21-002957MTR Gregg J. Maimone vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, February 17, 2022.

Summary: Petitioner proved, by clear and convincing evidence, that AHCA's Medicaid lien for past medical expenses should be reduced according to a pro rata allocation of damages recovered by Petitioner in a third-party settlement.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

G REGG J. M AIMONE ,

Petitioner ,

vs. Case No. 21 - 2957MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Pursuant to notice, a hearing was conducted in this case pursuant to

sections 120.569 and 120.57(1), Florida Statutes (2 021) , before

Administrative Law Judge ("ALJ") Cathy M. Sellers, on December 16, 2021 ,

in Tallahassee, Florida.

A PPEARANCES

For Pet itioner: Floyd B. Faglie, Esquire

Staunton & Faglie, PL

189 East Walnut Street

Monticello, Florida 32344

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

S TATEMENT OF T HE I SSUE

The issue to be determined is the amount to be paid by Petitioner , Gregg

J. Maimone, to Respondent, Agency for Health Care Adminis tration, from the

proceeds of a third party settlement, in satisfaction of Respondent's Medicaid

lien, pursuant to section 409.910(17)(b), Florida Statutes (2021) .

P RELIMINARY S TATEMENT

On September 28, 2021 , Petitioner filed his Petition to Determine Amo unt

Payable to Agency for Health Care Administration in Satisfaction of Medicaid

Lien ("Petition") with the Division of Administrative Hearings ("DOAH").

Init i ally, Humana , Inc. ("Humana") , was named as a Respondent; however,

Petitioner subsequently settle d his dispute with Humana, and filed a Motion

to Dismiss Party. The motion was granted, Humana was dropped as a party

to this proceeding, and the case style was amended accordingly.

The final hearing was held on December 17, 2021 . Petitioner presented

t he testimony of two expert witnesses, Loren Gold and Karen Gievers .

Petitioner's Exhibits 1 and 5 through 11 were admitted into evidence without

objection , and Petitioner's Exhibits 2 through 4 were admitted over objection .

Respondent did not present any w itness testimony or tender any exhibits for

admission into evidence.

The one - volume Transcript of the final hearing was filed at DOAH on

January 18, 2022 . The parties were given through January 28, 2022 , to file

their proposed final orders. Both partie s timely filed their Proposed Final

Orders , which have been given due consideration in preparing this Final

Order.

F INDINGS OF F ACT

The Parties

1. Petitioner, Gregg J. Maimone , is a person for whom Medicaid paid

medical care expenses for injuries that he suffered in an accident.

2. Respondent, Agency for Health Care Administration, is the state

agency that administers the Medicaid program in Florida. § 409.902, Fla.

Stat.

Stipulated Facts

3. On April 28, 2017, Petitioner, a 58 - year - old male, suffered s evere

injuries when his bicycle was struck by a car, and he was run over by

oncoming traffic. He suffered a crushed pelvis, a fractured leg, lower back

injury, and multiple lacerations. As a result of this accident, Petitioner is

unable to walk without ass istance and is permanently disabled.

4. Medicaid paid for Petitioner's medical care related to the injury.

Through Respondent, Medicaid provided $ 121,948.84 in be nefits for

Petitioner's medical care. In addition, Humana, a Medicaid managed care

organizatio n, provided $23,583.58 in benefits. The sum of the benefits paid by

Medicaid, through Responden t and Humana , totaled $145,532.42. This

amount constitutes Petitioner's entire claim for past medical expenses.

5. Petitioner pursued a personal injury claim aga inst the driver/operator

of the vehicle ("Tortfeasor") to recover all of Petitioner's damages resulting

from his injuries suffered in the accident.

6. The Tortfeasor had limited assets, and the amount of insurance policy

limits totaled $300,000.

7. Petitio ner settled his personal injury claim against the Tortfeasor for

the unallocated amount of $300,000.

8 . During the pendency of Petitioner's personal injury claim, Respondent

was notified of the claim and asserted a Medicaid lien in the amount of

$ 121 , 948.8 4 against Petitioner's cause of action and settlement of that action.

9 . Respondent did not institute a civil action to enforce its rights under

section 409.910, and it did not intervene or join in Petitioner 's claim against

the Tortfeasor .

10 . By letter, Respondent was notified of Petitioner's settlement with the

Tortfeasor .

11 . Respondent has not filed a motion to set aside, void, or otherwise

dispute Petitioner's settlement with the Tortfeasor .

