16-005766MTR Ammar Al Batha, As Personal Representative Of The Estate Of Abdel-Kader Al Batha, Deceased, And Shahira Alshami, Individually vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, September 30, 2019.

Summary: In satisfaction of its lien, AHCA is entitled to recover from the decedent's estate the amount calculated pursuant to section 409.910(11)(f), for medical expenses paid on behalf of Medicaid recipient.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMMAR AL BATHA, as Personal

Representative of the Estate of

ABDEL - KADER AL BATHA, deceased, 1/

Petitioner,

vs. Case No. 16 - 5766MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

________________________ _______/

FINAL ORDER

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

on May 7, 2019, in Tallahassee, Florida , and with

videoconference in Miami, Florida, before W. David Watkins,

Administrative Law Judge of the Divi sion of Administrative

Hearings (DOAH) .

APPEARANCES

For Petitioner: F loyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

M onticello, Florida 32344

For Respondent: Elizabeth A. Teegen, Esquire

Office of the Attorney General

The Capitol , Plaza Level 0 1

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue is the amount of Petitioner’s wrongful death

settlement payable to Respondent, Agency for Health Care

Administration (AHCA), to satisfy AHCA’s $143,663.18 lien.

PRELIMINARY STATEMENT

Abdel - Kader Al Batha died in 2015 shortly after sustaining

catastrophic injuries in a car accident in Broward County,

Florida. A wrongful death lawsuit was brought in September 2015

by Ammar Al Batha, as personal representative of th e Estate of

Abdel - Kader Al Batha (Estate) , and Shahira Alshami, individually

(Abdel - Kader’s surviving spouse), against the driver/owner of

the vehicle who caused the accident. The wrongful death case

was settled in a confidential settlement. AHCA had pai d

Mr. Al Batha’s last medical expenses and noticed a lien against

the proceeds of the wrongful death action in the full amount of

its Medicaid expenditures ($143,663.18).

On October 3, 2016, Petitioner s filed a Petition to

Determine Amount Payable to Agen cy for Health Care

Administration in Satisfaction of Medicaid Lien (Petition),

pursuant to section 409.910(17)(b), Florida Statutes. The

matter was assigned to the undersigned administrative law judge

to conduct a formal administrative hearing and enter a final

order.

On November 30, 2016, prior to the scheduled final hearing,

AHCA filed a Motion for Summary Final Order asserting that

Petitioner s w ere not permitted to challenge the Medicaid lien

under section 409.910(17)(b) because the Medicaid recipient w as

deceased and Petitioner s w ere not the Medicaid recipient s . The

December 14, 2016 , hearing was continued ; and on December 12,

2016 , Petitioner s filed an Objection to AHCA’s Motion for

Summary Final Order.

On January 30, 2017 , a Summary Final Order (SFO) was

entered agreeing with AHCA’s position and dismissing the

Petition with prejudice because the Medicaid recipient was

deceased. The SFO did not award AHCA its full Medicaid lien;

instead, the O rder simply dismissed the October 2016 petition

with prejud ice. In so ruling, the undersigned determined that

the plain language of section 409.410(17)(b) was "clear and

unambiguous" that the administrative procedure created in that

section was available only to a Medicaid recipient and concluded

that "[s]ince Mr . Al Batha is deceased, and neither of the

Petitioners are a Medicaid ‘ recipient ’ within the meaning of

chapter 409, the administrative procedure laid out to contest

the amount designated as recovered medical expenses payable to

the agency in section 409.9 10(17)(b) is not available in the

instant case." (SFO at pp. 12, 14).

Thereafter Petitioner s appealed the SFO to Florida’s First

District Court of Appeal (First DCA) asserting that the Petition

should not have been dismissed because deceased Medicaid

r ecipients may challenge the payment of a Medicaid lien under

section 409.910(17)(b) ; and Petitioner s , as p ersonal

r epresentative of the Medicaid recipient’s e state and the

surviving spouse , w ere the proper parties to bring such

administrative proceeding. AHCA did not file a cross - appeal

contesting the Findings of Fact made within the SFO.

On January 14, 2019, the First DCA issued its opinion in

Al Batha v. Agency for Health Care Admin istration , 263 So. 3d

817 (Fla. 1st DCA 2019). The majority opinion (and the dissent)

is limited to the issue of standing, with the majority affirming

the determination that the surviving spouse lacked standing, but

reversing the determination that the Estate lacked standing.

The matter was remanded for the Estate to proceed with a

challenge under section 409.910(17)(b).

By Notice dated February 27, 2019 , the undersigned

scheduled the final hearing following remand for May 7, 2019.

Prior to the final hearing , the parties filed a Joint Prehearing

Stipulation (JPHS), which incl uded numerous stipulated and

admitted facts. To the extent relevant, those facts have been

incorporated herein.

The f inal h earing proceeded as scheduled, with Petitioner

calling one witness, Manuel “Alex” Reboso, Esquire.

Petitioner ’ s Exhibits 1 through 8 were admitted into evidence.

AHCA did not call any witnesses or submit into evidence any

exhibit s . Petitioner’s evidence and testimony w ere unrebutted.

The one - volume T ranscript of the proceedings was filed with

DOAH on June 17, 2019. Following an ext ension of time to file

proposed final orders (PFOs), the parties filed their respective

PFOs on July 3, 2019. On that same date, Petitioner also filed

a Motion for Attorney Fees and Costs, and on July 10, 2019, AHCA

filed a response in opposition to the a ttorney fees motion.

