18-001844MTR Scott R. Brown vs. Agency For Healthcare Administration Status: Closed DOAH Final Order on Thursday, September 20, 2018.

Summary: Based on the evidence in the record, $5,317.12 of Petitioner's total third-party recovery represents the portion of the settlement proceeds fairly attributable to past medical expenses, which may be paid to satisfy the Agency's Medicaid lien.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SCOTT R. BROWN,

Petitioner,

vs. Case No. 18 - 1844MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

The final hearing in this mat ter 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 (2013), 1/ on July 11, 2018, by video

teleconference with sites in Tallahassee an d Orlando, Florida.

APPEARANCES

For Petitioner: Jason Dean Lazarus, Esquire

Special Needs Law Firm

911 Outer Road

Orlando, Florida 32814

For Respondent: Alexander R. Boler, Esquire

207 3 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

This matter concerns the amount of money to be reimbursed

to the Agency for Health Care Administration for medical

expenses paid on behalf of Scott R. Brown , a Medicaid recipient,

following a settlement recovered from a third party.

PRELIMINARY STATEMENT

On April 9, 2018, Petitioner, Scott R. Brown, filed a

Petition to Determine MedicaidÓs Lien Amount to S atisfy Claim

against Personal Injury Recovery by the A gency for Health Care

Administration (ÐPetitionÑ). Through his Petition, Petitioner

challenged the Agency for Health Care AdministrationÓs (the

ÐAgencyÑ) lien for medical expenses following PetitionerÓs

recovery from a third party. The Agency seeks reimb ursement

from Petitioner for medical expenses Medicaid paid on his

behalf. The Agency calculated the amount it believes it is owed

using the formula set forth in section 409.910(11)(f), Florida

Statutes. Petitioner asserts that reimbursement of a lesser

portion of his recovery is warranted pursuant to section

409.910(17)(b).

On April 9, 2018, 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 July 11, 2018. Prior to the

final hearing, Petitioner and the Agency filed a Joint Pre -

hearing Stipulation agreeing to several facts upon which the

undersigned relied. At the final heari ng, PetitionerÓs Exhibits

1 through 8 were admitted into evidence. Petitioner testified,

as well as presented the testimony of Michael J. Crow and David

A. Paul. The Agency did not offer any evidence or witnesses.

A one - volume Transcript of the final hea ring was filed with

DOAH on July 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. Both

parties filed Proposed Final Orders , which we re duly considered

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 $300,000 .00 settlement from a third party. The

Agency as serts that it is entitled to recover the full amount of

its $112,500.00 lien.

2. The incident that gave rise to this matter occurred on

December 22, 2010. On that day, Petitioner, a Florida resident,

was visiting relatives in Talladega County, Alabama. Petitioner

was shot while sitting in the backseat of a car. The bullet

struck Petitioner in his abdomen.

3. Immediately following the incident, Petitioner was

taken to UAB Hospital in Birmingham, Alabama. Petitioner

received medical care and treatment from December 22, 2010,

through January 27, 2011, which included surgical repair of his

abdominal injuries.

4. Following his release from UAB Hospital, Petitioner was

admitted to Spain Rehabilitation on January 28, 2011. There,

Petitioner was diagnose d with a T - 10 ASIA - A spinal cord injury ,

which caused paralysis from the waist down , as well as : a T - 12

vertebral fracture ; L1 - 2 vertebral fracture ; small bowel

injury ; pancreatic head laceration ; and duodenal laceration.

Petitioner was also noted to b e incontinent and required

assistance for all transfers and bed mobility. In short, the

gunshot rendered Petitioner a paraplegic. He will continue to

require medical treatme nt for the rest of his life.

5. In June 2011, Petitioner brought a negligence la wsuit

in Alabama against the two gunmen. Petitioner was represented

by Michael J. Crow, Esquire. Mr. Crow litigated Petitioner Ós

case over the course of two years. In 2013, Mr. Crow was able

to resolve the lawsuit for $300,000, which was the full amount

of the gunmenÓs homeownerÓs insurance. At the final hearing,

Mr. Crow testified that the homeownerÓs insurance policy was the

only available coverage or recoverable asset he identified that

could be used to compensate Petitioner for his injuries.

