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 to be determined in this matter is the amount of money to be reimbursed to the Agency for Health Care Administration for medical expenses paid on behalf of Amora Gonzalez, a Medicaid recipient, following Petitioner’s recovery from a third party.
Findings Of Fact On August 14, 2015, Amora, who was then five years old, was the backseat passenger in a car driven by her mother, Nicalea R. Gonzalez. Amora was secured in a child seat. While Ms. Gonzalez was stopped at a traffic light, a commercial cargo van collided directly into the rear end of her car at a speed of approximately 50 to 60 miles per hour. The impact crumpled the back of Ms. Gonzalez’s vehicle. The collision also severed the seat belt securing Amora’s child seat. Amora was thrown violently forward. Following the accident, Amora was found lying on the back floor of the vehicle, wedged between the front seats. When emergency services personnel arrived, Amora was found lying on the ground exhibiting signs of a severe brain injury. Subsequent CT scans and an MRI revealed that Amora had suffered diffuse axonal injury to her corpus callosum region of the brain, a temporal lobe hematoma, and a subdural hematoma in her right tentorial region. Due to elevated cranial pressure, Amora underwent neurosurgery for placement of an external ventricular drain, and she was placed in a medically induced coma. Amora also underwent a decompressive craniotomy due to continued intracranial pressure. Amora was diagnosed with a neuro cognitive disorder due to traumatic brain injury with a behavioral disorder. As a result of her brain injury, Amora suffers from serious cognitive impairment, executive functioning level disabilities, and behavioral disturbances. Amora’s past medical expenses related to the 2015 automobile accident total $108,725.29. Of that amount, the Agency, through the Medicaid program, paid $108,656.31 for Petitioner’s medical care and services. Petitioner did not make any payments on Amora’s behalf for past medical care or in advance for Amora’s future medical care. Ms. Gonzalez pursued a personal injury claim as Natural Guardian and Legal Guardian of the Property of Amora to recover all of Amora’s damages against the driver/owner of the vehicle that caused the car accident (the “Tortfeasor”). The Tortfeasor maintained an insurance policy with limits of $1,000,000 and had no other collectable assets. Prior to filing the lawsuit, the Tortfeasor tendered the $1,000,000 insurance policy limit in compromise and settlement of Amora’s claim for damages. No evidence or testimony was presented at the final hearing indicating that a specific portion of the $1,000,000 settlement was designated to cover past medical expenses. Neither was there any evidence or testimony offered segregating the $1,000,000 settlement between medical and non-medical expenses. The Agency was not a party to the settlement or settlement agreement. When notified of Ms. Gonzalez’s recovery on behalf of Amora, the Agency asserted a Medicaid lien for $108,656.31, the full amount of its medical expenses paid for Amora’s medical costs and services. This administrative proceeding centers on the amount the Agency should be reimbursed to satisfy its Medicaid lien following Petitioner’s recovery of $1,000,000 from a settlement with a third party. Under section 409.910, the Agency may be repaid for its Medicaid expenditures from any recovery from liable third parties. The Agency claims that, pursuant to the formula set forth in section 409.910(11)(f), it should collect the full amount of its Medicaid lien ($108,656.31) regardless of the actual value of Petitioner’s damages. Using the section 409.910(11)(f) formula, the Agency subtracted a statutorily recognized attorney fee of $250,000 from $1,000,000 leaving $750,000. One-half of $750,000 is $375,000. Because the $375,000 formula amount exceeds the Medicaid lien, the Agency seeks the full $108,656.31. Petitioner asserts that, pursuant to section 409.910(17)(b), the Agency should be reimbursed a lesser portion of Petitioner’s recovery than the amount it calculated under section 409.910(11)(f). Petitioner specifically argues that the Medicaid lien must be reduced pro rata, taking into account the full value of Amora’s injuries which Petitioner calculates as $8,000,000. Otherwise, application of the default statutory formula under section 409.910(11)(f) would permit the Agency to collect more than that portion of the settlement representing compensation for medical expenses. Petitioner maintains that such reimbursement violates the federal Medicaid law’s anti-lien provision, 42 U.S.C. § 1396p(a)(1). Petitioner contends that the Agency’s allocation from Petitioner’s recovery should be reduced to the amount of $13,590.66. To establish the full value of Amora’s injuries, Petitioner presented the testimony of attorneys Paul Catania and Vince Barrett. Mr. Catania represented Petitioner in the underlying personal injury claim and obtained the $1,000,000 settlement for Amora. Mr. Catania explained that prior to finalizing the settlement, he explored the possibility of collecting a verdict in excess of the policy limits. Mr. Catania concluded that not only were the defendants uncollectable, but multiple claimants were going after the same insurance proceeds. Consequently, Mr. Catania believed that it was in his clients’ best interest to settle expeditiously for the tendered insurance policy limits. Mr. Catania also opined on what he considered to be the actual value of Amora’s damages. Mr. Catania heads a plaintiff’s injury firm and has represented plaintiffs in personal injury cases for over 28 years. Mr. Catania has extensive experience handling cases involving automobile accidents, including catastrophic injury claims and traumatic brain injuries to children. Mr. Catania expressed that he routinely evaluates damages suffered by injured parties as part of his practice. He stays current on jury verdicts throughout Florida and the United States. Mr. Catania was accepted as an expert in the valuation of damages suffered by injured parties. Mr. Catania valued Amora’s damages as conservatively between $8,000,000 and $10,000,000. In deriving this figure, Mr. Catania reviewed the neuro psychological report in Amora’s discharge summary, as well as the subsequent neuro psychological updates that were performed on Amora approximately one year later. Mr. Catania noted Amora’s memory problems, inattention, hyperactivity, and behavioral issues. Mr. Catania relayed how these deficits will affect Amora’s ability to learn and be gainfully employed over her lifetime. Amora will need ongoing speech and occupational therapy. Mr. Catania also considered Amora’s past medical expenses, her wage loss or lost wage capacity, and her past and future pain and suffering. Finally, Mr. Catania testified that, in placing a dollar value on Amora’s injuries, he reviewed nine jury verdicts involving catastrophic injuries similar to Amora’s. Based on these sample results, Mr. Catania was comfortable valuing Amora’s damages conservatively in the $8 million to $10 million range given her injuries and her life expectancy. Mr. Catania testified that the $1,000,000 settlement did not fully or fairly compensate Amora for her injuries. Therefore, Mr. Catania urged that a lesser portion of Petitioner’s settlement be allocated to reimburse the Agency instead of the section 409.910(11)(f) formula amount of $108,656.31. Mr. Catania proposed applying a ratio based on the true value of Amora’s injuries ($8,000,000) compared to the amount Petitioner actual recovered ($1,000,000). Using his estimate of $8 million, the settlement represents a 12.5 percent recovery of the total value of all Amora’s damages. In like manner, the amount of medical expenses should also be reduced to 12.5 percent or $13,590.66. Therefore, in Mr. Catania’s professional judgment, $13,590.66 is the portion of Amora’s settlement that represents her compensation for past medical expenses. Mr. Catania testified that no portion of the settlement represents future medical expenses.2/ Mr. Catania expressed that allocating $13,590.66 for Amora’s past medical expenses is “reasonable” and “rational” under the circumstances. Mr. Barrett also testified on behalf of Petitioner. Mr. Barrett is a trial attorney with almost 40 years’ experience and works exclusively in the area of plaintiff’s personal injury, medical malpractice, and medical products liability cases. Mr. Barrett has handled many catastrophic injury matters involving catastrophic injuries and traumatic brain injury to children. Mr. Barrett was accepted as an expert in valuation of damages in personal injury cases. Prior to the final hearing, Mr. Barrett had reviewed Amora’s medical records, as well as Petitioner’s exhibits. He also reviewed the sample jury verdicts Petitioner presented at the final hearing as Exhibit 14. Based on his valuation of Amora’s injuries and his professional training and experience, Mr. Barrett expressed that injuries similar to Amora’s would result in jury awards averaging between $8 and $20 million dollars. In light of Amora’s “catastrophic” injuries, Mr. Barrett valued Amora’s injuries as at least $8 million. Mr. Barrett opined that Mr. Catania’s valuation of $8 million to $10 million was appropriate, if conservative. Mr. Barrett supported Mr. Catania’s proposed method of calculating a reduced portion of Petitioner’s $1,000,000 to represent past medical expenses. With injuries valued at $8 million, the $1,000,000 settlement only compensated Amora for 12.5 percent of the total value of her damages. Therefore, because Amora only recovered 12.5 percent of her damages, the most “reasonable and rational” manner to apportion the $1,000,000 settlement is to apply that same percentage to determine Amora’s recovery for past medical expenses. Petitioner asserts that applying the same ratio to the total amount of medical costs produces a definitive value of that portion of Petitioner’s $1,000,000 settlement that represents compensation for past medical expenses, i.e., $13,590.66 ($108,725.29 times 12.5 percent). The undersigned finds that the competent substantial evidence in the record establishes, clearly and convincingly, that the full value of Amora’s injuries is $8 million. However, the evidence in the record is not sufficient to prove that a lesser portion of Petitioner’s $1,000,000 settlement recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated pursuant to the formula set forth in section 409.910(11)(f). Accordingly, the Agency is entitled to recover $108,656.31 from Petitioner’s recovery from a third party to satisfy its Medicaid lien.
