The Issue The issue is the amount of Petitioner’s $800,000 personal injury settlement payable to Respondent, Agency for Health Care Administration (“AHCA”), to satisfy AHCA’s $187,950.01 Medicaid lien.
Findings Of Fact Based on the stipulations of the parties, evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Background On July 13, 2008, Carissa Gaudio (Carissa), then 26 years old, suffered severe physical injury and catastrophic brain damage when her car was struck by a train. Carissa received extensive medical intervention to save her life and address her injuries. Eventually, her medical condition stabilized and she was discharged to her parent’s home. While Carissa demonstrated consciousness and awareness, due to her catastrophic brain damage, she was unable to speak, ambulate, eat, toilet or care for herself in any manner. She was totally dependent on others for every aspect of her daily care. Carissa’s past medical expenses related to her injuries suffered on July 13, 2008, were paid by private health insurance through Blue Cross Blue Shield of Florida, Medicare, and Medicaid. Blue Cross Blue Shield of Florida provided $494,868.51 in benefits, Medicare provided $6,364.89 in benefits, and Medicaid provided $187,950.01 in benefits. The combined amount of these benefits is $689,183.41, and this $689,183.41 represented Carissa’s entire claim for past medical expenses. Carissa, or others on her behalf, did not make payments in the past or in advance for Carissa’s future medical care, and no claim for damages was made for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Due to Carissa’s incapacity, Carissa’s mother, Roseann Gaudio, was appointed her legal guardian. Roseann Gaudio, as Carissa’s mother and guardian, brought a personal injury action in Broward County, Florida to recover all of Carissa’s damages against the railway company and train engineer (“Tortfeasor”). On January 10, 2015, Roseanne Gaudio, as Carissa’s mother and guardian, settled Carissa’s personal injury lawsuit for $800,000. In making this settlement, the settling parties agreed that: 1) the settlement did not fully compensate Carissa for all her damages; 2) Carissa’s damages had a value in excess of $16,000,000, of which $689,183.41 represents her claim for past medical expenses; and 3) allocation of $34,459.17 of the settlement to Carissa’s claim for past medical expenses was reasonable and proportionate. Because Carissa was incapacitated, her settlement required Court approval. Accordingly, by Order Approving Settlement dated February 11, 2015, the Circuit Court Judge, Honorable Jack Tuter, approved Carissa’s settlement. As a condition of Carissa’s eligibility for Medicaid, Carissa assigned to AHCA her right to recover from liable third- parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. During the pendency of Carissa’s lawsuit, AHCA was notified of the lawsuit and AHCA, through its collections contractor, Xerox Recovery Services Group, asserted a $187,950.01 Medicaid lien against Carissa’s cause of action and future settlement of that action. By letter of February 17, 2015, Carissa’s personal injury attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Final Release and a copy of the Order Approving Settlement. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the Medicaid lien. AHCA did not respond to Carissa’s attorney’s letter of February 17, 2015. AHCA did not file an action to set aside, void, or otherwise dispute Carissa’s settlement with the Tortfeasor. The Florida Medicaid program spent $187,950.01 on behalf of Carissa, all of which represents expenditures paid for Carissa’s past medical expenses. Carissa died on August 12, 2015 (Death Certificate filed by Petitioner on September 11, 2015). No portion of the $187,950.01 paid by the Medicaid program represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. AHCA has determined that of Carissa’s $226,478.73 in litigation costs, $210,463.10 are taxable costs for purposes of the section 409.910(11)(f) formula calculation. Based on $210,463.10 in taxable costs, the section 409.910(11)(f) formula applied to Carissa’s $800,000 settlement, requires payment of $194,768.45 to AHCA in satisfaction of its $187,950.01 Medicaid lien. Since $187,950.01 is less than the $194,768.45 amount required to be paid to AHCA under the section 409.910(11)(f) formula, AHCA is seeking reimbursement of $187,950.01 from Carissa’s $800,000 settlement in satisfaction of its Medicaid lien. The full Medicaid lien amount has been deposited into an interest-bearing account pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, pursuant to section 409.910(17)(b). At hearing, Petitioner called Joseph J. Slama, a board-certified civil trial lawyer. Mr. Slama handles aviation crash, products liability, roadway defect, and automobile accident cases, including handling catastrophic brain injury cases through jury trial. He stays abreast of jury verdicts through review of publications and participation in trial attorney organizations. He testified that he routinely evaluates his client’s injuries