17-006448MTR Kapitola Morgan, As Personal Representative Of The Estate Of Malk S. Sunwabeh, Deceased vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, June 14, 2018.

Summary: Petitioner's petition is dismissed for failure to comply with the mandatory filing requirements. Further, Petitioner is not authorized to challenge the Medicaid lien because the recipient died before the Agency imposed the lien.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KAPITOLA MORGAN, as Personal

Representative of the Estate of

MALK S. SUNWABEH, DECEASED,

Petitioner,

vs. Case No. 17 - 6448MTR

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

120.57(1), Florida Statutes (2017) , 1/ on February 6, 2018, by

video teleconference with sites in Tallahassee and Orlando,

Florida.

APPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton & Faglie, P . L .

189 East Walnut Street

Montice ll o, Florida 32344

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The issue in this matter concerns the amount of the money to

be reim bursed to the Agency for Health Care Administration for

medical expenses paid on behalf of Malk S. Sunwabeh, a Medicaid

recipient, following a settlement recovered from a third party by

the Personal Representative of the Mr. SunwabehÓs estate.

PRELIMINARY STATEMENT

On November 27, 2017, Petitioner, Kapitola Morgan, as

Personal Representative of the Estate of Malk S. Sunwabeh, a

Medicaid recipient, filed a Petition to Determine the Amount

Payable to the Agency for Health Care Administration in

Satisfaction o f Medicaid Lien (the ÐPetitionÑ). Through the

Petition, Petitioner challenged the Agency for Health Care

AdministrationÓs (the ÐAgencyÑ) lien for medical expenses

following PetitionerÓs settlement with a third party on behalf of

Mr. SunwabehÓs estate. Th e Agency calculated its lien using the

formula set forth in section 409.910(11)(f) , Florida Statutes .

Petitioner asserts that reimbursement of a lesser portion of the

settlement is warranted under section 409.910(17)(b).

On November 28, 2017, the Division of Administrative

Hearings (ÐDOAHÑ) notified the Agency of PetitionerÓs Petition

for an administrative proceeding to determine the amount payable

to the Agency to satisfy the Medicaid lien.

The final hearing was held on February 6, 2018. At the

final hea ring, PetitionerÓs Exhibits 1 through 10 were admitted

into evidence. Petitioner presented the testimony of Johnny

Pineyro, Esquire. The Agency did not offer any evidence or

witnesses.

A one - volume Transcript of the final hearing was filed with

DOAH on F ebruary 27, 2018. At the close of the hearing, the

parties were advised of a ten - day timeframe following DOAHÓs

receipt of the hearing transcript to file post - hearing

submittals. At the final hearing, Petitioner requested (without

objection) an additiona l 20 days to file its post - hearing

submittal. After the Transcript was filed, the parties jointly

moved for an additional eight days to file their post - hearing

submittals, which was granted. 2/ Both parties filed Proposed

Final Orders , which were duly con sidered in preparing this Final

Order.

FINDING S OF FACT

1. This proceeding determines the amount the Agency should

be paid to satisfy a Medicaid lien following PetitionerÓs

recovery of a $275,000 settlement from a third party. The Agency

asserts that it is entitled to recover the full amount of its

$85,279.65 lien.

2. Malk S. Sunwabeh, the person who received the benefit of

the AgencyÓs Medicaid payments, died as a result of a hit - and - run

accident. Petitioner is the duly appointed Personal

Representativ e of Mr. SunwabehÓs estate and is authorized to

bring this action on his behalf.

3. The accident that gave rise to this matter occurred on

October 29, 2013. Early that morning, in pre - dawn darkness,

Mr. Sunwabeh left his residence to walk to his high school. The

well - worn path he followed led him to a divided roadway that ran

in front of his school. With no crosswalk or intersection

nearby, Mr. Sunwabeh walked straight across the road. Just after

Mr. Sunwabeh stepped into the road, he was struck fro m behind by

a car driven by another student. As he lay sprawled on the

pavement, a second vehicle (a gas truck) ran over his body.

4. After the accident, Mr. Sunwabeh was transported by

ambulance to Shands Hospital in Jacksonville. He immediately

unde rwent surgeryagically, Mr. Sunwabeh died during surgery.

He was 16 years old.

5. The Agency, through the Medicaid program, paid Shands

Hospital a total of $85,279.65 for Mr. SunwabehÓs medical care,

which was the full amount of his medical expense s following the

accident. 3/ All of the expenditures Medicaid spent on

Mr. SunwabehÓs behalf are attributed to past medical expenses.