The Issue The issue to be determined is the amount Respondent, Agency for Health Care Administration (“AHCA”), is to be reimbursed for medical expenses paid on behalf of Jonathan M. Martel (“Petitioner” or “Mr. Martel”) pursuant to section 409.910, Florida Statutes (2018).1
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. Martel was catastrophically and permanently injured on February 14, 2019, when another vehicle struck his motorcycle. Mr. Martel was behind a truck on a two-lane road, and the truck swung out wide to make a right turn. There was a collision as Mr. Martel was trying to pass the truck on the right. Mr. Martel, who was in his 30’s at the time, suffered severe orthopedic injuries along with catastrophic brain damage leaving him unable to ambulate or care for himself in any manner. He will need continuous care for the rest of his life. The Medicaid program, through AHCA, paid $261,318.10 to cover the medical care related to Mr. Martel’s injuries. Accordingly, $261,318.10 constitutes Mr. Martel’s entire claim for past medical expenses. Through his guardian, Mr. Martel pursued a personal injury claim against the parties (“the Defendants”) allegedly liable for his injuries. The Defendants maintained insurance coverage with policy limits of $510,000.00 and had no other collectible assets. Mr. Martel settled his personal injury claim via a series of confidential settlements resulting in an unallocated, lump-sum amount of $510,000.00. In other words, the settlement did not identify how the lump-sum amount was allocated between components of damages, such as past medical expenses, economic damages, and noneconomic damages. During the pendency of Mr. Martel’s personal injury claim, AHCA asserted a $261,318.10 Medicaid lien against Mr. Martel’s cause of action and any settlement of that action. That amount represents the sum that the Medicaid program, through AHCA, spent on Mr. Martel’s behalf for his past medical expenses. AHCA did not initiate a civil action to enforce its rights under section 409.910. Nor did AHCA intervene in or join Mr. Martel’s claim against the Defendants. AHCA, via letter, received notice of Mr. Martel’s settlement, but AHCA has not moved to set-aside, void, or otherwise dispute Mr. Martel’s settlement. Mr. Martel incurred $124.00 in taxable costs securing the settlement. Applying the formula in section 409.910(11)(f) to Mr. Martel’s $510,000.00 settlement would require a payment of $191,188.00 to AHCA. Mr. Martel deposited $191,188.00 into an interest-bearing account for AHCA’s benefit pending an administrative determination of AHCA’s rights. Valuation of the Personal Injury Claim Jack Fine represented Mr. Martel during the personal injury action. Mr. Fine has practiced law since December of 1976. He is a partner with the firm of Fine, Farkash, and Parlapiano in Gainesville, Florida, where he represents plaintiffs with catastrophic injuries. His primary practice areas are premises liability and vehicular accidents. Mr. Fine routinely assesses the value of damage claims, and he does so by examining medical records, meeting with clients, and then comparing the information he collected against what similarly situated plaintiffs have recovered as damages. Mr. Fine is a member of the American Board of Trial Advocates and the Florida Justice Association. He uses his membership in the latter organization to stay current on jury verdicts. Mr. Fine testified that $20 million would be a conservative valuation of Mr. Martel’s injuries: Q: Did you develop an opinion concerning the full value of [Mr. Martel’s] damages? A: Well, sure. The full value of his damages were incalculable. I mean, the case is worth tens of millions of dollars. We have this jury verdict survey here of cases where the – where the verdicts are in excess of $20 million, and the – I do believe that the case – you know, $20, $30, $40 million is a fair amount because the injuries were so incredibly substantial and horrible in terms of turning a person from a functioning human being to someone who needs to be cared for like a baby, basically. Q: So a range between $20 and $40 million would be an appropriate valuation of Mr. Martel’s damages? A: I think that’s reasonable, yes. On cross-examination, Mr. Fine reiterated his earlier testimony regarding the value of Mr. Martel’s damages: Q: You testified regarding the full value of Mr. Martel’s damages, and I believe you stated that the full value of his damages are incalculable. Do you agree with that? A: Well, it’s the job of the jury to calculate the damages. When I said the damages are “incalculable,” what I meant to say or what I meant to imply was this is like the worst thing that could happen to a person. So in terms of calculating the damages, picture the very worst thing that could happen to an individual. That’s – that’s sort of what I meant. Did I mean to say that the damages can’t be figured out or a jury couldn’t figure out or a lawyer can’t figure out what the approximate value is? That’s not what I meant. Q: All right and then you talked about a range of about $20- to $40 million. Do you have a breakdown for each element of Mr. Martel’s damages, what they would be worth? A: No, I don’t. I think the primary element of damages that is so incredibly severe is the pain- and-suffering component, because his life was just totally destroyed and he – you know, he went from being a dad and a functioning individual to someone who literally can’t partake in your everyday human experiences that we all take for granted. He can’t get out of bed and make breakfast. He can’t – he can’t hug a relative with any sort of knowledge. He – it’s just a really horrible situation. And I think that that component of the damages would be – would be the pain and suffering. * * * We know he needs 24/7 care, and we know that there were just a great number of orthopedic injuries as well. You know more than that, I can’t really give you. Q: For how long does he need 24/7 care? A: Based on my experience in dealing with these cases, the rest of his life. He is just profoundly – my experience with the brain injury – let me explain a little bit more. My experience with the brain injury cases is that when an individual awakes from the coma, very often they gradually improve. I have one case where a young lady was comatose for a couple months. They were talking about terminating care – pulling the plug, basically. She woke up from the coma. Today, although she walks with a limp and speaks with a slur, she is a proud mother of two, like an 8-year-old and a 10-year-old. She really pulled it together and did great. But you see – people who are going to get better, you see them get better in the six months, eight months [after the accident]. Afterward they start progressing. This is not one of those cases. He was not getting better. I would not expect him to ever get better because the injury was so profound. Of course, I am a -- I’m a lawyer, not a doctor, and I always tell my clients, “Don’t take your medical advice from a lawyer; take it from a doctor.” But based on my experience with these cases, as well as the medical records that I’ve reviewed, it’s 24/7 for the rest of his life. It’s just a horrible, permanent injury. With Mr. Martel’s damages being conservatively estimated at $20 million, Mr. Fine testified that Mr. Martel only recovered 2.55 percent of his damages via the settlement. Accordingly, under what shall hereinafter be referred to as “the pro rata approach,” Mr. Martel only recovered 2.55 percent, or $6,663.61, of his total past medical expenses of $261,000.00 Mr. Fine offered the following testimony regarding the rationale behind the pro rata approach: Q: Now, we were using that 2.55 percent ratio, and we’re applying that ratio to the claim for past medical expenses; is that correct? A: Yes. Q: And it’s easy for us to do that math because we have a firm and hard number stipulated to in this proceeding as to the value of the claim for past medical expenses, $261,000. That’s known; is that correct? A: Yes. Q: Now, my understanding’s that, using that same ratio theory, the 2.55 percent, could be applied to the claim for past pain and suffering, the claim for future medical – or future medical expenses, the claim for future pain and suffering, all of the other elements that could be on a jury verdict form, but in this particular case, we don’t have specific numbers for each one of them; is that correct? A: Yes. Q: All right. Now, I’m going to give you a hypothetical to demonstrate this. If this case went to a jury and a jury awarded $20 million in damages, and on that jury verdict form they listed out a value for pain and suffering – past and future – a value for future medical expenses, a value for lost earnings, and then, of course, $261,000 for past medical expenses, and at the bottom of that jury verdict form it came out to $20 million, but then they also determined that the defendant was only 2.55 percent liable, under that fact pattern, that defendant would only have to pay 2.55 percent of each one of those elements of damages is that correct? A: That is correct. Q: All right. So that 2.55 percent ratio would apply to each individual element of damages; is that correct? A: Yes. R. Vincent Barrett has practiced law since 1977 and is currently a partner with the firm of Barrett, Nonni, and Homola. He handles medical malpractice, pharmaceutical product liability, and catastrophic injury cases. Like Mr. Fine, Mr. Barrett is a member of the Florida Justice Association, and he stays current with jury verdicts. As part of his work, Mr. Barrett routinely assesses the value of damages suffered by injured parties. Mr. Barrett has been recognized as an expert in the valuation of damages and the allocation of settlements at DOAH over 30 times. With regard to the severity of Mr. Martel’s injuries, Mr. Barrett testified that: he has the worst possible kind of injuries. He’s a brain injury patient that can’t talk, can’t understand, can respond sometimes to simple commands that are repeatedly given. But he’s – he’s totally, absolutely, unconditionally just brain injured and – so he requires 24/7 care. Tragic injury. Mr. Barrett further testified that $20 million is a conservative valuation of Mr. Martel’s damages and that the actual value of his damages could be as high as $40 million. Accordingly, Mr. Barrett agreed with Mr. Fine’s assessment that Mr. Martel only recovered 2.55 percent of his full damages. As for ascertaining what portion of Mr. Martel’s settlement should be allocated to past medical expenses, Mr. Barrett also relied on the pro rata approach by opining that it would be reasonable to determine that Mr. Martel recovered 2.55 percent, i.e., $6,663.61, of the $261,318.10 of past medical expenses that Medicaid paid on his behalf: Q: So using $20 million as the full value of all of the damages, what percentage of those damages were recovered in the settlement? A: I believe it was 2.55 percent. Q: Now, turning to an allocation of past medical expenses, applying that same ratio, that 2.55 percent to the $261,000 claim for past medical expenses, that would result in $6,663 being allocated to past medical expenses; is that correct? A: Yeah, plus 61 cents. Q: Now, do you believe it would be reasonable to allocate $6,663 to past medical expenses? A: Yes, I do. Q: All right. Now, do you believe that that allocation would be conservative because we’re basing this calculation on a conservative value of all damages? A: Yes, it has to be. Q: All right. Now, this allocation method that we’re using, applying the same ratio of settlement to the full value of all damages, applying that same ratio to the claim for past medical expenses, that’s consistent with how you have testified in other allocation hearings here at [DOAH]? A: Yes, sir, over 30. * * * Q: Now, just to recap, $6,663.61 would be the amount allocable to past medical expenses, and you believe that would be a reasonable and fair allocation? A: Yes, I do. Findings Regarding the Testimony Presented at the Final Hearing The undersigned finds that the testimony from Mr. Fine and Mr. Barrett2 was compelling and persuasive as to: (a) the total damages incurred by Mr. Martel; (b) that Mr. Martel only recovered 2.55 percent of his total damages; and (c) that Mr. Martel only recovered 2.55 percent of his past medical expenses. The pro rata approach, the ratio resulting 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 a settlement. 2 Petitioner did not offer Mr. Fine and Mr. Barrett as expert witnesses during the final hearing. However, Petitioner noted in the Joint Pre-hearing Stipulation that Mr. Fine would be testifying as a fact and expert witness. Petitioner also noted in the Joint Pre-hearing Stipulation that Mr. Barrett would be testifying as an expert witness. Moreover, Respondent did not object when Mr. Fine and Mr. Barrett offered opinion testimony. As a result, the undersigned has elected to consider Mr. Fine and Mr. Barrett expert witnesses in the valuation of personal injury claims. AHCA offered no evidence to counter Mr. Fine and Mr. Barrett’s opinions regarding Mr. Martel’s total damages or the past medical expenses he recovered. Accordingly, clear and convincing evidence demonstrates that the total value of Mr. Martel’s personal injury claim is no less than $20 million and that the $510,000.00 settlement resulted in him recovering no more than 2.55 percent of his past medical expenses. In addition, clear and convincing evidence demonstrates that $6,663.61 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Mr. Martel and payable to AHCA.
The Issue What is the amount to be reimbursed to Respondent, Agency for Health Care Administration (AHCA), for medical expenses paid on behalf of Petitioner Bryant (Petitioner) pursuant to section 409.910, Florida Statutes, from a personal injury settlement received by Petitioner from a third party?
