21-001249MTR Devin F. Price vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Friday, July 23, 2021.

Summary: Petitioner showed, by clear and convincing evidence, that AHCA's Medicaid lien should be reduced to $68,629.90, pursuant to pro rata allocation.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

D EVIN F. P RICE ,

Petitioner ,

vs. Case No. 21 - 1249MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RD ER

This case came before Administrative Law Judge Darren A. Schwartz of

the Division of Administrative Hearings (ÑDOAHÒ) for final hearing by Zoom

conference on June 7, 2021.

A PPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton & Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

S TATEMENT O F T HE I SSUE

The issue is to determine the amount payable by Petitioner, Devin F.

Price (Ñ Petitioner Ò) , to Respondent, Agency for Health Care Administration

(ÑAHCAÒ), out of the $3,025,000 gross personal injury settlement proceeds, as

reimbursement for past Medicaid expenditures pursuant to section 409.910,

Florida Statutes.

P RELIMINARY S TATEMENT

On April 7, 2021, Petitioner filed a Petition to Determine Amount Payable

to Agency for Health Care Administration in Satisfaction of Medicaid Lien

pursuant to section 409.910(17)(b). On April 19, 2021, the undersigned

entered an Order setting the final hearing for June 7, 2021. The final hearing

was held on June 7, 2021 , with counsel for the parties app earing on behalf of

their clients. At hearing, Petitioner presented the expert testimony of

attorneys Jeanmarie Whalen and R. Vinson Barrett. PetitionerÔs Exhibits 1

through 9 were received into evidence. AHCA did not call any witnesses or

offer any exhibi ts into evidence.

The one - volume final hearing Transcript was filed on July 2, 2021. The

parties were granted an unopposed extension of time to file their proposed

final orders. The parties timely filed proposed final orders, which have been

considered i n the preparation of this Final Order.

The facts set forth in the partiesÔ Joint Pre - Hearing Stipulation, filed

May 27, 2021, have been incorporated herein. References to the Florida

Statutes are to the 2020 version.

F INDINGS O F F ACT

1. On August 20, 2 019, Petitioner was catastrophically injured when the

motorcycle he was operating collided with an automobile . In this accident,

Petitioner suffered a traumatic brain injury, multiple fractures to his upper

and lower extremities, a degloving injury to his right arm , and injury to his

lower left arm. Petitioner had multiple surgeries as a result of the accident .

He is now unable to use his right arm and has only limited use of his left

hand.

2. PetitionerÔs medical care related to the injury was paid by Med icaid.

Medicaid , through AHCA , provided $215,250.64 in benefits , and Medicaid ,

through a Medicaid Managed Care Organization known as WellCare of

Florida , provided $11,625.08 in benefits. The sum of these benefits,

$226,875.72, constituted PetitionerÔs enti re claim for past medical expenses.

3. Petitioner pursued a personal injury action against the parties allegedly

liable for his injuries (ÑDefendantsÒ) to recover all his damages.

4. Because of issues pertaining to liability and limited insurance coverag e

that was available, PetitionerÔs personal injury action was settled through a

series of confidential settlements in a lump - sum unallocated amount of

$3,025,000.

5. During the pendency of PetitionerÔs personal injury action, AHCA was

notified of the perso nal injury action and AHCA asserted a $215,250.64

Medicaid lien against PetitionerÔs cause of action and settlement of that

action .

6. AHCA did not commence a civil action to enforce its rights under

section 409.910 or intervene or join in PetitionerÔs ac tion against Defendants.

By letter, AHCA was notified of PetitionerÔs settlement. AHCA has not filed a

motion to set - aside, void, or otherwise dispute PetitionerÔs settlement.

7. The Medicaid program , through AHCA , spent $215,250.64 on behalf of

Petition er, all of which represents expenditures paid for PetitionerÔs past

medical expenses.

8. PetitionerÔs taxable costs incurred in securing the settlement totaled

$65,366.96.

9. Application of the formula in section 409.910(11)(f) to PetitionerÔs

$3,025,000 settlement requires payment to AHCA of the full $ 215 ,2 50 . 64

Medicaid lien.