On August 21, 2019 , the undersigned entered an Order, sua

sponte , following his review of the PFO’s filed by the parties.

This Order was precipitated by what appeared to be a defense

raised by Respondent for the first time in its PFO.

Specifically, AHCA argued:

37. According to the expert witness who

testified for the estate, the release

executed by the parties allocated an amount

to past medical expenses recovered, but did

not otherwise allocate recovered damages to

any category of damages or to either the

estate or to Ms. Alshami .

39. Nor did Mr. Reboso testify to the value

of Ms. Alshami’s recovery separate from the

estate’s recovery, and did not provide an

opinion whether the estate recovered the

same percentage of the total pot ential

damages as Ms. Alshami recovered . (emphasis

added).

(AHCA’s PFO, p. 16) .

Given that the above defense appeared to have been raised

for the first time in AHCA’s PFO, in fairness to both Petitioner

and AHCA, the parties were invited to submit bri efs/argument

regarding the above defense, including citation to authorities

in which this issue has been addressed, both in Florida and in

other jurisdictions. Petitioner timely filed a written response

to the Order, but no response was filed by Responden t.

On September 16, 2019 , Petitioner filed a Notice of

Supplemental Authority, attaching a copy of the First DCA ’s

September 12, 2019 , decision in Eady v. State of Florida Agency

for Health Care Administration , No. 1D18 - 1852, slip op. at 15

(Fla. 1st DCA S ept. 12, 2019). Since that Opinion has not become final as of this writing, it will not be further

referenced herein.

Both parties’ PFOs, and Peti tioner’s response to the

August 21, 2019 , Order, have been carefully considered by the

undersigned in the pre paration of this Final Order.

All statutory references are to the 2018 version of the

Florida Statutes, unless noted otherwise.

FINDING S OF FACT

BACKGROUND

The below Findings of Fact , paragraphs 1 through 17 , are

taken verbatim from the Findings of Fact , paragraphs 1

through 17 , in the SFO. AHCA stipulated to these facts in the

JPHS with the exception of paragraphs 5, 7, 9, 10 , and 11.

Paragraphs 18 through 21 are stipulated facts taken from the

JPHS.

1. On July 2, 2015, Abdel - Kader Al Batha (Mr. Al Ba tha)

was involved in a car accident in Broward County, Florida. In

this accident, Mr. Al Batha suffered catastrophic physical and

neurological injuries, and, as a result, died on July 20, 2015.

Mr. Al Batha was survived by h is spouse, Shahira Alshami

(Ms . Alshami).

2. Mr. Al Batha’s medical care related to his injury was

paid by Medicaid, and AHCA, through the Medicaid program.

Medicaid provided $143,663.18 in benefits associated with

Mr. Al Batha’s injury. This $143,663.18 represented the entire

cla im for past medical expenses.

3. Mr. Al Batha’s funeral expenses were in the amount of

$3,850.

4. As a result of Mr. A l Batha’s injury and death,

Ms. Alshami suffered economic and non - economic damages, which

are defined and limited by the Florida Wrongf ul Death Act to

loss of support, services, companionship, and protection from

the date of injury, as well as her mental pain and suffering

from the date of injury per section 768.21, Florida Statutes.

In addition, the Estate suffered economic damages, whi ch are

defined and limited, by the Florida Wrongful Death Act, to

medical expenses, funeral expenses, and loss of net

accumulations per section 768.21(6).

5. Altogether, the total combined monetary value of

Ms. Alshami and the Estate’s individual damages, and the value a

jury would assign to these damages, are no less than $2,500,000

to $5,000,000.

6. Ammar Al Batha, as the Personal Representative of the

Estate, brought a wrongful death action to recover both the

individual statutory damages of Ms. Alsham i, as well as the

individual statutory damages of the Estate, against the

driver/owner of the vehicle that caused the accident

(Defendant).

7. While Ms. Alshami and the Estate’s damages have an

exceedingly high monetary v alue in excess of $2,500,000

to $5 ,000,000, there were significant limitations to recovering

the full value of these damages from the Defendant associated

with disputed facts, liability, and policy insurance limits of

the primary responsible parties.

8. Based on these significant limitin g factors, the

wrongful death action was settled through a confidential

settlement.

9. While settlement was appropriate given the limiting

factors, that does not neg ate that in the settlement,

Ms. Alshami and the Estate are not being fully compensated fo r

all their damages, and they are only receiving a fraction of the

total monetary value of all their damages.

10. Understanding that the settlement does not fully

compensate Ms. Alshami and the Estate for all their damages, and

in the settlement they are only receiving a fraction of the

total monetary value of all the damages, including only a

fraction of the $143,663.18 claim for past medical expenses, the

parties to the settlement made an allocation to the claim for

past medical expenses. This allocati on was based on the

calculation of the ratio the settlement bore to the total

monetary value of all damages.

11. Using the conservative valuation of all damages of

$2,500,000, the parties calculated that Ms. Alshami and the

Estate were receiving 44.5 pe rcent of the total monetary value

of all their damages in the settlement, and accordingly they

were receiving in the settlement 44.5 percent, or $63,930.12, of

their $143,663.18 claim for past medical expenses.

