The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Derek Matson (“Petitioner” or “Mr. Matson”) pursuant to section 409.910, Florida Statutes (2018),1/ from settlement proceeds received from a third party.
Findings Of Fact The following findings are based on testimony, exhibits accepted into evidence, admitted facts set forth in the Pre- hearing Stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien Mr. Matson was 25 years old in November of 2017, and employed as an executive chef responsible for managing a restaurant’s cooking operations. His annual salary was approximately $61,000.00. On November 5, 2017, Mr. Matson was drinking and having brunch with his girlfriend. He met a friend, and they decided to take the friend’s boat out that afternoon. Mr. Matson was already very intoxicated by the time he arrived at the dock and continued to drink after the boat left the dock. While the boat was anchored in very shallow water, Mr. Matson dove from the boat, struck his head on the seafloor, and suffered a catastrophic spinal cord injury. Mr. Matson is now unable to walk, ambulate, eat, toilet, or care for himself in any manner. He has no use of his legs and extremely limited use of his upper extremities. Mr. Matson spends his waking hours in a wheelchair, requires continuous care, and must be repositioned every two hours in order to prevent pressure sores. Mr. Matson frequently suffers from depression. Medicaid, through AHCA, paid $85,896.60 for Mr. Matson’s care. Via a Medicaid managed care plan known as Optum, Medicaid paid an additional $32,167.31 in benefits. The sum of these benefits, $118,063.91, constituted Mr. Matson’s entire claim for past medical expenses. Mr. Matson pursued a personal injury claim against the boat’s owner and operator. The boat owner’s insurance policy was limited to $305,000.00, and the boat owner had no other recoverable assets. Ultimately, Mr. Matson’s personal injury claim settled for an unallocated lump sum2/ of $305,000.00. During the pendency of Mr. Matson’s personal injury claim, AHCA was notified of the action and asserted an $85,896.00 lien against Mr. Matson’s recovery from the personal injury claim. AHCA did not move to intervene or join in Mr. Matson’s personal injury case. AHCA received notice of Mr. Matson’s settlement and has not moved to set-aside, void, or otherwise dispute the settlement. As noted above, Medicaid spent $85,896.60 on Mr. Matson’s behalf. Application of the formula in section 409.910(11)(f) requires that all of AHCA’s $85,896.60 lien be satisfied.3/ Mr. Matson has deposited $85,896.60 in an interest bearing account pending an administrative determination of AHCA’s rights. Valuation of the Personal Injury Claim Jack Hill represented Mr. Matson during the personal injury action. Mr. Hill has practiced law since 2002 and been employed with the law firm of Searcy, Denney, Scarola, Barnhart, and Shipley in West Palm Beach, Florida, since August of 2004. Mr. Hill is board certified in civil trial law by the Florida Bar and has handled personal injury cases for approximately 15 years. Mr. Hill is a member of several trial attorney associations such as the American Justice Association, the Florida Justice Association, the Palm Beach Justice Association, and AIG, a products liability plaintiffs’ organization. Mr. Hill routinely evaluates the monetary value of damages suffered by his clients. That process involves discussing individual cases with the 28 other members of his law firm and then forming a consensus regarding a case’s settlement value and the damages a jury would likely award in the event of a trial. Without objection from AHCA, Mr. Hill was accepted as an expert regarding the evaluation of damages. If Mr. Matson’s personal injury action had gone to trial, Mr. Hill is confident that a jury would have returned a verdict of at least $20 million. As for the discreet aspects of Mr. Matson’s total damages, Mr. Hill testified that Mr. Matson’s economic damages exceed $20 million and that his noneconomic damages, such as pain and suffering, are $20 million. Mr. Hill testified that “$305,000 was a grossly inadequate recovery for Derek, considering his injuries.” If one assumes that a jury would have returned a $20 million verdict, then the $305,000.00 settlement represents a 1.52 percent recovery of Mr. Matson’s total damages. If one applies that same percentage to the individual components of the personal injury claim, then it would be determined that Mr. Matson only recovered 1.52 percent or $1,794.57 of the $118,063.91 in past medical expenses. This computational method shall be referred to herein as “the pro rata formula.” Mr. Hill testified that the pro rata formula was a reasonable methodology to ascertain how much of Mr. Matson’s past medical expenses were recovered via the $305,000.00 settlement: Q: Mr. Hill, based on a $20 million value of all damages, the $305,000 settlement represents a recovery of 1.25% of the value of the damages. Would you agree with that? A: 1.52%. Q: All right. And accordingly, in this settlement, Mr. Matson recovered 1.52% of his claim for past medical expenses? A: Yes. He would have recovered 1.52% of all aspects of his damages, including those for past medicals that were paid on his behalf. So, yes. Q: And this is similar to how a jury verdict would work, is that correct? So the jury would assign a value to each category of damages. But if it was determined that the defendant, the jury determined that the defendant was only 1.52% liable for those damages – the jury, the judge, in entering the judgment, would reduce each element of damages to that 1.52% amount. Is that correct? A: That’s the way it works, yes. Q: All right. So 1.52% of the $118,063.91 claim for past medical expenses, that comes out to $1,794.57. Is that your math? A: It is – that there was $32,167.31 paid by private health insurance, and the Medicaid paid $85,896.60. And so you take 1.52% of $118,063.91, you get a total past recovery for medical expenses of $1,794.57. Q: All right. And that’s the amount you believe should be allocated to past medical expenses? A: It is. Yes, Sir. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Hill was compelling and persuasive as to: (a) the total damages incurred by Mr. Matson; (b) that Mr. Matson only recovered 1.52 percent of his total damages; and (c) that Mr. Matson only recovered 1.52 percent of his past medical expenses. Using the pro rata formula, the ratio that results from dividing the settlement amount by total damages, is a reasonable method to determine how much of a party’s past medical expenses were recovered through the settlement. AHCA offered no evidence to counter Mr. Hill’s opinions regarding Mr. Matson’s total damages or the past medical expenses he recovered. Accordingly, the preponderance of the evidence demonstrates that the total value of Mr. Matson’s personal injury claim is no less than $20 million and that the $305,000.00 settlement resulted in him recovering no more than 1.52 percent of his past medical expenses. In addition, the preponderance of the evidence demonstrates that $1,794.57 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Matson and payable to AHCA.
The Issue What amount of the malpractice settlement of Petitioner, Marcello Fletcher, must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $395,618.55 Medicaid Lien?
Findings Of Fact Stipulated Facts On October 29, 2013, Alicia Fletcher was involved in a car accident. She was 28 weeks pregnant with MARCELLO. Alicia Fletcher was taken to the hospital emergency room. An ultrasound was performed, which noted a “possible suspicious for area for abruption.” Alicia Fletcher began complaining of bleeding and pain. Her obstetrician ordered a second ultrasound to rule out abruption. The second ultrasound reflected a similar suspicious area. Alicia Fletcher began experiencing placental abruption, contractions and pain. An emergency C-Section was performed. MARCELLO was born on October 29, 2013 without a heartbeat and requiring resuscitation. During the time leading up to birth and during the birthing process, MARCELLO suffered a hypoxic ischemic encephalopathy. This permanent catastrophic brain damage left MARCELLO unable to speak, walk, ambulate, eat, toilet, or care for himself in any manner. MARCELLO’s medical care related to the injury was paid by Medicaid and Medicaid provided $395,618.55 associated with MARCELLO’s injury. This $395,618.55 paid by Medicaid constituted MARCELLO’s entire claim for past medical expenses. MARCELLO’s Parents and Natural Guardians, ALICIA FLETCHER and TYLER BONFIGLIO, brought a medical malpractice action against the medical providers and staff responsible for MARCELLO’s care (“Defendant medical providers”) to recover all of MARCELLO’s damages as well as their own individual damages associated with MARCELLO’s injuries. The medical malpractice lawsuit was settled through a series of confidential settlements totaling $1,500,000 and this settlement was approved by the Court by Order of January 30, 2017. During the pendency of MARCELLO’s medical malpractice action, AHCA was notified of the action and AHCA asserted a $395,618.55 Medicaid lien against MARCELLO’s cause of action and settlement of that action. AHCA through the Medicaid program spent $395,618.55 on behalf of MARCELLO, all of which represents expenditures paid for MARCELLO’s past medical expenses. Application of the formula at §409.910(11)(f)2/ to MARCELLO’s settlement requires payment to AHCA of the full $395,618.55 Medicaid lien. The 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, pursuant to §409.910(17). Credible, Unimpeached, and Un-rebutted Testimony Mr. Vezina and Mr. Barrett testified about the value, measured in damages, of Marcello’s malpractice claims. They also testified to a method that, in their informed opinions, reasonably allocated a percentage of the settlement amount to past medical expenses. Both witnesses reviewed Marcello’s medical records and other information about him. Both were persuasive and well qualified. Both took a conservative approach to evaluating Marcello’s claim and allocating a portion of the settlement proceeds to past medical expenses. Mr. Vezina has been practicing law for 20 years. Ninety-five percent of Mr. Vezina’s practice involves catastrophic birth-related injuries caused by medical malpractice. During the first eight years of Mr. Vezina’s practice he defended malpractice actions. Since then he has concentrated his practice on the representation of children injured by medical negligence. Mr. Vezina’s firm specializes in representing children who suffered catastrophic injuries, like Marcello’s, at birth. As part of his practice, Mr. Vezina has reviewed countless medical records. He has reviewed life care plans that identify the services and supports a person with catastrophic injuries like Marcello’s will need through the course of his life. Mr. Vezina has worked closely with economists and physicians to identify the nature and extent of injuries and the costs of services and supports an injured person will need. Mr. Vezina keeps informed about medical malpractice verdicts around the country. Mr. Vezina’s practice requires him to regularly evaluate damages suffered by injured people. He represented Marcello in his malpractice claims. Mr. Barrett’s qualifications to evaluate medical malpractice claims are similarly imposing. Mr. Barrett is an experienced trial attorney. For 40 years, he has dedicated his practice to representing plaintiffs in medical malpractice cases, medical products liability cases, and pharmaceutical products liability cases. Mr. Barrett has handled medical malpractice cases involving catastrophic injury to children. He has represented children with catastrophic hypoxic brain injury like Marcello. Mr. Barrett regularly reviews jury verdict reporters, discusses cases and verdict with his peers, and tries cases to juries. Like Mr. Vezina, Mr. Barrett has reviewed numerous medical records, life care plans, and economist reports for children suffering from catastrophic brain injury. He also has regularly and routinely assessed the value of damages suffered by injured parties. The Agency did not offer evidence to question the qualifications or opinions of Mr. Vezina and Mr. Barrett. The Agency did not offer testimony to rebut the testimony of Mr. Vezina and Mr. Barrett. The Agency did not offer alternatives to the damages evaluation and allocation method testified to by Mr. Barrett and Mr. Vezina. The findings of fact rely in large part on the credible, unimpeached, and un-rebutted testimony of these expert witnesses. Value of Marcello’s Damages In a case tried to a jury verdict or a settlement with a party with sufficient resources, malpractice claims like Marcello’s would result in damages valued at between 50 million dollars and 25 million dollars. Twenty-five million dollars is a reasonable and conservative value for Marcello’s damages. He settled his claims for less because of the limited amount of insurance and other resources from which to pay damages. Allocation of Damages to Past Medical Expenses A number of injuries and costs combine to make the value of damages for medical malpractice. They include the actual medical expenses of the injured party, the projected future medical expenses of the party, the value of the party’s lost income, the cost of continuing care and assistance in life’s daily activities such as bathing or changing clothes, and the value of pain and suffering endured. Marcello’s damages necessarily encompassed all of these factors. Using the conservative damages valuation of 25 million dollars, the 1.5 million dollars for damages that Marcello recovered is six percent of the value of his medical malpractice claim and the value of his damages. In the absence of evidence to the contrary, concluding that Marcello recovered six percent of the value of each component of his damages is reasonable. The value of past medical expenses for Marcello’s care is $395,618.55, the value of services provided by Medicaid. It is reasonable to conclude that six percent of that amount is the value of damages for past medical expenses recovered by Marcello in the settlement of his claims. This means that $23,737.11 of the 1.5 million dollar settlement is the amount Marcello recovered for past medical expenses.