and makes assessments concerning the value of their damages, and he explained his process for making these determinations based on his experience and training. Mr. Slama was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Slama testified that he represented Carissa in relation to her personal injury action. He explained that he first met with Carissa and her mother after she was discharged home from the hospital. Mr. Slama testified that he had reviewed the accident report, Carissa’s medical records, taken depositions of witnesses and experts, and reviewed the Life Care Plan prepared by Craig H. Lichtblau, M.D. Mr. Slama explained in great detail the facts and circumstances of Carissa’s accident. He explained that Carissa’s car became stuck on the railroad tracks. Unfortunately, a train approached and shortly before impact, Carissa exited her vehicle. Her vehicle was struck by the train and she was propelled 167 feet from the point of impact. Mr. Slama testified that as a result of the accident, Carissa suffered catastrophic physical injury and brain damage. He testified that due to this catastrophic brain injury, Carissa was left in a semi-vegetative state and was unable to ambulate. While she was conscious and aware of her condition, she was unable to communicate other than with limited facial expressions. She lived in her parents’ living room where she received around the clock care, provided by her family, until her recent death. Mr. Slama testified that through his representation of Carissa, interactions with her, review of her medical records and reports, and based on his training and experience in similar cases, it was his opinion that the “minimum reasonable value” of Carissa’s damages was $16,000,000. He testified that this $16,000,000 would be the amount a jury would award in damages if the question of damages alone was presented to the jury, and he would be disappointed in this result because he would ask for much more in damages. Mr. Slama explained that the basis of his opinion was her past expenses, her need for future life care needs, and her non-economic damages, including pain and suffering, which would have been awarded from the date of her injury by a jury and would be a huge amount. Mr. Slama explained that Carissa’s lawsuit to recover all her damages had issues related to comparative negligence and disputed facts that called into question the responsibility of the defendants to pay for Carissa’s damages. He testified that based on these issues, Carissa’s lawsuit was settled for $800,000. Mr. Slama testified that this $800,000 settlement did not fully compensate Carissa for the full value of her damages and that based on the $16,000,000 valuation of all Carissa’s damages, the $800,000 settlement represented a five percent recovery of Carissa’s damages. He testified that because she only recovered five percent of her damages in the settlement, she “only recovered 5 percent of each and every element of her damages, including only 5 percent of her $689,183.41” claim for past medical expenses, or $34,459.17. R. Vincent Barrett has been a trial attorney since 1977 and is a partner with the Tallahassee law firm of Barrett, Fasig & Brooks. He practices in the area of medical malpractice and medical and pharmaceutical product liability. He has handled catastrophic injury cases and handled numerous jury trials. Mr. Barrett stays abreast of jury verdicts by reviewing Jury Verdict Reports, talking with other lawyers, and attending seminars. He testified that as a routine part of his practice, he ascertains the value of damages suffered by injured parties and has served as an expert in the valuation of damages in civil cases. Mr. Barrett was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Barrett testified that he was very familiar with Carissa’s injuries and had reviewed a substantial amount of Carissa’s medical records, the Life Care Plan, accident report, before and after pictures of Carissa, Day in the Life Video, the Second Amended Complaint, the Release, and the Order Approving Settlement. Mr. Barrett explained that he was familiar with the type of injury suffered by Carissa because he had handled a number of traumatic brain and orthopedic injury cases with injuries similar to Carissa’s. He testified that with respect to virtually every injury that Carissa suffered, he had handled a case that involved one or more of those injuries. Mr. Barrett stated that Carissa’s case is “one of the worst cases I’ve ever seen,” and he described Carissa’s accident and extensive injuries. Mr. Barrett explained that Carissa’s injuries were “horrible” and “dramatic” and that “tractor trailer versus car, train versus car, those kinds of cases are worth in a jury trial generally twice as much as in a regular car accident just because of the dramatic traumatic nature of the impact it has on jurors.” Mr. Barrett testified that Carissa’s damages had a value of at least up in the $30,000,000 range and that the valuation of her damages at $16,000,000 was extremely conservative. He explained that he had reviewed