20-003907MTR Jonathan Touchton vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, December 8, 2020.

Summary: Petitioner proved pro rata calculus was fair way to determine amount of personal injury claim damages he recovered that were allocable to past medical expenses paid by Medicaid.

S TATEMENT O F T HE I SSUE

What amount of the person al injury claim settlement of Petitioner,

Johnat han Touchton, must be paid to Respondent, Agency for Health Care

Administration (Agency), to satisfy the Agency ' s Medicaid Lien?

P RELIMINARY S TATEMENT

On August 31, 2020, Mr. Touchton filed a Petition to Determine

Medicaid's Lien Amount to Satisfy Claim against Person al Injury Recover y

by the Agency for Health Care Administration. The matter was assigned to

the undersigned to conduct a formal administrative hearing and issue a final

order. The matter was set for hearing to begin on November 13, 2020. It w as

held as scheduled. The parties filed a pre - hearing stipulation that included a

statement of nine admitted and undisputed facts. They are adopted in Findings of Fact one through nine , without substantive alteration.

At the final hearing, Mr. Touchton t estified and presented testimony from

Douglas R. Beam, and Ken McKenna. Mr. Touchton's Exhibits 1 through 5 were admitted into evidence without objection. The Agency did not offer any

evidence, advising that any exhibits it needed were among those offered by

Mr. Touchton. The parties timely filed Proposed Final Orders. They have

been considered in the preparation of this Order.

F INDINGS O F F ACT

Admitted and Stipulated Facts

1. On November 2, 2014 , Mr. T ouchton was punched in the face while

outside the Deba uchery Bar in downtown Melbourne. After being struck in

the face, M r . T ouchton fell backwards hitting his head. Immediately after the

assault, he was treated at Holmes Regional Medical C enter for a skull

fracture and brain bleed. Brain surgery, a right ven triculostomy, was

performed that same day by Dr. Paine. Dr. Paine performed two more

surgeries on Mr. Touchton 's brain including removal and reattachment of

part of the skull to relieve pressure from swelling.

2. As a result of the accident, Mr. Touchton s uffered the following injuries:

traumatic brain injury; trauma induced epilepsy ; seizure disorder ; short - term

memory loss ; slurred speech ; ataxia ; fatigue ; and low testosterone.

Mr. Touchton was treated at Brooks Rehabilitation after his release from

Holme s Regional on December 22, 2015. He was fully discharged on

February 25, 2015. Since that time, he has had continuing medical care for

his significant injuries.

3. Mr. Touchton brought a personal injury action to recover for all the

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

defendants.

4. As a result of the alleged negligence of the defendants, Mr. Touchton

suffered a severe traumatic brain injury and other physically disabling

conditions. Since this incident and the resultin g severe brain injury,

Mr. Touchton has been in a permanently disabled state requiring assistance

with many activities of daily living.

5. In December 2019, Mr. Touchton , after litigation was commenced,

settled his tort action.

6. The Agency was properly n otified of Mr. Touchton ' s lawsuit against the

defendants and indicated it had paid benefits related to the injuries from the

incident in the amount of $112,938.81. The Agency has asserted a lien for the

full amount it paid, $112,938.81, against Mr. Touchto n 's settlement proceeds.

7. The Agency has maintained that it is entitled to application of the

formula in section 409.910, Florida Statutes (2019) , to determine the lien

amount. 1 Applying the statutory reduction formula to this particular

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

settlement.

1 All citations to Florida Statutes are to the 2019 codification unless noted otherwise.

8. Mr. Touchton 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. Mr . Touchton ' s permanent injuries have left him

unable to adequately care for himself and in need of assistance and

supervision of all activities of daily living.

9. The Agency paid $112,938.81 on behalf of Mr. Touchton , related to his

claim against the liab le third parties.