No portion of the $85,279.65 Medicaid lien represents future

medical expenses.

6. Mr. SunwabehÓs aunt, Kapitola Morgan (Petitioner), was

appointed Personal Representative of Mr. SunwabehÓs estate.

Petitioner brought a wrongful death action to recover both the

damages of Mr. SunwabehÓs estate, as well as the individual

statutory damages of Mr. SunwabehÓs mother, against bo th drivers

who hit Mr. Sunwabeh.

7. Johnny Pineyro, Esquire, represented Petitioner in the

wrongful death lawsuit. On June 10, 2015, Mr. Pineyro negotiated

a $275,000 settlement for Petitioner with the second driver.

8. Under section 409.910, the Ag ency is to be repaid for

its Medicaid expenditures out of any recovery from liable third

parties. Accordingly, when the Agency was notified of the

wrongful death settlement, it asserted a Medicaid lien against

the amount Petitioner recovered. The Agency claims that,

pursuant to the formula set forth in section 409.910(11)(f), it

should collect the full amount of the medical costs it paid on

Mr. SunwabehÓs behalf ($85,279.65). The Agency maintains that it

should receive the full amount of its lien regardl ess of the fact

that Petitioner settled for less than what Petitioner represents

is the full value of the damages. (As discussed below, the

formula in section 409.910(11)(f) allows the Agency to collect

the full Medicaid lien.)

9. Petitioner, on the ot her hand, asserts that, pursuant to

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

portion of the settlement than the amount it calculated using the

section 409.910(11)(f) formula. Petitioner specifically argues

that the AgencyÓs Medicai d lien should be reduced

proportionately, taking into account the ÐtrueÑ value of

PetitionerÓs damages. Otherwise, the application of the default

statutory formula would permit the Agency to collect more than

that portion of the settlement that fairly rep resents

compensation for past medical expenses. Petitioner insists that

such reimbursement violates the federal Medicaid lawÓs anti - lien

provision (42 U.S.C. § 1396p(a)(1)) and Florida common law.

Therefore, Petitioner requests that the AgencyÓs allocati on from

PetitionerÓs recovery be reduced to the amount of $9,065.23.

10. To establish the value of PetitionerÓs damages,

Petitioner presented the testimony of Mr. Pineyro. Mr. Pineyro

heads the Florida Injury Law Firm in Celebration, Florida. He

has pra cticed law for over 20 years and focuses on personal

injury, wrongful death, and aviation law. Mr. Pineyro handles

jury trials and cases involving catastrophic injury. In his

practice, he regularly reviews accident reports, expert reports,

and medical re cords. Mr. Pineyro stays abreast of jury verdicts.

He also discusses jury results with members of his firm and other

personal injury attorneys. Mr. Pineyro testified that as a

routine part of his practice , he ascertains the value of damages

suffered by injured parties , and he explained his process for

making these determinations. Mr. Pi neyro was accepted as an

expert in the valuation of damages suffered by injured (and

deceased) parties.

11. Mr. Pineyro opined that the conservative value of

Mr. Sunwab ehÓs damages, as well as his motherÓs claim for pain,

suffering, and loss of her sonÓs companionship under the Florida

Wrongful Death Act, at between $2,500,000 and $5,000,000. 4/ In

deriving this figure, Mr. Pineyro considered t he accident and

homicide re ports, the medical examinerÓs report, and PetitionerÓs

medical records. Regarding Mr. SunwabehÓs motherÓs damages,

Mr. Pineyro described comparable jury verdicts which involved the

death of a child.

12. Mr. Pineyro also testified regarding the signifi cant

obstacles Petitioner faced to recovering the full amount of

damages in the wrongful death lawsuit based on the disputed facts

and circumstances of the accident, as well as insurance policy

limits. As part of his representation of Petitioner, Mr. Pine yro

deposed several fact and expert witnesses and visited the

accident scene. Mr. Pineyro conveyed that the first driver who

hit Mr. Sunwabeh was not covered by bodily injury insurance, nor

did she possess recoverable assets. Therefore, collecting a full

damages award against her would prove challenging.

