20-004223MTR Gregory Mcelveen, Through The Personal Representative Of His Estate, Daniel Hallup vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, February 2, 2021.

Summary: Petitioner proved, by a preponderance of the evidence, that a lesser portion of his total recovery should be allocated as reimbursement for medical expenses instead of the amount the Agency calculated pursuant to the section 409.910(11)(f) formula.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

G REGORY M CELVEEN , T HROUGH T HE

P ERSONAL R EPRESENTATIVE OF H IS

E STATE , D ANIEL H ALLUP ,

Petitioner ,

vs. Case No. 20 - 4223MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

The final hearing in this matter was conducted before J. Bruce Culpepper,

Administrative Law Judge of the Division of Administrative Hearings,

pursuant to sections 120.569 and 120.57 (1), Florida Statutes (20 20 ), 1 on

November 12, 2020 , by Zoom video conference from Tallahassee, Florida.

A PPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton & Faglie, PL

189 East W alnut Street

Monticello, Florida 32344

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive , Suite 330

Tallahassee, Florida 32317

1 All references to the Florida Statutes are to the 2020 version, unless otherwise noted.

Although PetitionerÔs medical expenses were incurred in 2017, PetitionerÔs estate settled his

negligence lawsuit in 2020 . The Agency obtained its right to reimbursement from third - party

benefits on that date. Accordingly, the 2020 version of the governing statute (section 409.910,

Florida Statutes) controls DOAHÔs jurisdiction. See Suarez v. Port Charlotte HMA, LLC , 171

So. 3d 740 , 742 (Fla. 2d DCA 2015).

S TATEMENT O F T HE I SSUE

This matter concerns the amount of money to be reimbursed to the Agency

for Health Care Administration for medical expenses paid on behalf of

Gregory Mc E lveen , a Medicaid recipient, following a settlement recovered

from a third party.

P RELIMIN ARY S TATEMENT

On September 18, 2020, Petitioner, Gregory Mc E lveen, through the

personal representative of his estate, Daniel Hallup , filed a Petition to

Determine Amount Payable to Agency for Health Care Administration In

Satisfaction of Medicaid Lien (the ÑPetitionÒ). Through his Petition,

Petitioner challenged the Agency for Health Care AdministrationÔs (the

ÑAgencyÒ) lien for medical expenses following PetitionerÔs recovery from a

third party. The Agency seeks reimbursement from Petitioner for medical

ex penses Medicaid paid on his behalf. The Agency calculated the amount it

believes it is owed using the ÑdefaultÒ formula set forth in section

409.910(11)(f). Petitioner asserts that reimbursement of a lesser portion of

his recovery is warranted pursuant to section 409.910(17)(b).

On September 21, 2020 , the Division of Administrative Hearings

(ÑDOAHÒ) notified the Agency of PetitionerÔs Petition for an administrative

proceeding to determine the amount payable to the Agency to satisfy the

Medicaid lien.

The final hearing was held on November 12, 2020 . Prior to the final

hearing, Petitioner and the Agency filed a Joint Pre - hearing Stipulation

agreeing to several facts upon which the undersigned relied. At the final

hearing, PetitionerÔs Exhibits 1 through 8 w ere admitted into evidence.

Petitioner presented the testimony of Charles T. Moore and R. Vinson

Barrett . The Agency did not offer any additional evidence or witnesses.

A one - volume Transcript of the final hearing was filed with DOAH on

December 26, 2020. At the close of the hearing, the parties were advised of a

ten - day timeframe following DOAHÔs receipt of the hearing transcript to file

post - hearing submittals. Following the hearing, the parties jointly moved for

an extension of the filing deadline, which was granted. 2 Both parties filed

Proposed Final Orders, which were duly considered in preparing this Final

Order.

F INDINGS O F F ACT

1. This proceeding determines the amount the Agency should be paid to

satisfy a Medicaid lien following PetitionerÔs recove ry of a $ 240, 000.00

settlement from a third party. The Agency asserts that it is entitled to

recover the full amount of its $ 72,907.93 lien.

