19-001590MTR Josiah Delva, By And Through His Parents And Natural Guardians, Jennifer Paulino Delva And Johnny Delva vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, October 7, 2019.

Summary: Petitioner failed to prove AHCA should be reimbursed for its Medicaid lien in a lesser amount than that calculated pursuant to section 409.910(11)(f).

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOSIAH DELVA, BY AND THROUGH HIS

PARENTS AND NATURAL GUARDIANS,

JENNIFER PAULINO DELVA AND

JOHNNY DELVA,

Petitioner,

Case No. 19 - 1590MTR

vs.

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

______________ _________________/

FINAL ORDER

Pursuant to notice, a formal administrative hearing was

conducted before Administrative Law Judge Mary Li Creasy by

video teleconference with locations in Miami and Tallahassee,

Florida, on Sep tember 17, 2019.

APPEARANCES

For Petitioner: Christopher R. Jaramillo, Esquire

Moore and Company PA

255 Aragon Avenue, Third Floor

Miami, Florida 33134

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

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

Petitioner to Respondent, Agency for Health Care Administration

("AHCA"), out of his sett lement proceeds, as reimbursement for

past Medicaid expenditures pursuant to section 409.910, Florida

Statutes.

PRELIMINARY STATEMENT

On March 25, 2019, Petitioner filed a " Petition to

Determine Amount Payable to Agency for Health Care

Administration in Sa tisfaction of Medicaid Lien , " pursuant to

s ection 409.910(17)(b), Florida Statutes (2019). The matter wa s

assigned to the undersigned Administrative Law J udge to conduct

a formal administrative hearing and enter a final order.

Prior to the final hearing the parties filed a Joint

Pre - hearing Stipulation , which included numerous stipulated and

admitted issues of law and fact. Those stipulated issues of law

and fact have been incorporated herein.

The final hearing proceeded as scheduled on September 17,

2 019. Petitioner, Jennifer Paulino Delva, as mother of

Josiah Delva, testified and also presented the testimony of

one expert witness, Zarahi Nunez, an expert in life care

planning. P etitioner's Exhibits 1 through 3 were admitted into

evidence. 1/ AHCA di d not call any witnesses. AHCA's Exhibit A

was admitted.

The parties elected not to order a transcript of the final

hearing. The parties timely filed their respective proposed

final orders which were considered by the undersigned in the

preparation of th is Final Order. All references to the Florida

Statutes are to the 2018 version unless otherwise stated.

FINDING S OF FACT

1. On January 1, 201 3, Josiah Delva ("Josiah"), who was

only 18 - months - old, was presented to a hospital with a fever and

emesis. He was discharged only one and a half hours later after

he was misdiagnosed with a "normal" condition.

2. The following day, Josia h 's fever continued, and he

began suffering from a purpuric rash on his body and

decompensated septic shock. He was taken back to the Emergency

R oom where he was diagnosed with meningococcal meningitis and

meningococcal bacteremia and grew Moraxella catarrhalis in his

sputum.

3. Josiah was admitted to and remained in the intensive

care unit of the hospital for five months. Due t o the necrosis ,

which was caused by the meningococcus, Josiah's left arm below

the elbow, his right leg below his knee, and the toes of his

left foot were all amputated. In addition, he required

bilateral patellectomies (removal of his knee caps).

4. Jos iah's medical care related to the injury was paid by

AHCA's Medicaid program. Medicaid provided $237,408.60 of the

costs associated with Josiah's injury. The $237,408.60 paid by

Medicaid constituted Josiah's entire claim for past medical

expenses.

5. Jo siah's parents and natural guardians,

Jennifer Paulino Delva and Johnny Delva, brought a medical

malpractice suit against the medical providers and staff

responsible for Josiah's care ("Defendant medical providers") to

recover all of Josiah's damages as as sociated with his injuries.

6. As a condition of Josiah's eligibility for Medicaid,

Josiah assigned to AHCA his rig ht to recover from liable third

parties any medical expenses paid by Medicaid. See 42 U.S.C.

§ 1396a(a)(25)(H); § 409.910(6)(b) , Fla. Stat.