13. Furthermore, Mr. Pineyro expressed that Petitioner did

not have a strong liability case against the second driver based

on causation and comparative negligence issues . (Mr. Sunwabeh

was wearing all black clothes which concealed his fallen body on

the road in the early morning gloom.) Mr. Pineyro was prepared

to argue a negligence theory asserting that the second driver

failed to use reasonable caution and react in time to avoid

driving over Mr. Sunw abeh. However, during his testimony,

Mr. Pineyro conceded that a defense verdict in favor of the

second driver was a real possibility. Consequently, Mr. Pineyro

believed that it was in PetitionerÓs best interests to settle the

lawsuit.

14. Based on M r. PineyroÓs testimony that the $275,000

settlement did not fully compensate Ms. SunwabehÓs estate or his

mother for their damages, Petitioner argues that a lesser portion

of the settlement should be allocated to reimburse Medicaid

instead of the full amou nt of the lien. Petitioner proposes that

a ratio should be applied based on the ÐtrueÑ value of

PetitionerÓs damage claim ($2,585,279) compared to the amount

that was actually recovered ($275,000). Using these numbers, the

settlement represents a 10.63 p ercent recovery of the total value

of PetitionerÓs damages. In like manner, the amount of the

Medicaid lien should also be reduced to 10.63 percent or

approximately $9,065.23. Therefore, Petitioner asserts that

$9,065.23 is the portion of the third - party settlement that

represents the fair and reasonable reimbursement of the amount

Medicaid paid for Mr. SunwabehÓs medical care .

15. The Agency was not a party to the wrongful death

lawsuit or PetitionerÓs settlement. Petitioner was aware of the

Medicaid l ien and past medical expense damages at the time she

settled the lawsuit. No portion of the $275,000 settlement

represents reimbursement for future medical expenses.

16. The undersigned finds that Petitioner did not meet her

burden of proving that the ÐtrueÑ value of PetitionerÓs damages

from this accident equaled $2,585,279.65. Further, based on the

evidence in the record, Petitioner failed to prove, by a

preponderance of the evidence, that a lesser portion of

PetitionerÓs total recovery should be all ocated 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 $85,279.65 from

PetitionerÓs recovery of $275,000 from a third p arty to satisfy

its Medicaid lien.

CONCLUSIONS OF LAW

17. DOAH has jurisdiction over the subject matter and

parties in this proceeding pursuant to sections 120.569,

120.57(1), and 409.910(17)(b). DOAH has final order authority.

§ 409.910(17 )( b), Fla. S tat.

18. The Agency is the Medicaid agency for the state of

Florida, as provided under federal law, and administers FloridaÓs

Medicaid program. See § 409.901(2), Fla. Stat.

19. The federal Medicaid program Ðprovide[s] federal

financial assistance to S tates that choose to reimburse certain

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

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

entirely optional, once a state elects to participate in the

federal Medicaid program, it mu st comply with federal

requirements governing the program. Id. ; and 42 U.S.C. § 1396,

et seq .

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

states are required to seek reimbursement for medical expenses

from Medicaid recipients who later reco ver from legally liable

third parties. See Arkansas DepÓt of Health & Hum. Servs. v.

Ahlborn , 547 U.S. 268, 276 (2006) and 42 U.S.C. § 1396a. To

comply with this federal requirement, the Florida Legislature

enacted section 409.910, FloridaÓs ÐMedicaid Th ird - Party

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

reimbursed for Medicaid funds paid for a recipientÓs medical care

when that recipient later receives a personal injury judgment or

settlement from a third party. See Smith v. Ag. for Health Care

Admin . , 24 So. 3d 590 (Fla. 5th DCA 2009). The Legislature

expressly set forth in section 409.910(1):

If benefits of a liable third party are

discovered or become available after medical

assistance has been provided by Medicaid, it

is the int ent of the Legislature that

Medicaid be repaid in full and prior to any

other person, program, or entity. Medicaid

is to be repaid in full from, and to the

extent of, any third - party benefits,

regardless of whether a recipient is made

whole or other credi tors paid. Principles of

common law and equity as to assignment, lien,

and subrogation are abrogated to the extent

necessary to ensure full recovery by Medicaid

from third - party resources. It is intended

that if the resources of a liable third party

beco me available at any time, the public

treasury should not bear the burden of

medical assistance to the extent of such

resources.