10. Petitioner has deposited the (11)(f) formula amount in an interest -

bearing account for the benefit of AHCA pending an administrative

determination of AHCAÔs rights, and pursuant to section 409.910(17), this

constitutes Ñfinal agency actionÒ for purposes of chapter 120 , Florida

Statutes .

11. At the hearing, Petitioner presented the expert testimony of attorney

Jeanmarie Whalen , who represented Petitioner throughout the underlying

action against the Defendants . Ms. Whalen has been a n attorney for 30 years

and devotes a substantial portion of her practice to plaintiffÔs personal injury

and bad faith cases. She is a partner with the law firm of Domnick

Cunningham and Whalen, P.A., in Palm Beach Gardens, Florida. Ms. Whalen

is a member of numerous trial attorney associations, including the Florida

Justice Association, Palm Beach County Justice Association, and the

American Association for Justice. Ms. Whalen serves as a member of the

Bo ard of Governors with both the Florida Justice Association and the

American Association for Justice , and routinely lectures throughout Florida

and the nation regarding civil litigation matters.

12. Ms. Whalen has successfully handled jury trials, and sta ys abreast of

jury verdicts on other personal injury cases in her area.

13. Ms. Whalen frequently represents plaintiffs who have been

catastrophically injured in motorcycle accidents. As a routine part of her

practice, Ms. Whalen makes assessments concerni ng the value of damages

suffered by her clients. She is very familiar with, and routinely participates

in, allocation of settlements in the context of health insurance liens, workersÔ

compensation liens, Medicare set - asides, and the reduction of jury verdi cts by

trial judges post - verdict.

14. As lead attorney on PetitionerÔs case, Ms. Whalen was familiar with

the circumstances surrounding PetitionerÔs injury , c laims , and current

condition, and gave a detailed explanation of them.

15. Ms. Whalen met with P etitioner on many occasions ; reviewed

PetitionerÔs medical records ; a life care plan, which details PetitionerÔs future

medical needs ; and an economist 's report, which calculated the present value

of PetitionerÔs future medical care and present value of Pe titionerÔs lost

future earnings.

1 6 . Based upon PetitionerÔs life care plan summary and the economist

report, Ms. Whalen testified that th e probable present value of PetitionerÔs

past lost wages and future earnings is $1,660,380 , and that the present valu e

of future medical expenses is $2,686 ,2 95. According to Ms. Whalen, the past

medical expenses of $226,875.72 would also be added to arrive at the full

value of PetitionerÔs economic damages. Ms. Whalen testified that in addition

to economic damages, a jur y would also be asked to assign a value to past and

future noneconomic damages (i.e., pain and suffering and loss of enjoyment of

life). Ms. Whalen testified that PetitionerÔs claim for noneconomic damages

would be significant and ÑdwarfÒ the total value o f all economic damages

because Petitioner would make a very good witness and had a strong story.

17. Ms. Whalen persuasively and credibly testified that the total value of

all of PetitionerÔs damages would be in excess of $10,000,000, and that

valuing Pet itionerÔs damages at $10,000,000 is a very conservative and low

valuation of his damages.

18. Using the pro rat a allocation methodology, Ms. Whalen persuasively

and credibly testified that the $3,025,000 settlement did not fully compensate

Petitioner for the full value of his damages , and that based on a conservative

value of all of PetitionerÔs damages of $10,000,000, the $3,025,000 settlement

represents a recovery of 30.25 percent of the value of his damages.

Ms. Whalen persuasively and credibly testifie d that because Petitioner only

recovered in the settlement 30.25 percent of the full value of his damages, he

only recovered 30.25 percent of his $226,875.72 claim for past medical

expenses, or $68,629.90 , and that it would be reasonable to allocate

$68,62 9.90 of the settlement to past medical expenses.

19. Petitioner also presented the expert testimony of R. Vinson Barrett.

Mr. Barrett has been a trial attorney for over 43 years and is a partner with

the law firm of Barrett Nonni Homola & Ferraro, P . A . , in Tallahassee ,

Florida . His practice is devoted to plaintiffÔs personal injury and wrongful

death cases. He has handled cases involving catastrophic injury and routinely

handles jury trials. He is a member of the Florida Justice Association and the

Capita l City Justice Association.