2. The incident that gave rise to this matter resulted from alleged medical

malpractice. In 2016, Mr. McElveen saw his primary care physician

complaining of pain and redness in his hand. The pain was ultimately traced

to a metal shaving that had lodged in his finger. Despite repeated visits

complaining of pain and swelling, however, Mr. McElveenÔs physician failed

to l ocate and remove the foreign object. In the meantime, his health

worsened. On July 17, 2017, Mr. McElveen was admitted to the hospital, and

was found to be critically ill with septic emboli. On August 15, 2017, Mr.

McElveen died as a result of a systemic i nfection. He was survived by his wife

and three daughters. 3

2 By requesting a deadline for filing post - hearing submissions beyond ten days after receipt

of the Transcript at DOAH, the 30 - day time period for filing the Final O rder was waived. See

Fla. Admin. Code R. 28 - 106.216(2).

3 Although Mr. McElveen Ôs three daughters survived his death , in his subsequent wrongful

death lawsuit, only one of his daughters was considered a Ñ minor child Ò under the Florida

Wr ongful Death Act , because the other two were over the age of 25 . § 768.18, Fla. Stat.

3 . The Agency, through the Medicaid program, paid a total of $ 72,907.93

for Mr. McElveen Ôs medical care, which was the full amount of his past

medical expenses .

4 . In 2019, Mr. McElveenÔs estate brought a wrongful death action against

his treating physician. 4 Charles T. Moore, Esquire, represented PetitionerÔs

estate and was the primary attorney handling the litigation. Ultimately,

Mr. Moore was able to settle the wrongful death action for $ 240 ,00 0 .

5 . The Agency was not a party to , nor did it intervene in, PetitionerÔs

wrongful death l awsuit.

6 . Under section 409.910, the Agency is to be repaid for its Medicaid

expenditures out of any recovery from liable third parties. Accordingly, when

the Agen cy was notified of the settlement of PetitionerÔs lawsuit, it asserted a

Medicaid lien against the amount Petitioner recovered. The Agency asserts

that, pursuant to the formula set forth in section 409.910(11)(f), it should

collect $ 72,907.93 to satisfy th e medical costs it paid on PetitionerÔs behalf.

The Agency maintains that it should receive the full amount of its lien

regardless of the fact that Petitioner settled for less than what Petitioner

believes is the full value of his damages.

7 . Petitioner, on the other hand, argues that, pursuant to section

409.910(17)(b), the Agency should be reimbursed a lesser portion of the

settlement than the amount the Agency calculated pursuant to the section

409.910(11)(f) formula. Petitioner specifically a sserts th at the Medicaid lien

should be reduced proportionately, taking into account the full value of

PetitionerÔs damages. Otherwise, the application of the statutory formula

would permit the Agency to collect more than that portion of the settlement

that fairly represents PetitionerÔs compensation for medical expenses.

Petitioner insists that reimbursement of the full lien amount violates the

federal Medicaid lawÔs anti - lien provision (42 U.S.C. § 1396p(a)(1)) and

4 Petitioner Daniel Hallup was appointed Personal Representative of Mr. McElveenÔs e state.

Florida common law. Petitioner requests that the AgencyÔs allocation from

PetitionerÔs recovery be reduced to $ 5,832.63 .

8 . To establish the value of Mr. McElveenÔs d amages, Petitioner offered

the testimony of Mr. Moore. Mr. Moore has practiced law for 24 years and is a

partner with the law firm of Morga n & Morgan in Tampa , Florida. In his

practice, Mr. Moore focuses exclusively on medical malpractice causes of

action. Mr. Moore represented that he has taken a number of his cases to

jury.

9 . As part of his pr actice, Mr. Moore routinely evaluates damages s imilar

to those Petitioner suffered. This activity includes analyzing jury verdicts to

keep current on case values, as well as discussing cases with other attorneys.