7. During the pendency of the medical malpractice action,

AHCA was notified of the action, and it asserted a $237,408.60

Medicaid lien against Josiah's cause of action and future

settlement of that action.

8. AHCA made payments totaling $237,408.60 rel ated to

Josiah's injuries for which the defendant medical providers are

liable.

9. Josiah's lawsuit ultimately settled in December of 2018

or January of 2019 for the gross unallocated sum of $550,000.00.

Petitioner deposited the full Medicaid lien amount in an

interest bearing account for the benefit of AHCA pending an

administrative determination of AHCA's rights, and this

constitutes "final agency action" for purposes of c hapter 120,

Florida Statutes, pursuant to s ection 409.910(17).

10. There were $1 46,110.61 in attorney's fees and costs

incurred to make the recovery. The parties stipulated that

operation of the statutory formula to Josiah's settlement would

require repayment to AHCA in the amount of $185,694.69.

Witness Testimony

11. Zarahi Nunez w as accepted, with no objection, as an

expert in life care planning. She met with the Delva family and

consulted with medical professionals regarding the treatment

needs and options for Josiah. She also reviewed the appropriate

manuals to determine a cour s e of treatment for Josiah.

Ms. Nunez developed a life care plan, along with dollar figures

for each aspect of treatment totaling $5,998,080.19. 2/

12. Mrs. Delva testified how she noticed that Josiah

developed a fever and was vomiting on New Y ear's Eve

( December 31, 2012). After midn ight, he vomited again, so

Mrs. Delva brought him to the hospital. He was discharge d a few

hours later around 4:00 a.m. on New Year's Day (January 1,

2013). Josiah was diagnosed with a stomach flu, and was given a

prescript ion to stop vomiting.

13. Josiah developed a rash, which concerned Mrs. Delva.

Upon talking to medical professionals via phone, Mrs. Delva

determined that Josiah's rash would not change with pressure on

his skin. This apparently indicated that his white blood cell

count was low. Mrs. Delva immediately rushed Josiah to the

hospital upon the doctor's instruction.

14. At the hospital, Josiah by passed triage as the rash

continued to spread and as symptoms of sepsis became apparent.

The doctors diagnosed Jo siah as having a bacterial meningitis

infection and treated him. His organs began shutting down and

his body turned colors from the rash.

15. Mrs. Delva vividly explained the horror of: watching

multiple physicians rush to her son's bedside; seeing th e

E mergency R oom go into quarantine due to her son's infection;

providing the names of all the people Josiah had come into

recent contact so that they could be give n precautionary

antibiotics; having the health department remove all of Josiah's

things from the house to prevent the spread of the infection;

and seeing her son essentially die on the table and be

resuscitated.

16. Josiah was in the hosp ital from January 1 through

May 2, 2013. Due to the lack of blood circulation, Josiah lost

multiple body pa rts. His left hand at the wrist, his right leg

at the ankle, and part of his left foot were amputated, and both

knee caps were removed. His skin is tough and scarred.

17. According to Mrs. Delva, had the doctor properly

diagnosed Josiah when they firs t arrived after midnight on

New Year's Day, he would not h ave suffered the extent of his

injuries. Mrs. Delva and her husband have four children,

including Josiah, and she detailed the extent to which the

family facilitates Josiah's needs. Josiah's sibling s do not

always understand the extra attention needed by Josiah from

their parents. She explained every day is a constant struggle,

and most notably explained , the need to travel from Miami to

Tampa to Shriner's Hospital ten or more times per year for

che ck - ups and to update Josiah's prosthetics.

18. No witness testified to Josiah's or his parents claim

for non economic damages. While it is clear that the malpractice

caused grievous pain and suffering to the family that will last

Josiah's entire life, no expert was presented to discuss the

valuation of these damages.

19. No testamentary or other evidence was advanced to show

how the $550,000 .00 settlement amount should be allocated

between past medical expense damages and other elements of

damages.

