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 his settlement proceeds, as reimbursement for past Medicaid expenditures pursuant to section 409.910, Florida Statutes.
Findings Of Fact On January 1, 2013, Josiah Delva ("Josiah"), who was only 18-months-old, was presented to a hospital with a fever and emesis. He was discharged only one and a half hours later after he was misdiagnosed with a "normal" condition. The following day, Josiah's fever continued, and he began suffering from a purpuric rash on his body and decompensated septic shock. He was taken back to the Emergency Room where he was diagnosed with meningococcal meningitis and meningococcal bacteremia and grew Moraxella catarrhalis in his sputum. Josiah was admitted to and remained in the intensive care unit of the hospital for five months. Due to the necrosis, which was caused by the meningococcus, Josiah's left arm below the elbow, his right leg below his knee, and the toes of his left foot were all amputated. In addition, he required bilateral patellectomies (removal of his knee caps). Josiah's medical care related to the injury was paid by AHCA's Medicaid program. Medicaid provided $237,408.60 of the costs associated with Josiah's injury. The $237,408.60 paid by Medicaid constituted Josiah's entire claim for past medical expenses. Josiah's parents and natural guardians, Jennifer Paulino Delva and Johnny Delva, brought a medical malpractice suit against the medical providers and staff responsible for Josiah's care ("Defendant medical providers") to recover all of Josiah's damages as associated with his injuries. As a condition of Josiah's eligibility for Medicaid, Josiah assigned to AHCA his right to recover from liable third parties any medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H); § 409.910(6)(b), Fla. Stat. During the pendency of the medical malpractice action, AHCA was notified of the action, and it asserted a $237,408.60 Medicaid lien against Josiah's cause of action and future settlement of that action. AHCA made payments totaling $237,408.60 related to Josiah's injuries for which the defendant medical providers are liable. Josiah's lawsuit ultimately settled in December of 2018 or January of 2019 for the gross unallocated sum of $550,000.00. 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). There were $146,110.61 in attorney's fees and costs incurred to make the recovery. The parties stipulated that operation of the statutory formula to Josiah's settlement would require repayment to AHCA in the amount of $185,694.69. Witness Testimony Zarahi Nunez was accepted, with no objection, as an expert in life care planning. She met with the Delva family and consulted with medical professionals regarding the treatment needs and options for Josiah. She also reviewed the appropriate manuals to determine a course of treatment for Josiah. Ms. Nunez developed a life care plan, along with dollar figures for each aspect of treatment totaling $5,998,080.19.2/ Mrs. Delva testified how she noticed that Josiah developed a fever and was vomiting on New Year's Eve (December 31, 2012). After midnight, he vomited again, so Mrs. Delva brought him to the hospital. He was discharged a few hours later around 4:00 a.m. on New Year's Day (January 1, 2013). Josiah was diagnosed with a stomach flu, and was given a prescription to stop vomiting. Josiah developed a rash, which concerned Mrs. Delva. Upon talking to medical professionals via phone, Mrs. Delva determined that Josiah's rash would not change with pressure on his skin. This apparently indicated that his white blood cell count was low. Mrs. Delva immediately rushed Josiah to the hospital upon the doctor's instruction. At the hospital, Josiah bypassed triage as the rash continued to spread and as symptoms of sepsis became apparent. The doctors diagnosed Josiah as having a bacterial meningitis infection and treated him. His organs began shutting down and his body turned colors from the rash. Mrs. Delva vividly explained the horror of: watching multiple physicians rush to her son's bedside; seeing the Emergency Room go into quarantine due to her son's infection; providing the names of all the people Josiah had come into recent contact so that they could be given precautionary antibiotics; having the health department remove all of Josiah's things from the house to prevent the spread of the infection; and seeing her son essentially die on the table and be resuscitated. Josiah was in the hospital from January 1 through May 2, 2013. Due to the lack of blood circulation, Josiah lost multiple body parts. His left hand at the wrist, his right leg at the ankle, and part of his left foot were amputated, and both knee caps were removed. His skin is tough and scarred. According to Mrs. Delva, had the doctor properly diagnosed Josiah when they first arrived after midnight on New Year's Day, he would not have suffered the extent of his injuries. Mrs. Delva and her husband have four children, including Josiah, and she detailed the extent to which the family facilitates Josiah's needs. Josiah's siblings do not always understand the extra attention needed by Josiah from their parents. She explained every day is a constant struggle, and most notably explained, the need to travel from Miami to Tampa to Shriner's Hospital ten or more times per year for check-ups and to update Josiah's prosthetics. No witness testified to Josiah's or his parents claim for noneconomic damages. While it is clear that the malpractice caused grievous pain and suffering to the family that will last Josiah's entire life, no expert was presented to discuss the valuation of these damages. No testamentary or other evidence was advanced to show how the $550,000.00 settlement amount should be allocated between past medical expense damages and other elements of damages. Petitioner's Theory of the Case Petitioner's counsel argues that the total value of the case that Petitioner should reasonably have expected to be awarded by a jury was $110,735,488.79. Counsel explained that this number represents the past medicals paid by Medicaid, $6 million for future medicals, $20 million for past pain and suffering, $80 million for future pain and suffering, and $2 million each (a total of $4 million) for Mr. and Mrs. Delva's loss of consortium claims. Petitioner argues that the past medicals, as paid by Medicaid in the amount of $234,408.60, represent 0.0021 percent of the total value of the case of $110,735,488.79. Petitioner argues that applying this 0.0021 percent times the actual recovery of $550,000.00 results in Medicaid's pro rata recovery being reduced to $1,155.00 as the portion of the settlement allocable to past medicals.3/ No expert testimony was introduced on the calculation of any element of damages other than future medical expenses.4/ In support of the $110 million dollar plus "total value" of the case, Petitioner provided three jury verdicts to establish comparable pain and suffering awarded in similar circumstances. These cases include: A.H., a minor, et al. v. Trustees of Mease Hospital, Inc., et al., 2018 FL Jury Verdict Rptr. LEXIS 277; Lisa-Marie Carter v. Larry Roy Glazerman, M.D., et al., 2018 FL Jury Verdict Rptr. LEXIS 175; and Cynthia N. Underwood and Stephen R. Underwood v. Katherine Strong, 2017 FL Jury Verdict Rptr. LEXIS 11578. The facts of how the injuries happened and the effects of the injuries, in these cited cases, differ highly from Josiah's case. The first of the three jury verdicts shows a gross verdict award of $9,250,000.00. The third of the jury verdicts show a gross award of $6,132,642. The second of the three jury verdicts shows an award of $109,760,930. This includes the staggering figure of $94 million for pain and suffering damages. The undersigned took official recognition of the docket for the Carter case and the Notice of Appeal filed on March 22, 2018, which show that the Carter verdict is on appeal. Unfortunately, these jury verdicts provide no guidance for calculating Josiah's or his parents' claims for noneconomic damages or the total value of the case.
The Issue The issue in this case is the amount of money to be reimbursed to Respondent, Agency for Health Care Administration, for medical expenses paid on behalf of Petitioner, Larry J. Griffis, from a personal injury claim settlement received by Petitioner from a third party.
