20-000605MTR Valeria Alcala, A Minor, By Yobany E. Rodriguez-Camacho And Manuel E. Alcala, As Natural Guardians And Next Friends vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, August 18, 2020.

Summary: In the absence of any contradictory evidence from the agency, ACHA's lien is reduced to $6,414.44 based upon the application of the pro-rata formula or proportionality test utilized by the Petitioner's experts.

Health Care Administration ( " AHCA " or " Agency " ), pursuant to

section 409.910, Florida Statutes (2018 ), to satisfy the Agency ' s claimed

$76,973.33 Medicaid Lien?

P RELIMINARY S TATEMENT

On Febru ary 3, 2020, Alcala, filed a Petition to Determine Medicaid ' s Lien

Amount to Satisfy Claim Against Personal Injury Recovery by the Agency for

Health Care Administration , pursuant to section 409.910(17)(b). The p etition

disputed the amount of the AHCA lien and requested a hearing.

The matter was assigned to the undersigned to conduct a formal

administrative hearing and render a final order establishing AHCA ' s lien

recovery amount.

On June 15 , 2020, Alcala filed an Amended Petition to Determine

Medicaid ' s Lien, without objection from AHCA .

The matter was set for a final hearing on June 30, 2020 , and proceeded to

hearing as scheduled on that date.

The parties filed a pre - hearing stipulation that incl uded several

undisputed facts. At the final hearin g, Alcala ' s Exhibits 1 through 7 were

admitted into evi dence without objection. Alcala presented testimony of her

personal injury lawyer, Andrew Needle, Esquire, and additional expert

t estimony from Kenneth Bush, Esquire. The Agency did not offer any

evide nce, nor did it call any witnesses.

Petitioner s ordered the hearing T ranscri pt. Both parties timely filed

proposed final o rders , which were duly considered by the undersigned in the

preparation of this Final Order.

All references to the Florida Statutes a re to the version in effect on the

date of the action or conduct involved . Otherwise, the parties agree that the

2019 version applies to the operative statute, section 409.910.

F INDINGS O F F ACT

The u ndersigned makes the following F indings of F act based on the

stipulations of the parties and the evidence presented at the hearing.

P ARTIES ' S TIPULATED F ACTS A ND L AW

1. On November 3, 2005 , Yobany Rodriguez, age 38, was a passenger in a

motor vehicle involved in a minor collision. She was eight months pregna nt.

Fire Rescue examined her on the scene.

2. She had a sore back, elevated blood pressure , and no other visible

injuries. She declined hospital transport.

3. The following day (November 4, 2005) she went to the Public Health

Trust ' s Penalver Clinic ("Pe nalver") where she had been receiving her pre -

natal care as a " county indigent " without insurance. She had been

experiencing irregular contractions since 7 :00 a.m. and Penalver referred her

to Jackson Memorial Hospital to rule out pregnancy induced hyperte nsion.

4. She was examined. Fetal movement was noted, membranes were intact,

and she was admitted at 4:40 p.m. , November 4, 2005 , as high risk based on

age and concerns regarding pregnancy induced hypertension.

5. On November 6, 2005 , at 00:29 a.m. , Valer ia Alcala was delivered over

a right midline episiotomy with no r espirations and apgars of 1/2/3 at 1, 5,

and 10 minutes respectively.

6. On that same day, Valeria Alcala was delivered in a severely depressed

state, with an apparent subgal eal hematoma, po ssible subdural and cerebral

hemorrhage, and hypoxic/anoxic injury to her brain.

7. Shortly after her birth, it was noticed that Valeria ' s head was extremely

swollen. CT of the brain showed an occipital bone fracture with bilateral

posterior parietal bones overriding the occipital bone; severe scalp soft tissue

swelling; subgaleal hemorrhage; bilateral parieto - occipital epidural

hematomas ; and a frontal contusion .

8. As a result of the alleged malpractice on November 6, 2005, Alcala

suffered a hypoxic even t at birth leading to cognitive deficits and significant

damage to her kidneys.

9. Alcala brought a medical malpractice action to recover all of her

damages from the malpractice. This action was brought a gainst Jackson

Memorial Hospital and t he University of Miami School of Medicine

("University of Miami") .

10. In 2019, Alcala settled her tort action for $750,000.00, even though

Petitioner s believed Alcala's injuries were tens of millions of dollars in excess

of the recovery.