Findings Of Fact Factual Allegations that Served As a Basis for the Underlying Personal Injury Litigation On March 11, 2009, Petitioner, then 21 years old, suffered catastrophic physical injury and brain damage when her bicycle was struck by a car near the Oakland Park I-95 overpass in Broward County. Petitioner was taken to the North Broward Hospital, where she was intubated with mechanical ventilation. Imaging revealed a right subdural hematoma, and Petitioner showed signs of increased intracranial pressure. On March 12, 2009, Petitioner underwent bilateral frontoparietal craniotomies through separate incisions with evacuation of a left parietooccipital epidural hematoma and right frontal temporoparietal subdural hematoma; bilateral duraplasty to accommodate brain swelling; and repair of a left occipital laceration. On that same date, a CT scan revealed that Petitioner had numerous pelvic and hip fractures. Petitioner underwent an upper gastrointestinal endoscopy with a PEG tube placement. Eventually, her medical condition stabilized and she was discharged to rehabilitation. Petitioner is now unable to move the left side of her body. She receives her nutrition through a g-tube and is bowel and bladder incontinent. She suffers from cognitive deficits. Petitioner is cognizant of her condition and her surroundings, but has extreme difficulty with communication. Petitioner is severely disabled and unable to ambulate or care for herself in any manner. Prior to the accident, Petitioner was a healthy 21-year-old. It is anticipated that Petitioner's life span will be approximately another 60 years, her condition is permanent, and she will always need full-time medical care. The Personal Injury Litigation Due to Petitioner's incapacity, Freda Bryant (Bryant) was appointed the guardian of the person and property of Petitioner. As Petitioner's guardian, Bryant brought a personal injury action to recover all of Petitioner's damages against the company responsible for maintaining the lights on the highway where Petitioner's accident occurred ("Defendant"). Freda Bryant retained the Krupnick, Campbell, Malone, et al., law firm of Fort Lauderdale, a firm concentrating in the areas of catastrophic personal injury, wrongful death, and products liability. The Medicaid Lien Petitioner is a Medicaid recipient and her medical care was paid for by Medicaid. AHCA, through the Medicaid program, paid $404,399.68 on behalf of Petitioner for medical benefits related to the injuries sustained by Petitioner. This $404,399.68 paid by Medicaid represented Petitioner's entire claim for past medical expenses up until the time of settlement. During the pendency of Petitioner's personal injury action, AHCA was notified of the action and AHCA, through its collections contractor Xerox Recovery Services, asserted a $404,399.68 Medicaid lien against Petitioner's cause of action and settlement of that action. Valuation of the Personal Injury Claim Joseph Slama (Slama), the attorney representing Petitioner in her personal injury action, prepared an evaluation of her claim in preparation for trial and/or settlement negotiations. Slama has extensive experience representing parties in catastrophic personal injury, wrongful death, and product liability cases since 1982. Slama has practiced in this field for 33 years, is a board-certified civil trial attorney, first certified in 1987, who has litigated hundreds of these types of cases. Slama is a member of the American Board of Trial Advocates (ABOTA), the Florida chapter of ABOTA (FLABOTA), Attorneys Information Exchange Group, Florida Justice Association, Broward Justice Association, and the Florida Bar. Slama was offered and accepted, without objection, as an expert in the valuation of damages in catastrophic injury cases. In making the determination regarding the valuation of Petitioner's personal injury claim, Slama reviewed Petitioner's medical records, accident report, prepared fact and expert witnesses for trial, and personally interacted with Petitioner on multiple occasions. Slama is very familiar with the injuries suffered by Petitioner and her need for constant care. Slama was present during the filming of Petitioner's "Day in the Life" video which was intended to be shown to the jury if Petitioner's case went to trial. Slama also reviewed Petitioner's economic damages report prepared by an economist1/ and is familiar with the mental pain and suffering Petitioner experiences as a result of her ability to understand the change in her life from a normal functioning individual to someone requiring total care for the rest of her life. To properly determine the value of Petitioner's claim, Slama researched Florida jury verdicts in personal injury cases with catastrophic brain injuries for young people requiring total care. Slama reviewed five comparable cases with verdicts for the plaintiff. The average jury award per plaintiff in these five cases was $51,474,346.00, and the average pain and suffering component of that award was $28,735,850.00. The case most closely comparable to that of Petitioner was the 2014 case of Mosley v. Lloyd, Case No. CACE09-025532, 2014 WL 7910512, a Broward County Circuit Court trial in which the jury awarded $75,543,527.00, of which $39,500,000.00 represented damages for past and future pain and suffering. Another similar case was that of Lymans v. Bynum Transportation, Case No. 2007CA-007728, 2009 WL 9051959, decided by a Pasco County jury. According to Slama, Pasco County juries are generally considered very conservative. In the Lymans case, a 21-year-old sustained a catastrophic brain injury resulting in her requiring 24/7 total care, much like the Petitioner. The jury awarded $65,000,000.00, of which $41,000,000.00 represented damages for pain and suffering. Based upon the five verdicts, including the Mosley and Lymans jury verdicts, review of the medical records, extensive personal interaction with Petitioner, and his personal experience and knowledge in valuing catastrophic personal injury cases from decades of practice in this field, Slama conservatively valued the damages for mental pain and suffering to be $15 million or greater. Slama acknowledged litigation risk issues with this personal injury action, which included a reduction or elimination of liability based on the defense of contributory negligence and a statutory restriction on liability for a utility company unless there was prior written notice to the utility company of deficient lighting. Slama consulted Allen McConnaughhay, Esquire, an attorney with the Tallahassee law firm of Fonvielle, Lewis, Foote & Messer, for an independent assessment of Petitioner's claim. McConnaughhay has practiced in the field of catastrophic personal injury cases for 15 years. He was offered and accepted, without objection, as an expert in the field of valuation of catastrophic injury cases. McConnaughhay explained that his firm, like that of Slama, relies on the expertise of its partners, a review of the injured party's medical records, research of jury verdicts in comparable cases, and it conducts a roundtable discussion to determine the value of a catastrophic personal injury claim. McConnaughhay and his partners engaged in such review of Petitioner's claim and found that a figure in excess of $50 million was a proper value for her pain-and-suffering damages. McConnaughhay opined that the $15 million figure ascertained by Slama was extremely conservative. The Settlement Allocation On May 18, 2015, Bryant settled Petitioner's personal injury lawsuit for $1,164,000. Given the facts of this case, the figure agreed upon was supported by the competent professional judgment of the trial attorneys in the interests of their clients. There is no evidence that the monetary figure agreed upon by the parties represented anything other than a reasonable settlement, taking into account all of the strengths and weaknesses of their positions. There was no evidence of any manipulation or collusion by the parties to minimize the share of the settlement proceeds attributable to the payment of costs expended for Petitioner's medical care by AHCA. The General Release with the settling Defendants stated, inter alia: Although it is acknowledged that this settlement does not fully compensate Petitioner Bryant for all of the damages she has allegedly suffered, this settlement shall operate as a full and complete Release as to Released Parties without regard to this settlement only compensating Petitioner Bryant for a fraction of the total monetary value of her alleged damages. The parties agree that Petitioner Bryant's alleged damages have a value in excess of $15,000,000, of which $404,399.68 represents Petitioner Bryant's claim for past medical expenses. Given the facts, circumstances, and nature of Petitioner Bryant's injuries and this settlement, the parties have agreed to allocate $31,381.42 of this settlement to Petitioner Bryant's claim for past medical expenses and allocate the remainder of the settlement towards the satisfaction of claims other than past medical expenses. This allocation is a reasonable and proportionate allocation based on the same ratio this settlement bears to the total monetary value of all Petitioner Bryant's damages. Further, the parties acknowledge that Petitioner Bryant may need future medical care related to her injuries, and some portion of this settlement may represent compensation for future medical expenses Petitioner Bryant will incur in the future. However, the parties acknowledge that Petitioner Bryant, or others on her behalf, have not made payments in the past or in advance for Petitioner Bryant's future medical care and Petitioner Bryant 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. Because Petitioner was incapacitated, court approval of the settlement was required. Accordingly, on June 4, 2015, the Honorable Circuit Court Judge Cynthia Imperato approved the settlement by entering an Order Approving Settlement. By letter of May 26, 2015, Petitioner's personal injury attorney notified AHCA of the settlement and provided AHCA with a copy of the executed Release, Order Approving Settlement, and itemization of Petitioner's $75,852.90 in litigation costs. This letter explained that Petitioner's damages had a value in excess of $15,000,000, and the settlement represented only a 7.76 percent recovery of Petitioner's $404,399.68 claim for past medical expenses. This letter requested AHCA to advise as to the amount AHCA would accept in satisfaction of the $404,399.68 Medicaid lien. AHCA responded to Petitioner's attorney's letter by letter of June 25, 2015, and demanded a "check made payable to 'Agency for Health Care Administration' in the amount of $404,399.68." AHCA has not filed an action to set aside, void, or otherwise dispute Petitioner's settlement. AHCA has not commenced a civil action to enforce its rights under Section 409.910, Florida Statutes. No portion of the $404,399.68 paid by AHCA through the Medicaid program on behalf of Petitioner represents expenditures for future medical expenses, and AHCA did not make payments in advance for medical care. AHCA has determined that of Petitioner's $75,852.90 in litigation costs, $63,375.06 are taxable costs for purposes of the section 409.910(11)(f) formula calculation. Based on $63,375.06 in taxable costs, the section 409.910(11)(f) formula applied to Petitioner's $1,164,000 settlement, results in $404,812.47 payable to AHCA in satisfaction of its $404,399.68 Medicaid lien. Because $404,399.68 is less than the $404,812.47 amount derived from the formula in section 409.910(11)(f), AHCA is seeking reimbursement of $404,399.68 from Petitioner's settlement in satisfaction of its Medicaid lien. 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, which constitutes "final agency action" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Petitioner proved by clear and convincing evidence that the $15 million total value of the claim was a reasonable and realistic value. Furthermore, Petitioner proved by clear and convincing evidence, based on the relative strengths and weaknesses of each party's case, and on a competent and professional assessment of the likelihood that Petitioner would have prevailed on the claims at trial and the amount she reasonably could have expected to receive on her claim if successful, that the amount agreed upon in settlement of Petitioner's claims constitutes a fair, just, and reasoned settlement, including $31,381.42, the amount attributable to the Medicaid lien for medical expenses as its 7.76 percent proportionate share of the total settlement.
The Issue What is the proper amount of Petitioner's personal injury settlement payable to Respondent, Agency for Health Care Administration ("AHCA"), to satisfy AHCA's $191,298.99 Medicaid lien under section 409.910(17)(b), Florida Statutes.