Findings Of Fact Griffis was severely injured in an accident occurring on April 29, 2012. The accident occurred generally as follows: Griffis owned and operated a large truck with a long aluminum dump trailer attached. He hauled hazardous waste and other materials for a living. At the end of each job, Griffis would raise the dump trailer for the purpose of cleaning out any residual material. On the date of the accident, Griffis did not clean his trailer in the usual because of some obstruction on that date. Instead, he drove out into a field next to his house to clean the trailer. When Griffis raised the trailer to clean it, he failed to notice electrical lines just above his trailer. He raised the trailer into the lines, resulting in an extremely high voltage of electricity running through his body. As a result of the accident, Griffis was transported to the burn unit at Shands hospital in Gainesville for treatment of his extensive injuries. He had over 50 medical procedures while at Shands, including debridement, skin grafts, tracheostomies, multiple chest tubes, etc. He had 19 different complications while in the hospital, including infections and kidney failure. Over 30 percent of his body surface area was burned; 23 percent of those burns were third degree. While undergoing treatment, Shands gave him only a 22 percent chance of surviving. Griffis remained in the hospital for three and one half months. The medical bills for Griffis’ treatment totaled Griffis cost $1,363,285.65. Medicaid paid $48,640.57 of that total amount. The Veterans Administration (VA) paid $275,911.87. Shands was eventually paid $324,552.44 of its charges and wrote off over $1 million. Griffis filed a lawsuit against Suwannee Valley Electric Cooperative, Inc. (“Suwannee”), seeking payment of economic and non-economic damages related to Suwannee’s alleged liability for the accident. After negotiations and mediation, a settlement was reached whereby Griffis was to receive the sum of $500,000 from Suwannee in full settlement of all his claims. After the settlement was reached between Griffis and Suwannee, the Agency attempted to enforce its lien, seeking repayment of the entire amount it had paid. Griffis, believing that less than the lien amount was actually owed, filed a Motion for Order Apportioning Damages as part of his pending lawsuit against Suwannee. The purpose of the motion was not to have the circuit court judge determine the amount of the Agency’s lien. The motion was filed to obtain an Order that would apportion the settlement among the lawful elements of damages to which Griffis was entitled. A hearing on the motion was set for April 14, 2015, before Circuit Court Judge Andrew J. Decker, III. The Agency was served a copy of the motion and the notice of hearing. The Agency filed an objection to the motion, seeking to relieve the circuit court of jurisdiction in favor of the Division of Administrative Hearings. See § 409.910 (17)(b), Fla. Stat. Griffis replied to the Agency’s objection, stating that “the purpose of the Motion is to differentiate or allocate the settlement among Mr. Griffis’ different elements of damages [rather than] asking this Court to resolve a Medicaid lien dispute.” At the Circuit Court hearing on Griffis’ motion, the Agency made an appearance and, in fact, cross-examined the expert witness who testified. The only testimony provided at that hearing was from retired District Court of Appeal Judge Edwin B. Browning, Jr. Judge Browning provided expert testimony as to the value of Griffis’ claim, which he set at $6 million. Mr. Smith also provided some argument in support of Griffis’ claim, but as an attorney, rather than a sworn witness. Judge Decker took the $6 million figure, plus economic damages in the sum of $211,518, plus past medical expenses of $324,552.44 for a total of $6,536,070.44. That was then divided into the $500,000 settlement figure amount. That resulted in a factor of 7.649 percent, which, applied to the “value of the case” amount, resulted in a figure of $458,919.49. Applying the factor to economic damages resulted in an amount of $16,179.01. The past medical expenses amount, once factored, resulted in a figure of $24,825.01.1/ After hearing the evidence presented at his motion hearing, Judge Decker entered an Order dated April 21, 2015, establishing the past medical expenses amount, i.e., the Agency’s lien, at $24,901.50. The Order did not address future medical expenses because they were not sought by Petitioner. Inasmuch as his future medical costs would be paid by VA, his attorneys did not add potential medical expenses to the claim.2/ A copy of Judge Decker’s Order was received into evidence in the instant proceeding (although, pursuant to section 90.202, Florida Statutes, it could have been officially recognized by the undersigned Administrative Law Judge). The Order, along with Griffis’ other exhibits and Mr. Smith’s testimony, constituted the evidence in this matter.
The Issue The issue in this proceeding is how much of Petitioner’s settlement proceeds should be paid to Respondent, Agency for Health Care Administration (“AHCA”), to satisfy AHCA's Medicaid lien under section 409.910, Florida Statutes.1/
Findings Of Fact On July 31, 2012, Luca Weedo’s natural mother, who was 30 weeks pregnant with Luca, was walking on the sidewalk on the east shoulder of Airport Pulling Road in Naples, Florida. At the same time, a Jeep Wrangler was traveling on Airport Pulling Road. As the Jeep Wrangler approached Luca’s natural mother, the left front tire and wheel separated from the Jeep Wrangler. The separated wheel bounced along the roadway at a high rate of speed, crossing the median and northbound lane of Airport Pulling Road. The wheel approached Luca’s natural mother at such a high rate of speed that she was unable to avoid it. She was struck by the wheel and knocked to the ground, which caused her to lose consciousness and suffer a ruptured placenta. Luca’s natural mother was transported to Lee Memorial Hospital. Upon admission, she underwent emergency surgery due to abdominal trauma. Luca was delivered via emergency C-section. Luca was born with extreme fetal immaturity and catastrophic brain damage. Luca remained in the hospital for three months, undergoing numerous medical procedures associated with his serious medical needs and brain damage. Luca now suffers from catastrophic brain damage and a seizure disorder that causes him to have multiple seizures every day. He is unable to ambulate, speak, eat, toilet, or care for himself in any manner. Prior to Luca’s birth, his natural mother had decided to place Luca up for adoption. Accordingly, when Luca was discharged from the hospital, the Florida Department of Children and Families asked Debra and Kenneth Weedo to take Luca into their home as a foster child. Kenneth Weedo is a retired truck driver and his wife Debra is a foster parent for medically needy children. Debra and Kenneth Weedo took Luca into their home and adopted him on May 2, 2013. Luca’s past medical expenses related to his injuries were paid by Medicaid, which provided $319,188.20 in benefits. This $319,188.20 paid by Medicaid constituted Luca’s entire claim for past medical expenses. Luca, through his parents and guardians, Debra and Kenneth Weedo, brought a personal injury action to recover all his damages. The lawsuit was initially brought against the owner/driver of the Jeep Wrangler. However, through discovery, it was determined that the party responsible for the wheel separating from the Jeep Wrangler was the tire and rim shop that installed the wheel on the Jeep Wrangler approximately a year prior to the accident (“Tire Shop”). The Tire Shop maintained insurance with a policy limit of $1 million. The Tire Shop’s insurance company tendered the $1 million insurance policy limit, which was accepted by Debra and Kenneth Weedo in settlement of Luca’s claim for damages against the Tire Shop. The General Release and Hold Harmless Agreement (“Release”), executed on December 21, 2015, memorialized the settlement with the Tire Shop as follows, in relevant part: Although it is acknowledged that this settlement does not fully compensate LUCA ALECZANDER WEEDO for all of the damages that he has allegedly suffered, this settlement shall operate as a full and complete Release as to Second Parties without regard to this settlement only, compensating LUCA ALECZANDER WEEDO for a fraction of the total monetary value of his alleged damages. LUCA ALECZANDER WEEDO has alleged his damages have a value in excess of $25,000,000, of which $319,188.20 represents LUCA ALECZANDER WEEDO’s claim for past medical expenses. Given the facts, circumstances, and nature of LUCA ALECZANDER WEEDO’s injuries and allegations, $12,767.53 of this settlement has been allocated to LUCA ALECZANDER WEEDO for LUCA ALECZANDER WEEDO’s claim for past medical expenses and the remainder of the settlement towards the satisfaction of claims other than past medical expenses. LUCA ALECZANDER WEEDO alleges that this allocation is reasonable and proportionate based on the same ratio this settlement bears to the total monetary value of all LUCA ALECZANDER WEEDO’s damages. Further, LUCA ALECZANDER WEEDO acknowledges that he may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses that LUCA ALECZANDER WEEDO will incur in the future. However, LUCA ALECZANDER WEEDO alleges that his family and/or others on his behalf have not made payments in the past or in advance for LUCA ALECZANDER WEEDO’s future medical care and LUCA ALECZANDER WEEDO 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, it is LUCA ALECZANDER WEEDO’s contention that no portion of this settlement represents reimbursement for future medical expenses. Because Luca was a minor, Court approval of the settlement was required. Accordingly, on February 17, 2016, Collier County Circuit Court Judge James Shenko approved the settlement by entering an Agreed Order on Petitioner’s Unopposed Petition to Approve Minor’s Settlement. As a condition of his eligibility to receive Medicaid benefits, Luca assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. AHCA was notified of Luca’s personal injury action during its pendency. Through its collections contractor, Xerox Recovery Services, AHCA has asserted a Medicaid lien in the amount of $314,747.23 against Luca’s cause of action and settlement of the personal injury action. This is the amount that the Medicaid program spent on behalf of Luca for his past medical expenses.2/ Application of the formula set forth in section 409.910(11)(f) requires that AHCA be reimbursed for the full $314,747.23 Medicaid lien. Neither Luca nor others on his behalf made payments in the past or in advance for his future medical care. No claim for damages was made for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Debra Ann Weedo attended the final hearing along with Luca. Ms. Weedo is a foster parent for medically needy children. She testified that she currently has four children in her home: three-year-old Luca; a six-year-old in more or less the same condition as Luca; a five-year-old who is “basically normal”; and an autistic eight-year-old. Ms. Weedo first met Luca in the hospital during his post-birth hospitalization. She was asked to take him as a foster child and visited him several times in the hospital before taking him home at age three months. Ms. Weedo stated that when she brought Luca home, the whole family fell in love with him and “he became our family.” As soon as it was possible, Ms. Weedo and her husband adopted Luca. Ms. Weedo testified that Luca’s siblings interact with him and that Luca knows the voices of his caregivers and “will kind of try to talk to us.” At the hearing, the undersigned observed that Luca is somewhat aware of his surroundings and responsive to voices. Ms. Weedo testified that her family does everything together. Luca travels, goes on vacations, and goes out to eat as part of the family. Ms. Weedo testified that Luca requires 24-hour supervision and that his condition will become progressively worse as he ages. Luca has been on oxygen since December 2014. He must use a BiPAP (Bilevel Positive Airway Pressure) machine when he sleeps because the oxygen saturation level in his blood