21-001836MTR Carlos Morales vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, October 28, 2021.

Summary: AHCA/Medicaid can only recover money from payments for past medical expenses. Petitioner didn't prove what part of recovery was past medical expenses because didn't prove the expenses. Record did not support pro rata lien reduction.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

C ARLOS M ORALES ,

Petitioner ,

vs. Case No. 21 - 1836MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Administrative Law Judge John D. C. Newton, II, of the Division of

Administrative Hearings (DOAH), conducted the final hearing in this case on

September 21, 2021, in Tallahassee, Florida, by Zoom video conference.

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 Drive, Suite 300

Tallahassee, Florida 32317

S TATEMENT OF T HE I SSUE

What amount of the personal injury claim settlement of Petitioner, Carlos

Morales, must be paid to Respondent, Agency for He alth Care Administration

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

P RELIMINARY S TATEMENT

On June 11, 2021, Mr. Morales filed a Petition to Determine Medicaid ' s

Lien Amount to Satisfy Claim A gainst Personal Injury Recovery 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 July 12, 2021. It convened

as scheduled. At the parties ' request, the hearing was reset and scheduled to

resume on September 21, 2021. The hearing was held as scheduled. The

parties filed a pre - hearing stipulation that included a statement of admitted

and undisputed facts. They are adopted in the Findings of Fact without

substantive al teration.

At the final hearing, Mr. Morales presented testimony from David

Novack, David Paul, and Jacky Rodriguez. Mr. Morales ' Exhibits 1 through 5

were accepted into evidence. The Agency did not present evidence. The

Transcript was filed October 6, 202 1. The parties timely filed proposed final

orders. They have been considered in the preparation of this Final Order.

F INDINGS OF F ACT

1. On August 8, 2020, a vehicle left its lane and ran head - on into

Mr. Morales. A second vehicle also hit Mr. Morales. M r. Morales was not

responsible for the accident. The accident trapped him in his vehicle and

severely injured him.

2. Mr. Morales was transported to Orlando Regional Medical Center by

helicopter and treated in the c enter's trauma unit because of his seve re

injuries. Mr. Morales ' injuries required multiple surgeries, right knee

reconstruction, insertion of a right hip rod, and repair of a lacerated spleen.

Mr. Morales also received multiple blood transfusions.

3. Mr. Morales received physical therapy after discharge from the

hospital. Since then, his injuries, including abnormal neurological issues,

have required continuing medical treatment. The injuries left Mr. Morales

permanently disabled.

4. Mr. Morales asserted a personal injury claim against various

defendants. Mr. Morales settled his claims in May of 2021, for $225,000.00.

5. Mr. Morales properly notified the Agency of his personal injury claim

and the settlement amount. The Agency paid $84,508.48 for Mr. Morales '

medical care. The Agency asserted a lien against the settlement proceeds for

the money it paid for Mr. Morales ' Medicaid services.

6 . The Agency maintains that it is entitled to application of the formula in

s ection 409.910 (11)(f) , Florida Statutes (2020) , 1 to determine the lien amount.

Applying the statute ' s reduction formula to the $84,508.48 results in a

recoverable lien amount of $84,206.67.

7 . There is no competent persuasive evidence of the total amount of

Mr. Morales ' medical expenses.

C ONCLUSIONS OF L AW

8 . Sections 120.569, 120.57(1), and 409.910(17), Florida Statutes, grant

DOAH jurisdiction over the subject matter and parties in this case.

9 . The Legislature authorized the Agency to administer Florida ' s Medicaid

program. See § 409.902, Fla. Stat.

10 . 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 in

the Medicaid program, it must comply with federal requirements governing

the program. Id .

1 1 . 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,

1 All citations to Florida Statutes are to the 2020 codification.

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 care when the recipient later

rec eives 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.

1 2 . 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 Health Care Admin. v. Riley , 11 9

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

right to contest a Medicaid lien before DOAH and provides that section

409.910(11) (f) establishes the default allocation of damage amounts

attributable to medical costs. The M edicaid recipient may prove that a

different allocation is the correct allocation.

1 3 . Section 409.910(17)(b) states that a challenger to the statutory lien

amount must prove its claim by clear and convincing evidence. Previously, a

federal injunction bar red the Agency from applying the clear and convincing

standard , resulting in application of the preponderance of the evidence

standard . However, the United States Court of Appeals for the Eleventh

Circuit recently reversed the district court ' s decision, an d, among other

things, held that application of the " clear and convincing evidence " burden of

proof does not violate federal law. Gallardo v. Dudek , 963 F.3d 1167, 1181

(11th Cir. 2020). The undersigned has considered this matter under both the

preponderan ce of the evidence and clear and convincing evidence standards.