Findings Of Fact Based on the stipulations of the parties, the evidence presented at the hearing, and the record as a whole, the following findings of fact are made: On August 9, 2018, Petitioner, Russell Wellington ("Wellington"), who was 59 years old, was driving a motorcycle in the inside northbound lane of U.S. Highway 1 at or near mile marker 99 in Monroe County, Florida. A vehicle driven by JI Young Chung ("Chung"), and owned by a car rental company, was northbound in the outside lane on U.S. Highway 1. Chung turned left into Wellington’s motorcycle causing him to be ejected from the motorcycle. As a result of the accident, Wellington sustained catastrophic injuries including a right leg amputation, a fractured pelvis, fractured humerus, fractured ribs, kidney failure, and a head injury. Wellington is now disabled and unable to work. JPHS p. 10, ¶1. Wellington’s medical care related to the injury was paid by Medicaid, and Medicaid, through AHCA, provided $191,298.99 in benefits. This $191,298.99 constituted Wellington’s entire claim for past medical expenses. JPHS p. 10, ¶2. Wellington pursued a personal injury claim against the driver and owner of the car that struck his motorcycle (“tortfeasors”) to recover all his damages. JPHS p. 10, ¶3. The other driver, Chung, maintained an insurance policy with only $100,000 in insurance limits, and had no other recoverable assets. The rental company that owned the vehicle maintained an insurance policy with only $10,000 in insurance limits. Wellington’s personal injury claim against the tortfeasors was settled for an unallocated lump sum amount of $110,000.00. JPHS p. 10, ¶4. As a condition of Wellington’s eligibility for Medicaid, Wellington assigned to AHCA his right to recover from liable third-parties medical expenses paid by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) ; § 409.910(6)(b), Fla. Stat. During the pendency of Wellington’s personal injury claim, AHCA was notified of the claim and asserted a $191,298.99 Medicaid lien against Wellington’s cause of action and settlement of that action. JPHS p. 10, ¶5. AHCA did not commence a civil action to enforce its rights under section 409.910 or intervene or join in Wellington’s claim against the tortfeasors. JPHS p. 10, ¶6. By letter, AHCA was notified of Wellington’s settlement. JPHS p. 10, ¶7. AHCA has not filed a motion to set-aside, void, or otherwise dispute Wellington’s settlement. JPHS p. 10, ¶8. The Medicaid program, through AHCA, spent $191,298.99 on behalf of Wellington, all of which represents expenditures paid for Wellington’s past medical expenses. JPHS p. 10, ¶9. Wellington’s taxable costs incurred in securing the $110,000.00 settlement totaled $766.78. JPHS p. 10, ¶10. Application of the formula at section 409.910(11)(f) to Wellington’s $110,000.00 settlement requires payment to AHCA of $40,866.61. JPHS p. 11, ¶11. Petitioner has deposited the section 409.910(11)(f) formula amount in an interest bearing account for the benefit of AHCA pending an administrative determination of AHCA’s rights, and this constitutes “final agency action” for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). JPHS p.11, ¶12. Testimony of Steven G. Jugo, Esquire Steven G. Jugo, Esquire ("Jugo"), was called by Petitioner. He has been an attorney for 41 years and practices with the law firm of Jugo & Murphy in Miami, Florida. For the past 37 years, Jugo has practiced exclusively plaintiff’s personal injury, medical malpractice, and wrongful death law. He routinely handles jury trials and cases involving catastrophic injury. He is familiar with reviewing medical records, reviewing accident reports, and deposing fact and expert witnesses. He stays abreast of jury verdicts in his geographic area by reviewing jury verdict reporters and discussing cases with other trial attorneys. He is a member of several trial attorney organizations including the Florida Justice Association and the American Association for Justice. As a routine part of his practice, Jugo makes assessments concerning the value of damages suffered by injured clients. He briefly explained his process for making these determinations. Jugo is familiar with, and routinely participates in, processes involving the allocation of settlements in matters including health insurance liens, workers' compensation liens, and Medicare set-asides, as well as, allocations of judgments made by judges post-verdict. Jugo represented Wellington in his underlying personal injury claim. Jugo reviewed the accident report, reviewed Wellington’s medical records, met with Wellington numerous times, and deposed the driver of the vehicle that struck Wellington’s motorcycle. As a result of the accident, Wellington underwent many surgeries and extensive medical intervention. Jugo felt that Wellington’s injuries have tremendously impacted his life in a negative way. He explained that Wellington is no longer able to work and he is no longer able to adequately care for or play with the three young children he adopted. Without objection by AHCA, Jugo testified that based on his professional training and experience, it was his opinion that a very conservative value for Wellington’s damages would be $4 million. Jugo explained that his valuation of Wellington’s total projected damages was based on his experience, his comparison of Wellington’s case to similar jury verdicts, and discussions about the case with other attorneys. He explained that the jury verdicts outlined in Petitioner’s Exhibit 9 were comparable to Wellington’s case and supported his valuation of Wellington’s total and projected damages in this case. Jugo detailed that about 70 percent of the verdicts he reviewed which were similar in nature, were in the $5 million range. He opined that this demonstrated that Wellington’s total and projected damages would also have a minimum value of $4 million. Jugo discussed the value of Wellington’s damages with other attorneys, and they agreed with the valuation of Wellington’s total projected damages being in excess of $4 million. Wellington’s personal injury claim was brought against the driver and the rental car company that owned the vehicle which struck Wellington’s motorcycle. The vehicle driver, Chung, maintained an insurance policy with only $100,000.00 in coverage, and had no other recoverable assets. Jugo explained that because the vehicle was owned by a rental car company, the law shielded the rental car company from suit. Nonetheless, he explained that the rental car company had a $10,000.00 insurance policy it made available. As a result, the total settlement was $110,000.00. Jugo believed that the personal injury settlement did not fully compensate Wellington for all of his projected personal injury damages. Without objection by AHCA’s counsel, Jugo testified that based on a conservative value of all damages of $4 million, Wellington recovered in the settlement only 2.75 percent of the value of his total and projected damages. Again, without objection, he testified that because Wellington recovered only 2.75 percent of his total and projected damages, he recovered in the settlement only 2.75 percent of his $191,298.99 claim for past medical expenses, or $5,260.72. Jugo also testified that it would be reasonable to allocate $5,260.72 of the settlement to past medical expenses, stating “[t]hat’s the maximum amount I believe should be allocated to past medical expenses.” Testimony of R. Vinson Barrett, Esquire R. Vinson Barrett, Esquire ("Barrett"), has been a trial attorney for over 40 years. He is a partner with the law firm of Barrett, Nonni and Homola, P.A., in Tallahassee. His legal practice is dedicated to plaintiff’s personal injury and wrongful death cases. He has handled cases involving automobile accidents and catastrophic injuries. Barrett routinely handles jury trials. Barrett stays abreast of jury verdicts by periodically reviewing jury verdict reports and discussing cases with other trial attorneys. He is a member of the Florida Justice Association and the Capital City Justice Association. As a routine part of his practice, Barrett makes assessments concerning the value of damages suffered by injured parties. He briefly explained his process for making these assessments. It has been part of his law practice to gain familiarity with settlement allocation involving health insurance liens, Medicare set-asides, and workers’ compensation liens. He is also familiar with the process of allocating settlements in the context of Medicaid liens, and he described that process. Barrett has been accepted as an expert in the valuation of personal injury damages in federal court, as well as numerous Medicaid lien hearings at DOAH. Barrett addressed the instant case. He was familiar with Wellington’s injuries and the circumstances resulting in the injuries. Barrett detailed the extensive nature of Wellington’s injuries and the general impact of such injuries. Barrett testified, without objection, that based on his professional training and experience, he believed Wellington’s damages had a conservative value of $4 million. More specifically, he stated, “I felt that the damages were conservatively, very conservatively, $4 Million. I believe this case, if it had gone to a jury could well have gone up into the eight figures, probably would have, I think. If I was asking for damages in this case in front of a jury, it would probably be somewhere, between $8 and 12 million or even a little higher, if I was in South Florida jurisdiction.” Barrett has been accepted as an expert in the valuation of personal injury damages in other cases at DOAH. Barrett explained that the jury verdicts outlined in Petitioner’s Exhibit 9 involved injuries comparable to Wellington’s injuries and supported his valuation of Wellington’s total and projected damages at $4 million. Barrett went on to explain that the average trial verdict and award he reviewed from Exhibit 9 was $5.5 million and the average award for pain and suffering was $3,788,333.00. Barrett believed that the jury verdict in the Nummela case, from Exhibit 9, most closely tracked Wellington’s case. Barrett explained that the injuries suffered by Nummela compared most closely with Wellington’s injuries and he noted the similarities. Barrett also pointed out that the jury in Nummela had determined that the damages had a value of $9.5 million, which Barrett testified was in line with what he believed a jury would have awarded to Wellington, if this matter had proceeded to trial. Barrett was aware that Wellington’s case had settled for the insurance policy limits of $110,000.00. He testified that this settlement amount did not fully compensate Wellington for all the personal injury damages he had suffered. Barrett testified, without objection by AHCA’s counsel, that using a conservative value of $4 million for all projected damages, the $110,000.00 settlement represented a recovery of 2.75 percent of the total and projected damages. Barrett testified, again without objection, that because only 2.75 percent of his damages were recovered in the settlement, only 2.75 percent of the $191,298.99 claim for past medical expenses was recovered by Wellington in the settlement, namely $5,260.72. Barrett testified that it would be reasonable to allocate $5,260.72 of Wellington’s settlement to his past medical expenses. Inexplicably, AHCA did not call any witnesses, present any contradictory evidence as to a lower value of Wellington’s projected or total damages, or call any witnesses to contest the methodology used to calculate the $5,260.72 allocation to past medical expenses. The unrebutted evidence supports that Wellington’s total and projected damages had a value in excess of $4 million. By applying the same ratio to AHCA's lien that the settlement ($110,000.00) bears to the total projected monetary value of all the damages ($4,000,000.00), a finding is reached that $5,260.72 of the settlement is fairly allocable to past medical expenses. Under the proportionality methodology, the $110,000.00 settlement represents a 2.75 percent recovery of the expert’s total and projected damages of $4 million ($110,000.00 is 2.75 percent of $4 million). Applying this same 2.75 percent to the $191,298.99 claim for past medical expense, the experts opined that Wellington recovered $5,260.72 in past medical expenses in the settlement.2 Of particular consequence to this case, AHCA did not call any expert witnesses, nor did it present any evidence, to rebut or contradict Petitioner's experts or proposed allocation of $5,260.72 in the settlement to past medical expenses. Likewise, AHCA did not dispute or present any persuasive evidence or arguments that Wellington’s injuries were overstated or incorrectly described by Messrs. Jugo or Barrett. 2 This methodology is commonly referred to as the proportionality test or pro-rata formula. On AHCA's cross-examination of the attorney experts, the methodology used by them to arrive at their opinion concerning a fair allocation of past medical expenses in Wellington’s settlement was not persuasively challenged or overcome by AHCA. Simply put, the amount of $5,260.72 proposed by Petitioner as a fair allocation of past medical expenses from the settlement agreement was not successfully refuted or challenged by AHCA. Under the circumstances and proof presented in this case, Petitioner proved by a preponderance of the evidence that $5,260.72 was a fair allocation of the total settlement amount to past medical expenses. AHCA failed to develop any adequate basis or evidence in the record to reject Jugo’s or Barrett’s opinion, or to reach any other conclusion concerning a fair allocation, other than the amount of $5,260.72 presented by the evidence and proposed by Petitioner.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (17b),1 Petitioner has proved that Respondent's recovery of $224,0002 in medical assistance expenditures3 from $1.4 million in proceeds from the settlement of a personal injury action must be reduced to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti Lien Statute)4; and, if so, the maximum allowable amount of Respondent's recovery.
