14-005308MTR Tyra N. Pierre, A Minor, By And Through Her Mother And Guardian, Yanique Benjamin vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, April 14, 2015.

Summary: Petitioner proved by clear and convincing evidence that a lesser amount should be reimbursed to the Respondent in satisfaction of its Medicaid lien than the amount calculated pursuant to section 409.910(11)(f), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TYRA N. PIERRE , a minor, by and

through her mother and guardian,

YANIQUE BENJAMIN,

Petitioner,

vs. Case No. 1 4 - 5308 MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

/

FINAL ORDER

Pursuant to notice, a final hearing was held in this case

on January 16, 2015 , in Tallahassee, Florida, before Suzanne Van

Wyk , a designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARA NCES

For Petitioner: Floyd B. Faglie , Esquire

Staunton & Faglie, P.L .

189 East Walnut Street

Monticello , F lorida 32 344

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 determined is the amount to be reimbursed

to Respondent , Agency for Health C are Administration (Respondent

or Agency) , for medical expenses paid on behalf of Petitioner,

Tyra Pierre, from a medical - malpractice settlement received by

Petitioner from a third party .

PRELIMINARY STATEMENT

On November 13 , 2014, Petitioner filed a Pet ition to

Determine Amount Payable to Agency for Health Care

Administration in Satisfaction of Medicaid Lien , by which she

challenged RespondentÓs lien for recovery of medical expenses

paid by Medicaid in the amount of $ 530,258.86 . The basis for

the challe nge was the assertion that the application of section

409.910(17) (b) , Florida Statutes (2014 ), warranted reimbursement

of a lesser portion of the total third - party settlement proceeds

than the amount calculated by Respondent pursuant to the formula

establi shed in section 409.910 (11)(f) .

Respondent referred the petition to the Division of

Administrative Hearings on November 13, 2014 . T he final hearing

was scheduled for January 16, 2015 , and was held as scheduled.

At the final hearing, Petitioner present ed the testimony of

Scott Le e ds, a n attorney who represented Petitioner in the

personal injury action from which the third - party settlement

proceeds were obtained . PetitionerÓs Exhibits 1 t hrough 9 were

received into evidence. Respondent offered no indep endent

witnesses or exhibits.

A one - volume Transcript of the proceedings was filed on

February 6 , 201 5 . The evidentiary record remained open for

Petitioner to file the deposition transcript of Vincent Barrett,

which was filed on February 13, 2015. The u ndersigned entered

an Order Closing Record on February 16, 2015.

B oth parties timely filed Proposed Final Orders, which have

been duly considered by the undersigned in the preparation of

this Final Order.

RULING ON EXPERT WITNESS DE SIGNATION

The deposition testimony of R. Vincent Barrett, Jr., was

filed on February 13, 2015. During the deposition, PetitionerÓs

counsel offered Mr. Barrett as an expert in valuation of

damages. Respondent did not object. The undersigned accepts

Mr. Barrett as an expert in v aluation of damages in personal

injury cases.

FINDINGS OF FACT

1. On November 4, 2011, Petitioner, Tyra Pierre

(Petitioner) , fell from the window of the fourth floor apartment

where she lived with her mother, Yanique Benjamin , in North

Miami Beach, Florid a.

2 . The apartment was owned by Harvard House, LLC (Harvard

House).

3. Petitioner was airlifted to , and treated at , Jackson

Memorial Hospital Trauma Center. Petitioner suffered a spinal

cord injury at cervical level C7 - C8, and is paralyzed from the

wa ist down , rendering her a permanent paraplegic .

4. Medicaid paid for PetitionerÓs medical expenses in the

amount of $530,258.86.

5 . Petitioner was three years old at the time of her

injury and has a normal life expectancy of 72.9 years .

6 . Petitioner is wheel - chair bound. She has no control of

her bladder or bowels.

7 . P araplegi cs suffer from a number of attendant

complications , such as erosion of skin integrity, pressure

ulcers, and kidney, bladder, and digestive system disorders.

Paraplegics requi re care from neurologists, neurosurgeons,

orthopedic surgeons, and gastroenterologists, among other

physicians, throughout their normal life expectancy.

8 . Ms. Benjamin retained Scott Lee ds, an attorney

specializing in personal and catastrophic injury cla ims, to

represent Petitioner in a personal injury claim against Harvard

House. Mr. Leeds served Harvard House with a Notice of Intent

to Initiate Litigation on December 29, 2011.

9 . The insurance liability of Harvard House was limited to

$1 million. Dur ing discovery, Mr. Leeds determined Harvard

House had no other collectible assets.

10 . Petitioner settled with Harvard House pre - suit for

$750,000. 1 /

11 . Mr. Leeds has practiced law in the area of

catastrophic personal injury for 31 years. He has repre sented

children in cases seeking damages for catastrophic injury. As

part of his practice, Mr. Leeds routinely estimates the value of

damages suffered by his clients.