Conse quently, Mr. Crow believed that it was in PetitionerÓs best

interests to settle the lawsuit for the policy limits.

6. A portion of PetitionerÓs medical care was paid for by

the Medicaid programs in Alabama and Florida in the total amount

of $262,536.95. 2/ Following PetitionerÓs settlement, the Alabama

Medicaid Agency asserted a lien of $139,169.94 against

PetitionerÓs recovery. On November 21, 2013, Mr. Crow was able

to settle the Alabama Medicaid lien for $6,000.00. This amount

represents approximately 4.31 percent of the total Alabama

Medicaid lien. Mr. Crow testified that he thought the

settlement payment should have been lower based on the full

value he placed on PetitionerÓs damages (discussed below) versus

the actual amount Petitioner recovered. However, he believed

that it was in PetitionerÓs best interests to settle the Alabama

Medicaid lien to avert protracted litigation.

7. The Agency, through the Florida Medicaid program, paid

a total of $123,366.95 for PetitionerÓs medical treatment from

the gunshot injury. All of the expenditures that Florida

Medicaid spent on PetitionerÓs behalf are attributed to past

medical expenses. No portion of the AgencyÓs Medicaid lien

represents future medical expenses.

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

its Medicaid expenditures out of any recovery from liable third

parties. Accordingly, when the Agency was notified of the

settlement of PetitionerÓs lawsuit, 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 $112,500.00 to satisfy the

medical costs it paid on PetitionerÓs behalf. (As discussed

below, the formula in section 409.910(11)(f) allows the Agency

to collect $ 112,500.00 to satisfy its Medicaid lien.) The

Agency maintains that it should receive the full amount of its

lien regardless of the fact that Petitioner settled for less

than what Petitioner believes is the full value of his damages.

9. Petitioner, on the other 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. 3/ Petitioner

specifically argues that the AgencyÓs Medicaid lien should be

reduced proportionately, taking into account the full 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 fair ly represents

PetitionerÓs compensation for past medical expenses.

Petitioner insists that reimbursement of the full lien amount

violates the federal Medicaid lawÓs anti - lien provision

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

request s that the AgencyÓs allocation from PetitionerÓs recovery

be reduced to $1,389.00.

10. To establish the value of his damages, Petitioner

testified regarding the extent of, and the impact on his life

from, the injuries he suffered from the gunshot wound.

Petitioner relayed that he has received 18 surgeries on his

stomach and intestines.

11. Petitioner further described his future medical

expenditures. Petitioner anticipates receiving a hernia

operation. Petitioner also requires medication and medical

supplies to address his pain and infections. In addition,

Petitioner desires a handicap - equipped van that he can use for

transportation to his medical visits. Petitioner would also

like to install ÐtrapezeÑ bars in his home to help him exercise.

12. Mr. Crow also testified regarding the full value of

PetitionerÓs injuries. Mr. Crow has practiced law for 32 years

and is a partner with the law firm of Beasley Allen in

Montgomery, Alabama. In his practice, Mr. Crow handles serious

personal injury and death cases involving car and truck

litigation, premise liability cases, and brain injury cases.

Mr. Crow has been involved in 15 to 25 lawsuits involving

paralyzed clients. As part of his personal injury practice,

Mr. Crow regularly evaluates damages si milar to those Petitioner

suffered.

13. Mr. Crow asserted that the $300,000 settlement was far

less than the true value of the injuries Petitioner suffered

from this incident. Mr. Crow opined that the full value of

PetitionerÓs damages equals $26,639 ,170.00. Mr. Crow explained

that this figure consists of $6.5 million present value for

PetitionerÓs future medical expenses, $5 million for pain and

suffering, $10 million for mental anguish and loss of quality of

life, $139,170 for the Alabama Medicaid lien, and $5 million in

punitive damages.

