14-003250MTR Callena Jones, As The Natural Guardian And Next Friend Of Nazyrah Jones, A Minor vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, February 19, 2015.

Summary: Petitioners failed to prove by clear and convincing evidence that a lesser amount than the Medicaid lien should be recovered by the agency for Petitioners' medical expenses.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CALLENA JONES, AS THE NATURAL

GUARDIAN AND NEXT FRIEND OF

NAZYRAH JONES , A MINOR,

Petitioners,

vs. Case No. 14 - 3250 MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

/

FINAL ORDER

On January 6 , 2015 , a duly - noticed h earing was held in

Daytona Beach and Tallahassee, Florida, via video

tele conference, before Suzanne Van Wyk , an A dministrative L aw

J udge assigned by the Division of Administrative Hearings.

APPEARANCES

For Petitioner s : William H. Ogle , Esquire

Ogle Law, LLC

444 Seabreeze Boulevard, Suite 800

Daytona Beach , Florida 32 118

For Respondent: Kevin A. Joyce , Esquire

Xerox Recovery Services Group

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 323 17

STATEMENT OF THE ISSUE

The issue to be decided is the amount payable to Respondent

in satisfaction of the AgencyÓs Medicaid lien from a settlement

received by Petitioner s from a third party , pursuant to section

409.910(17), Florida Statutes . 1/

PRELIMINARY STATEMENT

On July 18, 2014 , Petitioner s filed a Petition for

Declaratory Judg ment with the Division of Administrative

Hearings. The Petition is taken as a Petition to Determine

Amount Payable to the Agency for Health Care Administration in

Satisfaction of Medicaid Lien.

A final hearing was initially scheduled for September 10,

2014, but was rescheduled to October 16, 2014, for the

convenience of a witness, and again to January 6, 201 5, upon

RespondentÓs unopposed Motion for Final Hearing Continuance .

The final hearing commenced as rescheduled .

Petitioner s presented the testimony of Mr. Richard

Kolodinsky, an expert in medical malpractice litig ation, and

Petitioner, Callena Jones. Petitioner s offered no exhibits into

evidence . Respondent offered n either witnesses n or exhibits.

The undersigned granted Petitioner s Ó Request for O fficial

R ecognition of two orders by the Circuit Court of the Ninth

Judicial Circuit in and for Orange County, Florida, and one

order by the Tenth Judicial Circuit in and for Polk County,

Florida. A Transcript of the final hearing was filed

January 26, 2015 , and the parties timely filed Proposed Final

Orders that have be en considered in the preparation of this

Final Order .

FINDINGS OF FACT

1 . Nazyrah Jones was born May 13, 2008, at North Florida

Regional Hospital. The attending physician was Dr. Anthony

Agrios . 2/

2 . During her birth, Nazyrah suffered an anoxic brain

injury, a deprivation of oxygen to her brain. As a result,

Nazyrah is totally disabled, unable to sit up, stand, crawl,

walk, speak, or feed herself. Nazyrah is unable to swallow and

requires frequent suctioning of her airway to remove substances

which are , or may become, aspirated. NazyrahÓs condition is

permanent .

3 . NazyrahÓs mother, Callena Jones, lives alone with

Nazyrah and is NazyrahÓs primary care - giver. Ms. Jones relies

upon a home - health care agency, to assist with N azyrahÓs daily

care.

4 . Ms. Jones currently attends Webster University where

she is working toward a master Ó s degree in mental health

counseling.

5 . No evidence was introduced upon which to base a finding

that Ms. Jones is employed.

6 . Claims for c ompensation for birth - related neurological

injuries alleging medical malpractice are governed by FloridaÓs

Ne urological Injury Compensation Plan administered by the

Florida Birth - Related Neurological Injury Compensation

Association ( NICA ) , pursuant to sect ion s 766.301 through

766.316 , Florida Statutes. NICA is the exclusive remedy for

such medical malpractice claims, except that a civil action

Ðshall not be foreclosed where there is clear and convincing

evidence of bad faith or malicious purpose or willful and wanton

disregard of human rights, safety, or property[.]Ñ

§ 766.303(2), Fla. Stat.