Findings Of Fact On the evening of March 13, 2016, 28-year-old Petitioner presented at a regional hospital in eastern Kentucky, where she has lived all of her life, with a chief complaint of abdominal pain, as well as nausea and vomiting throughout the day. Petitioner reported that she had suffered intermittent 5 Most significantly, page 7 of the Prehearing Stipulation states: "Petitioner’s injuries will significantly shorten her life and will require a lifetime of medical care and will not allow her to work, likely for the remainder of her life." abdominal pain and nausea since undergoing a gastric bypass procedure seven years earlier. A physical exam revealed normal bowel sounds in all four quadrants and a nondistended abdomen. Petitioner underwent a CT scan, and the radiologist reported a normal gastrointestinal tract, other than "postoperative changes of [the] gastric bypass." Petitioner was admitted to the hospital for observation. After being released from the hospital and returning the next day,6 Petitioner complained of increased abdominal pain, although she did not have a fever, and her vital signs and white blood cell count were normal. Early on March 15, Petitioner began to vomit blood and was transferred to the intensive care unit. A second abdominal CT scan revealed a twisted bowel, which necessitated emergency surgery that resulted in the removal of her entire small intestine and part of her large intestine. The radiologist had misread the first CT scan or failed to communicate adequately the intestinal blockage from which Petitioner was suffering when she was admitted to the hospital. On March 16, Petitioner developed sepsis. She was intubated and transferred by helicopter to the University of Kentucky medical center, where she remained hospitalized until April 11. At the university medical center, Petitioner began total parenteral nutrition through a peripherally inserted central catheter (PICC) line. When discharged, Petitioner returned home, where a home health nurse visited her to provide care. A physician at the University of Kentucky medical center recommended that Petitioner consider transplant surgery at the intestinal-transplant program at Jackson Memorial Hospital in Miami (Program). An intestinal transplant is the rarest type of transplant and presents exceptional challenges in managing the potential for the rejection of the foreign organ by 6 Stipulation, p. 5. Actually, this stipulated finding is incorrect. The hospital medical records state that Petitioner was "released" from the emergency department, but to a medical-surgical bed, rather than from the hospital. In her deposition, Petitioner confirmed that her hospitalization was continuous. Petitioner Exhibit 15, p. 39. the host. The Program is one of the leading programs of its type in the United States. In July 2016, Petitioner and her mother flew to Miami to meet a Program surgeon and discuss whether she would be a good candidate for the procedure. At the time of this trip, Petitioner was so lacking in strength and stamina that she required the use of a wheelchair within the airport. The surgeon and Petitioner agreed that she would likely benefit from a transplant. Petitioner and her mother returned to Florida on September 1 to be placed on the organ-transplant waiting list and wait for a suitable organ to become available. Petitioner underwent successful intestinal-transplant surgery at Jackson Memorial on December 22 during a procedure that took five and one-half hours. At this time, the total parenteral nutrition was discontinued and PICC line removed. Petitioner was discharged from the hospital on January 9, 2017, with instructions to remain in the Miami area for at least six months so that any post-operative problems could be addressed by the Program physicians. Either by the time of discharge or one week later, a Program physician placed in Petitioner an ostomy bag for the elimination of waste. The ostomy bag typically remains in place for six months after an intestinal-transplant procedure, at which time a Program surgeon removes the bag, and the patient is released to return home. About three weeks after the transplant surgery, Petitioner became ill and exhibited abdominal discharge because she had developed a small leak in the colon, which required corrective surgery of two or three hours to trim the involved tissue. Due to post-surgical adhesions, three or four weeks after the transplant surgery is a bad time to reopen the patient, but there was no other option, and Petitioner remained hospitalized for a couple of weeks. Petitioner visited one of the Program surgeons for routine checks in early February and mid-March, and, on both occasions, the surgeon found that Petitioner was doing well and had no complaints. However, on March 28, Petitioner was readmitted to Jackson Memorial due to vomiting and dehydration. On April 21, a Program surgeon performed an exploratory laparotomy and partial gastrectomy after determining that Petitioner was experiencing gastritis from an alteration of her native stomach that had taken place during the gastric bypass. The procedure to rework this portion of the stomach took about two hours, and Petitioner remained hospitalized seven to ten days after this procedure. Finally, in late July, Petitioner underwent a two- or three-hour procedure for the removal of the ostomy bag. Petitioner remained hospitalized for a couple of weeks after this procedure. Except for the leak in the colon and the failure of the alteration of the native stomach, as well as, perhaps, the extra month that elapsed before the removal of the ostomy bag, Petitioner's post-transplant care and progress were normal for a patient who had just undergone an intestinal transplant. For the first year after a transplant, Program physicians and staff meet regularly with the transplant patient to perform lab work and educate the patient about dietary changes and medication regimes, as initially the patient is taking 20 to 40 pills daily. For the first few months, these office visits take place once or twice weekly. Eventually, the number of pills tapers off, but, based on the present state of medical science, for the rest of her life, Petitioner will have to take anti-rejection medication, which presently must be taken twice daily. Over time, the frequency of office visits is reduced. At the time of the deposition in August 2019 of the Program surgeon primarily responsible for Petitioner's care, Petitioner was having lab work done monthly, and the surgeon was seeing Petitioner every six months, which would later be reduced to every year. On March 1, 2017, Petitioner commenced a personal injury action in Kentucky against the radiologist and the regional hospital where the intestinal-removal surgery had taken place. Petitioner agreed to pay her trial counsel costs plus 33.3% of the gross recovery.7 In December 2019, prior to trial, the parties settled the case for $1.4 million, which represented the radiologist's policy limits of $1 million and $400,000 from the hospital. The liability of the radiologist was clear, but the liability of the hospital was doubtful; in fact, Petitioner's trial counsel never obtained an expert witnesses to testify that the hospital was liable. The trial court did not allocate the settlement proceeds among damages components. On April 9, 2020, Petitioner deposited in trust for the benefit of Respondent an amount equal to Respondent's lien of $224,000. According to the testimony of Petitioner's trial lawyer, paid past medical expenses totaled about $578,000, so one or more other payors paid $354,000 in addition to Respondent's Medicaid payments of $224,000.8 Future medical expenses following the settlement appear to be limited to the anti-rejection medication, which is expensive, but the record does not specify its cost. Petitioner claims a loss of earning capacity of about $1.6 million. Her trial counsel hired an economist who, in August 2019, issued a report projecting a loss in this amount. The economist's report notes that Petitioner completed high school and 45 credit hours at a local community college. She obtained a medical assistant certificate in 2012 and, as of March 13, 2016, Petitioner was working as a nursing service clerk at the regional hospital where she presented with a twisted intestine. The economist comprehensively analyzed Petitioner's earnings, including benefits, to project a loss of earnings and benefits through age 65 and pension benefits through age 82. Although the parties stipulated that 7 Stipulation, p. 7. 8 Total billed past medical expenses equaled about $1.383 million, consisting of the following items: the regional hospital--$66,000; the air ambulance--$53,000; the University of Kentucky medical center-- $206,000; miscellaneous Kentucky medical services--$29,000; and Jackson Memorial Hospital-- $1.029 million. Petitioner's life expectancy will be "significantly" shortened,9 as explained in the Conclusions of Law, the loss of future earnings or earning capacity is determined by using the life expectancy immediately prior to the actionable injury, so the terms of the economist's calculations were proper. Notwithstanding persuasive evidence to the contrary in the record, the findings are controlled by the parties' stipulation that Petitioner likely will never work again.10 The economist assumed as much based on the report of a "vocational expert," who issued an "employability evaluation" on February 12, 2019, determining that Petitioner was permanently totally disabled in terms of future employment. The employability evaluation consisted of an interview with Petitioner, vocational testing, and a review of background information, which did not include the deposition of Petitioner's Program surgeon, as it took place later in the same year. Although the stipulation renders the employability evaluation irrelevant as to the issue of Petitioner's ability to return to gainful employment, the employability evaluation is useful in assessing Petitioner's claim for pain and suffering damages. In the interview, which took place about one month prior to the issuance of the report or just over two years after the intestinal-transplant surgery, Petitioner reported that she could drive for one to two hours, but experienced pain and had to stop to use the restroom, which she invariably had to use while and after eating. Petitioner stated that, daily, she had to use the restroom six to ten times and experienced pain in her stomach and lower back. Petitioner also reported anxiety, depression, dehydration, chronic weakness, fatigue, and cognitive difficulties, including brain fog, difficulty concentrating and memory problems. Petitioner stated that she could not lift any weight, was unable to sit for more than three hours or stand for more than one hour, and could walk only short distances. Petitioner denied that a course of physical therapy had 9 See footnote 5. produced any relief. Believing that her condition was not improving, Petitioner opined that she could not perform any work due to pain and the need to use the restroom, although, later contradicting herself, she testified that she had thought about going into nursing. The evaluator interpreted a series of ability and aptitude tests to mean that, without regard to any physical disability, Petitioner could return to the "semi-skilled" work that she had performed since graduating from high school, but failed to address her suitability for a nursing program. After considering Petitioner's physical disability, the evaluator concluded that Petitioner was precluded from further employment, even though he lacked any apparent basis for inferring that Petitioner had reached maximum medical improvement. Petitioner filed portions of the transcript of her deposition, which was taken on October 26, 2018--ten months after the transplant surgery. Petitioner testified that she was receiving disability benefits from the Social Security Administration. She understandably did not recall much of March 2017, but she failed to describe her daily activities or her condition, such as her cognitive function, fatigue, and level of pain, prior to moving to south Florida for one year for the transplant surgery, during the year in south Florida, and after her return to Kentucky. She and her husband divorced sometime after the March 2017 surgery, but Petitioner had been dating someone for the three months preceding her deposition. As of the time of her deposition, Petitioner testified that she was always tired, never wanted to do anything, and would not go out due to fear that, in an immunocompromised state, she would contract a disease. Petitioner explained that she could not swim or go barefoot due to the possibility of infection, and she had to wear a mask wherever she went outside of her home during the flu season. However, Petitioner had 10 See footnote 5. undergone Botox treatments to her forehead, most recently about one month prior to her deposition. Petitioner stated that walking was difficult. The "few times" that she had gone to Disney World, Petitioner had had to use a wheelchair to navigate the park. Petitioner testified that her Program medications produced side effects, such as headaches, and admitted that she drank a lot of carbonated beverages rather than water, which made her nauseous. Toward the end of her deposition, Petitioner testified that her primary Program surgeon had advised her some time ago not to return to work, but she had not asked him lately "because I want to go back to work."11 At his deposition, the Program surgeon testified that presently there were no restrictions on Petitioner's activities. In response to a question based on Petitioner's reported fatigue, the surgeon stated that generally Program physicians expected full recoveries from their patients; patients obtained a good quality of life, even if they suffered from fatigue; and the one-year point after surgery was an important milestone in a patient's recovery, which underscored the fact that Petitioner's deposition likely took place too early for her testimony to serve as a good measure of where she was in her recovery by the time of the settlement, which took place just over one year after her deposition. The most prominent restriction recognized by the Program surgeon was pregnancy. He recommended that Petitioner not become pregnant for the "first few years" after the transplant surgery, until her immune system reestablishes itself. Additionally, the anti-rejection drugs are strong and can produce neurological side effects, so a transplant patient who became pregnant would need to be closely monitored. The Program surgeon emphasized the importance of proper hydration through the drinking of water. The surgeon explained that the large intestine absorbs fluids. Because Petitioner lacks much of her large intestine, it was even more important to overcome fatigue and preserve kidney function for Petitioner to remain hydrated--not just now, but for the