The Issue Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The issue for determination is the amount Petitioner, Kimikia Molina, must pay to Respondent, Agency for Health Care Administration (the Agency or AHCA), out of her settlement proceeds as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes (2017).1/ More specifically, it must be determined whether Petitioner owes the default amount, $41,250, pursuant to section 409.910(11)(f); and, if not, what portion of her $110,000 settlement proceeds is due to AHCA.
Findings Of Fact Underlying Accident and Injuries Although there was no testimony regarding Petitioner’s accident or injuries, the following information can be gleaned from her medical records. On February 3, 2017, Petitioner, then age 22, was admitted to a medical facility after being involved in a motor vehicle accident. Petitioner had been a passenger in the car and was not wearing her seatbelt; the driver of the car was declared “signal 7” (or deceased) by the emergency responders at the scene of the accident. Petitioner was treated for neurological and orthopedic injuries, including surgical care to her left knee, right ankle and fibula. After numerous surgeries, on March 8, 2017, Petitioner was released from the medical facility to return home. At the time of her release, she still had splints on her left arm and right leg and dressings on her wounds, but was otherwise stable and alert. Upon discharge, Petitioner was placed on restrictions that included the following: No driving. No tub baths. No heavy lifting (over 10 pounds). No lifting, pulling, pushing, or straining. No weight bearing on the lower right side. These restrictions were to remain in effect until lifted by a doctor. Petitioner was also given instructions to follow up with physical and occupational therapy. The parties stipulated that Medicaid provided $55,042.63 toward Petitioner’s past medical expenses arising out of the February 2017 car accident. Additionally, Amerigroup Community Care has a lien against the settlement amount for $3,199.59. Petitioner submitted billing records establishing she incurred $3,865 for services provided by Rehab Consultants of Central Florida from March 16 to August 24, 2017. There was no evidence if this amount remains unpaid, what kinds of services were provided, or whether they were effective in Petitioner’s rehabilitation. There was no evidence as to whether Petitioner suffered from any emotional injuries. There was no evidence as to whether the accident had a permanent impact on her physical abilities. There was also no evidence as to whether Petitioner, who is relatively young, suffered from memory or other cognitive injuries that would prevent her from working in the future. There was no evidence how the accident affected Petitioner’s daily life functions, or her ability to maintain normal family, social, and work relationships. Petitioner’s Sources of Recovery The parties stipulated that in total, Petitioner received $110,000 in gross settlement proceeds. These proceeds came from two sources. The bulk of the proceeds were provided as a result of a unilateral “Bodily Injury Release” (Release) with Progressive American Insurance Company (Progressive), executed by Petitioner on March 22, 2018. The release indicates Petitioner would receive $100,000 in exchange for forfeiting her rights to pursue any claims arising out of the February 2017 accident against the estate of Loron Michael Turner (presumably the driver and/or owner of the vehicle). The remaining $10,000 was provided to Petitioner by State Farm Insurance under a policy held by Jesmarie and Mirian Perez. There was no evidence or testimony identifying the relationship of the Perezes to Petitioner or the driver of the vehicle. Allocation of Past Medical Expenditures The key factual issue in this case is how much of the $110,000 settlement funds are available to ACHA for payment of the Medicaid lien. One way to determine this amount is through a default formula set forth in section 409.910(11)(f). The parties stipulated that under this default formula, Petitioner is required to pay AHCA $41,250 for its Medicaid lien from the $110,000 total settlement proceeds.3/ Alternatively, Petitioner can show that a lesser amount than the default amount “should be allocated as reimbursement” for past medical expenses. See § 409.910(17)(b), Fla. Stat. Here, Petitioner urges the reduction of the Medicaid lien by the ratio of the actual settlement recovery to the “settlement value” amount. Using this formula, Petitioner claims AHCA can only recover 5.5 percent of the past medical expenses, or a total of $3,208.72 from the $110,000 settlement proceeds. Petitioner offered only the Release and the opinion of Frank Currie in support of using this formula. The Release, signed only by Petitioner (not Progressive or the Turner estate), states in relevant part: The parties to this release agree that the total value of Kimikia Molina’s claim is $2,000,000.00 that of that $58,340.35 is allocated for past medical bills, $41,659.70 is allocated to past lost wages, $720,000.00 is allocated to future loss of earning capacity, $590,000.00 is allocated to past pain and suffering and $590,000.00 is allocated to future pain and suffering. There was no evidence as to how the parties arrived at the monetary allocations in the Release. Petitioner provided no evidence supporting the Release’s allocations of past lost wages, future loss earnings, or noneconomic damages, such as pain and suffering. AHCA was not a party to the Release. There was no evidence as to how the $10,000 State Farm proceeds were to be allocated among the damage categories. Regarding Mr. Currie’s testimony, although he may have had litigation experience in personal injury lawsuits, his testimony did not establish why an alternative to the default formula should be used in Petitioner’s case. Mr. Currie testified Petitioner’s “settlement value” would have been $2 million, but it was not clear from his testimony that the “settlement value” is equivalent to the “total value of Kamikia Molina’s claim,” as referenced in the Release. See Smathers v. Ag. for Health Care Admin., Case No. 16-3590MTR, 2017 Fla. Div. Adm. Hear. LEXIS 540, at *7-8 (Fla. DOAH Sept. 13, 2017) (defining total provable damages as “all components of a plaintiff’s recoverable damages, such as medical expenses, lost wages, and noneconomic damages (e.g., pain and suffering)”). Moreover, according to Mr. Currie, the terms “settlement value” and “jury award” are different from each other and do not necessarily establish the total value of Petitioner’s claim or the amount of damages suffered by Petitioner. He explained, the factors in determining a “settlement value” include the best interest of the client, as well as the cost and risk of going to trial. In contrast, a “jury award” is the amount of damages that can be proven at trial, and can be influenced by a jury’s emotions. In this case, Mr. Currie admitted a hypothetical jury could have been influenced by a number of facts, including: the defendant was an estate (as opposed to an individual); Petitioner failed to use her seat belt; and alcohol contributed to the accident. Regardless of whether the $2 million figure cited by Mr. Currie was a “settlement value” or potential “jury award,” there was insufficient evidence establishing this figure because there was no evidence establishing the elements other than past medical expenses, such as an amount attributable to future medical expenses, lost wages, or pain and suffering. Thus, Mr. Currie’s opinion as to the medical expenses portion of the settlement is purely speculative and inconsistent with the Release. For example, Mr. Currie testified Petitioner previously made approximately $18,000 a year in salary.4/ But using this figure, Petitioner’s past lost earnings from February 2017 (the date of the accident) to March 2018 (the date of the settlement) would total approximately $20,000, not the $42,000 agreed to in the Release. Moreover, Mr. Currie’s opinion regarding the value of Petitioner’s case was not based on an established methodology or verifiable facts. Although Mr. Currie testified he reviewed the Release and Petitioner’s medical records in reaching the $2 million figure, there was no evidence at the hearing that he was sufficiently familiar with the facts of Petitioner’s current economic situation, her work history, or current employability. There was no evidence that he met with Petitioner or knew any information other than what was in Petitioner’s exhibits. Even Mr. Currie noted the cases he relied upon to establish his $2 million settlement valuation were procedurally and factually distinguishable from Petitioner’s situation. For example, some of the cases involved recovery after a jury award, others involved settlements; some involved alcohol, some did not; and unlike one of the other claimants, Petitioner was not known to have a pre-existing medical condition. The undersigned rejects Mr. Currie’s testimony because, although unrebutted, it was not based on a reliable methodology or sufficiently established facts. Although he relied on a number of verdict reports where the claimant had injuries similar to Petitioner’s, the underlying facts of Petitioner’s accident and medical situation were never sufficiently established at the hearing to meaningfully compare them to the facts of these cases; there was no evidence regarding Petitioner’s pre-accident health, her occupation, or her future ability to work. Neither the Release nor Mr. Currie’s testimony establish that the “actual settlement”-to-“settlement value” formula should be applied to Petitioner’s Medicaid lien instead of the default formula, nor did Petitioner establish the “settlement value” of her claim was $2 million. Petitioner has not proven by a preponderance of the evidence an alternative amount should be allocated for reimbursement for past medical expenses.
