19-002013MTR Pedro Garcia, A Minor By And Through His Parents And Natural Guardians, Jesus Garcia And Norma Cisneros vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, August 27, 2019.

Summary: Petitioner proved 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

PEDRO GARCIA, A MINOR BY AND

THROUGH HIS PARENTS AND NATURAL

GUARDIANS, JESUS GARCIA AND

NORMA CISNEROS,

Petitioners,

vs. Case No. 19 - 2013MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_____________ __________________/

FINAL ORDER

This case came before Administrative Law Judge Darren A.

Schwartz of the Division of Administrative Hearings ( " DOAH " ) for

final hearing by video teleconference on June 12, 2019, at sites

in Ta llahassee and Lauderdale Lakes, Florida.

APPEARANCES

For Petitioner s : Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

For Resp ondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The amount to be paid by Petitioner s , Pedro Garcia, a minor

by and through his parents and natur al guardians, Jesus Garcia

and Norma Cisneros ( " Petitioner s " ) to Respondent, Agency for

Health Care Administration ( " AHCA " ), out of the settlement

proceeds, as reimbursement for past Medicaid expenditures

pursuant to section 409.910, Florida Statutes.

P RELIMINARY STATEMENT

On April 16, 2019, Petitioner s filed a Petition to

Determine Amount Payable to Agency for Health Care

Administration i n Satisfaction of Medicaid Lien pursuant to

s ection 409.910 (17)(b) . The matter was initially assigned to

Administrat ive Law Judge Mary Li Creasy. On April 26, 2019,

Judge Creasy entered an Order set ting the final hearing for

June 12, 2019. On June 3, 2019, the matter was transferred to

the undersigned for all further proceedings.

The final hearing was held on June 12, 2019, with counsel

for the parties appearing on behalf of their clients. At

hearing, Petitioner s presented the expert testimony of a ttorney

Edward H. Zebersky. Petitioners ' Exhibits 1 through 10 were

received in evidence based on the stipulation of t he parties.

AHCA did not call any witnesses or offer any exhibits into

evidence.

The one - volume final hearing Transcript w as filed on

July 10, 2019. The parties were granted two unopposed

extensions of time to file their proposed final orders. The

par ties timely filed proposed final orders, which have been

considered in preparation of this Final Order.

The facts set forth in the parties ' Joint Pre - hearing

Stipulation , filed June 3, 2019, have been incorporated herein.

References to the Florida Sta tutes are to the 2018 version.

FINDING S OF FACT

1. Pedro Garcia ( " Pedro " ) was born on October 30, 2014.

When he was two months old, he presented to the emergency room

( " ER " ) with vomiting and excessive crying. The doctors failed

to diagnose an intestin al blockage and discharged Pedro home.

Pedro was taken again to the E R in dire distress. He was

air lifted to a pediatric hospital where emergency sur gery was

performed to remove 90 percent of his intestine. Pedro now

suffers from the eff ects of having 9 0 percent of his intestine

removed, including : nutritional deficiencies, diarrhea,

dehydration, and abdominal distress. He cannot play with

exertion and his activities are limited. Pedro will suffer the

effects of his injury for the remainder of his lif e.

2. A portion of Pedro ' s medical care related to the injury

was paid by AHCA through the Medicaid program and Medicaid ,

through AHCA , provided $71,230.43 in benefits.

3 . Pedro ' s parents and natural guardians, Jesus Garcia and

Norma Cisneros, brought a medical malpractice action against the

medical providers and staff responsible for Pedro ' s care

( " Defendants " ) to recover all of Pedro ' s damages, as well as

their individual damages associated with their son ' s injury.

4. Because of uncertainty on issue s of liability and only

a $250,000 insurance policy on the most culpable defendant,

Pedro ' s medical malpractice action against the Defendants was

settled for a confidential unallocated lump sum of $2,000,000.

5. During the pendency of Pedro ' s medical ma lpractice

action, AHCA was notified of the action and AHCA asserted

a $71,230.43 Medicaid lien against Pedro ' s cause of action and

settlement of that action. The Medicaid program through AHCA,

spent $71,230.43 on behalf of Pedro, all of which represents

e xpenditures paid for Pedro ' s past medical expenses.

6. Another non - AHCA Medicaid provider, Integral Quality

Care, provided $223,089.26 in past medical expenses on behalf of

Pedro.

7. Another non - AHCA Medicaid provider, Department of

Health, Chil d ' s Medical Services, provided $168,161.12 in past

medical expenses on behalf of Pedro.

8. Accordingly, a total of $462,480.81 was paid for

Pedro ' s past medical expenses.

9. AHCA did not commence a civil action to enforce its

rights under section 409. 910 or intervene or join in Pedro ' s

action against the Defendants. By letter, AHCA was notified of

Pedro ' s settlement. AHCA has not filed a motion to set - aside,

void, or otherwise dispute Pedro ' s settlement.

