21-002709MTR Roger Dale Walden vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Friday, January 21, 2022.

Summary: Petitioner proved by clear and convincing evidence that he was entitled to a reduction of ACHA's lien from $596,173.98 to $192,463.53 using the pro-rata methodolgy. However, a portion of Petitioner's expert's case value for future medicals was rejected.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

R OGER D ALE W ALDEN ,

Petitioner ,

vs. Case No. 21 - 2709MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Pursuant to notice, a final hearing was held in this case on November 29,

2021, by Zoom video - teleconference, before Robert L. Kilbride, an

Administrative Law Judge of the Division of Administrative Hearings

(DOAH).

A PPEARANCES

For Petitioner: Diego Carlos Asencio, Esquire

Diego C. Asencio, P.A.

4440 PGA Boulevard, Suite 600

Palm Beach Gardens, Florida 33410

For Respondent: Alexander R. Boler, Esquire

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

S TATEMENT O F T HE I SSUE S

W hether the A gency for H ealth C are A dministration Ôs (AHCA)

full Medicaid lien of $596,173.98 should be reduced to the amount of

$374,584.76 from the Petit i oner , Roger Dale Walden Ôs (Petitioner or Walden) ,

$1,000,000.00 gross settlement under the default pr ovisions of

section 409.910(11)(f), Florida Statutes. If not, what lesser amount should be

recovered by ACHA under the provisions of section 409.910(17)(b).

P RELIMINARY S TATEMENT

Procedural Background

On September 8, 2021, Petitioner filed a ÑPetition f or Reduction on Agency

for Health Care Administration Presumptive LienÒ with DOAH under the

provisions of section 409.910(17)(b). Before the final hearing, Petitioner and

Respondent filed a Joint Pre - Hearing Stipulation in which they agreed on

many relevan t facts. 1

At the final hearing, Petitioner presented three witnesses: Elizabeth

Walker Finizio, Esq uire ; Mircea Albin Morariu, M.D. ; and Petitioner Walden.

Petitioner submitted into evidence 14 exhibits, and AHCA noticed one exhibit

(labeled A). However, based upon the stipulations and other evidence

presented, AHCA decided not to submit it into evidence. PetitionerÔs E xhibits

1 through 14 were received into evidence without objection.

The parties filed proposed final orders. Both have been reviewed and

considered by the undersigned in the preparation of this Final Order.

Respondent has argued that, unless proven otherwise, it must be

reimbursed in accordance with the statutory formula in

section 409.910(11)(f), which limits AHCAÔs recovery to the less er of (1) its

full lien, or (2) one - half of the settlement remaining after attorney fees

(calculated at 25 percent ) and taxable costs are subtracted. In this case, there

is no dispute that the (11)(f) formula would result in AHCA recovering

$374,584.76 of its full $596,173.98 Medicaid lien.

1 The undersigned has relied on those stipulated facts, as well as addition al facts adduced at

the hearing .

Petitioner believes a lesser amount is owed under section 409.910(17)(b).

Petitioner has already paid Respondent $374,584.76 in two nearly equal

payments. In the Stipulation filed, Petit i oner acknowledges AHCAÔs right to

retain the first payment of $187,291.38. Petitioner is seeking a full refund of

only the second payment he made totaling $187,293.38.

All citations to the Florida S tatutes are to the 2020 version of the Florida

Statutes, unless otherwise indicated.

F IND INGS O F F ACT

Based on the Joint Pre - Hearing Stipulation, 2 the testimony and the

documentary evidence presented, the undersigned finds:

1. On August 1, 2016 , at 8:43 p.m., near Sugar Loaf Key on U.S. 1, a

driver drove her SUV into the back of a motorcycle c arrying driver Roger

Walden and a passenger. Walden and his passenger were southbound at mile

marker 15 when struck from behind by the SUV. The passenger was killed.

Walden (age 56) survived but was severely injured.

2. An eyewitness saw the SUV approachin g mile marker 15 Ñreal fastÒ and

entering the center safety zone as if to pass the motorcycle. The driver didnÔt

stop once she hit the motorcycle. She kept driving and pushing that

motorcycle while sparks flew until it came to a rest outside a business on Bay

Point. She first went around a pickup truck. The pickup truck had scratches

on its rear bumper from the motorcycle being knocked into it. She then drove

a half - mile before stopping her SUV on the Saddle Bunch Keys Bridge.

3. The doctor who treated the driver at the Lower Keys Medical Center

ordered lab tests to determine her blood alcohol level. That blood draw at

Lower Keys Medical Center was done at 10:25 p.m . This was 95 minutes

after the DUI crash. The serum blood alcohol at 10:25 p.m. was .265 g/dL .

