17-003117MTR Melissa Figueroa vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Wednesday, March 28, 2018.

Summary: Petitioner proved (by a preponderance, per gloss for federal decisions) that portion of settlement allocated to medical expenses by statutory formula should be reduced pro rata.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MELISSA FIGUEROA,

Petitioner,

vs. Case No. 17 - 3117MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

On February 1, 2018, a fina l hearing was held in this case

before J. Lawrence Johnston, an Administrative Law Judge (ALJ) of

the Division of Administrative Hearings (DOAH). It was conducted

using video teleconferencing between sites in Tampa and

Tallahassee.

APPEARANCES

For Petitio ner: Joshua T. Chilson, Esquire

Johnson, Pop, Bokor, Ruppel, & Burns, LLP

911 Chestnut Street

Clearwater, Florida 33782

For Respondent: Elizabeth A. Teegen, Esquire

Office of the Attor ney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32308

STATEMENT OF THE ISSUE

The issue is the amount of the PetitionerÓs personal injury

settlement proceeds that should be paid to the Agency for Health

Care Administration (AHCA) to satisfy its Medicaid lien under

section 409.910, Florida Statutes (2016) . 1/

PRELIMINARY STATEMENT

On May 26, 2017, Melissa Figueroa filed a Petition to

Determine Medicaid Lien. After being placed in abeyance for a

time, the fina l hearing was scheduled, and the parties filed a

Joint Pre - h earing Stipulation. At the hearing, the Petitioner

and her attorney testified, and the PetitionerÓs Exhibits 1

through 8 were received in evidence. AHCA cross - examined but did

not call any witne sses or introduce any other evidence.

After the hearing, the Transcript was filed, and the parties

filed proposed final orders that have been considered.

FINDINGS OF FACT

1. The PetitionerÓs right hand and wrist were cut by glass

in the bathroom of her apartment in March 2012. Her injuries

included damage to the tendons and nerves. She was hospitalized

and received medical care and treatment, which Medicaid paid in

the amount of $4,348.45. The Petitioner also personally owes

$123 for physical therapy she received.

2. The Petitioner sued the owner of the apartment, who

vigorously contested liability and raised several affirmative

defenses alleging that the PetitionerÓs negligence or

recklessness was wholly or partially responsible for her injuries

and that she assumed the risk.

3. The PetitionerÓs damages were substantial because she

lost the effective use of her right hand. She applied and was

approved for Social Security supplemental security income

benefits, subject to periodic reviews of he r disability status.

She presented evidence in the form of her and her attorneyÓs

testimony and a report prepared by a vocational evaluation expert

that she will suffer lost wages in the amount of approximately a

million dollars, calculated by assuming sh e would have worked

full - time earning $ 12 - 15 an hour until age 70, but for her

accident, and assuming she cannot be gainfully employed in any

capacity as a result of her injury. While that amount of lost

wages might be overstated, the Petitioner presented evidence in

the form of her attorneyÓs testimony and a supporting affidavit

of another attorney with experience in personal injury case

valuations that the monetary value of her damages was no less

than approximately $550,000. 2/ AHCAÓs cross - examination did not

reduce the persuasiveness of the PetitionerÓs evidence, and AHCA

present ed no contrary evidence.

4. In March 2017, the Petitioner settled her lawsuit for a

mere $55,000 because of her concern that a jury would find for

the defendant or reduce th e recoverable damages due to

comparative negligence. The Petitioner knew at the time of her

settlement that AHCA was claiming a $4,348.45 Medicaid lien on

the settlement proceeds.

5. The Petitioner offered AHCA $434.85 in full satisfaction

of the Medic aid lien claim. AHCA declined and asserts its

entitlement to the full amount of the lien claim.

6. The PetitionerÓs settlement agreement included an

allocation of $434.85 to AHCAÓs Medicaid lien, $123 to the other

past medical expenses, and the rest to other components of

damages (which did not include any future medical expenses).

AHCA was not a party to the settlement and did not agree to that

allocation.

7. The PetitionerÓs attorney testified that the

PetitionerÓs proposed allocation is fair and reasonable and

introduced the concurring affidavit of another attorney. AHCA

did not present any evidence but argued that the Petitioner did

not prove that AHCAÓs Medicaid lien should be reduced and that,

as a matter of law, AHCA was entitled to the claim ed lien.

CONCLUSIONS OF LAW

8 . AHCA would be entitled to the full amount of its claimed

lien claim under section 409.910(11)(f), Florida Statutes. Under

that statute, AHCA is entitled to reimbursement of the full

amount of its Medicaid expenditures out o f third - party

recoveries, up to a maximum calculated by reducing the total

recovery by taxable costs and attorneysÓ fees calculated as 25

percent of the recovery, and halving the remainder of the

recovery. In this case, the statutory formulaÓs maximum wou ld be

$20,625, which is half of the difference between the $55,000

settlement and $13,750 for attorneysÓ fees (there being no

evidence of any taxable costs to subtract). The full amount of

AHCAÓs claimed lien is well within the statutory maximum.