10. Application of the formula in section 4 09.910(11)(f)

to Pedro ' s $2,000,000 settlement requires payment to AHCA of the

full $71,230.43 Medicaid lien.

11. At the hearing, Petitioner s presented the expert

testimony of at torney Edward H. Zebersky, who represented Pedro

throughout the underlying me dical malpractice action against the

Defendants. Without objection, Mr. Zebersky was accepted as an

expert in the valuation of damages suffered by injured parties.

12. Mr. Zebersky has been an attorney since 1991.

Since 1992, Mr. Zebersky has been a p laintiff ' s trial lawyer,

with a substantial portion of his practice devoted to personal

injury cases, including medical malpractice matters. He is a

partner with the law firm of Zebersk y Payne Shaw Lewenz, LLP and

AV rated by Martindale - Hubbell. Mr. Zebe rsky is a member of

numerous trial attorney associations and has held leadership

positions in s everal associations, including p resident of the

Florida Justice Association in 2006 and serving on the Board of

Governors of the American Association for Justice for the past

ten years.

13. Mr. Zebersky handles jury trials. He has secured

multiple eight - figure verdicts and several seven - figure

verdicts, and he stays abreast of jury verdicts on other cases

in his area.

14. As a routine part of his practice, Mr . Zebersky makes

assessments concerning the value of damages suffered by his

clients. Mr. Zebersky was accepted as an expert in a Medicaid

lien dispute at DOAH in the case of Herrera v. Agency for Health

Care Admin istration , Case No. 16 - 1270MTR , 2016 Fla. Div. Adm in .

Hear. LEXIS 493 ( Fla. DOAH Oct. 11, 2016).

15. Mr. Zebersky was familiar with the circumstances

surrounding Pedro's injury and medical malpractice claims and

gave a detailed explanation of them . Mr. Zebersky reviewed

Pedro ' s life c ar e p lan , which details Pedro ' s future medical

needs, and an economist r eport, which calculated the present

value of Pedro ' s future medical care and present value of

Pedro ' s lost future earnings.

16. The e conomist placed the present value of Pedro ' s

future medi cal expenses and lost future earnings at

approximately $9,500,000 . According to Mr. Zebersky, p ast

medical expenses would also be added to arrive at the full value

of Pedro ' s economic damages. Mr. Zebersky testified that in

addition to economic damages, a jury would also be asked to

assign a value to past and future non economic damages (i.e. ,

pain and suffering and loss of enjoyment of life). Mr. Zebersky

testified that Pedro ' s claim for non economic damages would have

an exceedingly high number, which as a " rule of thumb " is

three times the value of his e conomic damages.

17. Mr. Zebersky persuasively and credibly testified that

the total value of all of Pedro ' s damages would be in excess of

$20,000,000, and that valuing Pedro ' s damages at $15,000,000 i s

a very conservative and low valuation of his damages.

18. Mr. Zebersky persuasively and credibly testified that

the $2,000,000 settlement did not fully compensate Pedro for the

full value of his damages. Mr. Zebersky testified that based on

a conservat ive value of all of Pedro ' s damages of $15,000,000,

the $2,000,000 settlement represents a recovery of 13.33 percent

of the full value of his damages.

19. AHCA did not call any witnesses, present any evidence

as to the value of damages, or propose a dif ferent valuation of

damages. Mr. Zebersky ' s testimony regarding the total value of

Pedro ' s damages was credible, unimpeached, and unrebutted.

Petitioner proved that the settlement of $2,000,000 does not

fully compensate Pedro for the full value of his da mages.

20. Mr. Zebersky further testified that because Pedro only

re covered in the settlement 13.33 percent of the full value of

his d amages, he only recovered 13.33 percent of AHCA ' s

$71,230.43 Medicaid lien, or $9,495.01. Mr. Zebersky testified

that i t would be reasonable to allocate $9,495.01 of the

settlement to past medical expenses paid by AHCA through the

Medicaid program.

21. Following the settlement, Mr. Zebersky negotiated the

non - AHCA Integral Quality Care Medicaid lien from $233,089.26 to

$18,737.00, and the non - AHCA Department of Health, Child ' s

Medical Services lien from $168,161.12 to $22,415.

22. On cross - examination, Mr. Zebersky acknowledged that

the $233,089.26 and $168,161.12 from Integral Quality Care and

Department of Health, C hild ' s Medical Services are part of

Pedro ' s claim for past medical expenses. However, Mr. Zebersky

failed to include these past medical expenses in applying the

ratio to reduce the Medicaid lien amount owed to AHCA. AHCA

successfully contested the method ology used to calculate the

allocation to past medical expenses based on Mr. Zebersky ' s

failure to include these past medical expenses in applying the

ratio.