10. In calculating the value of Mr. McElveenÔs wrongful death claim,

Mr. Moore reviewed M r. McElveenÔs medical records. Mr. Moore stated that,

based on his professional assessment and experience, Mr. McElveenÔs

damages equaled between three to five million dollars which is the total

monetary value of the survivorsÔ and estateÔs wrongful death damages.

Therefore, Mr. Moore opined that a conservative value of Mr. McElveenÔs

damages is $ 3,000,000.

11. Based on his evaluation, Mr. Moore asserted that the $ 240 ,000

settlement was far less than the value of the actual damages Mr. McElveen

suffered . M r. Moore explained that Petitioner settled for a much lower

amount because his potential recovery was limited due to the fact that the

one potential defendant (Mr. McElveenÔs physician) was retiring and carried

minimal insurance coverage ($250,000). Mr. Mo ore also felt that the other

possible liable parties (including the hospital) had met the appropriate

standard of medical care when treating Mr. McElveen . Therefore, Mr. Moore

believed that he had settled for the best deal he could under the

circumstances, and Mr. McElveenÔs estate was not likely to recover more.

12. Finally, to support the Petition to reduce the amount of the Medicaid

lien, Mr. Moore explained that PetitionerÔs estate received only eight percent

of the true value of Mr. McElveenÔs damages ($3,000,000 divided by

$240,000). B ecause only eight percent of the damages were recovered, in like

manner, the $72,907.93 Medicaid lien should be reduced to eight percent , or

$5,832.63 , as a fair and reasonable allocation of the amount of PetitionerÔs

pas t medical expenses recovered the $240,000 settlement.

13. The Agency did not present evidence or testimony disputing

Mr. MooreÔs valuation of the ÑtrueÒ value of PetitionerÔs damages or his

calculation of the amount of the settlement that should be alloca ted as

PetitionerÔs past medical expenses.

1 4 . Petitioner also offered the testimony of R. Vinson Barrett, Esquire, to

established the value of Mr. McElveenÔs damages. Mr. Barrett is a trial

attorney with over 40 yearsÔ experience . Mr. Barrett w orks exclus ively in the

area of plaintiffÔs personal injury, medical malpractice, and medical products

liability cases. He has also handled wrongful death cases.

15. Mr. Barrett expressed that , as a routine part of his practice, he makes

assessments concerning the v alue of damages suffered by injured parties. In

addition, not only does he have personal experience with jury trials, but he

stays current in recent jury verdicts and regularly discusses jury results with

other attorneys. Mr. Barrett was accepted as an exp ert in the valuation of

damages suffered by injured persons.

1 6 . Prior to testifying , Mr. Barrett familiarized himself with the facts and

circumstances of Mr. McElveenÔs injuries and death. He reviewed PetitionerÔs

exhibits, including PetitionerÔs medical records. He also reviewed the sample

jury verdicts Petitioner introduced as PetitionerÔs Exhibit 8 .

1 7 . Based on his valuation of PetitionerÔs injuries , as well as his

professional training and experience, Mr. Barrett placed a Ñvery conservative

valueÒ on PetitionerÔs injuries at $3 ,000,000 . Mr. Barrett explained that

injuries similar to PetitionerÔs would result in jury awards averaging

approximately $3.5 million dollars.

18 . Mr. Barrett supported Mr. MooreÔs pro rata methodology of calculating

a reduce d portion of PetitionerÔs $ 240 ,000 settlement to equitably and fairly

represent past medical expenses. With injuries valued at $ 3,000,000 , the

$ 240 ,000 settlement only compensated Petitioner for eight percent of the

total value of his damages. Therefore, t he most ÑfairÒ and ÑreasonableÒ

manner to apportion the $ 240 ,000 settlement is to apply that same

percentage to determine PetitionerÔs recovery of medical expenses. Petitioner

asserts that applying the same ratio to the total amount of medical costs

produc es the definitive value of that portion of PetitionerÔs $ 240 ,000

settlement that represents compensation for past medical expenses, i.e.,

$ 5,823.63 ($ 72,907.93 times eight percent ).

