16-004873MTR Nicalea R. Gonzalez, As Natural Guardian And Legal Guardian Of The Property Of Her Daughter, Amora Gonzalez vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, January 9, 2017.

Summary: Petitioner did not prove, by clear and convincing evidence, that a lesser portion of Petitioner's total recovery should be allocated as reimbursement for medical expenses than the amount the Agency calculated using the section 409.910(11)(f) formula.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NICALEA R. GONZALEZ, AS NATURAL

GUARDIAN AND LEGAL GUARDIAN OF

THE PROPERTY OF HER DAUGHTER,

AMORA GONZALEZ,

Petitioner,

vs. Case No. 16 - 4873MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

__________ _____________________/

FINAL ORDER

The final hearing in this matter was conducted before

J. Bruce Culpepper, Administrative Law Judge of the Division of

Administrative Hearings, pursuant to sections 120.569 and

120.5 7(1), F lorida Statutes (2016), 1/ on October 25, 201 6, by

video teleconference sites in Tallahassee and Tampa, Florida.

APPEARANCES

For Petitioner: John W. Staunton, Esquire

Staunton & Faglie, PL

3000 Gulf to Bay Boulevard

Clearwater, Florida 33759

For Respondent: Alexander R. Boler, Esquire

Xerox Recovery Services

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

STATEMENT OF 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 Pet itionerÓs recovery

from a third p arty.

PRELIMINARY STATEMENT

On August 23, 2016, Petitioner, N icalea R. G onzalez ,

(ÐPetitionerÑ) as Natural Guardian and Legal Guardian of the

Property for her daughter, A mora G onzalez , filed a Petition to

Determine Amount Payable to the Agency for Health C are

Administration (the ÐAgencyÑ) in Satisfaction of Medicaid Lien

(ÐPetitionÑ). Petitioner challenges the amount of the AgencyÓs

lien for medical expenses following a third - party recovery on

behalf of Amora Gonzalez (ÐAmoraÑ), a Medicaid recipient. The

Agency seeks reimbursement of medical expenses paid by Medicaid

for Amora based on an amount calculated using the formula

established in section 409.910(11)(f) , Florida Statutes .

Petitioner asserts that reimbursement of a lesser portion of

PetitionerÓs re covery is warranted pursu ant to section

409.910(17)(b).

On August 24, 2016, the Division of Administrative Hearings

(ÐDOAHÑ) notified the Agency of PetitionerÓs Petition for an

administrative proceeding to determine the amount payable to

satisfy the Medica id lien.

The final hearing was held on October 25, 2016. At the

final hearing, Petitioner offered the testimony of Paul B.

Catania, Esq uire , and R. Vinson Barrett, Esq uire. PetitionerÓs

Exhibits 1 through 14 were admitted into evidence. The Agency

did n ot offer evidence or witnesses.

A court reporter recorded the final hearing. A one - volume

Transcript of the proceeding was filed on November 21, 2016. At

the close of the hearing, the parties were advised of a ten - day

timeframe following filing of the Tr anscript at DOAH to file

post - hearing submittals. Both parties filed Proposed Final

Orders which were duly considered in preparing this Final Order.

FINDING S OF FACT

1. 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. GonzalezÓs vehicle. The collision also sever ed the

seat belt securing Amora Ó s child seat. Amora was thrown

violently forward. Following the accident, Amora was found lying

on the back floor of the vehicle, wedg ed between the front seats.

2. 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 c allosum 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.

3. A mora 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.

4. AmoraÓs past medical expenses related to the 2015

automobile accident total $108,725.29. Of that amount, the

Agency, through the Medicai d program, paid $108,656.31 for

Petitioner Ó s medical care and services. Petitioner did not make

any payments on AmoraÓs behalf for past medical care or in

advance for AmoraÓs future medical care .

5. Ms. Gonzalez pursued a personal injury claim as Natural

Guardian and Legal Guardian of the Property of Amora to recover

all of AmoraÓs damages against the driver/owner of the vehicle

that cause d the car accident (the ÐTortfeasorÑ).