7 . Ms . Jones filed a civil medical malpractice lawsuit on

her behalf and on behalf of Nazyrah, against both North Florida

Regional Hospital and Dr. Agrios , alleging Ðwillful and wanton

misconductÑ on behalf of the medical providers.

8 . Petitioners obtained a settlement of $825,000.00 3/ from

the medical providers related to NazyrahÓs injuries.

9 . Petitioners presented no evidence as to what portion of

the $825,000.00 total settlement was designated by the parties

as compensation to Petitioners for medical expenses, or

conversely, for various other types of damages either Nazyrah or

her mother may have suffered, such as pain and suffering, loss

of enjoyment of life, or loss of future earnings. Neither the

settlement agreement itself , nor any documents prepared in

connection therewith , was introduced in to evidence. No witness

offered any testimony on this issue. Based upon the evidence

presented at hearing, all of the settlement might have been

apportioned to medical care, or none of it might have been.

10 . Petitioners offered the testimony of Richard

Kolodinsky , a civil trial lawyer who has practiced since 1978,

has b een board certified in civil trial law for approximately 20

years, and is a member of the American Board of Trial Advocates,

among other professional distinctions.

11 . Mr. Kolodinsky was retained by Petitioners to review

the case and offer his opinion on the full value, or total

damages, of the underlying medical malpractice claim.

12 . In preparation for his testimony, Mr. Kolodinsky

r evie wed PetitionersÓ medical records, the Life Care Plan for

Nazyrah Jones, the pleadings filed in the underlying medical

malpractice lawsuit, a list of payments by Medicaid on behalf of

Nazyrah Jones, the NICA statute, the settlement in the

underlying medical malpractice lawsuit, the Guardian ad Litem

report to the court evaluating the settlement , the court order

approving t he settlement, and a Ð tender Ñ from Dr. Agrios.

13 . Mr. Kolodinsky testified that, in his opinion, the

full value of the underlying medical malpractice claim was at

least $25 million.

14 . Mr. Kolodinsky testified that his opinion was Ðbased

primarily on the Life Care Plan . . . in summary . . . that

provided for costs of about $11 million over the childÓs

lifetime[.]Ñ 4/ Further, he testified that

itÓs my understanding that Ms. Jones is a

college graduate and may have a masterÓs

degree, if IÓm remembering correctly, and so

I looked at the potential for lost earnings

that was also mentioned in the Life Care

Plan. And for a college graduate , lifetime

ear nings are in the range of 2.1 million. 5/

15 . The L ife C a re P lan was not introduced into evidence.

Mr. Kolodinsk y testified, generally, that a Life Care Plan is

usually prepared as evidence in a personal - injury case by a life

care planner who evaluates the cost of services , as determined

by a ph ysician after examination of the injured party , to be

needed by the injured party over his or her lifetime .

16 . Mr. Kolodinsky testified that, together , the expenses

for NazyrahÓs ongoing care plus Ms. JonesÓ potential lost

earnings Ðbrings us to a special damages number of about

$13 million.Ñ 6 /

17 . Mr. Kolodinsky next testified as to his opinion of the

full value of non - economic damages in the underlying case. His

explanation was as follows:

And so on top o f that, you know, you

have of course the noneconomic damages

component . . . for a profoundly injured,

profoundly handicapped child, that is a life

of constant care and deprivation that t his

child suffers minute to minute and the

mother deals with minute t o minute and will

deal with for the rest of their lives.

So, you know, these are big numbers.

