19-002679MTR Brian Glass vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, November 21, 2019.

Summary: Petitioner proved by the preponderance of the evidence that the amount payable to AHCA in satistfaction of AHCA's Medicaid lien from the third party settlement should be reduced.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BRIAN GLASS ,

Petitioner ,

vs. Case No. 19 - 2679 MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION ,

Respondent.

______________________________ /

FINAL ORDER

This case came before Administrat ive Law Judge June C .

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

final hearing on September 13, 2019, in Tallahassee , Florida.

APPEARANCES

For Petitioner s : Floyd B. Faglie , Esquire

Staunton and Faglie , P . L .

189 East Waln ut Street

Monticello , Florida 32344

For Respondent: Alexander R. Boler , Esquire

2073 Summit Lake Drive , Suite 300

Tallahassee , F lorida 32317

STATEMENT OF THE ISSUE

The issue t o be decided is the amount paya ble to Respondent ,

Agency for Health Care Administration ( " Respondent " or " AHC A " ) ,

in satisfaction of Respondent ' s Medicaid lien from a settlement

received by Petitioner , from a third party , pursuant to

section 409.910 , Flori da Statutes (201 8 ).

PRELIMINARY STATEMENT

On or about May 20 , 201 9 , Petitioner, Brian Glass ( " Glass "

or "Petitioner" ) , filed a Petition to Determine Amount Payable to

Agency for Health Care Administration in Satisfaction of Medicaid

Lien ( " Petition " ) , purs uant to section 409.910(17)(b) , protesting

the lien claim and request ing a hearing .

On May 20, 2019 , t he Petition was filed at DOAH and assigned

to the undersigned administrative law judge. The case proceeded

as scheduled on September 13 , 201 9 .

At hear ing , Petitioner present ed the testimony of one

witness : Steven B. Phillips . Petitioner ' s Exhibits 1 through 11

were received into evidence without objection . Respondent did

not present any witnesses or proffer any exhibits for admission

into evidence.

T he proceedings of the hearing were recorded and

transcribed. A one - volume Transcript of the hearing was filed at

DOAH on October 8 , 201 9 . Both parties timely filed p roposed

f inal o rders that the undersigned has considered in the

preparation of this Final Order.

The pa rties stipulated to the facts in the Joint Pre - hearing

Stipulation , and the relevant facts stipulated therein are

accepted and made part of the Findings of Fact below . Unless

otherwise noted , all statutory references are to the Florida

Statu tes ( 201 8 ).

FINDINGS OF FACT

1. On November 8, 2013 , Glass , who was then 25 year s old,

was struck by a car while crossing the road , which caused

multiple severe mental and physical injuries .

2. After the accident, Glass was hospital ized . His medical

car e related to his injur ies was paid by Medicaid .

3. Glass , through counsel, brought a personal injury

lawsuit against the driver and company that owned the vehicle

that struck him ( " tortfeasor " ) to recover all of his damages

associat ed with his injuries.

4 . Steven B. Phillips ( " Phillips " ) , a nearly 2 8 - year civil

trial attorney with the law firm of Pincus & Currier in Palm

Beach , Florida , represented Glass in his personal injury action.

5. During the pendency of the personal injury action , AHCA

neither sta rt ed a civil action to enforce its rights under

section 409.910 n or intervene d or join ed in G lass ' s action

against the tortfeasor .

6. Phillips handled Glass ' s personal injury case through

settlement. The personal injury lawsuit was ultimately settled

for the lump - sum unallocated amount of $225,000.00.

7. Glass ' s taxable costs incurred in securing the

$225,000.00 settlement are $29,677.93.

8. By letter, AHCA was notified of Glass ' s settlement of

the personal injury action.

9. AHCA has neither file d an action to set aside , void , or

otherwise dispute the settlement .

10. AHCA , through its Medicaid program , spent $ 145,629.51

in Medicaid benefits on behalf of Glass , all of which represents

expenditures paid for Glass ' s past medical expenses.

11. The fo rmula at section 409.910(11 )( f) , as applied to

the entire $ 225 , 000 .00 settlement , requires payment of the

Medicaid lien in the full amount of the $ 69,536.04 . AHCA is

demanding payment of $ 69,536.04 from the $ 225 , 000 .00 settlement.