14. In deriving the value of PetitionerÓs injuries,

Mr. Crow considered that Petitioner is a younger individual

suffering from paraplegia. Mr. Crow explained that Petitioner

can live in his community with appropr iate nursing support.

However, he will require pain management on a monthly basis.

His current medications include Baclofen, Colace, Cymbalta,

Lopressor, Neurontin, Oxycodone, Senokot, and Glycerine

suppositories. Petitioner will also need attendant car e to help

administer his medications, as well as with bathing, cooking,

cleaning, dressing, grooming, and personal hygiene. In

addition, Petitioner will require follow - up treatment involving

physiatry , physical therapy, urology, and a wheelchair clinic.

Furthermore, although Petitioner does not have sensory awareness

from his waist down, he continues to experience severe pain in

his back and legs. Mr. Crow represented that Petitioner is able

to propel himself in a wheelchair, but he can only travel short

distances due to fatigue and pain. Petitioner does not have

access to a power wheelchair. Regarding transportation,

Petitioner will need assistance to drive a van with a wheelchair

lift.

15. Finally, Petitioner offered the testimony of David A.

Paul, Esquire. Mr. Paul has practiced law in Florida for

22 years as a plaintiff personal injury lawyer and is b oard -

c ertified in Civil Trial Law by the Florida Bar. Mr. Paul

handles catastrophic and serious personal injury cases involving

birth injuries, me dical malpractice, trucking accidents, and

wrongful death. As part of his practice, Mr. Paul regularly

evaluates catastrophic injuries. Mr. Paul testified that he has

handled many cases with similar injuries to Petitioner.

Mr. Paul was accepted as an e xpert regarding the value of

personal injury damages and resolving liens in personal injury

cases.

16. At the final hearing, Mr. Paul supported Mr. CrowÓs

valuation of PetitionerÓs injuries. Mr. Paul opined that a

Ðfair full valueÑ of PetitionerÓs dama ges equals in excess of

$26 million. In formulating his injury valuation, Mr. Paul

considered PetitionerÓs past medical expenses, anticipated

future medical expenses, the cost of attendant care with daily

living activities, past and future lost wages, pai n and

suffering, as well as mental anguish and loss of quality of

life.

17. Regarding the Medicaid liens, Mr. Paul relayed that

the norm when resolving liens in Florida is to compare the total

value of the injured partyÓs injuries to the amount of the

actual recovery. The lien is then reduced proportionally by

this ratio. Mr. Paul commented that he typically resolves

Medicaid liens in workers compensation cases using this

Ðequitable formula.Ñ

18. Based on the testimony from Mr. Crow and Mr. Paul tha t

the $300,000 settlement did not fully compensate Petitioner for

his damages, Petitioner argues that a lesser portion of the

settlement should be allocated to reimburse Florida Medicaid ,

instead of the full amount of the lien. Petitioner proposes

that a ratio should be applied based on the ultimate value of

PetitionerÓs damages ($26,639,170.00) compared to the amount

that Petitioner actually recovered ($300,000). Using these

numbers, PetitionerÓs settlement represents approximately a

1.126 percent recove ry of the full value of PetitionerÓs

damages. In like manner, the Florida Medicaid lien should be

reduced to 1.126 percent or approximately $1,389.00 ($123,366.95

times .01126). Therefore, Petitioner asserts that $1,389.00 is

the portion of his third - par ty settlement that represents the

equitable, fair, and reasonable amount the Florida Medicaid

program should recoup for its payments for PetitionerÓs medical

care.

19. The Agency was not a party to the Alabama wrongful

injury lawsuit or PetitionerÓs settl ement. Petitioner was aware

of both the Alabama and Florida Medicaid liens and past medical

expense damages at the time he settled the lawsuit. No portion

of the $300,000 settlement represents reimbursement for future

medical expenses.