tends to be perilously low. He receives his nutrition through a gastrostomy tube. Civil trial attorney Todd Rosen testified on behalf of Petitioner as a fact witness and an expert on the valuation of damages. Mr. Rosen has been an attorney for 15 years and is the principal of the Todd Rosen Law Group in Coral Gables. Mr. Rosen stated that his practice is exclusively devoted to representing plaintiffs in personal injury cases. Mr. Rosen is a member of the American Association for Justice, the Florida Justice Association, the American Trial Lawyers Association, and the Dade County Bar Association. Mr. Rosen has handled many jury trials and has represented plaintiffs who have suffered catastrophic brain injuries. A daily part of his practice is to assess the value of damages to injured persons. He stays abreast of jury verdicts in his area and routinely “round-tables” legal issues and damage valuations with other attorneys. Mr. Rosen testified that he was hired by Luca Weedo’s parents to investigate the potential claims they might have on behalf of their son. Mr. Rosen reviewed thousands of pages of Luca’s medical records, the accident report, and insurance policies for the defendants. The records indicated that Luca suffered catastrophic brain damage as a result of placental abruption and that this injury had a permanent and devastating impact on the child’s life. Mr. Rosen explained that he could not file a lawsuit until the adoption process was complete, about eight months after the accident. He initially brought the suit against the driver of the Jeep, who had only PIP and property damage insurance and no collectable assets. Mr. Rosen interviewed the Jeep owner and learned the name of the Tire Shop. He made a demand for payment of the Tire Shop’s $1 million insurance policy. The full policy amount was tendered very soon after Mr. Rosen’s demand. Mr. Rosen testified that no life care plan or economist’s report was prepared in this case because the case settled so quickly. He believed that it would have been imprudent to spend money out of the $1 million settlement on a life care plan when the Weedos were not facing the prospect of a jury trial. Mr. Rosen testified that Luca’s past medical care related to the accident was paid by Medicaid. He testified that Medicaid provided $319,188.20 in benefits, representing Luca’s entire claim for past medical expenses. Mr. Rosen testified that Luca, or others on his behalf, did not make payments in the past or in advance for future medical care and no claim was brought to recover reimbursement for past payments for future medical care. Mr. Rosen opined that Luca’s damages had a value “well in excess of” $25 million. Mr. Rosen explained that based on his experience in other cases, he believed the value of Luca’s future life care needs “would be well in excess of at least 10 to 15 million dollars” and that Luca’s non-economic damages would have a high value. Mr. Rosen noted that a jury would also take into account how “wonderful” Debra and Kenneth Weedo are to have devoted their lives to caring for Luca and other children in similar circumstances. Mr. Rosen believed that the $25 million valuation on Luca’s damages was “very conservative.” Mr. Rosen stated that the Tire Shop’s insurance counsel believed they had a strong argument that the owner of the Jeep must have done something to the tires after the Tire Shop put them on the car. However, despite the contested liability, the insurance company readily agreed during informal settlement discussions to pay the policy limits because the lawyers believed they were facing a verdict of up to $50 million. Mr. Rosen testified that the biggest cost factor in assessing Luca’s damages is the 24-hour attendant care that he will require for the rest of his life. Depending on how many caregivers are employed, the skill level required, and the location, attendant care may range from $25 to $40 per hour. Mr. Rosen estimated that a life care plan for Luca would be in the neighborhood of $10 million, including attendant care, nursing, and medical expenses. Mr. Rosen testified that the $1 million settlement did not come close to fully compensating Luca for the full value of his damages. Based on the conservative valuation of all Luca’s damages at $25 million, the $1 million settlement represented a recovery of four percent of the value of Luca’s damages. Mr. Rosen testified that because Luca only recovered four percent of the value of his damages in the settlement, he only recovered four percent of his $319,188.20 claim for past medical expenses, or $12,767.53.3/ Mr. Rosen noted that the settling parties agreed in the Release that Luca’s damages had a value in excess of $25 million, as well as to the allocation of $12,767.53 to past medical expenses. Mr. Rosen testified that the allocation of $12,767.53 of the settlement to past medical expenses was reasonable, rational, and more than fair because it was based on a conservative estimate of Luca’s damages. He stated, “Me, personally, I believe it should be less, but yes, that is fair just being conservative.” Mr. Rosen testified that because no claim was made to recover reimbursement for past payments for future medical care, no portion of the settlement represented reimbursement for past payments for future medical care. He noted that the parties agreed in the Release that no claim was made for reimbursement of past payments for future medical care, and no portion of the settlement represented reimbursement for future medical expenses. Because Luca was a minor, court approval of his settlement was required. The court appointed another experienced attorney to act as Luca’s Guardian ad Litem to review the terms of the settlement and make a report to the court as to its appropriateness. The Guardian ad Litem recommended approval of the settlement, and the court adopted that recommendation. Also testifying on behalf of Petitioner as an expert in the valuation of damages was R. Vinson Barrett, a partner in the Tallahassee firm of Barrett, Fasig and Brooks, which Mr. Barrett described as a mid-sized firm that exclusively undertakes personal injury and products liability cases. Mr. Barrett stated that he has been a trial lawyer for 40 years and for the last 15 years has confined his practice to medical malpractice, medical products liability, and pharmaceutical products liability cases. Mr. Barrett testified that he has done many jury trials. He discussed the importance of accurately estimating the value of the damages suffered by his clients because of the heavy investment that a trial firm must make in a complex case. Mr. Barrett stated that a firm can easily spend a quarter of a million dollars on experts and discovery, as well as life care plans, economic analyses, and vocational rehabilitation analyses, among other items required to establish damages. He stated that it is essential not to spend so much money in putting on the case that the client has nothing left after the verdict. Mr. Barrett stated that he has reviewed dozens of life care plans and economist reports, many for children with the same kind of injuries suffered by Luca Weedo. Mr. Barrett testified that he was familiar with Luca’s injuries and had reviewed the accident report, hospital birth records, records from a second hospitalization, medical records from Luca’s neurologist, the Guardian ad Litem report, the court order approving the settlement, Mr. Rosen’s demand letter to the insurance carrier, and each of Petitioner’s exhibits. He had also spoken to Debra Weedo by phone concerning Luca’s medical condition. Mr. Barrett gave a detailed explanation of Luca’s injuries and extent of his disability. He concluded that Luca’s injury “is as bad an injury as you can possibly receive and stay alive . . . . It could not be more catastrophic.” The medical records indicate that Luca will not get better and his prognosis is poor. Mr. Barrett opined that Luca’s life care plan alone would probably exceed $25 million. He conceded “that seems like a huge, huge, huge amount of money,” but explained that it really is not such a large sum when one considers that Luca is supposed to have 24-hour attendant care throughout his lifetime. Life care plans are not limited to the cost of services provided by Medicaid, which is a safety net that “takes care of things that are absolutely essential to keep on breathing.” However, Medicaid does not cover many things that medically needy children require for quality of life, such as wheelchair-equipped vans. The life care plan includes all of the child’s needs. Mr. Barrett testified that a life care planner accounts for every cost, “pill by pill, wheelchair replacement by wheelchair replacement,” then reduces it to present value. Mr. Barrett testified that based on his experience working with life care planners in trial preparation, and his extensive experience in evaluating damages in cases similar to that of Luca Weedo, he had no doubt that $25 million is a conservative estimate of Luca’s pure losses. Mr. Barrett testified that the settlement did not come close to compensating Luca for the full value of his damages. Using $25 million as the conservative measure of all his damages, Luca had recovered only four percent of the value of his damages. Mr. Barrett testified that “by equity and basically, now by federal law, you look at the same ratio for the lien that you look at [for] the claimant.” Accordingly, Mr. Barrett testified that the settlement provided Luca with only four percent of Medicaid’s $319,188.20 claim for past medical expenses, or $12,767.53. Mr. Barrett testified that the settling parties’ allocation of $12,767.53 of the settlement to past medical expenses was reasonable, rational, and conservative. Both Mr. Rosen and Mr. Barrett testified at some length about comparable jury verdicts and prior DOAH Medicaid lien cases involving children with catastrophic brain injuries. This discussion had some value in establishing that $25 million was by no means an unreasonable estimate of Luca Weedo’s damages, but was secondary and supplemental to the directly expressed expert opinions of Mr. Rosen and Mr. Barrett. AHCA presented the testimony of attorney James Bruner, who was accepted as an expert for the limited purpose of comparing the jury verdicts in the cases cited by Petitioner to the facts of the instant case. Mr. Bruner correctly noted that it can be misleading to cite the numbers from a jury verdict without reference to later reductions made on appeal or via settlement pending appeal. Mr. Bruner also effectively demonstrated that there is never a precise correlation between the facts of one case and those of another, and therefore that there cannot be a precise comparison of damages from one case to another.4/ However, the undersigned did not look to the comparative verdicts for such a strict comparison, but simply for the purpose of establishing a range of reasonableness in broadly similar cases. AHCA called no witness to directly contest the valuation of damages made by Mr. Rosen or to offer an alternative methodology to calculate the allocation to past medical expenses. No evidence was presented that 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 conservative in its valuation of Petitioner’s claim and that the settling parties could have reasonably apportioned 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 $250,000, as well as $8,112.70 in taxable costs, from the $1 million recovery, leaves $741,887.30, half of which is $370,943.65. 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 $314,747.23. Petitioner proved by clear and convincing evidence that the $25 million total value of the claim was a reasonable, even somewhat conservative, amount. Petitioner proved by clear and convincing evidence, based on the strength and sympathy 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 What amount is payable to Respondent, Agency for Health Care Administration (“AHCA”), as reimbursement for medical expenses paid on behalf of Petitioners, Carla Barrientos, a minor, by and through her parents and natural guardians, Asuncion Gutierrez and Carlos Barrientos, pursuant to section 409.910, Florida Statutes, from settlement proceeds they received from third parties?