19. Similar to Mr. MooreÔs testimony, Mr. BarrettÔs expert testimony was

u nrebutted. Further, the Agency di d not offer evidence or testimony

proposing a more appropriate or different valuation of Mr. McElveenÔs total

d amages, or contest ing the methodology Petitioner used to calculate the

portion of the $240,000 settlement fairly a lloca ble to PetitionerÔs past medical

expenses.

20 . Based on the testimony from Mr. Moore and Mr. Barrett that the

$ 240 ,000 settlement d oes not fully compensate Petitioner for Mr. McElveenÔs

damages, Petitioner argues that a lesser portion of the medical costs should

be calculated to reimburse Medicaid, instead of the full amount of the lien.

Petitioner proposes that a ratio be applied based on the true value of

PetitionerÔs damages ($ 3,000,000 ) compared to the amount that Petitioner

actually recovered ($ 240,000) . Using these numbers, PetitionerÔs settlement

represents approximately a n eight percent recovery of the full value of

PetitionerÔs damages. In similar fashion , the Medicaid lien should be reduced

to eight percent or approximately $ 5,832.63 ($ 72,90 7.93 times . 08 ). Therefore,

Petitioner asserts that $ 5,832.63 is the portion of his third - party settlement

that represents the equitable, fair, and reasonable amount the Florida

Medicaid program should recoup for its payments for PetitionerÔs medical

care.

2 1 . All of the expenditures Medicaid spent on PetitionerÔs behalf are

attributed to past medical expenses. No portion of the $ 7 2 ,907.93 Medicaid

lien represents future medical expenses.

2 2 . The undersigned finds that the unrebutted testimony at the final

hearing demonstrates that the full value of PetitionerÔs damages from this

incident equals $ 3,000,000 . Further, based on the evidence in the record,

Petitioner met his burden of prov ing, by clear and convincing evidence, that a

lesser portion of Petitione rÔs settlement should be allocated as

reimbursement for medical expenses than the amount the Agency calculated

using the formula set forth in section 409.910(11)(f). 5 Accordingly, the

undersigned finds that the competent substantial evidence adduced at the

final hearing establishes that the Agency should be reimbursed in the

amount of $5, 832.63 from PetitionerÔs recovery of $ 240 ,000 from a third party

to satisfy the Medicaid lien.

C ONCLUSIONS O F L AW

2 3 . The Division of Administrative Hearings has jurisdict ion over the

subject matter and parties in this proceeding pursuant to sections 120.569,

5 Regarding the standard of proof to be used in this matter, Petitioner argues that, based on

a pre - hearing stipulation between the parties, Petitioner should only be required to prove his

case by a preponderance of the evidence. In Gallardo by & through Vassallo v. Dudek , 963

F.3d 1167 (11th Cir. 2020) , however, the U.S. Court of Ap peals for the Eleventh Circuit

upheld the statutory standard of proof by which a Florida Medicaid recipient must rebut the

formula set forth in section 409.910(11)(f) as clear and convincing evidence. Gallardo , 963

F.3d at 1182 (Ñ nothing about this [clear and convincing] standard of proof stands in clear

conflict with federal law under Wos .Ò)

The undersigned concludes, however, that it is unnecessary to decide whether the

parties' stipulation regarding the standard of proof should be set aside. The strict er

evidentiary standard does not change the outcome of this case as Petitioner successfully

proved, by clear and convincing evidence, that the portion of his settlement recovery that

should be allocated as past medical expenses is less than the amount of t he Medicaid lien.

120.57(1), and 409.910(17)(b). DOAH has final order authority.

§ 409.910(17)(b), Fla. Stat.

2 4 . The Agency is the Medicaid agency for the State of Florida, as

provid ed under federal law, and administers FloridaÔs Medicaid program. See

§ 409.901(2), Fla. Stat.

2 5 . The federal Medicaid program Ñprovide[s] federal financial assistance

to States that choose to reimburse certain costs of medical treatment for

needy persons .Ò Harris v. McRae , 448 U.S. 297, 301 (1980). While a stateÔs

participation is entirely optional, once a state elects to participate in the

federal Medicaid program, it must comply with federal requirements

governing the program. Id. ; and 42 U.S.C. § 1396, et seq.