2 Findings 1 through 31 are taken directly from the Joint Pre - Hearing Stipulation with

minimal alteration .

4. After obtaining a search warrant a Florida Highway Patrol trooper and

Drug Recognition Expert required the driver to submit to a forensic blood

draw too. A nurse drew that forensic blood at 12:13 a.m., on August 2, 2016,

which is more than three hours after the DUI crash. The results were .182

g/dL.

5. Walden was brought to the Ryder Trauma Center by helicopter on

August 1, 2016. The Ryder Trauma Center is the only Level 1 trauma center

in Miami - Dade - County verified by the American College of Surgeons. Walden

had no idea earlier that day that he would become a resident at Ryder ICU

for the next six months, released on January 23, 2017. He arrived at Ryder

with a Glasgow Coma Scale (GCS) score of 3. That is a low GCS score. The

GCS is the most common sco ring system used to describe the level of

consciousness in a person following a traumatic brain injury.

6. Ryder had a neurosurgery consult as Walden was not waking during his

ICU stay. A brain CT showed bilateral subdural hygromas. A subdural

hygroma is a collection of cerebrospinal fluid, without blood, located under

the dural membrane. An EEG demonstrated moderate encephalopathy.

7. When first brought to Ryder, Walden was found to have blunt injury to

the pelvis, road burn to his chest and abdomen, a rig ht open elbow fracture, a

right open knee fracture, a fracture of his right ankle, multiple lacerations to

his lower extremities , and a left - hand degloving injury.

8. Walden also lost a lot of blood. Walden was transfused with 4 units of

PRBC (packed red b lood cells) in resuscitation. A drop in his blood pressure

after initial resuscitation caused the trauma doctors to take him emergently

to an operating room for an exploratory laparotomy. The surgeons found a

pelvic hematoma, a right sacroiliac joint dislo cation, and left superior and

inferior pubic ramus fractures.

9. The pelvic and ramus fractures were surgically repaired with closed

reduction and percutaneous fixation. The right sacroiliac joint was fixated

using a Ñsynthes 7.3 mm x 85 mm partially threa ded cannulated screw and

washer.Ò

10. The Ryder trauma doctors also addressed a number of other

orthopedic injuries. The doctors found right comminuted distal tibia and

fibula fractures and a closed pilon fracture. The ankle fracture was stabilized

with ex ternal fixation. That external fixation was later removed on

December 6, 2016 . Inter - operatively , doctors closed his left wrist degloving

injury. It was repaired with application of Integra skin substitute. They also

found a right open medial condyle frac ture (the condyle here is the

protuberance of bone below knee cap) with an open knee joint , right open

elbow joint fracture, and a left subcondylar fracture (jaw fracture). Damage to

ulna collateral ligament of right elbow also had to be surgically repaire d. Oral

and Maxi ll ofacial Surgery (OMFS) was considered for his subcondylar

fracture (broken jaw bone) but surgical intervention was not undertaken at

that time. Doctors elected t o allow the jaw to heal on its own.

11. As an unconscious patient, Walden had to be intubated and kept

breathing on a ventilator. He required multiple chest tubes for bilateral

traumatic pneumothorax. Ñ Traumatic pneumothoraxÒ means both of his

lungs collapsed from trauma. The tubes were inserted to get his lungs

inflated again. He was on a ventilator for months. Walden developed acute

respiratory distress syndrome (ARDS) that occurs in those who have

significant injuries.

12. Walden also developed a bronchopleural fistula of left lung.

13. Due to hemodynamic instability and septic s tatus for pseudomonas

pneumonia infections, doctors chose antibiotic treatment instead of

bronchopleural fistula surgery.

14. Walden was hooked up to an extracorporeal membrane oxygenation

(ECMO) machine on August 20, 2016. This requires insertion of a wir e into

the jugular vein. The ECMO machine replaces the function of the heart and

lungs.

15. Walden developed RUL (right upper lobe) loculated pleural effusion.

16. On January 18, 2017 , he was weaned from the ventilator and was on a

trach collar. Walden was stable enough for transfer to a Ñstep down unitÒ on

January 23, 2017 , and transferred to i n patient rehabilitation. He stayed in

impatient rehab for weeks.

17. WaldenÔs injuries and intubation not only caused lung infections, he

developed problems from his foley catheter. He had purulent drainage from

his urethra.

18. The above physical trauma and injury together with the mental

trauma of knowing that the passenger on his motorcycle, who was his life

companion (they married on an Indian reservation accordin g to tribal

custom), was killed in a preventable drunk driving crash has caused Walden

severe mental pain and suffering. Psychiatry was consulted at Ryder for sleep

difficulty, stress disorder, depression, anxiety , and PTSD once Walden awoke.

