20-003856MTR Deidra Mullins, As Guardian For Jesse Thomas vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, January 7, 2021.

Summary: Petitioner proved Medicaid lien should be reduced to a lesser amount, using pro rata method, but economic report proved true value of case was $24 Million not $30 Million.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

D EIDRA M ULLINS , A S G UARDIAN F OR

J ESSE T HOMAS ,

Petitioner , C ase No. 20 - 3856MTR

vs. ¶23 * A MENDED A S T O L IEN A MOUNT I N

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

A MENDED F INAL O RDER

On November 9, 2020, Administrative Law Judge Hetal Desai of the

Division of Administrative Hearings (DOAH) conducted the final hearing by

Zoom web conferencing.

A PPEARANCES

For Petitioner: Jason Dean Lazarus, Esquire

Special Needs Law Firm

2420 South Lakemont Avenue , Suite 160

Orlando, Florida 32814

For Respondent: Alexander R. Bol er, Esquire

2073 Summit Lake Drive , Suite 330

Tallahassee, Florida 32317

S TATEMENT O F T HE I SSUE

The issue in this proceeding is how much of Petitioner Ô s settlement

proceeds should be paid to Respondent, the Agency for Health Care

Administration (AHCA or Agency), to satisfy AHCA Ô s Medicaid lien under

section 409.910, Florida Statutes (2019). 1

P RELIMINARY S TATEMENT

On August 25, 2020, pursuant to section 409.910(17)(b), Deidra Mullins,

as Guar dian for Jesse Thomas (Petitioner or Mr. Thomas ), filed a Ñ Petition to

Determine Medicaid Ô s Lien Amount to Satisfy Claim against Personal Injury

Recovery by the Agency for Health Care Administration Ò with DOAH. Shortly

thereafter, DOAH notified AHCA of the Petition and assigned the case to the

undersigned Administrative Law Judge.

Petitioner subsequently filed two Amended Petitions without leave of the

Administrative Law Judge. These subsequent petitions amended the

monetary amounts received by Petitioner in settlement. AH C A did not file

objections to these amendments, and therefore the parties proceeded at the

hearing pursuant to the Ñ Second Amended Petition to Determine Medicaid Ô s

Lien Amount to Satisfy Claim against Personal Injury Recovery by the

Agency for Health Care Administration Ò filed on November 5, 2020.

Petitioner challenges the Medicaid lien asserted by AHCA against his

settlement proceeds and asserts the lien should be reduced because he did

not recover an amount necessary to fully compensate him for the full value of

his damages. The Agency argues it must be reimbursed for its Medicaid lien

in the amount of $121,870.81, as calculated pursuant to section

409.910(11)(f).

A pre - hearing conference was held on November 2 , 2020, at which the

parti es discussed the presentation of witnesses and the sealing of the exhibits

1 Unless referenced otherwise, all citations to state and federal statutes, rules , and

regulations are to the 2019 versions .

to maintain confidentiality. The parties also submitted a Joint Pre - Hearing

Stipulation containing nine stipulated facts and two undisputed legal issues.

All stipulations have been incorporated into this Final Order where

appropriate.

The final hearing was held on November 9, 2020. Petitioner offered the

testimony of Deidra Mullins (Petitioner's daughter) , Thomas Roebig, Esquire

(an expert witness for valuation of personal injury c laims), and Laurence

Huttman, Esquire ( Petitioner's personal injury attorney, and an expert in

valuation of personal injury claims) . Petitioner Ô s Exhibits P1 and P3 through

P12 were admitted into evidence without objection. Petitioner Ô s Exhibit P2

was admi tted over the Agency Ô s objections. The Agency did not offer any

witnesses or exhibits.

The Transcript of the final hearing was filed with DOAH on December 7,

2020, and both parties timely filed proposed final orders (PFOs) which have

been considered.

F I NDINGS O F F ACT

Parties, Accident, and Injuries

1. Deidra Mullins brings this action on behalf of her father, Jesse Thomas.

Ms. Mullins serves as Petitioner Ô s legal guardian.

2 . AHCA is the agency responsible for administering Florida Ô s Medicaid

program. S ee § 409.902, Fla. Stat.

3 . On May 9, 2017, Mr. Thomas was riding a motor scooter when he was

involved in an accident with a Freightliner truck.