20. The undersign ed finds that Petitioner met his burden

of proving, by a preponderance of the evidence, that the full

value of his damages from this incident equals $21,639,170.00. 4/

Further, based on the evidence in the record, Petitioner proved

that a lesser portion of PetitionerÓs settlement should be

allocated as reimbursement for medical expenses than the amount

the Agency calculated pursuant to the formula set forth in

section 409.910(11)(f). Finally, the undersigned finds that the

evidence establishes that the Age ncy should be reimbursed in the

amount of $5,317.95 from PetitionerÓs recovery of $300,000 from

a third party to satisfy the Florida Medicaid lien.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings 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. Stat.

22. The Agency is the Medicaid agency for the S tate of

Florida, as provided under federal law, and ad ministers

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

23. The federal Medicaid program Ðprovide[s] federal

financial assistance to States 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 must comply with federal

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

et seq.

24. As a cond ition for receipt of federal Medicaid funds,

states are required to seek reimbursement for medical expenses

from Medicaid recipients who later recover 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 Third - 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 intent of the Legislature that

Medicaid be repaid in full and prior to any

other person, program, or entity. M edicaid

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. 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 become available at any time,

the public treasury should not bear the

burden of medical assistance to the extent

of such resources.

25. 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 Age ncy 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 conditi on of

Medicaid eligibility, assignment to the state of the right to

payment for medical care from any third party). Section 409.910

creates an automatic lien on any such judgment or settlement

with a third party for the full amount of medical expenses

Med icaid paid on behalf of the Medicaid recipient. See

§ 409.910(6)(c), Fla. Stat.

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

Medicaid) following recovery from a third party is not

unbounded. Pursuant to 42 U.S.C. sections 1396a(a)(25)(A), ( B),

and (H) , 1396k(a) and 1396p(a), the Agency may only assert a

Medicaid 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

27 8; Wos v. E.M.A. , 133 S. Ct. 1391, 1396 (2013); Harrell v.

State , 143 So. 3d 478, 480 (Fla. 1st DCA 2014); and Davis v.

Roberts , 130 So. 3d 164, 266 (Fla. 5th DCA 2013). The federal

Medicaid statuteÓs anti - lien provision, 42 U.S.C. § 1396p(a)(1),

prohibit s a state from attaching a lien for medical assistance

on a Medicaid 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 provid e s that the Agency may not recover more than it paid

for the Medicaid recipientÓs medical treatment.

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

federal Medicaid Act circumscribes these obligations by

authorizing payment to a state only from t hose portions of a

Medicaid recipientÓs third - party settlement recovery allocated

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

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

concluded Ð[a]s the unanimous Ahlborn CourtÓs deci sion makes

clear, federal Medicaid law limits a stateÓs recovery to

settlement proceeds that are shown to be properly allocable to

past medical expenses.Ñ

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

the amount the Agency may recover for med ical assistance

benefits paid from a judgment, award, or settlement from a third

party. 5/ 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 pa rty 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

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 purpo ses of calculating the agencyÓs

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.

4. Not withstanding 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

benef its 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, a nd casualty.

29. In short, section 409.910(11)(f) 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 recover y

and all taxable costs, up to, but not to exceed, the 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).

30. In cases where a Medicaid recipient only rec overs a

limited amount, section 409.910 protects the Medicaid

recipientÓs interest in the non - medical expense portion of the

judgment, award, or settlement. In this matter, under the

section 409.910(11)(f) formula, PetitionerÓs recovery ($300,000)

is not sufficient to fully satisfy the medical assistance

provided by Florida Medicaid ($123,366.95). Therefore, the

Agency was required to reduce its Medicaid lien to $112,500.00. 6/

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

which a Medicaid rec ipient may contest the amount designated as

recovered medical expenses payable 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 judgme nt, award, or settlement in a tort action

that is properly allocable to medical expenses; and, thus, the

portion of the recovery that may be used to reimburse the

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

A recipient may contest the amount

designated as recovered medical expense

damages payable to the agency pursuant to

the formula specified in paragraph (11)(f)

by filing a petition under chapter 120

within 21 days after the date of payment of

funds to the agency or after the date of

placing the full a mount 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 purposes 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 proceedings

specified in this subsection rests with the

Divis ion 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 c onvincing 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 provi ded a lesser amount of

medical assistance than that asserted by the

agency . [7/] (emphasis added).