12. In making this allocation, the parties agreed that:

a. The settlement does not fully compensate

Mr. Al Batha’s surviving spouse and the

Estate of Abdel - Kader Al Batha for all the

damages they have suffered and the

settlement only compensates them for a

fraction of the total monetary value of all

the damages;

b. The damages have a value in excess of

$2,500,000;

c. The claim for past medical expenses was

$143,663.18; and

d. Allocation of the $63,930.12 of the

settlement to past medical expenses, and the

remainder of the settlement toward t he

satisfaction of claims other than the past

medical expenses, is reasonable and

proportionate based on the same ratio this

settlement bears to the total monetary value

of all the damages.

13. The parties memorialized the allocation of $63,930.12

of the settlement to past medical expenses in the General

Release (Release). The Release stated:

Although it is acknowledged that this

settlement may not fully compensate

Releasing Party for all of the damages they

have allegedly suffered, this settlement

shal l operate as a full and complete Release

as to Released Parties without regard to

this settlement only compensating Releasing

Party for a fraction of the total claimed

monetary value of their alleged damages.

The parties agree that Releasing Party’s

alleg ed damages may have a value in excess

of $2,500,000, of which approximately

$143,663.18 represents the claimed amount

for past medical expenses. Given the facts,

circumstances, and nature of Releasing

Party’s damages and this settlement, the

parties have agreed to allocate $63,930.12

of this settlement to Releasing Party’s

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 pro portionate allocation

based on the same ratio this settlement

bears to the claimed total monetary value of

all Releasing Party’s damages.

14. As a condition of Mr. Al Batha’s eligibility for

Medicaid, Mr. Al Batha, before his death, assigned to AHCA his

right to recover from liable third parties, medical expenses

paid by Medicaid.

15. During the pendency of the wrongful death action, AHCA

was notified of the action, and AHCA, through its collections

contractor, Xerox Recovery Services, asserted a $ 143,66 3.18

Medicaid lien against the Estate’s cause of action and

settlement of that action.

16. The attorney handling the wrongful death claim

notified AHCA of the settlement by letter and provided AHCA with

a copy of the executed General Release. The letter explained

that the damages had a value in excess of $2,500,000, and the

settlement represented only a 44.5 percent recovery of the

$143,663.18 claim for past medical expenses, or $63,930.12. The

letter requested AHCA to advise as to the amount AHCA would

accept in satisfaction of the $143,663.18 Medicaid lien.

17. AHCA calculated its payment pursuant to the formula in

section 409.910(11)(f) based on the gross settlement, which

includes those funds compensating Ms. Alshami for her individual

claim for pain and suffering and loss of support, services, and

companionship. This resulted in AHCA demanding payment for the

full amount of the Medicaid lien, or $143,663.18.

18 . AHCA has not filed an action to set - aside, void, or

otherwise dispute the wrongful deat h settlement.

19 . AHCA has not commenced a civil action to enforce its

rights under section 409.910.

20 . No portion of the wrongful death settlement represents

reimbursement for future medical expenses.

21 . Petitioner has deposited the full Medicaid lie n amount

in an interest bearing account for the benefit of AHCA pending

an administrative determination of AHCA’s rights, and this

constitutes “final agency action” for purposes of chapter 120,

pursuant to section 409.910(17).

ISSUE FOLLOWING REMAND

22 . On remand, the issue was raised regarding the binding

effect of the F indings of F act made in the SFO. In its Motion

for Summary Final Order dated November 30, 2016, AHCA stipulated

to only five facts alleged in the petition, all of which related

to P etiti oners’ standing, to wit:

a. That Petitioner AMNAR AL BATHA is the

Personal Representative of the Estate of

ABDEL - KADER AL BATHA (Petition ¶¶ 2, 8);

b. That Petitioner SHAHIRA ALSHAMI is the

surviving spouse of ABDEL - KADER AL BATHA

(Petition ¶¶ 2, 3, 6) ;

c. That ABDEL - KADER AL BATHA (“Recipient”)

was injured, received medical care paid by

the Agency for Health Care Administration’s

Medicaid program, and died (Petition

¶¶ 3, 4);

d. That the Agency for Health Care

Administration asserted a Medicaid li en in

the amount of $143,663.18, and that this

amount is required to be paid under

§ 409.910(11)(f) (Petition ¶ ¶ 17, 21, 22);

e. That “Section 409.910(17)(b) provides that a Medicaid recipient may contest the

amount of a settlement payable to AHCA

. . . .” (Petition ¶ 21). (emphasis

added) .

([AHCA’s] Motion for Summary Final Order, at pp. 1 – 2, filed

November 30, 2016.)

23 . AHCA notes that its motion for SFO was premised on

these very specific allegations, and there were no other

stipulations in AH CA’s motion as to any material facts

associated with the damages claimed or recovered by Petitioners

in their wrongful death suit, or Petitioners’ allegations

relating to the amounts allocable to the Medicaid lien in the

settlement.

24 . The relief grante d in the SFO was dismissal of the

matter, based on Petitioners’ lack of standing to proceed. The

SFO did not award AHCA the full amount of its lien; such a

ruling was not necessary upon dismissal with prejudice for lack

of standing.

25 . The findings of fact contained in the SFO, other than

those set forth in paragraph 22 above and in the JPHS filed by

the parties following remand, are not binding upon AHCA.

