14-002041MTR Nelson Puente vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Friday, August 29, 2014.

Summary: Petitioner shall reimburse the Agency for Health Care Administration $33,319.66 in satisfaction of its Medicaid lien under section 409.910(17), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NELSON PUENTE,

Petitioner,

vs. Case No. 14 - 2041MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

On July 17, 2014, a duly - notic ed hearing was held in Miami

and Tallahassee, Florida, via video teleconference, before

F. Scott Boyd, an Administrative Law Judge assigned by the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Andrew M. Moss, Esquire

Kutner, Rubinoff and Moss, P.A.

501 Northeast First Avenue, Suite 300

Miami, Florida 33132

For Respondent: Adam James Stallard, Esquire

Xerox Recovery Services Group

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The issue to be decided is the amount payable to Respondent

in satisfaction of Respondent ' s Medicaid lien from a settlement,

judgment, or award received by Petitioner from a third party

under section 409.910(17), Florida Statutes. 1/

PRELIMINARY STATEMENT

On May 1, 2014, Petitioner filed a Petition for Reduction of

Medicaid Lien. After a continuance, the hearing was held on

July 17, 2014. Petitio ner presented the testimony of one expert

and fact witness, Mr. Mario Quintero, Jr., Esquire, and offered

two exhibits, which were admitted into evidence. Respondent

offered no witnesses or exhibits. The parties filed a Joint Pre -

hearing Stipulation. Th e facts stipulated therein were accepted

and are made a part of the Findings of Fact below. Respondent ' s

objection to portions of the testimony of Mr. Quintero on the

ground that he had not been disclosed as an expert was denied.

In a joint motion filed over 45 days prior to hearing,

Mr. Quintero was clearly identified as an expert; yet, Respondent

did not seek to depose him or seek to discover information he was

relying upon as the basis for his opinion.

Respondent ' s unopposed motion to allow the partie s 20 days

from the filing of the transcript to submit proposed final orders

was granted. The one - volume Transcript of the hearing was filed

on July 29, 2014. Both parties timely filed proposed orders,

which were carefully considered.

FINDING S OF FACT

1. It was stipulated that Petitioner, Mr. Nelson Puente,

sustained gunshot injuries on or about February 4, 2010, for

which he received medical treatment.

2. Mr. Puente had Medicaid at that time, and Medicaid paid

the amount of $112,397.79 to treat Mr. P uente for his injuries.

3. As a result of his injuries, Mr. Puente has permanent

scars on his abdomen and thigh.

4. Mr. Mario Quintero, Jr., Esquire, represented Mr. Puente

in a personal injury case alleging negligent security.

5. Mr. Quintero has bee n practicing law in Florida for over

30 years, specializing in personal injury litigation. He has

tried well over 150 cases and has handled catastrophic injury

cases that were similar to Mr. Puente ' s case. Mr. Quintero is an

expert on the valuation of pe rsonal injury cases.

6. Mr. Quintero interviewed Mr. Puente regarding the scope

of his injuries, reviewed extensive medical records, considered

the prognosis for improvement, and examined jury verdict reports

and facts from similar cases to reach an opini on as to the value

of Mr. Puente ' s damages.

7. Mr. Quintero testified that if he had presented the case

to a jury that he would have asked for damages for past medical

expense s , future medical expense s , future loss of earning

capacity, pain and suffering, permanent scarring, and inability

to lead a normal life.

8. Mr. Quintero testified that, in addition to the

$112,397.79 paid by Medicaid, the Florida Patient s' Compensation

Fund 2/ or another fund paid for some of Mr. Puente ' s medical care.

There was no evidence presented as to the specific amount that

this fund paid. Mr. Quintero testified:

I don ' t have the figures in front of me right

now. But it was probably significantly less

than Medicaid.

* * *

I do know, I just don ' t remember. I am -- my

file is three boxes large. And for purposes

of my testimony here today, I don ' t believe

it was necessary for me to bring in those

three boxes and go through everything. So I

mentioned it would be less than Medicaid, but

I don ' t remember the exact amount .

