20-005258MTR Shirley Mcbride, As Personal Representative Of The Estate Of Robin Mcbride vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, March 9, 2021.

Summary: Petitioner proved AHCA should be reimbursed for its Medicaid lien in a lesser amount than that calculated pursuant to section 409.910(11)(f).

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

S HIRLEY M CBRIDE , A S P ERSONAL

R EPRESENTATIVE OF T HE E STATE OF

R OBIN M CBRIDE ,

Petitioner , Case No. 20 - 5258MTR

vs.

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

The final hearing was held in this case by Zoom Video Conference in

Tallahassee, Florida, on February 10, 202 1 , before Brian A. Newman, an

Administrative Law Judge of the Division of Administr ative Hearings

(DOAH).

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. Boler, Esquire

2073 Summit Lake Driv e , Suite 330

Tallahassee, Florida 32317

S TATEMENT OF T HE I SSUE

The issue for the undersigned to determine is the amount payable to

Respondent, Agency for Health Care Administration (AHCA or Respondent),

as reimbursement for medical expenses paid on behalf of Robin McBride ,

pursuant to section 409.910, Florida Statutes (2020), 1 from settlement

proceeds the estate received from third parties.

P RELIMINARY S TATEMENT

On December 4, 2020, Petitioner filed a Petition to Determine MedicaidÔs

Lien Amount to Satisfy Claim Against Personal Injury Recovery by the

Agency for Health Care Administration (Petition). The Petition challenged

AHCAÔs placement of a Medicaid lien in the amount of $41,250.00 2 on

PetitionerÔs $110,000 settlement proceeds from third partie s.

Prior to the final hearing, the parties filed a Joint Pre - hearing Stipulation

in which they stipulated to certain facts and law. To the extent relevant, the

partiesÔ stipulated facts and law have been incorporated below.

At the final hearing, Petiti oner presented testimony from two witnesses,

Louis Blanco, Esquire , and Malcom Purow, Esquire. PetitionerÔs Exhibits 1

through 4 were admitted in evidence. Respondent did not call any witnesses

or offer any exhibits.

The parties timely filed Proposed Fi nal Orders, which have been

considered in preparing this Final Order.

F INDINGS OF F ACT

1. AHCA is the state agency charged with administering the Florida

Medicaid program, pursuant to chapter 409.

1 A ll references to Florida Statutes are to the 2020 codificatio n, unless otherwise indicated.

2 At the final hearing, t he parties stipulated that the total amount recoverable under the lien

pursuant to the statutory formula found in section 409.910(11)(f) should be reduced to

$39,265.00 , to give Petitioner credit for additional taxable costs.

2. On July 12, 2019, Robin McBride was catastrophically injured and died

as a result of being struck by a vehicle (a Hummer 2) while riding a bicycle on

the sidewalk. The vehicle struck Mrs. McBride after the driver failed to stop

at a stop sign.

3. Mrs. McBride was knocked off the bicycle and struck her head on the

pave ment. Following the accident, Mrs. McBride was initially conscious but

incoherent, and was transported by fire rescue to the hospital.

4. After she was admitted to the hospital, Mrs. McBride was placed in a

medically - induced coma. Unfortunately, Mrs. McBrid e did not recover and

died at the hospital on August 3, 2019, following a 22 - day hospital stay.

5. Mrs. McBride was survived by her husband, adult children , and

grandchildren. She had been married to her husband for 35 years. At the

time of her death , Mrs. M cBride was a homemaker , but she was not

employed elsewhere and earned no income .

6. The McBride e state brought a personal injury action to recover for her

wrongful death against the tortfeasor and his insurer.

7. In 2020, the McBride e state settled the tort act ion for a total recovery of

$110,000, representing the insurerÔs policy limits of $100,000, and $10,000

contributed directly by the tortfeasor from his own funds.

8. The tortfeasor had additional insurance under a commercial policy

issued by another insurer. The commercial policy limits were $1 million , but

coverage was denied because the vehicle that struck Mrs. McBride was not

registered in the name of the tortfeasorÔs business.

9. AHCA was properly notified of the lawsuit and indicated it had paid

benefits r elated to the injuries from the accident in the amount of $87,828.24.

AHCA has asserted a lien, pursuant to the statutory formula reduction, of

$39,265.00 , against the settlement proceeds of $110,000 .

10. AHCA stipulated that Mrs. McBrideÔs estate suffered si gnificant

economic and non - economic damages due to Mrs. McBrideÔs injury and death,

but did not stipulate as to the value of these damages.

11. Petitioner presented claim valuation testimony from Louis Blanco,

Esquire, the attorney who represented the McBride estate in the claim

asserted against the tortfeasor and his insurer.

12. Mr. Blanco has practiced personal injury law in Florida since 1994.

Mr. Blanco placed a ÑconservativeÒ value on the McBride cla i m of $1.1

million.

