 14.1 hours dedicated to the claim.2 Thereafter, counsels' efforts were admittedly devoted to avoiding the exclusive remedy provisions of the Plan, by contesting compensability and notice. While Petitioners are free to contest such matters, they may not, as discussed supra, look to NICA to underwrite such efforts. Consequently, at most, counsel dedicated 14.1 hours to the pursuit of the claim, together with an additional 5 hours counsel concedes would be adequate to resolve issues related to the award. In all, counsel are entitled to be compensated for 19.1 hours, as reasonably expended.3 The next consideration in establishing a reasonable fee is the determination of the fee customarily charged in the locality for similar legal services, when the fee basis is hourly billing for time worked. Carreras, 633 So. 2d at 1108. Here, counsel has requested, and NICA has agreed, that $300.00 per hour is reasonable. Therefore, counsel are awarded an hourly rate of $300.00 without further discussion. A reasonable fee under the methodology established by Florida Patient's Compensation Fund v. Rowe, supra, and Florida Birth-Related Neurological Injury Compensation Association v. Carreras, supra, is determined by multiplying the hours reasonably expended by the reasonable hourly rate. The results produce the "lodestar figure" which, if appropriate, may be adjusted because of the remaining factors contained in Section 766.31(1)(c), Florida Statutes. Applying such methodology to the facts of this case produces a "lodestar figure" of $5,730.00 (19.1 hours x $300 per hour). Upon consideration of the facts of this case, and the remaining criteria established at Section 766.31(1)(c) 3-6, Florida Statutes, there is no apparent basis or reason to adjust the "lodestar figure." In this regard, it is observed that there were no significant time limitations shown to have been imposed by the claimants or the circumstances in this particular case, and the nature and length of the professional relationship with the claimants was likewise a neutral consideration. The experience, reputation and ability of the lawyers who performed the services has been considered in establishing the reasonable hours and reasonable hourly rate and does not, in this case, afford any additional basis to adjust the "lodestar figure." Finally, although counsel were employed on a contingency fee basis and stood to recover no fee if they proved unsuccessful in pursuing the claim or, alternatively, in pursuing a malpractice action, the contingency nature of the fee arrangement does not warrant an adjustment of the "lodestar figure." Given the nature of the claim, which was relatively straight-forward, lacked any novel aspects, and was promptly accepted by NICA, the risk of nonrecovery was not sufficient to warrant any adjustments. The claim for other expenses Finally, Petitioners' counsel incurred certain expenses for which they seek recovery. (Petitioners' Exhibit 2). Such costs total $21,363.54. Of those costs, NICA does not object to the following expenses: 08/25/02 Sunlife Medical Records $ 46.75 09/08/03 Medical Records $ 727.16 10/21/03 Medical Records $ 212.00 11/19/03 X-Ray films $ 234.00 05/11/07 DOAH-filing fee $ 15.00 $1,234.91 Accordingly, such expenses, totaling $1,234.91, are awarded without further discussion. As for the balance of expenses claimed, and opposed by NICA, the record is devoid of proof to support their recovery. Notably, all discovery post-dated NICA's acceptance of the claim, and was occasioned by Petitioners' contest of compensability and notice, and there is no basis for an award of an expert witness fee (for Drs. Eden and Fiascone) since they were neither deposed nor testified at hearing, and there was no showing as to the necessity for their consideration of the claim or the reasonableness of their fee. Gray v. Bradbury, 668 So. 2d 296, 298 (Fla. 1st DCA 1996)("The prevailing party's burden, at an evidentiary cost hearing, to recover an expert witness fee is 'to present testimony concerning the necessity and reasonableness of the fee.'"); Powell v. Barnes, 629 So. 2d 185 (Fla. 5th DCA 1993)(recognizing that evidence to support an award for expert witness fees must come from witnesses qualified in the areas concerned); Gray v. Bradbury, 668 So. 2d at 298 (Testimony of "a trial attorney and an insurance casualty claim manager, who were not shown to have proficiency in the various fields of expertise at issue (ranging from accident reconstruction to neurosurgery)," was not competent to support an award for expert witness fees.). Moreover, there is no basis for an award of legal fees (for Mr. Suarez) to set up a special needs trust, as there was no showing such expense was reasonably associated with the pursuit of the claim, or any evidence offered to demonstrate any activity he took, or proposed to take, was reasonably necessary or that the fee charged was reasonable. Brake v. Murphy, supra. Finally, the remaining items were either not explicated or are considered overhead, and not taxable. Department of Transportation v. Skidmore, 720 So. 2d 1125 (Fla. 4th DCA 1998)(recognizing that postage, long distance calls, fax transmissions, delivery service, and computer research are overhead and not properly taxable as costs).