TESTIMONY OF MANUAL REBOSO

26 . Manuel “Alex” Reboso i s a trial attorney with over

35 years of ex perience specializing in personal injury and

wrongful death cases. He is the managing partner at the Miami

law firm of Rossman, Baumberger, Reboso & Spier. Mr. Reboso

handles jury trials and cases involving catastrophic injury and

death. He is a member of several trial attorney organizations

including, the International Society of Barristers, American

Board of Trial Advocates, American Association for Justice,

Florida Justice Association , and Miami - Dade Trial Lawyers

Association. Mr. Reboso stays abreas t of jury verdicts by

reviewing Jury Verdict Reporters and discussing cases with other

attorneys. Mr. Reboso testified that as a routine part of his

practice , he makes assessments concerning the value of damages

suffered by injured parties and explained h is process for these

assessments. Mr. Reboso testified that he has been accepted as

an expert in the valuation of damages and allocation to past

medical expenses by DOAH in the past. Specifically, he provided

expert testimony at DOAH in a Medicaid lien d ispute hearing

under section 409.910(17)(b), which was accepted by the Florida

Supreme Court in Giraldo v. Ag ency For Health Care

Admin istration , 248 So. 3d 53 (Fla. 2018).

27 . Petitioner proffered Mr. Reboso as an expert in the

valuation of damages suff ered by injured parties. AHCA did not

object to this proffer, and Mr. Reboso was accepted as an expert

in the valuation of damages.

28 . Mr. Reboso testified that he represented the p ersonal

r epresentative of Mr. Al Batha’s Estate in regard to the

wrongfu l death claim. He was contacted by the family

immediately after the accident and met with the family at the

hospital while Mr. Al Batha was still alive. In the course of

his representation , he reviewed the accident report,

Mr. Al Batha’s medical records , and spoke to the Florida Highway

Patrol homicide investigator. He also consulted with an

accident reconstruction expert.

29 . Mr. Reboso explained that in the early morning hours

of July 2, 2015, Mr. Al Batha’s minivan was rear - ended by a

delivery truck . He testified that the driver of the truck

claimed Mr. Al Batha swerved into his lane, but limited

information from the minivan data recorder indicated that

Mr. Al Batha may have been stopped in front of the truck at the

time of the collision. Ultimate ly, it was difficult to

establish exactly what occurred because Mr. Al Batha suffered

catastrophic injuries and died a few days after the accident.

30 . Mr. Reboso testified that Mr. Al Batha’s injury and

death profoundly impacted his wife. She had to dea l with seeing

her husband of 40 years intubated in the intensive care unit and

even had to make the decision to have Mr. Al Batha’s arm

amputated in an attempt to save his life. Mr. Reboso testified

that every time he met with Ms. A l s h ami she was very ups et and

crying. Mr. Reboso testified that Mr. Al Batha was the

patriarch of the family and his family was devastated by his

death.

31 . Mr. Reboso testified that based on his professional

experience and training, the value of Mr. Al Batha’s surviving

wife’ s damages and his Estate’s damages would be in excess of

$2,500,000 to $5,000,000. He explained that in a Florida

wrongful death action, there are two categories of damages

recoverable. The Estate may recover medical expenses, funeral

expenses , and loss of net accumulations. Mr. Reboso testified

that in Mr. Al Batha’s case, there was no claim for net

accumulations because he did not have a history of saving, so

the Estate’s claim would be the $143,663.18 in medical bills and

the funeral bill. In additio n to the Estate’s claim for

damages, Mr. Al Batha’s surviving spouse would have a claim to

recover her individual damages for loss of support, services,

companionship, and protection, as well as her pain and suffering

from the date of injury. Mr. Reboso t estified that he has

experience with jury verdicts awarding $5 million to each

survivor in a wrongful death case and he would expect that

result from a jury in relation to Ms. Alshami’s claim for

damages. Mr. Reboso testified that his firm has the practic e of

“round - tabling” cases among the partners and he has round - tabled

the case with his law partners, all of whom agreed that the

value of the damages was between $2,500,000 to $5,000,000.

32 . Mr. Reboso testified that due to disputed facts (which

Mr. Al Batha was not in a position to contest), there were

significant issues associated with liability and comparative

fault. He explained that as a consequence of these disputed

facts, the case settled for $1,112,500.

33 . Mr. Reboso testified that the $1,112, 500 settlement

did not fully compensate the Estate and surviving spouse for the

full value of the damages. Mr. Reboso testified that using the

conservative value of all damage s of $2,500,000, the $1,112,500

settlement represents a recovery of 44.5 percent of the value of

all damages. Accordingly, Mr. Reboso testified that because

only 44.5 percent of the value of the damages was recovered in

the settlement, only 44.5 percent of the $143,663.18 claim for

past medical expenses was recovered, or $63,930.12. Mr. Reboso

testified that it would be reasonable to allocate $63,930.12 of

the settlement to past medical expenses.

34 . Mr. Reboso testified that in reaching the settlement,

the settling parties agreed to allocate $63,930.12 of the

settlement to past med ical expenses based on the same ratio the

settlement bore to the total monetary value of all damages to

the claim for past medical expenses.

35 . Mr. Reboso testified that the ratio method used to

make the allocation of $63,930.12 of the settlement to past

medical expenses is the same ratio method used in the Florida

Supreme Court decision in Giraldo , where his expert testimony

was the basis of the Court limiting the lien to $13,881.79.

36 . AHCA did not call any witnesses, present any evidence

as to the va lue of the damages, propose a differing valuation of

the damages, or contest the methodology used to calculate the

$63,930.12 allocation to past medical expenses. Petitioner ’ s

testimony and evidence presented was unrebutted.