6. 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 AmoraÓs

claim for damages.

7. No evidence or testimony was presented at the final

hearing indicat ing 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 med ical and non - medical

expenses.

8. The Agency was not a party to the settlement or

settlement agreement.

9. When notified of Ms. GonzalezÓs 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 Ós medical

costs and services .

10. This administrative proceeding centers on the amount

the Agency should be reimbursed to satisfy its Medicaid lien

following PetitionerÓs recovery of $1,000,000 from a settlement

with a third party. Under section 409.910, the Agency may be

repaid fo r 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 val ue of PetitionerÓs damages. Using the section

409.910(11)(f) formula, the Agency subtracted a stat utorily

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 Age ncy

seeks the full $108,656.31.

11. Petitioner asserts that, pursuant to section

409.910(17)(b), the Agency should be reimbursed a lesser portion

of PetitionerÓs 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 AmoraÓs injuries which Petitioner calculates as

$8 ,000,000 . Otherwise, application of the default statutory

formula under section 40 9.910(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 lawÓs anti - lien

provision, 42 U.S.C. § 1396 p(a)(1). Petitioner contends that the

AgencyÓs allocation from PetitionerÓs recovery should be reduced

to the amount of $13,590.66.

12. To establish the full value of AmoraÓs injuries,

Petitioner presented the testimony of attorneys Paul Catania and

Vinc e 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 clientsÓ

best interest to settl e expeditiously for the ten dered insurance

policy limits.

13. Mr. Catania also opined on what he considered to be the

actual value of AmoraÓs damages. Mr. Catania heads a plaintiffÓs

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 injur ed 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.

14. Mr. Catania valued AmoraÓs damages as cons ervatively

between $8 ,000,000 and $10 ,000,000 . In deriving this figure,

Mr. Catania reviewed the neuro psychological report in AmoraÓs

discharge summary , as well as the subsequent neuro psychological

updates that were performed on Amora approximately one year

later. Mr. Catania no ted AmoraÓs memory problems, inattention,

hyper activity, and behavioral issues. Mr. Catania relayed how

these deficits will affect AmoraÓs ability to learn and be

gainfully employed over her lifetime. Amora will need ongoing

s peech and occupational therapy. Mr. Catania also considered

AmoraÓs 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 AmoraÓs

injuries , he reviewed nine jury verdicts involving catastrophic

injuries similar to AmoraÓs. Based on these sample results,

Mr. Catania was comfortable valuing AmoraÓs damages

conservatively in the $8 million to $10 million range given her

injuries and her life expectancy.

15. 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

PetitionerÓs 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 AmoraÓs injuries ($8 ,000,000 ) compared to the

amount Petitioner actual recovered ($1,000,000). Using his

estimate of $8 million, th e settlement represents a 12.5 percent

recovery of the total value of all AmoraÓs damages. In like

manner, the amount of medical expenses should also be reduced to

12.5 percent or $13,590.66. Therefore, in Mr. CataniaÓs

professional judgment, $13,590.66 is the portion of AmoraÓs

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 AmoraÓs pa st medical

expenses is ÐreasonableÑ and Ðrati onalÑ under the circumstances.

16. Mr. Barrett also testified on behalf of Petitioner.

Mr. Barrett is a trial attorney wi th almost 40 yearsÓ experience

and works exclusively in the area of plaintiffÓs 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

da mages in persona l injury cases.

17. Prior to the final hearing, Mr. Barrett had reviewed

AmoraÓs medical records , as well as PetitionerÓs exhibits. He

also reviewed the sample jury verdicts Petitioner presented at

the final hearing as Exhibit 14.

18. Ba sed on his valuation of AmoraÓs injuries and his

professional training and experience, Mr . Barrett expressed that

injuries similar to AmoraÓs would result in jury awards averaging

between $8 and $20 million dollars. In light of AmoraÓs

ÐcatastrophicÑ inju ries, Mr. Barrett valued AmoraÓs injuries as

at least $8 million. Mr. Barrett opined that Mr. CataniaÓs

valuation of $8 million to $10 million was appropriate, if

conservative.