The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent), from the proceeds of Petitioners’ confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2020).1
Findings Of Fact Paragraphs 1 through 10 are the enumerated stipulated facts admitted and agreed upon by the parties, and required no proof at hearing. Petitioners commenced a medical malpractice action in 2013 to recover damages related to the injuries sustained by Tavarion Sanders at the time of his birth in 2009. Tavarion Sanders was born September 16, 2009. Misty Mobley is Tavarion Sanders’ mother. The medical malpractice action contains a cause of action asserted on behalf of Tavarion Sanders’ parents, Misty Mobley and Tavaris Sanders, for their own injuries, including for the loss of services, earnings, companionship, society, and affection of the infant, and for the value and expense of the infant’s hospitalizations in the past and future. The injuries related to Tavarion Sanders’ medical malpractice claim include hypoxic brain damage, cerebral palsy with decreased muscle tone in all four extremities, global developmental delays, and a neurogenic bowel and bladder. As a result of these permanent injuries, Tavarion Sanders requires, for the rest of his life, total assistance with all of his activities of daily living, including dressing, feeding, grooming, bathing, and toileting. Medicaid first made payments for medical care on behalf of Tavarion Sanders in 2010. 4 Page one of the Transcript provides that “the Honorable Lawrence P. Stevenson, Administrative Law Judge” heard this case. That is inaccurate. The undersigned was assigned this case on September 9, 2020. As found on page four of the Transcript, the undersigned called this hearing to order and presided throughout the hearing. In 2020, the medical malpractice action settled for a confidential amount. Petitioners assert that the settlement amount was not for the full value of Petitioners’ claims because of the challenges with proving liability and the risk of litigating the case to trial. AHCA was properly notified of the medical malpractice action, and the instant Petition was timely commenced by Petitioners. AHCA has asserted a lien against Tavarion Sanders’ settlement proceeds in the amount of $129,939.87. AHCA paid $129,939.87 on behalf of Tavarion Sanders, related to his claim against the liable third parties in the Petitioners’ medical malpractice action. The amount of the settlement in the medical malpractice action, and the allocation of the proceeds of the settlement as between Tavarion Sanders and Misty Mobley, is identified in Petitioners’ Lien Allocation and Reduction Worksheet. (Petitioners’ Exhibit 25). Petitioners’ Exhibit 1 is an August 18, 2020, 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 Tavarion Sanders’ 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: $129,939.87.6 Ms. Tejedor is a Florida board-certified civil trial lawyer with 23 years’ experience in personal injury law. She focuses on “birth-related injuries of 5 As noted in footnote 3 above, Petitioners’ Exhibit 2 was amended during the course of the hearing, and Exhibit 2a was filed at the conclusion of the hearing. 6 At some time during the course of this proceeding, Petitioners challenged approximately $3,000.00 of the stipulated amount. However, at hearing, Ms. Tejedor conceded and confirmed as correct the figure found in Petitioners’ Exhibit 2a: the stipulated amount, $129,939.87. children suffering birth injuries during delivery.” As part of her ongoing practice, she routinely evaluates the damages suffered by injured clients. Ms. Tejedor relies on her own experience including her daily legal practice, three of her most recent medical malpractice trials, plus her review of other jury verdicts to gauge any likely recovery. Ms. Tejedor continues to handle cases involving similar injuries suffered by Tavarion Sanders. Ms. Tejedor met and observed Tavarion Sanders; met with Tavarion Sanders’ family and discussed Tavarion Sanders’ condition with his parents and treating medical personnel; and reviewed Tavarion Sanders’ medical information, including the actual medical records of the treating physicians and the multiple MRI reports. Ms. Tejedor represented Petitioners in the civil litigation. She testified to the difficulties associated with this type of medical malpractice litigation in general, and then focused on the problematic causation and liability issues related to Tavarion Sanders and his injuries. Ms. Tejedor credibly testified regarding the evaluations she made of Tavarion Sanders’ injuries and the legal actions she orchestrated.7 In addition to the stipulated injuries listed in paragraph 4 above, Ms. Tejedor described, in laymen’s terms, Tavarion Sanders’ injuries based upon the evidence discovered in the civil litigation: Tavarion Sanders has a severe brain injury; a form of cerebral palsy with motor impairment and cognitive delays; significant mental retardation with seizure disorders; and he is essentially nonverbal. She also explained Tavarion Sanders’ current situation as he is “really not capable of learning;” will never be “gainfully employed any time in the future;” will “require 24/7 care;” and will never live alone. 7 The medical malpractice action was initially brought through the “Neurological Impairment Compensation Association: fund and dismissed because the presiding ALJ found that Tavarion Sanders had not suffered a birth-related neurological injury. Following an appeal, the civil medical malpractice action was restarted, which resulted in a confidential settlement. Ms. Tejedor’s unrefuted testimony placed the total full value of Tavarion Sanders’ damages conservatively at $21,972,186.87. Included in this total value are: Tavarion Sanders’ future medical care, $14,516,878.00; Tavarion Sanders’ loss of earnings capacity, $2,325,369.00; Tavarion Sanders’ pain and suffering, $5,000,000.00; and the past medical expenses, stipulated to by Petitioners and AHCA, $129,939.87. Further, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Ms. Tejedor averred she used the same formula to determine that 6.8% is the ratio of the settlement to the full value of Tavarion Sanders’ claim. Ms. Tejedor followed the formula as set forth in: Valeria Alcala, a Minor, by Yobany E. Rodriguez- Camacho and Manuel E. Alcala, as Natural Guardians and next friends vs. Agency for Health Care Administration, Case No. 20-0605MTR, 2020 Florida Division of Administrative Hearings, 2020 WL 4934729 (Fla. DOAH August 18, 2020); and Amy Lopez, Individually and as Parent and Natural Guardian of A.F., a Minor, vs. Agency for Health Care Administration, Case No. 20-2124MTR (Fla. DOAH Sept. 3, 2020). Ms. Tejedor testified she used the “same formula that other jurisdictions in Florida have followed, which is the, you know, Ahlborn[8] decision, which basically ... lists out how you determine the percentage that ... the percentage of the value of the case that represents past medical expenses, and that’s exactly the way we did it in this case.” Ms. Tejedor’s testimony was competent, substantial, persuasive and uncontradicted on this point. Mr. Copeland is a Florida civil trial lawyer with 28 years’ experience in personal injury law, with an active civil trial practice. He has handled and continues to practice in the areas of products liability and medical malpractice litigation. As part of his every day practice, Mr. Copeland is involved in resolving liens. 8 Ark. Dept of Health & Human Serv. v. Ahlborn, 547 U.S. 268 (2006). In addition to serving as a witness for damage valuation cases and an expert in the reduction of liens, Mr. Copeland has worked with the legislation that deals with “damages, calculation of damages, and to some extent on occasion lien resolution was part of those calculations.” Mr. Copeland has “spent quite a bit of time testifying before committees in the House and Senate,” and on “Blue Ribbon panels appointed by governors that dealt in part with damages, and evaluating personal injury statutes.” Mr. Copeland’s expert testimony has always been accepted in evidence. Mr. Copeland was tendered and without objection was accepted as an “expert witness in the valuation of damages in medical malpractice actions and in the resolution of health care liens.” Mr. Copeland testified that Florida “courts generally are following the Ahlborn formula.” Mr. Copeland routinely works with life care planners and economists in his practice, and used the economic damage numbers provided to him for this case. Further, Mr. Copeland testified that he based his opinion on Tavarion Sanders’ future medical care expense, lost earnings capacity, the medical expenses identified in the lien letter, Tavarion Sanders’ loss of enjoyment for the capacity of life, and Tavarion Sanders’ pain and suffering (both past and future) “just like you’re going through a jury verdict form” in Florida. Mr. Copeland opined that the full value of Tavarion Sanders’ claim, using his conservative approach, was $21,972,186.87. Using the Ahlborn pro rata methodology or formula, that is, using the $21,972,186.87 valuation amount and the confidential settlement proceeds, Mr. Copeland testified that Tavarion Sanders recovered only 6.8% of the full measure of all his damages. Then, by applying that 6.8% to the full amount that Medicaid claimed of $129.939.87, the full satisfaction of the lien is $8,835.91. Mr. Copeland’s testimony was uncontradicted and persuasive on this point. The testimony of Petitioners’ expert regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioners proved that the confidential settlement does not fully compensate Tavarion Sanders for the full value of his damages. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different methodology to the valuation of the damages. In short, Petitioners’ evidence was unrebutted. Respondent’s attempt to quibble with how many significant figures were used in determining the appropriate percentage for the pro rata methodology calculation is tenuous and unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $129,939.87. It is logical and rational to conclude that this figure is the amount expended for Tavarion Sanders’ past medical expenses. Respondent explored an additional past medical expense of $762.66, however the parties stipulated to the past medical expense figure. There is a lack of evidence to support this purported additional past medical expense, and the undersigned is not persuaded to amend the stipulated amount. Applying the 6.8% pro rata ratio to $129,939.87 equals $8,835.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioners 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: $8,835.91.
