20-003511MTR Mitchell Miller vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, October 19, 2020.

Summary: Petitioner proved by a preponderance of the evidence that AHCA's Medicaid lien should be reduced to $3,438.07.

for Health Care Administr ation (AHCA), to satisfy AHCA’ s Medicaid lien

under section 409.910, Florida Statutes.

P RELIMINARY S TATEMENT

On August 7 , 2020, Petitioner, Mitchel l Miller, filed a Petition to

Determine Medicaid’ s Lien Amount to Satisfy Claim Against Personal Injury

Recovery by the Agency for He alth Care Administration ( Petition ) to

challenge AHCA ’ s placement of a Medicaid lien in the amount of $ 108,456.65

on Petitioner ’ s $ 1,110,000 .00 settlement proceeds from a third party.

The parties filed a Joint Pre - Hearing Stipulation that contained

stipu lated facts for which no further proof would be necessary. Those

stipulated facts have been incorporated into the Findings of Fact below, to

the extent relevant .

The final hearing was held on September 23, 2020 , with both parties

present. At hearing, Peti tioner ’ s Exhibits 1 through 4 were admitted.

Petitioner presented the testimony of Mitchell Miller and two expert

witnesses: Kevin McLaughlin , Esquire, and Adam Fernandez , Esquire.

AHCA did not call any witnesses and did not offer any exhibits at the

heari ng.

The parties did not order a transcript. Both parties timely filed Proposed

Final Order s , which ha ve been duly considered in preparing this Final Order .

F INDINGS O F F ACT

Stipulated Facts

1. On July 13 , 2018, Mr. Miller was involved in an automobile ac cident in

Sarasota County , Florida . Mr. Miller was struck from behind while stopped

at a red light on Bee Ridge Road. At the ti me of the crash, the tortfeasor was

driving under the influence of alcohol.

2. Immediately after the accident, Mr. Miller was tr eated at Sarasota

Memorial Hospital for multiple serious injuries including a T2 complete

spinal cord injury, C5 - C7 incomplete spinal cord injury, brachial plexus

injury, loss of majority of function to dominant left hand, intracranial

hemorrhage, acetabul ar fracture, basilar skull fracture, femur fracture,

thoracic spine fracture, rib fractures, as well as a closed fracture of the pelvis.

3. As a result o f the accident, Mr. Miller cannot control his blood pressure,

cannot sweat, and lacks control of his b owels and bladder due to the spinal

cord injury. While hospitalized, he underwent a PEG placement and

tracheostomy.

4. As a result of the accident, Mr. Miller was rendered a paraplegic. Due to

the severity of his injuries, Mr. Miller has required intermit tent medical care

for his significant injuries.

5. Mr. Miller brought a personal injury action to recover for all the

damages related to the incident. This action was brought against various

defendants.

6. Since this incident and the resulting spinal cor d injury, Mr. Miller has

been in a permanently disabled state , requiring assistance with most

activities of daily living.

7. In May of 2020, after litigation was commenced, Mr. Miller settled his

tort action.

8. AHCA was properly notified of Mr. Miller’s law suit against the

defendants. AHCA indicated it had paid benefits related to the injuries from

the incident in the amount of $108,456.65. AHCA has asserted a lien for the

full amount it paid, $108,456.65, against Mr. Miller’s settlement proceeds.

9. AH CA has maintained that it is entitled to application of the formula in

section 409.910 (11)(f) , to determine the lien amount.

10. Application of the statutory formula to Mr. Miller’s $1,110,000 .00

settlement would result in no reduction of the lien, given the amount of the

settlement.

11. AHCA paid $108,456.65 for medical expenses on behalf of Mr. Miller,

related to his claim against the liable third parties.

12. The parties stipul ated that AHCA is limited in this section

409.910(17)(b) proceeding to the past medical expenses portion of the

recovery.

Evidence at the Hearing

13 . Mr. Miller testified about the extent of the injuries he suffered as a

result of the automobile accident that was the subject of the perso nal injury

lawsuit. As a 23 year old, who is confined to a wheelchair, Mr. Miller testified

about the severe, permanent injuries he endures and the tremendous and permanent impact it has and will have on his life. His testim ony was detailed

and compelling. H e explained his recent and upcoming surg eries. He also

explained the effects that his accident has had on his family, particularly his mother who helps him meet life’s daily routines.