Findings Of Fact Based on the weight of the credible and undisputed evidence, the total value of Petitioners’ medical malpractice damages was $17.5 million and, thus, the $1.75 million undifferentiated settlement resulted in Petitioners recovering ten percent of Carla’s past medical expenses. Based on the weight of the credible and undisputed evidence, $25,108.19—representing ten percent of total amount of past medical expenses of $251,081.89—is a fair and reasonable determination of the past medical expenses actually recovered by Petitioners and payable to AHCA.
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 What is the proper amount of Petitioner's personal injury settlement payable to Respondent, Agency for Health Care Administration ("AHCA"), to satisfy AHCA's $191,298.99 Medicaid lien under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulations of the parties, the evidence presented at the hearing, and the record as a whole, the following findings of fact are made: On August 9, 2018, Petitioner, Russell Wellington ("Wellington"), who was 59 years old, was driving a motorcycle in the inside northbound lane of U.S. Highway 1 at or near mile marker 99 in Monroe County, Florida. A vehicle driven by JI Young Chung ("Chung"), and owned by a car rental company, was northbound in the outside lane on U.S. Highway 1. Chung turned left into Wellington’s motorcycle causing him to be ejected from the motorcycle. As a result of the accident, Wellington sustained catastrophic injuries including a right leg amputation, a fractured pelvis, fractured humerus, fractured ribs, kidney failure, and a head injury. Wellington is now disabled and unable to work. JPHS p. 10, ¶1. Wellington’s medical care related to the injury was paid by Medicaid, and Medicaid, through AHCA, provided $191,298.99 in benefits. This $191,298.99 constituted Wellington’s entire claim for past medical expenses. JPHS p. 10, ¶2. Wellington pursued a personal injury claim against the driver and owner of the car that struck his motorcycle (“tortfeasors”) to recover all his damages. JPHS p. 10, ¶3. The other driver, Chung, maintained an insurance policy with only $100,000 in insurance limits, and had no other recoverable assets. The rental company that owned the vehicle maintained an insurance policy with only $10,000 in insurance limits. Wellington’s personal injury claim against the tortfeasors was settled for an unallocated lump sum amount of $110,000.00. JPHS p. 10, ¶4. As a condition of Wellington’s eligibility for Medicaid, Wellington assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) ; § 409.910(6)(b), Fla. Stat. During the pendency of Wellington’s personal injury claim, AHCA was notified of the claim and asserted a $191,298.99 Medicaid lien against Wellington’s cause of action and settlement of that action. JPHS p. 10, ¶5. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Wellington’s claim against the tortfeasors. JPHS p. 10, ¶6. By letter, AHCA was notified of Wellington’s settlement. JPHS p. 10, ¶7. AHCA has not filed a motion to set-aside, void, or otherwise dispute Wellington’s settlement. JPHS p. 10, ¶8. The Medicaid program, through AHCA, spent $191,298.99 on behalf of Wellington, all of which represents expenditures paid for Wellington’s past medical expenses. JPHS p. 10, ¶9. Wellington’s taxable costs incurred in securing the $110,000.00 settlement totaled $766.78. JPHS p. 10, ¶10. Application of the formula at section 409.910(11)(f) to Wellington’s $110,000.00 settlement requires payment to AHCA of $40,866.61. JPHS p. 11, ¶11. Petitioner has deposited the section 409.910(11)(f) formula amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). JPHS p.11, ¶12. Testimony of Steven G. Jugo, Esquire Steven G. Jugo, Esquire ("Jugo"), was called by Petitioner. He has been an attorney for 41 years and practices with the law firm of Jugo & Murphy in Miami, Florida. For the past 37 years, Jugo has practiced exclusively plaintiff’s personal injury, medical malpractice, and wrongful death law. He routinely handles jury trials and cases involving catastrophic injury. He is familiar with reviewing medical records, reviewing accident reports, and deposing fact and expert witnesses. He stays abreast of jury verdicts in his geographic area by reviewing jury verdict reporters and discussing cases with other trial attorneys. He is a member of several trial attorney organizations including the Florida Justice Association and the American Association for Justice. As a routine part of his practice, Jugo makes assessments concerning the value of damages suffered by injured clients. He briefly explained his process for making these determinations. Jugo is familiar with, and routinely participates in, processes involving the allocation of settlements in matters including health insurance liens, workers' compensation liens, and Medicare set-asides, as well as, allocations of judgments made by judges post-verdict. Jugo represented Wellington in his underlying personal injury claim. Jugo reviewed the accident report, reviewed Wellington’s medical records, met with Wellington numerous times, and deposed the driver of the vehicle that struck Wellington’s motorcycle. As a result of the accident, Wellington underwent many surgeries and extensive medical intervention. Jugo felt that Wellington’s injuries have tremendously impacted his life in a negative way. He explained that Wellington is no longer able to work and he is no longer able to adequately care for or play with the three young children he adopted. Without objection by AHCA, Jugo testified that based on his professional training and experience, it was his opinion that a very conservative value for Wellington’s damages would be $4 million. Jugo explained that his valuation of Wellington’s total projected damages was based on his experience, his comparison of Wellington’s case to similar jury verdicts, and discussions about the case with other attorneys. He explained that the jury verdicts outlined in Petitioner’s Exhibit 9 were comparable to Wellington’s case and supported his valuation of Wellington’s total and projected damages in this case. Jugo detailed that about 70 percent of the verdicts he reviewed which were similar in nature, were in the $5 million range. He opined that this demonstrated that Wellington’s total and projected damages would also have a minimum value of $4 million. Jugo discussed the value of Wellington’s damages with other attorneys, and they agreed with the valuation of Wellington’s total projected damages being in excess of $4 million. Wellington’s personal injury claim was brought against the driver and the rental car company that owned the vehicle which struck Wellington’s motorcycle. The vehicle driver, Chung, maintained an insurance policy with only $100,000.00 in coverage, and had no other recoverable assets. Jugo explained that because the vehicle was owned by a rental car company, the law shielded the rental car company from suit. Nonetheless, he explained that the rental car company had a $10,000.00 insurance policy it made available. As a result, the total settlement was $110,000.00. Jugo believed that the personal injury settlement did not fully compensate Wellington for all of his projected personal injury damages. Without objection by AHCA’s counsel, Jugo testified that based on a conservative value of all damages of $4 million, Wellington recovered in the settlement only 2.75 percent of the value of his total and projected damages. Again, without objection, he testified that because Wellington recovered only 2.75 percent of his total and projected damages, he recovered in the settlement only 2.75 percent of his $191,298.99 claim for past medical expenses, or $5,260.72. Jugo also testified that it would be reasonable to allocate $5,260.72 of the settlement to past medical expenses, stating “[t]hat’s the maximum amount I believe should be allocated to past medical expenses.” Testimony of R. Vinson Barrett, Esquire R. Vinson Barrett, Esquire ("Barrett"), has been a trial attorney for over 40 years. He is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee. His legal practice is dedicated to plaintiff’s personal injury and wrongful death cases. He has handled cases involving automobile accidents and catastrophic injuries. Barrett routinely handles jury trials. Barrett stays abreast of jury verdicts by periodically reviewing jury verdict reports and discussing cases with other trial attorneys. He is a member of the Florida Justice Association and the Capital City Justice Association. As a routine part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. He briefly explained his process for making these assessments. It has been part of his law practice to gain familiarity with settlement allocation involving health insurance liens, Medicare set-asides, and workers’ compensation liens. He is also familiar with the process of allocating settlements in the context of Medicaid liens, and he described that process. Barrett has been accepted as an expert in the valuation of personal injury damages in federal court, as well as numerous Medicaid lien hearings at DOAH. Barrett addressed the instant case. He was familiar with Wellington’s injuries and the circumstances resulting in the injuries. Barrett detailed the extensive nature of Wellington’s injuries and the general impact of such injuries. Barrett testified, without objection, that based on his professional training and experience, he believed Wellington’s damages had a conservative value of $4 million. More specifically, he stated, “I felt that the damages were conservatively, very conservatively, $4 Million. I believe this case, if it had gone to a jury could well have gone up into the eight figures, probably would have, I think. If I was asking for damages in this case in front of a jury, it would probably be somewhere, between $8 and 12 million or even a little higher, if I was in South Florida jurisdiction.” Barrett has been accepted as an expert in the valuation of personal injury damages in other cases at DOAH. Barrett explained that the jury verdicts outlined in Petitioner’s Exhibit 9 involved injuries comparable to Wellington’s