16-000690MTR Josie Thomas, As The Mother And Natural Guardian Of Ciara Thomas, A Minor vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, August 15, 2016.

Summary: Petitioner established by clear and convincing evidence that application of section 409.910(17) warranted lesser amount of reimbursement for Medicaid expense.

ATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOSIE THOMAS, AS THE MOTHER AND

NATURAL GUARDIAN OF CIAR A

THOMAS, A MINOR,

Petitioner, Case No. 1 6 - 0690 MTR

vs.

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

On June 7, 2016, D. R. Alexander, A dministrative Law Judge

of the Division of Administrative Hearings (DOAH), conducted a

hearing in this matter by video teleconferencing at sites in

St. Petersburg and Tallahassee , F lorida .

APPEARANCES

For Petitioner : Stephen H. Haskins, Esquire

Law Office s of L ucas/Magazine , PLLC

8606 Government Drive

New Port Richey, Florida 34654 - 5510

For Respondent : Alexander R. Boler, Esquire

Xerox Recovery Services Group

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 323 17 - 7949

STATEMENT OF THE ISSUE

The issue is the amount payab le to Respondent, Agency for

Health Care Administration ( Respondent or AHCA) , in satisfaction

of Respondent's Medicaid lien from a settlement offer received

on behalf of Petitioner, Ciar a Thomas .

PRELIMINARY STATEMENT

In this proceeding, Josie Thomas, the mother of Ciar a , was

notified by AHCA's collections contractor that s he owed

$37,435.21 in satisfaction of Ciar a 's Medicaid lien for medical

benefits paid to h er , to be paid from the proceeds of a

settlement offer she has r eceived as compensation for burn

injuries Ciar a suffered when she accidentally fell into a

bathtub and was scalded with hot water. When ACHA's claim could

not be settled informally, on February 10, 2016, Petitioner

filed with DOAH a Petition [to] Determine the Amount of

Medicaid's Lien , by which she challenged AHCA's lien for

recovery of medical expenses paid by Medicaid. The basis for

the challenge was the assertion that the application of

section 409.910(17)(b), Florida Statutes, warranted

reimbursement of a lesser portion of the thi rd - party settlement

proceeds than the amount calculated by AHCA pursuant to the

formula in section 409.910(11).

At the final hearing, Josie Thomas testified on behalf of

her daughter and presented the testimony of Keith Ligori, a

trial attorney accepted a s an expert witness in valuation of

damages in personal injury cases. Petitioner's Exhibits 1 and 2

were accepted in evidence . AHCA offered Exhibit A , which was

accepted in evidence. Pursuant to a request by AHCA, that

exhibit has been sealed .

A one - vol ume T ranscript of the hearing was prepared.

Proposed final orders were filed by the parties and have been

considered by the undersigned in the preparation of this Final

Order.

FINDINGS OF FACT

1. Ciar a Thomas is a six - year - old female who currently

reside s in St. Petersburg, Florida.

2. R espondent is the state agency authorized to administer

Florida's Medicaid program. See § 409.902, Fla. Stat.

3. On October 18, 2012, Ciara , then two and one - half weeks

shy of her third birthday, was se verely injured w hen she fell

into a bathtub and was scalded by hot water. At that time,

Ciar a , her mother, and a brother were tenants of a residential

dwelling located at 8181 91st Terrace, Seminole, Florida, which

was owned by Selvie Berberi, the landlord. Ciar a suffer ed from

second - and third - degree burns over 65 per c ent of her total body

surface area , and in particular, to her back, buttocks, chest,

bilateral tower extremities, bilateral upper extremities, and

genitals.

4 . Ciar a received extensive medical care and treatment for

her scald burns at Tampa General Hospital, where she was

hospitalized from October 18, 2012 , through January 9, 2013.

Th e parties have stipulated that through the Medicaid program ,

AHCA spent $174,675.05 on behalf of Ciara.

5. Because of the extensive nature of the burns on her

lower extremities and entire back, Ciar a has undergone five skin

grafts . She has completed physical therapy in the burn center

and does not anticipate any further medical treatment until she

is fully grown.