jury verdicts in developing his opinion as to the value of Carissa’s damages, and he compared a number of the verdicts he had reviewed with Carissa’s case, including the Mosley 2014 Broward verdict for $75,543,527, noting that the Mosley plaintiff, unlike Carissa, was left with limited verbal language and the ability to walk short distances with assistance. Mr. Barrett stated in relation to the $16,000,000 valuation of Carissa’s damages that, “in Broward County for a pretty, young, 26-year old, gainfully employed, Hispanic lady, who was engaged, it’s got to be the limit. I mean, some of those verdicts were $75 million and some of those people weren’t hurt as bad as Carissa. So, yes, it’s very conservative.” The testimony of Mr. Slama and Mr. Barrett that the minimum reasonable value of Carissa’s damages was $16,000,000 was unrebutted, and is credible. Respondent’s position is that it should be reimbursed for its Medicaid expenditures on behalf of Petitioner pursuant to the formula set forth in section 409.910(11)(f). Under the statutory formula, the lien amount is computed by deducting a 25 percent attorney’s fee ($200,000) and taxable costs ($210,463.10) from the $800,000 recovery, which yields a sum of $389,536.90, then dividing that amount by two, which yields a result of $194,768.45. Under the statute, Respondent is limited to recovery of the amount derived from the statutory formula or the amount of its lien, whichever is less. Since the Medicaid lien amount is $187,950.01, which is less than the $194,768.45 amount required to be paid to AHCA under the section 409.910(11)(f) formula, AHCA is seeking reimbursement of $187,950.01 from Carissa’s $800,000 settlement in satisfaction of its Medicaid lien. Petitioner’s position is that reimbursement for past medical expenses should be limited to the same ratio as Petitioner’s recovery amount to the total value of damages. Petitioner urges Respondent should be reimbursed $34,459.17 in satisfaction of its Medicaid lien. The settlement amount of $800,000 is five percent of the reasonable total value ($16 million) of Petitioner’s damages. By the same token, five percent of $689,183.41 (Petitioner’s past medical expenses paid by both Medicaid and private insurance) is $34,459.17. Petitioner proved by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by Respondent pursuant to the formula set forth in section 409.910(11)(f).
Findings Of Fact By stipulation filed December 2, 1993, petitioners and respondent stipulated as follows: That pursuant to Chapter 766.301- 766.316, Florida Statutes, a claim was filed on behalf of the above-styled infant against the Florida Birth-Related Neurological Injury Compensation Association (the "Association") on behalf of Andres Romero, Bertha Romero and Alberto Romero (the "Petitioners") for benefits under Chapter 766.301-766.316 (F.S.) 1988. That a timely filed claim for benefits complying with the requirements of F.S. 766.305 was filed by the Petitioners and a timely denial was filed on behalf of the Association. That the infant, Andres Romero, was born at Baptist Hospital [sic] [medical reports and records reflect South Miami Hospital] on July 22, 1991, and that the said hospital was a licensed Florida Hospital and the attending physician was a participating physician within the meaning of Chapter 766, Florida Statutes. That the Division of Administrative Hearings has jurisdiction of the parties and the subject matter of this claim. That Section 766.302(2), Florida Statutes, states that "birth-related neurological injury" means injury to the brain or spinal cord of a live infant weighing at least 2500 grams at birth caused by oxygen deprivation or mechanical injury occurring in the course of labor, delivery, or resuscitation in the immediate post- delivery in a hospital, which renders the infant permanently and substantially, mentally and physically impaired. The parties agree that Andres Romero suffers from a right brachial plexus injury. That the parties stipulate to the authenticity of the medical records and/or medical reports of Michael Duchowny, M.D., who appears on behalf of the Respondents and Leon I. Charash, M.D., who appears on behalf of the Petitioner. The parties stipulate that there are no other pertinent medical facts to be considered by the Division of Administrative Hearings. The parties further Stipulate that if the parties were to proceed to a hearing on the merits no further proof would be offered and traditional burdens of proof would apply. Based upon this stipulation, the parties request the hearing officer to rule on Petitioner's claim based upon this Stipulation, the attached medical records and the deposition of Dr. Duchowny. The neurological examinations of Andres reveal that he suffered from a "mild" to "moderate" right Erb's palsy related directly to the right brachial plexus injury he received at birth. A brachial plexus injury, the cause of Erb's palsy, is not, however, a spinal cord injury. Moreover, Andres's mental functioning is normal and not impaired due to any birth-related complications.