4 . The accident occurred in Putnam County, but immediately after the

accident, Petitioner was transported by Air Ambulance to Orange Park

Medical Center for multiple serious injuries.

5 . As a result of the accident, Mr. Thomas was hospitalized for

approximately 63 days, from May 9 to July 11, 2017. While hospitalized, he

underwent multiple surgical procedures in cluding spinal surgery and an

above - knee amputation on his left leg.

6 . Mr. Thomas suffered severe physical injuries, including the following: a

spine fracture with a spinal cord injury, multiple rib fractures, neurogenic

shock due to traumatic injury, traumatic hemorrhagic shock, displaced

fracture of the left tibial spine, closed fracture dislocation of left sacroiliac

joint, acute respiratory insufficiency, leukocytosis, acute tubular necrosis,

acute blood loss anemia, acute respiratory acidosis, hype rglycemia,

hemothorax, lacerations, open fracture of the lower leg, head injury,

respiratory failure, cardiac arrest , and shock.

Petitioner Ô s Damages

7 . The parties stipulated that Medicaid provided $121, 87 0.81 toward

Petitioner Ô s past medical expenses ar ising out of the accident. The Agency

has asserted a lien for this amount against Petitioner Ô s settlement proceeds.

8 . Petitioner was rendered a paraplegic as a result of the accident. The

parties have stipulated that Petitioner suffered serious injuries as a result of

the accident from which he will not fully recover and will continue to require

medical treatment for the rest of his life. Petitioner Ô s permanent injuries have

left him unable to adequately care for himself and in need of around the clock

as sistance and supervision of all of his activities of daily living.

9. At the hearing, Petitioner presented a life care plan, a rehabilitation

evaluation, and an economic damages rep ort prepared by Rody Jorb, Ph.D .

All of these reports were admitted into ev idence without objection.

10. Laurence Huttman and Thomas Roebig were tendered as experts

regarding valuation of personal injury damages. Mr. Huttman was also a fact

witness. The Agency did not object to the witnesses, their qualifications, or

the underly ing documentat ion on which they relied.

11 . Both were accepted as experts in the valuation of personal injury

damages. The life care plan establishes Petitioner will require life - long full -

time care. The life care plan set s forth two options for Petitioner Ôs future care:

(1) an assisted living facility the remainder of his life (Option A); or (2) in -

home care in a new home that can accommodate him (Option B). According to

the testimony Mr. Huttman and Petitioner's daughter, Petitioner and his

family prefer Option B, which would allow Petitioner to live and be cared for

at home rather than in a long - term care facility.

12 . As Petitioner Ô s attorney, Mr. Huttman knew Petitioner and was

familiar with his medical records, life care plan, and Dr. Jorb Ô s report.

Mr . Huttman opi ned that the value of Petitioner Ô s damages was $30 million .

Mr. Huttman arrived at that figure by attributing $18 million to future

medical care and $12 million for past and future pain and suffering damages.

13. Mr. Roebig corroborated Mr. H uttman Ô s estimate of the settlement

value of $30 million. He felt that Mr. Huttman Ô s valuation of the pain and

suffering of $12 million was conservative. In his opinion , the non - economic

damages would be approximately $13 million.

14 . Neither Mr. Roebig n or Mr. Huttman included past medical expenses

or past or future wages in their valuation of the settlement value. 2

15 . Mr. Huttman testified tha t the present value of Petitioner Ô s future

medical expenses was approximately $13 million for Option A or $18 million

for Option B. Mr. Roebig also assumed the $18 million figure when forming

his opinion that the case was valued at $30 million. These figures are

inconsistent with the Dr. Jorb's report, which Mr. Huttman referred to in his

testimony.

2 Petitioner argues in his PFO that this $30 million includes Ñ past and future lost wages Ò

(Pet. PFO , p.7 - 8, emphasis added). However, there was no evidence of past or future los t

wages in this case. Rather, Mr. Huttman Ô s testimony established that past and future los t

wages were not considered because Mr. Thomas did not have verifiable past income. Mr.

Ro ebig also testified that the $30 million valuation of Petitioner's case did not include a claim

for past and future wage loss.