The Issue The issue is the amount of money, if any, that must be paid to the Agency for Health Care Administration (AHCA) to satisfy its Medicaid lien under section 409.910, Florida Statutes (2013).
Findings Of Fact Harry Silnicki, at age 52, suffered devastating brain injuries when a ladder on which he was standing collapsed. Mr. Silnicki, now age 59, has required, and will for the remainder of his life require, constant custodial care as a result of his injuries. He has been, and will be into the indefinite future, a resident of the Florida Institute of Neurological Rehabilitation (FINR) or a similar facility that provides full nursing care. Debra Silnicki is the wife and guardian of Mr. Silnicki. Mr. Silnicki, through his guardian, brought a personal injury lawsuit in Broward County, Florida, against several defendants, including the manufacturer of the ladder, the seller of the ladder, and two insurance companies (Defendants), contending that Mr. Silnicki's injuries were caused by a defective design of the ladder. The lawsuit sought compensation for all of Mr. Silnicki's damages as well as his wife's individual claim for damages associated with Mr. Silnicki's damages. When referring to the personal injury lawsuit, Mr. and Mrs. Silnicki will be referred to as Plaintiffs. During the course of the trial, before the jury reached its verdict, the Plaintiffs entered into a High-Low Agreement (HLA) with the Defendants by which the parties agreed that, regardless of the jury verdict, the Defendants would pay to the Plaintiffs $3,000,000 if the Plaintiffs lost the case, but would pay at most $9,000,000 if the Plaintiffs won the case. After a lengthy trial, on March 27, 2013, the jury returned a verdict finding no liability on the part of the manufacturer or any other defendants. Consequently, the jury awarded the Plaintiffs no damages. The Defendants have paid to the Plaintiffs the sum of $3,000,000 pursuant to the HLA (the HLA funds). The HLA constitutes a settlement of the claims the Plaintiffs had against the Defendants.1/ As shown in their Closing Statement (Petitioners' Exhibit 7), dated September 23, 2013, the Silnickis' attorneys have disbursed $1,100,000 of the HLA funds as attorney's fees and $588,167.40 as costs. The sum of $1,011,832.602/ was paid under the heading "Medical Liens/Bills to be Paid/Waived/Reduced by Agreement Pending Court Approval." Included in that sum were payments to Memorial Regional Hospital in the amount of $406,464.49 and a payment to FINR in the amount of $600,000.00. Also included was the sum of $245,648.57, which was to be deposited in an interest-bearing account. Subject to court approval, the Closing Statement earmarked, among other payments, $100,000 for a special needs trust for Mr. Silnicki and a $100,000 payment to Mrs. Silnicki for her loss of consortium claim. AHCA has provided $245,648.57 in Medicaid benefits to Mr. Silnicki. AHCA has asserted a Medicaid lien against the HLA funds in the amount of $245,648.57. As required by section 409.910(17)(a), the amount of the Medicaid lien has been placed in an interest-bearing account. The Closing Statement reflects that should Petitioners prevail in this proceeding by reducing or precluding the Medicaid lien, any amounts returned to Petitioners will be split 50% to FINR, 25% to attorney's fees, and 25% to the Petitioners. Section 409.910(11)(f) provides as follows: (f) Notwithstanding any provision in this section to the contrary, in the event of an action in tort against a third party in which the recipient or his or her legal representative is a party which results in a judgment, award, or settlement from a third party, the amount recovered shall be distributed as follows: After attorney's fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid. The remaining amount of the recovery shall be paid to the recipient. For purposes of calculating the agency's recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25 percent of the judgment, award, or settlement. The parties stipulated that the amount of Petitioners' "taxable costs as defined by the Florida Rules of Civil Procedure" is $347,747.05. The parties have also stipulated that if the section 409.910(11)(f) formula is applied to the $3,000,000 settlement funds received by Mr. and Mrs. Silnicki, the resulting product would be greater than the amount of AHCA's Medicaid lien of $245,648.57. That amount is calculated by deducting 25% of the $3,000,000 for attorneys' fees, which leaves $2,250,000. Deducting taxable costs in the amount of $347,747.05 from $2,250,000 leaves $1,902,352.95. Half of $1,902,352.95 equals $951,176.48 (the net amount). The net amount exceeds the amount of the Medicaid lien. Section 409.910(17)(b) provides the method by which a recipient can challenge the amount of a Medicaid lien as follows: (b) A recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula specified in paragraph (11)(f) by filing a petition under chapter 120 within 21 days after the date of payment of funds to the agency or after the date of placing the full amount of the third-party benefits in the trust account for the benefit of the agency pursuant to paragraph (a). The petition shall be filed with the Division of Administrative Hearings. For purposes of chapter 120, the payment of funds to the agency or the placement of the full amount of the third-party benefits in the trust account for the benefit of the agency constitutes final agency action and notice thereof. Final order authority for the proceedings specified in this subsection rests with the Division of Administrative Hearings. This procedure is the exclusive method for challenging the amount of third-party benefits payable to the agency. In order to successfully challenge the amount payable to the agency, the recipient must prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency. Scott Henratty and his firm represented the Plaintiffs in the underlying personal injury case. Mr. Henratty is an experienced personal injury attorney. Mr. Henratty testified that the Plaintiffs asked the jury for a verdict in the amount of $50,000,000 for Mr. Silnicki for his total damages, not including his wife's consortium claim. Mr. Henratty valued the claim at between $30,000,000 and $50,000,000. There was no clear and convincing evidence that the total value of Mr. Silnicki's claim exceeded $30,000,000. Mr. Henratty testified that Plaintiffs presented evidence to the jury that Mr. Silnicki's past medical expenses equaled $3,366,267, and his future medical expenses, reduced to present value, equaled $8,906,114, for a total of $12,272,381. Those two elements of damages equal approximately 40.9% of the total value of the claim if $30,000,000 is accepted as the total value of the claim.3/ The Closing Statement reflects that more than the amount of the claimed Medicaid lien was to be used to pay past medical expenses. Petitioners assert in their Petition and Amended Petition three alternatives to determine what should be paid in satisfaction of the Medicaid lien in the event it is determined that the HLA funds are subject to the lien. All three alternatives are premised on the total value of Mr. Silnicki's recovery being $30,000,000 (total value) and compare that to the recovery under the HLA of $3,000,000, which is one-tenth of the total value. All three methods arrive at the figure of $24,564.86 as being the most that can be recovered by the Medicaid lien, which is one-tenth of the Medicaid lien. Future medical expenses is not a component in these calculations. The portion of the HLA funds that should be allocated to past and future medical expenses is, at a minimum, 30% of the recovery.4/
The Issue The issue to be decided is the amount to be paid by Petitioner to Respondent, Agency for Health Care Administration ("AHCA"), out of her settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On or about September 17, 2007, Alicia M. Fallon ("Alicia"), then 17 years old, drove to the mall to meet friends and became involved in an impromptu street race. Alicia lost control of the vehicle she was driving, crossed the median into oncoming traffic, and was involved in a motor vehicle crash. Her injuries consisted of traumatic brain injury ("TBI") with moderate hydrocephalus, right subdural hemorrhage, left pubic ramus fracture, pulmonary contusions (bilateral), and a clavicle fracture. Since the time of her accident, she has undergone various surgical procedures including the insertion of a gastrostomy tube, bilateral frontoparietal craniotomies, insertion of a ventriculoperitoneal shunt, and bifrontal cranioplasties. As a result of the accident, in addition to the physical injuries described above, Alicia suffered major depressive disorder, and Post-Traumatic Stress Disorder injuries. She is confined to a wheelchair for mobility, has no bowel or bladder control, and suffers from cognitive dysfunction. Alicia is totally dependent on others for activities of daily living and must be supervised 24 hours a day, every day of the week. A lawsuit was brought against the driver of the other car in the race, as well as the driver's mother, the owner of the vehicle. It could not be established that the tortfeasor driver hit Alicia's car in the race, or that he cut her off. The theory of liability was only that because Alicia and the other driver in the race were racing together, that the tortfeasor was at least partially responsible for what