2 6 . As a condition for receipt of federal Medicaid funds, states are

required to seek reimbursement for medical expenses from Medicaid

recipients who later recover from legally liable third parties. See Ark . DepÔt of

Health & Hum. Servs. v. Ahlbor n , 547 U.S. 268, 276 (2006); and 42 U.S.C. §

1396a. To comply with this federal requirement, the Florida Legislature

enacted section 409.910, FloridaÔs ÑMedicaid Third - Party Liability Act,Ò

which authorizes and requires the Agency to be reimbursed for Medi caid

funds paid for a recipientÔs medical care when that recipient later receives a

personal injury judgment or settlement from a third party. See Smith v. Ag.

for Health Care Admin. , 24 So. 3d 590 (Fla. 5th DCA 2009). The Legislature

expressly set forth i n section 409.910(1):

It is the intent of the Legislature that Medicaid be

the payor of last resort for medically necessary

goods and services furnished to Medicaid

recipients. All other sources of payment for medical

care are primary to medical assistance provided by

Medicaid. If benefits of a liable third party are

discovered or become available after medical

assistance has been provided by Medicaid, it is the

intent of the Legislature that Medicaid be repaid in

full and prior to any other person, program , or

entity. Medicaid is to be repaid in full from, and to

the extent of, any third - party benefits, regardless of

whether a recipient is made whole or other

creditors paid. Principles of common law and equity

as to assignment, lien, and subrogation are

abr ogated to the extent necessary to ensure full

recovery by Medicaid from third - party resources. It

is intended that if the resources of a liable third

party become available at any time, the public

treasury should not bear the burden of medical

assistance t o the extent of such resources.

2 7 . Accordingly, by accepting Medicaid benefits, Medicaid recipients

automatically subrogate their rights to any third - party benefits for the full

amount of medical assistance provided by Medicaid and automatically assign

t o the Agency the right, title, and interest to those benefits, other than those

excluded by federal law. See § 409.910(6)(a), and (b), Fla. Stat.; see also 42

U.S.C. § 1396k(a)(1) (requiring states participating in the federal Medicaid

program to provide, as a condition of Medicaid eligibility, assignment to the

state of the right to payment for medical care from any third party). Section

409.910 creates an automatic lien on any such judgment or settlement with a

third party for the full amount of medical e xpenses Medicaid paid on behalf of

the Medicaid recipient. See § 409.910(6)(c), Fla. Stat.

2 8 . However, the obligation to reimburse the Agency (and Medicaid)

following recovery from a third party is not unbounded. Pursuant to 42

U.S.C. §§ 1396a(a)(25)(A), (B), and (H), 1396k(a) , and 1396p(a), the Agency

may only assert a Medicaid lien against that portion of PetitionerÔs award

from a third party that represents the costs of the medical assistance made

available for the individual. See Ahlborn , 547 U.S. at 2 78; Wos v. E.M.A. , 133

S. Ct. 1391, 1396 (2013); Harrell v. State , 143 So. 3d 478, 480 (Fla. 1st DCA

2014); and Davis v. Roberts , 130 So. 3d 164, 266 (Fla. 5th DCA 2013). The

federal Medicaid statuteÔs anti - lien provision, 42 U.S.C. § 1396p(a)(1),

prohibit s a state from attaching a lien for medical assistance on a Medicaid

recipientÔs property other than that portion of a Medicaid recipientÔs recovery

designated as payment for medical care. See also §§ 409.910(4), (6)(b)1., and

(11)(f)4., which provides tha t the Agency may not recover more than it paid

for the Medicaid recipientÔs medical treatment.