He continues to struggle with depression, anxiety , and PTSD and it is

expected that he always will.

19. Walden was physically able bodied before the crash. Now his crash

related injuries have left him with an ugly right ankle deformity. His upper

extremities have parti al uncoordinated movement. Only two fingers on his

right - hand work at all. His left arm only bends a few inches and his left wrist

has very little movement. It is very difficult for Walden to grasp any objects.

He can no longer write. He can barely sign hi s name.

20. Walden made a claim against a restaurant on the basis that it had

served alcoholic beverages to the alcohol impaired driver who caused the

crash.

21. Walden reached a settlement with the restaurant in the amount of

$1,000,000 .00 , including that Walden released any claim for the death of his

passenger and life companion.

22. AHCA did not participate in the settlement.

23. There was no allocation of the past or future economic or noneconomic

damages nor for the wrongful death of WaldenÔs life com panion in the

settlement.

24. AHCA was properly notified of WaldenÔs settlement and indicated it

had paid benefits related to the injuries from the incident in the amount of

$596,173.98. AHCA has asserted a lien for the full amount it paid,

$596,173.98, ag ainst WaldenÔs settlement proceeds.

25. Petitioner and AHCA are not aware that anyone else has paid for past

medical expenses.

26. AHCA has maintained that it is entitled to application of the

s ection 409.910 formula to determine the lien amount. Applying the statutory

reduction formula to this settlement would result in $374,584.76 being

payable in satisfaction of AHCAÔs lien.

27. Petitioner paid $187,291.38 on June 25, 2021, which represents

(approximately) half of the statutory formula.

28. Petitioner c oncedes that AHCA is entitled to retain the $187,291.38

paid on June 25, 2021.

29. Petitioner paid an additional $187,293.38 on August 23, 2021.

30. Petitioner seeks a refund of the additional $187,293.38 paid on

August 23, 2021. 3

31. PetitionerÔs petiti on is timely and DOAH has jurisdiction to resolve the

partiesÔ dispute.

Elizabeth Walker Finizio

32. Elizabeth Walker Finizio is an attorney practicing in Ft. Lauderdale,

Florida. She has been an attorney for 20 years and currently practices

personal injur y and medical malpractice law with the Finizio Law Group. She

is admitted to practice in Florida, Pennsylvania, and New Jersey.

3 The specific relief requested by Petitioner is also confirmed in the Proposed Final Order

submitted by Petitioner.

33. She was called ostensibly to provide an expert opinion regarding (1)

the total valuation of WaldenÔs personal injury case as well as (2) providing

her opinion regarding the proper methodol o gy to determine what amount of

WaldenÔs settlement is fairly allocable to his past medical expenses.

34. Finizio reviewed WaldenÔs case, including his discharge summary,

medical records from Dr. Morariu, 4 the police report , and the Joint Pre -

Hearing Stipulation filed in this proceeding. She also did research on her own

utilizing 2016 CDC life tables.

35. Finizio explained her valuation of the personal injury case for Walden.

She testified th at it has a value of $3,493,094.53, or approximately $3.5

million . 5

36. Finizio broke down her opinion of the total value into separate

elements of damages, summarized as follows:

Ŭ $1 million for past non - economic damages

Ŭ $1 million for future non - eco nomic damages

Ŭ $597,094.53 for past medical expense damages

Ŭ $160,000.00 for past lost wage damages

Ŭ $200,000.00 for future lost wage damages

Ŭ $536,000.00 for future medical expense damages

37. While FinizioÔs inclusion of WaldenÔs past medical expens e damages

was based on real and readily determinable numbers, her assessment of

future medical expenses was less persuasive and not based on readily

ascertainable facts articulated by her.

38. Furthermore, FinizioÔs expertise in the area of personal injur y cases,

and her use of jury verdict research, lent credibility to her assessment of

noneconomic damages. However, she did not outline facts adequate to prove

the same expertise regarding PetitionerÔs future medical needs.

4 There were no medical records from Dr. Morariu offered into evidence or considered by the

undersigned .

5 The witness and counsel often used rounded numbers in the hearing, with the

understanding that the precise numbers should be used in calculations.

39. For instance, Finizio explain ed that there was no life care plan

prepared for Walden by another medical or economic expert for her to review

or rely on. Nor did she consult with any doctors regarding future medical

costs for Walden.

40. Instead, she testified that she estimated Wald enÔs future medical

expense damages based, in part, on the fact that his visit to Dr. Morariu cost

$20,000.00. While this was certainly useful information, it fell short of being

clear and convincing as a basis for predict ing unknown future medical

expense s.