16 . The presen t value figures for future medical expenses in Dr. Jorb's

report are much lower than those cited by Petitioner Ô s valuation experts. The

report provides the following :

Economic Damages Summary

JESSE THOMAS

All Figures are in Present Value

Future Losses

LOW AVERAGE HIGH

Future Care Option A $5,535 , 121.87 $5,999,678.87 $6,464,235.87

Future Care Option B $8,349,132.49 $10,227,917.70 $12,106,702.92

17 . Given that neither Mr. Huttman nor M r. Roebig w as offered as an

expert in economics, and the only cr edible evidence of the present value of

future medical expenses is those in D r. Jorb Ô s report, the undersigned finds

that the present value of the future medical expenses are approximately $6.5

million for Option A or $12 million for Option B.

18 . The A g ency did not dispute Petitioner Ô s sincerity in his desire to liv e at

home and leav e the long - term facility where he now resides, the Ñ low v ersus

high Ò amount s estimated in the life plan for future care, or the practicality of

at - home care for the rest of P etitioner Ô s life. Therefore, the undersigned finds

that future medical expenses should be calculated at the high range provided

by D r. Jorb Ô s report for Option B at $12 million.

19 . The Agency did not offer any competing testimony or evidence to

question t he credentials or opinions of either Mr. Huttman or Mr. Roebig.

20 . Relying on Dr. Jorb's report and the life care pla n (which reflect the

high range of $12 million for future medical expense s for Option B ) ; and on

the credible and unimpeached expert test imony of Mr. Huttman (which

establishes the value of non - economic damages in the amount of $12 million ) ,

the undersigned finds that the settlement value of Petitioner Ô s case is $24

million.

The Settlement

21 . The parties stipulated that Petitioner pursue d a personal injury action

against various defendants related to the accident.

22 . The tort actions were settled in July 2020, although the individual

settlement amounts are confidential. 3

23 . AHCA was notified of Petitioner Ô s personal injury action but did not

intervene or join in the litigation. Instead, AHCA asserted a $121,8 7 0.81

Medicaid lien against Petitioner Ô s personal injury action and any resulting

settlement proceeds.

24 . There was no evidence that AHCA made any attempts to set aside,

void, or otherwise dispute Petitioner Ô s settlements.

Allocation of Past Medical Expenditures

25 . The key factual issue in this case is how much of the settlement funds

are available to AHCA for payment of the Medicaid lien. One way to

determine this amount is thro ugh a default formula set forth in section

409.910(11)(f). The parties stipulated that under this default formula,

Petitioner is required to pay AHCA the full amount of the Medicaid lien,

$121,870.81. 4

26 . Alternatively, Petitioner can show that a lesser a mount than the

default amount Ñ should be allocated as reimbursement Ò for past medical

expenses. See § 409.910(17)(b), Fla. Stat.

27 . Here, Petitioner urges the reduction of the Medicaid lien using a Ñ pro

rata Ò approach. This method involves calculating th e ratio of the actual

settlement recovery to the Ñ settlement value Ò amount, and then applying that

ratio to each element of damages.

3 The re was no evidence related to the taxable costs incurred in securi ng the settlement

amounts .

4 Section 409.910(11)(f) esta blishes the Agency Ô s default recovery amount for a Medicaid lien:

the default amount is equal to one - half of the total award, after deducting attorney Ô s fees of

25 percent of the recovery and all taxable costs, up to, but not to exceed, the total amount

ac tually paid by Medicaid on the recipient Ô s behalf.

28 . Based on the above finding that the settlement value ratio is $24

million, the actual settlement recovery to settlement value is 20 percent.

29 . AHCA did not challenge Petitioner on the Ñ pro rata Ò approach used to

arrive at the amount of the settlement that could be reasonably attributed to

the Medicaid lien. Rather, it argues that the Ñ pro rata Ò percentage should be

appli ed to all past medical expenses (not just the amount of past medical

expenses paid by AHCA) to calculate the amount available to AHCA to

satisfy the lien.

