18-002361MTR Jennifer Puzanskas vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Wednesday, November 28, 2018.

Summary: Petitioner established that AHCA entitled only to a lower amount of reimbursement for medicaid expenses.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JENNIFER PUZANSKAS,

Petitioner,

vs. Case No. 18 - 2361MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

Administrative Law Judge D. R. Alexander conducted a

hearing in this matter on September 13, 2018, by video

teleconference at sites in St. Petersburg and Tallahassee,

Florida.

APPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton & Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344 - 1946

For Respondent: Alexander R. Boler, Esquire

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317 - 7949

STATEMENT OF THE ISSUE

The issue to be decided is the amount to be paid by

Petitioner to Respondent, Agency for Health Care Administration

(Agency), out of her settlement proceeds as reimbursement for

past Medicaid expenditures pursuant to section 409.910, Florida

St atutes (2018).

PRELIMINARY STATEMENT

On May 10, 2018, Petitioner, a Medicaid recipient, filed

with the Division of Administrative Hearings her Petition to

Determine Amount Payable to Agency for Health Care

Administration in Satisfaction of Medicaid Lien (P etition)

seeking a determination that the Agency is entitled only to

$8,992.50 for reimbursement of $54,171.70 in Medicaid expenses

incurred by the Agency.

At the hearing, Petitioner presented the testimony of two

witnesses. Petitioner's Exhibits 1 throug h 9 were accepted in

evidence. Respondent did not offer any witnesses or exhibits.

A one - volume Transcript of the hearing has been prepared.

The parties timely filed proposed final orders on November 7,

2018, which have been considered.

FINDING S OF FACT

1. On April 21, 2011, Ms. Puzanskas gave birth to her son.

After birth, Ms. Puzanskas began experiencing symptoms of

nervousness, panic attacks, and being overwhelmed. On June 21,

2011, she called her doctor's office and described her symptoms

to her mi dwife. Her midwife concluded that Ms. Puzanskas was

depressed or experiencing "baby blues." Based on this

telephonic diagnosis, the midwife arranged for a prescription of

the anti - depressant psychotropic drug, Zoloft, to be called into

Ms. Puzanskas' pha rmacy.

2. The next day after taking the Zoloft, Ms. Puzanskas

again called her doctor's office with complaints that the Zoloft

was causing her to feel strange and jittery. Ms. Puzanskas was

instructed to c ontinue taking the medication.

3. On June 24, 20 11, Ms. Puzanskas began suffering from

severe depression and hallucinations. That same day, she went

into her back yard and doused herself with gasoline and set

herself on fire. She suffered third - degree full thickness burns

over 30 percent of her body r equiring multiple skin grafts, with

scarring over 60 percent of her body from all burns and grafts.

4. Ms. Puzanskas' medical care for the injuries was paid

by Medicaid, which provided $54,171.70 in benefits associated

with her injuries. This amount cons tituted her entire claim for

past medical expenses. As a condition of her eligibility for

Medicaid, Ms. Puzanskas assigned to the Agency her right to

recover from liable third - part y medical expenses paid by

Medicaid.

5. Ms. Puzanskas brought a medical ma lpractice action

against the medical staff responsible for her care to recover

all of her damages associated with her injuries.

6. During the pendency of the lawsuit, the Agency was

notified of the action. Although it did not dispute the

ultimate settlem ent received by Petitioner or otherwise

participate in any aspect of the litigation, the Agency asserted

a $54,171.70 Medicaid lien against Ms. Puzanskas' cause of

action and settlement of the action.

7. In preparation for the trial, Petitioner's counsel used

mock jury panels to evaluate their trial strategies, value of

damages, and the li kelihood of a defense verdict.

8. Mock jurors split. Some would have returned a verdict

for the defense, finding no liability, while others would have

returned a verdic t for Ms. Puzanskas and given her some limited

damages. Still others would have given her a very high amount

of damages. See Pet'r Ex. 9.

9. Eleven mock jurors provided verdicts from approximately

$16,554,000 down to approximately $554,000. The remaini ng six

jurors would have returned zero - dollar verdicts. The average

award in the 17 verdicts was $3,741,000.

10. Nine of the 11 jurors who produced a verdict for

Petitioner included approximately $54,000 in their verdict, and

then added amounts ranging f rom $500,000 to $16,500,000. The

$54,000 is representative of Petitioner' s rounded hospital

bills.

11. The insurance policy covering the incident had limits

of $250,000 and the medical providers had no collectable assets.