41. She estimated $20,000.00 per year in future medicals for 21.8 years,

and $100,000.00 for surgeries for Walden. Aside from knowing the cost of one

visit to Dr. Morariu , which occurred 30 days before the final hearing, her

factual basis to support the $20,000.00 figure for 21.8 additional years and

$100,000.00 for surgeries, was lacking and not clear or convincing. This was

due, in part, to the absence of a life care plan for her to use or rely on.

42. Her additional reliance on life care plans for ot her clients in other

cases with other unexplained injuries or disabilities, is not clear or convincing

evidence upon which to base her opinion regarding future medicals for

Walden.

43. Further, as explained below, Dr. MorariuÔs broad range of surgical

cost s and treatments he estimated were, to a great degree, at odds with the

amounts that Finizio estimated would be incurred. This also raised serious

doubts about the future medical component of her valuation of WaldenÔs case.

44. Therefore, the undersigned r ejects the $536,000.00 future medical

portion of FinizioÔs total valuation as unsupported by clear and convincing

evidence .

45. Because $536,000.00 of the $3,493,094.53 total case valuation from

Finizio is rejected as unsupported by clear and convincing e vidence, only her

remaining $2,957,094.53 can be considered as her opinion regarding the

anticipated total damages. Noneth e less, as explained below, Dr. Morariu

gave sufficient and credible testimony about the future medicals. His figures

were used. 6

46. As explained below, instead of recovering 28.6 percent of his damages,

Walden recovered 32.28 percent of his proven damages. The 32.28 percent

represents the $1 million recovery for Walden divided by $3,097,594.53

($2,957,094.53 plus $140,500.00 in future medicals from Dr. Morariu).

47. Finizio went on to state that AHCA is only entitled to a pro - rata share

of the portion of WaldenÔs settlement fairly allocable to past medical

expenses.

48. FinizioÔs opinion on the propriety or use of the pro - rata methodo logy

was not supported by any specific reasoning or facts from her. To the extent

she was stating her reading of case law, her legal opinion, while helpful, is

not evidence.

Roger Dale Walden

49. Roger Dale Walden is the Petitioner. He explained his backgr ound and

relationship with his deceased wife, who was a passenger on the motorcycle.

He explained what he remembered of the accident and his medical care after

the accident. He is no longer able to work, although he wants to.

Understandably, he can no long er perform many of the normal and common

life activities he could before the accident.

50. Walden stood up and displayed several of his injuries. He also spent a

good deal of time explaining his current pain, physical limitations , and other

issues that af fect him. It is clear to the undersigned that Walden suffered

severe and permanent life altering injuries and disfigurement as a result of

the motorcycle accident.

51. Medicaid paid for WaldenÔs medical expenses. He was unaware of any

outstanding bills or other payors for his past medical expenses.

6 There was some brief evidence regarding the total value of the case had it gone to a jury

trial. However, the Petitioner has not requested that the undersigned consider or use that

value.

Doctor Micea Morariu

52. Dr. Micea Morariu is a medical doctor specializing in neurology. He

came to the United States in 1970. He has been practicing neurology in Palm

Beach since 1982, having previously been a staff neurologist at a major

hospital. He completed his residency at a local hospital.

53. Dr. Morariu saw Walden on October 29, 2021. The doctor completed an

extensive physical exam of Walden, and obtained several analytical and

diagnostic tests regard ing WaldenÔs condition. He explained WaldenÔs current

condition in great detail. This included WaldenÔs injuries, pain, muscle

atrophy, physical limitations , and memory problems. 7

54. Dr. Morariu attributed WaldenÔs current physical and mental

conditions, limitations , and disabilities to the motorcycle accident on

August 1, 2016.

55. He identified several treatments that could be offered to Walden. He

recommended starting with conservative treatment and increasing the

complexity of those treatments, if n ecessary. He did not describe in any detail

what particular process or procedures are involved in the treatments, or how

many such treatment s would be necessary.

56. However, based on evidence credited by the undersigned, the following

is a summary of fut ure medical expenses , which Dr. Morariu believes will be

necessary for Walden within a reasonable degree of medical certainty:

1. Physical Therapy - $4,500.00 per year.

2. Epidural Nerve Blocks - $1,000.00 for each of two

(2) segments of the spine, each involving three

(3) treatments - $6,000.00.

3. Ankle Surgery - $50,000.00.

7 Dr. MorariuÔs extensive explanation is outlined in the hearing transcript, pages 71 through

90. His general overview of WaldenÔs injuries and limitations is fully credited, and there

seems to be no real dispute between the parties on this. In fact, WaldenÔs injuries are

outlined extensively by the parties in their Joi nt Pre - Hearing Stipulation.