The Issue The issue in this case is the amount that must be paid to Respondent, Agency for Health Care Administration (AHCA or Respondent) from the proceeds of Petitioner’s confidential settlement to satisfy Respondent’s Medicaid lien against the proceeds pursuant to section 409.910, Florida Statutes (2019).1
Findings Of Fact Paragraphs 1 through 9 are the facts admitted8 and agreed upon by the parties, and required no proof at hearing. On December 7, 2012, A.F., an eight-year-old female, underwent an initial psychiatric evaluation. Following this assessment, A.F. was started on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD). A.F. was 4 Respondent’s Proposed Final Order provided that “Petitioner presented two witnesses: Andrew Needle, Esq., and Kenneth Bush, Esq.” The undersigned did not hear any testimony from Mr. Needle or Mr. Bush. 5 Respondent’s Exhibit 1, a “Provider Processing System Report,” contained a different “Total Claims” amount than the amount of A.F.’s medical expenses paid by AHCA to which the parties stipulated. Without testimony this exhibit is hearsay, and cannot support a finding of fact. As discussed at hearing, the parties agreed to use the stipulated amount: $261,334.61. 6 Although Petitioner’s PFO recites that Petitioner “did not order a transcript of the proceedings,” a review of the filed transcript shows otherwise. See Hearing Tran, pg. 10, lines 4–7. 7 The Hearing Transcript was electronically filed with DOAH on August 3, 2020; the hard– copy original Transcript was filed with DOAH on August 14, 2020. 8 Statement 3 has been reworded for clarity purposes. prescribed 18mg of the ADHD drug9 that was the subject of the personal injury litigation. On March 30, 2013, at the age of nine, and shortly after her ADHD medication was uptitrated from 18mg to 27mg daily, A.F. attempted suicide by way of hanging with a scarf fastened to her bunk bed. That action detrimentally impeded oxygen flow to A.F.’s brain for a dangerously prolonged period of time, resulting in extensive neurological damage and substantial motor impairment; ultimately leaving A.F. in a permanent vegetative state. Ms. Lopez, on behalf of A.F., brought a product liability and medical malpractice action to recover all of A.F.’s damages related to her prescription of the ADHD drug. This action was brought against various pharmaceutical and medical malpractice defendants. As a result of the alleged medical malpractice and pharmaceutical product liability claims, A.F. suffered a massive hypoxic brain injury. Since this incident and the resulting hypoxic brain injury, A.F. has been in a permanent vegetative state requiring 24/7 skilled nursing care. In 2020, Ms. Lopez, on behalf of A.F., settled her tort action for a limited confidential amount, due to significant liability challenges with her claims; even though she believed that A.F.’s injuries were tens of millions of dollars in excess of the recovery. AHCA was properly notified of A.F.’s lawsuit against the defendants and indicated it had paid benefits related to the injuries from the incident in the amount of $261,334.61. AHCA has asserted a lien for the full amount it paid, $261,334.61, against A.F.’s settlement proceeds. AHCA has maintained that it is entitled to application of section 409.910’s formula to determine the lien amount. Applying the statutory 9 The name of the drug is not being used based on the terms in the confidential settlement. reduction formula to this particular settlement would result in no reduction of the lien given the amount of the settlement. AHCA paid $261,334.61 on behalf of A.F., related to her claim against the liable third parties. The parties stipulated that AHCA is limited by section 409.910(17)(b) to the past medical expense portion of the recovery and that a preponderance of the evidence standard should be used in rendering this Final Order. There were two settlements regarding A.F.’s care and treatment: one with the doctor(s) who allegedly committed medical malpractice; and the second involving the pharmaceutical maker of the ADHD drug prescribed to A.F. Although AHCA was notified when the medical malpractice case was settled, AHCA did not file a lien on any of the recovery from the medical malpractice settlement. Limited information about the medical malpractice settlement was discussed, but the medical malpractice settlement is not considered in this Final Order. Petitioner’s Exhibit 1 is a February 16, 2019, letter (lien letter) from Conduent Payment Integrity Solutions, a subcontractor to Health Management Systems which is an authorized agent of AHCA “to operate the Florida Medicaid Casualty Recover Program.” In addition to directing A.F.’s counsel to review section 409.910, to determine the “responsibilities to Florida Medicaid,” Mark Lyles, Conduent’s case manager and author of this letter also posted the amount of the lien asserted by AHCA: $261,334.61. A.F. lives with her mother, sister, grandmother, and Ms. Lopez’s significant other. Everyone in the household can and does provide care and assistance to A.F. when necessary. Ms. Lopez rarely leaves A.F. in someone else’s care. A.F. is unable to speak and requires total care. Ms. Lopez described the injuries sustained by A.F. Ms. Lopez also detailed the care she has provided and is continuing to provide to A.F. since the event. A.F.’s activities of daily living (ADLs) must be met with assistance in every aspect of her being. When A.F. wakes up each morning: she is given all her medications; her diaper is changed; she is fed via a feeding tube; she is given lung treatments each morning; her trachea tube is cleaned and changed at times; and she is turned or moved every two hours to prevent sores forming on her skin. A.F. is on a ventilator at night and every four hours she is catheterized because she stopped urinating. In October 2019, A.F. started having seizures. Ms. Lopez testified that A.F.’s care is mentally and emotionally draining, and very tiring. She further added A.F.’s care is very repetitive and the “best way to describe it [each day] is the movie GROUNDHOG DAY,” (Columbia Pictures 1993); the same thing, every day. A.F. is confined to her hospital bed, a wheelchair, or a chair to which she can be secured. Although Ms. Lopez testified that A.F. is “entitled” to skilled nursing care 24/7, Ms. Lopez has learned how to care for A.F. because “they can’t staff me” with a skilled nurse (presumably referring to a Medicaid standard for care). Mr. Rafferty is a Florida board-certified civil trial lawyer with 26 years’ experience in personal injury law. He concentrates and specializes in pharmaceutical cases, including defective drug cases involving catastrophic injury, throughout Florida and the United States. As part of his ongoing practice, he routinely evaluates the damages suffered by injured clients, and relies on his own experience and his review of other jury verdicts to gauge any likely recovery for non-economic damages. Mr. Rafferty continues to handle cases involving similar injuries suffered by A.F. Mr. Rafferty was tendered and without objection was accepted as an expert regarding valuation of personal injury damages. Mr. Rafferty, along with Nathan Carter as co-counsel, represented A.F. and her mother in the civil litigation. He testified to the difficulties associated with pharmaceutical litigation in general, and then focused on the problematic causation and liability issues related to A.F. and her injuries. Mr. Rafferty met with the family; observed A.F. can no longer perform her ADLs; reviewed all of A.F.’s medical information; evaluated how the medication was uptitrated causing A.F.’s injury; analyzed the causation, liability issues, and fault; developed economic damages figures; and valued non-economic damages. Mr. Rafferty credibly testified regarding the evaluations he made regarding A.F.’s injuries and the pharmaceutical product prescribed. The non-economic damages included A.F.’s pain and suffering, both future and past, her loss of capacity to enjoy life, and her mental anguish. Mr. Rafferty explained the importance of assessing all of the elements of damages A.F. suffered as a result of her catastrophic injuries. Mr. Rafferty’s unrefuted testimony placed the total full value of A.F.’s damages conservatively in excess of $100,000,000.00.10 Mr. Rafferty included A.F.’s pain and suffering, mental anguish, and loss of quality of life, plus the economic damages. Further, using the $100,000,000.00 valuation amount and the confidential settlement proceeds, Mr. Rafferty opined that A.F. recovered only 4.75% of the full measure of all her damages. Mr. Rafferty reviewed Petitioner’s Exhibit 1, and as an experienced trial attorney understood the letter to contain the “lien for past medical” expenses of $261,334.61. Mr. Rafferty added that he routinely uses this type of approach with lien holders in his practice. Mr. Rafferty’s testimony was uncontradicted and persuasive on this point. Mr. Carter is an AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, with an active civil trial practice. He has always handled plaintiff’s medical malpractice, product liability, and car accident-type litigation. As a routine part of his practice, he makes assessments concerning the value of damages suffered by injured clients, including the liability, causation, and possible damages. Mr. Carter 10 For ease of discussion, the conservative total amount, $100,000,000.00 will be used. All the witnesses agreed that the economic value of the case was above $70 million and the non- economic damages were at least $30 million. confirmed that it is essential to have every element (liability, causation, and damages) evaluated because these types of cases are expensive in both time and money. Mr. Carter specifically looks at the injuries sustained, who the plaintiff is, how the injuries have affected their life, and the permanency of those injuries. He continues to handles cases with catastrophic injuries. Mr. Carter testified that the injuries suffered by A.F. were “worse than almost, almost any case … handled.” He added that A.F.’s damages were “catastrophic” and “one of the worst damage cases [he had] ever seen.” Mr. Carter was tendered and without objection was accepted as an expert regarding valuation of medical malpractice damages.11 Mr. Carter testified that “as a matter of course, [we] put every lienholder on notice as soon as we learn about them” and “then throughout the case.” Mr. Carter was in regular contact with Mr. Lyles. The medical malpractice case was settled before the pharmaceutical action. After the medical malpractice case was settled, Mr. Carter understood that AHCA would not negotiate on the medical malpractice settlement. When the “entire case” was completed, Mr. Carter notified Mr. Lyles, and then received the lien letter. As an experienced trial attorney he understood the letter to contain the “final lien figure:” $261,334.61. Mr. Carter also met with the family, reviewed all of A.F.’s medical information and records, and evaluated the medication that was uptitrated. Mr. Carter utilized a similar detailed analysis of A.F.’s injuries and her current condition. Mr. Carter also described the severity of A.F.’s injuries that entered into his decision to pursue the civil case and to testify in this proceeding. Mr. Carter analyzed the causation, liability issues, and fault. He evaluated the economic damages figures and valued non-economic damages 11 Mr. Carter was offered as an expert in medical malpractice damages. His insight in the combined totality of the medical malpractice and pharmaceutical product litigation warranted consideration, but AHCA’s failure to include the medical malpractice settlement precluded any consideration of that settlement. Without a more decisive understanding of what “pretty significant” means, ACHA’s attempt to question Mr. Carter’s knowledge of A.F.’s past medical expenses is unpersuasive. such as pain and suffering, both future and past, loss of capacity to enjoy life, scarring and disfigurement, and mental anguish. Mr. Carter opined A.F.’s damages could have easily been in excess of $100,000,000.00. Mr. Carter further opined that A.F.’s non-economic damages were “very significant” and “could have driven the total value of damages in excess of the $100,000,000.00.” However, Mr. Carter testified he used $100,000,000.00 in order to resolve the Medicaid lien. Mr. Carter used the same mathematical approach he has used in other lien issues: he divided the confidential settlement amount by the conservative full value of damages ($100,000,000.00) and arrived at a recovery of 4.75% of the full measure of her damages. Mr. Carter’s testimony was uncontradicted and persuasive on this point. Mr. McKenna is a board-certified, AV-rated Florida