11. AHCA was properly notified of Alcala ' s lawsuit against Jackson

Memorial and the University of Miami. AHCA paid benefits related to the

injuries from the incident in the amount of $76,973.33. AHCA has asserted a

lien for the full amount it paid, $76,973.33, against Alcala 's settlemen t

proceeds.

12. The parties stipulated that AHCA is limited in the section

409.910(17)(b) procedure to the past medical expense s portion of the recovery,

and that a preponderance of the evidence standard should be used.

13. Petitioner s and AHCA also agreed that application of the formula

found at section 409.910(11)(f), to the $750,000.00 settlement amount ,

requires payment to AHCA in the amount of $76,973.33.

14. Petitioner s and AHCA agreed that the burden of proof for a Medicaid

recipient to successfully contest the amount payable to AHCA in a section 409.910(17)(b) proceeding is a preponderance of the evidence. § 120.57(1)(j),

Fla. Stat.

15. Petitioner s and AHCA agree that the 2019 version of section 409.910

controls DOAH ' s jurisdiction and this case, and further they agree that

Petitioner s ha ve met the conditions precedent to bring the petition.

A DDITIONAL E VIDENCE A T T HE H EARING

16 . At the final hearing, Alcala present ed expert testimony from

Andrew Needle, Esquire ("Needle"), her personal injury attorne y, and

Kenneth Bush, Esquire ("Bush"), an experienced trial lawyer who handles

catastrophic damages cases with a specialty in medical malpractice. Both

Needle and Bush were accepted as experts on the valuation of personal injury

damages for an injured indi vidual .

17. Needle is a 43 - year practicing attorney who is a partner with the

Miami, Florida law firm of Needle & Ellenberg , P.A . He testified regarding

his representation of Alcala . Needle handles serious/catastrophic medical

malpractice injury cases th roughout Florida exclusively for plaintiffs. He

specializes in litigating complex medical malpractice claims. In his practice he has handled, and currently handles, cases with personal injuries similar to those suffered by Alcala . He is admitted to pract ice law in Florida.

18. Needle regularly evaluates the damages suffered by injured people

such as Alcala . He is familiar with Alcala ' s damages from his representation

of Alcala in this personal injury lawsuit.

19. Needle was tendered as an expert regarding valuati on of personal

injury damages. The Agency did not object to the witness or his qualificat ions, and the undersigned accepted him as such an expert.

20. Needle testified as to the nature of the litigation on behalf of Alcala

and the difficult liabili ty issues related to Alcala and her injuries.

21. As part of his work - up of the case, he evaluated all elements of

damages suffered by Alcala. After litigating the case for a lengthy period of

time, Ne edle negotiated a settlement of $750,000.00 against t he defendants.

22. He testified regarding the process that he followed to evaluate and

arrive at his opinion related to the total value of the dama ges suffered in

Alcala' s case. Through the course of his repres entation , he met with the

family; revie wed all the medical information; evaluated the facts of the case ;

determined how t he alleged malpractice occurred; reviewed all records and

reports regarding the injuries Alcala suffered; analyzed liability issues and

fault; developed economic damages figures ; an d also valued non economic

damag es such as pain and suffering -- both future and past, loss of capacity to

enjoy life, scarring and disfigurement , and mental anguish.

23. Needle testified about the significant impact of the injuries on Alcala ' s

life. He r elated that Alcala has endured significant medical treatment as a

result of the alleged malpractice and resu lting injuries to her kidneys. As a

result of her injuries, Alcala ' s life has been severely impacted due to the brain

injury, seizures , and treatmen t to her kidneys.

24. Ne edle testified that the total value of Alcala ' s damages was

conservatively $ 9 million. That figure included Alcala ' s pain and suffering,

mental anguish , loss of quality of life, and the economic damages.

25. He opined that in comp aring the $9 million total valuation to the

settlement proceeds of $750,000.00, this resulted in Alcala recovering o nly

8.3% of her total damages. Needle ' s testimony was not contradicted by

AHCA , and was persuasive on this point.

26. Bush is a 37 - year pr acticing plaintiff attorney whose practice focuses

on litigating serious plaintiff personal injuries involving medical malpractice.

He testified as an expert as to the total valuation of Alcala ' s damages, and

resolution of healthcare liens on behalf of Alc ala .