14 . Petitioner called two experts to testify on his behalf: Mr. Fernandez,

Petitioner’s personal injury attorney in the underlying case; and

Mr. McLaughlin, an experienced board - certified civil trial attorney. Both

Mr. Fernandez and Mr. McLaughlin were accepted as experts on the

valuation of personal injury damages , without objection by AHCA .

15 . Mr. Fernandez is an attorney at Maney & Gordon, P.A., in Tampa,

Florida. He is admitted to practice law in Florida and has been practicing for

12 years. In addition to Petitioner’s case, he has represented clients in

personal injury matters, including cases involving catastr ophic injuries

similar to that of Mr. Miller ’s .

16 . Mr. Fernandez regularly evaluates the damages suffered by injured

people such as Mr. Miller. He is familiar with Mr. Miller’s damages from his r epresentation of Mr. Miller in his personal injury lawsuit.

17 . Mr. Fernandez testified as to the difficulties he encountered in the

personal injury suit on behalf of Mr. Miller, which included the inherent

difficulties of dram shop claims 2 and the limited insurance coverage

available to fully compensate Mr. Mil ler for his injuries.

18 . Through his investigation, Mr. Fernandez sought out all of the

available insurance coverage and filed a complaint in Sarasota County circuit

court on behalf of Mr. Miller. As part of his work - up of the case, he evaluated

all elem ents of damages suffered by Mr. Miller. After litigating the case for

some time, Mr. Fernandez negotiated a total settlement for the insurance

limits of $1,110,000.00 against the defendants.

19 . Mr. Fernandez provided detailed testimony regarding how Mr. M iller’s

accident occurred and the extent of his injuries. Mr. Fernandez testified

regarding the process he followed to evaluate and arrive at his opinion on the total value of the damages suffered in Mr. Miller’s case. Through the course

of his representat ion, he reviewed all the medical information; evaluated the

facts of the case; determined how the accident occurred; reviewed all records

and reports regarding the injuries Mr. Miller suffered; analyzed liability

issues and fault; developed economic damage s figures; and also valued non -

economic damages such as past and future pain and suffering , l oss of capacity

to enjoy life, scarring and disfigurement, and mental anguish.

20 . Mr. Fernandez testified about the impact of the accident on

Mr. Miller’s life. As a result of his injuries, Mr. Miller can no longer perform

many of the normal activities of daily living for himself and he has limited mobility.

2 Florida’s dram shop law, as set forth in section 768.125, Florida Statutes, provides that “ [a]

person who sells or furnishes alcoholic beverages to a person of lawful drinking age shall not

thereby become liable for injury or damage caused by or resulting from the intoxication of

such person, except that a person who willfully and unlawfully sells or furnishes alcoholic

beverages to a person who i s not of lawful drinking age or who knowingly serves a person

habitually addicted to the use of any or all alcoholic beverages may become liable for injury or damage caused by or resulting from the intoxication of such minor or person.”

21 . Based on Mr. Fernandez’s evaluation of Petitioner’s case, he opined

that the total value of Mr. Miller’ s damages was conservatively estimated at

$35 million. The valuation of the case includes past medical expenses, future

medical expenses, economic damages, loss of quality of life, and pain and

suffering. Mr. Fernandez testified that the non - economic damag es were the

greatest element of loss or damage sustained by Mr. Miller, and therefore the

largest driver of the valuation and greatest portion of damages recovered in

the settlement.

22 . Mr. Fernandez testified that his estimation of total damages is base d

upon his experience as a trial lawyer , and would be what he would have

asked a jury to award related to Mr. Miller’s damages had the case gone to

trial.

23 . Mr. Fernandez opined that in comparing the $35 million valuation of

the damages in the case to th e total settlement proceeds of $1,110,000.00

(that is, by dividing $1,110,000.00 by $35,000,000.00), Mr. Miller recovered

only 3.17 percent of the full value of his claim.

24 . Mr. Fernandez opined that, as a result, the allocation formula is 3.17

percent. Mr. Fernandez went on to testify that he routinely uses a pro - rata

approach with lien holders in his day - to - day practice of resolving liens in

Florida. The past medical expenses of Mr. Miller are $108,456.65. 3 That

figure multiplied by 3.17 percent would result in recovery of $3,43 8 .07 4

allocated to past medical expenses.