civil trial lawyer with 25 years’ experience in personal injury law, who maintains an active civil trial practice. He has always practiced plaintiff’s work, and has tried between 40 and 50 cases to verdict. In the last 15 years, Mr. McKenna testified that “at least half … focused on … catastrophic cases either from the medical malpractice arena or from general liability trucking arena.” Mr. McKenna has reviewed thousands of personal injury cases relative to damages, and provided a detailed explanation of how he evaluates damages of catastrophic injury cases. He further provided that half of his cases were wrongful death cases and the other half were physical or brain injury cases. Mr. McKenna also provided the various resources he uses to keep abreast of personal injury verdicts and settlements. Mr. McKenna was tendered as “an independent expert attorney as to valuation of damages.” Mr. McKenna was not involved in the underlying civil litigation, but became A.F.’s guardian ad litem, appointed by the trial judge, to offer his “opinions regarding the reasonableness of the potential medical malpractice settlement, and ... the pharmaceutical settlement” which is the subject of this Final Order. Respondent did not object to Mr. McKenna’s tender and he was accepted as an expert in the valuation of damages. Mr. McKenna testified that he reviewed the facts and circumstances of both the medical malpractice and the pharmaceutical sides and the chronologies of A.F.’s medical records. He acquired an “intimate understanding” of A.F’s on going care and treatment in light of the injuries she sustained. Mr. McKenna agreed with Messrs. Rafferty and Carter that the non-economic damages in this case were very significant, and he agreed with their conservative $100,000,000.00 valuation of her total damages. Further, Mr. McKenna testified that the normal course for resolving liens in Florida was to look at the total value of damages in relation to the recovery to get a ratio by which to reduce the lien amount. Based on his past experiences in resolving Medicaid liens, other courts have resolved such liens using the formula from the Arkansas Department of Health & Human Services. v. Ahlborn, 547 U.S. 268 (2006), with the only other alternative formula found in section 409.910. The testimony of Petitioner’s three experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the confidential settlement does not fully compensate A.F. for the full value of her damages. As testified to by the experts, A.F.’s recovery represents only 4.75% of the total value of her claim. AHCA did not call any witnesses, present any evidence as to the value of damages, or propose a different valuation of the damages. In short, Petitioner’s evidence was unrebutted. AHCA did, however, contest the methodology used to calculate the allocation of past medical expenses, but was unpersuasive. The parties stipulated to the value of the services provided by Florida Medicaid as $261,334.61. It is logical and rational to conclude that this figure is the amount expended for A.F.’s past medical expenses. Applying the 4.75% pro rata ratio to $261,334.61 equals $12,413.39, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien. Petitioner proved by a preponderance of the evidence as set forth in section 409.910(11)(f) that AHCA should be reimbursed at the lesser amount: $12,413.39.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (“AHCA”), for medical expenses paid on behalf of Clifford J. Deyampert (“Petitioner” or “Mr. Deyampert”) pursuant to section 409.910, Florida Statutes (2015),1/ from settlement proceeds received by Mr. Deyampert from a third party.
Findings Of Fact The following findings of fact are based on exhibits accepted into evidence, admitted facts set forth in the pre- hearing stipulation, and matters subject to official recognition. Facts Pertaining to the Underlying Personal Injury Litigation and the Medicaid Lien On July 25, 2015, Mr. Deyampert was attending a party held at a friend’s house and was shot in the throat by another guest. The bullet traveled down Mr. Deyampert’s throat, struck his spinal cord, and caused Mr. Deyampert to be paralyzed from the chest down. As a result, Mr. Deyampert is permanently disabled, disfigured, and wheelchair-bound. In addition, Mr. Deyampert is bowel and bladder incontinent.2/ Medicaid paid $76,944.67 in order to cover Mr. Deyampert’s past medical expenses. No portion of the $76,944.67 paid by Medicaid on Mr. Deyampert’s behalf represents expenditures for future medical expenses, and Medicaid did not make payments in advance for medical care. Mr. Deyampert initiated a personnel injury lawsuit by making a claim against a homeowner’s insurance policy that covered the shooter. Mr. Deyampert’s personal injury action settled for $305,000, and that was the limit of an aforementioned insurance policy.3/ The General Release memorializing the settlement stated the following: Although it is acknowledged that this settlement does not fully compensate Clifford Deyampert for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating Clifford Deyampert for a fraction of the total monetary value of his alleged damages. The parties agree that Clifford Deyampert’s alleged damages have a value in excess of $6,000,000, of which $76,944.67 represents Clifford Deyampert’s claim for past medical expenses. Given the facts, circumstances, and nature of Clifford Deyampert’s injuries and this settlement, the parties have agreed to allocate $3,847.23 of this settlement to Clifford Deyampert’s claim for past medical expenses and allocate the remainder of the settlement toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Clifford Deyampert’s damages. Further, the parties acknowledge that Clifford Deyampert may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses Clifford Deyampert will incur in the future. However, the parties acknowledge that Clifford Deyampert, or others on his behalf, have not made payments in the past or in advance for Clifford Deyampert’s future medical care and Clifford Deyampert has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. During the pendency of Mr. Deyampert’s personal injury action, AHCA was notified of the suit and asserted a Medicaid lien in the amount of $76,944.67 against any damages received by Mr. Deyampert. Via a letter issued on July 24, 2017, Mr. Deyampert’s attorney notified AHCA that Mr. Deyampert’s personal injury action had settled. The letter asked AHCA to specify what amount it would accept in satisfaction of the $76,944.67 Medicaid lien. AHCA responded by demanding full payment of the lien. Section 409.910(11)(f) sets forth a formula for calculating the amount that AHCA shall recover in the event that a Medicaid recipient or his or her personal representative initiates a tort action against a third party that results in a judgment, award, or settlement from a third party.4/ AHCA is seeking to recover $76,944.67 in satisfaction of its Medicaid lien. See § 409.910(11)(f)4., Fla. Stat. (providing that “[n]otwithstanding any provision in this section to the contrary, [AHCA] shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid.”). Valuation of the Personal Injury Claim F. Emory Springfield represented Mr. Deyampert during the personal injury action and testified during the final hearing. Mr. Springfield has practiced law for 32 years. He owns his own law firm and handles cases involving personal injury, workers’ compensation, and social security disability. Mr. Springfield has experience with jury trials and monitors jury verdicts issued in his fields of practice. Mr. Springfield routinely assesses the value of damages suffered by injured parties. He makes those assessments by determining the injured person’s life expectancy, evaluating the injuries, and conferring with lifecare planners about the injured party’s need for future care. In addition, Mr. Springfield learns as much as possible about the injured party’s past life activities and compares those activities to what the injured party is presently capable of doing. Mr. Springfield also assesses an injured party’s damages by examining jury verdicts from other cases. Mr. Springfield was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Springfield is of the opinion that Mr. Deyampert’s damages (including damages for pain and suffering and economic damages) are well in excess of $6 million. According to Mr. Springfield, the $305,000 settlement does not “come close” to fully compensating Mr. Deyampert for all of his damages. Furthermore, the $305,000 settlement only represents a five percent recovery of the more than $6 million in damages incurred by Mr. Deyampert. Therefore, in Mr. Springfield’s opinion, only five percent (i.e., $3,847.23) of the $76,944.67 in Medicaid payments for Mr. Deyampert’s past medical expenses were recovered. Mr. Deyampert also presented the testimony of R. Vinson Barrett, Esquire, during the final hearing. Mr. Barrett is a trial attorney who has been practicing in North Florida since the mid 1970s. Over the last 30 years, he has focused his practice on the areas of medical malpractice, medical products liability, and pharmaceutical liability. Mr. Barrett routinely handles jury trials and monitors jury verdicts issued in his practice areas. Mr. Barrett routinely assesses the value of damages suffered by injured parties. According to Mr. Barrett, a personal injury attorney must be skilled at estimating the value of a client’s claim. Otherwise, the high cost of bringing a case to trial can result in a personal injury attorney losing money and going bankrupt. Mr. Barrett was accepted in this proceeding as an expert regarding the valuation of damages. Mr. Barrett gave the following testimony regarding Mr. Deyampert’s damages: This man not only is a paraplegic, but during all this, and I couldn’t really tell from the records I read whether the bullet caused this or some intubation in the hospital, but he got air into the space between his lung and his diaphragm, which can be a very painful problem, he had to be intubated to get that out. He developed, I believe, sepsis, at some point in his -- in his treatment; and it’s already evidence early on in his situation that he’s going to be, and is very susceptible to pressure ulcers on his skin. His skin is going to be prone to breakdown from prolonged periods of sitting in the same position and that sort of thing. Fortunately, he has enough strength left in his upper body that he’s able to ameliorate that somewhat. He’s able actually, on his own, and after a lot of rehab, to roll over in his bed to different positions even though his lower extremities are not working at all. He’s able to -- he’s able to reposition himself in his chair using the strength of his arms, so that will cut down a little bit on that. But he had already developed a pressure ulcer or two by the time he got into rehab in this case. He – so, he’s got no use at all, it appears, of his lower extremities. He had a number of complications that had to be dealt with. He was in the hospital a long time. His overall prospects after rehabilitation -– and he was still in some rehabilitation as early as about February of this year, so I’m not totally sure he’s through all his rehab yet. He has to take rehabilitation courses to learn -– relearn how to do things. He’ll need his home made wheelchair accessible, cabinets, and thing[s] like that, all the things that a person normally does without thinking about, are going to be challenges for him just in daily household stuff. He will have to have modifications, most likely, of his kitchen, his bathroom, that sort of thing. And so, yeah, there’s quite a bit to work within this case to come up with an evaluation. Mr. Barrett opined that $6 million was a “very conservative” estimate of the damages suffered by Mr. Deyampert. Mr. Barrett also opined that allocating five percent of the $76,000 claim (i.e., $3,847.23) to past medical expenses was a reasonable and rational allocation to past medical expenses and reflected the ratio of the amount recovered to the actual value of Mr. Deyampert’s damages. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Springfield and Mr. Barrett was compelling and persuasive. While attaching a value to the damages that a plaintiff could reasonably expect to receive from a jury is not an exact science, Mr. Springfield’s and Mr. Barrett’s decades of experience with litigating personal injury lawsuits make them very compelling witnesses regarding the valuation of damages suffered by injured parties such as Mr. Deyampert.5/ Accordingly, the undersigned finds that Mr. Deyampert proved by a preponderance of the evidence that $3,847.23 constitutes a fair and reasonable recovery for past medical expenses actually paid by Medicaid.