injuries and supported his valuation of Wellington’s total and projected damages at $4 million. Barrett went on to explain that the average trial verdict and award he reviewed from Exhibit 9 was $5.5 million and the average award for pain and suffering was $3,788,333.00. Barrett believed that the jury verdict in the Nummela case, from Exhibit 9, most closely tracked Wellington’s case. Barrett explained that the injuries suffered by Nummela compared most closely with Wellington’s injuries and he noted the similarities. Barrett also pointed out that the jury in Nummela had determined that the damages had a value of $9.5 million, which Barrett testified was in line with what he believed a jury would have awarded to Wellington, if this matter had proceeded to trial. Barrett was aware that Wellington’s case had settled for the insurance policy limits of $110,000.00. He testified that this settlement amount did not fully compensate Wellington for all the personal injury damages he had suffered. Barrett testified, without objection by AHCA’s counsel, that using a conservative value of $4 million for all projected damages, the $110,000.00 settlement represented a recovery of 2.75 percent of the total and projected damages. Barrett testified, again without objection, that because only 2.75 percent of his damages were recovered in the settlement, only 2.75 percent of the $191,298.99 claim for past medical expenses was recovered by Wellington in the settlement, namely $5,260.72. Barrett testified that it would be reasonable to allocate $5,260.72 of Wellington’s settlement to his past medical expenses. Inexplicably, AHCA did not call any witnesses, present any contradictory evidence as to a lower value of Wellington’s projected or total damages, or call any witnesses to contest the methodology used to calculate the $5,260.72 allocation to past medical expenses. The unrebutted evidence supports that Wellington’s total and projected damages had a value in excess of $4 million. By applying the same ratio to AHCA's lien that the settlement ($110,000.00) bears to the total projected monetary value of all the damages ($4,000,000.00), a finding is reached that $5,260.72 of the settlement is fairly allocable to past medical expenses. Under the proportionality methodology, the $110,000.00 settlement represents a 2.75 percent recovery of the expert’s total and projected damages of $4 million ($110,000.00 is 2.75 percent of $4 million). Applying this same 2.75 percent to the $191,298.99 claim for past medical expense, the experts opined that Wellington recovered $5,260.72 in past medical expenses in the settlement.2 Of particular consequence to this case, AHCA did not call any expert witnesses, nor did it present any evidence, to rebut or contradict Petitioner's experts or proposed allocation of $5,260.72 in the settlement to past medical expenses. Likewise, AHCA did not dispute or present any persuasive evidence or arguments that Wellington’s injuries were overstated or incorrectly described by Messrs. Jugo or Barrett. 2 This methodology is commonly referred to as the proportionality test or pro-rata formula. On AHCA's cross-examination of the attorney experts, the methodology used by them to arrive at their opinion concerning a fair allocation of past medical expenses in Wellington’s settlement was not persuasively challenged or overcome by AHCA. Simply put, the amount of $5,260.72 proposed by Petitioner as a fair allocation of past medical expenses from the settlement agreement was not successfully refuted or challenged by AHCA. Under the circumstances and proof presented in this case, Petitioner proved by a preponderance of the evidence that $5,260.72 was a fair allocation of the total settlement amount to past medical expenses. AHCA failed to develop any adequate basis or evidence in the record to reject Jugo’s or Barrett’s opinion, or to reach any other conclusion concerning a fair allocation, other than the amount of $5,260.72 presented by the evidence and proposed by Petitioner.
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 to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (AHCA), for medical expenses paid on behalf of Petitioner, Yesica Cardenas, from a personal injury settlement received by Petitioner from a third party.
Findings Of Fact Based on the stipulations of the parties, evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: On December 31, 2010, Yesica Cardenas (“Ms. Cardenas”) was a passenger on a motor scooter that was involved in an accident on State Road 112 in Miami, Florida. As a result of this accident, Ms. Cardenas suffered serious physical injury, including amputation of her left leg below the knee. (JPHS p. 8) Ms. Cardenas’ past medical expenses related to her injuries were paid in part by Medicaid, and Medicaid provided $89,518.80 in benefits. This $89,518.80 in benefits paid by Medicaid, combined with $12,449.80 in medical bills not paid by Medicaid, constituted Ms. Cardenas’ entire claim for past medical expenses. Accordingly, Ms. Cardenas’ claim for past medical expenses was in the amount of $101,968.60. (JPHS p. 8) Ms. Cardenas, or others on her behalf, did not make payments in the past or in advance for Ms. Cardenas’ future medical care, and no claim for damages was made for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Ms. Cardenas brought a personal injury lawsuit in Miami-Dade County to recover all of her damages against those responsible for her injuries (“Defendants”). (JPHS p. 8) On September 9, 2015, Ms. Cardenas compromised and settled her lawsuit with the Defendants for the amount of $240,000. (JPHS p. 8) In making this settlement, the settling parties agreed that: 1) the settlement did not fully compensate Ms. Cardenas for all her damages; 2) Ms. Cardenas’ damages had a value in excess of $2,400,000, of which $101,968.60 represented her claim for past medical expenses; and 3) allocation of $10,196.86 of the settlement to Ms. Cardenas’ claim for past medical expenses was reasonable and proportionate. In this regard, the General Release and Settlement Agreement (“Release”) memorializing the settlement stated: Although it is acknowledged that this settlement does not fully compensate RELEASOR for the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to all claims against [Defendants] without regard to this settlement only compensating the RELEASOR for a fraction of the total monetary value of her alleged damages. The damages have a value in excess of $2,400,000, of which $101,968.60 represents RELEASOR’S claim for past medical expenses. Given the facts, circumstances, and nature of the RELEASOR’S alleged injuries and this settlement, the parties settled this matter for 10% of the value of the damages ($240,000.00) and as such, have allocated $10,196.86 of this settlement the RELEASOR’S claim for past medical expenses and the remainder of the settlement has been allocated toward the satisfaction of her other claims. 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 her 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 her 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. (JPHS p. 8-9) As a condition of Ms. Cardenas’ eligibility for Medicaid, Ms. Cardenas assigned to AHCA her right to recover from liable third parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. During the pendency of Ms. Cardenas’ personal injury action, AHCA was notified of the action and AHCA, through its collections contractor, Xerox Recovery Services, asserted a $89,518.80 Medicaid lien against Ms. Cardenas’ cause of action and settlement of that action. (JPHS p. 9) By letter of September 11, 2015, AHCA was notified by Ms. Cardenas’ personal injury attorney of the settlement and provided a copy of the executed Release and itemization of $2,711.70 in litigation costs. This letter explained that Ms. Cardenas’ damages had a value in excess of $2,400,000, and the $240,000 settlement represented only a 10-percent recovery of Ms. Cardenas’ damages. Accordingly, she had recovered only 10 percent of her $101,968.60 claim for past medical expenses, or $10,196.86. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of its Medicaid lien. (JPHS p. 9) AHCA did not respond to Ms. Cardenas’ attorney’s letter of September 11, 2015. (JPHS p. 9) AHCA did not file an action to set aside, void, or otherwise dispute Ms. Cardenas’ settlement with the Defendants. (JPHS p. 9) AHCA has not commenced a civil action to enforce its rights under section 409.910. (JPHS p. 9) The Medicaid program spent $89,518.80 on behalf of Ms. Cardenas, all of which represents expenditures paid for Ms. Cardenas’ past medical expenses. (JPHS p. 9) No portion of the $89,518.80 paid by the Medicaid program on behalf of Ms. Cardenas represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. (JPHS p. 10) Ms. Cardenas is no longer a Medicaid recipient. (JPHS p. 10) AHCA has determined that $2,711.70 of Ms. Cardenas’ litigation costs are taxable costs for purposes of the section 409.910(11)(f) formula calculation. (JPHS p. 10) Subtracting the $2,711.70 in taxable costs and allowable attorney’s fees, the section 409.910(11)(f) formula applied to Ms. Cardenas’ $240,000 settlement requires payment of $88,644.15 to AHCA in satisfaction of its $89,518.80 Medicaid lien. Since the $89,518.80 Medicaid lien amount is more than the $88,644.15 amount required to be paid to AHCA under the section 409.910(11)(f) formula, AHCA is seeking reimbursement of $88,644.15 from Ms. Cardenas’ $240,000 settlement in satisfaction of its Medicaid lien. (JPHS p. 10) Petitioner has deposited the full Medicaid lien amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). (JPHS p. 10) Testimony of Michael Weisberg Mr. Weisberg has been an attorney since 1967 and is a partner with Weisberg and Weisberg, P.A. Mr. Weisberg explained that he is a civil trial attorney who has spent 30 years handling insurance defense, and in the last 20 years has focused his practice on plaintiff personal injury. Mr. Weisberg testified that over his career, he has handled approximately 550 jury trials to verdict and he often handles cases involving catastrophic injuries. Mr. Weisberg testified that