2 9 . As Ahlborn explains, the anti - lien provision of the federal Medicaid

Act circumscribes these obligations by authorizing payment to a state only

from those po rtions of a Medicaid recipientÔs third - party settlement recovery

allocated for payment of medical care. Ahlborn , 547 U.S. at 285; See also

E.M.A. ex rel. Plyler v. Cansler , 674 F.3d 290, 312 (4th Cir. 2012)(ÑAs the

unanimous Ahlborn CourtÔs decision makes clear, federal Medicaid law limits

a stateÔs recovery to settlement proceeds that are shown to be properly

allocable to past medical expenses.Ò)

30 . Section 409.910(11) establishes a formula to determine the amount the

Agency may recover for medical assist ance benefits paid from a judgment,

award, or settlement from a third party. 6 Section 409.910(11)(f) states, in

pertinent part:

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 representative 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 attorneyÔs fees and taxable costs as defined

by the Florida Ru les 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.

6 ÑThird - party benefitÒ is broadly defined to include any settlement between a Medicaid

recipient and a third party for any Medicaid - covered injury, including costs of medical

services related thereto, for personal injury or for death of the recipient. § 409.901(28), Fla.

Stat.

3. For purposes of calculati ng the agencyÔs 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 contrary, 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, Ñmedical coverageÒ

means any benefits under health i nsurance, a

health maintenance organization, a preferred

provider arrangement, or a prepaid health clinic,

and the portion of benefits designated for medical

payments under coverage for workersÔ

compensation, personal injury protection, and

casualty.

31 . In short, section 409.910(11)(f) establishes that the AgencyÔs recovery

for a Medicaid lien is limited to the lesser of: (1) its full lien; or (2) one - half of

the total award, after deducting attorneyÔs fees of 25 percent of the recovery

and all taxable co sts, up to, but not to exceed, the total amount actually paid

by Medicaid on the recipientÔs behalf. See Ag. for Health Care Admin. v. Riley ,

119 So. 3d 514, 515 n.3 (Fla. 2d DCA 2013). In this matter, using the section

409.910(11)(f) formula, PetitionerÔs recovery ($240,000) is sufficient to fully

satisfy the medical assistance provided by Florida Medicaid. Therefore, the

Agency is authorized to seek recovery of the full amount of its lien

($72,907.93).

3 2 . However, section 409.910(17)(b) provides a method by which a

Medicaid recipient may contest the amount designated as recovered medical

expenses payable under section 409.910(11)(f). Following the U.S. Supreme

Court decision in Wos , the Florida Legislature created an administrative

process to determine th e portion of the judgment, award, or settlement in a

tort action that is properly allocable to medical expenses; and, thus, the

portion of the recovery that may be used to reimburse the Medicaid lien.

Section 409.910(17)(b) states:

If federal law limits t he 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 paragr aph

(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 parag raph (a).

The petition shall be filed with the Division of

Administrative Hearings. For purposes of chapter

120, the payment of funds to the agency or the

placement of the full amount of the third - party

benefits in the trust account for the benefit of the

agency constitutes final agency action and notice

thereof. Final order authority for the proceedings

specified in this subsection rests with the Division

of Administrative Hearings. This procedure is the

exclusive method for challenging the amount of

third - party benefits payable to the agency. In order

to successfully challenge the amount designated as

recovered medical expenses, the recipient must

prove, by clear and convincing evidence, that the

portion of the total recovery which should be

allocated as p ast and future medical expenses is less

than the amount calculated by the agency pursuant

to the formula set forth in paragraph (11)(f). [ 7 ]

Alternatively, the recipient must prove by clear and

convincing evidence that Medicaid provided a lesser

amount of m edical assistance than that asserted by

the agency. (emphasis added).

7 The Florida Supreme Court interpret s federal law to limit the AgencyÔs lien to only the past

medical expense portion of a third - party tort recovery. Giraldo v. Agency for Health Care

Admin ., 248 So.3d 53 , 54 (Fla. 2018). The c ourt held that the section 409.910(17)(b)

procedure must be read to comply with the federal law, and thus effectively excised the

portions that would allow the Agency to impose a lien on recovered future medical expense

damages. Giraldo , 248 S o.3d at 56.