Findings Of Fact Joshua Clement was born on January 2, 2012, at Holmes Regional Medical Center. He weighed 4,173 grams. Joshua's vaginal birth was complicated by shoulder dystocia. His Apgar scores were 5/9. Bag and mask ventilation was required for less than 30 seconds after birth. Joshua responded to the resuscitation and was taken to the nursery at the hospital. His newborn hospital care was essentially uneventful. Joshua was subsequently diagnosed with Erb's palsy. Donald C. Willis, M.D. (Dr. Willis), reviewed the medical records for Joshua's delivery and opined that "[t]here was no apparent obstetrical event that resulted in loss of oxygen or mechanical trauma to the baby's brain or spinal cord during labor, delivery or the immediate post delivery period." On February 8, 2012, Michael S. Duchowny, M.D. (Dr. Duchowny), evaluated Joshua. Upon examination of Joshua and the pertinent medical records, Dr. Duchowny opined that: Joshua's neurological examination reveals findings consistent with a diagnosis of mild Erb's palsy affecting primarily the C5/6 and to a lesser degree C7 dermatomes. He has no sensory abnormalities and his motor deficits are mild and will likely improve with time. There were no findings referable to motor impairment arising from damage to the central nervous system and certainly his cognitive abilities are entirely intact. I have reviewed records sent on January 23, 2012. The information supports the mother's history and provides no information to suggest neurologic injury to the brain or spinal cord acquired due to oxygen deprivation or mechanical injury. I therefore do not believe that Joshua should be considered for compensation within the NICA program. He has a mild motor impairment which is the result of forces acting outside of the brain and spinal cord. Furthermore, his mental function is normal for age. A review of the file in this case reveals that there have been no expert opinions filed that are contrary to the opinions of either Dr. Willis or Dr. Duchowny. The opinions of Dr. Willis and Dr. Duchowny that there was no neurologic injury to the brain or spinal cord due to oxygen deprivation or mechanical injury are credited. Additionally, Dr. Duchowny's opinion that Joshua is not mentally impaired is credited.
Findings Of Fact Madison Carlene Benner was born on May 2, 2008, at Mease Countryside Hospital in Safety Harbor, Florida. On November 21, 2008, a complaint for medical malpractice was filed by Diana Lynn Benner, individually, and as parent and natural guardian of Madison Benner, a minor. The complaint alleged that Tampa Bay Women’s Healthcare Alliance, LLP, d/b/a Tampa Bay Women’s Care (Defendant), acting by and through an agent or employee, delivered Madison. The complaint further alleged that Defendant’s agent or employee applied excessive lateral traction “to the fetal head during the dystocia causing and/or substantially contributing to the brachial plexus injury and/or aggravating a pre-existing condition.” Subsequent to the filing of the medical malpractice action a Guardian Ad Litem was appointed. Shortly thereafter, a settlement agreement was entered into between Diana Benner, individually, and as parent and natural guardian of Madison Benner, a minor, and Anjana D. Patel, M.D.; Tampa Bay Women’s Healthcare Alliance, LLP, d/b/a Tampa Bay Women’s Care; Tampa Bay Women’s Healthcare Alliance, LLP, d/b/a Women’s Care Florida; and First Professionals Insurance Company, Inc. The Settlement Agreement and Release states as recitals the following: Recitals Diana Benner was a patient of Defendants. Madison Benner, the minor, was injured by Defendants during her delivery on May 2, 2008 in Pinellas County, Florida. Claimants allege that the minor’s physical and personal injuries arose out of certain alleged negligent acts or omissions by Defendants and have made a claim seeking monetary damages on account of those injuries. The Release extends to all damages which could have been alleged in the Notice of Intent to Initiate Litigation against the Defendants. The Release does not extend to any other person or entity not identified herein. FPIC is the Defendants’ liability insurer and, as such, would be obligated to pay any claim made or judgment obtained against Defendants which is covered by its policy with Defendants. The parties desire to enter into this Settlement Agreement in order to provide for certain payments in full settlement and discharge of all claims which have, or might be made, by reason of the incident described in Recital A above, upon the terms and conditions set forth below. In exchange for the complete release and forever discharge given to the Defendants and insurer, Diana Benner, individually, and as parent and natural guardian of Madison, received $250,000, $80,000 of which was annuitized. The settlement further states: Release and Discharge In consideration of the payments set forth in Section 2 Claimants hereby completely release, and forever discharge, Defendants and Insurer from any and all past, present or future claims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, whether based on a tort, contract, or other