19. Mr. Barrett supported Mr. CataniaÓs proposed method of

calculating a redu ced portion of PetitionerÓs $1,000,000 to

represent past medical expenses. Wi th 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 1 2.5 percent of her damages, the

most Ðreasonable and rationalÑ manner to apportion the $1,000,000

settlement is to apply that same percentage to determine AmoraÓs

recovery for past medical expenses. Petitioner asserts that

applying the same ratio to the t otal amount of medical costs

produces a definitive value of that portion of PetitionerÓs

$1,000,000 settlement that represents compensation for past

medical expenses, i.e. , $13,590.66 ($1 08,725.29 times 12.5

percent).

20. The undersigned finds that the co mpetent substantial

evidence in the record establishes, clearly and convincingly,

that the full value o f AmoraÓs injuries is $8 million . However,

the evidence in the record is not sufficient to prove that a

lesser portion of PetitionerÓs $1,000,000 settle ment 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 PetitionerÓs recover y from a

third part y to satisfy its Medicaid lien.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has jurisdiction

over the subject matter and parties in this matter pursuant to

sections 120.569, 120.57(1), and 409.910(17)(b), Florida Stat utes.

22. The Agency is the Medicaid agency for the state, as

provided under federal law, and administers FloridaÓs Medicaid

program. See § 409.901(2), Fla. Stat.

23. The federal Medicaid program Ðprovide[s] federal

financial assistance to States that c hoose to reimburse certain

costs of medical treatment for needy persons.Ñ Harris v. McRae ,

448 U.S. 297, 301 (1980). Though a stateÓs participation is

entirely optional, once a state elects to participate in the

federal Medicaid program, it must comply w ith federal requirements

governing the same. Id. ; and 42 U.S.C. § 1396, et seq .

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

states are required to seek reimbursement for medical expenses

from Medicaid recipients who later recover from legal ly liable

third parties. See Arkansas Dep't of Health & Human Servs. v.

Ahlborn , 547 U.S. 268, 276 , 126 S. Ct. 1752, 1758 (2006).

Consistent with this federal requirement, the Florida Legislature

enacted section 409.910, FloridaÓs ÐMedicaid Third - Party L iability

Act,Ñ which authorizes and requires the Agency to be reimbursed

for Medicaid funds paid for a recipient's medical care when that

recipient later receives a personal injury judgment or settlement

from a third party. See Smith v. Ag. for Health Car e Admin . , 24

So. 3d 590 (Fla. 5th DCA 2009). Section 409.910 creates an

automatic lien on any such judg ment or settlement with a third

party for the full amount of medical assistance Medicaid provided

to the Medicaid recipient. See § 409.910(6)(c), Fla. Stat.

25. Accordingly, by accepting Medicaid benefits, Medicaid

recipients automatically subrogate their rights to third - party

benefits for the full amount of medical assistance provided by

Medicaid and automatically assigned to the Agency the right,

titl e, and interest to those benefits, other than those excluded

by federal law. See § 409.910(6)(a), (b), Fla. Stat.; see also

42 U.S.C. § 1396 ( a ) (25)(H) and 42 U.S.C. § 1396k(a)(1) (requiring

states participating in the federal Medicaid program to provide,

as a condition of Medicaid eligibility, assignment to the state of

the right to payment for medical care from any third party); and

Giraldo v. Ag . for Health Care Admin. , No. 1D16 - 0392, 2016 Fla.

App. LEXIS 18299 (1st DCA Dec. 12, 2016). 3 /

26. The obliga tion to reimburse the Agency (and Medicaid)

following recovery from a third party, however, is not unbounded.