27. Bush and his firm specialize in litigating serious and catastrophic

personal in jury cases throughout Florida. As part of his practice, Bush has

reviewed thousands of personal injury c ases as it relates to damages. Bush

has worked closely with economists and life care planners to identify the

relevant types of damages in catastrophic personal injuries, and he regularly

evaluates the types of damages suffered by those who are catastrophically

injured.

28. Bush was tendered as an expert regard ing valuation of personal injury

damages and resolution of l iens in personal injury cases. The Agency did not

object to the witness or his qualifications, and this tribunal accepted him as

such an expert.

29. Bush testified as to how he arrived at his valu ation opinion by

explaining the elements of damages suffered by Alcala . Similar to Needle, he

stated that the greatest element of loss Alcala suffered was non economic

damages.

30. He testified that , in his opinion , the total damages suffered by Alcala

we re in the range of $9 to $10 million, and agreed with the conservative $9

million total valuation testified to by Needle. He testified that the future care

of Alcala would be in the high seven figures based upon a life care plan. His

opinion as to the tota l value of the claim was not persuasively rebutted or

contradicted by AHCA ' s counsel on cross examination or by any other

evidence.

31. Bush also testified that he believed that the standard accepted

practice when resolving liens in Florida was to look at the total value of

damages compared to the settlement recovery. This results in a ratio which

may be used to reduce the lien amount sought by AHCA . 1

32. Both Needle and Bush testified about the total value of the claim for

Alcal a' s personal injury medic al malpractice case. They also testified as to a

method that, in their opinions, reasonably allocated a percentage of the

settlement am ount to past medical expenses. Both witnesses reviewed

Alcala ' s medical information and other information before offering a n opinion

regarding her total damages.

33. AHCA offered no convincing or credible evidence to question the

credentials or opinions of either Needle or Bush, or to persuasively assail the

methodology used by Petitioner s .

1 This is also commonly referred to as the proportionality ratio or methodology.

34 . Further, the Agency did not offer any evidence to rebut the testimony

of either Needle or Bush regarding the total value of Alcala ’ s claim or the

proportionality ratio th ey proposed which would reduce Alcala’s claim .

35 . Likewise, AHCA did not offer any alternative expert opinions on the

damage valuation or allocation method proposed by either Needle or Bush.

36 . The undersigned finds that Petitioner s have established by unrebutted

and uncont radicted evidence that the $750,000 .00 recovery is 8.3% of the

total value ($9 million) of P etitioner s' total damages.

37 . Using that same 8.3% and applying the current proportionality

methodology required by the First District Court of Appeal , Petitioner s have

established that 8.3% of $76,973.33, or $6,414.44, is the amount of the

recovery fai rly allocable to past medical expenses and is the portion of the

Medicaid lien payable to AHCA.

C ONCLUSIONS O F L AW

3 8 . AHCA i s the s t a te ag e n c y r e sp on s ibl e f or a d m i n i s te r i ng F l o r i d a ' s

M e di c ai d pr o g r a 4 m. § 09 . 910 ( 2 ) , F l a . St a t.

3 9 . D O A H h a s j u r i sdic t i on of th i s m a tte r , p u rs u a nt to s e c t i on

409 . 910 ( 17 )( b ) . T h e p a r t i es a ck no wl d e g ed th a t the pr o p er s t a n d a r d of pr oof i n

th i s pr o c e e d i ng f or P et i t i oner s i s a pr e p o n d e r a n c e of the e vi d en c e .

40 . " M e d i c ai d i s a c o o p e r a t iv e f e d r e al - s t a te w e l f a r e pr o g r a m pr o vi d i ng

me d i c a l a ss i s t a n c e to nee d y p eo p l . e " Ro b er t s v. Al b t er s on ' s I n c . , 11 9 So. 3d

45 7 , 458 ( F la . 4 th D C A 2 0 12 ) . A l thou g h s t a te p a r t i c i p a t i on i n th i s f e d e r a l

pr o g r am i s v o l unt a r y , on c e a s t a te l e e c ts to p a r t i c i pa te, i t mu s t c om p l y wi t h

the f e d e r al M d e i c ai d law . I d.

4 1 . F e d e ra l l a w r e q u ir es th a t p a r t i c i p a t i ng s t a tes s eek r e i m b u rs ement f or

me d i c a l e x p en s es i n c u rr ed on b eh al f of M e d i c ai d r e c i p i ents w ho la ter r e c o v er

fr om l e ga l ly - l i a bl e t h ir d p a r t i e s .