theory of recovery, which the Claimants may have, or which may hereafter accrue or otherwise be acquired, on account of, or may in any way grow out of, the incident described in Recital A above, including, without limitation, any and all known or unknown claims for bodily or personal injuries to Claimants or any future wrongful death claim to Claimants’ representatives or heirs, which have resulted or may result from the alleged acts or omissions of the Defendants. On February 12, 2009, Ms. Benner filed a Motion to Approve Settlement. A two-page letter from the Guardian Ad Litem in support of the settlement was also filed. On March 6, 2009, a hearing was held before Circuit Judge Amy Williams, who approved the settlement. Any claims of Madison’s father were extinguished by the settlement. The Guardian Ad Litem was relieved of further responsibilities. The medical malpractice action was voluntarily dismissed on March 16, 2009. At the time of Madison’s birth, Dr. Patel, who was one of the parties settling with Ms. Benner, was a “participating physician” as that term is defined by section 766.302(7). There is no dispute that Dr. Patel delivered Madison, was named in the Petition as the physician providing obstetric services, and was present at the birth of Madison.
The Issue The issue to be decided 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 Petitioner, from a third party, pursuant to section 409.910, Florida Statutes (2018).
Findings Of Fact On November 8, 2013, Glass, who was then 25 years old, was struck by a car while crossing the road, which caused multiple severe mental and physical injuries. After the accident, Glass was hospitalized. His medical care related to his injuries was paid by Medicaid. Glass, through counsel, brought a personal injury lawsuit against the driver and company that owned the vehicle that struck him ("tortfeasor") to recover all of his damages associated with his injuries. Steven B. Phillips ("Phillips"), a nearly 28-year civil trial attorney with the law firm of Pincus & Currier in Palm Beach, Florida, represented Glass in his personal injury action. During the pendency of the personal injury action, AHCA neither started a civil action to enforce its rights under section 409.910 nor intervened or joined in Glass's action against the tortfeasor. Phillips handled Glass's personal injury case through settlement. The personal injury lawsuit was ultimately settled for the lump-sum unallocated amount of $225,000.00. Glass's taxable costs incurred in securing the $225,000.00 settlement are $29,677.93. By letter, AHCA was notified of Glass's settlement of the personal injury action. AHCA has neither filed an action to set aside, void, or otherwise dispute the settlement. AHCA, through its Medicaid program, spent $145,629.51 in Medicaid benefits on behalf of Glass, all of which represents expenditures paid for Glass's past medical expenses. The formula at section 409.910(11)(f), as applied to the entire $225,000.00 settlement, requires payment of the Medicaid lien in the full amount of the $69,536.04. AHCA is demanding payment of $69,536.04 from the $225,000.00 settlement. Glass 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). Hearing At the final hearing, Petitioner presented expert testimony from Phillips, Glass's Florida trial attorney. Phillips is a 21-year board-certified civil trial lawyer who practices exclusively in personal injury and insurance law. Phillip's board-certified designation recognizes him as a specialist that has extensive experience in civil trial practice. He is also a member of the Palm Beach Justice Association. Phillips's practice of law is a hundred percent personal injury cases, including catastrophic injuries. He has handled over a hundred jury trials. Phillips currently only represents plaintiffs who are injured, but he also previously was defense counsel for ten years. Phillips's expertise encompasses valuation of personal injury damages and allocation of settlements relating to health care liens. Phillips stays abreast of all State of Florida jury verdicts by reviewing jury verdict reporters and researching cases statewide. He also routinely discusses cases with other plaintiff attorneys. At hearing, Phillips explained that as a routine part of his practice, he makes assessments concerning the value of damages suffered by injured parties, and he detailed the steps for making those assessments. Valuation Phillips credibly explained the process he took to develop an opinion concerning the value for the damages suffered in Glass's case. Phillips testified that he met with Glass numerous times; reviewed his approximate 1,400 pages of medical records; assessed the injuries and costs of the medical treatment; evaluated how the accident occurred; assessed liability issues and fault; resolved if there was comparative negligence; verified future medical treatment; and established lost economic damages, such as wages, and any intangibles, such as past and future pain and suffering, loss of capacity to enjoy life, and mental anguish. Phillips analyzed how the accident occurred and detailed that Glass was walking on a main