as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties. Petitioner proffered Mr. Weisberg as an expert in the valuation of damages suffered by injured parties, and AHCA did not object to the proffer. Mr. Weisberg was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Weisberg represented Ms. Cardenas relative to her personal injury action. He explained that as part of his representation, he reviewed Ms. Cardenas’ medical records, met with her doctors, reviewed the accident report, took the deposition of persons involved in the accident, took the deposition of witnesses to the accident, and met with Ms. Cardenas many times. Mr. Weisberg gave a detailed explanation of the circumstances giving rise to Ms. Cardenas’ injury. He explained that Ms. Cardenas was a hostess at a restaurant in a Miami Beach hotel. After her shift ended, she was asked to stay and continue working. After the restaurant closed, she was unable to take the Metro Mover home because it ceased running at midnight. Instead, she was given a ride home by a co-worker who had a motor scooter. The co-worker’s motor scooter was too slow for the highway he chose to travel upon, and it was struck from behind by a motorcycle. Ms. Cardenas was thrown off the motor scooter. She was taken to Jackson Memorial Hospital where her leg was amputated a few inches below the knee. Due to her lack of financial resources, Ms. Cardenas was provided limited rehabilitation and she was provided only a rigid prosthetic leg that did not have a flexible ankle/foot. Mr. Weisberg explained that this injury has had a negative impact on Ms. Cardenas’ life. Because of the limitations presented by having an amputated leg, she has had difficulty maintaining her relationship with her friends and has become isolated. She is unable to enjoy her previous pastime of shopping due to the injury and is unable to play with her son in the same manner as before. Mr. Weisberg testified that Ms. Cardenas’ injury has caused Ms. Cardenas to suffer from depression and “she is not a happy girl.” Mr. Weisberg testified that Ms. Cardenas’ claim for past medical expenses related to her injury was $101,968.60, which consisted of $89,518.80 in Medicaid benefits and $12,449.80 in medical bills not paid by Medicaid. Mr. Weisberg testified that Ms. Cardenas, or others on her behalf, did not make payments in the past or in advance for future medical care, and no claim was brought to recover reimbursement for past payments for future medical care. Mr. Weisberg testified that through his representation of Ms. Cardenas, review of Ms. Cardenas’ file, and based on his training and experience, he had developed the opinion that the value of Ms. Cardenas damages was “a minimum of five million dollars.” In support of his valuation, he compared Ms. Cardenas’ case to a case he had tried to jury verdict involving a man with a preexisting leg amputation who was struck by a bus and suffered a degloving injury to his other leg. This client regained use of the injured leg and the jury still awarded him $1.3 million. Mr. Weisberg explained that if that client’s less severe injury where he regained use of his injured leg, warranted a $1.3 million verdict, then “a person with no leg, a reasonable verdict, in my opinion . . . would be in excess of five million dollars.” Mr. Weisberg also testified that he “round tabled” Ms. Cardenas’ case with five other experienced attorneys, and they believed Mr. Weisberg’s valuation of Ms. Cardenas’ damages at $5 million was low. Further, Mr. Weisberg testified that he had reviewed the jury verdicts in Petitioner’s Exhibit 11 and he believed those cases were comparable to Ms. Cardenas’ case and supported his valuation of Ms. Cardenas’ damages as being in excess of $5 million. Mr. Weisberg explained that the driver/owner of the motor scooter Ms. Cardenas was riding, as well as the driver/owner of the motorcycle that struck the motor scooter, did not have liability insurance or assets, so no recovery was possible against them. Instead, a lawsuit was brought against the restaurant under the theory that by requesting Ms. Cardenas to work after her shift was finished, they caused her to be unable to use public transit and rely upon transport home by way of the motor scooter. Mr. Weisberg explained that the theory of liability was difficult and there were numerous disputed facts associated with the case. Based on these issues, Ms. Cardenas settled her case for $240,000. Mr. Weisberg testified that the settlement did not fully compensate Ms. Cardenas for the full value of her damages. Mr. Weisberg testified that based on the conservative valuation of all Ms. Cardenas’ damages of $2,400,000, the settlement represented a recovery of 10 percent of the value of Ms. Cardenas’ damages. Mr. Weisberg testified that because Ms. Cardenas only recovered 10 percent of the value of her damages in the settlement, she only recovered 10 percent of her $101,968.60 claim for past medical expenses, or $10,196.86. Mr. Weisberg testified that the settling Defendant was represented by experienced trial attorneys and that the settling parties agreed in the Release that Ms. Cardenas’s damages had a value in excess of $2.4 million, as well as the allocation of $10,196.86 of the settlement to past medical expenses. Mr. Weisberg further testified that the allocation of $10,196.86 of the settlement to past medical expenses was reasonable and rational, as well as conservative, because it was based on a very low-end valuation of her damages of $2.4 million. If a higher valuation of her damages was used, the amount allocated to past medical expenses would have been much less. Mr. Weisberg testified that because no claim was made to recover reimbursement for past payments for future medical care, no portion of the settlement represented reimbursement for past payments for future medical care. He also testified that the parties agreed in the Release that no claim was made for reimbursement of past payments for future medical care, and no portion of the settlement represented reimbursement for future medical expenses. Testimony of Thomas Backmeyer Thomas Backmeyer has been an attorney since 1970, and since 1996, he has worked as a mediator. Prior to becoming a mediator in 1996, he was board-certified in civil trial law by the Florida Bar and the National Board of Trial Advocates. Mr. Backmeyer testified that he has handled 100 to 125 jury trials, 90 percent of which were personal injury cases. He further testified that in his practice he regularly made assessments concerning the value of damages suffered by injured parties. Petitioner proffered Mr. Backmeyer as an expert in the valuation of damages suffered by injured parties. AHCA did not object to the proffer, and Mr. Backmeyer was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Backmeyer testified that he was familiar with Ms. Cardenas’ injuries and had reviewed the hospital records from Jackson Memorial, pictures of Ms. Cardenas, the Complaint, and Petitioner’s exhibits. Mr. Backmeyer testified that in his opinion, Ms. Cardenas’ damages had a value in excess of $5 million to $10 million. He explained that his valuation was “based on my experience in handling jury trials. It’s based on my experience of dealing with cases over the last twenty years as a mediator, some of which involve amputations of, I can think of one that involved the amputation of a leg of a young lady.” Mr. Backmeyer also testified that he had reviewed the jury verdicts in Petitioner’s Exhibit 11 and he found those verdicts comparable with Ms. Cardenas’ case and supportive of his valuation of her damages. He discussed two of the verdicts in relation to Ms. Cardenas’ case. Mr. Backmeyer testified that he was aware of the Cardenas settlement, and that the parties had allocated $10,196.86 to past medical expenses based on a valuation of all damages of $2,400,000. He further testified that he believes allocation of $10,196.86 to past medical expenses was “a generous number” because he believed the value of the damages was much higher than the $2,400,000 valuation used by the parties in calculating the allocation to past medical expenses. AHCA did not propose a differing valuation of Ms. Cardenas’ damages or contest the methodology used by the parties to calculate the $10,196.86 allocation to past medical expenses. The testimony and evidence presented concerning the value of Petitioner’s damages, and the allocation to past medical expenses, was unrebutted. The evidence presented is not in conflict or ambiguous. The parties to the settlement agreed that: 1) Ms. Cardenas was not being fully compensated for all her damages in the settlement; 2) Ms. Cardenas’ damages had a value in excess of $2,400,000, of which $101,968.60 represented her claim for past medical expenses; 3) the parties allocated $10,196.86 of the settlement to past medical expenses based on the same ratio the settlement bore to the total monetary value of all damages; and 4) because there was no claim made for reimbursement, restitution, repayment, indemnification, or to be made whole for payments made in the past for future medical care, no portion of the settlement represented reimbursement for future medical expenses. AHCA was not a party or participant in the settlement. However, the unrebutted evidence and testimony is of sufficient quality and quantity to establish that the value of Ms. Cardenas’ damages was in excess of $2,400,000; the allocation of $10,196.86 to past medical expenses under the method of calculation used was reasonable, fair, and accurate; and no portion of the settlement represented reimbursement for future medical expenses. Petitioner has proven by clear and convincing evidence that $10,196.86 of the settlement represents reimbursement for past and future medical expenses. Petitioner has proven by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the $88,644.15 amount calculated by the Respondent pursuant to the formula set forth in section 409.910(11)(f).
The Issue The issue to be determined in this matter is the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Amora Gonzalez, a Medicaid recipient, following Petitioner’s recovery from a third party.