happened. It was viewed that there was no liability on the part of the driver of the third vehicle. The tortfeasor only had $100,000 in insurance policy limits, but the insurance company did not timely offer payment. The tortfeasor had no pursuable assets. The lawsuit was bifurcated and the issue of liability alone was tried. The jury determined that the tortfeasor driver was 40 percent liable for Alicia's damages. Because of the risk of a bad faith judgment, the insurance company for the tortfeasor settled for the gross sum of $2.5 million. AHCA, through its Medicaid program, provided medical assistance to Ms. Fallon in the amount of $608,795.49. AHCA was properly notified of the lawsuit against the tortfeasors, and after settlement, asserted a lien for the full amount it paid, $608,795.49, against the settlement proceeds. AHCA did not "institute, intervene in, or join in" the medical malpractice action to enforce its rights as provided in section 409.910(11), or participate in any aspect of Alicia's claim against the tortfeasors or their insurance company. Application of the formula at section 409.910(11)(f), to the settlement amount requires payment to AHCA in the amount of $608,795.49. Another provider, Optum, provided $592,554.18 in past medical expense benefits on behalf of Ms. Fallon. However, that amount was reduced through negotiation to a lien in the amount of $22,220.78.1/ Petitioner deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner, Donna Fallon, the mother of Alicia, testified regarding the care that was and is continuing to be provided to Alicia after the accident. She is a single parent, and with only the assistance of an aide during the day, she is responsible for Alicia's care. Alicia must be fed, changed, bathed, and turned every few hours to avoid bed sores. Alicia can communicate minimally by using an electronic device and by making noises that are usually only discernable by her mother. Although she needs ongoing physical therapy and rehabilitation services, the family cannot afford this level of care. Petitioner presented the testimony of Sean Domnick, Esquire, a Florida attorney with 30 years' experience in personal injury law, including catastrophic injury and death cases, medical malpractice, and brain injury cases. Mr. Domnick is board certified in Civil Trial by the Florida Bar. He represented Alicia and her mother in the litigation against the tortfeasors and their insurance company. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients. He was accepted, without objection, as an expert in valuation of damages. Mr. Domnick testified that Alicia's injuries are as catastrophic as he has handled. Alicia has no strength, suffers contractions and spasms, and is in constant pain. Alicia has impaired speech, limited gross and fine motor skills, is unable to transfer, walk, or use a wheelchair independently. Alicia is unable to self-feed. All of her food must be cooked and cut up for her. Alicia is unable to perform self-hygiene and has no ability to help herself in an emergency and therefore requires constant monitoring. As part of his work-up of the case, Mr. Domnick had a life care plan prepared by Mary Salerno, a rehabilitation expert, which exceeded $15 million on the low side, and $18 million on the high side, in future medical expenses alone for Alicia's care. Mr. Domnick testified that the conservative full value of Alicia's damages was $45 million. That figure included $30 million for Alicia's pain and suffering, mental anguish and loss of quality of life, disability, and disfigurement, extrapolated for her life expectancy, plus the low end of economic damages of $15 million. Petitioner also presented the testimony of James Nosich, Esquire, a lawyer who has practiced primarily personal injury defense for 29 years. Mr. Nosich and his firm specialize in defending serious and catastrophic personal injury/medical malpractice cases throughout Florida. As part of his practice, Mr. Nosich has reviewed more than 1,000 cases of personal injury/medical malpractice cases and formally reported the potential verdict and full value to insurance companies that retained him to defend their insureds. Mr. Nosich has worked closely with economists and life care planners to identify the relevant damages of those catastrophically injured in his representation of his clients. Mr. Nosich has also tried over 30 cases in Broward County in which a plaintiff suffered catastrophic injuries similar to those of Alicia. Mr. Nosich was tendered and accepted, without objection, as an expert in the evaluation of damages in catastrophic injury cases. In formulating his expert opinion with regard to this case, Mr. Nosich reviewed: Alicia's medical records and expenses; her life care plan prepared by Ms. Salerno; and the economist's report. He took into consideration the reputation of Alicia's lawyer (Mr. Domnick); and the venue in which the case would be tried. Mr. Nosich opined that Broward County is known for liberal juries who tend to award high amounts in catastrophic cases. He also testified that Mr. Domnick is known as a lawyer with extreme capability and who has an excellent rapport with juries and the ability to get higher dollar verdicts. Mr. Nosich agreed with Mr. Domnick that the estimated $45 million figure for the total value of Alicia's case was conservative. He agreed with Ms. Salerno's estimated economic damages of $15 million and a doubling of that amount ($30 million) for Alicia's noneconomic damages. Mr. Nosich credibly explained that the $45 million total value was very conservative in his opinion based on Alicia's very high past medical bills and the fact that she will never be able to work. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $2.5 million does not fully compensate Alicia for the full value of her damages. As testified to by Mr. Domnick, Alicia's recovery represents only 5.55 percent of the total value of her claim. However, in applying a ratio to reduce the Medicaid lien amount owed to AHCA, both experts erroneously subtracted attorney's fees and costs of $1.1 million from Alicia's $2.5 million settlement to come up with a ratio of 3 percent to be applied to reduce AHCA's lien.2/ Further, in determining the past medical expenses recovered, Petitioner's experts also failed to include the Optum past medical expenses in the amount of $592,554.18. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner's evidence was unrebutted. However, through cross-examination, AHCA properly contested the methodology used to calculate the allocation to past medical expenses. Accordingly, the undersigned finds that Petitioner has proven by a preponderance of the evidence that 5.55 percent is the appropriate pro rata share of Alicia's past medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. Total past medical expenses is the sum of AHCA's lien in the amount of $608,795.49, plus the Optum past medicals in the amount of $592,554.18, which equals $1,201,349.67. Applying the 5.55 percent pro rata ratio to this total equals $66,674.91, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Micaiah McCray, from a medical-malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on November 11, 2008. In the months following birth, Petitioner underwent several surgeries and procedures including a percutaneous endoscopic gastrostomy tube placement on January 26, 2009, a repair of incomplete atrioventricular canal defect on April 15, 2009, and Nissen Fundoplication and revision of gastrostomy tube on July 8, 2009. On July 23, 2009, Petitioner was admitted to St. Mary’s Medical Center with suspected bronchitis and exacerbation of reactive airway distress. During this hospitalization, on or about August 15, 2009, Petitioner suffered a stroke involving the right hand and part of the right leg. A CT scan of Petitioner’s brain revealed a left middle cerebral artery distribution infarction suggesting a large ischemic infarct. Petitioner’s condition stabilized and Petitioner was released from the hospital on August 27, 2009, with the following discharge summary: Exacerbation of reactive airway disease Bronchitis Mitral stenosis Mild pulmonary hypertension Hypersecretory upper airway Pansinusitis Clostridium difficile colitis Hypoxemia with oxygen dependency Gastroesophageal reflux disease, status post fundoplication Left cerebral infarction of unknown etiology Endocardial cushion defect status post atrioventricular canal repair Bilateral optic nerve colobomas Rule out CHARGE association/Goletz syndrome On September 21, 2009, Petitioner was admitted to Palms West Hospital with a diagnosis of respiratory distress. Petitioner’s condition improved and he was discharged home on September 25, 2009. Subsequent to that hospitalization, an MRI performed on October 19, 2009, revealed new acute strokes. In the years following Petitioner’s strokes, he underwent numerous surgeries, procedures, and therapies for a multitude of medical conditions. Petitioner’s past medical expenses related to his injuries were paid by both private health insurance and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $217,545.58. United Healthcare and Aetna provided $37,090.17 and $3,231.72 in benefits, respectively. Total healthcare expense incurred for Petitioner’s injuries was $257,867.47. Petitioner is developmentally delayed and cannot walk or crawl. Petitioner requires a wheelchair or stroller for mobility and requires positioning and trunk support to maintain a seated position. His ability to independently explore his environment is severely restricted. Petitioner is completely dependent on others for activities of daily living. He cannot bathe, dress, or eat on his own. He requires a feeding tube, and receives professional in-home services to monitor his respiration and heartrate, manage his GJ tube, administer medication, and monitor bowel and bladder function. Petitioner does not vocalize words and has limited communication. He has no function of his right hand and has tightness in the right leg below the knee. Petitioner’s condition is permanent. Petitioner’s parents brought a medical malpractice action on his behalf in the Circuit Court of the 15th Judicial Circuit Court in and for Palm Beach County against Tenet St. Mary’s Inc., d/b/a St. Mary’s Medical Center; Palms West Hospital Limited Partnership, d/b/a Palms West Hospital; David Evan Mound Drucker, M.D.; South Florida Pediatric Surgeons, P.A.; Physicians Professional Liability Risk Retention Group; Alberto Antonio Marante, M.D.; Florida Pediatric Critical Care, P.A.; Diego Maurcio Diaz, M.D.; Gerard Minor, P.A.