road, Indiantown Road, in Jupiter, Florida. As Glass was walking on a sidewalk, he turned and walked across the roadway. A vehicle was approaching him, and he went back and forth as to whether he was going to cross or step back on the curb; and the car driver did not slow down, hit Glass, and threw him approximately 65 feet in the air. He landed with his face smashed down in the road and was rendered unconscious at the scene. Glass suffered multiple maxillofacial injuries along with numerous broken bones and a traumatic brain injury. As a result, Glass was taken to St. Mary's Hospital, a trauma hospital, for treatment. Phillips explained the importance of assessing each of Glass's injuries in order to properly determine the true value of the case. Next, he went over the injuries in detail describing that Glass had a traumatic head injury that resulted in an acute right and rear frontal lobe hemorrhage, contusion, which bled for several days, and resulted in a traumatic brain injury. He had post-traumatic cephalgia and pain in his head. Glass's optic nerve in his left eye resulted in decreased visual acuity. One side of his lung collapsed, and he had multiple fractured ribs. Glass suffered a functional decline in his short-term memory, and he had cerebral spinal fluid in the subdural space around the brain. Additionally, he had an extensive LeFort II fracture, which involved the roof of the mouth on both sides; his front teeth on the bottom were fractured; and the top of his eyes was fractured and displaced on the left side, as well as several other bones on his face were fractured. His legs and arms also had broken bones. Glass underwent multiple extensive surgeries to repair all the fractures, and he even had surgical debridement to repair the soft tissue and closure of the skin. There was additional surgery to repair the top third of his face and a broken nose. At hearing, Phillips testified that the medical care related to the accident was paid by Medicaid in the amount of $145,629.51. Phillips explained that the accident had a tremendous impact on Glass's life. He was hospitalized for approximately seven months. Some results from the accident are Glass cannot retain short memory, count money, or go to the store alone to purchase something. After he was released from the hospital, he moved in with his mother where he resides now. Glass sued the individual driver and driver's company, Quest Diagnostic, because it was Phillips's position that the driver was negligent in failing to slow down, stop, and take affirmative action to avoid striking Glass on the roadway. As the litigation proceeded, Phillips discovered challenges in the case. One hurdle was that Glass did not remember the accident, and the personal injury case had to be built around the police report. Phillips further explained that another issue existed as to whether Glass had been drinking on the day of the accident and had alcohol in his system. With Glass's memory loss, Phillips ultimately concluded that there was a major issue with comparative negligence in this case, and he determined that it would be difficult to prove the driver of the vehicle was at fault. As a result of the challenges to the personal injury action, Phillips settled the case for $225,000.00. Phillips credibly explained that to determine the true value of Glass's case, he used the routine method of researching the value of damages for each injury. Phillips discovered while researching the jury verdict system that there was not even one case that had half of the injuries Glass had sustained. Phillips discovered memory-loss cases ranged in damages from $160,000.00 upward, depending on the extent. He found that brain injury cases started at $500,000.00 in damages depending on the hemorrhaging and residual effect. Elbow fractures are calculated $50,000.00 upward. Optic nerve damage cases are $200,000.00 upward. Orbital fractures cases were awarded damages from $300,000.00 upward. Phillips put together about ten different jury verdicts adding up the various injuries Glass sustained to calculate a fair value for his injuries. Phillips concluded that a true value of the case conservatively was $1.5 million. Phillips also round tabled the case with other attorneys to finalize a value. The other attorneys all agreed that Glass's damages were in excess of $1.5 million. As a result, Phillips concluded that the low-end conservative number for the value of Glass's damages is $1.5 million. Allocation Phillips also credibly and persuasively testified that he is familiar with and has participated in several hundred allocations of settlements including Medicaid cases,1/ health insurance liens, automobile insurance coverage liens, Medicare set asides, jury verdict setoff for comparative negligence, as well as allocations of judgments. Phillips explained that he has been dealing with Medicaid payment allocations, negotiation of settlements, and reductions of the liens on a routine basis for his 27 years' membership in The Florida Bar. Phillips summarized how common the method of allocation is in the industry and stated about "90 percent of his cases involve some