12. Glass deposited t he section 409.910(11)(f ) formula

amount in an interest - bearing account for the benefi t of AHCA ,

pending an administrative determination of AHCA ' s rights ; and

this constitutes " final agency action " for purposes of

chapter 120 , Florida Statutes, pursuant to section 409.910(17 ).

Hearing

13. At the final hearing , Petitioner presented expert

testimony from Phillips , Glass ' s Florida trial attorney.

Phillips is a 21 - year board - certified civil trial lawyer who

practices exclusively in personal injury and insuran ce law.

Phillip ' s board - certified designation recognizes him as a

specialist that has extensive experience in civil trial practice.

He is also a member of the Palm Beach Justice Association.

14. Phillips ' s practice of law is a hundred percent

personal i njury cases , including catastrophic injuries . H e has

handle d over a hundred jury trials . Phi l lips currently only

represents plaintiffs who are injured , but he also previously was

defense counsel for ten years.

15. Phillips ' s expertise encompasses valuat ion of personal

injury damages and allocation of settlements relating to health

care liens . Phillips stay s abreast of all S tate of Florida jury

verdicts by reviewing jury verdict reporters and researching

cases statewide. He also routinely discusses case s with other

plaintiff attorneys .

16. At hearing , Phillips explained that as a routin e part

of his practice , he makes assessments concerning the value of

damages suffered by injured parties , and he detailed the steps

for making those assessments.

Valuatio n

17. Phillips credibly explained the process he took to

develop an opinion concerning the value fo r the damages suffered

in Glass ' s case. Phillips testified that he met with Glass

numerous times ; reviewed his approximate 1,400 pages of medical

records ; assessed the injuries and cost s of the medical

treatment ; evaluated how the accident occurred ; assessed

liability issues and fault ; resolved if there was comparative

negligence ; verified future medical trea tment ; and established

lost economic damages , such as wages, and any intangibles , such

as past and future pain and suffering, loss of capacity to enjoy

life , and mental anguish .

18. Phillips analyzed how the accident occurred and

detailed that Glass was walking on a main road, Indiantown Road,

in Jupiter , Florida. As Glass was walking on a sidewalk, he

turned and walked across the roadway. A vehicle was approaching

him, and he went back and forth a s to whether he was going to

cross or step back on the curb; and the car driver did not slow

down , hit G las s , and threw him approximately 65 feet in the air.

He landed with his face smashed down in the road and was rendered

unconscious at the scene .

19. Glass suffered multiple maxillofacial injuries along

with numerous broken bone s and a traumatic brain injur y. As a

result, Glass was taken to St. Mary ' s Hospital, a trauma

hospital , for treatment.

20. Phillips explained the importance of assessing each of

Glass ' s injuries in order to properly determine the true val ue of

the case. Next, he went over the inj uries in detail describing

that Glass had a traumatic head injury that resulted in an acute

right and rear frontal lobe hemorrhage, contusion , which bled for

several days , and resulted in a traumatic brain injury . He had

post - traumatic cephalgia and pain in his head. Glass ' s optic

nerve in his left eye resulted in decreased visual acuity. One

side of his lung collapsed , and he had multiple fractured ribs .

Glass suffered a functional decline in his short - term memory , and

he had cerebral spinal fluid in t he subdural space around the

brain. Additional ly , he had an extensive LeFort II fracture ,

which involved the roof of the mouth on both sides ; his front

teeth on the bottom were fractured ; and the top of his eyes was

fractured and displaced on the left sid e , as well as several

other bones on his face were fractured. His legs and arms also

had broken bones.

21. Glass underwent multiple extensive surgeries to repair

all the fractures , and he even had surgical debridement to repair

the soft tissue and closur e of the skin. There was additional

surgery to repair t he top third of his face and a b roken nose .

22. At hearing, Phillips testified that the medical care

related to the accident was paid by Medicaid in the amount of

$145,629.51 .

23. Phillips explaine d that t he accident had a tremendous

impact on Glass ' s life. He was hospitalized for approximately

seven months. Some results from the accident are Glass cannot

retain short memory, count money, or go to the store alone to

purchase something. After he w as released from the hospital, he

moved in with his mother where he resides now.

24. Glass sued the individual driver and driver ' s company,

Quest Diagnostic, because it was Phillips 's position that the

driver was negligent in failing to slow down , stop , and take

affirmative action to avoid striking Glass on the roadway.