-C; Children’s Center Gastroenterology & Nutrition, P.A.; Chartis Claims, Inc.; Lexington Insurance Company; Eunice Cordoba, M.D; and Edwin Liu, M.D., P.A., d/b/a Pediatric Neurologist of Palm Beach (Defendants). Petitioner’s action alleged, among other theories, that the Defendants failed to recognize in Petitioner a sickle cell trait and properly treat Petitioner’s dehydration, a factor contributing to Petitioner’s strokes. Petitioner’s parents retained Scott Marlowe Newmark, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in the medical malpractice action against Defendants. In preparation for litigation, Stephanie P. Chalfin, M.S., prepared a life care plan for Petitioner. The plan sets out the need for future medical care, equipment, hospitalizations, surgeries, medications, and attendant care, through Petitioner’s expected life span. In this case, Petitioner’s life expectancy is an additional 66.9 years. During the pendency of the medical malpractice action, J. Rody Borg, Ph.D., an economist, prepared a report assigning a present value between $24,373,828 and $29,065,995 for the future costs of Petitioner’s life care plan, lost benefits, and lost earning capacity. Mr. Newmark’s expert valuation of the total damages suffered by Petitioner is at least $30 million. Mr. Newmark considered the life care plan and Dr. Borg’s report in arriving at the value of total economic damages. Mr. Newmark then examined jury verdicts in similar cases involving catastrophic injury to value non-economic damages. Of the nine jury verdicts examined, Mr. Newmark highlighted three as particularly relevant because they involved young children with brain injuries similar to Petitioner’s injury and who required life-long care. The nine cases had an average award of $12 million for non-economic damages (past and future pain and suffering). Mr. Newmark arrived at his valuation of Petitioner’s damages at $30 million by considering the low-end of Dr. Borg’s economic damages estimate, $24 million, along with the average jury award for non-economic damages in similar cases. Mr. Newmark’s testimony was credible, reliable and persuasive. Mr. Newmark’s valuation of total damages was supported by the testimony of two additional personal injury attorneys, Mark Finklestein and R. Vinson Barrett, both of whom have practiced personal injury law for more than 30 years and were accepted as experts in valuation of damages (in personal injury cases). Mr. Finkelstein served as Petitioner’s guardian ad litem in the underlying medical malpractice action and agreed with the valuation of total damages at $30 million. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations, the life care plan, Dr. Borg’s report, and a day-in-the-life video of Petitioner. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Newmark. Mr. Barrett likewise agreed with the $30 million valuation of Petitioner’s total damages. Respondent was notified of Petitioner’s medical malpractice action during its pendency. Respondent asserted a Medicaid lien in the amount of $217,545.58 against the proceeds of any award or settlement arising out of that action. In 2012 and again in 2015, Petitioner received a series of settlements from the Defendants. The settlements totaled $2,450,000. The settlements do not fully compensate Petitioner for the total value of his damages. The settlements are undifferentiated, meaning they are not apportioned to specific types of damages, such as economic or non-economic, past or future. In all of the releases signed by the parties thereto, the parties agreed that, “if an allocation of this settlement is necessary in the future, this allocation should be made by applying the same ratio this settlement bears to the total monetary value of all [Petitioner’s] damages to the specific damage claim.” Respondent was not a party to the 2012 and 2015 settlements and did not execute any of the applicable releases. 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 and taxable costs (in this case, $613,131) from the $2,450,000 recovery, which yields a sum of $1,836,869 then dividing that amount by two, which yields $918,434.50. 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. In the case at hand, Respondent may recover under the statute the full amount of its 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 $21,067.77 in satisfaction of its Medicaid lien. The settlement amount of $2,450,000 is 8.17 percent of the total value ($30 million) of Petitioner’s damages. By the same token, 8.17 percent of $257,867.47 (Petitioner’s past medical expenses paid by both Medicaid and private insurance) is $21,067.77. Both Mr. Finklestein and Mr. Barrett testified that $21,067.77 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. 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).
The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds should be paid to Respondent, the Agency for Health Care Administration (“AHCA”) to satisfy AHCA's Medicaid lien under section 409.910, Florida Statutes.1/
Findings Of Fact In mid-October 2012, Petitioner, a trial lawyer, woke up on a Friday morning with a pain in the big toe of his left foot. He called his family practice physician2/ and was able to obtain an appointment for the following Tuesday. At the appointment, Petitioner saw a nurse practitioner who examined him and pronounced that he had gout. The nurse practitioner prescribed a gout medication. Over the course of the next week, Petitioner’s condition worsened, with pain radiating all the way to his hip. On the following Tuesday, he saw the physician. Despite blood testing that showed an elevated white blood cell count, the physician concurred with the nurse practitioner that Petitioner was suffering from an extreme case of gout. The physician prescribed a regimen of steroids for the gout. By the next Saturday, November 3, 2012, Petitioner was so sick that a neighbor drove him to Tampa General Hospital. His blood pressure was extremely low and his kidneys had ceased functioning. Petitioner was on the verge of death. At the hospital, he learned that the physician and his nurse practitioner had misdiagnosed Petitioner’s condition. He in fact had a raging staphylococcus aureus infection. Over the course of the next several days, Petitioner underwent several surgeries to save his life. First, the toes on his left foot were amputated. Then, his left foot was amputated. Next, his left leg was amputated below the knee. Finally, the left leg was amputated above the knee. Still, the infection was not controlled. Petitioner was in and out of a coma for a month. He testified that his infectious disease doctor told him that the infection was so bad that the treatment team was at a loss on how to proceed. However, the infection ultimately was brought under control. Once he was stabilized, Petitioner was transferred to Tampa General’s rehabilitation facility and finally released to return to his home. Petitioner was sixty-one years old at the time his leg was amputated. He testified that he practiced as a trial lawyer in Florida from 1977 until his illness. Petitioner stated that he does not find it possible to be a trial lawyer with a prosthetic leg and a walker, but that he does some mediation work. His basic income is $1,653 per month in Social Security benefits. Petitioner testified that this amount is never enough to cover his expenses and that he is required to dip into the proceeds of his settlement with the medical providers in order to make ends meet. He stated that it is “terrifying” to watch the money going out and to wonder what he will do when it is gone. Petitioner lost his Tampa home to foreclosure and was forced to move 40 miles away to find a house that he could afford. Moving away from his longtime home further isolated Petitioner and necessitated paying money for things that he could previously rely on friends and neighbors to help with, such as grocery shopping. Petitioner testified that prior to the amputation he had led an active lifestyle. He ran, rode a bike, and played golf twice a week. He was an instructor pilot. Petitioner is now incapable of engaging in any of those activities. Petitioner testified that if he falls and is not near a piece of furniture or other object that allows