37 . Section 409.910(17)(b) pr ovides that in order to

challenge the amount payable to AHCA, P etitioner must prove the

amount of the settlement that “should be allocated as

reimbursement for past medical expenses.” The U.S. Supreme

Court in Wos v. E.M.A. , 568 U.S. 627, 133 S. Ct. 1391 (2013) ,

provided guidance in making the determination as to the amount that “should be allocated” noting that the standard is that

there must be a “fair allocation of damages” based on

“projections of damages the plaintiff likely could have proved

had the case gone to trial.” 133 S. Ct. 1391, 1400 - 1401 (states

may “design administrative and judicial procedures to ensure a

prompt and fair allocation of damages” and “trial lawyers [can]

make projections of the damages the plaintiff likely could have

proven h ad the case gone to trial.”) . The Wos Court noted that

a settlement may be difficult.” 133 S. Ct. at 1400. However,

the Court identified “trial lawyers” as persons who can “find

objective b enchmarks to make projections of the damages the

plaintiff likely could have proved had the case gone to trial.”

This is exactly what Petitioner did in this case. Petitioner

presented the unrebutted expert testimony of a trial lawyer who

made projections as to the amount of damages awardable based on

his experience in order to determine the amount of the

settlement that “should be allocated as reimbursement for past

medical expenses.”

38 . Here, the evidence presented is not in conflict or

ambiguous. The unrebutted testim ony presented supports that

Mr. Al Batha’s surviving wife’s individual claim for damages and

the Estate’s individual claim for damages under the Florida

Wrongful Death Act, had a value in excess of $2,500,000.

39 . According to Petitioner , based on the methodology of

applying the same ratio the settlement bore to the total

monetary value of all the dama ges to the Estate’s

$143,663.18 claim for past medical expenses, $63,930.12 of the

settlement represents the Estate’s compensation for past medical

expenses. This is because the $1,112,500 settlement represents

a 44.5 percent recovery of all damages based on a valuation of

all damages of $2,500,000 ($1,112,500 is 44.5 percent of

$2,500,000). Applying this 44.5 percent ratio to the

$143,663. 18 claim for past medical expense s , the Estate in the

settlement recovered $63,930.12 in past medical expense s .

40 . The above “claim value to recovery amount ratio”

formula has been successfully argued in numerous cases before

DOAH, and found to meet the requirements of section

409.910(17)(b). However, the instant situation is factually

different than most, if not all, of the cases cited by

Petitioner in its PFO, in that one of the parties to the tort

settlement, Shahira Alshami (Abdel - Kader’s surviving spouse) , is

not a party to the instant action. As suggested by Respondent

in its PFO, the portion of the settlement proceeds received by

the Estate (as opposed to Ms. Alshami) needs to be allocated

between those two entities in determining AHCA’s entitlem ent to

recovery. Fortunately, due to the stipulations of the parties,

and the evidence received at hearing, this allocation is

straightforward.

41 . The categories of damages recoverable in a wrongful

death action are set forth in Florida’s Wrongful Death Act,

section 768.21. As explained by Mr. Rebo s o, there are two

categories of damages recoverable in a wrongful death action.

The Estate may recover medical expenses, funeral expenses , and

loss of prospective net accumulations. Mr. Reboso testified

that in Mr. Al Batha’s case, there was no claim for net

accumulations because he did not have a history of saving, so

the Estate’s claim would be the $143,663.18 in medical bills and

the funeral bill. In addition to the Estate’s claim for

damages, Mr. Al Bath a’s surviving spouse would have a claim to

recover her individual damages for loss of support, services,

companionship, and protection, as well as her pain and suffering

from the date of injury.

42 . As stipulated by the parties, Mr. Al Batha’s medical

car e related to his injury was paid by Medicaid, and AHCA,

through the Medicaid program. Medicaid provided $143,663.18 in

benefits associated with Mr. Al Batha’s injury. This

$143,663.18 represented the entire claim for past medical

expenses. Thus, of the settlement proceeds received by the

Estate, a maximum of $143,663.18 would have been allocated for

past medical expenses, since this represented the entirety of

Mr. Al Batha’s medical expenses.

43 . As stipulated by the parties, Mr. Al Batha’s funeral

expe nses were in the amount of $3,850.00. Since this is a

category of damages recoverable by the Estate, this amount is

appropriately added to the $143,663.18 recovered for medical

expenses, bringing the Estate’s total recovery to $147,513.18.

44 . 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).

Ag. f or Health Care Admin. v. Riley , 119 So. 3d 514, 515 n.3

(Fla. 2d DCA 2013). That formula provides:

(f) Notwithstanding any provision in this

section to the contrary, in the event of an

action in tort against a third party in

which the recipient or his or her legal

representative is a party which results in a

judgment, award, or settlement fro m a third

party, the amount recovered shall be

distributed as follows:

1. After attorney’s fees and taxable costs

as defined by the Florida Rules of Civil

Procedure, one - half of the remaining

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 agency’s

recovery of medical assistance 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.

45 . Applying the above form ula to the Estate’s recovery

of $147,513.18 renders the following result:

$147,513.18 Estate’s Total Rec overy

(36,878.30) Attorneys’ fees (25% of

recovery)

___________

$110,634.88/2 = $55,317.44

46 . Thus, application of the formula set forth at section

409.910(11)(f) results in a finding that AHCA is entitled to

recover $55,317.44 in sati sfaction of its Medicaid lien.