Petiti oner's Theory of the Case

20. Petitioner's counsel argues that the total value of

the case that Petitioner should reasonably have expected to be

awarded by a jury was $110,735,488.79. Counsel explained that

this number represents the pa st medicals paid b y Medicaid,

$ 6 million for future medicals, $ 20 million for past pain and

suffering, $ 80 million for future pain and suffering , and

$ 2 million each (a total of $ 4 million) for Mr. and Mrs. Delva's

loss of consortium claims.

21. Petitioner argues that the past medicals, as paid by

Medicaid in the amount of $234,408.60, represent 0 .0021 percent

of the total value of the case of $110,735,488.79. Petitioner

argues that applying this 0 .0021 percent times the actual

recovery of $550,000.00 results in Medicaid's pro rata recovery

being reduced to $1,155.00 as the portion of the settlement

allocable to past medicals. 3/

22. No expert testimony was introduced on the calculation

of any element of damages other than future medical expenses. 4/

23. In support of the $ 110 million dollar plus "total

value" of the case, Petitioner provided three jury verdicts to

establish comparable pain and suffering awarded in similar

circumstances. These cases include: A . H . , a minor, et al . v.

Trustees of Mease Hospital, In c., et al. , 2018 FL Jury Verdict

Rptr. LEXIS 277; Lisa - Marie Carter v . Larry Roy Glazerman, M.D.,

et al. , 2018 FL Jury Verdict Rptr. LEXIS 175; and Cynthia N.

Underwood and Stephen R. Underwood v. Katherine Strong , 2017 FL

Jury Verdict Rptr. LEXIS 11578.

24. The fa cts of how the injuries happened and the effects

of the injuries, in these cited cases, differ highly from

Josiah's case. The first of the three jury verdicts shows a

gross verdict award of $9,250,000.00. The third of the jury

verdicts show a gross award of $6,132,642.

25. The second of the three jury verdicts shows an award

of $109,760,930. This includes the staggering figure of

$94 million for pain and suffering damages. The undersigned

took official recognition of the docket for the Carter case and

the Notice of Appeal filed on March 22, 2018, which show that the Carter verdict is on appeal.

26. Unfortunately, these jury verdicts provide no guidance

for calculating Josiah's or his parents' claims for non economic

damages or the total value of the cas e.

CONCLUSIONS OF LAW

27. The D ivision of A dministrative H earings has

jurisdiction over the parties and subject matter in this case,

and has final order authority pursuant to sections 120.569,

120.57(1), and 409.910(17)(b), Florida Statutes.

28. AHCA is the state agency authorized to administer

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

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

states are required to seek reimbursement for medical expenses

from Medicaid recipients who later recove r from legally liable

third parties.

30. By accepting Medicaid benefits, Medicaid recipients

automatically subrogate their rights to any third - party benefits

for the full amount of Medicaid assistance provided by Medicaid

and automatically assign to AHCA 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 r ecipient. However,

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

medical expenses.

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

AHCA's recovery for a Medicaid lien to the lesser of its full

lien; or one - half of the total award, a fter 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 results in AHCA recovering $185 ,694.69.

32. 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 th e amount payable to AHCA, 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 the amount calculated by AHCA pursuant to

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

2017).

33. As explained in Smith v. Agency for Health Care

Administration , 24 So. 3d 590 (Fla. 5th DCA 2009), evidence of

all medical expenses must be presented, as AHCA may recover from

the entirety o f the medical expense portion -- not just the

portion that represents its lien. Further, section

409.910(17)(b) grants the undersigned power to find "the portion

of the total recovery which should be allocated as past . . .

medical expenses," and to limit AHC A to that amount. The

statute does not authorize a reduction of the Medicaid lien to

the Medicaid - only portion of a recipient's recovery.

34. Where uncontradicted testimony is presented by the

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

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

53 , 56 (Fla. 2018). However, in this case, no evidence was

presented to accept it. While the settlement is obviously

woefully inadequate to fully compensate Josiah or his parents

for the d amages wrought by the medical negligence, there simply

was no evidence presented upon which to determine what a jury

would likely award in this case. The two jury verdicts of under

$10,000,0 00.00 do not to suggest that Petitioner's case could be

valued in the $110,000,000.00 range.