Pursuant to 42 U.S.C. §§ 1396a(a)(25)(A), (B), and (H), 1396k(a),

and 1396p(a), the Agency may only assert a Medicaid lien against

that portion o f Petitio nerÓs recovery from a third party that

represents the costs of the medical assistance made available for

the individual. See Ahlborn , 547 U.S. at 278; Wos v. E.M.A. , 133

S. Ct. 1391, L . Ed.2d (2013) ; Harrell v. State , 143 So. 3d 478, 480

(Fla. 1st DCA 2014); and Davis v. Roberts , 130 So. 3d 164, 266

(Fla. 5th DCA 2013). T he federal Medicaid statuteÓs anti - lien

provision, 42 U.S.C. § 1396p(a)(1), prohibits a state from

attaching a lien on a Medicaid recipientÓs property for the

medical assistance p aid by the state , other than that portion of a

Medicaid recipientÓs recovery designated as payment for medical

care. See also section 409.910(4), (6)(b)1., and (11)(f), which

provides that the Agency may not recover more than it paid for the

Medicaid reci pientÓs medical treatment.

27. As Ahlborn explains, the anti - lien provisions of the

federal Medicaid Act authorize payment to a state only from those

portions of a Medicaid recipientÓs third - party settlement recovery

allocated for payment of medical care. See also E.M.A. ex rel.

Plyler v. Cansler , 674 F.3d 290, 312 (4th Cir. 2012)(Ð[a]s the

unanimous Ahlborn Court's decision makes clear, federal Medicaid

law limits a state's recovery to settlement proceeds that are

shown to be properly allocable to past m edical expenses.Ñ) . In

cases where a Medicaid recipient recovers less than the medical

expenses, section 409.910 protects the Medicaid recipient Ó s

interest in the non - medical expense portion of the judgment,

award, or settlem ent.

28. In this matter, the Agency, through the Medicaid

program, paid $108,656.31 for Petitioner Ó s past medical expenses.

PetitionerÓs settlement agreement did not allocate some part of

the $1,000,000 settlement to cover AmoraÓs medical costs.

Therefore, the Agency employed the fo rmula established in section

409.910 to calculate the portion of AmoraÓs recovery that should

be set aside to reimburse the medical assista nce it provided to

Petitioner.

29. Section 409.910(11)(f) sets forth the formula to

determine the amount the Agency may recover for medical expenses

from a judgment, award, or settlement from a third party. Section

409.910(11)(f) , states in pertinent part:

[ I ]n the event of an action in tort against a

third party in which the recipient or his or

her legal representativ e is a party which

results in a judgment, award, or settlement

from a third party, the amount recovered shall

be distributed as follows:

1. After attorneyÓs fees and taxable costs as

defined by the Florida Rules of Civil

Procedure, one - half of the remain ing recovery

shall be paid to the agency up to the total

amount of medical assistance provided by

Medicaid.

2. The remaining amount of the recovery shall

be paid to the recipient.

3. For purposes of calculating the agencyÓs

recovery of medical assistan ce benefits paid,

the fee for services of an attorney retained

by the recipient or his or her legal

representative shall be calculated at 25

percent of the judgment, award, or settlement.

4. Notwithstanding any provision of this

section to the contrary, the agency shall be

entitled to all medical coverage benefits up

to the total amount of medical assistance

provided by Medicaid. For purposes of this

paragraph, Ðmedical coverageÑ means any

benefits under health insurance, a health

maintenance organizatio n, a preferred provider

arrangement, or a prepaid health clinic, and

the portion of benefits designated for medical

payments under coverage for workersÓ

compensation, personal injury protection, and

casualty.

30. The section 409.910(11)(f) formula establ ishes that the

AgencyÓs recovery for a Medicaid lien is limited to the lesser of:

(1) its full lien, or (2) one - half of the total award, after

deducting attorneyÓs fees of 25 percent of the recovery and all

taxable costs, up to, but not to exceed, the tot al amount actually

paid by Medicaid on the recipientÓs behalf. See Ag. f or Health

Care Admin. v. Riley , 119 So. 3d 51 4, 515 n.3 (Fla. 2d DCA 2013).

31. Under the section 409.910(11)(f) formula, up to $375,000

of PetitionerÓs $1,000,000 total recovery may be set aside to

reimburse the agency for the medical assistance it provided to

Amora. This pool of funds sufficiently covers the Medicaid lien

of $108,656.31. Therefore, the Agency asserts that Petitioner

should pay the full amount of the Medicaid lien.