4. Two lower back surgeries (cervical and lumbar

areas) - $80,000.00 .

5.Total estimate of future medicals from

Dr. Morariu - $140,500.00 . [ 8 ]

57. AHCA did not call any witnesses, present any experts regarding a

different value of the damages or utilize its own witnesses to propose a

different method to value the total damages suffered by Walden. Nor did

ACHA independently provide any affirmative or contrary evi dence regarding

the amount in WaldenÔs settlement Ñfairly attributableÒ to medical expenses.

58. Other than persuading the undersigned that FinizioÔs inclusion of

$536,000.00 of future medicals in her valuation number was incorrect, AHCA

did not persuasiv ely contest FinizioÔs remaining valuation of Petitioner Ô s total

damages or the methodology used to calculate the allocation of past medical

expenses in the settlement he reached. Nor did ACHA effectively assail

Dr. MorariuÔs estimate of $140,500.00 for fu ture medical expenses Walden

would incur.

59. As a result, but for the $536,000.00 attributable to future medicals by

Finizio, Petitioner Ô s evidence regarding his projected total damages was

essentially unrebutted and uncontradicted by ACHA.

60. To recap the evidence, Petitioner presented the unrebutted expert

testimony of an experienced trial lawyer who provided an opinion as to the

total value of WaldenÔs personal injury claim. This evidence, with certain

adjustments excluding her future medicals portion and inserting

8 It was the PetitionerÔs burden to prove his challenge to ACHAÔs figures by clear and

convincing evidence, as well as the future medicals he proposes to include in the total

valuation of his case under the pro - rata methodology. Dr. MorariuÔs estimates for some of his

future medicals lacked specificity, particularly with respect to how many physical therapy

and epidurals sessions would be necessary. This was absent from the record. As a result, the

undersigned is constrained to c alculate using only one year of physical therapy and one year

of epidurals. It would be speculation on the undersignedÔs part to award additional years, in

the absence of clear and convincing evidence , to support a precise number of years.

Dr. MorariuÔs instead, provided an adequate basis to calculate what portion

of WaldenÔs undifferentiated settlement was "fairly allocableÒ to past medical

expenses, utlizing the pro - rata methodology.

61. More specifically, in "doing the m ath" under the proportionality

methodology -- the $1,000,000.00 settlement represents a 32.28 percent

recovery of all damages. ($1,000,000.00 is 32.28 percent of $3,097,594.53 Ï

which excludes FinizioÔs $536,000.00 for future medicals, but includes

Dr. Mora riuÔs $140,500.00 instead.)

62. Applying the same percentage or ratio of 32.28 percent to the

$596,173.98 in past medical expenses paid out by AHCA, the undersigned

finds that $192,463.53 in the settlement agreement is the amount to be

recovered by ACHA under the proportionality test as "fairly allocable" to past

medical expenses. 9

63. Petitioner conceded in the partiesÔ Joint Pre - H earing Stipulation, at

the hearing , and in his proposed final order, that he only seeks a refund of

the additional $187,293. 38 he paid on August 23, 2021.

64. This stipulation by Petitioner results in ACHA retaining the

$187,291.38 and is owed the additional sum of $5,172.15 under the

proportionality test outlined below. 10

65. Like other cases, pretrial stipulations are enforc eable in Medicaid lien

recovery cases. Delgado v. Ag . f or Health Care Admin . , 237 So. 3d 432 (Fla.

1 st DCA 2018) , and cases cited therein. It would be error for the undersigned

to overlook or reject the binding nature of the stipulation reached between

the parties.

9 As a point of law, the proportionality ratio or percentage is applied to the full amount

ACHA spent, not the reduced amount under the section 409.910(11)(f) formula. See generally

A g. For H ealth C are Admin. v. Rodriguez , 294 So. 3d 441 (Fla. 1st DCA 2020), wherein the

C ourt applied the proportionality ratio or percentage formula to the full lien amount claimed

by ACHA, not the reduced amount under the section 409.910(11)(f) formula.

10 The additional amount owed, $5,172.15, is: $192,463.53 (pro - rata amount owed to ACHA)

minus $187,291.38 (already paid to ACHA on June 25, 2021). This results in ACHA being

owed the additional sum of $5,172.15.

C ONCLUSIONS O F L AW

66. AHCA is the state agency responsible for administering Florida's

Medicaid program. § 409.910(2), Fla. Stat.

67. DOAH has jurisdiction of this matter, pursuant to

section 409.910(17)(b).