next "10, 15, 20 years," according to the surgeon. The surgeon testified that Petitioner could eat whatever food she wished, although she would learn which foods caused diarrhea, which is a side effect of Petitioner's surgeries. At the time of the deposition, Program physicians were monitoring monthly lab work and seeing Petitioner every six months, which eventually would be reduced to every year. Petitioner's trial attorney referred to the testimony of a Dr. Gore, "the leading bariatric radiologist in the country," who reportedly testified that he did not share the Program surgeon's optimism, and Petitioner could never bear children, work, or lead the active life of a young person. Petitioner did not explain why she did not file in this proceeding the original testimony of Dr. Gore, so the administrative law judge could assess, among other things, the bases for such testimony by a radiologist, whose involvement with transplant patients would seem not to be as comprehensive or extended as the involvement of a Program surgeon. The reported testimony of Dr. Gore is disregarded. The trial attorney broke down the true value of the damages as follows: the loss of future earnings--$1.6 million; paid past medical expenses-- $578,000; and $8 million in noneconomic damages. In support of a true value of $10 million, the trial attorney testified that his law firm had obtained $11 million from a surgeon in a bariatric case brought by the estate of a deceased patient, who had resided in a nearby city. But the trial attorney provided no other details about that case to allow its use as a comparator. The putative true value is properly based on the loss of future earnings and paid past medical expenses, but not the $8 million in noneconomic damages, nearly all of which is pain and suffering. The stipulation to a "significantly" shortened life expectancy provides no basis for 11 Petitioner Exhibit 15, p. 99. calculating a reasonable term of future pain and suffering. The record is not especially detailed as to pain and suffering at and before the time of the settlement. Petitioner's description of the limitations upon her life pertained to a point relatively early in the recovery process, only ten months following the transplant surgery, and a little over one year prior to the relevant point, which is the time of the settlement. The deposition of the Program surgeon, which took place only four months prior to the settlement, is entitled to greater weight in terms of its closer proximity to the settlement date. Addressing a typical patient, the Program surgeon portrayed a life of relatively few restrictions--provided the transplant patient takes care of her crucial need for hydration, which Petitioner had not. The Program surgeon did not detail any setbacks experienced by Petitioner, which her trial attorney who took the deposition would have developed, if they had existed. Doubtlessly, Petitioner has suffered a considerable diminution in the quality of her life, extensive inconvenience, and periods of intense pain, but, balancing Petitioner's somewhat generalized description of these elements and the Program surgeon's more upbeat description of the typical transplant patient, as well as Petitioner, the relationship of Petitioner's pain and suffering to money supports an award of no more than $2 million.12 12 This finding of $2 million in pain and suffering is supported by the facts of the administrative law judge’s two Medicaid recovery cases immediately preceding the present case. These cases involved personal injury actions in south and central Florida, not eastern Kentucky, where jury verdicts may run higher or lower. But these cases include $5-$10 million of pain and suffering, and Petitioner's case does not. In DOAH Case 20-2038MTR, the recipient's attorney sought noneconomic damages of only $5 million for catastrophic brain injuries to a five-year-old child, which left her cognitively intact, but unable to express herself in any fashion and subject to contracture of the limbs, painful spasms, and a shortened lifetime of inability to self-ambulate, feed, bathe, or clothe herself--with a major impact on her parents and siblings, who were caring for her at home. The true value of the noneconomic damages was closer to $10 million for reasons unique to that case, in which a summary jury trial had returned this damages component in a highly abbreviated proceeding designed to facilitate settlement by addressing primarily liability. Adding noneconomic damages of $2 million to the paid past medical expenses of $578,000 and loss of future earnings of $1.6 million yields a true value of $4.2 million. A settlement of $1.4 million represents a recovery of 33.3% of the true value. Applying this settlement recovery percentage to the total paid past medical expenses, the proportional reduction method would allocate about $193,000 of the settlement proceeds to total paid past medical expenses. Applying this settlement recovery percentage to the past medical expenses paid by Respondent, the proportional reduction method would allocate about $75,000 of the settlement proceeds to Respondent's Medicaid payments. As explained in the Conclusions of Law, Respondent's tentative recovery is $193,000 because Petitioner has failed to prove the extent to which, if any, that the $354,000 of past medical expenses paid by a payor other than Respondent is subject to a Medicaid recovery claim. Petitioner agreed to pay costs, which were $41,000, and one-third of any recovery, which is $466,000, so her total obligation to the law firm is $507,000. The record provides no basis for finding that this obligation is unreasonable in amount or was not reasonably expended to produce the settlement. On these facts, a failure to require Respondent's recovery to bear its pro rata share of this obligation would allow Respondent's recovery to reach a portion of the settlement proceeds not allocable to paid past medical expenses. Without regard to the fees and costs, the gross settlement proceeds are tentatively allocated as follows: $193,000 to Respondent and $1.207 million to Petitioner. Applying to 13.8% of the gross settlement proceeds, Respondent's In DOAH Case 19-5547MTR, the recipient's attorney sought noneconomic damages of $10 million for catastrophic injuries to an 11-year-old child that left her in a vegetative state, incapable of speech or other expression, incapable of walking or assisting with the transfer into a wheelchair, and incapable of assisting with feeding, except to open her mouth at the sight of a spoon, for the remainder of her injury-shortened life, during which time she too was cared for by her parents at home. If the administrative law judge lacks the authority to find pain and suffering damages, the administrative law judge rejects the proof of noneconomic damages in its entirety. lien must bear 13.8%, or $70,000, of the $507,000 in fees and costs that produced the settlement. Respondent's net recovery is thus $123,000.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (17b),1 Petitioner has proved that Respondent's recovery of $535,312 in medical assistance expenditures2 from $5 million in proceeds from the settlement of a personal injury action must be reduced to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)3; and, if so, the maximum allowable amount of Respondent's recovery.
Findings Of Fact On September 28, 2005, Petitioner was born by an unremarkable delivery at 42 weeks' gestation at a hospital in West Palm Beach. On October 1, 2005, from all appearances a healthy infant, Petitioner was discharged to home. However, Petitioner was born with an extremely rare metabolic disorder known as B-ketothiolase deficiency (BKT), which prevents the body from processing a protein building block called isoleucine and impedes the body's processing of ketones. A few weeks after Petitioner's birth, the birth hospital began screening that would have detected this condition and permitted timely management and treatment of this serious condition. Petitioner progressed normally until, at the age of five years, she acquired an infection that caused her to suffer a decompensation attack and guardian," and DOAH Case 20-2124MTR identifies by name a parent, "individually and as parent and natural guardian of A. F., a minor." As to the latter case, the same attorneys represent the petitioner and respondent as represent Petitioner and Respondent. 9 Resp.'s proposed final order, footnote 2. metabolic crisis. Over the span of a few hours, Petitioner suffered irreversible and progressive atrophic changes to her basal ganglia. This brain damage produced, among other permanent conditions, intermittent painful spasms, multiple times during the day and night, that cause Petitioner to thrash her head about wildly, to arch her back into an extreme "U-like position," and uncontrollably to scratch her eyes or mouth until the spasm ends or her arms are secured or become entrapped in the wheelchair. Otherwise, Petitioner's arms and legs are in a permanent state of contracture, so as to be of little use to her, and her head is typically deviated to the left. Unable to walk, Petitioner requires the use of a wheelchair for mobility, but chronic pain, especially in her back, prevents her from remaining in the chair for more than 30 minutes at a time. Unable to maintain any position for very long, Petitioner is unable even to watch television or a movie. Petitioner attends school, where she is assisted by a one-to-one paraprofessional, but, due to pain, she typically finds it necessary to leave, often in tears, prior to the end of the school day. Petitioner is completely dependent on others for all of the activities of daily living. She is fed through a gastrostomy tube. Without respite care, Petitioner's mother is unable to leave her daughter unattended and provides nearly all of the required care. Among many other things, the mother secures Petitioner to her bed, changes her position, stretches her, brushes her teeth, and takes her to appointments, including brain stimulation therapy in Gainesville twice weekly to help with the spasms. The impact of Petitioner's condition upon the family is nearly inestimable. For instance, nearly the entire family must accommodate Petitioner's desire to go to an amusement park, as the mother, Petitioner's father, and the older of their other two children must help to get Petitioner into one ride. Petitioner's ability to speak is limited, and she lacks the means of expressive communication by writing or a keyboard. The frustration of these communication barriers is heightened by the fact that Petitioner is likely to be cognitively intact, meaning that she is substantially "locked in," so as to understand what is going on about her, but is unable to express herself, even by body movement or gesture. No single measure adequately conveys the extensive care required just to maintain, to the maximum extent possible, Petitioner's present, limited functionality. When assessed for a life care plan, Petitioner was being seen by nine different physicians, three therapists, and the school nurse; was taking nine different medications; and was served by or consumed nearly two dozen items of equipment or supplies. In 2013, Petitioner filed a personal injury action in circuit court in West Palm Beach against the birth hospital and its corporate parent. The case presented three major problems in establishing liability. At the time of Petitioner's birth, only two hospitals in the state of Florida provided BKT screening at birth, and the birth hospital was not one of them. However, the corporate parent owns numerous hospitals in other states, and at least some of these hospitals were providing BKT screening at the time. Petitioner's ability to establish a favorable standard of care was thus dependent on keeping the corporate parent in the case, even though its liability was attenuated. Petitioner's task was complicated by a Florida statute that explicitly provides that the failure of a healthcare provider to provide supplemental diagnostic tests is not actionable if the provider acted in good faith with due regard to the prevailing standard of care.10 Lastly, Petitioner was confronted by a causation issue because, when informed of Petitioner's rare metabolic condition, the parents did not immediately obtain a screening for her older brother. In September 2017, the circuit judge ordered the parties to submit to two summary jury trials, in which each side had a little over one hour to present the case to actual jurors for a nonbinding verdict. Each party devoted 10 § 766.102(4). nearly all of its allotted time to a presentation on liability, not damages. One jury returned a verdict for the defendants, and the other returned a verdict for the plaintiffs, awarding $23.5 million as follows: the loss of earning capacity and future medical expenses after the age of 18 years--$10.5 million; past and future pain and suffering--$5 million; past and future medical expenses until the age of 18 years--$5 million; and the parents' loss of consortium--$3 million. In the ensuing settlement negotiations, the defendants' counsel did not contest the damages. Significantly, in calculating future medical expenses and loss of earning capacity, both sides chose conservative reduced actuarial values with only four years separating their choices. Additionally, the defendants' counsel did not contend that a timely screening might not have prevented the injuries. Instead, the defendants' counsel argued the above-described liability and causation issues. The plaintiffs' counsel opposed these arguments and, secondarily, argued that the $23.5 million summary jury verdict was too low due to the necessity of counsel's preoccupation with liability during their presentations. Nearly one year after the summary jury verdicts and after extensive discovery and the expenditure of about $200,000 in costs by the plaintiffs, the parties reached the settlement described above. By any standard of proof, Petitioner has proved that the true value of her case was at least $23.5 million, including $535,000 for past medical expenses, and that the $5 million settlement was driven by concerns as to liability and causation, not damages. The only noteworthy damages component in the true value is Petitioner's past and future pain and suffering, which could have supported a larger value based on the Florida Supreme Court's jury instructions on the matter.11 11 Florida Standard Jury Instructions in Civil Cases, Appendix B, Form 2, states in part: What is the total amount of (claimant’s) damages for pain and suffering, disability, physical impairment, disfigurement, mental anguish, inconvenience, aggravation of a disease or physical defect (list any other noneconomic damages) and loss The $5 million settlement represents a discount of $18.5 million or 78.7% when compared to the true value of the case. Applying the same discount to $535,312 results in Respondent's recovery of $114,021.