32. However, section 409.910(17)(b) provides a method by

which a Medicaid recipient may contest the amount designated as

recovered medical expenses payable under section 409.910(11)(f).

In 2013, following the U.S. Supreme Court decision in Wos , the

Flor ida Legislature created an administrative process to determine

the portion of the judgment, award, or settlement in a tort action

representing medical expenses, and thus the portion of the

Agency Ó s Medicaid lien that must be reimbursed. Section

409.910(17 )(b) states:

A recipient 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 purpo ses of chapter 120, the

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 pro ceedings 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 payab le to the agency, the

recipient 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 for mula set forth in paragraph (11)(f) or

that Medicaid provided a lesser amount of

medical assistance than that asserted by the

agency . (Emphasis added).

33. Section 409.910(17)(b) sets out an administrative

procedure by which the Medicaid recipient may c hallenge and rebut

the section 409.910(11)(f) formula allocation and assert that a

lesser amount of a settlement should be attributable to medical

expenses. See Harrell v. State , 143 So. 3d at 480 (Fla. 1st DCA

2014)( Ðwe now hold that a plaintiff must be given the opportunity

to seek reduction of the amount of a Medicaid lien established by

the statutory formula outlined in section 409.910(11)(f), by

demonstrating, with evidence, that the lien amount exceeds the

amount recovered for medical expenses.Ñ ) .

34 . In order to successfully challenge the amount payable to

the Agency, the burden is on the Medicaid recipient to 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 the Agency calculated.

§ 409.910(17)(b), Fla. Stat.

35. 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 r e Graziano , 696 So. 2d

744, 753 (Fla. 1997). Clear and convincing evidence requires:

[T] hat the evidence 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 t he

witnesses must be lacking in confusion as to

the facts in issue. The evidence must be of

such weight that it produces in the mind of

the trier of fact a firm belief or convi ction,

without hesitancy, as to the truth of the

allegations sought to be estab lished.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994); Slomowitz v. Walker ,

429 So. 2d 797, 800 (Fla. 4th DCA 1983).

36. Accordingly, in this administrative proceeding, if

Petitioner can prove, by clear and convincing evidence, that the

past medical expen se portion of AmoraÓs settlement is less than

the amount the Agency calculated using the section 409.910(11)(f)

formula, the undersigned may reduce the amount Petitioner must

reimburse the Agency from the settlement funds below the Medicaid

lien of $108,65 6.31.

37. Petitioner proposes that the AgencyÓs Medicaid lien be

reduced to $13,590.66 , which constitutes 12.5 percent of AmoraÓs

past medical expenses. Petitioner calculates this amount as

follows: the expert testimony at the final hearing establishes

that Amora suffered $8 million in total damages. Petitioner

settled for $1,000,000 , or 12.5 percent of the value of AmoraÓs

injuries. The settlement agreement did not designate a portion of

the $1,000,000 to pay for past medical expenses. But, by applyi ng

the percentage Amora recovered to the total amount of her past

medical costs, a Ðreasonable, fair, and accurateÑ calculation of

AmoraÓs past medical expenses included in the settlement is

$13,590.66 ($108,725.29 times 12.5 percent ). Therefore, the

Agen cy should only recover $13,590.66 as reimbursement for the

medical assistance Me dicaid paid on AmoraÓs behalf.

38. However, Petitioner did not meet its burden of

demonstrating, by clear and convincing evidence, that the portion

of the $1,000,000 settlemen t allocated to past medical expenses 4 /

is less than the $375,000 the Agency calculated under section

409.910(11)(f), or should be reduced to $13,590.66. Primarily,

the competent substantial evidence in the record does not

demonstrate how PetitionerÓs $1,0 00,000 recovery is divided

between medical and non - medical expenses.