12 . The components of damages in catastrophic personal

injury cases generally follow th e elements set out in a jury

verdict form, including economic damages, such as past medical

expenses (date of injury to date of trial), future medical

expenses, loss of past earnings, loss of future earning

capacity, past attendant care and rehabilitation, future

at tendant care and rehabilitation; as well as non - economic

damages, such as past and future pain and suffering, and loss of

enjoyment of life .

13 . PetitionerÓs claim for past medical expenses is valued

at $530,258.86, the amount paid by Medicaid f or her past

treatment.

14 . Mr. Leeds estimate d PetitionerÓs future medical care

expenses at $8 million, based on statistics from the Ch r istopher

and Dana Reeves Foundation. Mr. Leeds testified that

PetitionerÓs attendant care costs for her expected life time are

an additional $9 m illion .

15 . Mr. Leeds Ó estimate of PetitionerÓs economic damages

is $17.5 million before valu ing PetitionerÓs los s of future

earning capacity .

16 . Mr. LeedsÓ opinion on the value of PetitionerÓs

damages is informed by his exper ience representing children in

two separate catastrophic injury cases. In both cases, the

children were under five years old and their injuries resulted

in paraplegia. In both cases, Mr. Leeds negotiated structured

settlements for the children in excess of $20 million in future

benefits over the childrenÓ s lifetime.

17 . Mr. Leeds testified, convincingly, that a jury would

likely award Petitioner a substantial sum to compensate

Petitioner for her non - economic damages, given her life

expectancy of over 70 years to endure the consequences of her

injury.

18 . Mr. LeedsÓ valuation of PetitionerÓs combined economic

and non - economic damages in excess of $20 million is accepted as

credible and reliable, as well as persuasive.

19 . Petitioner also presented the te stimony of a second

expert in valuing damages in catastrophic personal injury cases,

R. Vinson Barrett, Jr. Mr. Barrett is a civil trial lawyer who

has practiced exclusively in the area of personal injury for the

past 30 years. He is a senior partner in the law firm of

Barrett, Fasig & Brooks in Tallahassee, Florida .

20 . In preparing for his testimony, Mr. Barrett reviewed

PetitionerÓs medical records, the police report filed on the

date of PetitionerÓs injury, Mr. Leeds ' demand letter to Harvard

House , some discovery documents, the settlement , and the court

order approving the settlement. In formulating his opinion as

to the value of PetitionerÓs damages, Mr. Barrett also consulted

with colleagues practicing personal injury law in South Florida .

Accordi ng to Mr. Barrett, jury awards var y by region in the

state of Florida, with South Florida juries returning high jury

verdicts in personal injury cases.

21 . Mr. Barrett emphatically agree d that the value of

PetitionerÓs damages are in excess of $20 million .

22 . In formulating his opinion, Mr. Barrett reviewed jury

verdicts in cases which he considered comparable, or otherwise

instructive.

23 . In one case, a four - year - old boy rendered a paraplegic

in an automobile accident was awarded $19.9 million in d amages

in 2010. That verdict was rendered in Osceola County.

Mr. Barrett testified that a jury verdict in Dade County would

be expected to be higher than in Osceola County.

24 . In a second case, a jury in Pinellas County awarded

over $10 million to a 57 - year - old woman who was rendered

paraplegic as a result of medical malpractice. The jury award

allocated $3 million for future medical expenses and $7 million

for future pain and suffering. Mr. Barrett testified that

future pain and suffering awards are generally lower for older

plaintiffs, such as this 57 - year - old woman, than for younger

plaintiffs , like Petitioner, with a much longer life expectancy .

25 . Another case to which Mr. Barrett referred involved an

adult male construction worker rendered para plegic in a fall

from a steel beam which resulted in a spinal injury similar to

PetitionerÓs. The Hillsborough County jury awarded over $16

million to the plaintiff in that case.

26 . The construction workerÓs life expectancy was shorter

than Petitioner Ós, thus Mr. Barrett believes an award greater

than $16 million would be made in PetitionerÓs case.

Mr. Barrett would also expect a higher award in a present - day

civil jury trial than this $16 - million award which was made in

1995.

27 . Mr. BarrettÓs opini on on the value of PetitionerÓs

damages was both credible and persuasive.

28 . Medicaid is to be reimbursed for medical assistance

provided if resources of a liable third party become available.

Thus, Respondent asserted a Medicaid lien in the amount of

$530,258.8 6 against any proceeds Petitioner received from a

third party.