4 2 . U n d er the U n i ted St a tes Su pr eme C ou r t ' s r e a s on i ng i n Ar k a n sas

D epa r tm e nt of H e a l th a nd H um a n S er v i c e s v. A h l b o r n , 7 54 U. S. 2 6 8 ( 2 0 ) 06 ,

the f e d e r a l M e d i c ai d a nt i - l i en pr o vi s i on a t 4 2 U . S . C . § 13 9 6 p( a )( 1 ) pr oh ibi ts a

M e d i c ai d li en on a ny pr o c e e d s fr om a M e d i c ai d r e c i p i ent ' s to r t s e tt l ement.

4 3 . H o w e v r e , the pr o vi s i ons r q e u i r i ng s t a tes to s eek r e i m b u rs ement of

the i r M e d i c ai d e x p en d i tu r es fr om liabl e th i r d p a r t i e s , a l s o cr e a te a n e x pr e s s

e xc e p t i on to the a n t i - li en la w, a nd a utho r i ze s t a tes to s eek r e i m b u rs ement

fr om the me d i c a l x e p en s e p o r t i on of the r e c i p i ent ' s to r t r e c o v e r y .

4 4 . A s note d , the F e d r e a l M e d i c ai d Ac t m li i ts a s t a te ' s r e c v o e r y t o c e r t ai n

p o r t i ons of the s ett l ement f un d s r e c iv e ed b y the M e d i c ai d r e c i p i ent. I n

Fl o r i d a , t h i s h a s b een r e c ent l y i nte rpr eted b y the F l r o i d a Su pr eme C ou r t to

b e the a mount i n a p e rs on a l i n j u r y s et t l em e nt w h i c h i s fa i r l y a l l o c abl e to p a s t

( not f utu r e) me d i c a l e x p en s e s . G ir a l do v. A g . f or Heal th C a r e A d m i n . , 24 8 So.

3 d 53 , 5 6 ( F la . 2 0 18 ) . 2

4 5 . I n th i s c a s e, Alcala s ett l ed her p e rs on a l i n j u r y c l a i m ag ai n s t th i rd

p a r t i es w ho w r e e l i a b l e to her f or i n j u r i es related to AHCA ' s M e d i c ai d lien .

T he r e f o r e, AHC A ' s l i en m a y b e en f o rc ed aga i n s t Alcala ' s to r t s ett l ement.

4 6 . T he un d e r lyi ng q u e s t i on i n t h i s c a s e, ho w e v r e , i s how mu c h i s AHC A

ent i t l ed to r c e o v er fr om P et i t i oner s f or the me d i c a l payments it p r o vi d ed to

Alcala ?

4 7 . Se c t i on 4 0 9. 9 10 (1 1 ) e s t ab l i s hes a f o r mu l a to d ete r m i ne the a m oun t

AHC A m a y r e c o v er f o r me d i c a l a i ss s t a n c e b ene f i ts p ai d fr om a j u d g ment,

2 Recently, in Gallardo v. Dudek , 963 F.3d 1167 (11th C.A. 2020), th e Eleventh Circuit Court

of Appeal s determined that amounts in a settlement agreement fairly allocable to both past

and future medical expenses are subject to the agency's lien. However, this is contrary to the

Florida Supreme Court's holding in Giraldo . G enerally, state courts are not required to

follow the decisions of intermediate federal appellate courts on questions of federal law.

"Although state courts are bound by the decisions of the United States Supreme Court construing federal law, Chesapeake & O. Ry. Co. v. Martin , 283 U.S. 209, 220 – 221, 51 S.Ct.

453, 75 L.Ed. 983 (1931), there is no similar obligation with respect to decisions of the lower

federal courts." Abela v. Gen. Motors Corp ., 469 Mich. 603, 677 , N.W. 2d 325, 327 (2004), cert.

denied, 54 3 U.S. 870, 125 S.Ct. 98, 160 L.Ed.2d 117 (2004). Decisions of numerous state

supreme courts have similarly held that state courts are under no obligation to follow the

decisions of the lower federal courts. See, e.g., Skelly Oil Co. v. Jackson , 194 Okla. 183, 148