The Issue Whether the Agency for Health Care Administration's ("AHCA" or "the agency") Medicaid lien of $267,072.91 should be reimbursed in full from the $1 million settlement recovered by Petitioner or whether Petitioner proved that a lesser amount should be paid under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulation between the parties (paragraphs 1 through 13 below), the evidence presented, and the record as a whole, the undersigned makes the following Findings of Fact: On January 13, 2016, Mr. Jay Hosek was operating his 1999 Chevy Trailblazer northbound on U.S. Highway 1, near mile marker 56, in Monroe County. At that same time and place, his vehicle was struck by a southbound tractor trailer. Hosek suffered catastrophic physical injuries, including permanent brain damage. Hosek is now unable to walk, stand, eat, toilet, or care for himself in any manner. Hosek's medical care related to the injury was paid by Medicaid, Medicare, and United Healthcare ("UHC"). Medicaid provided $267,072.91 in benefits, Medicare provided $93,952.97 in benefits and UHC provided $65,778.54 in benefits. Accordingly, Hosek's entire claim for past medical expenses was in the amount of $426,804.42. Jirina Hosek was appointed Hosek's legal guardian. As legal guardian, Jirina Hosek brought a personal injury lawsuit against the driver and owner of the tractor trailer that struck Hosek ("defendants") to recover all of Hosek's damages associated with his injuries. The defendants maintained only a $1 million insurance policy and had no other collectable assets. Hosek's personal injury action against the defendants was settled for the available insurance policy limits, resulting in a lump sum unallocated settlement of $1 million. Due to Hosek's incompetence, court approval of the settlement was required and the court approved the settlement by Order of October 5, 2018. During the pendency of Hosek's personal injury action, AHCA was notified of the action and AHCA asserted a $267,072.91 Medicaid lien against Hosek's cause of action and settlement of that action. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Hosek's action against the defendants. By letter, AHCA was notified of Hosek's settlement. AHCA has not filed a motion to set aside, void, or otherwise dispute Hosek's settlement. The Medicaid program through AHCA spent $267,072.91 on behalf of Hosek, all of which represents expenditures paid for Hosek's past medical expenses. Application of the formula at section 409.910(11)(f) to Hosek's $1 million settlement requires payment to AHCA of the full $267,072.91 Medicaid lien. Petitioner has deposited AHCA's full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). While driving his vehicle northbound, Hosek drifted into oncoming traffic, crossed over the center line, and struck a southbound vehicle in its lane head on. Petitioner had an indisputable and extremely high degree of comparative negligence in causing this tragic vehicle accident. Petitioner presented the testimony of Brett Rosen ("Rosen"), Esquire, a Florida attorney with 12 years' experience in personal injury law. His practice includes catastrophic and wrongful death cases. Rosen is board-certified in civil trial by the Florida Bar. He is a member of several trial attorney associations. Rosen represented Hosek and his family in the personal injury case. As a routine part of his practice, Rosen makes assessments regarding the value of damages his injured client(s) suffered. He stays abreast of personal injury jury verdicts by reviewing jury verdict reports and searching verdicts on Westlaw. Rosen regularly reads the Daily Business Review containing local verdicts and subscribes to the "Law 360," which allows him to review verdicts throughout the country. Rosen was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency. Rosen testified that Hosek's case was a difficult case for his client from a liability perspective, since all the witnesses blamed Hosek for the crash and the police report was not favorable to him. In his professional opinion, had Hosek gone to trial, the jury could have attributed a substantial amount of comparative negligence to him based upon the facts of the case. There was also a high possibility that Hosek might not receive any money at all, since Hosek's comparative negligence in the accident was very high. Rosen explained the seriousness of Hosek's injuries, stating that Hosek may have fallen asleep while driving and his car veered over and crossed the centerline. It hit an oncoming commercial truck, which caused his vehicle to flip resulting in severe injuries to him. Rosen testified that Hosek is unable to communicate since he received catastrophic brain injury from the accident and is unable to care for himself. Rosen provided an opinion concerning the value of Hosek's damages. He testified that the case was worth $10 million, and that this amount is a very conservative valuation of Hosek's personal injuries. He also generalized that based on his training and experience, Hosek's damages could range anywhere from $10 to $30 million at trial. He testified that Hosek would need future medical care for the rest of his life. This future medical care has a significant value ranging from $15 to $25 million.1/ Rosen testified that he reviewed other cases and talked to experts in similar cases involving catastrophic injuries. After addressing various ranges of damages, Rosen clarified that the present value of Hosek's damages in this case was more than $10 million dollars. Although he did not state specific amounts, he felt that Hosek's noneconomic damages would have a significant value in addition to his economic damages.2/ Rosen believed that a jury would have returned or assigned a value to the damages of over $10 million. He testified that his valuation of the case only included the potential damages. He did not take into account Hosek's "substantial amount" of comparative negligence and liability.3/ Despite doing so in other personal injury cases, Rosen did not conduct a mock trial in an effort to better assess or determine the damages in Hosek's case. Rosen testified that Hosek sued the truck driver, Alonzo, and Alonzo's employer. He further testified that Hosek was compensated for his damages under the insurance policy carried by the truck driver and his company and settled for the policy limits of $1 million dollars representing 10 percent of the potential total value of his claim. Rosen did not obtain or use a life care plan for Hosek, nor did he consider one in determining his valuation of damages for Hosek's case. Rosen did not provide any specific numbers or valuation concerning Hosek's noneconomic damages. Instead, he provided a broad damage range that he said he "would give the jury" or "be giving them a range of $50 Million for past and future."4/ Rosen testified that he relied on several specific factors in making the valuation of Hosek's case. The most important factor for him was to determine what his client was "going through" and experience his client's "living conditions."5/ Secondly, he considers the client's medical treatment and analyzes the client's medical records. Based on these main factors, he can determine or figure out what the client's future medical care will "look like."6/ Petitioner also presented the testimony of R. Vinson Barrett ("Barrett"), Esquire, a Tallahassee trial attorney. Barrett has more than 40 years' experience in civil litigation. His practice is dedicated to plaintiff's personal injury, as well as medical malpractice and medical products liability. Barrett was previously qualified as an expert in federal court concerning the value of the wrongful death of an elderly person. This testimony was used primarily for tax purposes at that trial. Barrett has been accepted as an expert at DOAH in Medicaid lien cases in excess of 15 times and has provided testimony regarding the value of damages and the allocation of past medical expenses. Barrett has handled cases involving catastrophic brain injuries. He stays abreast of local and state jury verdicts. Barrett has also reviewed several life care plans and economic reports in catastrophic personal injury cases. He routinely makes assessments concerning the value of damages suffered by parties who have received personal injuries. Barrett determines the value of these damages based primarily on his experience and frequent review of jury verdicts. Barrett was accepted by the undersigned as an expert in the valuation of damages in personal injury cases, without objection by the agency.7/ Barrett testified that Hosek had a catastrophic brain injury with broken facial bones and pneumothoraxes, all sustained during an extremely violent head-on collision with a commercial truck. This assessment was based on the case exhibits and the "fairly limited medical records" he reviewed. He believed that Hosek would need extensive and expensive medical care for the rest of his life. However, no details were offered by Barrett.8/ Barrett provided an opinion concerning the value of Hosek's damages. This was based on his training and experience. Barrett did not provide a firm number for Hosek's damages. Instead, he offered a nonspecific and broad range of damages. Barrett testified that Hosek's damages "probably" have a value in the range of $25 to $50 million, and the range of Hosek's future medical care would be $10 to $20 million. However, he felt that $10 million was a "very, very, very conservative" estimate of damages, primarily because he felt that future medical expenses would be so high. Barrett stated that Hosek's economic damages would have a significant value exceeding $10 million and that Hosek's noneconomic damages would have an additional value exceeding $10 million. Barrett acknowledged that he did not consider or take into account Hosek's "huge comparative negligence" in estimating the total value of the case. Instead, he only considered the amount(s) that would be awarded for damages. He testified that Petitioner's degree of comparative negligence would reduce each element of damages he was awarded. As a result of Hosek's very significant comparative negligence, Barrett testified that a trial would have likely resulted in a "complete defense verdict" against Hosek or with only minor negligence attributed to the truck driver or his company. Barrett felt that a jury in Hosek's case would not have awarded Hosek "more than one million dollars or so." Barrett explained that in a trial for personal injuries that each element of damages awarded by the jury to the plaintiff on the verdict form is reduced by the percentage of the plaintiff's comparative negligence. Barrett also explained that when the jury verdict assigns ten percent of the negligence to the defendant and 90 percent of the negligence to the plaintiff, then the defendant is liable for paying only ten percent of each element of the damages awarded to the plaintiff. Barrett testified that he does not believe that the $1 million settlement fully compensated Hosek for his injuries and that a potential award of $10 million would be a conservative value of Hosek's claim. While both experts provided broad and nonspecific ranges for the value of Hosek's claims, they both summed up their testimony by concluding that $10 million was a very conservative estimate of Hosek's total claim. AHCA did not call any witnesses. The agency presented Exhibit 1, entitled "Provider Processing System Report." This report outlined all the hospital and