9 . Se ction 409.910(17)(b) allows a Medicaid recipient to

rebut the statutory maximum calculated under section

409.910(11)(f) by proving, Ðby 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 paragraph (11)(f) or that Medicaid provided a lesser amount of

medical assistance than that asserted by the agency.Ñ

10 . Glosses have been placed on the statute to strike

future medical expenses from consideration 3/ and to reduce the

standard of proof from Ðclear and convincingÑ to a Ðpreponderance

of the evidenceÑ in order to harmonize the statute with recent

federal court decisions. See Museguez, etc., et al. v. Ag. for

Health Care Admin. , Case 16 - 7379MTR (Fla. DOAH Sept. 19, 2017). 4/

11 . Applying the gloss to section 409.910(17)(b), the

Petitioner proved, by a preponderance of the evidence, that a

lesser portion of the total recovery should be allocated as

reimbursement for past medical expenses than the amount

calculated under section 409.910(11)(f). Specifically, the

PetitionerÓs evidence was that it is reasonable and appropriate

to allocate ten percent of the PetitionerÓs settlement as

reim bursement for past medical expenses. This is the percentage

represented by the relationship between the PetitionerÓs

settlement, which was reduced primarily due to serious questions

as to the third partyÓs liability, and the full amount of the

PetitionerÓ s damages. AHCA presented no evidence to the

contrary.

12 . AHCA argues that it is entitled to the full amount of

its claimed lien because section 409.910(6)(a) - (c) fixes the lien

on third - party benefits, subrogates the Medicaid recipientÓs

third - party benefits, and assigns those benefits to AHCA, and

because the full amount of the lien is less than the amount

calculated under section 409.910(11)(f).

13 . AHCAÓs proposed statutory interpretation is rejected.

Section 409.910(17)(b) clearly affords the Petitioner a procedure

for establishing that the amount of AHCAÓs lien should be reduced

from the full amount claimed so that it would not be paid from

portions of the settlement recovery other than the portion

allocated to past medical expenses (applying the gloss to account

for the federal decisions), contrary to the federal Medicaid

anti - lien law and the federal decisions interpreting it. See

Ark. DepÓt of Health and Human Servs. v. Ahlborn , 547 U.S. 268

(2006); and Wos v. E.M.A. ex rel. Johnson , 568 U. S. 627 , 133 S.

Ct. 1391, 185 L. Ed. 2d 471 (2013). Neither the statutes nor the

courts have provided clear guidance on how to determine the

proper allocation. While the pro rata allocation proven by the

Petitioner in this case may not be the only accepta ble way to do

it in every case, it is the only way supported by evidence in

this case, and is reasonable and appropriate. See Willoughby v.

Ag. for Health Care Admin. , Case 15 - 3276MTR (Fla. DOAH Dec. 4,

2017).

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is determined and ordered that the amount of AHCAÓs

Medicaid lien payable from the PetitionerÓs settlement is

$434.85.

DONE AND ORDERED this 28th day of March , 2018 , in

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTON

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 28th day of March, 2018 .

ENDNOTE S

1/ Statutory references are to the 2016 codification of the

Florida Statutes, which was in effect at the time of the

PetitionerÓs settlement. See Cabrera v. A g. for Health Care

Admin. , Case No. 17 - 4557MTR, 2018 Fla. Div. Adm in . Hear. LEXIS 43

n.1 (Fla. DOAH Jan. 23, 2018) (citing Suarez v. Port Charlotte

HMA , 171 So. 3d 740 (Fla. 2d DCA 2015)).

2/ It is not clear how, specifically, this damage estimate

factor ed in the Social Security supplemental security income

benefits.

3/ This gloss would not change the result since there was no

evidence of any future medical expense component in the

PetitionerÓs damages.

4/ This gloss is preferable, in the opinion of this ALJ, to the

holding in Smathers v. Agency for Health Care Administration ,

Case No. 16 - 3590MTR (Fla. DOAH Sept. 13, 2017), that DOAH no

longer has jurisdiction in light of the federal decisions.

COPIES FURNISHED:

Alexander R. Boler, Esquire

Suit e 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Elizabeth A. Teegen, Esquire

Office of the Attorne y General

The Capitol, Plaza Level 01

Tallahassee, Florida 32308

(eServed)

Joshua T. Chilson, Esquire

Johnson, Pop, Bokor, Ruppel, & Burns, LLP

911 Chestnut Street

Clearwater, Florida 33782

(eServed)

Justin Senior, Secretary

Agency for Health Care Adm inistration

Mail Stop 1

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop , Agency Clerk

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Shena Grantham, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agen cy for Health Care Administration

Mail Stop 3

2727 Mahan Drive

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, Flori da 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 agency clerk of the

Division of Administrative Hearings within 30 day s 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 re sides or

as otherwise provided by law.