P.2d 182, 185 (1944) ("[D]ecisions of lower federal courts are persuasive and usually followed

unless a conflict between the decisions of such courts makes it necessary to choose between

one or more announced interpretations."). Carnival Corp. v. Carlisle , 953 So. 2d 461 (Fla.

awa rd , or s ett l ement fr om a th i r d p a r t y c . Se t i on 40 9 .9 1 0 ( ) 11 )(f s t a te s , i n

p e r t i nent p a r t:

N ot wi th s t a n d i n g a ny vi o pr s i on i n th i s s e c t i on

to the c ont r a r y , i n the e v a ent of n a c t i on i n to r t

ag a i n s t a t h i r d p a r ty i n w h i c h the r e c i p i ent or

h i s or her l e ga l r e pr e s en t a t iv e i s a p a r ty w h i c h

r e s u l ts i n a j u d g ment, awa r d , or s ett l ement f r o m

a th i r d p a r t y , the a mount r e c o v e r ed s h al l b e

d i s t r ib uted a s f o ll o w s:

1 . Af ter a tto r ne y ' s f e e s a nd t axa b l e c o s ts a s

d e f i ned b y the Fl o r i d a R u l es of C ivi l P r o c e d u r e,

o n e - h al f of the r em ai n i ng r c e o v e r y s h al l b e p ai d to

the ag en c y up to the tot a l a mount of me d i c a l

a ss i s t a n c e p r vi o d ed b y M e d i c ai d.

2 . T he r em a i n i ng a m ount of the r e c o v e r y s h al l

b e p ai d to the r e c i p i ent.

3 . F or p u rp o s e s of c al c u la t i ng the a g en c y ' s

r e c o v e ry of me d i c a l a i ss s t a n c e b ene f i ts p ai d , the

f ee f o r s e r vi c es of a n a tto r n e y r et ai ned b y the

r e c i p i ent or h i s or her l e ga l r e pr e s ent a t iv e s h a l l

b e c al c u la ted a t 2 5 p e rc ent of the j u d g ment,

a w a rd , or s ett l ement.

4 . N ot wi th s t a n d i n g a ny vi pr o s i on of t h i s s e c t i on

to the c ont r a r y , the a g en c y s h al l b e ent i t l e d to all

me d i c a l c o v e r ag e b n e e f i ts up to the to t a l a mount

of me d i c a l a ss i s t a n c e vi o pr d ed b y M e d i c a i d . F or

p u rp o s es of th i s p a r ag r a p h, " me d i c a l c o v e r ag e "

me a ns a ny b ene f i ts un d er he al th i n s u r a n c e, a

he al th m a i nten a n c e o r ga n i z a t i on, a pr e f e rr ed

pr o vi d er a rr a n g eme n t, or a pr e p ai d he al t h c li n i c,

a nd the p o r t i on of b e ne f i t s d e s ig n a ted f o r

me d i c a l p ay ments un d er c v o e r ag e f or w o rk e r s '

c om p en s a t i on, p e rs o n a l i n j u r y pr ote c t i on, a nd

c a s u al t y .

2007). As a result, the undersigned has limited his inquiry to that portion of Alcala's

settlement allocable to past medical expenses.

4 8 . I n e ss en c e, s c e t i on 40 9 .9 1 0 ( ) )(f 11 pr o vi d es th a t the ag en c y ' s r e c o v e r y

f or a M e d i c ai d en li i s the l e ss er o f : ( 1 ) i ts f u l l li e n ; or (2 ) one - h al f of the tot a l

awa rd , a f ter d e d u c t i ng a tto r ne y ' s f ees of 2 5 % of the r e c v o e r y a nd t ax a bl e

c o s t s , not x to e c eed the tot a l a mount a c tu a l l y pa i d b y M e d i c ai d on the

r e c i p i ent ' s b eh al f . S e e A g . f or Heal th Car e A dm i n. v. R ile y , 11 9 So. 3d 51 4

( F la . 2 d D C A 2 0 1 3 ) .

4 9 . H e r e, the p a r t i es ag r eed th a t a pp li c a t i o n of the section 4 0 9 . 9 10 ( 11 )(f)

f o r mu l a to P t e i t i one r s ' s ett l ement w ou l d r e q u i r e p ay ment to A H C A of

$76,973.33.