You know, the valuation on personal injury

and medical malpractice claims, you know,

there was sort of a rule of thumb that

people talk about three times the specials,

but that really is a rule of thumb that

almost never is accurately applied, and as

we all know that is very difficult to

predict what a jury would do in any

particular cases but you have to think that

when you have special damages in the

$13 mill ion range that the damages for the

child could easily be another $10 million on

top of that and for the mom somewhere in the

couple million to 5 million range. So, that

brings us up to in the 25 million plus

range, and if there were no damage caps, if

the re were no limitations on insurance, if

there was no NICA, if there were no problems

with the case, and you were looking at,

okay, what are the full damages for this

case absence of any of those other issues,

thatÓs what I would think that that would be

worth. 7/

18 . On cross - examination, when questioned whether he had

tried cases similar to NazyrahÓs, Mr. Kolodinsky testified, ÐI

donÓt do NICA cases and in part because of the limitations on

damages, Ñ 8/ and that he has never tried a case involving an

an oxic injury at birth Ðbecause of NICA.Ñ 9/

19 . Mr. Kolodinsky has tried cases in which a child was a

victim of medical malprac tice, an d has tried cases which involve

Medicaid and Medicare liens.

20 . Mr. Kolodinsky conducted no jury verdict research and

d id not compare this case to any case tried to verdict.

21 . Mr. KolodinskyÓs testimony regarding Petitioners Ó

economic damages was imprecise, utilizing hedging language such

as costs Ð of about $11 millionÑ and earnings Ðin the range of

$ 2 .1 million.Ñ Mr. Kolodinsky provided no basis f or his

opinions other than the Life Care Plan , which was not introduced

into evidence and the genesis and role of which was explained

only in the most general terms.

22 . Mr. KolodinskyÓs testimony regarding Petitioners Ó non -

e conomic damages was lacking in detail, failed to establish the

basis for his opinion, and was unpersuasive. No other evidence

was introduced as to the basis for Mr. KolodinskyÓs opinion on

the full value of the non - economic damages in the underl ying

medic al malpractice claim.

23 . Mr. KolodinskyÓs opinion was the only evidence

introduced on the issue of valuing the total damages in the

underlying medical malpractice claim.

24 . Respondent, Agency for Health Care Administration

(AHCA), is the Florida state agency authorized to administer

FloridaÓs Medicaid program. § 409.902 , Fla. Stat.

25 . The Florida Statutes provide that Medicaid shall be

reimbursed for medical assistance that it has provided if

resources of a liable third party become available.

§ 409.910(1) , Fla. Stat.

26 . Florida Medicaid, through AHCA, paid $172,890.44 for

Na z yrahÓs medical expenses. Thus, Respondent has asserted a

Medicaid lien in the amount of $172,890.44 against any proceeds

received from a third party.

27 . The amount to be recovered for Medicaid medical

expenses from a judgment, award, or settlement from a third

party is determined by the formula in section 409.910(11)(f),

which establishes the amount at one - half of the total recovery,

after deducting attorneyÓs fees of 25 % of the recover y and all

taxable costs, up to the total amount actually paid by Medicaid

on the recipientÓs behalf.

28 . The parties stipulated that a pplication of the formula

in section 409.910(11)(f) to the entire proceeds of the

settlement yields $172,890.44. 10/

29 . Petitioners argue d that the Agency should be

reimbursed a lesser amount than the lien of $172,890.44.

Petitioners offer ed two theor ies for calculating the correct

amount to be reimbursed to the Agency.

30 . The first theory , and the one advanced by PetitionersÓ

expert, is that the Agency should recover from its lien in the

same proportion that PetitionersÓ recovered from the full value

of the damages in the underlying ca se.

31 . Petitioners again relied upon Mr. Kolodinsky to

establish the proportion of the Medicaid lien which the Agency

should be reimbursed under this theory.

32 . In this regard, Mr. Kolodinsky testified as follows:

So then you look at what proportion the

settlement is to the 25 million and you get

I think itÓs like 3 or 4 percent. We can do

the math and determine correctly. Then you

apply the percentage, the 3 or 4 percent, to

the $172,000 that Medicaid is seeking and

thatÓs the net that Medicaid ge ts;

4 percent, 3 percent of 172,000, because

that is the proportion that the settlement

was of the total value of the case. 11/

33 . Mr. KolodinkyÓs testimony, again, was imprecise and

unpersuasive.