25. A s the litigation proceeded, Phillips discovered

challenges in the case. One hurdle was that Glass did not

remember the accident , and the personal injury case had to be

buil t aroun d the police report.

26. Phillips further explained that an other issue existed

as to whether Glass had been drinking on the day of the accident

and had alcohol in his system. With Glass ' s memory loss,

Phillips ultimately concluded that there was a major issue with

comparative negligence in this case , and he determined that it

would be difficult to prove the driver of the vehicle was at

fault.

27. As a result of the challenges to the personal injury

action , Phillips settled the case for $225,000.00.

28. Phillips credibly explained that to determine the true

value of Glass ' s case, he used the routine method of researching

the value of damages for each injury. Phillips discovered while

researching the jury verdict system that there was not even one

case that had half of the injuries Glass had sustained. Phillips

discovered memory - loss cases ranged in damages from $160,000.00

upward, depending on the extent. He found that brain injury

cases started at $500,000.00 in damages depending on the

hemorrhaging and residual effect. Elbow fractures are calculated

$50,000 .00 upward. Optic nerve damage cases are $200,000.00

upward . Orbital fractures cases were awarded damages from

$300,000.00 u p ward .

29. Phillips put together about ten different jury verdicts

adding up the various injur ies Glass sustained to calculate a

fair value for his injuries . Phillips concluded that a true

value of the case conservatively was $1.5 million . Phillips also

round tabled the case with other attorneys to finalize a value.

Th e other attorneys all agreed that Glass ' s damages were in

excess of $ 1.5 million. As a result, Phillips concluded that the

low - end conservative number for the value of Glass ' s damages is

$1.5 million.

Allocation

30. Phillips also credibly and persuasivel y testified that

he is familiar with and has participated in several hundred

allocations of settlements i ncluding Medicaid cases , 1 / health

insurance liens, automobile insurance coverage liens, Medicare

set asides, jury verdict setoff for comparative neglig ence, as

well as allocations of judgments. Phillips explained that he has

been dealing with Medicaid payment allocations, negotiation of

settlements, and reductions of the liens on a routine basis for

his 27 years ' membership in The Florida Bar.

31. Phil lips summarized how common the method of allocation

is in the industry and stated about " 90 percent of his cases

involve some type of allocation of medical expenses versus the

true or pure value of the case to determine a fair and reasonable

amount to reim burse a lien holder on payments, such as Medicaid. "

32. Phillips opined that the settlement was not the full

value of Glass ' s damages and that the settlement only represents

15 percent of the full measure of his damages. Phillips ' s

testimony was uncontra dicted and compelling.

33. Phillips explained that the 15 percent is the

percentage of the settlement value , $ 225, 000 .00 , from the true

value of $ 1.5 million. He calculate d the percentage by dividing

$225,00 0.00 into $1.5 million which equal s 15 percent . Phillips

also credibly testified that he utilized the same method that he

has been routinely using for over 25 years to p roperly and

reasonably allocate Glass ' s past medical expenses . Phillips took

15 percent of the $145, 629.51 Medicaid lien , which make s the

allocation of past medical expenses $21,844.43 . Phillips also

explained that it is the only allocation method he has ever used.

Findings Regarding the Testimony Presented at the Final

Hearing

34. The undersigned finds that Petitioner ha s establishe d

by unrebutted uncontested evidence that t he $ 2 25 , 000.00

settlement amount is 15 percent of the total value ($ 1 . 5 million )

of Petitioner ' s damages. Using the same calculation , Petitioner

correctly established that 15 percent of $ 145,629.51

(Petitioner ' s lien amount for past medical expenses) , $ 21,844.43 ,

should be the portion of the Medicaid lien paid to AHCA .

35. ACHA offered no evidence to counter either Phillip s ' s

opinions or Petitioner's Exhibit 8, Scott S. Warburton's

("Warburton") sworn affidavit. Warburton is opposing counsel in

Glass ' s personal injury case, who corroborates the value of

Glass ' s damages in excess of $ 1.5 million and also allocate s the

case with the same 15 percent recovery amount resulting in a

$21,844.43 claim for past medical ex penses .