50 . H o w e v e r , a nother corresponding s c e t i on, section 40 9 . 9 10 ( 17 )( b ) ,

vi o pr outlined below, d s e a met h od b y w h i c h a M e d i c ai d r c e i p i ent m a y

c h a ll en g e the a mount AHC A s ee k s un d er the d e f a u l t f o r mu l a f ound ab o v e a t

s e c t i on 40 9 .9 1 0 ( 11 )(f) .

5 1 . M o r e sp c e i f i c all y , f wi o ll o n g the U n i ted St a tes Su pr eme C ou r t 's

d e c i s i on i n W os v. E . M . A . , 5 6 8 U. S. 7 62 , 6 3 3 (2 013 ) , the Fl r o i d a L e gi s la tu r e

cr e a ted an a d m i n i s t r a t i v e pr o c e s s to c h all en g e a nd d ete r m i ne w h a t p o r t i on of

a j u d g ment, awa rd , or s ett l ement i n a to r t ac t i on i s pr o p r e l y all o c abl e to

me d i c a l e x p en s es a n d , thu s , w h a t p r o t i on o f a p et i t i one r ' s s ett l ement m a y be

r e c o v e r ed to r e i m b u r s e the M e d i c ai d li en he l d b y AHCA . Se c t i on

40 9 .9 1 0 ( 17 )(b ) s t a te s :

A r e c i p i ent m a y c on t s e t the a mount d e s ig n a ted a s

r e c o v e r ed m e d i c a l x e p en s e d a m ag es p ayabl e to

the ag en c y p u rs u a nt to the f r o mu l a sp e c i f i ed i n

p a r ag r a p h ( 11 )(f ) b y f i l i ng a p et i t i on un d er

c h a p ter 12 0 w i th i n 2 1 d ay s a f ter the d a te of

p ay ment of f un d s to the ag en c y o r a f ter the d a te of

p l ac i ng the f u l l a mount of the th i rd - p a r ty

b ene f i ts i n the t r u st a cc ount f o r the b ene f i t of the

ag en c y p u r s u a nt to p a r ag r a p h ( a ) . T he p et i t i on

s h a l l b e f il ed wi th the Di v i s i on of Ad m i n i s t r a t iv e

H e a r i n g s . F or p u rp o s es of c h a p ter 120 , the

p ay ment of f un d s to t h e ag en c y or the p la c ement

of the f u l l a mount of t he th i - rd p a r ty b ene f i ts i n

the t r u s t ac c ount f o r the b ene f i t of the ag en c y

c on s t i t u tes f i n a l a g en c y a c t i on a nd not i c e the r eo f .

Fi n a l o rd er a utho r i ty f or the c pr o e e d i n g s sp e c i f i ed

i n t h i s s u b s e c t i on r e s ts wi th the Divi s i on of

A d m i n i s t r a t i v e H e a r i n g s . T h i s c o pr e d u r e i s the

e x c l u s iv e method f or c h a ll en g i ng the a mount of

th i rd - p a r ty b ene f i ts p ay a bl e to the ag en c y . I n

o rd er to s u cc e s s f u y ll c h a l l e n g e the a mount

p ay a bl e to t he ag en c y , the r e c i pi ent mu s t pr o v e,

b y c l e a r a nd c on vi n c i ng e v i d en c e, th a t a l e ss er

p o r t i on of t h e tot a l r e c v o e r y s hou l d b e all o c a ted a s

r e i m b u rs ement f or p a s t a n d f utu re me d i c a l

e x p en s es th a n the a mount c al c u la ted b y the

ag en c y p u rs u a nt to the f r o mu l a s et f o r th i n

p a r ag r a p h ( 11 )(f ) or th a t M e d i c ai d pr o vi d e d a

l er e ss a mount of me d i c a l a s s i s t a n c e th a n th a t

a s s e r ted b y the ag en c y . [ 3 ]

5 2 . I n s i m p l e t e r m s , i f P et i t i oner s c a n d emon s t r a te b y a pr e p o n d e r a n c e of

the e vi d en c e, th a t the p o r t i on of Alcala's s ett l ement ag r eement f ai r l y

a l l o c abl e a s p a y ment f or p a s t me d i c a l e x p en s e s i s l e s s th a n t he a mount the

ag en c y s ee ks , then the a mount P e t i t i o n er s are o b l iga ted to pa y to A H CA for

its lien w ou l d b e r e d u c e d.