medical payments that AHCA made on Hosek's behalf, totaling $267,072.91. On the issue of damages, the experts did not provide any details concerning several of Petitioner's claims, including the amount of past medical expenses, loss of earning capacity, or damages for pain and suffering. The burden was on Petitioner to provide persuasive evidence to prove that the "proportionality test" it relied on to present its challenge to the agency's lien under section 409.910(17)(b) was a reliable and competent method to establish what amount of his tort settlement recovery was fairly allocable to past medical expenses. In this case, the undersigned finds that Petitioner failed to carry this burden.9/ There was no credible evidence presented by Petitioner to prove or persuasively explain a logical correlation between the proposed total value of Petitioner's personal injury claim and the amount of the settlement agreement fairly allocable to past medical expenses. Without this proof the proportionality test was not proven to be credible or accurate in this case, and Petitioner did not carry his burden. There was a reasonable basis in the record to reject or question the evidence presented by Petitioner's experts. Their testimony was sufficiently contradicted and impeached during cross-examination and other questioning. Even if the experts' testimony had not been contradicted, the "proportionality test" proposed by Petitioner was not proven to be a reliable or accurate method to carry Petitioner's burden under section 409.910(17)(b). To reiterate, there was no persuasive evidence presented by Petitioner to prove that (1) a lesser portion of the total recovery should be allocated as reimbursement for past medical expenses than the amount calculated by the agency, or (2) that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
The Issue The issue 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.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Breana Collins was born on January 31, 1985, with a severe chromosomal growth deficiency known as 3P2 Trisomy. She was unable to speak or care for herself and could walk only with assistance. Breana lived at home with her parents, Clifford and Gwen Collins, until she was 17 years old, at which time she was placed in Howell Branch Court, a group home located in Winter Park near the family’s home. On July 11, 2017, Breana underwent an esophagogastroduodenoscopy, or “EGD” procedure. On July 11, 2017, while undergoing the EGD procedure, Breana Collins was noted to be unarousable and unresponsive. Breana was transported by emergency medical services to Florida Hospital Altamonte. She was experiencing severe distress and was unresponsive. She was diagnosed with acute respiratory failure. On August 24, 2017, Breana died. Her cause of death was noted as acute cardiorespiratory arrest. Petitioner, Clifford Collins, brought the following claims: a medical malpractice tort claim; a claim for abuse, neglect, and exploitation under section 415.1111, Florida Statutes, commonly called the “Vulnerable Adult” statute; and a claim under section 393.13, Florida Statutes, the “Bill of Rights of Persons with Developmental Disabilities.” The claims were brought against several healthcare providers, seeking wrongful death damages for Breana Collins’s parents for non-economic mental pain and suffering for the loss of their daughter, and survival damages for Breana’s loss, injury, and damage, including, but not limited to, acute hypoxic respiratory failure, right lower lobe pneumonia, aspiration pneumonia, urinary tract infection, sepsis with shock, and leukocytosis. In 2020, Petitioner, Clifford Collins, settled the tort action for a limited confidential amount due to significant liability and causation challenges with the claims. AHCA was properly notified of the Collins’s lawsuit against the defendants and provided notice that it had paid benefits related to the injuries from the incident in the amount of $44,836.83. AHCA paid benefits in the amount of $44,836.83 for the care of Breana related to the injuries allegedly caused by third parties. The parties stipulated that the application of the formula provided by section 409.910(11)(f), to the confidential settlement amount, would require payment to AHCA in the amount of $44,836.83 from the settlement proceeds. J. Scott Murphy is an attorney, who is Florida Board Certified in Civil Trial Law. Mr. Murphy is also certified by the American Board of Professional Liability Attorneys and the National Board of Trial Advocates, and is a member of the American Board of Trial Advocates. Mr. Murphy specializes in wrongful death and catastrophic injury cases, primarily in medical malpractice. He has over 35 years’ experience in this area of practice. As part of his ongoing practice, Mr. Murphy routinely evaluates the damages suffered by injured persons, including wrongful death medical malpractice cases involving adult children as defined by section 768.18(2), Florida Statutes, i.e., persons over the age of 25. In formulating his opinions, Mr. Murphy reviewed the deposition of Mr. Collins, as well as the amended complaint and the motions to dismiss filed by the defendants in the underlying case. Mr. Murphy also reviewed the pre-suit expert affidavits and jury verdict reports related to damage awards and settlements involving the death of an adult child. Mr. Murphy testified that in medical malpractice cases brought under section 768.21, emotional loss, pain, and suffering for the parents’ loss of an adult child is specifically disallowed. Mr. Murphy testified as to the substantial legal obstacles to pursuing the underlying personal injury/medical malpractice claim brought by Clifford and Gwen Collins for the death of Breana. Mr. Murphy stated that it would be extremely difficult to prove the causation element because no autopsy was performed to establish definitively Breana’s cause of death. Mr. Murphy opined that Breana’s survival claim for her pain and suffering over the month and a half between the EGD procedure and her death would be de minimus because of her congenital disability. Mr. Murphy further testified as to the extreme difficulties in pursuing the two statutory claims under sections 415.1111 and 393.13. He testified that similar claims under section 415.1111 have been specifically rejected by the First and Third District Courts of Appeal, both of which concluded that the medical malpractice statutes provide an exclusive remedy that cannot be circumvented by resorting to the Vulnerable Adult statute. Mr. Murphy testified that, while the appellate courts have yet to address the question of whether a claim under section 393.13 could be used to avoid the limitations of the medical malpractice statute, he would expect the result to be the same as that reached by the courts on section 415.1111. Mr. Murphy testified that his review of the motions to dismiss filed by the defendants in the underlying action led him to conclude that the odds of success were very low on the claims under section 415.1111 and 393.13. Mr. Murphy testified that Breana’s EGD procedure was performed by a gastroenterologist and monitored by a certified registered nurse anesthetist, both of whom met the statutory definition of “health care providers.” Because the claims would likely have been construed as “medical malpractice claims,” Clifford and Gwen Collins would have been limited to the recovery of medical expenses incurred as a result of the negligence of the defendants, plus Breana’s funeral expenses. The significant damages associated with the parents’ pain and suffering and emotional loss would have likely been barred by the limitations imposed under section 768.21. Mr. Murphy’s unrefuted testimony was that the total value of the parents’ claims would be at least $1 million by a very conservative estimate. The Collins family was very close knit and the parents remained intimately involved in Breana’s life for as long as she lived. Based on the Collins’s depositions and family photographs that were admitted into evidence, Mr. Murphy found it “glaringly apparent” that the loss of their daughter was devastating to Clifford and Gwen Collins. Mr. Collins’s testimony at the hearing confirmed Mr. Murphy’s opinion. Mr. Collins testified that his health has suffered, and he has lost substantial weight since Breana’s death. Mr. Collins appeared reticent to discuss his feelings, but he did state, “It’s the worst thing that can happen to a parent. I mean, we knew her limitations, but she was – you know, she was a joy in our lives and it’s emotional.” In her deposition testimony, Gwen Collins stated, “I know I can’t ask you questions, but if you were a parent and you truly are involved and love your child, you’re impacted daily by that loss and you never get over it.” Ms. Collins testified that she now has high blood pressure that she did not have before Breana’s death. She is now pre-diabetic, which she also attributes to the stress of losing a child. Mr. Murphy testified that the amount of the settlement in this case was $190,000, or 19 percent of the conservative valuation of $1,000,000.00. Using a pro rata methodology, Mr. Murphy concluded that the appropriate share of Breana’s past medical expenses to be applied to satisfy AHCA’s medical lien should be 19 percent of the $44,836.83 total, or $8,518.99. Mr. Murphy’s testimony was uncontradicted and persuasive on this point. Petitioner’s counsel, Alan J. Landerman, testified as an expert in the evaluation of damages for medical malpractice and wrongful death cases, without objection from AHCA. Mr. Landerman is an AV-rated civil trial attorney with over 35 years of experience, primarily as counsel in catastrophic injury cases, medical malpractice, and product liability cases. Mr. Landerman has tried multiple medical malpractice cases and product liability cases, and has achieved multiple verdicts in excess of $1 million in those cases. A routine part of Mr. Landerman’s practice is to make assessments concerning the value of damages, including damages in wrongful death cases under section 768.21. Mr. Landerman concurred with Mr. Murphy’s testimony regarding the strict monetary limitations associated with pursuing medical malpractice wrongful death cases on behalf of parents for the death of an adult child. Mr. Landerman testified that he keeps abreast of settlement and damage awards through the Florida Jury Verdict Reporters, and as a member of many plaintiff attorneys’ organizations, including the American Justice Association and Central Florida Trial Lawyers. Mr. Landerman was the primary trial attorney for Clifford and Gwen Collins in the underlying civil lawsuit. Mr. Landerman testified that after the defendants filed motions to dismiss, he initiated settlement discussions with defense counsel. Mr. Landerman testified that he accepted a compromise settlement on behalf of his clients, in light of the substantial factual and legal impediments previously described by Mr. Murphy. Mr. Landerman testified that in evaluating the underlying wrongful death action, he elected to plead “novel theories” under sections 415.1111 and 393.13 in order to evade the limitations imposed by the wrongful death statute on medical malpractice cases. Mr. Landerman testified that, unfortunately, the recent case styled Specialty Hospital-Gainesville, Inc. v. Barth, 277 So. 3d 201 (Fla. 1st DCA 2019), held that the wrongful death statute is the exclusive remedy for medical malpractice, and that