General Principles of Medicaid Lie n Law

68. "Medicaid is a cooperative federal - state welfare program providing

medical assistance to needy people." Roberts v. Albertson's , Inc. , 119 So. 3d

457, 458 (Fla. 4th DCA 2012). Although state participation in this federal

program is voluntary, once a state elects to participate, it must comply with

the federal Medicaid law. Id.

69. Federal law requires participating states to seek reimbursement for

medical expenses incurred on behalf of Medicaid recipients who later recover

from liable third partie s.

70. Under the United States Supreme Court's reasoning in Arkansas

Department of Health and Human Services v. Ahlborn , 547 U.S. 268 (2006),

the federal Medicaid anti - lien provision at 42 U.S.C. § 1396p(a)(1) generally

prohibits a Medicaid lien on any pr oceeds from a Medicaid recipient's tort

settlement.

71. However, the provisions requiring states to seek reimbursement of

their Medicaid expenditures also create an express exception to the anti - lien

law, and authorize states to seek reimbursement from th e medical expense

portion of the recipient's tort recovery.

72. As previously noted, the Federal Medicaid Act limits a state's recovery

to certain portions of the settlement funds received by the Medicaid recipient.

In Florida, this has been recently inte rpreted by the Florida Supreme Court

to be the amount in a personal injury settlement , which is fairly allocable to

past (not future) medical expenses. Giraldo v. Ag. for Health Care Admin. ,

248 So. 3d 53, 56 (Fla. 2018). 11

73. In this case, Walden settle d his claim against a third party potentially

liable to him for his injuries related to AHCA's Medicaid lien. Therefore,

AHCA's lien may be enforced against his tort settlement.

74. The underlying question in this case is: How much is AHCA entitled to

rec over from Walden for the medical payments it provided to him?

Florida Law on Medicaid Lien Recovery

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

AHCA may recover for medical assistance benefits paid from a judgment,

award, or sett lement from a third party. 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 attorney's fees and taxable costs as defined

by the Florida Rules of Civil Procedure, one - half of

11 Recently, in Gallardo v. Dudek , 963 F.3d 1167 (11th C.A. 2020), the Eleventh Circuit Court

of Appeals determined that amounts in a settlement agreement fairly allocable to both past

and future medical expenses are subject to the agency's lien. However, this is contrary to the

Florida Supreme Court's holding in Giraldo . Generally, state courts are not required to

follow the decisions of intermediate federal appellate courts on questions of federal law.

"Although state courts are bound by the decisions of the United States Supreme Court

construing federal law, Chesapeake & O. Ry. Co. v. Martin , 283 U.S. 209, 220 Ï 221, 51 S.Ct.

453, 75 L. Ed. 983 (1931), there is no similar obligation with respect to decisions of the lower

federal courts." Abela v. Gen. Motors Corp ., 469 Mich. 603, 677, N.W. 2d 325, 327 (2004), cert .

denied , 543 U.S. 870, 125 S.Ct. 98, 160 L.Ed.2d 117 (2004). Decisions of n umerous state

Supreme Courts have similarly held that state courts are under no obligation to follow the

decisions of the lower federal courts. See, e.g., Skelly Oil Co. v. Jackson , 194 Okla. 183, 148 ,

P.2d 182, 185 (1944) ("[D]ecisions of lower federal co urts are persuasive and usually followed

unless a conflict between the decisions of such courts makes it necessary to choose between

one or more announced interpretations."). Carnival Corp. v. Carlisle , 953 So. 2d 461 (Fla.

2007). As a result, the undersig ned has limited his inquiry to that portion of WaldenÔs

settlement allocable to past medical expenses.

the remaini ng 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 agency's recovery

of medical assista nce 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, "medical coverage"

means any benefits under health insurance, a

health maintenance organizatio n, a preferred

provider arrangement, or a prepaid health clinic,

and the portion of benefits designated for medical

payments under coverage for workers'

compensation, personal injury protection, and

casualty.

76. In essence, section 409.910(11)(f) provi des that the agency's recovery

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

award, after deducting attorney's fees of 25% of the recovery and taxable

costs, not to exceed the total amount actually paid by Medicaid o n the

recipient's behalf. See Ag. for Health Care Admin. v. Riley , 119 So. 3d 514

(Fla. 2d DCA 2013). 12

77. Nonetheless, another corresponding section, section 409.910(17)(b),

provides a method by which a Medicaid recipient may challenge the amount

AHCA se eks under the default formula found at section 409.910(11)(f).

12 Here, the parties agreed in the Joint Pre - hearing Stipulation that application of the

section 409.910(11)(f) formula to PetitionerÔs settlement woul d require payment to AHCA of

$374,584.76.