34 . A ssuming the full value of the damages at $25 milli on,

Petitioners recovered 3.3 % of the full value of their claim in

the $825,000 settlement . Under PetitionersÓ first theory, the

Agency should be reimbursed 3.3 % of its lien for medical

expenses, or $5,705.38 . 12/

35 . Under an alternate theory, advanced for the first time

in PetitionersÓ Proposed Final Order, Petitioners maintain the

Agency should recover in the same proportion that past medical

expenses are to the full value of the damages in the underlying

case. Unde r this theory, Petitioners designate the amount paid

by Medicaid, $172,890.44, as PetitionersÓ past medical expenses.

36 . Petitioners introduced n o direct evidence to establish

the amount to be recovered by the Agency under this theory .

37 . Petitioners posit, correctly, that $172,890.44 is .69 %

of $25 million. Applying that percentage to the settlement

amount returns a figure of $5, 692 .5 0 , which Petitioners claim is

due to the Agency in satisfaction of its lien. 13/

38 . Both theories rely upon establish ing the full value of

damages in the underlying medical malpractice claim at

$25 million.

39 . Petitioners did not prove the value of the damages in

underlying medical malpractice by clear and convincing evidence.

40 . Petitioner s failed to prove by clear and convincing

evidence that the statutory lien amount of $ 172,890.44 exceeds

the amount actually recovered in the settlement for medical

expenses .

C ONCLUSIONS OF LAW

41 . The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties in this

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

Florida Statutes.

42 . 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 & Hum .

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

43 . 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 p ersonal - 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 create s a n automatic lien on

any such judgment or settlement for the medical assistance

provided by Medicaid . § 409.910(6)(c) , Fla. Stat .

44 . S ection 409.910(11)(f) set s forth a formula to

determine the amount the State is to be reimbursed . Th e s tatute

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

deducting taxable costs and 25 percent attorney Ós fees , not to

exceed the amount actually pai d by Medicaid on the beneficiaryÓs

behalf. Ag. f or Health Care Admin. v. Riley , 119 So. 3d 514,

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

45 . Sect ion 409.910(17) (b) thus makes clear that the

formula set forth in subsection (11) constitutes a default

allocat ion of the amount of a settlement that is attributable to

medical costs , and sets forth an administrative procedure for

adversarial testing of that allocation . See Harrell v. State ,

143 So. 3d 478, 480 (Fla. 1st DCA 2014) ( adopting the holding in

Riley that petitioner Ð should be afforded an opportunity to seek

the reduction of a Medicaid lien amount established by the

statutory default allocation by demonstrating, wi th evidence,

that the line amount exceeds the amount recovered for medical

expenses Ñ ) ( quoting Roberts v. AlbertsonÓs , Inc. , 119 So. 3d

457, 465 - 466 (Fla. 4th DCA 2012), rehÓg and rehÓg en banc denied

sub nom. Giorgione v. AlbertsonÓs, Inc. , 2013 Fla. App. LEXIS

10067 (Fla. 4th DCA June 26, 2013) ) .

46 . Sect ion 409.910(17) (b) provide s that a Medicaid

recipient has the right to rebut the default allocation in an

administrative hearing by establishing, through clear and

convincing evidence , that either: 1) a lesser portion of the

total 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.

47 . Petitioner s did not dispute the amount of medical

assistance provided by Medicaid , but attempt ed to show th at a

lesser portion of the total recovery should be allocated as

medical expense reimbursement th an that calculated by the

statutory formula , principally through expert witness testimony .

48 . Petitioner s argue that $825,000 .00 represents 3.3 % of

the purported $25 million total damages and concludes that the

Medicaid lien should be likewise limited to 3.3 % , that is, to

the sum of $5, 705 . 38.

49 . Alternately, Petitioners argue that $172,890.44 is

0.69 % of the total damages and concludes that the Medicaid lien

should therefore be limited to 0 .69 % of the settlement amount ,

that is, to the sum of $5,700.75.

50 . In reliance on these pro rata approaches, PetitionersÓ

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

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

amount of the settlement. The parties stipulated to the two

latter facts.