32. Section 409.910(17)(b) establishes that the section

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

amount of a settlement that is attri butable 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 the lien amount exceeds the

amount recovered for medical expensesÑ).

33. In order to successfully challenge the amount payable

to the Agen cy, 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), F la. Stat. In other words, if Petitioner can

demonstrate that the portion of the settlement attributed to

past medical 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

$112,500.

34. Turning to apportioning PetitionerÓs $300,000

settlement, the undersigned finds that Petitioner persuasively

demonstrated that a lesser portion of his third - party recovery

should be allocated to satisfy the Agency Ós Medicaid lien,

instead of applying the default amount calculated under section

409.910(11)(f).

35. Regarding the amount of PetitionerÓs settlement that

should be allotted to reimburse the Agency, the Florida

Legislature, despite establishing a proced ure for a Medicaid

recipient to challenge the amount of a Medicaid lien, provided

little guidance as to the standard DOAH should use to determine

what portion of the third - party recovery should represent (past)

medical expenses.

36. Petitioner contends that the Medicaid lien should be

reduced using a ratio that factors in the full value of

PetitionerÓs damages. Petitioner specifically asserts that only

$1,389.00 of the total settlement should be attributed to past

medical expenses ($123,366.95 times 1.1 26 percent). Petitioner

maintains that his alternative calculation apportions a more

equitable and reasonable share of the settlement to Petitioner

in light of his significant injuries. 8/

37. However, the undersigned is mindful that, Ð[t]he

Medicaid pr ogram provides federal and state funding to pay

healthcare costs for individuals who cannot afford it.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 DC A 2012); and 42 U.S.C.

§ 1396a(a)(25)(A) - (B). To keep the Medicaid program viable,

Congress recognized that it is necessary to obtain reimbursement

when a third party makes payment to the Medicaid beneficiary for

medical care already paid for by Medicaid . Roberts , 119 So. 3d

at 459. Roberts further observed that the Medicaid programÓs

requirement that states take all reasonable measures to seek

reimbursement from legally liable third parties ensures that tax

dollars are protected, while preventing Medic aid recipients from

receiving Ða windfall by recovering medical costs they did not

pay.Ñ Roberts , 119 So. 3d at 459 (citing Tristani v. Richman ,

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

38. The Florida Medicaid Third - Party Liability Act

emphasizes this manda te by instructing : 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. Section

409.910 further directs that Ð[e]quitie s of a recipient . . .

shall not defeat, reduce, or prorate recovery by the agency as

to its subrogation rights.Ñ £ 409.910(6)(a), Fla. Stat. 9/

39. In balancing the competing interests of Petitioner and

the Agency in this matter, the undersigned notes th at a state

Medicaid agency (Alabama) has already considered the amount of

PetitionerÓs settlement and agreed to reduce its own Medicaid

lien. Based on controlling Federal case law , the Alabama

Medicaid Agency operates under the same dictates and directive s

as the Agency, including the requirement to seek full

reimbursement from mon ie s recovered from third parties. The

Alabama Medicaid Agency acceded to reduce its lien to 4.31

percent of its total amount ($6,000 divided by $139,169.94). I n

determining the fair and reasonable portion of PetitionerÓs

recovery to allocate as past medical expenses paid for by the

Florida Medicaid program, the undersigned concludes that the

AgencyÓs lien should also be reduced to 4.31 percent of its

total value, or $5,317.12 ($ 123,366.95 times .0431). This

result serves to maintain consistency in the application of two

state Medicaid programs. Accordingly, the Agency is entitled to

be reimbursed $5,317.12 from PetitionerÓs $300,000 settlement.

ORDER

Based on the foregoing Find ings of Fact and Conclusions of

Law, it is

ORDERED that Petitioner, Scott R. Brown, shall pay to

Respondent, Agency for Health Care Administration, the sum of

$5,317.95 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 20 th day of September , 20 18 , in

Tallahassee, Leon County, Florida.

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 Fi ling (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20 th day of September , 2018 .