9. The exact amount for which the fund ' s claim was settled

was similarly not in evidence, but Mr. Quintero characterized it

as a " few thousand dollars. " He testified, " They understood the

severity of Mr. Puente ' s injuries and damages, they knew the

amount of the settlement, and they took - Ï they factored in

everything and significantly reduced the amount that we had to

repay them. "

10. Mr. Quintero said that he would have asked a jury for

significant damages for future lost earning capacity. He noted

that Mr. Puente was 35 years old at the time of the settlement,

had a long life expectancy, and the " potential to earn 35

to 40 thousand dollars per year. " Mr. Quintero did not offer a

dollar estimate of lost future earnings. There was no evidence

as to Mr. Puente ' s occupation. Mr. Quintero admitted on cross -

examination that he was " pretty sure " that Mr. Puente was

unemployed at the time of his injuries.

11. Mr. Quintero testified that future medical expenses

would " probably not " be very large, based u pon his understanding

that " other than maybe palliative issues with therapy and things

like that, " there wasn ' t that much more that could be done for

Mr. Puente. Mr. Quintero noted that " there probably would be

some rehabilitation that he could benefit fr om in the future, but

nothing major. " On cross examination, he admitted that there was

nothing in evidence to indicate that there would not be

significant future medical expenses for Mr. Puente.

12. No life care plan or testimony from health care

perso nnel, vocational specialists, or economists was introduced.

Mr. Quintero stated that it is expensive to have life care plans

and economist reports prepared . He stated t hat they are prepared

only when there is adequate insurance coverage , and it is worth

the expenditure.

13. Mr. Quintero testified that he believed that 80 to 85

percent of a jury verdict in Mr. Puente ' s personal injury case

would have been based upon pain and suffering and the inability

to lead a normal life. He did not elaborate on how he arrived at

this conclusion.

14. Mr. Quintero testified that , although the value that a

particular jury might put on a case can never be absolutely

determined, in his opinion , a reasonable estimate of the value of

Mr. Puente ' s damages was $2.5 million. He testified that, in his

opinion, the range of damages would be from $2 million to

$5 million and that $2.5 million was a conservative estimate.

Mr. Quintero ' s testimony on this point was credible, Respondent

offered no contrary testimony, and the valu e of Mr. Puente ' s

damages is found to be $2.5 million.

15. The settlement in the personal injury case was for the

sum of $100,000.

16. There was no direct evidence as to what portion of the

$100,000 total settlement was designated by the parties as

co mpensation to Petitioner for medical expenses, or conversely,

for the various other types of damages he may have suffered, such

as pain and suffering, scarring and other permanent physical

injury, or loss of future earnings. Neither the settlement

agreeme nt itself nor any other documents prepared in connection

with the settlement were introduced. Mr. Quintero offered no

testimony on this issue. Based upon the evidence presented at

hearing, all of the settlement might have been for medical care,

or none o f it might have been.

17. It is possible that there was no discussion or

understanding among the parties as to what portions of the

settlement were to be allocated to Mr. Puente ' s various

categories of damages, but such a conclusion would be pure

specul ation, for there was no testimony or other evidence to that

effect. Mr. P u en t e did not show by clear and convincing evidence

that the settlement was " unallocated " by the parties.

18. The Florida Statutes provide that Respondent, Agency

for Health Care A dministration (AHCA), is the Florida state

agency authorized to administer Florida ' s Medicaid program.

§ 409.902, Fla. Stat.

19. The Florida Statutes provide that Medicaid shall be

reimbursed for medical assistance that it has provided if

resources of a l iable third party become available.

§ 409.910(1), Fla. Stat.

20 . AHCA did not participate in settlement negotiations or

sign any of the settlement documents. There was no evidence to

suggest that A HCA otherwise released its lien.

21. Application of the formula found in section

409.910(11)(f) to the $100,000 settlement in the personal injury

case yields a Medicaid lien in the amount of $33,319.66.

22. The $100,000 total recovery represents four percent of

the $2.5 million total economic damages.

23. Mr. Puente failed to prove by clear and convincing

evidence that the settlement was unallocated as to categories of

damages.

24. Mr. Puente failed to prove by clear and convincing

evidence that all categories of damages sought in the personal

injury case wer e, or should be, compromised pro rata in the

settlement.

25. Mr. Puente failed to prove the amount of the settlement

that should be allocated to medical expenses by clear and

convincing evidence.

26. Mr. Puente failed to prove by clear and convincing

evi dence that the statutory lien amount of $33,319.66 exceeds the

amount actually recovered in the settlement for medical expenses.

CONCLUSIONS OF LAW

27. The Division of Administrative Hearings has

jurisdiction over the subject matter and parties in this

case pursuant to sections 120.569, 120.57(1), and 409.910(17),

Florida Statutes (2014) .