him to use his upper body strength to lift himself, he is helpless until someone comes along to assist him. Merely going to the bathroom involves a complicated transfer from his wheelchair using specially installed bars. Petitioner testified that prior to his settlement he had not, and to his knowledge others had not, made payments in the past or in advance for his future medical care. Civil trial attorney William E. Hahn testified on behalf of Petitioner. Mr. Hahn has practiced since 1972, is a board certified civil trial lawyer, and is a past president of the Florida chapter of the American Board of Trial Advocates, a group that named Mr. Hahn “trial lawyer of the year” in 2012. Mr. Hahn testified that he generally represents plaintiffs in medical malpractice cases and has tried over 100 complex jury trials. He has won verdicts as high as $22.5 million, as low as zero, and “all in between.” Mr. Hahn takes cases involving “devastating, catastrophic” injuries such as that suffered by Petitioner. A routine part of his practice is to make a determination of the value of a client’s damages. Mr. Hahn was accepted without objection as an expert in assessing the value of damages suffered by injured parties. Mr. Hahn testified that his evaluation process begins with acquainting himself with the nature of the injury. He then calculates the expenses that have been incurred in the past for the client’s treatment and predicts the costs of future treatment. He looks at the medical records and performs his own medical research. He speaks with the treating physicians as well as the client. Mr. Hahn bases his assessments on his experience and training and the experience of other lawyers in handling similar cases throughout Florida and the United States. Mr. Hahn testified that he has known Petitioner since they were both young lawyers practicing in Tampa. When Petitioner called him and explained his situation, Mr. Hahn agreed to represent Petitioner in his medical malpractice action. Mr. Hahn noted that with proper medical treatment Petitioner would have been spared multiple surgeries and the amputation of his leg. He would likely have recovered and returned to law practice. Mr. Hahn opined that the value of Petitioner’s case was “well in excess of $2 million,” based on Petitioner’s background, his training and experience, and the devastating injury and its long term effects. Given Petitioner’s status in Tampa and the legal community, and the outrageousness of what happened, Mr. Hahn believed the verdict would have “exceeded two, four or many more millions of dollars.” Mr. Hahn explained that in order to proceed with a medical malpractice claim in Florida, the plaintiff must go through a number of administrative steps called the “notice of intent” process. Mr. Hahn secured the services of a board certified internal medicine physician as his expert. The surgeon confirmed what Mr. Hahn had surmised from the medical records, that this was a case of gross malpractice. Mr. Hahn obtained an affidavit from the surgeon and notified the potential defendants that he was about to make a claim on Petitioner’s behalf. Mr. Hahn was aware that Petitioner had received services from Medicaid and initiated a correspondence with AHCA.3/ The correspondence indicated that Medicaid had paid $135,047.86 in medical expenses for Petitioner. Mr. Hahn stated that this amount would have been part of Petitioner’s claim had the matter been fully litigated. Mr. Hahn testified that, despite the clear liability, the recoverable assets complicated any potential award of damages from the medical providers. The total insurance available was $500,000. The insurance company was acting in good faith in trying to settle the case, which ruled out a bad faith case against the insurer. The only other potential sources of funds were the personal assets of the nurse practitioner and the physician. The defense attorney informed Mr. Hahn that any assets possessed by these individuals were protected from judgment. The defendants recognized that this was a “terrible” case and wanted to settle. Mr. Hahn stated that it became apparent to him that the best business decision for Petitioner was to get the case resolved within the limits of the insurance coverage. He was able to reduce his fee, keep the litigation costs down, and get the matter resolved quickly. Mr. Hahn secured a settlement of $492,500. Mr. Hahn testified that no amount of money could ever make Petitioner whole, but that the amount of the settlement did not come close to fully compensating him for his damages and would not come close to taking care of him for the rest of his life. Mr. Hahn pointed out that in the document memorializing the settlement agreement, the defendants acknowledged that the settlement would not come close to making Petitioner whole. The portion of the settlement agreement referenced by Mr. Hahn was the “Allocation of Settlement” language, which read as follows: Although it is acknowledged that this settlement does not fully compensate the Releasor for the damages he has allegedly suffered, this settlement shall operate as a full and complete release as to all claims against the Releasees, without regard to this settlement only compensating the Releasor for a fraction of the total monetary value of his alleged damages. These damages have a value in excess of $2,000,000, of which $135,047.86 represents Releasor’s claim for past medical expenses. Given the facts, circumstances, and nature of the Releasor’s alleged injuries and this settlement, $33,255.54 of this settlement has been allocated to the Releasor’s claim for past medical expenses and the remainder of the settlement has been allocated 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 of the Releasor’s alleged damages. Further, the parties acknowledge that the Releasor may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for these future medical expenses that the Releasor may incur in the future. However, the parties acknowledge that the Releasor, or others on his behalf, have not made payments in the past or in advance for the Releasor’s future medical care and the Releasor 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 payments made to secure future medical care. Mr. Hahn testified that the allocation of settlement paragraphs were the product of a negotiation with the defendants’ lawyer. The language was acknowledged and agreed to by all parties. The defendants agreed with the valuation of damages “in excess of $2 million.” The allocation of $33,255.54 to past medical expenses was “simple math,” its relation to the $492,500 settlement amount being proportional to the relation of $135,047.86 to the $2 million value of the claim. Petitioner was settling for 24.625% of his claim’s value, and therefore the Medicaid lien should be reduced proportionately. Mr. Hahn testified that all the parties believed this settlement to be reasonable. Mr. Hahn stated that in his professional judgment, the allocation of $33,255.54 was not only reasonable, it was overly generous. The real value of the case was well in excess of $2 million. Mr. Hahn believed that it would have been reasonable to value the claim at $4 million, in which case the Medicaid allocation would have been cut in half. Mr. Hahn testified that the parties were trying to recognize that Medicaid did “wonderfully” by Petitioner. They valued the case conservatively at $2 million. Many lawyers would have valued it much higher, and could have supported their valuation with documentation. Mr. Hahn stated that the parties’ concern was to be appropriate, conservative, and provide a fair recovery to Medicaid. AHCA called no witness to contest the valuation of damages made by Mr. Hahn or to offer an alternative methodology to calculate the allocation to past medical expenses. No evidence was presented indicating the settlement agreement was not reasonable given all the circumstances of the case. It does not appear that the parties colluded to minimize the share of the settlement proceeds attributable to Medicaid’s payment of costs for Petitioner’s medical care. In fact, the evidence established that the settlement was extremely conservative in its valuation of Petitioner’s claim and that the settling parties could have reasonably apportioned far less to Medicaid than they actually did. AHCA was not a party to the settlement of Petitioner’s claim. AHCA correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee, or $123,125, from the $492,500 recovery leaves $371,375, half of which is $185,687.50. That figure exceeds the actual amount expended by Medicaid on Petitioner’s medical care. Application of the formula would provide sufficient funds to satisfy the Medicaid lien of $135,047.86. Petitioner proved by clear and convincing evidence that the $2 million total value of the claim was a reasonable, if not unduly conservative, amount. Petitioner proved by clear and convincing evidence, based on the clear strength of his case and on the fact that it was limited only by the inability to collect the full amount of the likely judgment, that the amount agreed upon in settlement of Petitioner’s claims constituted a fair settlement, including the portion attributed to the Medicaid lien for medical expenses.
The Issue The issue in this proceeding is the amount to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner from a settlement received by Petitioner from a third party.