chapter 415 cannot serve as a vehicle for a medical malpractice claim. As to the claim under section 393.13, Mr. Landerman testified that this was a case of first impression. While he concurred with Mr. Murphy that the result would likely be the same as that in Specialty Hospital, Mr. Landerman also believed that uncertainty about the outcome in a jury trial was a driving factor in the defendants’ willingness to settle the case. Mr. Landerman agreed with Mr. Murphy that a very conservative total value for the case was $1 million. Mr. Landerman testified that he conducted jury verdict research that revealed the case of the death of a 30-year-old, in a non-medical malpractice setting, in which the parents were awarded in excess of $10 million in non-economic damages. Mr. Landerman further agreed with Mr. Murphy that if one accepts the $1 million figure as the full value of the claim, then the settlement amount equaled 19 percent of the value of the parents’ damages. Applying a pro rata analysis, Mr. Landerman testified that 19 percent of $44,836.83 yields $8,518.99, which is the amount that should be allocated to the past medical expenses claim of AHCA. AHCA did not offer any witnesses or documentary evidence to question the credentials or opinions of either Mr. Murphy or Mr. Landerman. AHCA did not offer testimony or documentary evidence to rebut the testimony of Mr. Murphy and Mr. Landerman as to valuation or the pro rata reduction ratio. AHCA did not offer alternative opinions on the damage valuation or allocation method suggested by either Mr. Murphy or Mr. Landerman, both of whom testified knowledgably and credibly as experienced practitioners. The testimony of Petitioner's two experts regarding the total value of damages was credible, unimpeached, and unrebutted. Petitioner proved that the settlement of $190,000 does not begin to fully compensate Clifford and Gwen Collins for the full value of their damages. Petitioner’s recovery represents only 19 percent of a conservative valuation of the Collins’s claims. AHCA argues with some force that this case is distinguishable from other Medicaid reimbursement cases in that here the question of the value of the Collins’s damages versus the settlement amount is not merely a matter of the uncertainty of pressing forward with the underlying litigation. The parents in this case faced a statutory barrier to recovering non-economic damages for the wrongful death of their adult daughter, which leads AHCA to argue that the $1 million valuation of their damages is unrealistically high and that this case is not suitable for application of the pro rata reduction methodology. ACHA’s argument is undercut by the settlement itself, which was more than a nominal amount even if only a fraction of the total damages estimated by Petitioner’s experts. The fact that the defendants were willing to pay over $190,000 to settle the lawsuit indicates a degree of uncertainty as to the outcome of the claim brought under section 393.13 that is sufficient to bring this case comfortably within the ambit of the pro rata reduction analysis. The undersigned finds that Petitioner has proven by a preponderance of the evidence that 19 percent (the ratio that $190,000 bears to $1 million) is the appropriate pro rata share of Breana Collins’s medical expenses to be applied to determine the amount recoverable by AHCA in satisfaction of its Medicaid lien. ACHA’s lien for past medical expenses is $44,836.83. Applying the 19 percent pro rata ratio to this total yields $8,518.99, which is the portion of the settlement representing reimbursement for past medical expenses and the amount recoverable by AHCA for its lien.
The Issue On October 3, 2016, Petitioners, Ammar Al Batha, as Personal Representative of the Estate of Abdel-Kader Al Batha, deceased, and Shahira Alshami, individually, filed a Petition to Determine Amount Payable to Agency for Health Care Administration in Satisfaction of Medicaid Lien (Petition) with the Division of Administrative Hearings (DOAH) pursuant to section 409.910(17)(b), Florida Statutes (2016).1/ The final hearing was scheduled for December 14, 2016. On November 30, 2016, Respondent filed a Motion for Summary Final Order. In the Motion for Summary Final Order, Respondent asserted that Petitioners, as a matter of law, cannot successfully challenge the amount payable to AHCA under section 409.910(17)(b) because Petitioners are not the Medicaid recipients. On December 2, 2016, Petitioners filed a Motion for Continuance and Extension of Time to Respond to Motion for Summary Final Order. That motion was granted by the undersigned on December 6, 2016, and the hearing scheduled for December 14, 2016, was canceled. On December 12, 2016, Petitioners filed an Objection to Respondent’s Motion for Summary Final Order, asserting that a Medicaid recipient’s right to challenge the payment of a Medicaid lien through DOAH does not die with the recipient, and the recipient’s representative is entitled to challenge the amount payable to AHCA under the procedure in section 409.910(17)(b). Both Respondent’s Motion for Summary Final Order and Petitioners’ Objection to Respondent’s Motion for Summary Final Order have been duly considered in preparation of this Summary Final Order.
Findings Of Fact Based on the record as a whole, the following Findings of Fact are made: On July 2, 2015, Abdel-Kader Al Batha (Mr. Al Batha) was involved in a car accident in Broward County, Florida. In this accident, Mr. Al Batha suffered catastrophic physical and neurological injuries, and, as a result, died on July 20, 2015. Mr. Al Batha was survived by his spouse, Shahira Alshami (Ms. Alshami). Mr. Al Batha’s medical care related to his injury was paid by Medicaid, and AHCA, through the Medicaid program. Medicaid provided $143,663.18 in benefits associated with Mr. Al Batha’s injury. This $143,663.18 represented the entire claim for past medical expenses. Mr. Al Batha’s funeral expenses were in the amount of $3,850. As a result of Mr. Al Batha’s injury and death, Ms. Alshami suffered economic and non-economic damages, which are defined and limited by the Florida Wrongful Death Act to loss of support, services, companionship, and protection from the date of injury, as well as her mental pain and suffering from the date of injury per section 768.21, Florida Statutes. In addition, the Estate of Abdel-Kader Al Batha (the Estate) suffered economic damages, which are defined and limited, by the Florida Wrongful Death Act, to medical expenses, funeral expenses, and loss of net accumulations per section 768.21(6). Altogether, the total combined monetary value of Ms. Alshami and the Estate’s individual damages, and the value a jury would assign to these damages, are no less than $2,500,000 to $5,000,000. Ammar Al Batha, as the Personal Representative of the Estate, brought a wrongful death action to recover both the individual statutory damages of Ms. Alshami, as well as the individual statutory damages of the Estate, against the driver/owner of the vehicle that caused the accident (Defendant). While Ms. Alshami and the Estate’s damages have an exceedingly high monetary value in excess of $2,500,000 to $5,000,000, there were significant limitations to recovering the full value of these damages from the Defendant associated with disputed facts, liability, and policy insurance limits of the primary responsible parties. Based on these significant limiting factors, the wrongful death action was settled through a confidential settlement. While settlement was appropriate given the limiting factors, that does not negate that in the settlement, Ms. Alshami and the Estate are not being fully compensated for all their damages, and they are only receiving a fraction of the total monetary value of all their damages. Understanding that the settlement does not fully compensate Ms. Alshami and the Estate for all their damages, and in the settlement they are only receiving a fraction of the total monetary value of all the damages, including only a fraction of the $143,663.18 claim for past medical expenses, the parties to the settlement made an allocation to the claim for past medical expenses. This allocation was based on the calculation of the ratio the settlement bore to the total monetary value of all damages. Using the conservative valuation of all damages of $2,500,000, the parties calculated that Ms. Alshami and the Estate were receiving 44.5 percent of the total monetary value of all their damages in the settlement, and accordingly they were receiving in the settlement 44.5 percent, or $63,930.12, of their $143,663.18 claim for past medical expenses. In making this allocation, the parties agreed that: The settlement does not fully compensate Mr. Al Batha’s surviving spouse and the Estate of Abdel-Kader Al Batha for all the damages they have suffered and the settlement only compensates them for a fraction of the total monetary value of all the damages; The damages have a value in excess of $2,500,000; The claim for past medical expenses was $143,663.18; and Allocation of the $63,930.12 of the settlement to past medical expenses, and the remainder of the settlement toward the satisfaction of claims other than the past medical expenses, is reasonable and proportionate based on the same ratio this settlement bears to the total monetary value of all the damages. The parties memorialized the allocation of $63,930.12 of the settlement to past medical expenses in the General Release (Release). The Release stated: Although it is acknowledged that this settlement may not fully compensate Releasing Party for all of the damages they have allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Releasing Party for a fraction of the total claimed monetary value of their alleged damages. The parties agree that Releasing Party’s alleged damages may have a value in excess of $2,500,000, of which approximately $143,663.18 represents the claimed amount for past medical expenses. Given the facts, circumstances, and nature of Releasing Party’s damages and this settlement, the parties have agreed to allocate $63,930.12 of this settlement to Releasing Party’s claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the claimed total monetary value of all Releasing Party’s damages. As a condition of Mr. Al Batha’s eligibility for Medicaid, Mr. Al Batha, before his death, assigned to AHCA his right to recover from liable third parties, medical expenses paid by Medicaid. During the pendency of the wrongful death action, AHCA was notified of the action, and AHCA, through its collections contractor, Xerox Recovery Services, asserted a $143,663.18 Medicaid lien against the Estate’s cause of action and settlement of that action. The attorney handling the wrongful death claim notified AHCA of the settlement by letter and provided AHCA with a copy of the executed General Release. The letter explained that the damages had a value in excess of $2,500,000, and the settlement represented only a 44.5 percent recovery of the $143,663.18 claim for past medical expenses, or $63,930.12. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $143,663.18 Medicaid lien. AHCA calculated its payment pursuant to the formula in section 409.910(11)(f) based on the gross settlement, which includes those funds compensating Ms. Alshami for her individual claim for pain and suffering and loss of support, services, and companionship. This resulted in AHCA demanding payment for the full amount of the Medicaid lien, or $143,663.18.