28. As a condition for receipt of federal Medicaid funds,

s tates are required to seek reimbursement for medical expenses

incurred on behalf of beneficiaries who later recover from third -

party tortfeasors. See Arkansas Dep ' t of Health & Human Servs.

v. Ahlborn , 547 U.S. 268 (2006).

29. Consistent with this federal requirement, the Florida

Legislature has enacted section 409.910. This statute authorizes

and requires the State to be reimbursed for Medicaid funds paid

for a plaintiff ' s medical care when that plaintiff later receives

a personal injury judgment or settlement from a third party.

Smith v. Ag. for Health Care Admin . , 24 So. 3d 590 (Fla. 5th DCA

2009). The statute creates an automatic lien on any such

judgment or settlement for the medical assistance provided by

Medicaid. § 409.910(6)(c), Fla. Stat.

30. A formula is set forth in section 409.910(11)(f) to

determine the amount the State is to be reimbursed . The statute

sets that amount at half the amount of the total recovery, after

deducting taxable costs and 25 percent attorney ' s fees, not to

exceed the amount actually paid by Medicaid on the beneficiary ' s

behalf. Ag. for Health Care Admin. v. Riley , 11 9 So. 3d 514, 515

n . 3 (Fla. 2d DCA 2013).

31. Section 409.910(17)(b) makes clear that the formula set

forth in subsection (11) constitutes a default allocation of the

amount of a settlement attributable to medical costs. See Davis

v. Roberts , 130 So. 3d 264, 268 (Fla. 5th DCA 2013); Roberts v.

Albertson ' s Inc. , 119 So. 3d 457, 465 - 466 (Fla. 4th DCA 2012),

reh ' g and reh ' g en banc denied sub nom. Giorgione v.

Albertson ' s, Inc. , 2013 Fla. App. LEXIS 10067 (Fla. 4th DCA

June 26, 2013).

32. Section 409.910( 17)(b) provides that a Medicaid

recipient has the right to rebut this presumptively valid

allocation created under Florida law in an administrative hearing

by establishing, through clear and convincing evidence, that

either: 1) a lesser portion of the tot al recovery should be

allocated as medical expense reimbursement than has been

calculated by the statutory formula; or 2) Medicaid actually

provided a lesser amount of medical assistance than has been

asserted by AHCA.

33. Petitioner stipulated as to t he amount of medical

assistance provided by Medicaid, but attempted to show that a

lesser portion of the total recovery should be allocated as

medical expense reimbursement than that calculated by the

statutory formula.

34. Petitioner argues 3/ that $11 2,397.79 represents

4.49 percent of the $2 .5 million total damages and concludes that

the Medicaid lien should therefore be limited to that same

4.49 percent of the $100,000 total recovery, that is, to the sum

of $4,495, which he (questionably) rounds to $ 4,900.

35. In reliance upon this pro rata approach, Petitioner ' s

case was centered upon proof of only three facts: the amount of

total damages; the amount of the Medicaid lien; and the amount of

the settlement. While it might result in less litigation,

Florida and federal 4/ law do not provide for automatic application

of this mathematical calculation.

36. First, any such calculation would have to be based upon

the total amount of medical expense paid, not just that portion

of medical expense paid by Med icaid. Section 409.910(17)(b)

provides for determination that a lesser portion of a total

recovery has been allocated as reimbursement for " medical

expenses. " Smith v. Ag . for Health Care Admin. , 24 So. 3d 590,

591 (Fla. 5th DCA 2009). The federal anti - lien provision, 42

U.S.C. § 1396p(a)(1), similarly pre - empts State efforts to take

any portion of a Medicaid beneficiary ' s settlement allocated as

compensation for other than " medical care. " Arkansas Dep ' t of

Health & Human Servs. v. Ahlborn , 547 U.S. 268 , 284 (2006).