25 . Mr. Fernandez’s testimony was not contradicted by AHCA, and ,

mathematical error aside, was persuasive on this point.

3 There is no competent substantial evidence in the record that Mr. Miller’s past medical

expenses amount to more than the sum of AHCA’s Medicaid lien.

4 The undersigned finds that 3.1 7 percent of $108,456.65 is $3,438.07, not $3,433.07, as

testified to by Petitioner’s witnesses and presented in Petitioner’s Proposed Final Order.

26 . Mr. McLaughlin is a 23 - year practicing plaintiff ’s attorney w ith

Wagner & McLaughlin. Mr. McLaughlin and his firm specialize in litigating

serious and catastrophic personal injury cases throughout central Florida.

27 . As part of his practice, Mr. McLaughlin has reviewed numerous

personal injury cases in so far as damages are concerned . Mr. McLaughlin

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

relevant damages in catastrophic personal injuries, and he regularly

evaluates the types of damages suffered by those who are catastrophically

i njured.

28 . Mr. McLaughlin testified as to how he arrived at his valuation opinion

in this case by explaining the elements of damages suffered by Mr. Miller.

Similar to Mr. Fernandez, he stated that the greatest element of loss Mr.

Miller suffered was non - economic damages. He testified that his estimates for

the future care and pain and suffering damages of Mr. Miller would be in the high eight figures.

29 . Mr. McLaughlin testified that, in his opinion, the total damages

suffered by Mr. Miller are conserva tively estimated at $38,350,000.00.

Mr. McLaughlin testified that it is a routine part of his practice to conduct round - table discussions about cases with other attorneys at his firm. His

discussions regarding Mr. Miller’s case with attorneys in his firm resulted in

a consensus that Mr. Miller’s total damages had a value in excess of $38

million. He agreed with the $35 million total valuation testified to by Mr.

Fernandez

for purposes of the lien reduction formula.

30 . Mr. McLaughlin also testified t hat 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 (that is, dividing $1,110,000.00 by $35,000,000.00). This resulted in Mr. Miller recovering on ly

3.17 percent of the full value of his claim, and, as such, a 3.17 percent ratio may be used to reduce the lien amount sought by AHCA.

31 . Both Mr. Fernandez and Mr. McLaughlin testified about the ultimate

value of the claim, measured in damages, for Mr . Miller’s personal injury

liability case. They also testified as to a method that, in their opinions,

reasonably allocated a percentage of the settlement amount to past medical

expenses. Both witnesses reviewed Mr. Miller’s medical information and

other i nformation before offering an opinion regarding his total damages.

3 2 . Both Mr. Fernandez and Mr. McLaughlin’s approaches to evaluating

the damages suffered by Mr. Miller and the resulting ratio for reducing past

medical expenses were conservative. The und ersigned finds that both were

credible, persuasive, and well qualified to render their opinions.

33 . The valuation opinions by Mr. Fernandez and Mr. McLaughlin as to

the total value of the claim were not rebutted or contradicted by AHCA on

cross examinati on or by any other evidence. AHCA offered no evidence to

question the credentials or opinions of either Mr. Fernandez or

Mr. McLaughlin, or to dispute the methodology they proposed which would

reduce Mr. Miller’s claim.

34 . AHCA did not offer any alternati ve expert opinions on the damage

valuation or allocation method proposed by Mr. Fernandez or Mr. McLaughlin.

35 . The undersigned finds that Petitioner has established by persuasive,

unrebutted , and uncontradicted evidence that the $1,110,000.00 recovery i s

3.17 percent of the total value ($35 million) of Petitioner’s total damages.

36 . A pplying the proportionality methodology, Petitioner has established

that 3.17 percent of $108,456.65, or $3,438.07, is the amount of the recovery

fairly allocable to past medical expenses and is the portion of the recovery

payable to AHCA , pursuant to its Medicaid lien .

37 . Petitioner proved by a preponderance of the evidence that Respondent

should be reimbursed $3,438.07, which is the portion of the settlement

proceeds fai rly all ocable to past medical expenses.

C ONCLUSIONS O F L AW

38 . DOAH has jurisdiction over the parties and the subject matter of this

cause pursuant to sections 120.569, 120.57(1), and 409.910(17)(b) .