The Issue The issue is the amount payable to Respondent, Agency for Health Care Administration (AHCA), in satisfaction of Respondent’s Medicaid lien from a settlement received by Petitioner, James T. Stirk, from a third party pursuant to section 409.910, Florida Statutes (2015).
Findings Of Fact On January 24, 2014, Petitioner, then 25 years old, was involved in a serious motorcycle accident. Petitioner struck the rear of a truck with a trailer near mile marker 129 on I-75 in Lee County, Florida. Petitioner was taken to Lee Memorial Hospital where he remained in a coma for a couple of months. He sustained a broken back at T-4 level, two broken arms, a fractured neck and internal injuries. As a result of his injuries, Petitioner is now a paraplegic from the chest down and confined to a wheelchair. Respondent is the state agency authorized to administer Florida’s Medicaid program. See § 409.902, Fla. Stat. Prior to the accident, Petitioner worked as an appliance and air conditioning repairman, earning $16 an hour. After the accident and his recovery, Petitioner has been unable to work and his only source of income is through a Social Security disability check of approximately $1,083 monthly. He believes he is now eligible for Medicare, which should start “next month” (August 2016). He rents a home ($750 monthly) and lives there with his four-year-old son. Petitioner brought a negligence claim against the truck driver to recover his damages sustained in the crash. Petitioner settled his negligence claim for $95,000.00. During the pendency of Petitioner’s claim, AHCA was notified of the third-party negligence claim. AHCA has not filed an action to set aside or otherwise object to Petitioner’s $95,000.00 settlement. Petitioner’s past medical care related to his motorcycle accident totaled approximately $929,589.46. Petitioner was insured under a Florida Blue ERISA Health Insurance Plan (Florida Blue) for a portion of the time he received medical treatment. He subsequently became eligible for Medicaid after being unable to work after the accident. Florida Blue paid approximately $501,487.30 towards Petitioner’s medical care. Medicaid paid $47,008.81 towards Petitioner’s medical care. No portion of this amount was paid for future medical expenses and no payments were made in advance for medical care. By letter dated January 20, 2016, AHCA, through its contractor Xerox Recovery Services, asserted a lien of $47,008.81 against Petitioner’s third-party negligence claim and settlement thereof. By letter dated January 21, 2016, Petitioner’s counsel provided Xerox Recovery Services the settlement information and requested the Medicaid lien be proportionally reduced to $714.05, 1.9 percent of the total value of Petitioner’s claim. By letter dated February 18, 2016, AHCA, through its contractor, applied the statutory formula to Petitioner’s gross settlement and requested a check in the amount of $32,062.25 for full satisfaction of its lien. Petitioner’s attorney forwarded payment of $32,062.25 from Petitioner’s settlement proceeds. The payment of these funds to AHCA constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Section 409.910(11)(f), provides, in pertinent part, as follows: (f) [I]n the event of an action in tort against a third party in which the recipient or his or her legal representative is a party which results in a judgment, award, or settlement from a third party, the amount recovered shall be distributed as follows: After attorney’s fees and taxable costs . . . one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid. The remaining amount of the recovery shall be paid to the recipient. For purposes of calculating the agency’s recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient . . . shall be calculated at 25 percent of the judgement, award, or settlement. Pursuant to the formula set forth in 409.910(11)(f), Respondent should be reimbursed $32,062.25, the amount set forth in the February 18, 2016, letter. However, the statute provides a method by which a recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula set forth in subsection (11)(f). “In order to successfully challenge the amount payable to the agency, the recipient must prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency” pursuant to the formula. § 409.910(17)(b), Fla. Stat. The testimony spoke in generalities and global assessments. The testimony did not explicitly disclose that a lesser amount of the total recovery should be allocated for past and future medical expenses in this instance. Ty Roland is an attorney with over 20 years’ experience representing plaintiffs in personal injury and wrongful death claims. The majority of Mr. Roland’s cases have been in the Fort Myers area. Mr. Roland was accepted as an expert in the valuation of the damages (in personal injury cases), and testified as to his opinion of the total value of damages in Petitioner’s underlying action. In formulating his opinion of the total value of Petitioner’s damages, Mr. Roland considered cases he has previously tried. Petitioner’s suit demanded $5 million; however, Mr. Roland estimated the value of Petitioner’s suit at $10 million. There were no specifics as to the elements of damages. Total recovery for Petitioner’s damages through settlement was $95,000, roughly 1.9 percent of the estimated total value of his damages. The parties stipulated the amount due under section 409.910(11)(f) is $32,062.25.
The Issue The issue to be determined is the amount to be reimbursed to Respondent, Agency for Health Care Administration (Respondent or AHCA), for medical expenses paid on behalf of Petitioner, Genesis Belinaso (Petitioner), from a medical malpractice settlement received by Petitioner from a third party.
Findings Of Fact Petitioner was born on August 29, 2011. At 11 months of age, Petitioner was diagnosed with Gaucher Disease, Type I. On September 21, 2012, when she was approximately 13 months of age, Petitioner was admitted to the hospital for the insertion of a central venous port (mediport) for treatment of her Gaucher Disease with Cerezyme infusions. The mediport insertion on the right side was unsuccessful, and it was inserted on the left side. Petitioner did not wake up from anesthesia and experienced seizure activity. Radiographic evaluation with CT and MRI of the brain revealed subarachnoid hemorrhage, cerebral edema, and herniation. Petitioner required an emergency craniotomy, duraplasty and partial right temporal lobectomy, with the operative note diagnosing a right internal carotid artery stroke and possible dissecting aneurysm of the internal carotid artery bifurcation. A post-operative CT revealed significant infarction of the right cerebral hemisphere. A subsequent intracranial hemorrhage resulted in recurrent/worsening of cerebral edema. Petitioner was transferred to Jackson Memorial Hospital where she underwent numerous neurological surgeries and procedures associated with catastrophic brain damage from the strokes suffered on September 21, 2012. As a result of the catastrophic brain damage, Petitioner suffers from left side hemiplegia and severe cognitive deficits. She is permanently disabled and unable to care for herself. She will need some form of care for the rest of her life. AHCA, through the Medicaid program, spent $301,085.18 on behalf of Petitioner, all of which represents expenditures paid for Petitioner’s past medical expenses. The $301,085.18 paid by Medicaid constituted Petitioner’s entire claim for past medical expenses. No portion of the $301,085.18 paid by AHCA through the Medicaid program on behalf of Petitioner represented expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. Petitioner’s parents and natural guardians, Cintia Aquino and Jonas Belinaso, brought a medical malpractice claim against Petitioner’s medical providers, including the physician and the hospital, to recover Petitioner’s damages, as well as their damages associated with their child’s injury. The physician responsible for the unsuccessful mediport insertion (“Settling Tortfeasor”), maintained only an insurance policy with a policy limit of $250,000.00. Petitioner’s medical malpractice claim against the Settling Tortfeasor was settled during the pre-suit period for the insurance policy limit of $250,000.00. The Release of All Claims with the Settling Tortfeasor (“Release”) stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Genesis Belinaso and her parents for all of the damages that they have allegedly suffered, this settlement shall operate as a full and complete RELEASE as to RELEASEES without regard to this settlement only compensating Genesis Belinaso and her parents for a fraction of the total monetary value of their alleged damages. The parties agree that the alleged damages sustained by Genesis Belinaso and her parents, have a potential full value in excess of $25,000,000, of which $301,085.18 represents Genesis Belinaso’s claim for past medical expenses. Given the facts, circumstances, and nature of Genesis Belinaso’s injuries and this settlement, the parties have agreed to allocate $3,010.85 of this settlement to the claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all of the damage claims sustained by Genesis Belinaso and her parents. Further, the parties acknowledge that Genesis Belinaso may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Genesis Belinaso will incur in the future. However, the parties acknowledge that Genesis Belinaso, or others on her behalf, have not made payments in advance for Genesis Belinaso’s future medical care and Genesis Belinaso has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. The Release did not further differentiate or allocate the $250,000.00 total recovery. Thus, this proceeding was brought by Petitioner pursuant to section 409.910(17)(b) to establish “that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph [409.910](11)(f).” The acceptance of the Settling Tortfeasor’s policy limits was expressly conditioned on all claims against the hospital being preserved. Because Petitioner was a minor, Court approval of the settlement was required. Accordingly, on July 29, 2015, Circuit Court Judge Maria M. Korvick entered an Order Approving Settlement. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to past medical expenses for Petitioner’s medical care. During the pendency of Petitioner’s medical malpractice claim, AHCA was notified of the claim. AHCA, through its collections contractor Xerox Recovery Services, asserted a Medicaid lien in the amount of $301,085.18 against any proceeds received from a third party as a result of Petitioner’s cause of action and settlement of that action. By letter of September 24, 2015, Petitioner’s medical malpractice attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of Petitioner’s $85,095.49 in litigation costs. The letter explained that the damages suffered had a value in excess of $25,000,000, and that the $250,000.00 settlement represented only a one-percent recovery of Petitioner’s $301,085.18 claim for past medical expenses. The letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $301,085.18 Medicaid lien. AHCA responded to the September 24, 2015, letter on November 2, 2015. AHCA indicated that it had calculated the section 409.910(11)(f) formula amount owed from the $250,000.00 settlement and, under the formula, $74,735.15 was owed to AHCA in satisfaction of its Medicaid lien. AHCA requested a “check made payable to ‘Agency for Health Care Administration’ in the amount of $74,735.15.” AHCA correctly computed the lien amount pursuant to the statutory formula in section 409.910(11)(f). Deducting the 25 percent attorney’s fee of $62,500.00 from the $250,000.00 recovery left a sum of $187,500.00. AHCA then deducted $38,029.71 in approved taxable costs, which left a sum of $149,470.29, half of which is $74,735.15. That figure establishes the maximum amount that could be reimbursed from the third-party recovery in satisfaction of the Medicaid lien. Thus, application of the formula allows for sufficient funds from the settlement proceeds to satisfy the Medicaid lien amount of $74,735.15. AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner’s settlement, nor has it commenced a civil action to enforce its rights under section 409.910. Petitioner 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, pursuant to section 409.910(17). At the final hearing, Petitioner presented the expert testimony of Mr. Rossman. Mr. Rossman, who is board-certified in civil trial practice, demonstrated considerable experience handing personal injury and medical malpractice cases in the Miami area. Mr. Rossman testified that the standard of care in his field of practice requires a careful evaluation of a case from the time of intake through the trial. That evaluation, which includes an assessment of the value of the damages, includes a comparison of other jury verdicts in comparable cases as “the barometer of what is happening.” In assessing the value and worth of a case, it is common practice for counsel to retain a life care planner and an economist, and information provided by such persons is reasonably relied upon by persons in Mr. Rossman’s field of expertise. Mr. Rossman had extensive knowledge of the nature and extent of the injuries suffered by Petitioner, and was familiar with the information provided in Petitioner’s Habilitation Assessment and Present Value Analysis. Mr. Rossman testified that Petitioner’s total economic damages were $8,367,417.18, which included $301,085.18 in past medical expenses; $1,330,634.00 in lost earning capacity over Petitioner’s lifetime; and $6,735,698.00 for future life care needs. The future life care costs included those for future medical, surgical, diagnostic, and therapeutic needs, specialized equipment and supplies, attendant care, and related needs. The $6,735,698.00 amount estimated for future life care needs was the most conservative figure among the scenarios presented in the Present Value Analysis. Mr. Rossman also estimated the non-economic damages associated with Petitioner’s claim to be in the range of $12 million for Petitioner, and $3 million each for Petitioner’s parents, for a total of $18 million. His assessment of non- economic damages was based not only on his own knowledge and experience, but included an analysis of comparable jury verdicts, which is information reasonably relied upon by persons in Mr. Rossman’s field of expertise. As a result of his expert analysis, Mr. Rossman testified that, as a case of absolute liability with full damages awarded, Petitioner’s claim had a minimum value of $25 million dollars. Mr. Rossman’s testimony was credible, and is accepted. At the final hearing, Petitioner also presented the expert testimony of Mr. Barrett. Mr. Barrett has focused his practice for the past 30 years on personal injury cases, with the past 10 years devoted to medical malpractice and pharmaceutical products liability cases. Evaluation of personal injury cases and medical malpractice cases is a daily component of his practice. In preparation for his testimony, Mr. Barrett reviewed the reports of Petitioner’s life care planner and economist, Petitioner’s medical records, and other materials that are included in the record of this proceeding. Mr. Barrett routinely reviews jury verdict reports, and applied his knowledge and experience to Petitioner’s claim. Based on his review, Mr. Barrett concurred that the overall value of Petitioner’s claim was, conservatively, in the $25 million range, with the same general breakdown for economic and non- economic damages. Mr. Barrett’s testimony was credible, and is accepted. The evidence was clear and convincing that the total value of the damages related to Petitioner’s injury was, conservatively, $25 million, and that the settlement amount was one percent of the total value. The evidence was equally clear and convincing that the allocation for past medical expenses reflected in the court-approved Release was of the same ratio to the total past medical expenses as was the settlement amount to the reasonable value of the claim. There was no evidence that the allocation was subject to any form of manipulation to increase or decrease the accounting of past medical expenses.