36. Petitioner proved by a preponderance of the evidence

that Respondent should be reimbursed for its Medicaid lien in a

lesser amount than the amount calculated by Respondent pursuant

to the formula set forth in section 409.910 (11)(f).

CONCLUSION S OF LAW

37. DOAH has jurisdiction over the subject matter and the

parties in this case , and final order authority pursuant to

sections 120.569 , 120.57(1) , and 409.910(17) , Florida Statutes

(201 9 ) .

38. As the party contesting the amount of the settlement

that should be payable to AHCA for past medical expenses,

Petitioner must prove by the preponderance of evidence that a

lesser portion of the total recovery should be allocated as

reimbursement for past medical expenses than the amount

calculated by AH C A pursuant to the formula . Gallardo v. Dudek ,

263 F. Supp. 3d 1247 (N.D. Fla. 2017).

39. The Florida Supreme Court defines " preponderance of the

evidence " as follows:

The greater weight of the evidence, not

necessarily established by the greater number

of witnesses testifying to a fact but by

evidence that has the most convincing force;

superior evidentiary weight that, though not

sufficient to free the mind wholly from all

reasonable doubt, is still sufficient to

incline a fair and impartial mind to one s ide

of the issue rather than the other.

S. Fla. Water Mgmt. v. RLI Live Oak, LLC , 139 So. 3d 869, 872 n.1

(Fla. 2014).

40. AHCA is the agency authorized to administer Florida ' s

Medicaid program. See § 409.902 , Fla. Stat.

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

states are required to seek reimbursement for medical expenses

incurred on behalf of beneficiaries who later recover from a

third party. See Ark. Dep ' t of Health & Hum an Servs. v. Ahlborn ,

547 U.S. 268 , 276 (2006). To secure re imbursement from liable

third parties , the state must require the Medicaid recipient

assign to the state his right to recover medical expenses from

those third parties . In relevant part , 42 U.S.C. § 1396a(a)(25)

requires:

(H) that to the extent that paym ent has been

made under the State Plan for medical

assistance in any case where a third party

has a legal liability to make payment for

such assistance , the State has in effect laws

under which , to the extent that payment has

been made under the State Plan for medical

assistance for health care items or services

furnished to an individual , the State is

considered to have acquired the rights of

such individual to payment by any other party

for such health care items or services.

42. To comply with this fed eral mandate , the Florida

Legislature enacted section 409.910 , Florida ' s Medicaid

Third - Party Liability Act. This statute authorizes and requires

the State , through AHCA , to be reimbursed for Medicaid funds paid

for a recipient ' s medical care when that r ecipient later receives

a personal injury judgment or settlement from a third party.

Smith v. Ag. for Health Care Admin. , 24 So. 3d 590 (Fla. 5th

DCA 2009). The statute creates an automatic lien on any such

judgment or settlement for the medical assistan ce provided by

Medicaid. § 409.910(6)( c) , Fla. Stat.

43. The amount to be recovered for Medicaid medical

expenses from a judgment , award , or settlement from a third party

is determined by the formula in section 409.910(11)(f). Ag. for

Health Care Admin . v. Riley , 119 So. 3d 514 , n.3 (Fla. 2d

DCA 2013).

44. The parties stipulated that the amount due to AHCA in

satisfaction of its lien , pursuant to the formula set forth in

section 409.910(11)(f) , is $ 69,535.04 . Petitioner , however ,

assert s that a lesse r amount is owed to Respondent because

Petitioner did not recover the full value of his damages.

45. It is undisputed that Medicaid provided $ 145,629.51 in

medical expenses for Glass and that AHCA asserted a Medicaid lien

against Petitioner ' s $ 225 , 000.00 settlement and the right to seek

reimbursement for its expenses. AHCA is utilizing t he mechanism

set forth in section 409.910 (11)(f) to enforce its right .

46. Section 409.910(13) provides that AHCA is not

automatically bound by the allocation of damage s set forth in

Petitioner ' s settlement agreement . Section 409.910(13) provides ,

in pertinent part , that :

(13) No action of the recipient shall

prejudice the rights of the agency under this

section. No settlement , agreement , consent

decree , trust agreeme nt , annuity contract ,

pledge , security arrangement , or any other

device , hereafter collectively referred to in

this subsection as a " settlement agreement , "

entered into or consented to by the recipient

or his or her legal representative shall

impair the ag ency ' s rights. However , in a

structured settlement , no settlement

agreement by the parties shall be effective

or binding against the agency for benefits

accrued without the express written consent

of the agency or an appropriate order of a

court having pe rsonal jurisdiction over the

agency.