35. In the instant case, Petitioner failed to prove by a

preponderance of the evidence the total value of Petitioner's

claim or what portion of the $550,000.00 represents a fair share

of past medical expenses. As explained rec ently in Gray v.

State , No . 1D17 - 355 (Fla. 1st DCA Sept. 3 , 2019), "when the

plaintiff fails to produce evidence or present testimony showing

that the lien amount should be reduced, the plain language of

section 409.910(11)(f) requires the ALJ to apply the statutory

formula." Therefore, it is concluded that AHCA's full Medicaid

lien amount should be reduced by the formula contained in

section 409.910(11)(f) to a total of $185,694.69.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is ORDERED that the Agency for Health C are

Administration is entitled to $185,694.69 from Petitioner's

settlement proceeds in satisfaction of its Medicaid lien.

DONE AND ORDERED this 7th day of October , 2019 , in

Tallahassee, Leon County, Florida.

MARY LI CREASY

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 t he Clerk of the

Division of Administrative Hearings

this 7th day of October , 2019 .

ENDNOTE S

1/ Josiah, now eight years old, was present at the hearing. At

the end of the hearing, the undersigned had a brief conversation

with Josiah as a courtesy and t o allow him to ask any questions

about the hearing process. Josiah was exceptionally well -

behaved and courteous at the hearing and deserved to be

recognized. Josiah was not placed under oath. The answers

provided by Josiah to the undersigned's questions about his new

school year were not intended, nor considered, as testimony.

2/ The dollar figures in the life care plan are based upon the

initial amount the medical providers charge, not upon discounted

rates, nor the amount that the medical prov iders a ctually

receive .

3/ ferent figures in Petitioner's Proposed Counsel offered dif

Final O rder ( " PFO " ) than at hearing. The numbers in the PFO are

inconsistent with the evidence and the stipulated facts.

Petitioner's PFO refers to the $500,000.00 "lump sum " and also

"$500,000.00 available settlement proceeds."

At the final hearing, and by a simple calculation, the past

medica ls of $237,408.60 divided by Petitioner's offered total

value of the case ($110,735,488.79) is 0. 00 21 percent.

However in Petitioner's PFO, Petitioner states, " [u]sing

the conservative estimate of the value of the damages of

$110,735,488.79, the $500,000.00 available settlement proceeds

that Petitioners recovered for all of their injuries represented

.45% of the value of t heir entire medical malpractice case."

This percentage does not show how much of the proceeds are

allocable to past medicals. Accordingly, the undersigned is

using 0 . 00 21 percent for the calculations in this Final Order.

4/ evidence of the manner in which When questioned whether any

these figures were derived would be presented, counsel for

Petitioner offered to provide his own affidavit or suggested

that the hearing be held open for a later date so that he could

secure an expert to opine on the topic o f damages calculations.

Counsel did not identify himself as an "expert" or witness who

would tes tify at tria l in the Joint Pre - hearing Stipulation.

Rule 4 - 3.7 of the Florida Bar's Rules of Professional Conduct

generally prohibits an attorney from testify ing in a case in

which he is representing a party.

Further, this case was noticed for hearing on April 10,

2019. At no time did counsel seek an extension of time within

which to secure an expert, nor did Petitioner's counsel identify

any experts p rior to hearing. Florida Administrative Code

Rule 28 - 106.210 provides, "[ t] he presiding officer may grant a

continuance of a hearing for good cause shown. Except in cases

of emergency, requests for continuance must be made at least

five days prior to the date noticed for the hearing." Counsel's

lack of preparation of his case does not constitute "good cause"

or an "emergency."

COPIES FURNISHED:

Christopher R. Jaramillo, Esquire

Moore and Company PA 255 Aragon Avenue , Third Floor Miami, Florida 33134

(eServed)

Alexander R. Boler, Esquire

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

J ohn Co field, Client Services Senior Manager

Conduent Payment Integrity Solutions

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahas see, Florida 32308

(eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail S top 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Mary C. Mayhew, Secretary

Agency for Health Care Administration

2727 Mahan Dri ve, Mail Stop 1

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 governe d by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 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.