Findings Of Fact On October 18, 2013, Jose Fourcoy, who was then 39 years old, was on the premises of an air-conditioning shop that refurbished air-conditioners, waiting for them to discard their scrap metal. While there, an employee who was disassembling an air conditioner with a blowtorch ignited a gas tank and caused an explosion and fire. The fire spread across the floor engulfing Mr. Fourcoy in flames. The fire was extinguished and Mr. Fourcoy’s long-term girlfriend/common law wife and young child, who were waiting for Mr. Fourcoy and witnessed the event, immediately took Mr. Fourcoy to the hospital. As a result of the accident, Petitioner suffered severe, catastrophic and very painful injuries with 2nd, 3rd and 4th degree burns to about 17 percent of his body, including both his legs, his right arm and the right side of his face, mouth and throat. He was admitted to the hospital on two occasions. Amputation of both legs was recommended but rejected by Petitioner. Eventually, Mr. Fourcoy spent one and a half months undergoing numerous surgeries and skin grafts first with pig skin and then with his own skin from other parts of his body. Throughout the process he was in extreme pain. Currently and as a result of the burn injury, he has neurological problems with his legs and other areas of his body including constrictions and chronic pain syndrome in both legs. Additionally, he has post-traumatic stress disorder, moderate to severe anxiety with flashbacks, irritability, forgetfulness and reduced self-regulation. The pain Mr. Fourcoy suffers is chronic and will be with him the rest of his life. His injuries have resulted in a 50-percent impairment of his whole body. Further, his chronic pain, anxiety and post-traumatic stress disorders have caused him not to be able to do the things he used to do, including loss of consortium, inability to enjoy playing with his young son, inability to play sports, and general inability to enjoy life. Mr. Fourcoy’s legs are deformed and disfigured and he cannot straighten them without severe pain. He is unable to wear long pants due to the pain they cause. Petitioner cannot walk and requires a wheelchair/rolling chair for mobility. He is dependent on others for activities of daily living. His condition is permanent and he most likely will not be able to obtain employment sufficient to support himself or replace the income/earning capacity he had as a scrap metal recycler prior to his injuries, which income could have provided for him during the 35.1 years he is expected to live. Petitioner is no longer a Medicaid recipient. Petitioner’s past medical expenses related to his injuries were paid by both personal funds and Medicaid. Medicaid paid for Petitioner’s medical expenses in the amount of $119,673.33. Unpaid out-of-pocket expenses totaled $36,423.04. Thus, total past healthcare expenses incurred for Petitioner’s injuries was $156,096.37. Petitioner brought a personal injury claim to recover all his damages against the owner of the air-conditioning shop and premises where the accident occurred (Defendants). Towards that end, Petitioner retained Stuart H. Share, an attorney specializing in personal and catastrophic injury claims for over 30 years, to represent Petitioner in his negligence action against the Defendants. Ultimately, Petitioner settled his personal injury action for $850,000, which did not fully compensate Petitioner for the total value of his damages. The settlement was allocated and the settling parties agreed that: 1) Mr. Fourcoy’s damages had a value in excess of $3,400,000, of which $156,096.37 represented his claim for past medical expenses; and 2) allocation of $39,024.09 of the $850,000 settlement to Mr. Fourcoy’s claim for past medical expenses was reasonable and proportionate based on the same ratio the settlement bears to the total monetary value of all Mr. Fourcoy’s damages. The General Release stated, in pertinent part: JOSE FOURCOY, has claimed damages in excess of $3,400,000, of which $156,096.37 represents JOSE FOURCOY’s claim for past medical expenses. Given the facts, circumstances, and nature of JOSE FOURCOY’s injuries and this settlement $39,024.09 has been allocated to JOSE FOURCOY’s claim for past medical expenses and allocate the remainder of the settlement towards 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 JOSE FOURCOY’s damages. Further, JOSE FOURCOY may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses JOSE FOURCOY will incur in the future. However, JOSE FOURCOY, or others on his behalf, have not made payments in the past or in advance for JOSE FOURCOY’s future medical care and JOSE FOURCOY 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. No dollar amount was assigned to Petitioner’s future medical care needs, and there remains uncertainty as to what those needs will be. Additionally, neither Petitioner nor others on his behalf made payments in the past or in advance for his future medical care, and no claim for reimbursement, restitution or indemnification was made for such damages or included in the settlement. On the other hand, given the loss of earning capacity and the past and present level of pain and suffering, the bulk of the settlement was clearly intended to provide future support for Petitioner. Respondent was notified of Petitioner’s negligence action around July 13, 2015. Thereafter, Respondent asserted a Medicaid lien in the amount of $119,673.33 against the proceeds of any award or settlement arising out of that action. No portion of the $119,673.33 paid by AHCA through the Medicaid program on behalf of Mr. Fourcoy represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Respondent was not a party to the 2015 settlement and did not execute any of the applicable releases. Mr. Share’s expert and conservative valuation of the total damages suffered by Petitioner is at least $3,400,000. In arriving at this valuation, Mr. Share reviewed the facts of Petitioner’s personal injury claim, vetted the claim with experienced members in his law firm, and examined jury verdicts in similar cases involving catastrophic injury. The reviewed cases had an average award of $3,639,577.62 for total damages and $2,418,390.31 for non- economic damages (past and future pain and suffering). Mr. Share’s valuation of total damages was supported by the testimony of one additional personal injury attorney, R. Vinson Barrett, who has practiced personal injury law for more than 30 years. In formulating his opinion on the value of Petitioner’s damages, Mr. Barrett reviewed the discharge summaries from Petitioner’s hospitalizations. Mr. Barrett also reviewed the jury trial verdicts and awards relied upon by Mr. Share. Mr. Barrett agreed with the $3.4 million valuation of Petitioner’s total damages and thought it could likely have been higher. The settlement amount of $850,000 is 25 percent of the total value ($3.4 million) of Petitioner’s damages. By the same token, 25 percent of $156,096.37 (Petitioner’s past medical expenses paid in part by Medicaid) is $39,024.09. Both experts testified that $39,024.09 is a reasonable and rational reimbursement for past medical expenses. Their testimony is accepted as persuasive. Further, the unrebutted evidence demonstrated that $39,024.09 is a reasonable and rational reimbursement for past medical expenses since Petitioner recovered only 25 percent of his damages, thereby reducing all of the categories of damages associated with his claim. Given these facts, 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). Therefore, the amount of the Medicaid lien should be $39,024.09.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby ORDERED that the Agency for Health Care Administration is entitled to $39,024.09 in satisfaction of its Medicaid lien. DONE AND ORDERED this 27th day of April, 2016, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2016. COPIES FURNISHED: Alexander R. Boler, Esquire Xerox Recovery Services Group 2073 Summit Lake Drive, Suite 300 Tallahassee, Florida 32317 (eServed) Floyd B. Faglie, Esquire Staunton and Faglie, P.L. 189 East Walnut Street Monticello, Florida 32344 (eServed) Elizabeth Dudek, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 (eServed) Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed) Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed)
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioners, Devyn Jeffries (Devyn) and Makayla Jeffries (Makayla), minors, by and through their parents and natural guardians, Theresa Jeffries and Christopher Jeffries, (collectively Petitioners), from settlement proceeds received by Petitioners from third parties.
Findings Of Fact On January 24, 2010, Devyn and Makayla were born via emergency C-Section at 27 weeks gestation. During the birthing process, both children suffered severe and permanent brain damage. As a result, Devyn suffers from Cerebral Palsy with spastic paralysis and cognitive developmental disabilities, and Makayla suffers from Cerebral Palsy, failure to thrive, feeding difficulties, and cognitive deficits. Devyn and Makayla’s medical care related to their birth injuries was paid by Medicaid in the following amounts: 1 Respondent’s Proposed Final Order was served by email and received by DOAH at 9:50 p.m. on October 21, 2020. It was, therefore, “filed” at 8:00 a.m. on October 22, 2020, in accordance with Florida Administrative Code Rule 28-106.104(3). However, it is accepted and considered as though timely filed. In regard to Devyn, Medicaid, through AHCA, provided $108,068.58 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $25,087.08 in benefits. The sum of these Medicaid benefits, $133,155.66, constituted Devyn’s entire claim for past medical expenses. In regard to Makayla, Medicaid, through AHCA, provided $107,912.33 in benefits and Medicaid, through a Medicaid Managed Care Plan known as Simply Healthcare, provided $13,915.84 in benefits. The sum of these Medicaid benefits, $121,828.17, constituted Makayla’s entire claim for past medical expenses. Devyn and Makayla’s parents and natural guardians, Theresa and Christopher Jeffries, pursued a medical malpractice lawsuit against the medical providers responsible for Devyn and Makayla’s care (“Defendants”) to recover all of Devyn and Makayla’s damages, as well as their own individual damages associated with their children’s injuries. The medical malpractice action settled through a series of confidential settlements, which were approved by the court on February 21, 2020. During the pendency of the medical malpractice action, AHCA was notified of the action and AHCA asserted a $108,068.58 Medicaid lien associated with Devyn’s cause of action and settlement of that action and a $107,912.33 Medicaid lien associated with Makayla’s cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910, nor did it intervene or join in the medical malpractice action against the Defendants. By