23. Accordingly, Petitioner s proved by a preponder ance of

the evidence that 13.33 percent is the appropriate pro rata

share of Pedro ' s past medical expenses to be applied to

determine the amount recoverable by AHCA in satisfaction of its

Medicaid lien.

24. Total past medical expenses is the sum of AHCA ' s lien

in the amount of $71,230.43, and the pa st medical expenses in

the amount s of $233,089.26 and $168,161.12, which equals

$462,480.81. Accordingly, following Mr. Zebersky ' s methodology

and applying the $15,000,000 valuation to the proper amount of

total past medical expenses of $462,480.81, the s ettlement

portion properly allocable to Pedro ' s past medical expenses to

satisfy AHCA ' s lien is $61,648.69 ($462,480.81 x 13.33 percent =

$61,648.69).

CONCLUSIONS OF LAW

25 . DOAH has jurisdiction over the parties and subject

matter of this case pursuant t o sections 120.569, 120.57(1), and

409.910(17)(b), Florida Statutes.

26. Medicaid is a joint fede ral - state program that allows

states to provide medical services to residents who cannot

afford treatment. As a condition of receipt of federal Medicaid

fun ds, states are required to seek reimbursement for medical

expenses from Medicaid recipients who recover from legally

liable third parties. Giraldo v. Ag. for Health Care Admin. ,

248 So. 3d 53, 55 (Fla. 2018).

27. AHCA is the state agency authorized to administer

Florida ' s Medicaid program. AHCA is subrogated to any rights a

Medicaid recipient may have from any third party to recover the

full amount of the past medical expenses paid to the Medicaid

recipient. §§ 409.902, 409.910(6), Fla. Stat.

28. S ec tion 409.910(11)(f) provides a statutory formula

that AHCA uses in determining the Medicaid lien amount. The

parties agree that application of the statutory formula results

in AHCA recovering the full amount of its $71,230.43 lien.

29. Pursuant to sect ion 409.910(17)(b), a Medicaid

recipient may contest the amount payable under the statutory

formula in an administrative proceeding at DOAH. In order to

prevail in such an action, the Medicaid 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 pursuant to the

statutory formula. Giraldo , 248 So. 3d at 54. Although a

factfinder may reject uncontradicted testimony, the re must be a

reasonable basis in the record for doing so. Id. at 56.

30 . As detailed above, the unrefuted, uncontradicted, and

unimpeached testimony of Mr. Zebersky demonstrates that the

$2,000,000 s ettlement represents only 13.33 percent of

Petition ers ' claim valued conservatively at $15,000,000.

31 . The full amount of all past medical expenses (which in

this case totals $462,480.81) must then be considered, not just

the past medical expenses representing the amount of AHCA ' s

lien. Fallon v. Ag. for Health Care Admin. , Case No. 19 -

1923MTR , 2019 Fla. Div. Adm in . Hear. LEXIS 420 ( Fla. DOAH

July 26, 2019)(concluding that past medical expenses of

$592,554.18 provided by Optum must be included in calculating

total past medical expenses even though this amount was reduced

through negotiation to a lien in the amount of $22,220.78);

Ramella v. Ag. for Health Care Admin. , Case No. 17 - 5454MTR ,

2018 Fla. Div. Adm in . Hear. LEXIS 92, *20 ( Fla. DOAH Feb. 15,

2018)(rejecting Petitioners ' contention that non - AHCA lien

should not be considered in total past medical expenses for the

purpose of applying ratio); Osmond v. Ag. for Health Care

Admin . , Case No. 16 - 3408MTR , 2016 Fla. Div. Adm in . Hear. LEXIS

454, *16 ( Fla. DOAH Sept. 8, 2016)(full amount of medical

expenses is the amount to be applied in calculating that portion

of the settlement which is available for reimbursement of AHCA ' s

Medicaid lien). Petitioners' contention that the outcome should

be different in this particular case because Medicaid, as a

payer of last resort, paid for all of Pedro's Medicaid care is a

distinction without a difference. All of Pedro's past Medicaid

expenses were included in Petitioners' total recovery and claim

for past medical expenses.

32 . Accordingl y, the application of the 13. 33 percent

ratio to Petitioners ' total past medical expenses of $462,480.81

results in $61,648.69, which is the settlement portion properly

allocable to Pedro ' s past medical expenses to satisfy AHCA ' s

lien.

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 $61,648.69 from Petitioners '

settlement proceeds in satisfaction of its Medicaid lien.

DONE AND ORDERED this 27th day of August , 2019 , in

Tallahassee, Leon Cou nty, Florida.

S

DARREN A. SCHWARTZ

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 27th day of August , 2019 .

COPIES FURNISHED:

Alexander R. Boler, Esquire

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

(eServed)

Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

(eServed)

Kim Annette Kellum, Esquire

Agency for Health Care Administration

2727 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)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stefan Grow, Gen eral Counsel

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 Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

NO TICE 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 proceed ings 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 pre scribed 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.