Findings Of Fact Yancel Peraza was born on April 1, 2009, at Winnie Palmer Hospital in Orlando, Florida. Yancel weighed 3,525 grams at birth. Donald Willis, M.D. (Dr. Willis), was requested by NICA to review the medical records for Yancel. In a medical report dated November 27, 2013, Dr. Willis opined the following: The newborn was not depressed. Apgar scores were 8/9. No cord blood gas was done. No resuscitation was required after birth. The baby had a weak right arm and some mild respiratory distress with grunting and flaring. The respiratory distress resolved shortly after birth. Neurology consultation was obtained at one day of age for evaluation of a weak right arm. Erb’s palsy was suspected. New born hospital course was otherwise uncomplicated. The baby was discharged home two days after birth with Neurology follow-up scheduled for reevaluation of the weak right arm. There 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. The baby did have a brachial plexus injury, but no damage to the spinal cord. NICA retained Michael S. Duchowny, M.D., to perform an independent medical examination of Yancel. Dr. Duchowny examined Yancel on September 25, 2013. In a medical report dated September 25, 2013, Dr. Duchowny reported his findings and gave the following opinion: In summary, Yancel’s neurologic examination is significant for a right Erb’s (upper brachial plexus) palsy involving the C5 and C6 dermatomes. He has a preserved individual finger dexterity and fine motor coordination but is mechanically limited by a fixed elbow contracture on the right. In contrast, there are no other significant findings on the neurologic examination. Despite the absence of supplementary medical records, Yancel’s neurological examination today that is consistent with an Erb’s palsy of the upper cervical nerve roots anatomically places his deficit outside the central nervous system (brain and spinal cord). For this reason, I do not believe that Yancel should be considered for compensation within the NICA program. A review of the file does not show any contrary opinion, and Petitioner and Intervenors have no objection to the issuance of a summary final order finding that the injury is not compensable under Plan. The opinion of Dr. Willis that Yancel did not suffer a neurological injury due to oxygen deprivation or mechanical injury during labor, delivery, or resuscitation in the immediate postdelivery period is credited. The opinion of Dr. Duchowny that Yancel has Erb’s palsy, which is outside the central nervous system, meaning that the injury does not involve the brain or spinal cord, 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 At issue in this proceeding is whether Cassidy Taylor Shiver, a minor, suffered an injury for which compensation should be awarded under the Florida Birth-Related Neurological Injury Compensation Plan.
