18-003847MTR Amanda L. Baker, By And Through Her Parents And Guardians, Jeffrey Baker And Karen Baker vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, May 21, 2019.

Summary: Petitioner proved that AHCA's Medicaid lien should be reduced to same ratio as the settlement is to the value of the claim.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMANDA L. BAKER, BY AND THROUGH

HER PARENTS AND GUARDIANS,

JEFFREY BAKER AND KAREN BAKER,

Petitioner,

vs. Case No. 18 - 3847MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_____________________________ __/

FINAL ORDER

Administrative Law Judge D. R. Alexander conducted a hearing

in this matter on February 25, 2019, by video teleconference at

sites in Lakeland and Tallahassee, Florida.

APPEARANCES

For Petitioner: Floyd B. Fa glie, 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

pa st Medicaid expenditures pursuant to section 409.910, Florida

Statutes.

PRELIMINARY STATEMENT

On July 2 0, 2018, Petitioner, Amanda L. Baker, a Medicaid

recipient, by and through her parents and guardians, Jeffrey and

Karen Baker, f iled with the Division of Administrative Hearings

her Petition to Determine Amount Payable to Agency for Health

Care Administration in Satisfaction of Medicaid Lien (Petition)

seeking a determination that the Agency is entitled to only

$ 9,453.15 for reimbursement of $ 162,146.65 in Medicaid expenses

incurred by the Agency.

At the hearing, Petitioner presented the testimony of two

witnesses. Petitioner's Exhibits 1 through 12 were accepted in

evidence. Respondent did not offer any witnesses but its

Exhibit A has been accepted in e vidence.

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

The parties filed proposed final orders on April 26, 201 9 , which

have been considered.

FINDING S OF FACT

1. On August 11, 2014, Amanda Baker, then 15 years old, was

transferred from a medi cal center to a specialty pediatric

hospital where she presented with complaints and symptoms of back

pain, weakness, and paresthesia in her lower extremities. Over

the next few days, she underwent examinations and assessments,

but no steps were taken to prevent her development of blood

clots/embolisms due to her immobility nor were signs and symptoms

of her development of blood clots/embolisms recognized.

2. On August 13, 2014, Amanda suffered two cardiac arrests

due to blood clots/embolisms traveling to her heart and lungs.

She was resuscitated, but due to a lack of oxygen to her brain,

Amanda suffered a catastrophic hypoxic brain injury. She is now

in a persistent vegetative state.

3. The Agency provided $162,146.65 in Medicaid benefits

associated with Amanda's injuries, all of which represent

expenditures paid for her past medical expenses.

4. Amanda's parents brought a medical malpractice action

against the medical providers responsible for her care to recover

all of the damages associated with h er injuries, as well as their

individual damages associated with their daughter's injuries.

5. Seven defendants maintained insurance policies with a

policy limit of $250,000. The medical malpractice action was

settled for each of the insurance policy lim its, resulting in a

lump sum unallocated settlement of $1,750,000. This settlement

was approved by the c ourt.

6. During the pendency of the malpractice action, the

Agency was notified of the action. It asserted a $162,146.65

Medicaid lien against the Ba kers' cause of action and settlement

of that action. However, it did not institute, intervene in, or

join in the action to enforce its rights, as provided in

section 409.910(11), or participate in any aspect of the

litigation.

7. Application of the for mula in section 409.910(11)(f) to

Amanda's $1,750,000 settlement requires full payment of the

Medicaid lien.

8. Petitioner presented the testimony of Daniel Moody,

Esquire, a Lakeland attorney with 30 years' experience in

personal injury law, including medical malpractice. He

represented Amanda and her family in the medical malpractice

action. As a routine part of his practice, he makes assessments

concerning the value of damages suffered by injured clients. He

also stays abreast of jury verdicts in h is area by reviewing jury

verdict reporters and discussing cases with other trial

attorneys. He has been accepted as an expert in valuation of

damages.