PETITIONER’S MOTION FOR ATTORNEYS’ FEES AND COSTS

47 . At the conclusion of the evidentiary hearing, counsel

for Petitioner moved, ore tenus , for an award of attorneys’ fees

and costs. Counsel for AHCA objected to the under signed

considering the motion ore tenus , and accordingly, the

undersigned ruled that Petitioner would need to file a written motion, and provide Respondent an opportunity to respond to the motion in writing. Those written filing s were made on July 3

and 1 0, 2019, respectively.

48 . The basis of Petitioner’s Motion for Attorneys’ Fees

and Costs (Fees Motion) is Petitioner’s assertion that the

conduct of a final hearing following remand was unnecessary.

This is for two reasons. First, in this proceeding , AHCA moved

for a n SFO, and on January 30, 2017 , a n SFO was entered

dismissing Petitioner’s Petition. That SFO included numerous

Findings of Fact , including the value of the damages suffered

and allocation of $63,930.12 of the settlement to past medical

ex penses. Petitioner appealed that SFO to the First DCA based

on the legal determination that the Petition should be dismissed

with prejudice. AHCA did not file a cross - appeal or otherwise

dispute the Findings of Fact contained within the SFO. Further,

th e First DCA decision did not reject the Findings of Fact

contained within the SFO. Yet, in this proceeding on remand,

AHCA refused to accept the figure of $63,930.12 allocated to

past medical expenses based on the Findings of Fact in the SFO.

Instead, AH CA required Petitioner to proceed with a full - blown

evidentiary proceeding to prove the facts already found by DOAH

in the SFO.

49 . Second, while AHCA required Petitioner to proceed

through a full - blown evidentiary proceeding to prove the facts

already fo und by DOAH in the SFO, it did not present any

evidence or testimony to challenge or contest Petitioner’s

evidence. The evidence presented by Petitioner at final hearing

was unrebutted. In short, according to Petitioner, it was

unnecessary for Petitioner to be required to proceed through an

evidentiary hearing given the Findings of Fact previously made

in the SFO. Further, it was unnecessary for an evidentiary

hearing if AHCA was not going to present evidence or testimony

rebutting Petitioner’s evidence.

50 . Petitioner’s Fees Motion was filed pursuant to section

120.595(1), which provides:

(1) CHALLENGES TO AGENCY ACTION PURSUANT TO

SECTION 120.57(1). —

(a) The provisions of this subsection are

supplemental to, and do not abrogate, other

provisions allowing the award of fees or

costs in administrative proceedings.

(b) The final order in a proceeding

pursuant to s. 120.57(1) shall award

reasonable costs and a reasonable attorney’s

fee to the prevailing party only where the

nonprevailing adverse party has been

determined by the administrative law judge

to have participated in the proceeding for

an improper purpose.

(c) In proceedings pursuant to

s. 120.57(1), and upon motion, the

administrative law judge shall determine

whether any party participated in the

proceeding for an improper purpose as

defined by this subsection. In making such

determination, the administr ative law judge

shall consider whether the nonprevailing

adverse party has participated in two or

more other such proceedings involving the

same prevailing party and the same project

as an adverse party and in which such two or

more proceedings the nonprev ailing adverse

party did not establish either the factual

or legal merits of its position, and shall

consider whether the factual or legal

position asserted in the instant proceeding

would have been cognizable in the previous

proceedings. In such event, i t shall be

rebuttably presumed that the nonprevailing

adverse party participated in the pending

proceeding for an improper purpose.

(d) In any proceeding in which the

administrative law judge determines that a

party participated in the proceeding for an

i mproper purpose, the recommended order

shall so designate and shall determine the

award of costs and attorney’s fees.

(e) For the purpose of this subsection:

1. “Improper purpose” means participation

in a proceeding pursuant to s. 120.57(1)

primarily t o harass or to cause unnecessary

delay or for frivolous purpose or to

needlessly increase the cost of litigation,

licensing, or securing the approval of an

activity.

2. “Costs” has the same meaning as the

costs allowed in civil actions in this state

as p rovided in chapter 57.

3. “Nonprevailing adverse party” means a

party that has failed to have substantially

changed the outcome of the proposed or final

agency action which is the subject of a

proceeding. In the event that a proceeding

results in any su bstantial modification or

condition intended to resolve the matters

raised in a party’s petition, it shall be

determined that the party having raised the

issue addressed is not a nonprevailing

adverse party. The recommended order shall

state whether the c hange is substantial for

purposes of this subsection. In no event

shall the term “nonprevailing party” or

“prevailing party” be deemed to include any

party that has intervened in a previously

existing proceeding to support the position

of an agency.

51 . For the reasons set forth in greater detail in the

Conclusions of Law below, Petitioner’s motion must be denied.

CONCLUSIONS OF LAW

52 . AHCA is the state agency responsible for administering

Florida’s Medicaid program. § 409.910(2), Fla. Stat.

53 . Ju risdiction of this matter is in DOAH.

§ 409.910(17)(b), Fla. Stat.

54 . Medicaid covered medical expenses associated with

injuries sustained by Abdel - Kader Al Batha in a 2015 car

accident. These expe nses were paid in the amount of

$143,663.18.

55 . “Medi caid is a cooperative federal - state welfare

program providing medical assistance to needy people.” Giraldo

v. Ag. for Health Care Admin. , 208 So. 3d 244 (Fla. 1st DCA

2016). Although state participation in this federal program is

voluntary, once a state elects to participate, it must comply

with federal Medicaid law. Id. at 249. Federal law requires

that participating states seek reimbursement for medical expenses incurred on behalf of Medicaid recipients who later recover from legally liable third part ies. Id.