Findings Of Fact Fundamental findings Kellie Dawn Shiver and Robert L. Shiver are the parents and natural guardians of Cassidy Taylor Shiver (Cassidy), a minor. Cassidy was born a live infant on November 5, 1996, at DeSoto Memorial Hospital, a hospital located in Arcadia, Florida, and her birth weight was in excess of 2500 grams. The physician providing obstetrical services during Cassidy's birth was Dumitru-Dan Teodoreseu, 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. Coverage under the Plan Pertinent to this case, coverage is afforded under the Plan when the claimant demonstrates, more likely than not, that the infant suffered an "injury to the brain or spinal cord . . . 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, which renders the infant permanently and substantially mentally and physically impaired." Sections 766.302(2) and 766.309(1)(a), Florida Statutes. Here, Cassidy's neurologic condition is dispositive of the claim and it is unnecessary to address the timing or cause of her condition. Cassidy's neurologic status On January 7, 1999, following the filing of the claim for compensation, Cassidy was evaluated by Michael Duchowny, M.D., a board-certified pediatric neurologist. Dr. Duchowny chronicled Cassidy's history and the results of his examination as follows: I evaluated Cassidy Shiver on January 7, 1999. Cassidy is a 2 year old girl who comes for an evaluation of developmental problems. Cassidy was accompanied by her mother and maternal grandmother. HISTORY ACCORDING TO THE FAMILY: The family began by explaining that Cassidy's seizures are her main ongoing problem. She had her last seizure several weeks ago and is now taking phenobarbital 20 mg b.i.d. Her seizure onset was at 2 months of age. She has essentially had persistent seizures, except for a 6 month seizure free interval. Each episode lasts approximately 1 to 2 minutes and typically occurs 15 to 20 minutes after falling asleep. Cassidy experiences the rapid onset of tonic and subsequently clonic movements primarily involving the upper extremities. They are associated with loss of consciousness and foaming at the mouth. She has a period of postictal depression before regaining normal baseline status during daytime attacks. Cassidy was allegedly the product of a 32 weeks gestation, born with the birth weight of 5-pounds, 9-ounces. The delivery was by a vacuum extraction and left Cassidy with a large right cephalohematoma. There was a significant collection of blood which ultimately "ruptured". Mrs. Shiver indicated that Cassidy experienced damage to both frontal lobes which was documented on both CT and MRI studies. Despite Cassidy's stormy neonatal course, her growth and development have proceeded reasonably well. She walked at 16 months and said single words at 22 months. She is not yet potty trained. Cassidy is fully immunized, has no known allergies and has never undergone surgery. She sporadically sees physical and occupational therapist, but Mrs. Shiver's [sic] performs the therapies at home. Cassidy has made a remarkable recovery, in that her motor function is essentially within the normal range with the exception of a minor arm asymmetry and with decreased left swing. Cassidy is quite curious and socially engaging. Her vision and hearing are said to be adequate and there has been no deterioration in her overall developmental level. PHYSICAL EXAMINATION today reveals Cassidy to be alert and cooperative. The skin is warm and moist. Her hair is blonde and of normal texture. Cassidy's head circumference measures 50.2 cm which is within standard percentiles. The anterior and posterior fontanelles are closed. There are no significant cranial or facial asymmetries. The neck is supple without masses, thyromegaly or adenopathy. The cardiovascular, respiratory and abdominal examinations are normal. NEUROLOGICAL EXMINATION reveals Cassidy to be alert, curious and slightly overactive. She does participate in the examination fully and is socially engaging. Cassidy maintains central gaze fixation and demonstrates conjugate following movements. The pupils are 4 mm and react briskly to direct and consentually presented light. There are no fundoscopic abnormalities. The tongue and palate move well. Motor examination reveals symmetric strength, bulk and tone. There are no adventitious movements or evidence of focal weakness. The gait is stable with an arm swing that indeed shows some posturing of the left arm. This is minimal however and does not affect Cassidy's stance or balance. She demonstrates good dexterity with both hands and has a well developed fine motor coordination for age. She uses both hands in a coordinated fashion. The deep tendon reflexes are 2+ and symmetric with flexor plantar responses. There is no evidence of gait, truncal or extremity ataxia. The neurovascular examination reveals no cervical, cranial or ocular bruits and no temperature or pulse asymmetries. The sensory examination is deferred. Cassidy did not speak in words or sentences at any time during the evaluation, but tends to verbalize consonants only. In SUMMARY, Cassidy's neurologic examination reveals evidence of an expressive language delay and a minor non-functional asymmetry of upper arm swing on her gait. Otherwise, Cassidy appears to be developing well and is being managed appropriately for her seizure diathesis. In Dr. Duchowny's opinion, which is credited, Cassidy is not currently substantially physically impaired and, notwithstanding any events which may have occurred at birth, is not likely to be so impaired in the future. 1/ (Respondent's Exhibit 1, pages 8, 9, and 11.)