5 3 . Notably, the question of how to fa i r l y a l l c o a te the p a s t me d i c a l

e x p en s e p o r t i on of a n un d i r ff e ent ia ted s ett l ement ag r eement h a s b een the

s u bj e c t of c on s i d r e abl e and ongoing d e ba te. Unfortunately, this h a s not yet

b een s q u a r e l y decid ed b y the U n i ted St a tes Su pr eme C ou r t, as it

acknowledged:

A q ue s t i on the C ou r t h a d no o cc a s i on to r e s o lv e i n

A h lb o r n i s how to d ete r m i ne w h a t p o r t i on of a

s ett l ement r e pr e s e nts p ay ment f or me d i c a l c a r e.

T he p a r t i es i n th a t c a s e s t i p u la ted th a t ab out

6 p e r c ent of r e sp o n d ent A h lb o r n ' s to r t r e c o v e ry

( a ppr o xi m a te l y $ 3 5 , 6 0 0 of a $5 5 0 , 0 0 0 s ett l ement)

r e pr e s ented c om p en s a t i on f or me d i c a l c a r e. I d . ,

a t 274 , 12 6 S. C t. 1 752 . T he C ou r t n o nethe l e s s

a nt i c i p a ted the c o n c r e n th a t s ome s e t t l ements

w ou l d not i n c l u d e a n i t em i zed all o c a t i on. I t

3 The parties agree, however, that the standard of proof is a preponderance of the evidenc e,

not clear and convincing .

al s o r e c o g n i zed the p t ibili ss o y th a t M e d i c ai d

b ene f i c ia r i es a nd to r t f a e s o r s m ig ht c o lla b o r a te to

all o c a te a n a r t i f i c i a ll y l ow p o r t i on of a s ett l ement

to me d i c a l e x p en s e s .

W o s , 5 6 8 U .S. a t 6 2 7 , 634.

5 4 . In an effort to ascertain the proper answer to the " allocation

conundrum , " s e v e ra l Florida D i s t r i c t C ou r t of A pp e a l p o i n i ons h av e relied on

the f o ll o wi ng s t a tement b y t h e Fl o r i d a Su pr eme C ou r t as a basis to settle the

question and discern the correct methodology to establish AHCA ' s lie n :

B e c a u s e w e ho l d t h a t the f e d e r a l M e d i c ai d Act

pr oh ibi ts AHC A fr om p la c i ng a li en on t h e f utu re

me d i c a l e x p en s es p r o t i on of a M e d i c ai d

r e c i p i ent ' s to r t r c e o v e r y , w e r em a nd wi th

i n s t r u c t i ons th a t the Fi rs t Di s t r i c t d i r e c t t he A L J

to r e d u c e A H CA ' s li en a mo unt to $ 1 3 , 8 81 . 7 9 .

A l thou g h a f a c t f i n d er m a y r e j e c t " un c ont r a d i c t e d

te s t i mon y, " the r e mu s t b e a " r e a s on abl e ba s i s i n

the e vi d en c e " f o r the r e j e c t i on. W al d v. G r a i n g er ,

6 4 So. 3 d 1201 , 1 2 0 5 - 0 6 ( Fla. 20 1 1 ) . H e r e, V i l l a

pr e s ented u n c on t r a d i c vi ted e d en c e e s t ab li s h i ng

, $13 8 . 81 7 9 a s the s ett l ement p o r t i on pr p o e r l y

a ll o c a ted to h i s p a s t me d i c a l e x p en s e s , a nd the r e

i s no r e a s on abl e ba s i s i n th i s r e c o r d to r e j e c t

V illa ' s e vi d en c e. F or th i s r e a s on, no f u r ther f a c t

f i n d i ng i s r e q u i r e d. ( Emphasis added)

G iral do , 24 8 S o. 3 d a t 56 .

5 5 . Fortunately, the vexing q ue s t i on th a t had e x i s ted i n t h e la w r e ga rd i ng

an appropriate metho d o l o g y to use h as b een r e s lv o ed b y the F i rs t Di s t r i c t

C ou r t of Ap p e a l i n a s e r i es p of related o i n i on s e . Wh il the Fl o r i d a S u pr eme

C ou r t h a s not i ue ss d a d e f i n i t iv e or e x pr e s s o p i n i on on the m a tte r , the

pr e va i l i ng l a w i n the Fi rs t D is t r i c t C ou rt of App e a l a pp e a r s to b e s et t l e d when

certain evidentiary circumstances exist.