39 . The parties stipulat ed that Petitioner ’ s burden of proof in this

proceeding is by a preponderance of the evidence.

4 0 . AHCA is the state agency responsible for administering Florida ’ s

Medicaid program. § 409.910(2), Fla. Stat.

41 . The Medicaid program “ provide[s] federal financial assistance to

States tha t choose to reimburse certain costs of medical treatment for needy

persons. ” Harris v. McRae , 448 U.S. 297, 301 (1980). Though participation is

optional, once a State elects to participate in the Medicaid program, it must

comply with federal requirements. Id.

42 . One of the conditions, under f ederal law , requires that participating

states seek reimbursement for medical expenses incurred on behalf of Medicaid recipients who later recover from legally - liable third parties.

See Ark. Dep ’ t of Health & Human Ser vs. v. Ahlborn , 547 U.S. 268, 276

(2006) .

43 . To carry out this federal requirement, t he Florida Legislature enacted

section 409.910, which authorizes and requires the State to be reimbursed for

Medicaid funds paid for a recipient ’ s medical care when that recipient 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).

44 . T he Florida Legislature has authorized AHCA to recover the monies

paid from any third party, the recipient, the provider of the recipient ’ s

medical services, and any person who received the third - party benefits.

§ 409.910(7), Fla. Stat.

45 . AHCA ’ s effort to recover the full amount paid for medical assistance is

facilitated by section 409.910(6)(a ), which provides :

(6) When the agency provides, pays for, or becomes

liable for medical care under the Medicaid program,

it has the following rights, as to which the agency

may assert independent principles of law, which shall nevertheless be construed to gether to provide

the greatest recovery from third - party benefits:

* * *

(a) The agency is automatically subrogated to any

rights that an applicant, recipient, or legal

representative has to any third - party benefit for

the full amount of medical assistance provided by Medicaid. Recovery pursuant to the subrogation

rights created hereby shall not be reduced,

prorated, or applied to only a portion of a judgment, award, or settlement, but is to provide full recovery by the agency from any and all thi rd - party benefits.

Equities of a recipient, his or her legal

representative, a recipient ’ s creditors, or health

care providers shall not defeat, reduce, or prorate

recovery by the agency as to its subrogation rights granted under this paragraph.

* * *

(c) The agency is entitled to, and has, an automatic

lien for the full amount of medical assistance

provided by Medicaid to or on behalf of the

recipient for medical care furnished as a result of any covered injury or illness for which a third part y

is or may be liable, upon the collateral, as defined

in s. 409.901 .

46 . The amount to be recovered by AHCA from a judgment, award, or

settlement from a third party is initially determined by the formula in section

409.910(11)(f). Ag. for Health Care Adm in. v. Riley , 119 So. 3d 514, 515 n.3

(Fla. 2d DCA 2013). Section 409.910(11)(f) provides:

Notwithstanding any provision in this section to

the contrary, in the event of an action in tort

against a third party in which the recipient or his

or her legal re presentative is a party which results

in a judgment, award, or settlement from a third

party, the amount recovered shall be distributed as

follows:

1. After attorney ’ s fees and taxable costs as

defined by the Florida Rules of Civil Procedure,

one - half of the remaining recovery shall be paid to

the agency up to the total amount of medical

assistance provided by Medicaid.

2. The remaining amount of the recovery shall be

paid to the recipient.

3. For purposes of calculating the agency ’ s

recovery of medical assistance benefits paid, the fee

for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25 percent of the judgment, award, or

settlement.

4. Notwithstanding any provision of this section

to the con trary, the agency shall be entitled to all

medical coverage benefits up to the total amount of medical assistance provided by Medicaid. For

purposes of this paragraph, “ medical coverage ”

means any benefits under health insurance, a health maintenance organ ization, a preferred

provider arrangement, or a prepaid health clinic,

and the portion of benefits designated for medical

payments under coverage for workers ’

compensation, personal injury protection, and casualty.

47 . Here, the parties agreed that applic ation of the formula in section

409.910(11)(f) to Petitioner ’s settlement would require payment to AHCA of

$ 108,456.65 , the full amount of its Medicaid lien. However, section

409.910(17)(b) provides a method by which a Medicaid recipient may contest

the am ount designated as recovered medical expenses payable under section

409.910(11)(f).

48 . F ollowing the United States Supreme Court ’ s decision in Wos v.