78. More specifically, following the United States Supreme Court's

decision in Wos v. E.M.A. , 568 U.S. 627, 633 (2013), the Florida Legislature

created an administrative process to challenge a nd determine what portion of

a judgment, award, or settlement in a tort action is properly allocable to

medical expenses and, thus, what portion of a petitioner's settlement may be

recovered to reimburse the Medicaid lien held by AHCA.

Section 409.910(17) (b) states:

A recipient may contest the amount designated as

recovered medical expense damages payable to the

agency pursuant to the formula specified in

paragraph (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

paragraph (a). The petition shall be filed with the

Division of Administrative Hearings. For purpos es

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

proce edings 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 payable t o the agency, the recipient must

prove, by clear and convincing evidence, that a

lesser portion of the total recovery should be

allocated as reimbursement for past and future

medical expenses than the amount calculated by

the agency pursuant to the formula set forth in

paragraph (11)(f) or that Medicaid provided a lesser

amount of medical assistance than that asserted by

the agency. [ 13 ]

13 In this case, the parties agreed that the standard of proof for the Petitioner is clear and

convincing evidence.

79. In simple terms, if Petitioner can demonstrate that the portion of his

settlement agreement fairly allocable as paym ent for past medical expenses

is less than the amount the agency seeks, then the amount Petitioner is

obligated to pay to AHCA for its lien should be reduced.

80. The difficult question of how this is demonstrated had been the subject

of considerable deba te in Florida, and around the country. Unfortunately,

this fundamental question has not been directly decided by the United States

Supreme Court, as it acknowledged in Wos v. E.M.A. , 568 U.S. 627 ( 2013):

A question the Court had no occasion to resolve i n

Ahlborn is how to determine what portion of a

settlement represents payment for medical care.

The parties in that case stipulated that about 6

percent of respondent Ahlborn's tort recovery

(approximately $35,600 of a $550,000 settlement)

represented comp ensation for medical care. Id., at

274, 126 S. Ct. 1752. The Court nonetheless

anticipated the concern that some settlements

would not include an itemized allocation. It also

recognized the possibility that Medicaid

beneficiaries and tortfeasors might coll aborate to

allocate an artificially low portion of a settlement to

medical expenses.

Wos , 568 U.S. at 634.

81. In an effort to arrive at the proper answer to this "allocation question"

in Florida, several Florida District Court s of Appeal opinions have relied on

the following statement by the Florida Supreme Court, and have utilized it,

in part, to identify one correct methodology to establish AHCA's lien. In

Giraldo , the Florida Supreme Court stated:

Because we hold that the federal Medicaid Act

proh ibits AHCA from placing a lien on the future

medical expenses portion of a Medicaid recipient's

tort recovery, we remand with instructions that the

First District direct the ALJ to reduce AHCA's lien

amount to $13,881.79. Although a factfinder may

reject " uncontradicted testimony," there must be a

"reasonable basis in the evidence" for the rejection.

Wald v. Grainger, 64 So. 3d 1201, 1205 - 06 (Fla.

2011) . Here, Villa presented uncontradicted

evidence establishing $13,881.79 as the settlement

portion properly allocated to his past medical

expenses, and there is no reasonable basis in this

record to reject Villa's evidence. For this reason, no

further fact finding is required. (Emphasis added).

Giraldo , 248 So. 3d at 56.

The Proportionality Methodology in F lorida

82. The question that had existed in Florida regarding the appropriate

methodology to determine a fair allocation of past medical expenses in an

undifferentiated settlement agreement was resolved by the First District

Court of Appeal in a series of related opinions in 2019. While the Florida

Supreme Court has not issued a definitive opinion expressly or specifically

addressing this matter, the prevailing law in the First District Court of

Appeal appears to be settled when certain evidentiary circumst ances exist. 14

83. Beginning with Eady v. Agency for Health Care Administration , 279

So. 3d 1249 (Fla. 1st DCA 2019) , and followed by Larrigui - Negron v. Agency

for Health Care Administration , 280 So. 3d 550 (Fla. 1st DCA 2019) , and

Mojica v. Agency for Hea lth Care Administration , 285 So. 3d 393 (Fla. 1st

14 A recent district court opinion observed that the Florida Supreme Court has Ñaccepted the

use of the pro - rata method to reduce the Medicaid lien when the Medicaid recipient has

presented competent, substantial, and uncontradicted evidence to support the position that

only a portion of the settlement should be allocated for past medical expenses . Ò See Soto v.