30 . There is no credible evidence, however, establishing the amount for

past medical expenses, other than the amount of the AHCA lien for

Petitioner Ô s past medical expenses. Contrary to AHCA Ô s assertion in its PFO

( Resp. PFO , p.7 - 8, n.4), there was no stipulation that the past medical

expenses were $1.5 million. Rather, at the hearing, Mr. Huttman testif ied he

thou ght $6 million was billed for past medical expenses but noted this

amount did not include any adjus tments or reductions. Mr. Huttman believed

that Medicare and Medicaid paid approximately $1.5 million in past medical

expenses but noted other ent ities also contributed toward Petitioner Ô s past

medical expenses and that there remained outstanding unpaid past medical

expenses. Other than the $121,870.8 1 figure stipulated to by the par ties,

there was no evidence regarding what other amounts were still owing and to

whom , or what other amounts had been paid and by whom . Had AHCA

wanted to use the total past medical expenses for calculating how much was

available from the settlement for the lien, it could have offered credible

evidence regarding this figu re. It did not.

31 . Applying the Ñ pro rata Ò percentage to AHCA Ô s lien amount would

result in the recovery of $24,374.16 for the Medicaid lien.

C ONCLUSIONS O F L AW

32 . The Division of Administrative Hearings has jurisdiction over the

subject matter and parties in this case pursuant to sections 120.569, 120.57,

and 409.910, Florida Statutes.

33 . As explained by the Florida Supreme Court in Giraldo v. Agency for

Health Care Administration , 248 So . 3d 53, 55 (Fla. 2018), Medicaid is a joint

governmental pro gram designed to help participating states provide medical

treatment for their residents who cannot afford to pay for treatment. 5

34 . In order for the State of Florida to take advantage of federal Medicaid

funds for patient care costs, it must comply with the federal regulations

requiring it to recover its expenditures for m edical expenses from third - party

sources, such as settlement s . See 42 U.S.C. § 1396a(a)(25)(B); Ahlborn , 547

U.S. at 284 - 85. At the same time, the Medicaid statute limits a state Ô s righ t

to collect reimbursement of expended funds to only those third - party monies

that can be allocated for medical care. 42 U.S.C. § 1396p(a)(1); Ahlborn , 547

U.S. at 285 - 86.

35 . As mentioned above, the Florida Legislature set forth a Ñ default

formula Ò to det ermine the amount AHCA may recover for past Medicaid

payments from a judgment, award, or settlement from a third party. See

§ 409.910(11)(f), Fla. Stat.

36 . Alternatively, the statute provides Medicaid recipients with a method

for challenging this default amount by initiating an administrative

proceeding pursuant to section 409.910(17)(b), which states:

In order to successfully challenge the amount

designated as recovered medical expenses, the

recipient must prove, by clear and convincing

5 Although participation in Medicaid is voluntary, all states take advantage of this funding

source for the medical needs of its citizens. See Ark. Dep Ô t of Health & Human Servs. v.

Ahlborn , 547 U.S. 268, 275 (2006) ( Ñ States are not required to participate in Medicaid, but all

of them do. The program is a cooperative one; the Federal Government pays between 50%

and 83% of the costs the State incurs for patient care, and, in return, the State pays its

porti on of the costs and complies with certain statutory requirements for making eligibility

determinations, collecting and maintaining information, and administering the program. Ò ) .

evidence, that th e portion of the 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).

Fla. Stat. § 409.910(17)(b).

37 . Petitioner erroneously argues that the statutory burden of proof of

clear and convincing evidence does not apply. Instead he asserts his burden is

a preponderance of the evidence, Ñ because of the stipulation of the parties

and the rulings in Gallardo v. Senior , U.S. District, Ca se No. 4:16 - cv - 116 -

MW - CAS (N.D. Fla.2017) as well as Giraldo v. Agency for Health Care

Administration , 248 So. 3d 53 (F la. 2018). Ò (Pet. PFO , p.13). AHCA does not

address the burden in its PFO .

38 . First, contrary to Petitioner Ô s statement above, the parti es did not

stipulate to the burden of proof.

39 . Second, and more importantly, the federal case cited by Petitioner,

Gallardo , was reversed in June 2020 by the Eleventh Circuit and is no longer

good law. Gallardo by & through Vassallo v. Dudek , 963 F.3d 1 167 (11th Cir.