3 3 . Section 409.910(17)(b) establishes that the section 409.910(11)(f)

formula constitutes a default allocation of the amount of a settlement that is

attributable to medical costs, and sets forth an administrative procedure for

an adversarial challenge of that allocation. See Harrell , 143 So. 3d at 480

(Ñwe now hold that a plaintiff must be given the opportunity to seek reduction

of the amount of a Medicaid lien established by the statut ory formula

outlined in section 409.910(11)(f), by demonstrating, with evidence, that the

lien amount exceeds the amount recovered for medical expensesÒ).

3 4 . In order to successfully challenge the amount payable to the Agency,

the burden is on the Medicai d recipient to prove, by clear and convincing

evidence, that a lesser portion of the total recovery should be allocated as

reimbursement for (past) medical expenses than the amount the Agency

calculated. 8 § 409.910(17)(b), Fla. Stat. In other words, in thi s matter, if

Petitioner can demonstrate that the portion of the settlement attributed to

past medical expense s is less than the amount the Agency calculated using

the section 409.910(11)(f) formula, the amount Petitioner must reimburse the

Agency may be re duced below $72,907.93.

3 5 . With respect to PetitionerÔs $240,000 settlement, the undersigned

finds that Petitioner persuasively demonstrated that a lesser portion of his

third - party recovery should be allocated to satisfy the AgencyÔs Medicaid lien,

inste ad of the default amount calculated under section 409.910(11)(f).

3 6 . Regarding the specific amount of PetitionerÔs settlement that should

be allotted to reimburse the Agency, the Florida Legislature, despite

establishing a procedure for a Medicaid recip ient to challenge the amount of a

Medicaid lien, provided little guidance as to the standard DOAH should use

to determine what portion of the third - party recovery should represent (past)

medical expenses.

8 Although Mr. McElveen was deceased at the time the Agency sought to impose the

Medicaid lien, Petitioner, as the personal representative of Mr. McElveenÔs estate, may

contest the lien on his behalf. Al Batha v. Agency for Health Care Admin. , 263 So. 3d 817,

819 (Fla. 1st DCA 2019)

3 7 . Petitioner contends that the Medicaid lien sh ould be reduced using a

ratio that factors in the full value of PetitionerÔs damages. Petitioner

specifically asserts that only $5,832.63 of the total settlement amount should

be attributed to past medical expenses ($72,907.93 times eight percent ).

Petitio ner maintains that his calculation apportions a fairer and more

reasonable share of the settlement to Petitioner in light of his significant

injuries. This Ñpro rataÒ methodology of lien reduction has been recognized

and approved by Florida courts. See Gir aldo , 248 So. 3d at 56; Soto v. Agency

for Health Care Admin ., -- So. 3d -- , 45 Fla. L. Weekly D2604 (Fla. 1st DCA

Nov. 18, 2020); Agency for Health Care Admin. v. Rodriguez , 294 So. 3d 441,

442 (Fla. 1st DCA 2020); Mojica v. Agency for Health Care Admin. , 285 So. 3d

393, 398 (Fla. 1st DCA 2019); and Eady v. State , 279 So. 3d 1249, 1259 (Fla.

1st DCA 2019) .

38 . T he Agency, on the other hand, emphatically opposes PetitionerÔs pro

rata calculation to quantify the past medical expense portion of PetitionerÔs

$ 240,000 settlement. However, although the Agency does not have the

burden of proof, it did not elicit testimony or present evidence contradicting

PetitionerÔs expertÔs testimony that using a ratio comparing the ÑfullÒ value of

PetitionerÔs damages with the total amount Petitioner recovered produces a

reasonable share of a settlement available as reimbursement for past medical

expenses.

3 9 . The undersigned is mindful that, Ñ[t]he Medicaid program provides

federal and state funding to pay healthcare costs fo r individuals who cannot

afford it.Ò Vestal v. First Recovery Grp., LLC , 292 F. Supp. 3d 1304, 1310

(M.D. Fla. 2018); see also Roberts v. AlbertsonÔs Inc. , 119 So. 3d 457, 458 (Fla.