Unrebutted and Unimpeached Testimony

10. Mr. Touchton relies upon the opinion testimony of two witnesses to

prove what portion of the settlement amount is fairly allocable to past

medical expenses.

11. One witness, Douglas R . Beam, repre sented Mr. Touchton. Mr. Beam

has been a lawyer for 35 years. Mr. Beam served as President of the Brevard

County Bar Association and the Florida Council of Bar Association

Presidents. He is on the Executive Council of the National Trial Lawyers and

is a me mber of the Florida Justice Association. He handles serious,

catastrophic personal injury and death cases in Florida, representing the

injured parties. His practice includes regular representation in premises

security liability claims. He has testified man y times as an expert witness on

valuation of claims. Mr. Beam also regularly informs himself about the

damages recovered for personal injuries by reviewing information from a

Lexis data base containing national information about settlements and verdicts, t alking to other lawyers, and talking to mediators.

12. As part of his practice, Mr. Beam regularly evaluates the damages

suffered by injured parties like Mr. Touchton. He evaluated Mr. Touchton ' s

damages in his usual way, going through the elements of dam ages identified

in standard jury instructions and applying them to the facts of the case. As

Mr. Touchton’s lawyer, he became intimately familiar with Mr. Touchton ' s

damages. His opinions on the value of Mr. Touchton ' s damages and allocation

of them to p ast medical expenses were well - informed, credible, persuasive,

and conservative.

13. The second witness, Ken McKenna, has pra cticed law for 26 years. He

is b oard c ertified in c ivil trial law. He and his firm specialize in representing

plaintiffs in catast rophic and serious personal injury cases. He has evaluated

damages in countless personal injury cases.

14. Mr. McKenna conducted a thorough and persuasive evaluation of the

value of Mr. Touchton ' s damages. He individually considered each element of

damage s and the evidence to support them. H is opinions on the value of

Mr. Touchton ' s damages and allocation of them to past medical expenses

were well - informed, credible, persuasive, and conservative.

15. The Agency did not present evidence of a different way o f determining

the value of Mr. Touchton's damages or a different analysis to determine the

amount fairly allocable to past medical expenses.

Value of Damages and Settlement for Lesser Amount

16. In addition to past medical expenses, Mr. Touchton ' s damages

included future medical expenses, pain and suffering, mental anguish,

reduced quality of life, lost wages, and life care expenses.

17. A significant portion of Mr. Touchton ' s damages were the non -

economic damages such as pain and suffering, mental anguish, and reduced

quality of life. The cost of continued care that Mr. Touchton will need all his

life is another significant portion of his damages. The value of the damages suffered by Mr. Touchton reasonably falls within a range of $15,000,000 to

$28,500,000 . Past medical expenses are a small part of the damages. Fifteen

million dollars is a conservative and reasonable valuation of Mr. Touchton ' s

damages.

18. Mr. Touchton settled the case for much less than the value of his

damages. There were sound liability and collectability reasons to settle. The

primary defendant, Debauchery Bar, was on the brink of bankruptcy , making

insurance the only source of recovery for Debauchery’s portion of any

damages award. Debauch e ry had only $1,000,000 in insurance coverage. The

person who punched Mr. Touchton was never identified and therefore not a

party to the litigation. Mr. Touchton also faced a comparative negligence

defense that would have reduced any recovery.

19. Mr. Touchton elected to settle his claim for $425,000. This is far less

than the value of his damages.

Allocation of Damages to Past Medical Expenses

20. Mr. Touchton’s recovery of $425,000 is 2.83 percent of the $15,000,000

value of his damages. A fair and rational way to determine the amount of his

recove ry allocable to past medical expenses is to calculate a pro rata portion .

This calculation is also consistent with the fact that past medical expenses are a

small portion of Mr. Touchton ' s full damages due to his extensive disabilities,

his lost income, th e significant amount of care that he will need his entire

life, and the pain and suffering he suffered and continues to suffer. The

calculation results in $3,196.17 as the amount of Mr. Touchton ' s damages

that is fairly allocable to past medical expenses.