After the first day of trial, t he medical providers offered

$500,000 to settle the case, and this was accepted. However,

this amount did not fully compensate Petitioner for her

injuries.

12. Mr. Moore, an experienced trial attorney who

represented Petitioner, testified that based on h is training and

experience, Petitioner's damages had a value in excess of

$3,700,000. However, using a conservative number for purposes

of this case, he valued her damages at $3,000,000. Thus, the

$500,000 settlement represented a recovery of 16.6 percen t of

the value of her damages, and a similar percentage for past

medical expenses. Therefore, he testified that an allocation of

$8,992.50, or 16.6 percent of $54,171.70, would be a reasonable

and conservative portion of the settlement for past medical

ex penses.

13. Based on his training and experience and review of the

medical records and file, Mr. Barrett, a trial attorney, valued

Petitioner's damages between three and five million dollars. He

also opined that $3,000,000 would be a very conservative figure.

Using the same allocation method advocated by trial counsel,

Mr. Barrett applied a 16.6 percent ratio to the Medicaid

expenses, and concluded that an allocation of $8,992.50 of the

settlement to past medical expenses is reasonable, rational, and

appropriate.

14. This testimony was not rebutted by the Agency, and the

Agency did not present any evidence proposing a differing

valuation of damages or contest the methodology used to

calculate the $8,992.50 allocation to past medical expenses .

15. Th e testimony from Mr. Moore and Mr. Barrett is

compelling and persuasive. Accordingly, the undersigned finds

that Petitioner has proven by a preponderance of the evidence

that $8,992.50 of the settlement represents reimbursement for

past medical expenses.

CONCLUSIONS OF LAW

16. The Agency is the state agency authorized to

administer Florida's Medicaid program. § 409.902, Fla. Stat.

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

states are required to seek reimbursement for medical expenses

fro m Medicaid recipients who later recover from legally liable

third parties.

18. By accepting Medicaid benefits, Medicaid recipients

automatically subrogate their rights to any third - party benefits

for the full amount of Medicaid assistance provided by Medi caid

and automatically assign to the Agency the right, title, and

interest to those benefits, other than those excluded by federal

law. Section 409.910(6)(c) creates an automatic lien on any

such judgment or settlement with a third party for the full

amou nt of medical expenses paid to the Medicaid recipient.

However, the Agency's recovery is limited to those proceeds

allocable to past medical expenses.

19. Section 409.910(11)(f) establishes the amount of the

Agency's recovery for a Medicaid lien to the l esser of its full

lien; or one - half of the total award, after deducting attorney's

fees of 25 percent of the recovery and all taxable costs, up to,

but not to exceed, the total amount actually paid by Medicaid on

the recipient's behalf. In this case, the parties agree the

formula produces a lien of $54,17 1 .70.

20. However, section 409.910(17)(f) provides a method

(default allocation) by which a Medicaid recipient may contest

the amount designated as recovered Medicaid expenses payable

under section 409.91 0(11)(f). In order to successfully

challenge the amount payable to the Agency, the recipient must

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 th e amount calculated by the Agency

pursuant to the formula. Gallardo v. Dudek , 263 F. Supp. 3d

1247 (N.D. Fla. 2017).

21. In the instant case, Petitioner proved by a

preponderance of the evidence that the settlement proceeds of

$500,000 represent 16.6 per cent of Petitioner's claim valued

conservatively at $3,000,000. Therefore, it is concluded that

the Agency's full Medicaid lien amount should be reduced by the

percentage that Petitioner's recovery represents of the total

value of Petitioner's claim. App lying this 16.6 percent ratio

to the Agency's Medicaid lien of $54,17 1 .70 results in

$8,992.50. This amount represents that share of the settlement

proceeds fairly and proportionately attributable to expenditures

that were actually paid by the Agency for Petitioner's past

medical expenses.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that the Agency for Health Care Administration is

entitled to $8,992.50 from Petitioner's settlement proceeds in

satisfaction of its Med icaid lien.

DONE AND ORDERED this 28th day of November , 2 018 , in

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

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 November , 2018 .

COPIES FURNISHED:

Alexander R. Boler, Esquire

2073 Summit L ake Drive , Suite 300

Tallahassee, Florida 32317 - 7949

(eServed)

Floyd B. Faglie, Esquire

Staunton & Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344 - 1946

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shena Grantham, 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

2 727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(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 Car e 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)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A p arty 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 orig inal 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.