Findings Of Fact On August 14, 2015, Amora, who was then five years old, was the backseat passenger in a car driven by her mother, Nicalea R. Gonzalez. Amora was secured in a child seat. While Ms. Gonzalez was stopped at a traffic light, a commercial cargo van collided directly into the rear end of her car at a speed of approximately 50 to 60 miles per hour. The impact crumpled the back of Ms. Gonzalez’s vehicle. The collision also severed the seat belt securing Amora’s child seat. Amora was thrown violently forward. Following the accident, Amora was found lying on the back floor of the vehicle, wedged between the front seats. When emergency services personnel arrived, Amora was found lying on the ground exhibiting signs of a severe brain injury. Subsequent CT scans and an MRI revealed that Amora had suffered diffuse axonal injury to her corpus callosum region of the brain, a temporal lobe hematoma, and a subdural hematoma in her right tentorial region. Due to elevated cranial pressure, Amora underwent neurosurgery for placement of an external ventricular drain, and she was placed in a medically induced coma. Amora also underwent a decompressive craniotomy due to continued intracranial pressure. Amora was diagnosed with a neuro cognitive disorder due to traumatic brain injury with a behavioral disorder. As a result of her brain injury, Amora suffers from serious cognitive impairment, executive functioning level disabilities, and behavioral disturbances. Amora’s past medical expenses related to the 2015 automobile accident total $108,725.29. Of that amount, the Agency, through the Medicaid program, paid $108,656.31 for Petitioner’s medical care and services. Petitioner did not make any payments on Amora’s behalf for past medical care or in advance for Amora’s future medical care. Ms. Gonzalez pursued a personal injury claim as Natural Guardian and Legal Guardian of the Property of Amora to recover all of Amora’s damages against the driver/owner of the vehicle that caused the car accident (the “Tortfeasor”). The Tortfeasor maintained an insurance policy with limits of $1,000,000 and had no other collectable assets. Prior to filing the lawsuit, the Tortfeasor tendered the $1,000,000 insurance policy limit in compromise and settlement of Amora’s claim for damages. No evidence or testimony was presented at the final hearing indicating that a specific portion of the $1,000,000 settlement was designated to cover past medical expenses. Neither was there any evidence or testimony offered segregating the $1,000,000 settlement between medical and non-medical expenses. The Agency was not a party to the settlement or settlement agreement. When notified of Ms. Gonzalez’s recovery on behalf of Amora, the Agency asserted a Medicaid lien for $108,656.31, the full amount of its medical expenses paid for Amora’s medical costs and services. This administrative proceeding centers on the amount the Agency should be reimbursed to satisfy its Medicaid lien following Petitioner’s recovery of $1,000,000 from a settlement with a third party. Under section 409.910, the Agency may be repaid for its Medicaid expenditures from any recovery from liable third parties. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of its Medicaid lien ($108,656.31) regardless of the actual value of Petitioner’s damages. Using the section 409.910(11)(f) formula, the Agency subtracted a statutorily recognized attorney fee of $250,000 from $1,000,000 leaving $750,000. One-half of $750,000 is $375,000. Because the $375,000 formula amount exceeds the Medicaid lien, the Agency seeks the full $108,656.31. Petitioner asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s recovery than the amount it calculated under section 409.910(11)(f). Petitioner specifically argues that the Medicaid lien must be reduced pro rata, taking into account the full value of Amora’s injuries which Petitioner calculates as $8,000,000. Otherwise, application of the default statutory formula under section 409.910(11)(f) would permit the Agency to collect more than that portion of the settlement representing compensation for medical expenses. Petitioner maintains that such reimbursement violates the federal Medicaid law’s anti-lien provision, 42 U.S.C. § 1396p(a)(1). Petitioner contends that the Agency’s allocation from Petitioner’s recovery should be reduced to the amount of $13,590.66. To establish the full value of Amora’s injuries, Petitioner presented the testimony of attorneys Paul Catania and Vince Barrett. Mr. Catania represented Petitioner in the underlying personal injury claim and obtained the $1,000,000 settlement for Amora. Mr. Catania explained that prior to finalizing the settlement, he explored the possibility of collecting a verdict in excess of the policy limits. Mr. Catania concluded that not only were the defendants uncollectable, but multiple claimants were going after the same insurance proceeds. Consequently, Mr. Catania believed that it was in his clients’ best interest to settle expeditiously for the tendered insurance policy limits. Mr. Catania also opined on what he considered to be the actual value of Amora’s damages. Mr. Catania heads a plaintiff’s injury firm and has represented plaintiffs in personal injury cases for over 28 years. Mr. Catania has extensive experience handling cases involving automobile accidents, including catastrophic injury claims and traumatic brain injuries to children. Mr. Catania expressed that he routinely evaluates damages suffered by injured parties as part of his practice. He stays current on jury verdicts throughout Florida and the United States. Mr. Catania was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Catania valued Amora’s damages as conservatively between $8,000,000 and $10,000,000. In deriving this figure, Mr. Catania reviewed the neuro psychological report in Amora’s discharge summary, as well as the subsequent neuro psychological updates that were performed on Amora approximately one year later. Mr. Catania noted Amora’s memory problems, inattention, hyperactivity, and behavioral issues. Mr. Catania relayed how these deficits will affect Amora’s ability to learn and be gainfully employed over her lifetime. Amora will need ongoing speech and occupational therapy. Mr. Catania also considered Amora’s past medical expenses, her wage loss or lost wage capacity, and her past and future pain and suffering. Finally, Mr. Catania testified that, in placing a dollar value on Amora’s injuries, he reviewed nine jury verdicts involving catastrophic injuries similar to Amora’s. Based on these sample results, Mr. Catania was comfortable valuing Amora’s damages conservatively in the $8 million to $10 million range given her injuries and her life expectancy. Mr. Catania testified that the $1,000,000 settlement did not fully or fairly compensate Amora for her injuries. Therefore, Mr. Catania urged that a lesser portion of Petitioner’s settlement be allocated to reimburse the Agency instead of the section 409.910(11)(f) formula amount of $108,656.31. Mr. Catania proposed applying a ratio based on the true value of Amora’s injuries ($8,000,000) compared to the amount Petitioner actual recovered ($1,000,000). Using his estimate of $8 million, the settlement represents a 12.5 percent recovery of the total value of all Amora’s damages. In like manner, the amount of medical expenses should also be reduced to 12.5 percent or $13,590.66. Therefore, in Mr. Catania’s professional judgment, $13,590.66 is the portion of Amora’s settlement that represents her compensation for past medical expenses. Mr. Catania testified that no portion of the settlement represents future medical expenses.2/ Mr. Catania expressed that allocating $13,590.66 for Amora’s past medical expenses is “reasonable” and “rational” under the circumstances. Mr. Barrett also testified on behalf of Petitioner. Mr. Barrett is a trial attorney with almost 40 years’ experience and works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. Mr. Barrett has handled many catastrophic injury matters involving catastrophic injuries and traumatic brain injury to children. Mr. Barrett was accepted as an expert in valuation of damages in personal injury cases. Prior to the final hearing, Mr. Barrett had reviewed Amora’s medical records, as well as Petitioner’s exhibits. He also reviewed the sample jury verdicts Petitioner presented at the final hearing as Exhibit 14. Based on his valuation of Amora’s injuries and his professional training and experience, Mr. Barrett expressed that injuries similar to Amora’s would result in jury awards averaging between $8 and $20 million dollars. In light of Amora’s “catastrophic” injuries, Mr. Barrett valued Amora’s injuries as at least $8 million. Mr. Barrett opined that Mr. Catania’s valuation of $8 million to $10 million was appropriate, if conservative. Mr. Barrett supported Mr. Catania’s proposed method of calculating a reduced portion of Petitioner’s $1,000,000 to represent past medical expenses. With injuries valued at $8 million, the $1,000,000 settlement only compensated Amora for 12.5 percent of the total value of her damages. Therefore, because Amora only recovered 12.5 percent of her damages, the most “reasonable and rational” manner to apportion the $1,000,000 settlement is to apply that same percentage to determine Amora’s recovery for past medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces a definitive value of that portion of Petitioner’s $1,000,000 settlement that represents compensation for past medical expenses, i.e., $13,590.66 ($108,725.29 times 12.5 percent). The undersigned finds that the competent substantial evidence in the record establishes, clearly and convincingly, that the full value of Amora’s injuries is $8 million. However, the evidence in the record is not sufficient to prove that a lesser portion of Petitioner’s $1,000,000 settlement recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $108,656.31 from Petitioner’s recovery from a third party to satisfy its Medicaid lien.
The Issue The issue to be determined is the amount payable under section 409.910, Florida Statutes,1/ in satisfaction of Respondent's Medicaid lien on settlement proceeds received by Petitioner, Victor Hugo Herrera, Sr., from a third party.