47. Section 409.910(17)(b) provides a method whereby a

recipient may challenge AHCA ' s presumptively correct calculation

of medical expenses payable to the agency . The mechanism is a

means for determining whether a le ss e r portion of total recovery

should be allocated as reimburseme nt for medical expenses in

lieu of the amount calculated by application of the formula in

section 409.910(11)(f). Section 409.910(17)(b) provides , in

pertinent part , that :

If federal law lim its the agency to

reimbursement from the recovered medical

expense damages, a recipient, or his or her

legal representative, may contest the amount

designated as recovered medical expense

damages payable to the agency pursuant to the

formula specified in p aragraph (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 amount 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

Division 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 designated

as recovered medical expenses, the recipient

must prove, by clear and convincing evidence,

that the portion of the total recovery which

should be allo cated as past and future

medical expenses is less than the amount

calculated by the agency pursuant to the

formula set forth in paragraph (11)(f).

Alternatively, the recipient must prove by

clear and convincing evidence that Medicaid

provided a lesser amo unt of medical

assistance than that asserted by the agency.

48. An administrative procedure for adversarial testing o f

the fair allocation of the amount of the settlement that is

attributable to medical costs includes considering the evidence

used to reb ut the section 409.910 (11)(f) formula when determining

whether AHCA ' s lien amount should be adjusted . See Harrell v.

State , 143 So. 3d 478 , 480 (Fla. 1st DCA 2014 )( holding that

petitioner " should be afforded an opportunity to seek the

reduction of a Medic aid lien amount established by the statutory

default allocation by demonstrating , with evidence , that the lien

amount exceeds the amount recovered for medical expenses " ) .

49. 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). In this matter, there is no reasonable basis to

reject Petitioner ' s uncontradicted testimony.

50. The undersigned is not persuaded by Respond ent ' s

position in its Proposed Final Order that Petitioner ' s " pro - rata

allocation methodology " is inaccurate because Respondent failed

to provide any evidence or a reasonable basis for an alternative

to rebut Petitioner ' s method. Instead, the record demon strates

that the allocation process in this matter is rational, proper,

and reasonable.

51. Here a s in Eady v. State , 2019 Fla. App. LEXIS 13685,

44 Fla. L. Weekly D2287, Petitioner presented sufficient facts

through expert testimony to establish the Med i c aid lien should be

reduced to 15 percent. Likewise , AHCA failed to refute the

expert ' s opinions or present any evidence to the contrary .

52. Therefore , Petitioner proved by the preponderance of

the evidence that the $225,000.00 settlement recovered r epresents

only 15 percent of Petitioner ' s claim valued conservatively at

$1.5 million , and AHCA ' s full Medicaid lien amount should be

reduced by the percentage that Petitioner ' s recovery represents

of the total value of Petitioner ' s claim .

53. Accordingly , a pplying the 15 percent ratio to the

$ 145,629.51 claim for past medical expenses is $ 21,844.43 and

represents Glass ' s recovery of past medical expenses , which

constitutes a fair , reasonable , and accurate share of the total

proportionate recovery for past medical exp en ses actually paid by

AHCA .

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law , it is hereby

ORDERED that :

T he Agency for Health Care Administration is entitled to

$21,844.43 in satisfaction of its Medicaid lien.

DONE AND O RDERED this 2 1st day of November , 201 9 , in

Tallahassee , Leon County , Florida.

S

JUNE C. MCKINNEY

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 2 1st day of November , 201 9 .

ENDNOTE

1/ The undersigned finds Phillips ' s testimony regarding his

experience with Medicaid allocations while practicing nearly

28 years persuasive and rejects Respondent ' s position in the

Proposed Final Order that Phillips has no expertise in Medicaid

allocations.

COPIES FURNISHED:

Alexander R. Boler, Esquire

2073 Summit Lake Dr ive, 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 S top 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 Care Administration

2727 M ahan 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)

Shena L. Grantham, Esquire

Agency for Health Care Administra tion

Building 3, Room 3407B

2727 Mahan Drive

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 or iginal

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 t he 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.