The Issue The issues are whether, pursuant to section 409.910(17)(b), Florida Statutes (sometimes referred to as "17b"), Respondent's recovery of medical assistance expenditures from $500,000 in proceeds from the settlement of a products liability action must be reduced from its allocation under section 409.910(11)(f) (sometimes referred to as "11f")1 to avoid conflict with 42 U.S.C. § 1396p(a)(1) (Anti-Lien Statute)2; and, if so, the amount of Respondent's recovery.
Findings Of Fact As a result of a motor vehicle accident that took place on May 27, 2012, Petitioner sustained grave personal injuries, including damage to his spinal cord that has left him a paraplegic incapable of self-ambulation of more than a few steps, except by means of a wheelchair or rolling walker. Petitioner was a passenger in a 2003 extended-cab Ford F-150 pickup truck that was driven at a high rate of speed by his brother, who lost control of the vehicle in a curve, over-corrected, and caused the vehicle to rollover three times, ejecting Petitioner with such force that he traveled a distance of 150 feet in the air. The force of the rollovers crushed the vehicle's roof, which caused Petitioner's door latch to fail, allowing Petitioner's door to open and Petitioner to be expelled from the relative safety of the passenger compartment. In settlement negotiations, Petitioner's trial counsel claimed that Ford F-150s of the relevant vintage suffered from deficient door latches, but the forces to which the latch were subjected were overwhelming and well beyond reasonable design limits: the truck's door could not have resisted these forces unless it had been welded to the frame. The one-vehicle accident was substantially, if not entirely, caused by Petitioner's brother, who was intoxicated and is now serving a five-year sentence in prison for his role in the crash. Petitioner shared some responsibility because he likely was not wearing a seatbelt when the truck rolled over. Petitioner's brother and another passenger who were not ejected from the vehicle sustained minor injuries. Petitioner commenced a products liability action against Ford Motor Company and the manufacturer of the door latch. Ford Motor Company defended the case vigorously. Expert witnesses were unable to find any federal safety standards that had been violated in connection with the vehicle, the door latch, or the performance of the vehicle and door latch during the rollovers. The manufacturer of the door latch raised a substantial defense of a lack of personal jurisdiction. At the time of the incident, Petitioner was a 25-year-old plumber and construction worker. He was the sole means of support for his three young children. He has undergone an arduous course of rehabilitation to gain wheelchair-dependent self-autonomy. At the time of the settlement, which appears to have resolved the products liability action, the putative true value of Petitioner's case was $6 million, consisting of $154,219 of past medical expenses, $2.1 million of future medical expenses, $800,000 of lost wages and loss of future earning capacity, and about $2.95 million of noneconomic damages, including pain and suffering and loss of consortium. Petitioner has proved each of these damages components, so the putative true value is the true value (sometimes referred to as the "actual true value"). Petitioner settled the case for $500,000, representing a settlement discount of 91.7% from the true value of $6 million (Settlement Discount). Petitioner has paid or incurred $147,000 in attorneys' fees and about $123,000 in recoverable costs in prosecuting the products liability action. Respondent has expended $154,219 of medical assistance. Under the 11f formula, which is described in the Conclusions of Law, Respondent would recover approximately $126,000 from the $500,000 settlement. This provisional 11f allocation provides the point of reference for determining whether Petitioner has proved in this 17b proceeding a reduced recovery amount for Respondent. Having proved the Settlement Discount of 91.7% from the actual, not putative, true value to the settled value, Petitioner has proved that each damages component of the true value, including past medical expenses, must be proportionately reduced by 91.7% to identify the portion of the settlement proceeds representing past medical expenses, which, as discussed in the Conclusions of Law, is the only portion of the proceeds subject to the Medicaid lien. Reducing the past medical expenses of $154,219 by 91.7% yields about $12,800, which is Respondent's tentative 17b recovery. As mentioned in the Conclusions of Law, Respondent's recovery must bear its pro rata share of the attorneys' fees and costs paid or incurred to produce the settlement. The total fees and costs of $270,000 represent 54% of the settlement. The record provides no reason to find that these fees and costs are unreasonable in amount or were not reasonably expended to produce the $500,000 settlement. Reducing Respondent's recovery of $12,800 by 54% yields $5888, which is Respondent's 17b recovery.
The Issue What amount of Petitioner’s malpractice settlement must be paid to Respondent, Agency for Health Care Administration (Agency), to satisfy the Agency’s $13,904.06 Medicaid Lien?1/
Findings Of Fact On September 12, 2015, [Petitioner] was a 28-year-old single male living alone in Tampa, Florida and enrolled as a student at the University of South Florida working on his master’s degree in education. Because he recently ceased his employment with the Hillsborough County School Board, [Petitioner] had no health insurance. He called 911 for emergency medical services due to severe abdominal pain and was taken by EMS to the Emergency Department at St. Joseph’s Hospital where he was diagnosed with acute pancreatitis and admitted. His condition worsened and was complicated by abdominal distention that made his breathing difficult. In the evening of September 13th, [Petitioner] was transferred to the Medical Intensive Care Unit (“ICU”) because of a rapidly worsening condition and need for close monitoring. Over the next several hours, vital sign monitoring showed high heart and respiratory rates. A consulting physician found “acute respiratory insufficiency likely developing ARDS,” and directed he be “monitor closely, may need to be on mechanical ventilation, his work of breathing is hard to keep current sats [sic]”. During the early morning of September 14, [Petitioner’s] heart rate and respiratory rates remained high, he was short of breath, and given multiple doses of Morphine for severe pain and Ativan for agitation/anxiety, which drugs are known to suppress respiratory function. Throughout the morning, [Petitioner] was in a perilous condition due to a combination of his prolonged efforts to breathe, suppressive medications, and systemic complications of acute pancreatitis including electronical abnormalities associated with hypokalemia and hypocalcemia, and with electrocardiographic changes resulting in arrhythmia, conduction abnormalities and changes in cardiac T wave and QT period. At around 11:30, [Petitioner] attempted to perform a breathing exercise as instructed earlier that morning which required him to get on his hand and knees to relieve the pressure on his chest. [Petitioner’s mother], a licensed and practicing RN herself, was present and attempted to help him when his cardiac monitoring leads became disconnected. At this time, the attending RN was on break. An unknown RN reported [Petitioner] to have a change in the condition “with increased confusion and restlessness” and a call was made to the ICU specialist who issued verbal orders for Haldol, a medication used for sedation but in combination with the Morphine, Ativan and Labetatol, further lowers blood pressure and is contraindicated for cardiac arrhythmias. Without informing [Petitioner or his mother], the nursing staff mistakenly issued a "code grey" to control [Petitioner] and the nursing supervisor approved the administration of the Haldol without any physician assessment or knowing his cardiac status because the monitor was not connected. The ICU specialist who ordered the Haldol was close by in the ICU area but did not evaluate [Petitioner] or assess his condition, cardiac status and need for mechanical ventilation before the Haldol was administered. Immediately upon administration of the Haldol, [Petitioner] became “agonal” and his heart was thrown into a cardiac arrhythmia (PEA) causing a prolonged time period where his brain was deprived of oxygen that resulted in permanent hypoxic encephalopathy so that [Petitioner] now lives in a persistent minimally conscious state. The acute pancreatitis which [Petitioner] initially sought treatment resolved without further complications. His current medical condition is only complicated by the sequelae of his hypoxic encephalopathy and persistent minimally conscious state. Petitioner complied with all requirements of Chapter 766, Florida Statutes, including, all pre-suit requirements and presuit investigation of claims against the treating Hospital, the ICU Specialist and her employer that were corroborated by an expert witness, which were rejected. On October 27, 2017, Petitioner filed a lawsuit in the Circuit Court for Hillsborough County Florida, Case No. 17-CA-009829, against the treating Hospital and the ICU Specialist asserting claims for medical negligence. Based on the foregoing limitations, the medical malpractice claims were settled for a total of $1,975,000, which was approved by the Court to be in the best interest of [Petitioner]. [The Agency], through its Medicaid program, provided medical assistance to [Petitioner] in the amount of $13,904.36. During the pendency of the medical negligence case, [the Agency] was notified of the action and asserted a $13,904.06 Medicaid lien against Petitioner's cause of action and settlement. [The Agency] did not commence a civil action to enforce its rights under §409.910 or intervene or join in [Petitioner’s] action against Defendants. [The Agency] did not file a motion to set-aside, void or otherwise dispute Petitioner's settlement with Defendants. Application of the formula at §409.910(1l)(f) to the settlement requires payment to [the Agency] in the amount of the full $13,904.06 Medicaid lien. Petitioner deposited the full Medicaid lien amount in an interest-bearing account for the benefit of [the Agency] pending an administrative determination of [the Agency’s] rights, and this constitutes "final agency action" for purposes of chapter 120, pursuant to §409.910(17). Credible, Unimpeached, and Unrebutted Testimony Mr. Tonelli is the only person who testified about the value of the various elements of damages making up Petitioner’s malpractice claim. Mr. Tonelli has practiced law for 44 years. He has practiced in Tampa, Florida, the venue where Petitioner’s case would have been tried if it had not settled. He first practiced primarily in the area of personal injury defense. Presently, Mr. Tonelli spends over 25 percent of his time as a mediator. Since 1985, he has mediated many medical negligence