13. Mr. Blanco estimated that economic da mages for loss of support and

services to the surviving spouse would range between $150,000 and $200,000

based on Mrs. McBrideÔs economic value as a homemaker. Economic damages

also include past medical care , which was $87,828.24, the amount of the

Medicai d lien.

14. Mr. Blanco testified that the non - economic damages due to the

estate Ð including the loss of companionship and pain and suffering Ð would

exceed $800,000. Mr. Blanco also noted that liability was not an issue in the

case given that the vehicle stru ck Mrs. McBride after the driver ran a stop

sign. Mr. Blanco conducted an asset search of the tortfeasor and determined

that an excess judgment against the tortfeasor would be uncollectible.

Mr. Blanco testified that the tortfeasor contributed $10,000 of p ersonal funds

to settle the claim because he was very remorseful that he had caused the

accident.

15. Mr. Blanco emphasized the fact that the insurer paid its policy limits

of $100,000 immediately after the death certificate was provided , an

indication that t he insurer valued the claim above its policy limits . The

commercial insurer also requested the death certificate, but refused to pay

after it was determined that there was no coverage due to the vehicle

registration. Mr. Blanco testified that he believes t he commercial insurer

would have quickly tendered its policy limits of $1 million Ð had the claim

been covered Ð because there was no liability defense and Mrs. McBride was

survived by her husband of 35 years.

16. Using the pro rata allocation methodology, Mr. Bl anco testified that

$8,782.82 of the $110,000 settlement proceeds should be allocated to past

medical expenses because the personal injury claim was settled for ten

percent of its conservative value.

17. Mr. BlancoÔs testimony was credible and persuasive an d is accepted.

18. Petitioner also presented valuation testimony from Malcolm Purow,

Esquire, an attorney who has practiced personal injury law in Florida for 30

years. Mr. Purow is board certified in Civil Trial Law by the Florida Bar.

19. As to economic dam ages, Mr. Purow valued the damages for loss of

support and services to the surviving spouse at $180,000 , and damages for

past medical care at $87,828.24, the amount of the Medicaid lien.

20. Mr. Purow testified that adding non - economic damages to the

economic damages raises the total value of the claim to $2 million. Mr. Purow

conceded, however, that $1.1 million i s an acceptable conservative value for

the claim .

21. Mr. Purow used the pro rata allocation methodology and found that

that $8,782.82 of the $110,000 s ettlement proceeds should be allocated to

past medical expenses because the personal injury claim was settled for ten

percent of its conservative value of $1.1 million.

22. AHCA did not present any expert valuation testimony and did not

propose a valuation th at was less than $1.1 million. There is no reasonable

basis to reject the testimony of Mr. Blanco or Mr. Purow, and their testimony

that $1.1 million is a reasonable and conservative value for the McBride

estateÔs claim is accepted.

23. The undersigned finds t hat the value of the McBride estateÔs claim is

$1.1 million, and that $8,782.82 of the $110,000 settlement proceeds should

be allocated to past medical expenses.

C ONCLUSIONS OF L AW

24. DOAH has jurisdiction over the subject matter and the parties to this

pr oceeding in accordance with sections 120.57(1) and 409.910(17), Florida

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

25. AHCA is the agency authorized to administer FloridaÔs Medicaid

program. § 409.902, Fla. Stat.

26. PetitionerÔ s burden of proof to challenge the statutory lien is clear and

convincing evidence. § 409.9 10(17)(b), Fla. Stat.; Gallardo by & through

Vassallo v. Dudek , 963 F.3d 1167 , 1182 (11th Cir. 2020) (finding no conflict

between the clear and convincing standard an d federal law).

27. Medicaid is a cooperative federal - state medical assistance program.

See 42 U.S.C. § 1396, et seq. Florida has elected to participate in the program,

and thus must comply with federal Medicaid statutes and regulations. See

Wilder v. Virginia Hosp. AssÔn, 496 U.S. 498 (1990); Public Health Trust of

Dade Cty. v. Dade Cty. Sch. Bd. , 693 So. 2d 562, 564 (Fla. 3d DCA 1997).

28. The federal Medicaid program requires every participating state to

implement a third - party liability provision that authoriz es a state to seek

reimbursement for Medicaid expenditures from third parties when those

resources become available. See 42 U.S.C. § 1396a(a)(25); § 409.910(4), Fla.

Stat.; Giraldo, 248 So. 3d at 55. To accomplish this, section 409.910(6)

establishes that AHCA is automatically assigned any rights a Medicaid

recipient has to third - party benefits. Section 409.910(1) states, in part:

It is the intent of the Legislature that Medicaid be

the payor of last resort for medically necessary

goods and services furni shed 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 paid in full from, and to

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

whether a recipient is made whole or other

creditors paid.