The Issue The issue to be determined in this case is the amount to be paid to Respondent, Agency for Health Care Administration (“Respondent” or “AHCA”), to reimburse Medicaid for medical expenses paid on behalf of Petitioner from proceeds of a personal injury settlement received by Petitioner.
Findings Of Fact The following findings of fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the prehearing stipulation. Petitioner, William O’Malley, is the recipient of Medicaid for injuries he sustained in an automobile accident. Respondent is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409. On September 9, 2009, Petitioner, William O’Malley, lost control of his vehicle when it hydroplaned across three lanes of traffic. Mr. O’Malley’s vehicle left the roadway and struck a tree. While he was restrained with a seat belt, Mr. O’Malley suffered a severe brain injury, fractured skull, injury to his neck at the C6-C7 level, numerous fractured ribs, shattered spleen, lacerated liver, abdominal bleeding, a fractured ankle and other serious injuries. He remained in a coma for a number of weeks undergoing extensive surgical procedures to save his life. As a result of his severe and permanent injuries, Mr. O’Malley now suffers from cognitive deficits, is disfigured, and is unable to work. He receives disability payments due to his injuries. A portion of Mr. O’Malley’s past medical expenses related to his injuries was paid by Medicaid, in the amount of $196,125.72. Mr. O’Malley initiated a personal injury civil action to recover all his damages associated with his injuries against the construction companies who allegedly designed and constructed the roadway in a defective manner (“Defendants”). During the pendency of Mr. O’Malley’s personal injury action, AHCA was notified of the action, and asserted a $196,125.72 Medicaid lien against any damages received by Mr. O’Malley. AHCA was not otherwise involved in the personal injury action or settlement. In October 2016, Mr. O’Malley’s personal injury action settled for the gross amount of $1,750,000. The General Release memorializing the settlement agreement provides as follows: Although it is acknowledged that this settlement does not fully compensate William O’Malley for all of the damages he has allegedly suffered, this settlement shall operate as a full and complete Release as to Releasees without regard to this settlement only compensating William O’Malley for a fraction of the total monetary value of his alleged damages. The parties agree that William O’Malley’s alleged damages have a value in excess of $20,000,000.00, of which $379,874.27 represents William O’Malley’s claim for past medical expenses. Given the facts, circumstances, and nature of William O’Malley’s injuries and this settlement, the parties have agreed to allocate $33,239.00 of this settlement to William O’Malley’s claim for past medical expenses and allocate the remainder of the settlement toward the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all William O’Malley’s damages. Further, the parties acknowledge that William O’Malley may need future medical care related to his injuries, and some portion of this settlement may represent compensation for future medical expenses William O’Malley will incur in the future. However, the parties acknowledge that William O’Malley, or others on his behalf, have not made payments in the past or in advance for the First Party’s future medical care and William O’Malley has not made a claim for reimbursement, repayment, restitution, indemnification, or to be made whole for payments made in the past or in advance for future medical care. Accordingly, no portion of this settlement represents reimbursement for future medical expenses. By letter of October 13, 2016, Mr. O’Malley’s attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release and itemization of $123,699.86 in litigation costs. This letter explained that Mr. O’Malley’s damages had a value in excess of $20 million and the settlement represented only 8.75 percent of the recovery of Mr. O’Malley’s $379,874.27 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $196,125.72 Medicaid lien. AHCA responded to Mr. O’Malley’s attorney’s letter and demanded full payment of the entire $196,125.72 Medicaid lien from the settlement. AHCA, through the Medicaid program, spent $196,125.72 on behalf of Mr. O’Malley, all of which represents expenditures paid for Mr. O’Malley’s past medical expenses. No portion of the $196,125.72 paid by AHCA represented expenditures for future medical expenses. Application of the formula at section 409.910(11)(f) to Mr. O’Malley’s settlement requires payment to AHCA of $196,125.72, the actual amount of the medical expenses paid by Medicaid. Petitioner disputes that $196,125.72 is the amount of recovered medical expenses payable to Respondent, and instead asserts that $33,239.00 in medical expenses are payable to Respondent. Notwithstanding Petitioner’s dispute, Petitioner has deposited the full Medicaid lien amount in an interest-bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). In support of his position, Mr. O’Malley presented the testimony of two experts, Steven Browning, Esquire, and Vinson Barrett, Esquire. Mr. Browning represented Mr. O’Malley in the personal injury action. He testified as an expert regarding the valuation of Mr. O’Malley’s personal injury claim. Mr. Browning has practiced law for 31 years, primarily representing plaintiffs. He is a partner of his law firm and handles serious personal injury, wrongful death, and catastrophic injury cases. Mr. Browning handles cases that result in jury trials and, thus, he routinely researches jury verdicts to determine potential value of cases. In the litigation of civil actions, he also prepares mediation statements regarding the value of cases. He reviews life care plans, economic reports, and past jury verdicts to determine the value of a case. Mr. Browning opined that $20 million constituted a very conservative valuation of damages suffered by Mr. O’Malley. He based this opinion on having represented Mr. O’Malley in the underlying personal injury action and on his knowledge of jury verdicts and settlements in recent Florida cases involving awards of damages to individuals with similar injuries as Mr. O’Malley. He emphasized that his valuation was far more conservative than many comparable cases that resulted in substantially higher verdicts or settlements. Mr. Browning concluded that the $1,750,000 settlement amount represented 8.75 percent of the damages suffered by Mr. O’Malley. He also opined that only 8.75 percent of the $196,125.72, the past medical expenses paid by Respondent, was recovered. Mr. Browning was accepted as an expert in this matter and his testimony was found to be persuasive. Mr. O’Malley also presented the testimony of Mr. Barrett regarding the valuation of Petitioner’s claim. Mr. Barrett has practiced law for approximately 35 years. He primarily practices in the areas of medical malpractice, pharmaceutical liability, and catastrophic injuries resulting from automobile accidents. Mr. Barrett routinely handles jury trials. Thus, he routinely monitors jury verdicts and determines the value of damages suffered in personal injury actions. He reviewed recent jury verdicts and the life care plan for Mr. O’Malley to formulate his opinion regarding the valuation of Mr. O’Malley’s claim. Mr. Barrett testified that $20 million to $25 million was the estimated value of Mr. O’Malley’s claim. He testified that the amount was a very conservative estimate of damages suffered by Mr. O’Malley. Similar to Mr. Browning, Mr. Barrett opined that allocating 8.75 percent to past medical expenses in the amount of $196,125.72 was a reasonable allocation of past medical expenses and reflected the amount recovered by Mr. O’Malley for past medical expenses. Respondent also presented an expert regarding the valuation of Mr. O’ Malley’s claim, Steven Carter. Mr. Carter has been licensed to practice law for 23 years. He is the managing shareholder of his law firm. He has handled catastrophic injury cases in which he determined the value of the claim. He has conducted 35 to 40 jury or bench trials. Mr. Carter was accepted as an expert regarding valuation of Mr. O’Malley’s claim. Mr. Carter testified that the value of Mr. O’Malley’s damages was the actual settlement amount of $1,757,000. Ultimate Finding of Fact The undersigned finds that the testimony of Mr. Browning and Mr. Barrett was more persuasive regarding valuation of Mr. O’Malley’s claim than the testimony of Respondent’s expert witness. Mr. Browning and Mr. Barrett’s number of years of experience with handling catastrophic personal injury cases, and the fact that they had the benefit of the life care plan when evaluating the case, make their testimony more persuasive regarding the valuation of damages suffered by Mr. O’Malley in this case.