Findings Of Fact On July 29, 2014, unbeknownst to Mr. Herrera, an individual (hereinafter Assailant) entered the common area where Mr. Herrera rented an office. The Assailant stalked Mr. Herrera and forced his way into Mr. Herrera’s office. The Assailant attacked Mr. Herrera in his office and shot Mr. Herrera in the leg. As a result of being shot in the leg, Mr. Herrera had his leg medically amputated above the knee, suffered a collapsed lung, and was comatose for nearly two months. As a result of his severe injuries, Mr. Herrera is now permanently disabled, disfigured, and wheelchair-bound, unable to walk. Mr. Herrera’s medical expenses related to his injuries were paid by Medicaid, which provided $271,344.06 in benefits. Mr. Herrera brought a personal injury lawsuit to recover all of his damages associated with his injuries against the owner of the office and security company responsible for providing security (Defendants). The $271,344.06 paid by Medicaid constituted Mr. Herrera’s entire claim for past medical expenses. On December 11, 2015, Mr. Herrera compromised and settled his personal injury action against the Defendants for $925,000. The General Release of Claims memorializing the settlement with the Defendants stated, inter alia: The First Party, the Second Party and their respective counsel acknowledge that this settlement does not fully compensate the First Party for the damages he has allegedly suffered, but as provided herein this settlement shall operate as a full and complete release as to all claims against Second Party, without regard to this settlement only compensating the First Party for a fraction of the total monetary value of his alleged damages. These parties agree that the damages suffered by the First Party have a value in excess of $5,000,000.00, of which $271,344.06 represents First Party’s claim for past medical expenses. Given the facts, circumstances, and nature of the First Party’s alleged injuries and this settlement, $50,198.65 of this settlement has been allocated to the First Party’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 First Party’s alleged damages. Further, the parties acknowledge that the First Party may need future medical care related to his alleged injuries, and some portion of this settlement may represent compensation for those future medical expenses the First Party may incur in the future. However, the parties acknowledge that the First Party, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and the First Party 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. During the pendency of Mr. Herrera’s personal injury lawsuit, the Agency for Health Care Administration (AHCA) was notified of the lawsuit and AHCA, through its collections contractor Xerox Recovery Services, asserted a $271,344.06 Medicaid lien against Mr. Herrera’s cause of action and settlement of that action. By letter of January 22, 2016, AHCA was notified by Mr. Herrera’s personal injury attorney of the settlement and provided a copy of the executed release and itemization of Mr. Herrera’s $10,114.38 in litigation costs. This letter explained that Mr. Herrera’s damages had a value in excess of $5,000,000, and the $925,000 settlement represented only an 18.5 percent recovery of Mr. Herrera’s damages. Accordingly, he had recovered only 18.5 percent of his $271,344.06 claim for past medical expenses, or $50,198.65. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $271,344.06 Medicaid lien. AHCA did not respond to Mr. Herrera’s attorney’s letter of January 22, 2016. AHCA has not filed an action to set aside, void, or otherwise dispute Mr. Herrera’s settlement. AHCA has not commenced a civil action to enforce its rights under section 409.910. The Medicaid program spent $271,344.06 on behalf of Mr. Herrera, all of which represents expenditures paid for Mr. Herrera’s past medical expenses. No portion of the $271,344.06 paid by the Medicaid program on behalf of Mr. Herrera represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Mr. Herrera and AHCA agree that application of the formula at section 409.910(11)(f) to Mr. Herrera’s $925,000 settlement would require payment to AHCA of the full $271,344.06 Medicaid lien. Petitioner has deposited the full Medicaid lien amount into an interest-bearing account pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). At the final hearing, Mr. Zebersky, who represented Mr. Herrera in his underlying personal injury action, testified and was accepted, without objection, as an expert in the valuation of damages suffered by injured parties. Mr. Zebersky has been an attorney for 27 years and has demonstrated considerable experience in handling plaintiffs’ personal injury and insurance class action claims in South Florida. In rendering his opinion as to the value of Mr. Herrera’s claim, Mr. Zebersky explained that, as a routine and daily part of his practice, he makes assessments concerning the value of damages suffered by injured parties and he explained his process for making these determinations. Mr. Zebersky was familiar with and gave a detailed explanation of the circumstances giving rise to Mr. Herrera’s claim. In making his valuation determination, Mr. Zebersky reviewed the police report, the State Attorney’s file on the shooting, all of Mr. Herrera’s medical records, and met numerous times with Mr. Herrera and his family. Mr. Zebersky testified that through his representation of Mr. Herrera, review of Mr. Herrera’s file, and based on his training and experience, he had developed the opinion that the value of Mr. Herrera’s damages was $5,000,000. Mr. Zebersky suggested that the $5,000,000 amount was conservative, by testifying that “five million dollars, you know, is probably what the pain and suffering value is especially in Broward County.” In addition to his first-hand experience with Mr. Herrera’s claim, Mr. Zebersky further supported his valuation opinion by explaining that he had “round-tabled” the case with other experienced attorneys and they agreed that the value of Mr. Herrera’s damages was $5,000,000. Further, Mr. Zebersky testified that he had reviewed jury verdicts in developing his opinion and the jury verdicts in Petitioner’s Exhibit 12 were comparable to Mr. Herrera’s case and support the valuation of Mr. Herrera’s damages at $5,000,000. Mr. Zebersky’s testimony was credible and is accepted. Petitioner also presented the testimony of Mr. Barrett, who was accepted as an expert in the valuation of damages. Mr. Barrett has been accepted as an expert in valuation of damages in a number of other Medicaid lien cases before DOAH. Mr. Barrett has been a trial attorney for 40 years, with a primary focus on plaintiff personal injury cases, including medical malpractice, medical products liability, and pharmaceutical products liability. Mr. Barrett stays abreast of jury verdicts and often makes assessments concerning the value of damages suffered by injured parties. After familiarizing himself with Mr. Herrera’s injuries through review of pertinent medical records and Petitioner’s Exhibits, including the police report, pictures of Mr. Herrera, Mr. Herrera’s complaint and Mr. Herrera’s General Release of Claims, Mr. Barrett offered his opinion, based upon his professional training and experience, that “five million was a conservative estimate” for the value of Mr. Herrera’s damages and that Mr. Herrera’s damages were “undoubtedly at least five million dollars.” Mr. Barrett also reviewed the jury verdicts in Petitioner’s Exhibit 12 and opined that those verdicts were comparable and supported his valuation of Mr. Herrera’s damages. Mr. Barrett’s testimony was credible and is accepted. AHCA’s designated expert, Mr. Bruner, was not available for testimony at the final hearing. Instead of asking for a continuance, the parties agreed to take Mr. Bruner’s deposition after the final hearing and then file the transcript with DOAH. Further, during the final hearing, AHCA agreed that Mr. Bruner would not be testifying as to the value of Mr. Herrera’s damages. In accordance with that agreement, Mr. Brunner’s deposition was subsequently taken and his deposition transcript was filed on August 3, 2016. At Mr. Bruner’s deposition, AHCA proffered Mr. Bruner as an expert in evaluation of cases and settlements. Petitioner objected on the grounds that Mr. Bruner lacked experience or expertise in personal injury cases and should not be allowed to testify as an expert. Further, Petitioner objected to the relevance of Mr. Bruner’s testimony based on AHCA’s earlier agreement that he would not be testifying concerning the value of the damages suffered. Counsel for AHCA responded to Petitioner’s objection to the relevance of Mr. Bruner’s testimony by agreeing that AHCA would not be seeking any “expert testimony as to evaluation of damages,” but would only be using Mr. Bruner’s testimony to “evaluate” the jury verdicts in Petitioner’s Exhibit 12. While Mr. Bruner does not have the same level of experience in personal injury claims as the experts offered by Petitioner, Mr. Bruner has sufficient experience to offer an opinion on the jury verdicts set forth in Petitioner’s Exhibit 12, and to that extent, his expertise in the evaluation of cases is accepted. However, because of his lack of recent experience in settling personal injury claims, Mr. Brunner is not accepted as an expert in personal injury settlements.2/ In his deposition testimony, Mr. Bruner criticized the relevance of the 12 verdicts in Petitioner’s Exhibit 12 on the grounds that, while the verdicts involved amputations of legs, there were factual differences in the mechanism of injury. Mr. Bruner further asserted that, to the extent the verdicts in Petitioner’s Exhibit 12 included awards for future medical expenses, they should not be considered because, according to Mr. Bruner’s understanding, Mr. Herrera did not recover any future medical expenses in the settlement. Finally, while the juries in the 12 jury verdicts had determined the value of the damages, Mr. Bruner criticized the verdicts because he asserted that it was possible that the cases may have settled post-verdict for less, or that the injured parties may have received less, due to reductions for comparative negligence. On this last point, it appears that Mr. Bruner confused the issue of the value of the damages with the settlement value of the case. The value of the damages is the estimation of the monetary value a jury would assign to the damages. On the other hand, the settlement value of the case is the amount it settled for with the considerations of liability, causation, the Defendant’s ability to pay, risk of trial, and other limiting factors, which are a calculus in every settlement. Despite Mr. Bruner’s criticisms of the jury verdicts in Petitioner’s Exhibit 12, the undersigned finds those verdicts supportive of the valuation opinions offered by Petitioner’s experts. Further, Petitioner’s experts’ opinions were not primarily reliant on those 12 verdicts, but were rather based upon their knowledge of Mr. Herrera’s injury and their extensive experience in handling cases involving catastrophic injury, including jury trial experience. Mr. Bruner’s testimony did not provide an alternative value of the damages suffered by Petitioner. The value of $5,000,000 for Mr. Herrera’s claim opined by Petitioner’s experts is unrebutted. Considering the valuation of Mr. Herrera’s claim in the amount of $5,000,000, his $925,000 settlement represents only an 18.5 percent recovery of Mr. Herrera’s damages. Applying that same 18.5 percent to the $271,344.06 paid by Medicaid for past medical expenses results in the sum $50,198.65 from the settlement proceeds available to satisfy AHCA’s Medicaid lien.