Petitioner presented no clear and convincing evidence as to the

total amount of medical expenses. Putting aside the issue of

future medical care, 5/ in addition to the $112,397.79 paid by

Medicaid, the evidence clearly showed an unknown amou nt paid for

medical expenses by another fund, and possibly some small amounts

paid by Petitioner and his family. 6/

37. Second, even had there been clear and convincing

evidence of the total amount of medical expenses, it would not

follow that the settleme nt necessarily reflected a pro rata

allocation. As the Fifth District has noted, a tortfeaser might

be willing to pay 100 percent of a plaintiff ' s medical expense

claim, but not all non - economic claims. Smith v. Ag . for Health

Care Admin. , 24 So. 3d 590, n.1 (Fla. 5th DCA 2009). The

evidence here does not negate the possibility of disproportional

allocation, for Petitioner chose not to introduce the settlement

documents or any other evidence as to the parties ' own

allocation. Petitioner had the burden i n this proceeding to

prove appropriate division of the settlement between medical and

non - medical expenses. 7/ Dillard v. Ag. for Health Care Admin. ,

127 So. 3d 820, 821 (Fla. 2d DCA 2013).

38. While Petitioner ' s assessment that the case had an

overall value of $2 . 5 million was unrefuted, he did not go on to

clearly or convincingly break down that total amount among the

various categories of damages -- most importantly the amount of

medical claims -- much less demonstrate, as he was then obligated

to do, th at it was appropriate and accurate to attribute these

same proportions to the total recovery.

39. Petitioner failed to prove by clear and convincing

evidence what portion of the $100,000 settlement should be

allocated to compensate Petiti o ner for his medi cal expenses.

40. Petitioner failed to prove by clear and convincing

evidence that less than $33,319.66 of the total recovery should

be allocated as reimbursement for medical expenses.

ORDER

Upon consideration of the above F indings of F act and

C onclusion s of L aw, it is hereby

ORDERED that t he Agency for Health Care Administration is

entitled to $33,319.66 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 29th day of August , 2014 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Divis ion of Administrative Hearings

this 29th day of August , 2014 .

ENDNOTE S

1/ All statutory citations are to the 2013 Florida Statutes

except as otherwise indicated.

2/ It does not appear that the Florida Patients ' Compensation

Fund would have any liabi lity for damages resulting from

negligent security. See § 766.195, Fla. Stat. It is more likely

that the Crimes Compensation Trust Fund was involved, see section

960.065, Florida Statutes. The testimony on this point, as with

so many others, was less th an clear or convincing. As noted, the

settlement agreement and supporting documents were not introduced

and details of the settlement were not made a part of the record.

3/ This calculation is taken from Petitioner ' s p roposed o rder.

Petitioner arrived at a slightly different amount based upon the

calculations in his original Petition for Reduction of Medicaid

Lien.

4/ Federal law is relevant because Medicaid is a cooperative

federalism program. The United States Supreme Court has

determined that a S tate statute allowing a Medicaid lien to be

asserted against any portion of a settlement allocated to other

than medical care is contrary to, and preempted by, the " anti -

lien " provision of federal law found at 42 U.S.C. § 1396p(a)(1).

Arkansas Dep ' t of Health & Human Servs. v. Ahlborn , 547 U.S. 268,

284 - 285 (2006)( " [T]he exception carved out by §§ 1396a(a)(25) and

1396k(a) is limited to payments for medical care. Beyond that,

the anti - lien provision applies. " ).

5/ The parties disagree as to whether or not settlement amounts

allocated to future medical expenses are subject to a Medicaid

lien. In view of the insufficient evidence as to the amount

allocated to past medical expenses, it is not necessary to

address this issue.

6/ In the Petition for Redu ction of Medicaid Lien, it was noted

in footnote 1, " Mr. Puente actually had other medical bills not

covered by Medicaid. For the sake of simplicity he is not

claiming these additional bills in this Petition. " Since

Mr. Quintero testified that another fu nd ' s claim for medical care

was settled, it was incumbent upon Petitioner to either prove

that the settlement did not include these expenses or

alternatively include them in calculations.

7/ The Court in Wos v. E.M.A. , 133 S. Ct. 1391, 1400 - 1401 (2013) ,

noted that s tates can conduct administrative or judicial

proceedings to perform the difficult task of dividing settlements

between medical and non - medical expenses in the absence of

stipulation.

COPIES FURNISHED:

Andrew M. Moss, Esquire

Kutner, Rubin off and Moss, P.A.

501 Northeast First Avenue , Suite 300

Miami, Florida 33132

(eServed)

Adam James Stallard, Esquire

Xerox Recovery Services Group

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

(eServed)

Elizabeth Dudek, Secretary

Agenc y for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Richard J. Sho op, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant t o section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

notice of administrative appeal with the agency clerk of the

Division of Administrative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its headquart ers or where a party resides or

as otherwise provided by law.