6. C iar a has very visible scars over much of her body ,

which will not likely improve over time . The skin feels

rubbery , with no smooth texture , and it is affected by the

weather . Whenever she is outside, Ciara must be completely

covered with clothing. She a ttends school but cannot play

out doors due to potential injury or infection. Because of the

condition of her skin, she is subjected to star es by other

persons and students, causing her to be extremely self -

conscious.

7 . Petitioner filed suit in Pinellas County Cir cuit Court

against the landlord in negligence for her failure to provide

safe and proper working plumbing to the rental home. Among

other things, the water heater had been set far above the legal

limits of 120 degrees. During the pendency of th at litigation,

the landlord's homeowner ' s insurance company offered payment in

settlement in the amount of $101,000.00, representing the

$100,000.00 coverage limit for bodily injury liability, and

$1,000.00 as payment of the coverage limit of the policy's

medical payments provisions. At hearing, Ciara's mother

indicated that she intends to accept the offer if it is approved

by the court.

8 . AHCA contends it should be reimbursed for Medicaid

expenditures on behalf of Petitioner pursuant to the formula se t

forth in section 409.910(11)(f). Under the formula, the lien

amount is computed by deducting a 25 percent attorney's fee

($25,250.00) and taxable costs ($879.59) from the $101,000.00

recovery, which yields a sum of $74,870.41. This amount is then

divid ed by two, which yields $37,435.21. Under the statute,

Respondent is limited to recovery of the amount derived from the

statutory formula or the amount of the lien, whichever is less.

Petitioner agrees that under th e statutory default allocation ,

AHCA wo uld be entitled to $37,435.21.

9 . S ection 409.910(17)(b) provides that a Medicaid

recipient has a right to rebut the default allocation described

above . Utilizing that provision , Petitioner asserts that

reimbursement should be limited to the same ratio a s h er

recovery amount is to the full or total value of her damages.

Under this theory, Petitioner contends that had her case gone to

trial, a jury would have awarded at least $3.5 million, or the

mid - point between $3 million and $4 million. Because the

s ettlement represents a recovery of 2.9 percent of the valuation

of her total damage s, Petitioner contends she should pay

2.9 percent of AHCA's past medical expenses, or $5,066.0 0 , to

satisfy the Medicaid lien. The statute requires that Petitioner

sub stantiate h er position by clear and convincing evidence.

10 . To support the proposed full value of damages,

P etitioner presented the testimony of Keith Ligori, a trial

attorney in Tampa for the last 15 years , who specializes in all

types of personal inj ury cases. Mr. Ligori has handled similar

cases "numerous times , " and o n a daily basis he makes

assessments of the valuation of potential claims. He is

familiar with the reasonable valuation of personal injury cases

in the greater Tampa Bay area , includi ng Pinellas County .

1 1 . Mr. Ligori presented fact and opinion testimony on the

issue of valuation of damages. Before forming his opinion on

damages in this case , Mr. Ligori reviewed the medical records ,

including photographs of Ciara , interviewed the chi ld and her

mother , and discussed the case with her trial counsel . He also

relied on his training and experience and familiarity with other

cases in the Tampa Bay area .

1 2 . B ased on h is review of the case, Mr. Ligori valued

total damages, conservatively, at $3.5 million . This figure

took into account non - economic factors, including mental

anguish, loss of ability or capacity to enjoy life, disability,

and scarring and disfigurement , and economic damages consisting

of the medical expenses paid by AHCA . Mr . Ligori testified that

if he was actually trying the case before a jury, he would seek

damages of between $5 million and $10 million. T h e undersigned

finds the valuation of damages at $3.5 million to be credible

and persuasive and is hereby accepted.

1 3 . In summary, by clear and convincing evidence ,

Petitioner has demonstrated that , conservatively, the f ull value

of h er damages is $ 3 .5 million . The settlement amount of

$101,000.00 is 2.9 percent of the total value of Petitioner's

damages. The applicati on of this factor to total medical

expenses incurred by AHCA results in an allocation of $5,066.0 0

as a reasonable payment of the Medicaid lien.