ENDNOTE S

1/ All references to the Florida Statutes are to the 2013

version, unless otherwise noted. Petitioner settled his

negligence lawsuit in 2013. The Agency obtained its right to

reimbursement from third - party benefits on that date.

Accordingly, the 2013 version of the governing statute (section

409.910 , Florida Statutes ) controls DOAHÓs jurisdiction. See

S uarez v. Port Charlotte HMA, LLC , 171 So. 3d 740 (Fla. 2d DCA

2015).

2/ PetitionerÓs total medical bills equaled approximately

$745,445.00.

3/ Initially, in May 2015, Petitioner filed a Petition to

Allocate Settlement and Determine Past Medi c al Expense Related

to Medicaid [L] ien in the Sixth Judicial Circuit Court in

Pinellas County, Florida. In June 2015, the Agency responded

with a Motion for Order on Jurisdiction based on Suarez , 171 So.

3d 740, seeking to remove the case from circuit court. In

Sep tember 2015, the circuit court issued an order agreeing with

the Agency that the circuit court lacked subject matter

jurisdiction over the matter. Petitioner appealed to the Second

District Court of Appeal. On February 28, 2018, the court per

curiam affi rmed the circuit courtÓs ruling. Thereafter,

Petitioner filed his Petition with DOAH.

4/ In reaching this figure, the undersigned subtracted out the

$5 million , which Mr. Crow included for punitive damages. In

Alabama, punitive damages may be awarded i n a tort action:

[W] here it is proven by clear and convincing

evidence that the defendant consciously or

deliberately engaged in oppression, fraud,

wantonness, or malice with regard to the

plaintiff.

Ala. Code § 6 - 11 - 20 .

Based on the record in this mat ter, Petitioner did not

sufficiently demonstrate that he would have recovered punitive

damages in the underlying civil action.

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

settlement between a Medicaid recipient and a third party for

any Me dicaid - covered injury, including costs of medical services

related thereto, for personal injury or for death of the

recipient. § 409.901(28), Fla. Stat.

6/ The Agency calculated its Medicaid lien as follows: first,

25 percent ($75,000) is subtracted fr om the full settlement

amount ($300,000), which leaves $225,000. One - half of that

remaining recovery is $112,500. Therefore, section

409.910(11)(f) limits the AgencyÓs share of PetitionerÓs

recovery to $112,500.

7/ Recent federal case law directs that Ðclear and convincing

evidenceÑ is not the appropriate 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 Galla rdo 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), Fl a. Stat.

Further, the Florida Supreme Court recently instructed that

a Medicaid lien may only be imposed on settlement funds

attributed to past (not future) medical expenses. See Giraldo

v. Ag. for Health Care Admin. , 248 So. 3d 53 (Fla. 2018). (It

is undisputed that no portion of PetitionerÓs $300,000

settlement represents future medical expenses.) .

8/ The Agency emphatically opposes PetitionerÓs Ðpro rataÑ

formula to calculate the past medical expense portion of

PetitionerÓs $300,000 settlement. However, although the Agency

does not have the burden of proof, it did not elicit testimony

or present evidence contradicting PetitionerÓs expertsÓ

testimony that using a ratio comparing the ÐfullÑ value of

PetitionerÓs damages with the total amount Petit ioner recovered

produces a reasonable share of a settlement available as

reimbursement for past medical expenses. This methodology of

lien reduction has been recognized and approved by Florida

courts. See Giraldo , 248 So. 3d at 53.

9/ See also section 409.910(13), which states:

No action of the recipient shall prejudice

the rights of the agency under this 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

shal l impair the agencyÓs rights.

COPIES FURNISHED:

Alexander R. Boler, Esquire

Suite 300

2073 Sum mit 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)

Dan Gabric

Agency for Health Care Administ r ation

Mail Stop 19

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Jason Dean Lazarus, Esquire

Special Needs Law Firm

9 11 Outer Road

Orlando, Florida 3281 4

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration

2 727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Justin Senior, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shena Grantham, Esquire

Agency for Health Care Administr ation

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)

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 o riginal notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 days of rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of the District Court of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.