C ONCLUSIONS OF L AW

21. Sections 120.569, 120.57(1), and 409.910(17), Florida Statutes (2020),

grant the Division jurisdiction over the subject matter and parties in this case.

22. The Legislature authorized the Agency to administer Florida's

Medicaid prog ram. See § 409.902, Fla. Stat.

23. The Medicaid program "provide[s] federal financial assistance to

States that choose to reimburse certain costs of medical treatment for needy persons." Harris v. McRae , 448 U.S. 297, 301 (1980). If a state participates i n

the Medicaid program, it must comply with federal requirements governing

the program. Id .

24. Federal law requires states to seek reimbursement for medical

expenses incurred on behalf of Medicaid recipients who recover from third

parties. See Ark. Dep' t of Health & Human Servs. v. Ahlborn , 547 U.S. 268,

276 (2006). Florida's Legislature enacted section 409.910 to comply with that

requirement. Section 409.910(7) requires the Agency to recover for Medicaid

funds paid for a Medicaid recipient's medical car e when the 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). The statute

imposes an automatic lien on the proceeds of any judgment or settlement for

the medical services provided by Medicaid. § 409.910(6)(c), Fla. Stat.

25. The formula in section 409.910(11)(f) determines the amount the

Agency may recover from a judgment, award, or settlement from a third

party for Medicaid medical expenses. Ag. for H ealth Care Admin. v. Riley , 119

So. 3d 514, 515 n.3 (Fla. 2d DCA 2013). Section 409.910(17)(b) establishes the

right to contest a Medicaid lien before the Division and provides that section

409.910(11) establishes the default allocation of damage amounts

a ttributable to medical costs. The Medicaid recipient may prove that a

different allocation is the correct allocation. The recipient must prove the

allocation by a preponderance of the evidence. Delgado v. Ag. for Health Care

Admin. , 237 So. 3d 432 (Fla. 1s t DCA 2018).

26. Application of the statutory allocation formula in this matter results

in Mr. Touchton owing the Agency $112,938.81. The persuasive, unrebutted,

unimpeached evidence in this matter proves that $3,196.17 of the settlement

amount is the amo unt fairly allocable to medical expenses. The evidence is

clear and convincing. The First District Court of Appeal recently accepted the

pro rata method used for this determination as sufficient proof of a fair

allocation of a settlement amount. Soto v. Ag . for Health Care Admin. , Case

No. 1D17 - 5387 (Fla. 1st DCA Nov. 18, 2020)( r eversing Soto v. Ag. for Health

Care Admin. , Case No. 17 - 4556MTR (Fla. DOAH Nov. 28 2017 ) for rejecting a

pro rata allocation like the one proven in this proceeding.). See also Brya n v.

State , 291 So. 3d 1033 (Fla. 1 st DCA 2020); Larrigui - Negron v. Ag. for Health

Care Admin. , 280 So. 3d 550 (Fla. 1st DCA 2019).

O RDER

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

ORDERED that Respondent, Agency for Health Care Administration, is

entitled to recover only $3,196.17 in satisfaction of its M edicaid lien.

D ONE A ND O RDERED this 8th day of N ovember , 2020 , in Tallahassee, Leon

County, Florida.

J OHN D. C. N EWTON , II

Administra tive 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

th is 8th day of N o vember , 2020 .

C OPIES F URNISHED :

Jason Dean Lazarus, Esquire

Special Needs Law Firm

Suite 160

2420 South Lakemont Avenue

Orlando, Florida 32814

(eServed)

Shena Grantham, Esquire

Agency for Health Care Administration

Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Alexander R. Boler, Esquire

Suite 330

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail St op 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Bill Roberts, Acting General Counsel

Agency for Health Care Administration

27 27 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shevaun L. Harris, Acting Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

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 otherwise provided by law.