21. Accordingly, by accepting Medicaid benefits, Medicaid

recipients automatically subrogate their rights to any third -

party benefits for the full amount of medical assistance provided

by Medicaid and automatically assign to the Agency the right,

title, 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. § 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); see also Giraldo v. Ag. for

Heal th Care Admin. , 208 So. 3d 244 (Fla. 1st DCA 2016). 5/ Section

409.910 creates an automatic lien on any such judgment or

settlement with a third party for the full amount of medical

expenses Medicaid paid on behalf of the Medicaid recipient. See

§ 409.910 (6)(c), Fla. Stat.

22. However, the obligation to reimburse the Agency (and

Medicaid) following recovery from a third party 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 Med icaid lien against

that portion of PetitionerÓs award 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, 1396 (2013); Harrell v. State , 1 43 So. 3d 478,

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

266 (Fla. 5th DCA 2013). The federal Medicaid statuteÓs anti -

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

attaching a lien for medical assistance on a Medicai d recipientÓs

property 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)4., which provide that

the Agency may not recover more than it paid for the Medicai d

recipientÓs medical treatment. 6/

23. As Ahlborn explains, the anti - lien provision of the

federal Medicaid Act circumscribes these obligations by

authorizing payment to a state only from those portions of a

Medicaid recipientÓs third - party settlement rec overy allocated

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

Cansler , 674 F.3d 290, 312 (4th Cir. 2012), where the court

concluded Ð[a]s the unanimous Ahlborn CourtÓs decision makes

clear, federal Medicaid law limits a stateÓs recovery t o

settlement proceeds that are shown to be properly allocable to

past medical expenses.Ñ

24. Section 409.910(11) establishes a formula to determine

the amount the Agency may recover for medical assistance benefits

paid from a judgment, award, or settlemen t from a third party. 7/

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

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 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 remaining re covery

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 assistance ben efits 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 organization, 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.

25. In short, the section 409.910(11)(f) formula

establishes 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, t he

total amount actually paid by Medicaid on the recipientÓs behalf.

See Ag. for Health Care Admin. v. Riley , 119 So. 3d 514, 515 n.3

(Fla. 2d DCA 2013).

26. In this matter, using the section 409.910(11)(f)

formula, PetitionerÓs recovery amount ($275,000 ) is sufficient to

pay the full amount due to the Agency to satisfy its Medicaid

lien of $85,279.65. 8/

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

which a Medicaid recipient may contest the amount designated as

recovered medical expenses paya ble under section 409.910(11)(f).

Following the U.S. Supreme Court decision in Wos , the Florida

Legislature created an administrative process to determine the

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

that is properly allocable to med ical expenses; and, thus, the

portion of the recovery that may be used to reimburse the

Medicaid lien. Section 409.910(17)(b) states:

If federal law limits the agency to

reimbursement from the recovered medical

expense damages, a recipient, or his or her

legal representative, 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 fu nds 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 purpose s 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 proce edings

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 designa ted

as recovered medical expenses, the recipient

must prove, by clear and convincing evidence,

that the portion of the total recovery which

should be allocated as past and future

medical expenses is less than the amount

calculated by the agency pursuant to the

formula set forth in paragraph (11)(f).

Alternatively, the recipient must prove by

clear and convincing evidence that Medicaid

provided a lesser amount of medical

assistance than that asserted by the

agency . [ 9/ ] (emphasis added).

28. Section 409.91 0(17)(b) establishes that the section

409.910(11)(f) formula constitutes a default allocation of the

amount of a settlement that is attributable to medical costs, and

sets forth an administrative procedure for an adversarial

challenge of that allocation. See Harrell , 143 So. 3d at 480

(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 th e lien amount exceeds the

amount recovered for medical expensesÑ).

29. In order to successfully challenge the amount payable

to the Agency, the burden is on the Medicaid recipient to prove,

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 the Agency calculated.

§ 409.910(17)(b), Fla. Stat. 10/ In other words, if Petitioner can

demonstrate that the portion of the settlement attributed to past

medi cal expense is less than the amount the Agency calculated

using the section 409.910(11)(f) formula, the amount Petitioner

must reimburse the Agency may be reduced below $85,279.65.

30. The Agency defends PetitionerÓs claim on three grounds.

Each argument has merit as discussed below.