20. Mr. Barret t is familiar with reviewing medi c al records, life care plans,

economist reports, and preparing and evaluating plaintiffÔs personal injury

cases for trial. Mr. Barrett testified that as a routine part of his pract ice, he

makes assessments concerning the value of damages suffered by injured

parties and he explained his process for making these assessments.

Mr. Barrett testified that it has been part of his law practice to, and he is

familiar with, settlement allocat ion in the context of health insurance liens,

Medicare set - asides, and workersÔ compensation liens. He further testified

that he is familiar with the process of allocating settlements in the context of

Medicaid liens and he described that process.

21. Mr. Barrett has been accepted as an expert in the valuation of

damages and has testified regarding the pro rata methodology in numerous

Medicaid Third - Party Reimbursement (ÑMTRÒ) administrative hearings at

DOAH. In addition, Mr. BarrettÔs expert testimony at DOAH was quoted with

approval in Eady v. Ag ency for Health Care Admin istration , 279 So. 3d 1249

(Fla. 1st DCA 2019).

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

circumstances of PetitionerÔs injuries. He reviewed Petitione rÔs medical

records, exhibits, the economist 's report, and testified regarding the nature

and extent of PetitionerÔs injuries.

23. Mr. Barrett testified that the full value of PetitionerÔs economic

damages for loss of earning capacity and future medic al expenses is in the

range of $5,963,801 to $7,435,147, and that PetitionerÔs claim of noneconomic

damages would have a significantly high value.

24. Mr. Barrett persuasively and credibly testified that t he full value of

PetitionerÔs damages exceeded $10 ,000,000, and that valuing PetitionerÔs

damages at $10,000,000 is conservative and a low valuation of his damages .

25. Using the pro rat a allocation methodology, Mr. Barrett persuasively

and credibly testified that the $3,025,000 settlement did not fully compensate

Petitioner for the full value of his damages, and that based on a conservative

value of all of PetitionerÔs damages of $10,000,000, the $3,025,000 settlement

represents a recovery of 30.25 percent of the value of his damages.

Mr. Barrett persua sively and credibly testified that because Petitioner only

recovered in the settlement 30.25 percent of the full value of his damages, he

only recovered 30.25 percent of his $226,875.72 claim for past medical

expenses, or $68,629.90, and that it would be r easonable to allocate

$68,629.90 of the settlement to past medical expenses.

26. AHCA did not call any witnesses , present any evidence as to the value

of damages, propose a different valuation of the damages, or present evidence

contest ing the methodolog y used by the PetitionerÔs experts to calculate the

$68,629.90 allocation to past medical expenses. The testimony of PetitionerÔs

expert witnesses regarding the value of the case and the use of the pro rata

methodology was not persuasively rebutted or cont radicted by AHCAÔs

counsel on cross - examination, or by any other evidence.

27. In sum, Petitioner proved by clear and convincing evidence that

30.25 percent is the appropriate pro rat a share of PetitionerÔs past medical

expenses to be applied to determine the amount recoverable by AHCA in

satisfaction of its Medicaid lien. F ollowing Ms. WhalenÔs and Mr. BarrettÔs

methodology and applying the $10,000,000 valuation to the total past medical

expenses of $226,875.72, the settlement portion properly allocable t o

PetitionerÔs past medical expenses to satisfy AHCAÔs lien is $68,629.90

($226,875.72 x 30.25 percent = $68,629.90 ).

C ONCLUSIONS O F L AW

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

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

2 9 . Medicaid is a joint federal - state program that allows states to provide

medical services to residents who cannot afford treatment. As a condition of

receipt of federal Medicaid funds, states are required to seek reimbursement

for medical expenses from Medicaid recipients who recover from legally liable

third parties. Giraldo v. Ag . for Health Care Admin. , 248 So. 3d 53, 55 (Fla.

2018).

30 . AHCA is the state agency authorized to administer FloridaÔs Medicaid

prog ram. AHCA is subrogated to any rights a Medicaid recipient may have

from any third party to recover the full amount of the past medical expenses

paid to the Medicaid recipient. §§ 409.902 and 409.910(6), Fla. Stat.