39. Petitioner contends that 12.5 percent of the settlement

constitutes medical expenses (or, conversely, 87.5 percent of

PetitionerÓs recovery represents non - medical expenses). However ,

other than applying a simple ratio that Petitioner derives from

assigning the ÐconservativeÑ value t o AmoraÓs injuries of

$8 million , Petitioner did not present any definite, tangible, or

verifiable costs or figures that evince how the $1,000,000

settle ment is segregated into medical and non - medical categories.

Neither did PetitionerÓs methodology sufficiently demonstrate that

less than $108,656.31 of the settlement (only $13,590.66 to be

precise) consists of medical costs. PetitionerÓs proposal,

witho ut some evidence culling AmoraÓs non - medical costs from her

medical costs does not produce a rational sum of PetitionerÓs

medical expenses recovered in the settlement.

40. As a result, PetitionerÓs alternative formula fails to

adequately account for or de signate some limited portion of

PetitionerÓs settlement that represents AmoraÓs past medical

expenses. Consequently, Petitioner did not convincingly rebut the

default statutory calculation that at least $375,000 of

PetitionerÓs $1,000,000 recovery from a third party may be

allocated to AmoraÓs medical costs. Neither does the evidence

indicate that the AgencyÓs reimbursement of $108,656.31 would

impermissibly allow it to collect money in excess of what

Petitioner recovered for AmoraÓs medical care and serv ices ( i.e. ,

non - medical costs). Therefore, because Petitioner bears the

burden of proving, clearly and convincingly, that $13,590.66 is

the only portion of PetitionerÓs third - party recovery that should

be used to satisfy the AgencyÓs Medicaid lien, Petiti oner failed

to present the evidence necessary to avoid the application of the

statutory formula contained in section 409.910(11)(f).

41. Accordingly, while PetitionerÓs calculation may offer a

more equitable portion of PetitionerÓs $1,000,000 recovery to be

allotted to the Agency in light of the large amount of injuries

Amora sustained, the undersigned is mindful that : ÐMedicaid is a

cooperative federal - state welfare program providing medical

assistance to needy people.Ñ Roberts v. AlbertsonÓs Inc. , 119

So. 3d 457, 458 (Fla. 4th DCA 2012) (quoting Ag . for Health Care

Admin. v. Estabrook , 711 So. 2d 161, 163 (Fla. 4th DCA 1998));

see also 42 U.S.C. § 1396a(a)(25)(A) - (B). Although state

participation in this federal program is voluntary, once a state

elec ts to participate, it must comply with federal Medicaid law.

Roberts , 119 So. 3d at 458; see also Wilder v. Va. Hosp. AssÓn ,

496 U.S. 498, 502 (1990). Further, as expressed in Giraldo :

To keep the Medicaid program viable, Congress

recognized that it is n ecessary to obtain

reimbursement when a third party makes payment

to the Medicaid beneficiary for medical care

already paid for by Medicaid. Roberts , 119

So. 3d at 459. As Roberts explains, the goal

of the reimbursement provision of the Medicaid

Act was at least in part to protect tax

dollars. 119 So. 3d at 459 (citing Tristani v.

Richman , 652 F.3d 360, 373 (3d Cir. 2011)).

This, no doubt, is at least in part so that

other "needy people" may secure the care they

so desperately require.

Giraldo supra , at 18.

42. In sum, Petitioner failed to prove, by clear and

convincing evidence, that a lesser portion of PetitionerÓs total

recovery should be allocated as reimbursement for past medical

expenses than the amount the Agency calculated using the section

40 9.901(11)(f) formula. Based on the facts in the record, the

Agency is entitled to $108,656.31, the full amount of Medicaid

expenditures, from PetitionerÓs third - party recovery.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is OR DERED that t he Agency for Health Care Administration

is entitled to $108,656.31 from the third - party settlement at

issue in this matter in satisfaction of its Medicaid lien.

DONE AND ORDERED this 9 th day of January , 2017 , in

Tallahassee, Leon County, Flori da.

S

J. BRUCE CULPEPPER

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

Division of Administrative Hearings

this 9 th day of January , 2017 .