29. In addition, section 409.910(7) authorizes AHCA to recover payments

paid from any third party, the recipient, the provider of the recipientÔs

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

30. Section 409.910(11) (f) provides a formula to establish the amount

AHCA may recover from a settlement, as follows:

(f) 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 l egal 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 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 agencyÔs recover y

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 sec tion 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 insurance, a

health ma intenance 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. As the parties stipulated , application of the formula set forth in

section 409.910(11)(f) to the $110,000 settlement proceeds recovered by

Petitioner results in AHCA being owed $39,265.00 to satisfy the Medicaid

lien. Petitioner contends, however, that a lesser amount is owed beca use the

personal injury claim was settled for less than its full value.

32. Section 409.910(17)(b) provides an administrative procedure to

determine whether a lesser portion of the total recovery should be allocated

as reimbursement for past medical expenses , instead of the amount

calculated pursuant to section 409.910(11)(f). Section 409.910(17)(b) provides,

in pertinent part, that a recipient:

[M]ay contest the amount designated as recovered

medical expense damages payable to the agency

pursuant to the form ula specified in

paragraph 11(f) by filing a petition under

chapter 20 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

agen cy pursuant to paragraph (a). The petition

shall be filed with the Division of Administrative

Hearings È . In order to successfully challenge the

amount designated as recovered medical expenses,

the recipient must prove, by clear and convincing

evidence, t hat the portion of the total recovery

which should be allocated as past and future

medical expense 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.

33. The formula set forth in section 409.910(11)(f) provides an initial

determination of AHCAÔs recovery for past medical expenses paid on a

Me dicaid recipientÔs behalf, and section 409.910(17)(b) sets forth an

administrative procedure for an adversarial challenge to that recovery.

Ñ[W]hen AHCA has not participated in or approved a settlement, the

administrative procedure created by section 409.9 10(17)(b) È serves as a

means for determining whether a lesser portion of the total recovery should

be allocated as reimbursement for medical expenses in lieu of the amount

calculated by application of the formula in section 409.910(11)(f).Ò Eady v. Ag.

fo r Health Care Admin. , 279 So. 3d 1249, 1255 (Fla. 1st DCA 2019) (quoting

Delgado v. Ag. for Health Care Admin. , 237 So. 3d 432, 435 (Fla. 1st DCA

2018)). To challenge successfully the amount payable to AHCA, the Medicaid

recipient must prove that a lesser portion of the total recovered should be

allocated as reimbursement for past medical expenses than the amount

AHCA has calculated pursuant to section 409.910(11)(f).

34. The undersigned concludes that Petitioner proved, by clear and

convincing evidence, that the $110,000 settlement proceeds represent ten

percent of the value of PetitionerÔs wrongful death claim.

35. Mrs. McBrideÔs past medical expenses, which have been stipulated to

by the parties, consist of the amounts provided by Medicaid of $87,828.24.

When applying the percentage allocation of ten percent to the past medical

expenses of $87,828.24, the result is $8,782.82, which constitutes the share of

the settlement proceeds properly allocated to PetitionerÔs recovery of past

medical expenses under the pr o rata allocation methodology.

36. Although imperfect, the pro rata allocation methodology Petitioner

relies upon here has been accepted as an appropriate methodology, and must

be accepted when there is no reasonable basis in the record to reject it. See

Gir aldo , 248 So. 3d at 56; Bryan v. State , 291 So. 3d 1033, 1036 (Fla. 1st DCA

2020); Mojica v. Ag. for Health Care Admin. , 285 So. 3d 393, 398 (Fla. 1st

DCA 2019); Eady , 279 So. 3d at 1259. Because there is no reasonable basis to

reject the pro rata allocati on methodology in this case, AHCAÔs Medicaid lien

must be reduced to $8,782.82, representing ten percent of the stipulated

amount of past medical expenses.

O RDER

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

ORDERED that the Agency for Health Care Administration is entitled to

$8,782.82 in satisfaction of its Medicaid lien.

D ONE A ND O RDER ED this 9th day of March , 2021 , in Tallahassee, Leon

County, Florida.

S

B RIAN A. N EWMAN

Administrative Law Judge

1230 Apalachee Parkway

Tallahas see, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of March , 2021 .

C OPIES F URNISHED :

Alexander R. Boler, Esquire Shena L. Grantham, Esquire

2073 Summit Lake Drive , Suite 330 Agency for Health C are Administration

Tallahassee, Florid a 32317 Building 3, Room 3407B

2727 Mahan Drive

Jason Dean Lazarus, Esquire Tallahassee, Florida 32308

Special Needs Law Firm

2420 South Lakemont Avenue , Suite 160 Simo ne Marstiller, Secretary

Orlando, Florida 32814 Agency for Health C are Administration

2727 Mahan Drive, Mail Stop 1

Richard J. Shoop, Agency Clerk Tallahassee, Florida 32308

Agency for Health C are Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

Thom as M. Hoeler, Esquire James D. Varnado, General Counsel

Agency for Health C are Administration Agency for Health C are Administration

2727 Mahan Drive , Mail Stop 3 2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308 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 procee dings 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 pr escribed 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.