29 . RespondentÓs position is that it should be reimbursed

for its Medicaid expenditures on behalf of Petitioner pursuant

to the formula set forth in section 409.910(11)(f). Under the

statutory formula, the lien amount is computed by deducting a 25

percent attorneyÓs fee and taxable costs (in this case,

$8,704.50) from the $750,000.00 recovery, which yields a sum of

$553,795.50, then dividing that amount by two, which yields

$276,89 7.75. That figure establishes the maximum amount that

could be reimbursed from the third - party recovery in

sati sfaction of the Medicaid lien.

30 . PetitionerÓs position is that Respondent should be

reimbursed $19,884.71 in sat isfaction of its Medicaid lien.

31 . On August 27 , 2014 , Petitioner and Harvard House

exe cuted a Release of Claims (Release) based upon the settlement

of $750,000. In the Release, the parties acknowledge that the

settlement Ðonly compensat[es] Tyra Pierre for a fraction of the

tot al monetary value of her alle g ed damages.Ñ

32 . The Release does not differentiate or allocate the

total recovery among the components of damages, such as economic

or non - economic. However, the Release allocates $19,884.71 to

PetitionerÓs claim for past medical expenses, and allocates the

Ðremainder of the settlement towards the satisfaction of claims

other than past medical expenses.Ñ

33 . The Release provides that said Ðallocation is a

reasonable and proportionate allocation based on the same ratio

t his settlement bears to the total monetary value of all Tyra

PierreÓs damages.Ñ

34 . The settlement amount of $750,000 is 3.75% of the

total value of PetitionerÓs damages.

35 . The figure of $19,884.71 is 3.75% of the value of past

medical expenses paid by Medicaid on PetitionerÓs behalf.

36 . Respondent was not a party to the settlement.

Respondent did not participate in litigation of the claim or in

settlement negotiations, and no one represented RespondentÓs

interests in the negotiations. Responden t has not otherwise

executed a release of the lien.

37 . Petitioner did not introduce the settlement in

evidence . H owever, Petitioner did introduce the circuit court

order authorizing the settlement. The order reads, in pertinent

part, as follows:

Given the facts, circumstances, and nature

of TyraÓs injuries and this settlement, the

parties have agree[d] to allocate $19,884.71

of this settlement to TyraÓs 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 the settlement bears to the total

monetary value of all TyraÓs damages.

* * *

5. The allocation of damages recited in the

previous paragraph and made a material term

of the settlement , is fair and accurate, and

is expressly adopted by this Court.

(emphasis added).

38 . Mr. Leeds testified that allocation of $19,884.71 of

the settlement proceeds to PetitionerÓs past medical expenses

was fair and accurate, Ðbased upon the analysis of this

catastrophic injury and the future 73 years that Tyra Pierre

will have and the value of this case[.]Ñ

39 . Mr. Barrett testified that allocation of $19,884.71

for past medical expenses was r easonable and rational.

40 . Petitioner prove d by clear and convincing evidence

that a lesser portion of the total recovery should be allocated

as reimbursement for past medical expenses than the amount

calculated by Respondent pursuant to the formula set forth in

section 409.910(11)(f).

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 (201 4 ). 2/

42 . Respondent is the agency authorized to administer

FloridaÓs Medicaid program. £ 409.902, Fla. Stat.

43 . The Medicaid program Ðprovide[s] federal financial

assistance to States that choose to reimburse certain costs of

medical treatment for needy persons.Ñ Harris v. McRae , 448 U.S.

297, 301 (1980). Though participation is optional, o nce a State

elects to participate in the Medicaid program, it must comply

with federal requirements governing the same. Id .

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

s tates are required to seek reimbursement for medical expenses

incurred on behalf of Medicaid recipients wh o later recover from

legally liable third parties . See Arkansas Dep't of Health &

Human Servs. v. Ahlborn , 547 U.S. 268 , 276 (2006).

45 . Consistent with this federal requirement, the Florida

Legislature has enacted section 409.910 , which authorizes and

requires the State to be reimbursed for Medicaid funds paid for

a recipient 's medical care when that recipient later receiv es a

personal injury judgment or settlement from a third party.

Smith v. Ag. for Health Care Admin . , 24 So. 3d 590, 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 M edicaid. § 409.910(6)(c) , Fla. Stat .

46 . 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 sets th at amount at one - half of the total recovery , after

deducting attorneyÓs fees of 25 percent of the recovery and all

taxable costs , up to, but not to exceed , the total amount

actually pai d by Medicaid on the recipient Ós behalf. Ag. For

Health Care Admin. v. Riley , 119 So. 3d 514, 515 , n . 3 (Fla. 2d

DCA 2013).