4th DCA 2012); and 42 U.S.C. § 1396a(a)(25)(A) - (B). To keep the Medicaid

p rogram viable, Congress recognized that it is necessary to obtain

reimbursement when a third party makes payment to the Medicaid

beneficiary for medical care already paid for by Medicaid. Roberts , 119 So. 3d

at 459. Roberts further observed that the Medica id programÔs requirement

that states take all reasonable measures to seek reimbursement from legally

liable third parties ensures that tax dollars are protected, while preventing

Medicaid recipients from receiving Ña windfall by recovering medical costs

th ey did not pay.Ò Roberts , 119 So. 3d at 459 (citing Tristani v. Richman , 652

F.3d 360, 373 (3d Cir. 2011)).

40 . The Florida Medicaid Third - Party Liability Act emphasizes this

mandate by instructing: ÑIf benefits of a liable third party are discovered or

become available after medical assistance has been provided by Medicaid, it

is the intent of the Legislature that Medicaid be repaid in full and prior to

any other person, program, or entity.Ò £ 409.910(1), Fla. Stat. Section

409.910(6)(a) further directs that, ÑEquities of a recipient, [or] his or her legal

representative ... shall not defeat, reduce, or prorate recovery by the agency

as to its subrogation rights under this paragraph.Ò 9

41 . However, in balancing the competing interests of Petitioner and th e

Agency, to determining the fair and reasonable portion of PetitionerÔs

recovery to allocate as past medical expenses paid for by the Florida Medicaid

program, the undersigned concludes that the AgencyÔs lien should be reduced

to eight percent of its tota l value, or $5,832.63. The Agency did not present

any evidence contradicting PetitionerÔs position that Mr. McElveenÔs damages

have a full value of $3,000,000 or contesting the pro rata methodology

Petitioner used to calculate the proper portion of the set tlement to designate

as past medical expenses. Neither is there a reasonable basis in the record to

reject PetitionerÔs evidence and testimony.

9 See also section 409.910(13), which states, in part:

No action of the recipient shall prejudice the rights of the

agency under this section. No settlement, agreement, consent

decree, trust agreement, annuity contr act, pledge, security

arrangement, or any other device, hereafter collectively

referred to in this subsection as a Ñsettlement agreement,Ò

entered into or consented to by the recipient or his or her

legal representative shall impair the agencyÔs rights.

4 2. Therefore, Petitioner met his burden of proving that $5,832.63 is the

portion of PetitionerÔs settlement Ñwh ich should be allocated as past È

medical expenses,Ò pursuant to section 409.910(17)(b). Accordingly, the

Agency is entitled to be reimbursed $5,832.63 from PetitionerÔs $240,000

settlement.

O RDER

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

O RDERED that Petitioner, Gregory McElveen, through the personal

representative of his estate, Daniel Hallup, shall pay to Respondent, Agency

for Health Care Administration, the sum of $5,832.63 in satisfaction of its

Medicaid lien.

D ONE A ND O R DERED this 2nd day of February , 2021 , in Tallahassee, Leon

County, Florida.

S

J. B RUCE C ULPEPPER

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of February, 2021 .

C OPIES F URNISHED :

Alexander R. Boler, Esquire Floyd B. Faglie, Esquire

Suite 330 Staunton & Faglie, PL

2073 Summit Lake Drive 189 East Walnut Street

Tallahassee, Florida 32317 Monticello, Florida 32344

Shena L. Grantham, Esquire Thomas M. Hoeler, Esquire

Agency for Health C are Admi nistration Agency for Health Care Administration

Building 3, Room 3407B 27 27 Mahan Drive, Mail Stop 3

2727 Mahan Drive Tallahassee, Florida 32308

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Shevaun L. Harris, Acting Secretary Agency for Health Care Administration

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308

Tallahassee, Florida 32308

Bill Roberts, Acting General Counsel

Agenc y for Health Care Administration

2727 Mahan Drive, Mail Stop 3

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 ap peal 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.