12 . The Medicaid program, through Respondent, paid $ 121,948. 84 on

behalf of Petitioner , all of which represents expenditures paid for Petitioner's

past medical expenses.

13 . Petitioner's taxable costs incurred in securing the settlement totaled

$9,752.83.

14 . If the formula in section 409.910(11)(f) is applied to P etitioner's

$300,000 settlement, then $107,618.58 should be paid to Respondent to

satisfy its Medicaid lien .

15 . Petitioner deposited the amount due under application of the formula

in section 409.910(11)(f) Ð i.e., $107,618.58 Ð into an interest - bearing accou nt

for the benefit of Respondent, pending the outcome of an administrative

determination of Respondent's right s regarding the Medicaid lien. Pursuant

to section 409.910(17), such deposit constitutes "final agency action" under

chapter 120.

Facts Found Purs uant to the Evidence Adduced at Final Hearing

16 . Loren Gold testified as an expert witness for Petitioner regarding the

value of Petitioner's case.

17. Gold has been a trial attorney since 1989 and exclusively practices

personal injury law on behalf of pl aintiffs, with a focus on cases involving car

accidents. Gold is experienced at reviewing medic al records and accident

reports, and he stays abreast of jury verdicts by reviewing jury verdict

reports and discussing cases with other attorneys.

18. As a rout ine part of his practice , Gold assesses the value of damages

suffered by injured clients . H e is familiar with, and routinely participates in,

the allocation of settlements in the context of health insurance liens, worker s'

compensation liens , Medicare set - asides, and allocations of post - verdict

judgments .

19. Gold represented Petitioner in relation to his personal injury claim

from the accident that gave rise to this proceeding . He reviewed Petitioner's

extensive medical records and the accident report, a nd met with Petitioner

numerous times .

20 . Petitioner worked at the same liquor store for 20 years. He would ride

the bus and then ride his bike the remaining distance to work. On April 28,

2017, while riding his bike home from work , Petitioner ran into a n SUV and

fell into oncoming traffic. A car ran over Petitioner , resulting in severe

injuries. Petitioner suffered multiple fractures to his vertebra e , a crushed

pelvis , and a broken leg. He had a massive wound to his back side and leg ,

which caused him to nearly bleed to death. He was taken to the hospital ,

where he had multiple blood transfusions and surgeries.

21 . Petitioner 's injuries have had a significant negative impact on him.

Petitioner is only able to stand for short periods of time and only able to walk

short distances, both of which require the use of a walker. He suffers from

bowel and bladder incontinence, resulting in the need to wear diapers.

22 . Petitioner enjoyed his work and was well - liked by customers at the

store where he worked. Post - accident , he is not able to work , depriving him of

that social outlet. Additionally, h e lives with his 91 - year - old father , and is

unable to provide assistance to him, as he previously was able to do .

Petitioner is depressed, and worries about his future.

2 3 . Based on his professional training and experience, Gold conservatively

valued Petitioner's damages at $3,000,000, but opined that they could be as

much as $5,000,000, with the majority of his damages attributable to his

claim for past and future pain a nd suffering.

2 4 . The life - altering impact of the accident and the seriousness of the

physical injury that Petitioner suffered are demonstrable . Gold testified,

credibly, that he would expect a significant award in non - economic damages

from a Broward Coun ty jury. To this point, jury verdicts in cases involv ing

injuries comparable to those suffered by Petitioner averaged approximately

$4.7 million in damages for pain and suffering, and he expect s that a jury

would award Petitioner damages for pain and suffe ring in a similar amount.

25. In valuing Petitioner's claims, Gold consulted with other personal

injury attorneys who concurred that the value of Petitioner's damages for

pain and suffering would exceed $3 million.

2 6 . Petitioner pursued a p ersonal injur y claim against the driver and

owner of the vehicle that pulled out in front of him, and also filed a claim

against Petitioner's uninsured motorist insurance carrier. While the damages

Petitioner suffered had a very high value, the limits in available insu rance

restrict ed Petitioner's recovery for those damages to a total settlement

amount of $300,000.

2 7 . Gold testified , persuasively, that the $300,000 settlement amount did

not fully compensate Petitioner for the entire value of his damages. B ased on

the conservative valu ation of $3,000,000 for all of Petitioner's damages ,

Petitioner recovered only ten percent of the value of his damages. B ecause

Petitioner recovered only ten percent of his damages in the settlement , he

proportionately recovered only ten p ercent of his $145,532.42 claim for past

medical expenses, which is $14,553.