31. Initially, the Agency asserts that Petitioner may not

avail herself of the opportunity to reduce the Medicaid lien

because she failed to timely file her Petition. Section 409.910

establishes certain requirements a Medic aid recipient (or his

legal representative) must meet before the recipient may

challeng e the amount payable to the Agency. Section

409.910(17)(a) directs that the recipient Ð must, within 60 days

after receipt of settlement proceeds, pay the agency the ful l

amount of the third - party benefits, . . . or place the full

amount of the third - party benefits in an interest - bearing trust

account for the benefit of the agency.Ñ Thereafter, to contest

the amount payable to the Agency, section 409.910(17)(b) requires

the recipient to file a petition with DOAH within 21 days. Based

on the clear language in section 409.910(17), this timeframe is a

specific condition precedent with which a Medicaid recipient must

comply in order to challenge the amount payable to the Age ncy in

a chapter 120 hearing.

32. To support its argument that PetitionerÓs Petition must

be dismissed on jurisdictional grounds, the Agency points to the

fact that Petitioner settled the wrongful death lawsuit on

June 10, 2015. However, Petitioner file d her Petition with DOAH

on November 27, 2017, over two years later. The Agency posits

that Petitioner received the settlement funds at some point

before September 7, 2017 (60 days plus 21 days before

November 27, 2017). Therefore, Petitioner missed the statutory

deadline in which to challenge the amount designated as recovered

medical expense damages under section 409.910(17)(b).

33. The AgencyÓs jurisdictional argument has merit.

Petitioner failed to present any evidence that she placed the

Ð full a mount Ñ of the $275,000 settlement in an interest - bearing

account within 60 days after receipt as required by s ection

409.910(17)(a) . To challenge the AgencyÓs Medicaid lien,

Petitioner bears the burden of establishing the claim under

section 409.910(17)(b ). Consequently, because Petitioner did not

demonstrate that she complied with the filing requirements set

forth in section 409.910(17) (a), PetitionerÓs Petition must be

dismissed .

34. Next, the Agency asserts that PetitionerÓs claim fails

because Mr. Su nwabeh died before Petitioner collected the

settlement from the third party. Therefore, Petitioner (on

behalf of Mr. Sunwabeh) may not avail herself of the protections

provided by the federal Medicaid anti - lien statute (42 U.S.C.

§ 1396p(a)(1)) and argue that the Medicaid lien must be reduced

in the proceeding authorized under section 409.910(17)(b). 11/

35. Several Florida courts have reviewed the interplay

between section 409.910(17)(b) and the federal anti - lien statute

where a Medicaid recipient dies before the settlement with a third

party. These courts held that , in these circumstances, the

federal anti - lien statute does not operate to preempt or negate

the applicability of section 409.910(11)(f). Consequently, the

default formula governs the port ion of the third - party benefits

that is to be paid to satisfy a Medicaid lien. In other words,

because Mr. Sunwabeh died before the settlement, Petitioner does

not have the right under section 409.910(17)(b) to contest or

reduce the amount she must pay to the Agency.

36. In the case of Goheagan v. Perkins , 197 So. 3d 112 (Fla.

4th DCA 2016), Medicaid paid the medical costs of a recipient who

died from her injuries. After her death, the recipientÓs estate

brought a wrongful death action against the allege d ly negligent

third party. The estate settled the lawsuit. The Agency then

asserted its Medicaid lien. The estate sought to reduce the amount

of the lien. Goheagan affirmed the trial courtÓs order that the

recipientÓs estate must repay the full amount of the Medicaid lien.

The Goheagan court concluded that:

[t]he plain language of section 1396p(a)(1)

clearly reflects Congress' intent that the

anti - lien statute apply only to recoveries by

Medicaid recipients who are living when the

settlement or judgmen t against the third

party is obtained, and not to recoveries made

by an estate or beneficiary in a wrongful

death action. The anti - lien statute does not

apply to preempt the state statute in all

cases, and thus does not prohibit a state

from imposing a li en against the deceased

recipient's recovery from third parties for

the full am ount paid for medical expenses.

Goheagan , 197 So. 3d at 120.

37. The court in Hernandez v. Agency for Health Care

Administration , 190 So. 3d 139 (Fla. 3d DCA 2016), reached th e

same conclusion. As in Goheagan , Medicaid paid the medical costs

of a recipient who died from her injuries. The recipientÓs estate

settled following a wrongful death lawsuit. The Agency then

sought to recover the full amount of the Medicaid lien from the

third - party benefits. Hernandez declared that, Ð[b] y its express

terms, the Medicaid Act's anti - lien provision [42 U.S.C.

the property of a Medicaid recipient after her death.Ñ

Hernand ez , 190 So. 3d at 143. The court then held that Ð the

federal Medicaid Act's anti - lien provision does not preempt

Florida's Medicaid Third - Party Liability Act where a Medicaid

lien is imposed on a wrongful death settlement.Ñ Id.