31 . Section 409.910(11)(f) provides a sta tutory formula that AHCA uses in

determining the Medicaid lien amount. The parties agree that application of

the statutory formula results in AHCA recovering the full amount of its

$ 215,250.64 lien.

32 . P ursuant to section 409.910(17)(b), a Medicaid reci pient may contest

the amount payable under the statutory formula in an administrative

proceeding at DOAH.

33. In order to prevail in such an action, section 409.910(17)(b) provides

that the Medicaid recipient must prove, by clear and convincing evi dence,

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

reimbursement for past medical expenses than the amount calculated

pursuant to the statutory formula. 1

1 At hearing, the parties agreed the burden of proof is clear and convincing evidence . See

Gallardo v. Dudek , 963 F.3d 1167, 1182 (11th Cir. 2020) , cert. granted , Gallardo v.

Marstiller , No. 20 - 1263, 2021 WL 2742787 (Jul y 2, 2021).

34. The pro rata allocation methodology , relied upon by PetitionerÔs

experts , has be en accepted by the Florida Supreme Court and First District

Court of Appeal as an appropriate methodology to determine what amount of

an underlying settlement agreement should be fairly allocable to a

petitionerÔs past medical expenses and must be accepted when there is no

reasonable basis in the record to reject it. Giraldo, 248 So. 3d at 56 ; Bryan v.

Ag. for Health Care Admin . , 291 So. 3d 1033, 10 36 (Fla. 1st DCA 2020);

Soto v. Ag. for Health Care Admin. , 313 So. 3d 143 (Fla. 1st DCA 2020);

Ag . f or Heal th Care Admin . v. Rodriguez , 294 So. 3d 441, 444 (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 . A review of these decisions reflects that

u nder the pro rata methodology, the tot al value of the case, established by

expert testimony, is compared against the settlement amount resulting in a

ratio or percentage of recovery. The amount of the past medical expenses is

then multiplied by the resulting percentage to determine the amount

properly allocable to past medical expenses.

3 5 . As detailed above, the unrefuted, uncontradicted, and unimpeached

testimony of M s . Whalen and Mr. Barrett demonstrates that the $ 3 , 025 ,000

settlement represents only 30.25 percent of PetitionerÔs claim val ued

conservatively at $1 0 ,000,000 , and that the application of the 30 . 25 percent

ratio to PetitionerÔs total past medical expenses of $ 226,875 . 72 results in

$6 8 , 629.90 , which is the settlement portion properly allocable to Pe titionerÔs

past medical expense s to satisfy AHCAÔs lien.

36. In its P roposed Final Order, AHCA argues that Petitioner did not

meet his burden because the testimony of the experts was based on hearsay

(i.e. medical records , life care plan, and an economist 's report). ÑIt is

axiomatic th at an expert may rely upon hearsay in arriving at an opinion,

provided that the hearsay is of the type reasonably relied upon by experts in

the field.Ò Vega v. State Farm Mutual Automobile , 45 So. 3d 43, 45 (Fla. 5th

DCA 2010); See also § 90.704, Fla. Stat . In the present case, the documents

relied upon by PetitionerÔs experts are of the type reasonabl y relied upon by

experts in the field. Accordingly, AHCAÔs position is without merit.

O RDER

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

O RDERED that the Agency for Health Care Administration is entitled to

$6 8 , 629 . 90 from PetitionerÔs settlement proceeds in satisfaction of its

Medicaid lien.

D ONE A ND O RDERED this 2 3 rd day of July , 2021 , in Tallahassee, Leon

County, Florida.

S

D ARREN A. S CHWARTZ

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 2 3rd day of July , 2 021 .

C OPIES F URNISHED :

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

2073 Summit Lake Drive , Suite 300 Staunton & Faglie, PL

Tallahassee, Florida 32317 189 East Walnut Street

Monticello, Florida 32344

Shena L. Grantham, Esquire

Agency for Health Care Administration Richard J. Shoop, Agency Clerk

Building 3, Room 3407B Agency for Health Care Administration

2727 Mahan Drive 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308 Tallahassee, Florida 32308

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

Agency for Health Care Administration Ag ency for Health Care Administration

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

Tallahassee, Florida 32308 Tallahassee, Florida 32308

Simone Marstiller, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Tallahassee, Florida 32308 - 5407

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.