47 . Respondent correctly asserts that it is not

automatically bound by any allocation of damages set forth in a

settlement between a Medicaid recipient and a third party that

may be contrary to the formulaic amount , citing secti on

409.910(13). See also , § 409.910(6)(c)7., Fla. Stat. (ÐNo

release or satisfaction of any . . . settlement agreement shall

be valid or effectual as against a lien created under this

paragraph, unless the agency joins in the release or

satisfaction or e xecutes a release of the lien.Ñ). Rather, i n

cases such as this , where Respondent has not been provided prior

notice and has not participated in or approved the settlement,

the administrative procedure created by section 409.910(17)(b)

is the means for de termining whether a lesser portion of a total

recovery should be allocated as reimbursement for medical

expenses in lieu of the amount calculated by application of the

formula in section 409.910(11)(f).

48 . Section 409.910 (17) (b) provide s that

A recipie nt may contest the amount

designated as recovered medical expense

damages payable to the agency pursuant to

the formula specified in paragraph (11)(f)

by filing a petition under chapter 120

within 21 days after the date of payment of

funds to the agency or after the date of

placing the full amount of the third - party

benefits in the trust account for the

benefit of the agency pursuant to paragraph

(a). The petition shall be filed with the

Division of Administrative Hearings. For

purposes of chapter 120, th e payment of

funds to the agency or the placement of the

full amount of the third - party benefits in

the trust account for the benefit of the

agency constitutes final agency action and

notice thereof. Final order authority for

the proceedings specified in this subsection

rests with the Division of Administrative

Hearings. This procedure is the exclusive

method for challenging the amount of third -

party benefits payable to the agency. In

order to successfully challenge the amount

payable to the agency, the r ecipient must

prove, by clear and convincing evidence,

that a lesser portion of the total recovery

should be allocated as reimbursement for

past and future medical expenses than the

amount calculated by the agency pursuant to

the formula set forth in parag raph (11)(f)

or that Medicaid provided a lesser amount of

medical assistance than that asserted by the

agency.

49 . 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 Ðshould be afforded an opportunity to seek

the reduction of a Medicaid lien amount established by the

statutory default allocation by demonstrating, with evidence,

that the lien amount exceeds the amount recovered for medical

expensesÑ)(quoting Roberts v. AlbertsonÓ s , 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)).

50. Clear and convincing evidence Ðrequires more proof

than a Òprepond erance 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 proof

entails both a qualitative and quantitative

standard. The evid ence must be credible;

the memories of the witnesses must be clear

and without confusion; and the sum total of

the evidence must be of sufficient weight to

convince the trier of fact without

hesitancy.

Clear and convincing evidence requires

that the evide nce must be found to be

credible; the facts to which the

witnesses testify must be distinctly

remembered; the testimony must be

precise and explicit and the witnesses

must be lacking in confusion as to the

facts in issue. The evidence must be

of such weig ht that it produces in the

mind of the trier of fact a firm belief

or conviction, without hesitancy, as to

the truth of the allegations sought to

be established.

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

approval, Slomowitz v. Walker , 42 9 So. 2d 797, 800 (Fla. 4th DCA

1983)); see also In re Henson , 913 So. 2d 579, 590 (Fla. 2005).

"Although [the clear and convincing] standard of proof may be

met where the evidence is in conflict, it seems to preclude

evidence that is ambiguous." Westing house Elec . Corp. v. Shuler

Bros. , 590 So. 2d 986, 989 (Fla. 1st DCA 1991).

Proof as to Reimbursement for Past Medical Expenses

51 . The evidence in this case is clear and convincing that

the allocation for PetitionerÓs past medical expenses in the

amount of $ 19,884.71 as set forth in the settlement agreement ,

and approved by the circuit judge, and incorporated into the

court order approving the settlement, constitutes a fair,

reasonable, and accurate share of the total recovery for those

past medical expe nses actually paid by Medicaid .

52 . Petitioner has proven, by clear and convincing

evidence, that $ 19 , 884 . 71 of the total third - party recovery

represents that share of the settlement proceeds fairly

attributable to expenditures that were actually paid by

Respondent for PetitionerÓs 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 Administration is entitled to

$ 19,884 . 71 in satisfaction of its Me dicaid lien.

DONE AND ORDERED this 14th day of April, 2015, in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Park way

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of April, 2015.

ENDNOTES

1/ Ms. Benjamin also sought damages in a separate civil action

for loss of consortium with her daughter, which she settled for

$250,000.

2 / All references to the Florida Statutes are to the 2014

version, unless otherwise specified herein.

COPIES FURNISHED:

Kevin A . Joyce, Esquire

Xerox Services

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

(eServed)

Frank Dichio

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 19

Tallahassee, Florida 32308

(eServed)

John Cofield

Affiliated Computer Services, Inc.

2308 Killearn Cen ter Boulevard

Tallahassee, Florida 32309

(eServed)

Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Sto p 3

Tallahassee, Florida 32308

(eServed)

Stuart Fraser Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administrat ion

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 to section 120.68, Florida

Statutes. Review proceed ings 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 headquarters or where a

party resides or as otherwise provid ed by law.