9. Based on his training and experience, Mr. Moody opined

that the damages recoverable in Amanda's c ase had a conservative

value of $30 million.

10. Petitioner also presented the testimony of

R. Vinson Barrett, Esquire, a Tallahassee trial attorney with

more than 40 years' experience. His practice is dedicated to

plaintiff's personal injur y, as well as medical malpractice,

medical products liability, and pharmaceutical products

liability. He routinely makes assessments concerning the value

of damages suffered by injured parties. He was accepted as an

expert in the valuation of damages.

11 . Based on his training and experience, Mr. Barrett

opined that Amanda's damages are "worth at a bare minimum Î and

we're talking very conservatively here -- $30,000,000."

12. Both experts testified that using $30,000,000 as the

value of all damages, A manda only recovered 5.83 percent of the

value of her damages. Accordingly, they opined that it would be

reasonable, rational, and conservative to allocate 5.83 percent

of the settlement, or $9,453.15, to past medical expenses paid by

the Agency through t he Medicaid program.

13. The Agency did not call any witnesses, present any

evidence as to the value of damages, propose a different

valuation of the damages, or contest the methodology used to

calculate the allocation to past medical expenses. In shor t,

Petitioner's evidence was unrebutted.

1 4 . The testimony from Mr. Moo dy and Mr. Barrett is

compelling and persuasive. Accordingly, the undersigned finds

that Petitioner has proven by a preponderance of the evidence

that $ 9,453.15 of the settlement repr esents reimbursement for

past medical expenses.

CONCLUSIONS OF LAW

15. The Agency is the state agency authorized to administer

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

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

states are requi red to seek reimbursement for medical expenses

from Medicaid recipients who later recover from legally liable

third parties.

17. By accepting Medicaid benefits, Medicaid recipients

automatically subrogate their rights to any third - party benefits

for the f ull amount of Medicaid 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. Section 409.910(6)(c) creates an automatic lien on any such

judgment or settlement with a third party for the full amount of

medical expenses paid to the Medicaid recipient. However, the

Agency's recovery is limited to those proceeds allocable to past

medical expenses.

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

Agency's recovery for a Medicaid lien to the lesser 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 Medic aid on

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

formula results in the Agency recovering the full amount of the

lien.

19. 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 409.910(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 tota l

recovery should be allocated as reimbursement for past medical

expenses than the amount calculated by the Agency pursuant to the

formula. Gallardo v. Dudek , 263 F. Supp. 3d 1247 (N.D. Fla.

2017).

20. Where uncontradicted testimony is presented by the

recipient, there must be a "reasonable basis in the record" to

reject it . Giraldo v. Ag. for Health Care Admin. , 248 So. 3d 53

(Fla. 2018). Here, t here is no reasonable basis to reject that

testimony.

2 1 . In the instant case, Petitioner proved by a

pre ponderance of the evidence that the settlement proceeds of

$1,750,000 represent only 5.83 percent of Petitioner's claim

valued conservatively at $30,000,000. Therefore, it is concluded

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

the p ercentage that Petitioner's recovery represents of the total

value of Petitioner's claim. The application of the 5.83 percent

ratio to the Agency's Medicaid lien of $162,146.65 results in

$9,453.15. This amount represents that share of the settlement

pro ceeds 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 $9,453.15 from Petitioner's settlement proceeds in

satisfaction of its Medicaid lien.

DONE AND ORDERED this 2 1st day of May , 2019 , in Tallahassee,

Leon County, Florida.

S

D. R. ALEXANDER

Admi nistrative 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 Heari ngs

this 2 1st day of May , 2019 .

COPIES FURNISHED:

Alexander R. Boler, Esquire

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317 - 7949

(eServed)

Floyd B. Faglie, Esquire

Staunton & Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32 344 - 1946

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 - 5407

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

T allahassee, 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 Care Administration

2727 Mahan Dr ive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Mary C. Mayhew, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely aff ected 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 administra tive 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.