The outcome is the same applying either standard.

1 4 . Mr. Morales presented the testimony of two qualified personal injury

attorneys to support his contention that the Medicaid lien amount sho uld be

reduced. They testified in general about a " pro rata " method of allocating a

portion of the total recovery to past medical expenses paid by the Agency.

This refers to an analysis of the recovery for an injury, the damages value of

a claim for the in jury, the components of the damages, and what percentage

of the damages should be attributed to past medical expenses, a component of

which are the amounts paid by the Agency. Thorough record - based analyses

of this sort have been found sufficient and persu asive. See , e.g. , D.T. v. Ag . for

Health Care Admin. , Case No. 21 - 1122 (Fla. DOAH Sept. 21, 2021); Touchton

v. Ag . for Health Care Admin. , Case No. 20 - 3907 (Fla. DOAH Dec . 8, 2020) ;

Mobley v. Ag . for Health Care Admin. , Case No. 20 - 4033 (Fla. DOAH Dec . 21,

2020).

1 5 . Appellate decisions have accepted a proportional reduction or pro rata

analysis as a valid, albeit no t exclusive, basis for calculating the amount of

recovered damages attributable to past medical expenses and allocating the

Medicaid portio n of those expenses. Ag. for Health Care Admin. v. Rodriguez ,

294 So. 3d 441, 444 (Fla. 1st DCA 2020); Bryan v. Ag . for Health Care

Admin . , 291 So. 3d 1033 (Fla. 1st DCA 2020). The cases giving rise to those

opinions, like Division of Administrative Hearin gs Final Orders in Medicaid

third party reimbursement cases, involve evidence - based detailed factual

analys e s of the various elements of damages, including past medical

expenses. Sometimes the parties explicitly or tacitly agree that the amount of

past med ical expenses is the amount paid by Medicaid. Here they do not. T he

record does not contain the amount of past medical expenses. The Agency

questions the absence of proof of all past medical expenses.

1 6 . Mr. Morales ' claim rests on the testimony of his expert witness, David

Paul . Mr. Paul acknowledged the significance of total medical expenses. He

testified that in evaluating the damages value of a case he tries " to get

questions answered, like what were the past medical expenses that were

billed, becaus e I think that ' s a very helpful measure in how you calculate the

Ï reasonable value of the noneconomic damages. " (Tr. p. 33) Yet he did not

know the amount of total medical expenses. Similarly , Mr. Paul testified that

lawyers often use the cost of medical treatment as a benchmark " for

discussions over what ' s the value of noneconomic [damages]. " (T r. 38)

Mr. Paul also stated that he did not include economic damages in the total

damages amount used to calc ulate the percentage of Mr. Morales ' recovery

attributable to medical expenses. Testifying about this he said, " I can explain

why, but I don ' t have to. " (T r. 43)

1 7 . Mr. Paul ' s unpersuasive and conclusory testimony about damages and

apportionment of them w as insufficient to prove by a preponderance of the

evidence that the adjusted Medicaid lien of $84,206.67 should be reduced.

O RDER

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

O RDERED that Respondent, Agency for Health Care Admini stration, recover

the entire Medicaid lien amount of $84,206.67.

D ONE A ND O RDERED this 28th day of October , 2021 , in Tallahassee, Leon

County, Florida.

S

J OHN D. C. N EWTON , II

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 28th day of October , 2021 .

C OPIES F URNISHED :

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

2073 Summit Lake Drive , Suite 300 Agency for Health Care Administration

Tallahassee, Florida 32317 Building 3, Room 3407B

2727 Mahan Drive

Tallahassee, Florida 32308

Jason Dean Lazarus, Esquire Simone Marstiller, Secretary

Special Needs Law Firm Agency for Health Care Administration

2420 South Lakemont Avenue , Suite 160 2727 Mahan Drive, Building 3

Orlando, Florida 32814 Tallahassee, Florida 32308 - 5407

William H. Roberts, General Counsel Richard J. Shoop, Agency Clerk

Agency for Health Care Administration Agency for Health Care Administration

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

Tallahassee, Florida 32308 Tallahassee, Florida 32308

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(850) 922 - 5873

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 ori ginal 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 th e 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.