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), for medical expenses paid on behalf of Clifford J. Deyampert (“Petitioner” or “Mr. Deyampert”) pursuant to section 409.910, Florida Statutes (2015),1/ from settlement proceeds received by Mr. Deyampert from a third party.
Findings Of Fact The following findings of fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On July 25, 2015, Mr. Deyampert was attending a party held at a friend’s house and was shot in the throat by another guest. The bullet traveled down Mr. Deyampert’s throat, struck his spinal cord, and caused Mr. Deyampert to be paralyzed from the chest down. As a result, Mr. Deyampert is permanently disabled, disfigured, and wheelchair-bound. In addition, Mr. Deyampert is bowel and bladder incontinent.2/ Medicaid paid $76,944.67 in order to cover Mr. Deyampert’s past medical expenses. No portion of the $76,944.67 paid by Medicaid on Mr. Deyampert’s behalf represents expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Mr. Deyampert initiated a personnel injury lawsuit by making a claim against a homeowner’s insurance policy that covered the shooter. Mr. Deyampert’s personal injury action settled for $305,000, and that was the limit of an aforementioned insurance policy.3/ The General Release memorializing the settlement stated the following: Although it is acknowledged that this settlement does not fully compensate Clifford Deyampert for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating Clifford Deyampert for a fraction of the total monetary value of his alleged damages. The parties agree that Clifford Deyampert’s alleged damages have a value in excess of $6,000,000, of which $76,944.67 represents Clifford Deyampert’s claim for past medical expenses. Given the facts, circumstances, and nature of Clifford Deyampert’s injuries and this settlement, the parties have agreed to allocate $3,847.23 of this settlement to Clifford Deyampert’s claim for past medical expenses and allocate the remainder of the settlement toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Clifford Deyampert’s damages. Further, the parties acknowledge that Clifford Deyampert may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses Clifford Deyampert will incur in the future. However, the parties acknowledge that Clifford Deyampert, or others on his behalf, have not made payments in the past or in advance for Clifford Deyampert’s future medical care and Clifford Deyampert has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. During the pendency of Mr. Deyampert’s personal injury action, AHCA was notified of the suit and asserted a Medicaid lien in the amount of $76,944.67 against any damages received by Mr. Deyampert. Via a letter issued on July 24, 2017, Mr. Deyampert’s attorney notified AHCA that Mr. Deyampert’s personal injury action had settled. The letter asked AHCA to specify what amount it would accept in satisfaction of the $76,944.67 Medicaid lien. AHCA responded by demanding full payment of the lien. Section 409.910(11)(f) sets forth a formula for calculating the amount that AHCA shall recover in the event that a Medicaid recipient or his or her personal representative initiates a tort action against a third party that results in a judgment, award, or settlement from a third party.4/ AHCA is seeking to recover $76,944.67 in satisfaction of its Medicaid lien. See § 409.910(11)(f)4., Fla. Stat. (providing that “[n]otwithstanding any provision in this section to the contrary, [AHCA] shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid.”). Valuation of the Personal Injury Claim F. Emory Springfield represented Mr. Deyampert during the personal injury action and testified during the final hearing. Mr. Springfield has practiced law for 32 years. He owns his own law firm and handles cases involving personal injury, workers’ compensation, and social security disability. Mr. Springfield has experience with jury trials and monitors jury verdicts issued in his fields of practice. Mr. Springfield routinely assesses the value of damages suffered by injured parties. He makes those assessments by determining the injured person’s life expectancy, evaluating the injuries, and conferring with lifecare planners about the injured party’s need for future care. In addition, Mr. Springfield learns as much as possible about the injured party’s past life activities and compares those activities to what the injured party is presently capable of doing. Mr. Springfield also assesses an injured party’s damages by examining jury verdicts from other cases. Mr. Springfield