5 6 . I n Ea dy v. A g e n c y f or He a l th C a r e A d m i n i n i s t r a t i on , 27 9 So. 3 d 12 4 9

( Fla . 1 s t D C A 2 0 19 ) ; L arri g u i - N e g r on v. A g e n c y f or H e a l th C a re

A dm i n i s t r ati on , 0 28 S o. 3 d 5 5 0 ( F l a . 1 s t D C A 20 1 9 ) ; a nd M o j ic a v. A g e n c y f or

Hea l th C a r e A dm i n is t rati on , 28 5 So. 3 d 3 9 3 ( Fla . 1 s t D C A 2 019 ) , the Fi rs t

Di s t r i c t C ou r Ap t of p e a l p a ne l s a cc e p ted the p r o p o r t i on al i ty te s t or pro - rata

method a d va n c ed b y P et i t i one r s as one acceptable method of proof . 4

5 7 . M o r e to the point, a p et i t i oner m a y c a rr y his/ her b u rd en of proof and

the tribunal may reduce AHCA ' s lien by the same ratio that petitioner 's

settlement bears to the total damage claim . This may be a cc om p li s hed th r o u g h

the te s t i mony of e x p e r t w i tne ss e s . Most significantly, i f the expert testimony

is not adequat ely contradicted or rebutted , it stands as the proper allocation

in the settlement agreement and sets t he amount AHCA may recover.

5 8 . In this case, there was no evidence presented by AHCA to contest or

contradict the amount of $6,414.44 presented by Petitioner s ' expert as the

fair allocation of past medical expenses in Petitioner s ' settlement.

59 . Counsel for AHCA cross - examined Petitioner s ' experts, but elicited no

compelling information or persuasive evidence to assail their opinions that a

fair allocation of past medical expenses recovered in the Petitioner s '

undifferentiated settlement was $6,414.44.

60 . In short, Petitioner s ' expert testimony concerning a fair allocation of

the settlement agreement was unchallenged by AHCA, without any contrary

or contradictory facts or evidence in the record.

61 . In the aforementioned cases, t he Fi rs t D i s t r i c t C ou r t of A p p e a l has

d ete r m i ned th a t i t w o u l d b e an e rr or to r e j e c t the e x p e r t te s t i mon y , un l e ss

the r e i s a b a s i s i n the r e c o r d to d o s o. T he r e wa s no ba s i s i n t h i s r e c o r d to d o

s o.

6 2 . A s s u c h, a nd ba s e d on th i s r e c o rd , the u n d e rs ig ned i s obliged to apply

Ea dy , L a rri g u i - N e g r on , a nd M o j ica and c on c l u d e s th a t 8.3% of $76,973.33 or

$6,414.44 -- is the a mount d ue t o AHCA.

4 These cases recognize, however, that AHCA m ay present evidence to refute or contradict

the expert testimony offered. Likewise, every case is different. Eady, Larrigui - Negron , and

Mojica do not define the exact par ameters of t he pro - rata formula. N or do they exclude the

possibility that there may be other methods of proof, or facts elicited from the experts o r

other evidence presented, which may warrant an adjustment to the proportionality test or

the total damages projected by the experts.

O RDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is

O RDERED that the Agency for Health Care Administration is entitled to

reco ver $6,414.44 from the amount recovered in Petitioners ' personal injury

matter.

D ONE A ND O RDERED this 18th day of August , 2020 , in Tallahassee, Leon

County, Florida.

R OBERT L. K ILBRIDE

Administrative Law Judge

Divisio n 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 18th day of August , 2020 .

C OPIES F URNISHED :

Alexander R. Boler, Esquire

2073 Summit Lake Drive , Suite 330

Tallahassee, Florida 32317

(eServed)

Jason Dean Lazarus, Esquire

Special Needs Law Firm

2420 South Lakemont Avenue , Suite 160

Orlando, Florida 32814

(eServed)

Sh ena L. Grantham, Esquire

Agency for Health Care Administration

Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Fl orida 32308

(eServed)

Stefan Grow, General 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

Ta llahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

N OTICE O F R IGHT T O J UDICIAL R EVIEW

A party who is adversely affected by this Final Or der 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 administrative appeal with the age ncy 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 d istrict c ourt of

a ppeal in the appellate distri ct where the agency maintains its headquarters

or where a party resides or as otherwise provided by law.