E.M.A. , 568 U.S. 627, 633 (2013), the Florida Legislature created an

administrative process to challenge and determine what portion of a

judgment, award, or settlement in a tort action is properly allocable to

medical expenses and, as a result , what portion of a petitioner ’ s settlement

may be recovered to reimburse the Medicaid lien held by AHCA. Section

409 .910(17)(b) states:

If federal law limits 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 paragraph

(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

exclusiv e 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,

[5] that the

portion of th e total recovery which should be

allocated 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 amount of medical assistance than that asserted by the agency.

49 . If Petitioner can demonstrate by a preponderance of the evidence, that

the portion of Mr. Miller’ s settlement agreement fairly allocable as payment

for pas t medical expenses is less than the amount the agency se eks, then the

amount Petitioner is o bligated to pay to AHCA for its lien would be reduced.

5 0 . The Florida Supreme Court has determined that the state ’ s recovery of

certain portions of settlement fun ds received by a Medicaid recipient to be the

amount in a personal injury settlement fairly allocable to past medical

expenses. Giraldo v Ag. for Health Care Admin. , 248 So. 3d 53, 56 (Fla. 2018).

T he parties stipulated that AHCA is restricted to recovery from past medical

expenses, which the undersigned accepts.

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

contradict the reduced amount presented by Petitioner’s expert s as the fair

allocation of past me dical expenses from Petition er’s settlement.

52 . AHCA cross - examined Petitioner ’s experts, but elicited no compelling

information or persuasive evidence to refute their opinions that a fair

allocation of pa st medical expenses recovered from the Pe titioner’s settlement

was $3,438 .07 . 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.

53 . Where uncontradicted testimony is presented by the recip ient, the

factfinder must have a “ reasonable basis in the record ” to reject it. Giraldo ,

248 So. 3d at 56 (quoting Wald v. Grainger , 64 So. 3d 1201, 1205 - 06 (Fla.

2011)). Here, the testimony was clear, credible, and uncontradicted: there is

no reasonable b asis to reject the testimony of either Mr. Fernandez or

Mr. McLaughlin .

54 . The full amount of all past medical expenses, totaling $ 108,456.65 ,

must be considered in calculating the amount payable to AHCA.

[5] Petitioner and AHCA agreed that the burden of proof for a Medicaid recipient to

successfully contest the amount payable to AHCA in this section 409.910(17)(b) proceeding is

a preponderance of the evidence.

The only evidence at the hearing was offered by P etitioner and supported a

finding that the past medical expenses amounted to Medicaid’s lien of

$108,456.65. Petitioner proved by a preponderance of the evidence th at the

settlement proceeds of $1 , 110 ,000.00 represent only 3.17 percent of

Petitioner ’ s clai m valued at $ 35 million, which both testifying experts

reasonably believed was a c onservative valuation. Therefore, AHCA ’ s

Medicaid lien should be reduced to the ratio of Petitioner ’ s actual recovery to

the total value of his claim.

55 . The application of the 3.17 percent ratio to Petitioner ’ total past

medical expenses of $ 108,456.65 results in a sum of $ 3,438.07 , which is the

portion of the settlement proceeds reasonably and proportionately allocable to

Mr. Miller’ s past medical expenses to satisfy AHCA ’ s lien.

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

$ 3,438.07 from Petitioner ’ s settlement proceeds in satisfaction of its Medicaid

lien .

D ONE A ND O RDER ED this 1 9 th day of October , 2020 , in Tallahassee, Leon

County, Florida.

S

J ODI - A NN V. L IVINGSTONE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Flor ida 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 1 9 th day of October , 2020 .

C OPIES F URNISHED :

Shena L. Grantham, Esquire

Agency for Health Care Administrati on

Building 3, Room 340713

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Jason Dean Lazarus, Esquire

Special Needs Law Firm

2420 South Lakemont Avenue , Suite 160

Orlando, Florida 32814

(eServed)

Alexander R. Boler, Esquire

2073 Summit Lake Dri ve , Suite 330

Tallahassee, Florida 32317

(eServed)

Richard J. Shoop, Agency Clerk

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)

Bill Roberts, Acting General Counsel

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)

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

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 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 d istrict c ourt of

a ppeal in the appellate district where the agency maintains its headquarters

or where a party resides or as ot herwise provided by law.