was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Springfield is of the opinion that Mr. Deyampert’s damages (including damages for pain and suffering and economic damages) are well in excess of $6 million. According to Mr. Springfield, the $305,000 settlement does not “come close” to fully compensating Mr. Deyampert for all of his damages. Furthermore, the $305,000 settlement only represents a five percent recovery of the more than $6 million in damages incurred by Mr. Deyampert. Therefore, in Mr. Springfield’s opinion, only five percent (i.e., $3,847.23) of the $76,944.67 in Medicaid payments for Mr. Deyampert’s past medical expenses were recovered. Mr. Deyampert also presented the testimony of R. Vinson Barrett, Esquire, during the final hearing. Mr. Barrett is a trial attorney who has been practicing in North Florida since the mid 1970s. Over the last 30 years, he has focused his practice on the areas of medical malpractice, medical products liability, and pharmaceutical liability. Mr. Barrett routinely handles jury trials and monitors jury verdicts issued in his practice areas. Mr. Barrett routinely assesses the value of damages suffered by injured parties. According to Mr. Barrett, a personal injury attorney must be skilled at estimating the value of a client’s claim. Otherwise, the high cost of bringing a case to trial can result in a personal injury attorney losing money and going bankrupt. Mr. Barrett was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Barrett gave the following testimony regarding Mr. Deyampert’s damages: This man not only is a paraplegic, but during all this, and I couldn’t really tell from the records I read whether the bullet caused this or some intubation in the hospital, but he got air into the space between his lung and his diaphragm, which can be a very painful problem, he had to be intubated to get that out. He developed, I believe, sepsis, at some point in his -- in his treatment; and it’s already evidence early on in his situation that he’s going to be, and is very susceptible to pressure ulcers on his skin. His skin is going to be prone to breakdown from prolonged periods of sitting in the same position and that sort of thing. Fortunately, he has enough strength left in his upper body that he’s able to ameliorate that somewhat. He’s able actually, on his own, and after a lot of rehab, to roll over in his bed to different positions even though his lower extremities are not working at all. He’s able to -- he’s able to reposition himself in his chair using the strength of his arms, so that will cut down a little bit on that. But he had already developed a pressure ulcer or two by the time he got into rehab in this case. He – so, he’s got no use at all, it appears, of his lower extremities. He had a number of complications that had to be dealt with. He was in the hospital a long time. His overall prospects after rehabilitation -– and he was still in some rehabilitation as early as about February of this year, so I’m not totally sure he’s through all his rehab yet. He has to take rehabilitation courses to learn -– relearn how to do things. He’ll need his home made wheelchair accessible, cabinets, and thing[s] like that, all the things that a person normally does without thinking about, are going to be challenges for him just in daily household stuff. He will have to have modifications, most likely, of his kitchen, his bathroom, that sort of thing. And so, yeah, there’s quite a bit to work within this case to come up with an evaluation. Mr. Barrett opined that $6 million was a “very conservative” estimate of the damages suffered by Mr. Deyampert. Mr. Barrett also opined that allocating five percent of the $76,000 claim (i.e., $3,847.23) to past medical expenses was a reasonable and rational allocation to past medical expenses and reflected the ratio of the amount recovered to the actual value of Mr. Deyampert’s damages. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Springfield and Mr. Barrett was compelling and persuasive. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Springfield’s and Mr. Barrett’s decades of experience with litigating personal injury lawsuits make them very compelling witnesses regarding the valuation of damages suffered by injured parties such as Mr. Deyampert.5/ Accordingly, the undersigned finds that Mr. Deyampert proved by a preponderance of the evidence that $3,847.23 constitutes a fair and reasonable recovery for past medical expenses actually paid by Medicaid.
The Issue The issue to be 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.