56 . Florida’s Third - Party Liability Act gives AHCA at

least three mechanisms to recoup expenditures from third

parties: (1) an automatic lien “upon the collateral, as defined

in s. 409.901” for the full amount of medical assistance

provided by Medicaid; (2) automatic subrogation to any rights of

a recipient to third - party benefits; and (3) an automatic

assignment of the recipient's rights to any third - party

benefits. § 409.910(6)(a) - (c), Fla. Stat.

57 . “Collateral” includes settlement proceeds payable by

liable third parties. See §§ 409.901(7) and 409.901(26), Fla.

Stat.

58 . The automatic lien attaches when a recipient first

receives treatment, and the lien is perfected automatically at

the time of attachment. § 409.910 (6) (c)1 . , Fla. Stat.

59 . Section 409.910(6)(b) provides:

By applying for or accepting medical

assistance, an applicant, recipient, or

legal representative automatically assigns

to the agency any right, title, and interest

such person has to any third - party benefit,

excluding any Medicare benefit to the extent

required to be excluded by federal law.

1. The assignment granted under this

paragraph is absolute, and vests legal and

equitable title to any such right in the

agency, but not in excess of the amount of

medical assista nce provided by the agency.

2. The agency is a bona fide assignee for

value in the assigned right, title, or

interest, and takes vested legal and

equitable title free and clear of latent

equities in a third person. Equities of a

recipient, the recipient 's legal

representative, his or her creditors, or

health care providers shall not defeat or

reduce recovery by the agency as to the

assignment granted under this paragraph.

60 . This provision constitutes an absolute assignment by

the recipient, vesting l egal and equitable title in the state to

any third - party benefits (subject to the constraints of the

federal law cited above).

61 . However, AHCA’s right to recover Medicaid expenditures

is limited by federal law. According to the United States

Supreme Co urt in Arkansas Dep artmen t of Health and Human

Serv ices v. Ahlborn , 547 U.S. 268 (2006), the federal Medicaid

anti - lien provision at 42 U.S.C. § 1396p(a)(1) would ban a lien

on all proceeds from a Medicaid recipient’s tort settlement.

However, the provisi ons in federal law requiring states to seek

reimbursement of their Medicaid expenditures from liable third

parties create an exception to the anti - lien law, and allow

states to seek reimbursement from the medical expense portion of

the recipient’s tort rec overy.

62 . The L egislature has capped Medicaid’s recovery of its

lien by formula in section 409.910(11)(f): one - half of the

settlement proceeds after deductions for a 25 percent attorney’s

fee and certain costs associated with the litigation.

63 . Medica id’s recovery is limited to this amount, but

only to the extent the lien exceeds the statutory formula. If

the lien is less than the statutory formula, then Medicaid is

entitled to recover the full amount of its lien.

64 . Since the enactment of the 2013 version of section

settlement,” the administrative procedure in section

409.910(17)(b) “serves as a means for determining whether a

lesser portion of a total recovery should be allocated as

r eimbursement for medical expenses in lieu of the amount

Delgado v. Ag. for Health Care Admin. , 237 So. 3d 432, 435 (Fla.

1st DCA 2018).

65 . Section 409.910(17)(b) provides that:

(b) A recipi ent 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 o r after the date of

placing the full amount of the third - party

benefits in the trust account for the

benefit of t he agency pursuant to

paragraph (a). The petition shall be filed

with the Division of Administrative

Hearings. For purposes of chapter 120, t he

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 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

formula set forth in par agraph (11)(f) or

that Medicaid provided a lesser amount of

medical assistance than that asserted by the

agency.

66 . Although section 409.910(17)(b) makes reference to

“future” medical expenses being a consideration and the

heightened burden of proof of “clear and convincing evidence,”

judicial decisions have defined the contours of 409.910 (17)(b)

proceedings. Portions of sections 409.910(11)(f) and

409.910(17)(b) have been determined preempted by federal

Medicaid law. See Gallardo v. Dudek , No. 4:16 - c v - 116, 2017 U.S.

Dist. LEXIS 59848 (N.D. Fla. Apr. 18, 2017); Gallardo v. Senior ,

2017 U.S. Dist. LEXIS 112448 (N.D. Fla. Jul. 18, 2017).

Specifically, in the Gallardo decisions, the U.S. District Court

for the Northern District of Florida enjoined AHCA f rom “seeking reimbursement of past Medicaid payments from portions of a recipient’s recovery that represents future medical expenses.”

Medicaid recipient to affirmatively disprove § 409.910(1 7)(b)’s

formula - based allocation with clear and convincing evidence to

successfully challenge it where, as here, that allocation is

arbitrary and there is no evidence that it is likely to yield

reasonable results in the mine run of cases.”

67 . In this cas e, AHCA stipulated that no portion of the

settlement represents reimbursement for future medical expenses.

(JPHS , p. 11) . Further, AHCA stipulated that “the burden of

proof for a Medicaid recipient to successfully contest the

amount payable to AHCA pursu ant to the formula as

§ 409.910(11)(f) is a preponderance of the evidence.” (JPHS ,

p. 13) .

68 . Petitioner settled the wrongful death claim against

the driver of the other vehicle. Accordingly, AHCA has a lien

against the medical expense portion of the p roceeds recovered by

P etitioner, the Medicaid recipient’s E state.