cases. Mr. Tonelli also serves as a guardian ad litem in approximately 50 cases per year. Usually two to five of the cases involve catastrophic injury. Mr. Tonelli has served as counsel in 50 to 75 civil trials. Approximately 20 were jury trials. Mr. Tonelli’s practice includes review of medical records and life care plans. He also consults with economists about lost wage claims and works with doctors to identify the nature and extent of injuries and costs of medical services for injured persons. Mr. Tonelli participates in regular intake review of personal injury cases for his firm. The review includes evaluating the recoverable damages. He informs himself about jury awards and settlement amounts through his firm work, his participation in the American Board of Trial Attorneys, and his mediation practice. Mr. Tonelli was Petitioner’s Guardian Ad Litem. He reviewed the case and the proposed settlement and reported to the court about whether the settlement was in Petitioner’s best interests. Mr. Tonelli’s knowledge, skill, and experience qualify him to provide an opinion about the value of the elements of the damages for Petitioner’s malpractice claims against the hospital and the physician. Mr. Tonelli reviewed Petitioner’s hospital and physician medical records. He also reviewed the deposition of Roland Snyder, M.D., who prepared the life care plans admitted into evidence. Between Mr. Tonelli’s service as Guardian Ad Litem for Petitioner and his record review to prepare for his testimony, he had sufficient facts and data to form an opinion about the value of elements of damages of Petitioner’s malpractice claims. Also, he reasonably and reliably applied principles and methods based upon his knowledge, skill, and experience to provide a credible and conservative determination of the value of each element of damages that make up Petitioner’s malpractice claim. His testimony was unrebutted, unimpeached, credible, and persuasive. Injuries and Negligence Petitioner suffers from profound anoxic encephalopathy. This brain damage leaves him in a permanent, minimally conscious state, just barely more conscious than a patient in a vegetative state. He cannot speak, walk, or care for himself. Petitioner lives in pain. He breathes and eats only with the assistance of a tracheostomy. He takes nourishment through a “G-tube.” This is a gastrojejunostomy tube that delivers nutrients directly to the stomach. Petitioner requires daily care and assistance in every task of life from eating to waste elimination. His condition will not change for his estimated 20-year remaining life span. Petitioner’s multiple, severe medical conditions require that he live those 20 years in a long-term care facility with medical services, such as a skilled nursing home. This condition resulted from treatment he received for pancreatitis, a condition from which he fully recovered. While in the hospital, Petitioner developed cardiac and respiratory problems. A cascading series of improper prescriptions exacerbated Petitioner’s medical problems leading to catastrophic injuries resulting in his current condition. Damages The elements of damages for Petitioner’s malpractice claims are past medical expenses, future medical expenses, loss of current income, loss of future income, pain and suffering, and loss of enjoyment of life. The value of the damages in Petitioner’s malpractice claims falls within a range of $25,000,000 to $35,000,000. The amount of $25,000,000 is a reasonable, conservative value to place on Petitioner’s damage claims. The only evidence of past medical expenses is the stipulation that Medicaid paid $13,904.36. Consequently, that is the amount of past medical expenses. Future medical expenses in the form of costs for continued treatment and supports necessary to maintain Petitioner’s existence are a significant part of the damages. As explicated in two detailed life care plans, those expenses will range from $14,535,508.26, for residence in a modified home with supportive caregivers, to $31,082,301.36, for residence in a skilled long-term nursing facility. Loss of current income, comparatively, is not a major factor in this case. Loss of future income is. Petitioner was 30 years old earning $34,000 per year teaching “at-risk” children who would have otherwise been suspended from school. He was dedicated to his profession, volunteered at Boys and Girls Clubs, and had just been accepted to a master’s degree program. Petitioner’s lost future income ranges between $750,000 to $1,000,000. Petitioner’s injuries and resulting conditions are catastrophic. Pain and suffering damages and loss of enjoyment of life damages easily range between 10 and 20 million dollars. They could reasonably exceed 50 million dollars. Consideration of the value of the elements of damages affirms that the total damages that would have been proven if Petitioner’s claims had been tried would have been at least $25,000,000. Settlement Realities Petitioner’s claims were not tried. Petitioner had a strong malpractice claim against the doctor. The doctor, however, had only $500,000 worth of insurance coverage. There is no evidence of assets of the doctor that could have been reached to enforce a judgment. Petitioner’s claim against the hospital was not as strong. The hospital had significant liability and causation defenses. The doctor was not an employee or agent of the hospital. Hospital employees in most instances were following the doctor’s instructions, including when administering the medications that caused the damages. The limits of the doctor’s insurance coverage and the liability and causation issues of the claim against the hospital resulted in the decision to settle. Uncertainty about the provability or amount of damages was not a factor. The trial court approved the settlement. The settlement amount is 7.9 percent of the value of Petitioner’s claims. The stipulated amount of medical expenses the Agency paid through the Medicaid program is $13,904.36. The reasonable inference from the record in this case is that applying the 7.9 percent ratio of claims value to settlement recovery to the stipulated amount of medical expenses paid by the Medicaid program demonstrates that $1,098.44 of Petitioner’s settlement recovery was for past medical expenses. The Agency did not call witnesses, present evidence of the value of damages, or propose an alternative way to value damages.
The Issue The issue for the undersigned to determine is the amount payable to Respondent, Agency for Health Care Administration (AHCA), as reimbursement for medical expenses paid on behalf of Petitioner Nigel Carter (Mr. Carter), by and through Bernice Bonnett, plenary guardian of Mr. Carter (Petitioner), pursuant to section 409.910, Florida Statutes (2019), from settlement proceeds Mr. Carter received from third parties.
Findings Of Fact AHCA is the state agency charged with administering the Florida Medicaid program, pursuant to chapter 409, Florida Statutes. On November 24, 2016, Mr. Carter, age 20, visited friends at the Hilltop Village Apartments, 1646 West 45th Street, Jacksonville, Duval County, Florida. During this visit, an unknown assailant shot Mr. Carter. Mr. Carter sustained gunshot wounds to his head and ankle. As a result of the November 24, 2016, incident, Mr. Carter suffered a traumatic brain injury. Mr. Carter does not have the full use of the left side of his body, cannot walk or ambulate independently, and requires 24-hour assistance. Mr. Carter can speak, but has occasional emotional outbursts. Mr. Carter’s life expectancy is significantly reduced. Mr. Carter made a claim for personal injury damages against Southport Financial Services, Inc., d/b/a Hilltop Village Apartments, and SP Hilltop Village, LP (Hilltop Village Apartments). Petitioner entered into a settlement agreement with Hilltop Village Apartments for $1,900,000. Petitioner contends that Mr. Carter’s injuries were millions of dollars in excess of the settlement. Mr. Carter has not received any other recovery for the injuries suffered as a result of the shooting on November 24, 2016, and Petitioner does not expect to make any other recovery on behalf of Mr. Carter. The value of Mr. Carter’s personal injury claim that arose from the November 24, 2016, incident at the Hilltop Village Apartments is $21,966,575.18. This amount consists of the following sum of Mr. Carter’s damages: Past medical costs: $1,023,371.05; Future medical costs: $9,959,916.54; and Past and future pain and suffering, mental anguish, and loss of enjoyment of life: $10,983,287.59.1 Gerri Pennachio has the expertise to create Mr. Carter’s life plan, and did so based upon facts not disputed by the parties. Ms. Pennachio’s life plan for Mr. Carter confirms the valuation of Mr. Carter’s future life care needs at $9,959,916.54, which is consistent with the parties’ stipulated value of Mr. Carter’s future medical costs. AHCA, through its Florida Medicaid program, provided $240,587.85 in medical assistance payments for the benefit of Mr. Carter, and has asserted a statutory lien in this amount against Petitioner’s recovery from the third parties. Molina Healthcare of Florida paid $27,179.81 for medical expenses associated with Mr. Carter’s gunshot wounds and has also imposed a lien seeking a recovery for that entire amount. Petitioner has deposited the full Medicaid lien amount in an interest- bearing account pending a determination of AHCA’s rights, which, under 1 The parties note that this amount was determined based upon the practice of multiplying the economic damages to determine the non-economic damages. Here, a multiplier of 1 was used for the non-economic damages. Thus, this amount is the sum of the past and future medical costs. chapter 120, Florida Statutes, constitutes “final agency action” pursuant to section 409.910(17). The parties stipulated that the value of Mr. Carter’s personal injury claim is $21,966,575.18. The parties have also stipulated that Mr. Carter’s settlement ($1,900,000.00) represents 10 percent of the true value of his personal injury claim.2 However, the undersigned finds that Mr. Carter’s settlement actually represents 8.6 percent of the stipulated value of his personal injury claim. Strangely, AHCA states, in its proposed final order, that it “accepts the stipulated 10% figure as the recovery rate, despite the seeming incongruity.” Accordingly, the undersigned finds that the preponderance of the evidence establishes that the total value of Petitioner’s personal injury claim is $21,966,575.18, and that the $1,900,000.00 settlement resulted in Petitioner recovering 8.6 percent of Mr. Carter’s past medical expenses. In addition, the preponderance of the evidence establishes that Mr. Carter’s total past medical expenses (i.e., the amounts provided by Medicaid and Molina Healthcare) are $267,767.66. The 8.6 percent of $267,767.66 is $23,028.02. Thus, the undersigned further finds that the preponderance of the evidence establishes that $23,028.02 amounts to a fair and reasonable determination of the past medical expenses actually recovered by Petitioner and payable to AHCA.