2 8 . Gold opined that the allocat ion of $14,553.24 of the settlement to past

medical expenses was fair and reasonable , and, in fact, is conservative

because it is based on the valu ation of $3,000,000 for Petitioner's damages ,

which could fairly be valued at much higher than that amount.

2 9 . Karen Gievers also testified on Petitioner's behalf. Gievers, who is

Board Certified in Civil Trial Practice by the Florida Bar, has extensive

experience handling personal injury cases.

30 . D uring Gievers' s civil trial practice, she has handled numerous jury

trials and represented plaintiffs with catastrophic injuries. She also stays

abreast of jury verdicts by reviewing j ury v erdict r eports and discussing cases

with other attorneys.

31 . As a routine part of her practice , Gievers assesses the value of

damages suffered by injured parties . S he is familiar with, and has

participated in, settlement allocations in the context of health insurance

lien s, Medicare set - asides , and workersÔ compensation liens . Additionally, s he

has experience in the process of allocating settlements of Medicaid liens , both

as an attorney and as a former circuit court judge .

3 2 . Gievers was familiar with the nature and ext ent of Petitioner's

injuries . She concurred with Gold that the injuries Petitioner suffered were

catastrophic and life - changing. She noted that the photographs of Petitioner's

physical injuries were extremely graphic and disturbing , and definitely would

de monstrate , to a jury , the extreme nature of the injuries he suffered .

3 3 . B ased on her professional training and experience, Gievers believe s

that Petitioner's damages had a value of $6 to $10 million .

3 4 . She noted that Broward County juries typically a ward larger verdicts

than juries in n orth Florid a, and that the $3,000,000 valuation of Petitioner's

damages was very conservative. She testified that the largest component of

Petitioner's damages would be non - economic , due to the nature of his injury

and his relatively long life expectancy . Additionally, Petitioner's injuries are

demonstrable and juries would readily comprehend the impact that his

injuries had on his daily life . Based on these considerations, Gievers opined

that the $3,000,000 valuation of Petitioner's case is a conservative , low - end

valuation of his injuries.

3 5 . Gievers testified that the $300,000 settlement amount did not fully

compensate Petitioner for the damages he had suffered. She opined that,

using the conservative valu ation of $3 ,000,000 for all of Petitioner's damages ,

the $300,000 settlement amount represents a recovery of ten percent of the

full value of Petitioner's damages.

3 6 . Gievers further opined that because Petitioner recovered ten percent

of the full value of all of t he damages he suffered , he proportionately

recovered ten percent of the $145,532.4 2 claim for past medical expenses Ð

i.e., $14,553 .24. She noted that allocating $14,553.24 of the settlement for

past medical expense s was reasonable and fair under the circums tances.

3 7 . Gievers explained that the methodology for calculating the $14,553.24

allocation to past medical expenses was the formula typically used to

determine the allocation to past medical expenses. This method of allocation,

which appl ies the same ra tio that the settlement amount bears to the total

value of the damage s claim, to determine past medical expenses, is the

method she previously applied, as a circuit judge, to determine the amount to

be paid in satisfaction of Medicaid liens , and is consist ently applied in

Medicaid third - party reimbursement cases before DOAH.

3 8 . Respondent did not call any witnesses or present any evidence as to

the value of the damages . Nor did it propose a differ ent valuation of the

damages or contest the methodology used to calculate the $14,553.24

allocation to past medical expenses. Thus, PetitionerÔs testimony and other

evidence presented was unrebutted.

C ONCLUSIONS OF L AW

39 . DOAH has jurisdiction over the parties to, and subject matter of, this

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

4 0 . Petitioner bears the burden of proof, by clear and convincing evidence,

to show that the amount to be paid to Respondent in satisfaction of its

Medicaid lien is less than the $ 107,618.58 that would be due if the formula in

section 409.910(11)(f) were applied in this proceeding.

4 1 . Medicaid is a joint federal - state cooperative program that helps

participating states provide medical services to residents who cannot afford

treatment. Ark. Dep't of Healt h & Human Servs. v. Ahlborn , 547 U.S. 268,

275 (2006). The federal Medicaid Act ("Act") governs regulation of the

Medicaid program, and it mandates that states that participate in the

program comply with federal Medicaid statutes and regulations. Id. at 27 5.

As a condition for receipt of federal Medicaid funds, states are required to

seek reimbursement for medical expenses incurred on behalf of beneficiaries

who later recover from a third party. Id. at 276.