69 . Since the E state of a Medicaid recipient qualifies as

a recipient for purposes of standing under section

409.910(17)(b), the estate of a Medicaid recipient who has

received proceeds fro m a wrongful death settlement can challenge

the amount allocable to the Medicaid lien. Al Batha v. Ag . for

Health Care Admin. , 263 So. 3d 817 (Fla. 1st DCA 2019).

70 . According to the expert witness who testified for the

Estate, the release executed by the parties allocated an amount

to past medical expenses recovered, but did not otherwise

allocate recovered damages to any category of damages or to

either the E state or to Ms. Alshami. However, as noted above,

the allocation of the settlement proceeds t o the claims of the

Estate is straightforward in this instance, since it is

comprised entirely of the decedent’s past medical expenses paid

by Medicaid, and his funeral expenses.

RULING ON MOTION FOR ATTORNEYS’ FEES AND COSTS

71 . Under section 120.595, Florida Statutes, if a

“nonprevailing adverse party” has participated in the litigation

with an “improper purpose , ” fees can be awarded. Thus, both the

criterion of “improper purpose” and “nonprevailing adverse

party” must be met in order for a fee to be awarded under

section 120.595. Since AHCA is not a “nonprevailing adverse

party” under section 120.595(1)(e)3 . for purposes of an award of

fees, it is unnecessary to address the issue of whether its

participation in this proceeding was motivated by an “im proper

purpose . ”

72 . Pursuant to section 120.595(1)(e)3 . , a nonprevailing

adverse party is defined as one who has “failed to have

substantially changed the outcome of the proposed or final

agency action which is the subject of a proceeding.” Here, the

S FO simply dismissed the petition for Petitioners’ lack of

standing -- in effect allowing the presumptive amount payable to

AHCA (i.e., the entire Medicaid lien) to stand. On remand,

P etitioner ha s offered evidence in support of its claim that a

lesser amoun t is payable to AHCA, and AHCA has argued that the

Estate ha s still not met its burden of proof. Regardless of

whether Petitioner prevailed on remand and the undersigned

determined that an amount less than the full lien was payable to

AHCA, such a substan tial change in the outcome of the proceeding

is not attributable to AHCA’s failure, but instead to

P etitioner’s effort. Stated differently, AHCA, by definition,

cannot be a non prevailing adverse party since it is the agency

that is proposing to take actio n, not a party that is trying to

change the proposed action. Under these circumstances, a fee is

not payable under section 120.595(1)(e). See Johnson v. Dep ’ t

of Corr . , 191 So. 3d 965 (Fla. 1st DCA 2016) .

73 . In Johnson , the plaintiff was terminated by the

Department of Corrections (DOC) , but voluntarily reinstated by

DOC after he appealed his dismissal to the Public Employees

Relation Commission. Fees under section 120.595(1)(e) were

denied because, although the department did not “prevail” in the

admi nistrative proceeding to terminate the plaintiff’s

employment, the department was not a party who had “failed to

have substantially changed the outcome of the proposed or final

agency action” -- instead, it was the plaintiff in that case who

had succeeded in changing the outcome of the agency action. The

court determined that DOC simply did not meet the statutory

definition of a nonprevailing adverse party. Id. at 968.

74 . In this case, according to section 409.910(11)(f) , the

statutory amount presumptivel y payable to satisfy the Medicaid

lien was the entire amount of the lien, $143,663.18. Had

Petitioner decided not to challenge this amount, AHCA would have

received the entire amount of its lien in reimbursement to

Medicaid. Regardless of whether Petitio ner prevailed or not in

challenging the presumptive lien amount, under no circumstances

could AHCA be considered the nonprevailing adverse party who

failed to substantially change the outcome, a necessary

precondition to an award of fees under section 120. 595.

Johnson , 191 So. 3d at 968 . 2/ Accordingly, Petitioner’s motion

for attorneys’ fees and costs pursuant to section 120.595 must be denied.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is hereby

ORDERED that:

1. The Agency for Health Care Administration is entitled

to recover $55,317.44 in satisfaction of its Medicaid lien.

2. Petitioner’s Motion for Attorney Fees and Costs is

denied.

DONE AND ORDERED this 30 th day of September , 2019 , in

Tallahassee, Leon County, Florida.

W. DAVID WATKINS

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

F iled with the Clerk of the

Division of Administrative Hearings

this 30 th day of September , 2019 .

ENDNOTE S

1/ The case style has been modified to delete Sharia Alshami as

a petitioner pursuant to the First District Court of Appeal

decision Al Bath a v. A gency for Health Care Administration , 263

So. 3d 817 ( F la. 1st DCA 2019) .

2 / Because it is equally applicable in this proceeding, the

undersigned will repeat here the observation he made in the

Johnson case:

The inherent unfairness of an agency being

im munized from an award of attorney’s fees

and costs where, as here, a Petitioner

successfully contests the proposed agency

action is troubling. However, as noted, ALJs

are required to apply the law as written, not

as they would have it written. Rather,

correcting the current inequity of section

120.595(1)(e)3. is solely within the province

of the Legislature.

Johnson v. Dep ’ t of Corr . , Case No. 15 - 1803F , n.4 (Fla. DOAH

Sept. 30, 2015).

COPIES FURNISH ED:

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Office of the Attorney General

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Office of the Attorney General

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Tallahassee, Florida 32399

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Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

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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. S uch 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 fili ng 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.