letter, AHCA was notified of the settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute the settlement. The Medicaid program through AHCA spent $108,068.58 on behalf of Devyn and $107,912.33 on behalf of Makayla, all of which represents expenditures paid for past medical expenses. No portion of the $215,980.91 paid by AHCA through the Medicaid program on behalf of Petitioners represented expenditures for future medical expenses. The $215,980.91 combined total in Medicaid funds paid towards the care of Devyn and Makayla by AHCA is the maximum amount that may be recovered by AHCA. In addition to the foregoing, Simply Health spent $39,002.92 on Petitioners’ medical expenses. Thus, the total amount of past medical expenses incurred by Petitioners is $254,983.83. The taxable costs incurred in securing the settlement totaled $109,701.62. Application of the formula at section 409.910(11)(f) to the settlement requires payment to AHCA of the full $108,068.58 Medicaid lien associated with Devyn and the full $107,912.33 Medicaid lien associated with Makayla. Petitioners have deposited the full Medicaid lien amounts in interest- bearing accounts for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). This case is somewhat unique in that it involves two petitioners, with separate injuries and separate Medicaid expenditures. However, the incident causing the injuries was singular, and resulted in a total settlement of all claims asserted by Devyn, Makayla, and their parents of $2,650,000. Therefore, for purpose of determining the appropriate amount of reimbursement for the Medicaid lien, it is reasonable and appropriate to aggregate the amounts paid in past medical expenses on behalf of Devyn and Makayla, and the economic and non-economic damages suffered by them. There was no suggestion that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. The evidence firmly established that the total of Devyn’s and Makayla’s economic damages, consisting of lost future earnings, past medical expenses, and future medical expenses were, at the conservative low end, roughly $4,400,000 for Devyn and $2,400,000 for Makayla, for a sum of $6,800,000 in economic damages.2 Based on the experience of the testifying experts, and taking into account jury verdicts in comparable cases, Petitioners established that non- economic damages would reasonably be in the range of $10,000,000 to $15,000,000 for each of the children. Based on the forgoing, it is found that $15,000,000, as a full measure of Petitioners’ combined damages, is very conservative, and is a fair and appropriate figure against which to calculate any lesser portion of the total recovery that should be allocated as reimbursement for the Medicaid lien for past medical expenses. The $2,650,000 settlement is 17.67 percent of the $15,000,000 conservative value of the claim.3
The Issue The issue 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, from settlement proceeds he received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, and admitted facts stated in the Joint Pre-Hearing Stipulation. Facts Concerning Underlying Personal Injury Matter and Giving Rise to Medicaid Lien On August 29, 2011, Brody Hurd, a male child who was then 2.7 years old, suffered injuries after a child gate gave way causing him to fall down a flight of stairs. Brody was taken to the Emergency Room (“ER”) where ER staff failed to identify a visible cerebral bleed on the cervical CT scan. Brody was discharged home where his condition worsened. The next day he was taken to his pediatrician who reviewed the CT scan and correctly noted the cerebral bleed. Thereafter, Brody was admitted to the hospital where he underwent numerous surgeries, including a significant laminectomy. After the surgery, Brody’s parents took Brody to Scottish Rite Hospital in Atlanta for recovery and he received treatment for several months. Brody is now wheelchair bound, unable to stand, walk, toilet, bathe, or care for himself in any manner. Based on his current condition, it is anticipated that Brody will require treatment and be confined to a wheelchair for the rest of his life. As a result of the delay in proper diagnosis and treatment of the cerebral bleed, Brody was permanently rendered an incomplete quadriplegic. Brody has a life expectancy of approximately 78 years of age. Brody’s medical care related to the injury was paid by Medicaid. Medicaid, through AHCA, paid $266,092.46 in benefits; Medicaid, through the Department of Health Children’s Medical Services, paid $73,253.94 in benefits; and the Brain and Spinal Cord Injury Program paid $5,504.31 in benefits. The sum of benefits totaling $344,850.71 represents the amount Medicaid paid on Brody’s behalf, which are attributed to past medical expenses. Brody’s parents and natural guardians, Nicholas and Brittany Hurd, pursued a medical malpractice lawsuit against the parties allegedly liable for Brody’s injuries (“Defendants”) to recover all of Brody’s damages, as well as their own individual damages associated with their son’s injuries. After nearly five years of litigation, Petitioner settled the medical malpractice action for a lump-sum amount of $2,875,000.00. The settlement did not allocate Petitioner’s award between past medical and other damage categories. During the pendency of Brody’s medical malpractice action, AHCA was notified of the action and AHCA asserted a $266,092.46 Medicaid lien against Brody’s cause of action and settlement of that action. The Medicaid program through AHCA spent $266,092.46 on behalf of Brody, all of which represents expenditures paid for Brody’s past medical expenses. By letter dated January 26, 2020, AHCA was notified of Brody’s settlement. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Brody’s action against the Defendants. AHCA has not filed a motion to set-aside, void, or otherwise dispute Brody’s settlement. Brody’s taxable costs incurred in securing the settlement totaled $68,087.32. Application of the formula at section 409.910(11)(f) to Brody’s $2,875,000.00 settlement requires payment to AHCA of the full $266,092.46 Medicaid lien. Petitioner offered Brody’s life care plan and economist report as evidence of future medical expenses and loss of employment or wages. Expert Testimony Petitioner called two experts to testify on his behalf pertaining to valuation of Petitioner’s damages, Henry Lawrence Perry and Karen Gievers. Mr. Perry, a founding partner of the Perry and Young Law Firm in Panama City Beach, Florida, has been practicing law for 29 years. He served as the lead attorney for the underlying case. In addition to Petitioner’s case, he has represented clients in personal injury matters, including many cases involving catastrophic injuries similar to that of Brody. Mr. Perry evaluated Petitioner’s case and opined that $25 million was a conservative valuation of the case. The valuation of the case encompasses past medical expenses, future medical expenses, economic damages, and pain and suffering. Mr. Perry opined that there would be no admission of liability, so no cap on medical malpractice would be applicable. Mr. Perry opined that Petitioner settled the case for the lower amount because of issues with medical causation. Since Petitioner filed his action against the radiologist group and the hospital, the defense also raised an issue of the pediatrician being a Fabre defendant.1 As a result, Brody’s recovery could have been reduced based on the liability issues related to the claim. Mr. Perry opined that Brody’s settlement represented 11.5 percent of the full value of his claim, including past medical expenses. Mr. Perry opined that the allocation formula is 11.5 percent. The past medical expenses recovered as part of the settlement resulted in a total of $344,850.71. That figure multiplied by 11.5 percent would result in recovery of $39,657.83 allocated to past medical expenses. Karen Gievers also testified as an expert regarding valuation of Brody’s claim. Ms. Gievers, a licensed attorney for 42 years and a former 1 A Fabre defendant is a defendant that is not named in a lawsuit, but which can still be assigned liability by a jury. See Fabre v. Marin, 623 So. 2d 1182 (Fla. 1993). circuit court judge, focuses her practice on civil litigation. In her practice as an attorney, she has handled personal injury cases involving catastrophic injuries. She has also represented children in her practice. Similar to Mr. Perry, she opined that the value of Brody’s case was conservatively estimated at $25 million. She opined that Brody’s settlement amount of $2,875,000.00 resulted in a recovery of 11.5 percent of the full value of his claim. She opined that applying the 11.5 percent to each damage category is the appropriate way to allocate the amount of damages across all categories. Thus, applying the allocation formula of 11.5 percent of the $344,850.71 claim for past medical expenses would be $39,657.83. Ms. Gievers looked at Brody’s economic and noneconomic damages in her valuation of the case. Petitioner asserted that the $2,875,000.00 settlement is far less than the actual value of Petitioner’s injuries and does not adequately compensate Brody for his full value of damages. Therefore, a lesser portion of the settlement should be allocated to reimburse AHCA, instead of the full amount of the lien. Ultimate Findings of Fact Mr. Perry and Ms. Gievers credibly opined that a ratio should be applied based on the full value of Petitioner’s damages, $25,000,000.00, compared to the amount that Petitioner actually recovered, $2,875,000.00. Based on this formula, Petitioner’s settlement represents an 11.5 percent recovery of Petitioner’s full value of damages. Similarly, the AHCA lien should be reduced by 11.5 percent. Therefore, $39,657.83 is the portion of the third-party settlement that represents the amount AHCA should recover for its payments for Brody’s past medical care. The expert witnesses’ testimony was supported by their extensive experience in valuing damages and their knowledge of Brody’s injuries. AHCA, on the other hand, did not offer any witnesses or documentary evidence to question the credentials or opinions of either Mr. Perry or Ms. Gievers. AHCA did not offer testimony or documentary evidence to rebut the testimony of Mr. Perry or Ms. Gievers as to valuation or the reduction ratio. AHCA did not offer alternative opinions on the damage valuation method suggested by either Mr. Perry or Ms. Gievers. Based on the record, the testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Based on the evidence in the record, the undersigned finds that, Petitioner proved by a preponderance of the evidence that a lesser portion of Brody’s settlement should be allocated as reimbursement for past medical expenses than the amount AHCA calculated. Accordingly, AHCA is entitled to recover $39,657.83 from Petitioner’s recovery of $2,875,000.00 to satisfy the Medicaid lien.