4 2 . The Act contains a general anti - lien provisio n that protects Medicaid

recipients by prohibiting state Medicaid agencies from imposing liens against

a recipient's property. 42 U.S.C. § 1396p(a)(1).

4 3 . However, the Act also contains a narrow exception to this anti - lien

provision which requires states to seek reimbursement for their Medicaid

expenditures by pursuing payment from third parties who are legally liable

for Medicaid recipients' medical expenses. Ahlborn , 547 U.S. at 284 - 85.

States are preempted from taking any portion of a Medicaid benefici ary's

third - party tort judgment or settlement not designated for medical care. Id. ;

Wos v. E.M.A. , 568 U.S. 627, 630 (2013).

4 4 . The Act limits the portion of a recipient's tort recovery on which a

state can impose a lien to past medical expenses only. Gir aldo v. Ag. for

Health Care Admin ., 248 So. 3d 53, 56 (Fla. 2018)(" Giraldo II ") .

4 5 . To comply with the Act's requirement that states seek reimbursement

for Medicaid expenditures from judgments or settlements paid by third

parties to Medicaid recipients, F lorida enacted section 409.910, the Medicaid

Third - Party Liability Act.

4 6 . Section 409.910(6)(c) creates an automatic lien, on behalf of

Respondent, on a judgment or settlement paid by a third party to a Medicaid

recipient for the amount of medical care f urnished by Medicaid to the

recipient. The lien attaches automatically when a recipient first receives

treatment for which Respondent may be obligated to provide medical

assistance under the Medicaid program.

4 7 . Section 409.910(11)(f) establishes a formul a for determining the

amount owed Respondent in satisfaction of its Medicaid lien. This statute

states, in pertinent part:

(11) The agency may, as a matter of right, in order

to enforce its rights under this section, institute,

intervene in, or join any l egal or administrative

proceeding in its own name in one or more of the

following capacities: individually, as subrogee of

the recipient, as assignee of the recipient, or as

lienholder of the collateral.

* * *

(f) Notwithstanding any provision i n this section to

the contrary, in the event of an action in tort

against a third party in which the recipient or his

or her legal representative is a party which results

in a judgment, award, or settlement from a third

party, the amount recovered shall be distributed as

follows:

1. After attorneyÔs fees and taxable costs as defined

by the Florida 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. T he remaining amount of the recovery shall be

paid to the recipient.

3. For purposes of calculating the agencyÔs recovery

of medical assistance benefits paid, the fee for

services of an attorney retained by the recipient or

his or her legal representative shall be calculated

at 25 percent of the judgment, award, or

settlement.

4. Notwithstanding any provision of this section to

the contrary, the agency shall be entitled to all

medical coverage benefits up to the total amount of

medical assistance provided by Medicaid. For

purposes of this paragraph, Ñmedical coverageÒ

means any benefits under health insurance, a

health maintenance organization, a preferred

provider arrangement, or a prepaid health clinic,

and the portion of benefits designated for medical

p ayments under coverage for workersÔ

compensation, personal injury protection, and

casualty.

4 8 . This formula creates a presumptive "default allocation" of third party

proceeds subject to a Medicaid lien when the Agency for Health Care

Administration does not participate in the settlement. Roberts v. Albertson's

Inc. , 119 So. 3d 457, 465 - 66 (Fla. 4th DCA 2012); Ag. for Health Care Admin.

v. Riley , 119 So. 3d 514, 516 (Fla. 2d DCA 2013).

49 . Consistent with the holding in Wos that the Act's anti - lien provisi on

preempts state statutes that create a conclusive presumption regarding the

amount of medical expenses for which the state is entitled to reimbursement,

the Florida Legislature enacted section 409.910(17)(b), which creates an

administrative process under chapter 120 to contest the amount designated

as recovered medical expense damages payable to Respondent pursuant to

the formula in section 409.910(11)(f). See Delgado v. Ag. for Health Care

Admin. , 237 So. 3d 432, 435 (Fla. 1st DCA 2018); Mobley v. Ag. fo r Health

Care Admin. , 181 So. 3d 1233, 1235 (Fla. 1st DCA 2015). Section

409.910(17)(b) states:

(b) If federal law limits the agency to

reimbursement from the recovered medical expense

damages, a recipient, or his or her legal

representative, may contest t he 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 purposes of chapter 120, the payment of funds

to the agency or the placement of the full amount of

the third - party benefits in the trust account for the

benefit of the agency constitutes final agency action

and notice thereof. Final order authority for the

proceedings specified in this subsection res ts with

the Division of Administrative Hearings. This

procedure is the exclusive method for challenging

the amount of third - party benefits payable to the

agency. In order to successfully challenge the

amount designated as recovered medical expenses,

the re cipient must prove, by clear and convincing

evidence, that the portion of the total recovery

which should be allocated as past and future

medical expenses 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.