38. Based on the holdings in Goheagan and Hernandez, the

undersigned concludes that the default formula in section

409.910(11)(f) governs the amount of the $275,000 settlement that

Petitioner must pay to the Agency to satisfy the Medicaid lien.

( As discussed above, section 409.91 0(11)(f) allows the Agency to

collect the full Medicaid lien.) Because this proceeding

involves the recovery of third - party benefits after the death of

Mr. Sunwabeh (the Medicaid recipient), Petitioner is not afforded

the right under section 409.910(17)(b ) to challenge the amount of

the AgencyÓs recovery.

39. Finally (notwithstanding the above), Petitioner did not

prove that the portion of the settlement attributed to past

medical care is less than the amount of the Medicaid lien (as

calculated using the section 409.910(f)(11) formula). Petitioner

argues that the Medicaid lien should be reduced using a ratio

that reflects the ÐtrueÑ value of PetitionerÓs injuries.

Petitioner specifically asserts that the Agency should receive

only 10.63 percent of the Me dicaid lien. Petitioner calculates

this lesser portion as follows: Mr. PineyroÓs testimony

establishes that the value of PetitionerÓs damages is

(conservatively) $2,585,279. 12/ Petitioner recovered $2 7 5,000

through the settlement. The settlement amount equals 10.63

percent of the actual value of PetitionerÓs damages. Applying

this percentage to the Medicaid lien, as a matter of fairness,

Petitioner proposes that the Agency should only recover $9,065.23

from the settlement funds ($85,279.65 times 10.63 percent).

40. The Legislature , d espite establishing a procedure in

section 409.910(17)(b) for a Medicaid recipient to contest the

amount of a Medicaid lien, did not provide guidance as to how

DOAH is to specifically determine what portion of a r ecovery

should be allocated as (past) medical expenses , instead of

applying the default formula. However, the Legislature

repeatedly emphasizes its desire for Medicaid to Ðbe repaid in

fullÑ from third - party resources if they are available . See

§ 409.910(1) and (6), Fla. Stat.

41. PetitionerÓs decision to settle the wrongful death

claim at less than its ÐtrueÑ value, rather than pursue the

underlying lawsuit to fruition, does not provide a sufficiently

persuasive reason to compromise the amount the Medicaid pr ogram

should recover. To do so is contrary to clear Legislative

mandate that , ÐMedicaid is to be repaid in full from, and to the

extent of, any third - party benefits, regardless of whether a

recipient is made whole or other creditors paid.Ñ § 409.910(a),

Fla. Stat. (emphasis added) . And, Ð [e] quities of a recipient,

[or] his or her legal representative . . . shall not defeat,

reduce, or prorate recovery by the agency as to its subrogation

rights.Ñ § 409.910(6)(a), Fla. Stat. 13/

42. PetitionerÓs alternat ive calculation certainly

apportions a more equitable portion of the settlement to

Petitioner in light of the terribly unfortunate loss of

Mr. SunwabehÓs life. However, Petitioner did not prove that the

settlement does not include sufficient f unds attrib uted to (past)

medical costs which may be used to cover the full amount of the

Medicaid lien .

43. The undersigned is also mindful that, Ð[t] he Medicaid

program provides federal and state funding to pay healthcare

costs for individuals who cannot afford i t.Ñ Vestal v. First

Recovery Grp., LLC , 292 F. Supp. 3d 1304, 1310 (M.D. Fla. 2018);

see also Roberts v. AlbertsonÓs Inc. , 119 So. 3d 457, 458 (Fla.

4th DCA 2012); and 42 U.S.C. § 1396a(a)(25)(A) - (B). Ð The federal

government pays a substantial portion of Medicaid costs.Ñ

Vestal , 292 F. Supp. 3d at 1310. In light of this fact, as

expressed in Giraldo :

To keep the Medicaid program viable, Congress

recognized that it is necessary to obtain

reimbursement when a third party makes

payment to the Medicaid bene ficiary 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. Richma n , 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 , 208 So. 2d at 18.