51 . Clear and convincing evidence Ðrequires more proof

than a Òpreponderance of the evidenceÓ but less than Òbeyond and

to the exclusion of a reasonable doubt.ÓÑ In re _ Graziano , 696

So. 2d 744, 753 (Fla. 1997). The clear and convincing evidence

level of proo f

entails both a qualitative and quantitative

standard. The evidence must be credible;

the memories of the witnesses must be clear

and without confusion; and the sum of the

total of the evidence must be of sufficient

weight to convince the trier of facts

without hesitancy.

In re _ Davey , 645 So. 2d 398, 404 (Fla. 1994).

52 . Petitioners failed to prove by clear and convincing

evidence the full value of PetitionersÓ damages in the

underlying medical malpractice claim . Without this variable,

PetitionersÓ formulas are meaningless, and PetitionersÓ case

fails under either theory.

53 . Petitioner s failed to prove by clear and convincing

evidence that l ess than $ 172,890.44 of the total recovery should

be allocated as reimbursement for medical expenses.

CONCLUSION

Upon consideration of the above F indings of F act and

C onclusions of L aw, it is hereby

ORDERED that :

The Agency for Health Care Administr ation is entitled to

$172,890.44 in sat isfaction of its Medicaid lien.

DONE AND ORDERED this 19th day of February, 2015 , in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 96 75

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of February, 2015 .

ENDNOT ES

1/ Except as otherwise provided herein, all references to the

Florida Statutes are to the 2014 version.

2/ The record does not include direct evidence of the spelling

of Dr. AgriosÓ name, which was recorded phonetically by the

court reporter.

3/ While the parti es stipulated to the settlement amount of

$825,000, it is noteworthy that the record contains other

evidence, in the form of testimony from Petitioners Ó expert,

that the case settled for Ð850,000Ñ [T.17:15] , and Ð$850,620 or

so net, after attorneyÓs fees.Ñ [T.32:19 - 21 ]

4/ T.23:22 - 25.

5/ T.24:4 - 10.

6/ T.24:10 - 11.

7/ T . 24:12 - 25:12.

8/ T.26:14 - 15.

9/ T . 27:11.

10/ Assuming no taxable costs, application of the formula yields

$309,375.00, which is more than the Medicaid lien; thus the

AgencyÓs recovery is limited to the Ðtotal amount of medical

assistance provided by Medicaid.Ñ £ 409.910(11)(f)1., Fla.

Stat.

11/ T.32:18 - 33:4.

12/ The record contains no direct evidence of the dollar amount

which Petitioners allege should be reimbursed to the Agency

under this theory of the case. PetitionersÓ attorney alleged in

his opening statement that the amount the Agency should be

reimbursed under this theory was $5,348.00. However, that

figure was based on a full value of $20 million, rather than

$25 million, which yields a ratio of 4.125 % . Further, counsel

arrived at his total by deducting a 25 % attorneyÓs fee after

applying the ratio. Of course, counselÓs opening statement does

not constitute evidence.

13/ In their Proposed Final Order, Petitioners maintain the

dollar amount under this theory is $5,700.75.

COPIES FURNISHED :

John Cofield

Affiliated Computer Services, Inc.

2308 Killearn Center Boulevard

Tallahassee, Florida 32309

(eServed)

Frank Dichio

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 19

Tallahassee, Florida 32308

(eServed)

Stuart Fraser Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Station 3

Tallahassee, Florida 32308

(eServed)

William H. Ogle, Esquire

Ogle Law, LLC

444 Seabreeze Boulevard, Suite 800

Daytona Beach, Florida 32118

(eServed)

Kevin Andrew Joyce, Esquire

Xerox Recovery Services Group

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing one copy of a Notice of Administrative Appeal with the

agency clerk of the Division of Administrative Hearings and a

second copy, accompanied by filing fees prescribed by law, with

the District Court of Appeal, First District, or w ith the

District Court of Appeal in the appellate district where the

party resides. The Notice of Administrative Appeal must be

filed within 30 days of rendition of the order to be reviewed.