2020). In direct contradiction to Petitioner Ô s assertions, the federal appellate

court upheld the clear and convincing burden found in section 409.910:

We reject the district court Ô s assertions that

Florida Ô s allocation is Ñ nearly impossible to rebut Ò

and Ñ quasi - irrebuttable. Ò Nothing in the statute or

the record supports those assertions. Ñ Clear and

convincing evidence Ò is not an Ñ impossible Ò

evidentiary standard. It is a familiar and widely

used standard of proof in Florida civil proceeding s,

requiring evidence Ñ of such weight that it produces

in the mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the truth of the

allegations sought to be established. Ò S. Fla. Water

Mgmt. Dist. v. RLI Live Oak, LLC , 139 So. 3d 869,

872 Ï 73 (Fla. 2014) (listing types of cases where this

standard applies). Most importantly for purposes of

our preemption analysis, nothing about this

standard of proof stands in clear conflict with

federal law under Wos [ v. E.M.A. ex rel. Johnson, 56 8

Id. at 1182.

40 . As such, the burden is on Petitioner to establish by clear and

convincing evidence that an amount less than the default amount should be

used to satisfy AHCA Ô s lien.

41 . Although not th e only method, Florida courts have consistently held

that where there is competent, substantial evidence supporting the value of

the various elements of damages, the Ñ pro rata Ò approach employed by

Petitioner Ô s experts is one way to support the allocation of a smaller portion

of a settlement for past medical expenses than the portion claimed by AHCA.

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

Rodriguez , 294 So. 3d 441 (Fla. 1st DCA 2020); Mojica v. Ag . for Health Care

Admin. , 285 So. 3d 393 (Fla. 1st DCA 2019).

42 . This case is factually similar to Eady v. State , 279 So. 3d 1249 (Fla. 1st

DCA 2019). In Eady , the Medicaid recipient settled his lawsuit, but, as in this

case, the terms of the settlement were confidential. The petitio ner presented

unrebutted expert testimony regarding the total value of his damages and

the appropriate share of the settlement funds that should be allocated to past

medical expenses. Id. at 1252 - 53. The First District Court of Appeal held that

despite the Administrative Law Judge Ô s finding that the expert spoke in

Ñ generalities, speculations, and reasonableness as to the settlement in

relation to the Medicaid lien, Ò the petitioner had met his burden. Relying on

Giraldo , the Eady court noted that the Agency had not put on any

contradictory evidence, and the Administrative Law Judge could not ignore

the expert Ô s testimony establishing the appropriate share of settlement funds

properly allocated to past medical expenses.

43 . Similarly, in Mojica , the court he ld that a pro rata methodology is

appropriate where a petitioner presents Ñ unrebutted and unimpeached expert

testimony concerning the full value of her damages ... [and] AHCA did not

present any evidence contesting the pro rata methodology used to calculat e

the [ ] allocation to past medical expenses. Ò Mojica , 285 So. 3d at 396

(citations omitted).

44 . Here, Petitioner Ô s experts Ô testimony regarding future medical

expenses was contradicted by Dr. Jorb's report, but otherwise their testimony

was not impeach ed or rebutted. The Agency presented no witnesses or

evidence of its own. As such, Petitioner has proved that $ 24,374.16

represents the amount that can be fairly attributable to past medical

expenses and is available to the Agency for repayment on its Medi caid lien.

O RDER

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

ORDERED that the Agency for Health Care Administration may recover

$ 24,374.16 from the settlement proceeds paid to Jesse Thomas in satisfaction

of its Medicaid lien.

D ONE A ND O RDERED this 7 th day of January , 2021 , in Tallahassee, Leon

County, Florida.

S

H ETAL D ESAI

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 7 th day of January , 2021 .

C OPIES F URNISHED :

Alexander R. Boler, Esquire

Suite 330

2073 Summit Lake Dr ive

Tallahassee, Florida 32317

(eServed)

Shena L. Grantham, Esquire

Agency for Health C are Administration

2727 Mahan Drive, Building 3, Room 340713

Tallahassee, Florida 32308

(eServed)

Jason Dean Lazarus, Esquire

Special Needs Law Firm

Suite 160

2420 S outh Lakemont Avenue

Orlando, Florida 32814

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shevaun L. Harris, Acting Secretary

Agency for Health C are Administ ration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Bill Roberts, Acting General Counsel

Agency for Health C are Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Heal th C are 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

renditio n 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 o therwise provided by law.