CONCLUSIONS OF LAW

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

states are required to seek rei mbursement for medical expenses

incurred on behalf of beneficiaries who later recover from

third - party tortfeasors. See Ark. Dep't of Health & Hum. Servs.

v . Ahlborn , 547 U.S. 268 (2006). States may satisfy this

requirement by enacting statutes that impo se Medicaid liens to

recover the portion of settlements that represent medical

expenses.

15 . Consistent with federal law, section 409.910

authorizes and requires the State to be reimbursed for Medicaid

funds paid for medical expenses when the beneficiar y

subsequently receives a settlement from a third - party. The

statute creates an automatic lien on any such settlement for the

medical assistance provided by Medicaid. See § 409.910(6) (c),

Fla. Stat.

16 . Section 409.910(11)(f) establishes a formula to

determine the amount of Medicaid medical assistance benefits the

State is to be reimbursed. "The formula operates by reducing

the gross settlement amount by 25% to account for attorneys'

fees, then subtract taxable costs, then divides that number by

two, and awards Medicaid the lesser of the amount of benefits

paid or the resulting number." Mobley v. State, Ag . for Health

Care Admin. , 181 So. 3d 1233, 1235 n.1 (Fla. 1st DCA 2015) .

17 . The application of the apportionment formula in

section 409. 910(11)( f)1. to the $ 101 ,000.00 settlement at issue

yields attorney's fees of $ 25,250 .00, less taxable costs of

$ 879.59 , with $ 74,870.00.41 of the recovery amount remaining.

One - half of th is is $ 37,435.21 , which is less than the

$ 174,675.05 of Medicaid assistance that Respondent provided for

Petitioner. Accordingly, if the statutory formula applies to

determine the reimbursement due in this case, Respondent would

be entitled to $ 37,435.21 , as the amount of medical assistance

provided is greater than the medical e xpense portion of the

settlement.

18 . Under section 409.917(17)(b), a Medicaid recipient has

the right to rebut this presumptively valid statutory default

allocation in an administrative proceeding. This is

accomplished by establishing, through clear and convincing

evidence, that either a lesser portion of the total recovery

should be allocated as a medical expense reimbursement than is

calculated under the statutory formula, or that Medicaid

actually provided a lesser amount of medical assistance than ha s

been asserted by Respondent. Clear and convincing evidence

"requires more proof than a 'preponderance of the evidence' but

less than 'beyond and to the exclusion of a reasonable doubt.'"

In re Graziano , 696 So. 2d 744, 753 (Fla. 1997).

19. Petitione r's position is that reimbursement for past

medical expenses should be limited to the same ratio as

Petitioner's recovery amount to the total value of damages , as

described in finding of fact 12 . That ratio is 2.9 percent and

would limit the amount of the Medicaid lien to $5,066.00.

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

the allocation for Petitioner's past medical expenses in the

amount of $5,066.00 constitutes a fair, reasonable, and accurate

share of the settlement for the total rec overy for those past

medical expenses paid by Medicaid. Therefore, any such Medicaid

lien is limited to the same amount.

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that Respondent is entitled to reimbursemen t in the

amount of $ 5,066.0 0 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 15th day of August , 201 6 , in

Talla hassee, Leon County, Florida.

S

D . R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

123 0 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

Division of Administrative Hearings

this 15th day of August , 201 6.

COPIES FURNISHED:

Stephen H. Haskins, Esqu ire

Law Offices of Lucas/Magazine, PLLC

8606 Government Drive

New Port Richey, Florida 34654 - 5510

(eServed)

Alexander R. Boler, Esquire

Xerox Recovery Services Group

Suite 3 00

2073 Summit Lake Drive

Tallahassee, Florida 323 17 - 7949

(eServed)

Stuart Fra ser Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail St op 3

Tallahassee, Florida 32308 - 5407

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Fl orida 32308 - 5407

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308 - 5407

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Ord er 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 the original

notice of administrative appeal with the ag ency 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 distr ict where

the agency maintains its headquarters or where a party resides or

as otherwise provided by law.