44. In sum, the Petition is dismiss ed for failure to comply

with section 4 09.910(17)(a) which requires Petitioner to place

the full amount of the third - party benefits in an interest -

bearing trust account for the benefit of the agency Ð within

60 days after receipt of settlement proceeds .Ñ

4 5 . Further, the federal anti - lien s tatute does not apply

in this case because the Agency did not impose the Medicaid lien

on PetitionerÓs settlement until after Mr. SunwabehÓs death.

Accordingly, as a matter of law, Petitioner is not entitled to

reduce the amount it must pay to the Agency as determined by the

formula in section 409.910(11)(f).

4 6 . Finally , Petitioner failed to meet its burden of

proving that $9,065.23 is the total portion of the $275,000

settlement that should be allocated as ( past ) medical costs ,

instead of the amount t he Agency calculated using the section

409.901(11)(f) formula. Petitioner did not demonstrate that its

alternative methodology appropriately calculate s the share of the

settlement that should be allotted to satisfy the Medicaid lien.

Accordingly, the Age ncy is entitled to the full amount of its

Medicaid expenditures ($85,279.65) from PetitionerÓs third - party

recovery.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that Petitioner, Kapitola Morgan, as Personal

Represen tative of the Estate of Malk S. Sunwabeh, Deceased, shall

pay to Respondent, Agency for Health Care Administration, the sum

of $85,279.65 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 14 th day of June , 2018 , in

Tallahassee, Leon County, Flor ida.

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 14 th day of June , 2018 .

ENDNOTE S

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

version, unless otherwise noted. Petitioner settled the wrongful

death lawsuit on June 10, 2015. The Agency obtained its right to

reimbursement from third - party benefits on that date.

Accordingly, the 2014 version of the governing statute ( section

409.910) controls DOAHÓs jurisdiction. See Suarez v. Port

Charlotte HMA, LLC , 171 So. 3d 74 0, 742 (Fla. 2d DCA 2015) .

(Petitioner suggests that the 2013 version of section 409.910

applies. The undersigned notes that the language in the relevant

portions of section 409.910 is the same in both the 2013 and 2014

version.)

2/ By requesting a dea dline for filing post - hearing submissions

beyond ten days after the final hearing, the 30 - day time period

for filing the Recommended Order was waived. See Fla. Admin.

Code R. 28 - 106.216.

3/ Shands Hospital initially presented a bill totaling

$149,520.50 for Mr. SunwabehÓs medical care. Later, Shands

Hospital elected to accept a reduced amount of $85,279.65 from

Medicaid.

4/ The Florida Wrongful Death Act authorized Mr. SunwabehÓs

estate to pursue a claim on behalf of Mr. SunwabehÓs mother for

her pain and suffering, loss of companionship, as well as funeral

expenses. (Mr. SunwabehÓs mother paid $15,207.06 for his

funeral.) The $85,279.65 medical bill was also recoverable as an

element of the estateÓs individual claim for damages. See

Section 768.21 (6), Fl orid a Stat utes , which states, in pertinent

part:

The decedentÓs personal representative may

recover for the decedentÓs estate the

following:

* * *

(b) Medical or funeral expenses due to the

decedentÓs injury or death that have become a

charge against her or his estate or that were

paid by or on behalf of decedent. . . .

Accordingly, Petitioner asserts that the total monetary value of

PetitionerÓs claim equals between $2,585,279.65 and

$5,085,279.65.

5/ Giraldo is currently on appeal to the Florida Supreme Court.

See Giraldo v. Ag. for Health Care Admin. , No. SC17 - 297, 2017

Fla. LEXIS 1826 (Sep. 6, 2017).

6/ In cases where a Medicaid recipient only recovers a limited

amount, section 409.910 protects the Medicaid recipientÓs

interes t in the non - medical expense portion of the judgment,

award, or settlement. In this matter, however, PetitionerÓs

recovery ($275,000) is sufficient to fully satisfy the AgencyÓs

Medicaid expenditures ($85,279.65). Therefore, the Agency was

not required t o reduce the Medicaid lien pursuant to the formula

established in section 409.910(11)(f).

7/ ÐThird - party benefitÑ is broadly defined to include any

settlement between a Medicaid recipient and a third party for any

Medicaid - covered injury, including cost s of medical services

related thereto, for personal injury or for death of the

recipient. § 409.901(28), Fla. Stat.