5 0 . In compliance with section 409.910(17)(b), Medicaid recipients who

assert that the amount paid to satisfy Respondent's Medicaid lien is less than

that calculated by application of the section 409.910(11)(f) formula are

entitled to present evidence in an administrative forum showing that the lien

amount exceeds the amount recovered in a third - party settlement or

judgment for past medical expenses. When such evidence is introduced, the

ALJ must consider it in determining whether Respondent's lien should be

reduced. See Harrell v. Ag. for Health Care Admin. , 143 So. 3d 478, 480

(Fla. 1st DCA 2014).

5 1 . The First District Court of Appeal, in Eady v. Agency for Health Care

Administration , 279 So. 3d 1249 (Fla. 1st DCA 2019), determined, under

circumstances similar to those in this case Ð where the Medicaid recipient

presented expert testimony regarding the appropriate share of settlement

funds to be allocated to past medical expenses and the agency did not present

any evidence to refute the experts' opinions Ð that utilizing the pro rata

allocation method for determining the amount of the third - party recovery to

be allocated to past medical expenses not only was appropriate, but was

required under the circumstances. Id. at 1259. Citing Giraldo II , the court in

Eady determined, as a matter of law, that the ALJ was not authorized to

reject uncontra dicted testimony where there is no reasonable basis in the

evidence for doing so. Id .

5 2 . Since Eady , Florida courts consistently have held that where a

Medicaid recipient presents unrebutted competent substantial evidence to

show that the pro rata allocat ion methodology supports a reduction of the

Medicaid lien as calculated under the formula in section 409.910(11)(f), it is

reversible error for an ALJ to reject the use of such methodology in

determining the amount of the Medicaid lien pursuant to section

409.910(17)(b), unless there is a reasonable basis in the evidentiary record for

doing so. See, e.g., Bryan v. Ag. for Health Care Admin. , 291 So. 3d 1033,

1036 (Fla. 1st DCA 2020); Mojica v. Ag. for Health Care Admin. , 285 So. 3d

393, 398 (Fla. 1st DCA 20 19); Larrigui - Negron v. Ag. for Health Care Admin. ,

280 So. 3d 550 (Fla. 1st DCA 2019).

5 3 . Here, clear and convincing evidence establishes that the pro rata

allocation methodology is a fair and reasonable method for allocating

Petitioner's third - party set tlement proceeds in this case.

5 4 . As noted above, Respondent did not present any countervailing

evidence at the final hearing. Thus, there is no evidentiary basis in the record

for rejecting Petitioner's evidence, which, as found above, credibly and

persu asively shows that the pro rata allocation methodology is a fair and

reasonable means for determining Petitioner's past medical damages for

purposes of determining the amount payable to satisfy Respondent's

Medicaid lien.

5 5 . Under Eady and the other case law cited herein, it would be reversible

error for the undersigned to reject application of the pro rata allocation

methodology to Petitioner's third - party settlement recovery in determining

the amount of his past medical expenses for purposes of satisfact ion of

Respondent's Medicaid Lien.

5 6 . Based on the foregoing, it is concluded that Respondent is entitled to a

payment of $ 14,553.24 in satisfaction of its Medicaid lien.

O RDER

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

O RDER ED that the Agency for Health Care Administration is entitled to

payment of $ 14,553.24 from Petitioner's third - party settlement proceeds in

satisfaction of its Medicaid lien.

D ONE A ND O RDERED this 17th day of February , 2022, in Tallahassee, Leon

County, F lorida.

S

C ATHY M. S ELLERS

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 17th d ay of February , 2022.

C OPIES F URNISHED :

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

2073 Summit Lake Drive , Suite 300 Staunton & Faglie, P . L .

Tallahassee, Florida 32317 189 East Walnut Street

Monticello, Florida 32344

Shena L. Grantham, Esquire

Agency for Health Care Administration Simone Marstiller, Secretary

Building 3, Room 3407B Agency for Health Care Administration

2727 Mahan Drive 2727 Mahan Drive, Mail Stop 1

Tallahassee, Flori da 32308 Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk Josefina M. Tamayo, Gen eral Counsel

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

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 120.6 8, 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 pa rty resides or as otherwise provided by law.