type of allocation of medical expenses versus the true or pure value of the case to determine a fair and reasonable amount to reimburse a lien holder on payments, such as Medicaid." Phillips opined that the settlement was not the full value of Glass's damages and that the settlement only represents 15 percent of the full measure of his damages. Phillips's testimony was uncontradicted and compelling. Phillips explained that the 15 percent is the percentage of the settlement value, $225,000.00, from the true value of $1.5 million. He calculated the percentage by dividing $225,000.00 into $1.5 million which equals 15 percent. Phillips also credibly testified that he utilized the same method that he has been routinely using for over 25 years to properly and reasonably allocate Glass's past medical expenses. Phillips took 15 percent of the $145,629.51 Medicaid lien, which makes the allocation of past medical expenses $21,844.43. Phillips also explained that it is the only allocation method he has ever used. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that Petitioner has established by unrebutted uncontested evidence that the $225,000.00 settlement amount is 15 percent of the total value ($1.5 million) of Petitioner's damages. Using the same calculation, Petitioner correctly established that 15 percent of $145,629.51 (Petitioner's lien amount for past medical expenses), $21,844.43, should be the portion of the Medicaid lien paid to AHCA. ACHA offered no evidence to counter either Phillips's opinions or Petitioner's Exhibit 8, Scott S. Warburton's ("Warburton") sworn affidavit. Warburton is opposing counsel in Glass's personal injury case, who corroborates the value of Glass's damages in excess of $1.5 million and also allocates the case with the same 15 percent recovery amount resulting in a $21,844.43 claim for past medical expenses. Petitioner 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).
The Issue The issue to be determined in this case is the amount to be paid to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), to reimburse Medicaid for medical expenses paid on behalf of Petitioner from proceeds of a personal injury settlement received by Petitioner.
Findings Of Fact The following findings of fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the prehearing stipulation. Petitioner, William O’Malley, is the recipient of Medicaid for injuries he sustained in an automobile accident. Respondent is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 9, 2009, Petitioner, William O’Malley, lost control of his vehicle when it hydroplaned across three lanes of traffic. Mr. O’Malley’s vehicle left the roadway and struck a tree. While he was restrained with a seat belt, Mr. O’Malley suffered a severe brain injury, fractured skull, injury to his neck at the C6-C7 level, numerous fractured ribs, shattered spleen, lacerated liver, abdominal bleeding, a fractured ankle and other serious injuries. He remained in a coma for a number of weeks undergoing extensive surgical procedures to save his life. As a result of his severe and permanent injuries, Mr. O’Malley now suffers from cognitive deficits, is disfigured, and is unable to work. He receives disability payments due to his injuries. A portion of Mr. O’Malley’s past medical expenses related to his injuries was paid by Medicaid, in the amount of $196,125.72. Mr. O’Malley initiated a personal injury civil action to recover all his damages associated with his injuries against the construction companies who allegedly designed and constructed the roadway in a defective manner (“Defendants”). During the pendency of Mr. O’Malley’s personal injury action, AHCA was notified of the action, and asserted a $196,125.72 Medicaid lien against any damages received by Mr. O’Malley. AHCA was not otherwise involved in the personal injury action or settlement. In October 2016, Mr. O’Malley’s personal injury action settled for the gross amount of $1,750,000. The General Release memorializing the settlement agreement provides as follows: Although it is acknowledged that this settlement does not fully compensate William O’Malley for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating William O’Malley for a fraction of the total monetary value of his alleged damages. The parties agree that William O’Malley’s alleged damages have a value in excess of $20,000,000.00, of which $379,874.27 represents William O’Malley’s claim for past medical expenses. Given the facts, circumstances, and nature of William O’Malley’s injuries and this settlement, the parties have agreed to allocate $33,239.00 of this settlement to William O’Malley’s claim for past medical expenses and allocate the remainder of the settlement toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all William O’Malley’s damages. Further, the parties acknowledge that William O’Malley may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses William O’Malley will incur in the future. However, the parties acknowledge that William O’Malley, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and William O’Malley has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. By letter