ENDNOTE S

1/ All references to the Florida Statutes are to the 2016

version, unless otherwise noted.

2/ Petitioner, in its Proposed Final Order (ÐPFOÑ), argues that

the AgencyÓs Medicaid lien may not be reimbursed from funds

recovered for future medical expenses. To illustrate this point,

Petitioner refers to a category of damages attributed to Ðskilled

home careÑ which Petitioner characterizes as analog ous to Ðfuture

medical expenses.Ñ Petitioner appears to take the position that

if some portion of the $1,000,000 settlement covers AmoraÓs future

skilled home care, then that sum should not be included in

calculating the amount payable to the Agency. How ever, in light

of the recent decision in Giraldo v. Agency for Health Care

Admin istration , Case No. 1D16 - 0392, 2016 Fla. App. LEXIS 18299

(1st DCA Dec. 12, 2016), the undersigned believes that

PetitionerÓs position is incorrect and that the Agency has a ri ght

to be reimbursed from both past and future medical expenses.

See endnote 4 below.

In addition, while Petitioner did not introduce evidence

indicating that Amora will incur costs for or require skilled

home care, the undersigned wonders whether Mr. C ataniaÓs

testimony , that no portion of PetitionerÓs settlement represents

future medical expenses , would change based on the Giraldo

decision. If Amora will, in fact, need skilled home care, then

any portion of the $1,000,000 settlement that is be attribu ted to

such medical care should be incorporated into the allotment from

PetitionerÓs recovery that may be used to reimburse the Agency.

Such ambiguity further hinders PetitionerÓs effort to establish,

by clear and convincing evidence, that its methodology accurately

partitions PetitionerÓs recovery into medical and non - medical

expenses.

3/ Giraldo was issued on December 12, 2016 , and is not final

until time expires to file motion for rehearing and disposition

thereof if filed.

4/ Petitioner asserts tha t no portion of the $1,000,000

settlement amount includes future medical expenses. In light of

this statement, the undersigned finds no competent substantial

evidence in the record establishes that the settlement includes an

amount for future medical cost s. That being said, the undersigned

notes that in determining the portion of a Medicaid recipientÓs

recovery available to reimburse the Agency, funds attributed to

both past and future medical costs should be included in the

calculation. See Giraldo , sup ra , at 8 - 9, 17, which holds that the

Agency has the right to reimbursement from settlement proceeds

attributed to both past medical expenses, as well as that portion

of a settlement designated as future medical expenses. Giraldo

explains:

[W]e find no er ror in the ALJ's legal

determination relating to AHCA's right to

secure reimbursement for payments already made

for medical costs from not only that portion

of the settlement allocated for past medical

expenses but also from that portion of the

settlement intended as compensation for future

medical expenses. We do so initially because

that is precisely what Florida law required

the ALJ to do. . . . Specifically, the

of the gross (or entire settlement) recover ed

(which would include the recipient's recovery

for past and future medical costs) less only

attorney's fees and costs as designated to

repay the state's Medicaid agency for the

medi cal expenses that it has paid.

Likewise, section 409.910(17)(b), which

a uthorizes a Medicaid recipient to challenge

the amount allocated under section

409.910(11)(f), expressly requires

consideration of the amounts the Medicaid

recipient has "recovered" to reimburse him or

her "for past and future medical expenses."

* * *

[W e ] choose . . . to align ourselves with

what we believe are the better reasoned

decisions of those courts which have held

that a state agency may secure payment from

both past and future recoveries for medical

expenses.

COPIES FURNISHED:

Alexand er R. Boler, Esquire

Xerox Recovery Services

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

John W. Staunton, Esquire

Staunton & Faglie, PL

3000 Gulf to Bay Boulevard

Clearwater, Florida 33759

(eServed)

Richard J. Shoop, Agenc y Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stuart Williams, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

J ustin Senior, Interim Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas M. H oeler, Chief Facilities Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Kim Kellum, Chief Medicaid Counsel

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 to section 120.68, Florida Statutes.

Review proceedings are governed b y 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 provided by law.

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