Ag . f or Health Care Admin . , 313 So. 3d 143 (Fla. 1st DCA 2020)

DCA 2019), these appellate panels adopted the proportionality test or pro -

rata method advanced by Petitioner as one acceptable method of proof. 15

84. Under the proportionality test, a petitioner may carry his burden of

proof, and the tribunal may reduce AHCA's lien, by the same ratio or

percentage that petitioner's personal injury settlement bears to the total

projected value of his claim. ( e . g. , PetitionerÔs total settlement amount

divided by the total ca se value equals a percentage or proportion. That

percentage is multiplied by ACHAÔs lien to arrive at the reduced amount

owed to ACHA). The total value may be established through the testimony of

expert witnesses called by Petitioner, typically experienced personal injury

attorneys.

85. Notably, if the PetitionerÔs expert testimony concerning the total case

value and resulting proportionality ratio is not adequately contradicted or

rebutted by Respondent, then those values stand as the means to calculate

the proper and fair allocation in the settlement agreement for past medicals,

ultimately setting the amount AHCA may recover. Eady , 279 So.3d at 1258 .

86. In this case, other than demonstrating that FinizioÔs inclusion of her

future medicals in her valuati on of the case was flawed and unsupportable,

there was no evidence presented by AHCA to contest or contradict a finding

that the amount of $192,463.53 would be the fair allocation of past medical

expenses in Petitioners' settlement.

87. Counsel for AHCA cr oss - examined PetitionerÔs witnesses, but elicited

no compelling information or persuasive evidence to assail their opinions. As

15 These cases do not exclude the possibility that the agency may present evidence to refute

or contradict the expert testimony offered. Likewise, every case is different. Neither Eady ,

Larrigui - Negron , or Mojica define the exact parameters of the pro - rata formula. Nor do they

exclude the possibility that there may be other acceptable or competing methods of proof to

use at the hearing. Likewise, there may be facts elicited from the exp erts on direct or cross

examination or other evidence presented, which may warrant an adjustment to the

proportionality test or the total damages projected by the experts. As an example, the

undersigned has previously found that a petitionerÔs high degree of comparative negligence

in an accident should be considered insofar as it affects the total damages recoverable by the

petitioner at trial. Hosek ex rel. Hosek v. Ag. For Health Care Admin . , Case No. 18 - 6720MTR

(Fla. DOAH July 3, 2019)(Revised Final Order Apr . 27, 2020).

a result, a fair allocation of past medical expenses recovered in the

PetitionerÔs undifferentiated settlement would result in A CHA being owed

the reduced amount of $192,463.53.

88. In short, PetitionerÔs expert testimony concerning a fair allocation of

the settlement agreement was unchallenged by AHCA, without any contrary

or contradictory facts or evidence in the record.

89. In Eady and related cases, the First District Court of Appeal has

cautioned that it would be an error to reject the expert testimony, unless

there is a basis in the record to do so. With the limited exception of

discounting the total value by $536,000.00 , an d using instead Dr. MorariuÔs

testimony establishing $140,500.00 in future medicals, there was no basis in

this record to reject her total and resulting valuation of $2,957,094.53.

90. As such, and based on this record, the undersigned is obliged to follo w

Eady , Larrigui - Negron , and Mojica, and concludes that $192,463.53 is the

reduced amount due to AHCA.

O RDER

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

O RDERED A ND A DJUDGED as follows:

1. AHCA may retain the sum of $187,291.3 8 received from Petitioner on

June 25, 2021 , and recover the additional amount of $5,172.15, which will

fully satisfy its Medicaid lien. This totals $192,463.53.

2. Likewise, the adjusted and net amount of $182,121.23 shall be

recovered and refunded to Pet itioner from the funds on deposit.

D ONE A ND O RDERED this 2 1st day of January, 2022 , in Tallahassee, Leon

County, Florida.

S

R OBERT L. K ILBRIDE

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 3239 9 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2 1st day of January, 2022 .

C OPIES F URNISHED :

Diego Carlos Asencio, Esquire Shena L. Grantham, Esquire

Diego C. Asencio, P.A. Agency for Health Care Administration

4440 PGA Boulevard, Suite 600 Building 3, Room 3407B

Palm Beach Ga rdens, Florida 33410 2727 Mahan Drive

Tallahassee, Florida 32308

Alexander R. Boler, Esquire

Suite 300 Thom as Hoeler, Esq u ire

2073 Summit Lake Drive Agency for Health Care A dministration

Tallahassee, Florida 32317 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration Simone Marstiller, Secretary

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

Tallahassee, Florida 32308 2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

Josefina M. Tam ayo, General Counsel

Agency 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

com menced 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 l aw, 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.