8/ Petitioner recovered $275,000 in settling the wrongful death

action. Using the section 409.910(11)(f) formula to calculate

the portio n of the settlement funds available to satisfy the

Medicaid lien, first, 25 percent ($68,750) is subtracted from the

full settlement amount, which leaves $206,250. One - half of that

remaining recovery is $103,125. Therefore, up to $103,125 is

available to pay the Agency for the medical assistance Medicaid

provided. This pool of money is sufficient to cover the full

amount of the Medicaid lien ($85,279.65).

Further, the undersigned is mindful that the issue of

whether a Medicaid lien may be imposed on bot h Ðpast and future

medical expenses,Ñ as section 409.910(17)(b) states , is currently

unresolved in Florida appellate courts. See Willoughby v. Agency

for Health Care Administration , 212 So. 3d 516, 521 (Fla. 2d DCA

2017), which holds that a Medicaid lien can only be satisfied

from settlement funds allocable to past medical expenses because

the Agency cannot impose its Ðlien upon settlement proceeds which

are not Òdesignated as payments for medical care,Ó as those

[nonmedical] proceeds qualify as a recipien tÓs property.Ñ

(citing Goheagan v. Perkins , 197 So. 3d 112, 116 (Fla. 4th DCA

2016)); contra Giraldo , 208 So. 3d at 248 (Ðwe find no error in

the ALJÓs legal determination relating to [the AgencyÓs] 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.Ñ) .

However, i t is undisputed that no portion of the $275, 000

settlement represents future medical expenses. (Mr. Sunwabeh is

deceased.) Therefore, the settlement includes sufficient funds

to satisfy the full Medicaid lien.

9/ Recent federal case law directs that Ðclear and convincing

evidenceÑ is not the app ropriate standard of proof by which to

determine whether a Medicaid recipient rebuts the default formula

in section 409.910(11)(f). See Gallardo v. Dudek , 263 F. Supp.

3d 1247, 1256 (N.D. Fla. 2017); and Gallardo v. Senior ,

No. 4:16cv116 - MW/CAS, 2017 U.S . Dist. LEXIS 112448, at *24

(N.D. Fla. July 18, 2017). Therefore, the undersigned applies

the preponderance of evidence standard to PetitionerÓs challenge

under section 409.910(17)(b). See § 120.57(1)(j), Fla. Stat.

Further, collection of settlement funds has been limited to

the amount allocated in the settlement for past (not future)

medical expenses. See endnote 8 above and Gallardo v. Dudek ,

263 F. Supp. 3d at 1253.

10/ See endnote 9 above.

11/ Title 42 U.S.C. § 1396p(a) (the federal anti - l ien statute)

states:

Imposition of lien against the property of an

individual on account of medical assistance

rendered to him under a State plan.

(1) No lien may be imposed against the

property of any individual prior to his death

on account of medica l assistance paid or to

be paid on his behalf under the State plan.

(emphasis added).

12/ In addition to the other impediments to PetitionerÓs claim

described herein, as stated above, Petitioner did not prove, by a

preponderance of the evidence, that Pe titioner would have

recovered the ÐtrueÑ amount of its damages in the wrongful death

lawsuit. Therefore, the undersigned does not find that the

actual value of PetitionerÓs damages equals $2,585,279.65.

Consequently, Petitioner failed to prove that some lesser portion

of the $275,000 settlement represents Ðpast medical expenses.Ñ

13/ See Giraldo , 208 So. 3d at 247 (Fla. 1st DCA 2016); see also

section 409.910(13), which states:

No action of the recipient shall prejudice

the rights of the agency under t his section.

No settlement, agreement, consent decree,

trust agreement, annuity contract, pledge,

security arrangement, or any other device,

hereafter collectively referred to in this

subsection as a Ðsettlement agreement,Ñ

entered into or consented to by the recipient

or his or her legal representative shall

impair the agencyÓs rights. However, in a

structured settlement, no settlement

agreement by the parties shall be effective

or binding against the agency for benefits

accrued without the express writte n consent

of the agency or an appropriate order of a

court having personal jurisdiction over the

agency.

COPIES FURNISHED:

Alexander R. Boler, Esquire

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

John Cofield, Client Services Sr. Manager

Conduent Payment Integrity Solutions

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

(eServed)

Johnny Pineyro, Esquir e

Florida Injury Law Firm, P.A.

Suite G

950 Celebration Boulevard

Celebration, Florida 34747

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stefan Grow, General C ounsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Justin Senior, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Shena Gra ntham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

K im Annette Kellum, Esquire

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 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 Admi nistrative 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.