of October 13, 2016, Mr. O’Malley’s attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of $123,699.86 in litigation costs. This letter explained that Mr. O’Malley’s damages had a value in excess of $20 million and the settlement represented only 8.75 percent of the recovery of Mr. O’Malley’s $379,874.27 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $196,125.72 Medicaid lien. AHCA responded to Mr. O’Malley’s attorney’s letter and demanded full payment of the entire $196,125.72 Medicaid lien from the settlement. AHCA, through the Medicaid program, spent $196,125.72 on behalf of Mr. O’Malley, all of which represents expenditures paid for Mr. O’Malley’s past medical expenses. No portion of the $196,125.72 paid by AHCA represented expenditures for future medical expenses. Application of the formula at section 409.910(11)(f) to Mr. O’Malley’s settlement requires payment to AHCA of $196,125.72, the actual amount of the medical expenses paid by Medicaid. Petitioner disputes that $196,125.72 is the amount of recovered medical expenses payable to Respondent, and instead asserts that $33,239.00 in medical expenses are payable to Respondent. Notwithstanding Petitioner’s dispute, Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). In support of his position, Mr. O’Malley presented the testimony of two experts, Steven Browning, Esquire, and Vinson Barrett, Esquire. Mr. Browning represented Mr. O’Malley in the personal injury action. He testified as an expert regarding the valuation of Mr. O’Malley’s personal injury claim. Mr. Browning has practiced law for 31 years, primarily representing plaintiffs. He is a partner of his law firm and handles serious personal injury, wrongful death, and catastrophic injury cases. Mr. Browning handles cases that result in jury trials and, thus, he routinely researches jury verdicts to determine potential value of cases. In the litigation of civil actions, he also prepares mediation statements regarding the value of cases. He reviews life care plans, economic reports, and past jury verdicts to determine the value of a case. Mr. Browning opined that $20 million constituted a very conservative valuation of damages suffered by Mr. O’Malley. He based this opinion on having represented Mr. O’Malley in the underlying personal injury action and on his knowledge of jury verdicts and settlements in recent Florida cases involving awards of damages to individuals with similar injuries as Mr. O’Malley. He emphasized that his valuation was far more conservative than many comparable cases that resulted in substantially higher verdicts or settlements. Mr. Browning concluded that the $1,750,000 settlement amount represented 8.75 percent of the damages suffered by Mr. O’Malley. He also opined that only 8.75 percent of the $196,125.72, the past medical expenses paid by Respondent, was recovered. Mr. Browning was accepted as an expert in this matter and his testimony was found to be persuasive. Mr. O’Malley also presented the testimony of Mr. Barrett regarding the valuation of Petitioner’s claim. Mr. Barrett has practiced law for approximately 35 years. He primarily practices in the areas of medical malpractice, pharmaceutical liability, and catastrophic injuries resulting from automobile accidents. Mr. Barrett routinely handles jury trials. Thus, he routinely monitors jury verdicts and determines the value of damages suffered in personal injury actions. He reviewed recent jury verdicts and the life care plan for Mr. O’Malley to formulate his opinion regarding the valuation of Mr. O’Malley’s claim. Mr. Barrett testified that $20 million to $25 million was the estimated value of Mr. O’Malley’s claim. He testified that the amount was a very conservative estimate of damages suffered by Mr. O’Malley. Similar to Mr. Browning, Mr. Barrett opined that allocating 8.75 percent to past medical expenses in the amount of $196,125.72 was a reasonable allocation of past medical expenses and reflected the amount recovered by Mr. O’Malley for past medical expenses. Respondent also presented an expert regarding the valuation of Mr. O’ Malley’s claim, Steven Carter. Mr. Carter has been licensed to practice law for 23 years. He is the managing shareholder of his law firm. He has handled catastrophic injury cases in which he determined the value of the claim. He has conducted 35 to 40 jury or bench trials. Mr. Carter was accepted as an expert regarding valuation of Mr. O’Malley’s claim. Mr. Carter testified that the value of Mr. O’Malley’s damages was the actual settlement amount of $1,757,000. Ultimate Finding of Fact The undersigned finds that the testimony of Mr. Browning and Mr. Barrett was more persuasive regarding valuation of Mr. O’Malley’s claim than the testimony of Respondent’s expert witness. Mr. Browning and Mr. Barrett’s number of years of experience with handling catastrophic personal injury cases, and the fact that they had the benefit of the life care plan when evaluating the case, make their testimony more persuasive regarding the valuation of damages suffered by Mr. O’Malley in this case.
The Issue The issue 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.
