22-000211MTR Brian K. Johnston vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Friday, May 20, 2022.

Summary: Petitioner proved by clear and convincing evidence that AHCA's lien amount should be reduced, utilizing the proportionality or pro-rata method approved by various district courts of appeal.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

B RIAN K. J OHNSTON ,

Petitioner ,

vs. Case No. 22 - 0211MTR

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 in Tallahassee,

Florida, on March 31, 2022, before Robert L. Kilbride, the designated

Administrative Law Judge of the Division of Administrative Hearings

( " DOAH " ).

A PPEARANCES

For Petitioner: 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 a mou nt of P e tition er ' s p er so n a l inju r y s e ttl e m e nt p a y a ble to

R e spond e nt, Agency For Health Care Administration ( " AH C A " ) , to s a tis f y

AH C A ' s $118,062.09 M e di ca id li e n, und e r s ec tion 409.9 1 0 ( 17 )( b ) , Florida

Statutes .

P RELIMINARY S TATEMENT

On January 20, 2022, Pe titioner filed a Petition with DOAH pursuant to

s ection 409.910(17)(b). The matter was assigned to the undersigned to

conduct a formal administrative hearing and enter a final order. The final

hearing was scheduled for March 31, 2022.

Prior to the final h earing, the parties filed a Joint Prehearing Stipulation

( " JPHS " ), which included numerous stipulated and admitted issues of law

and fact. Those stipulated issues of law and fact have been incorporated into

this Final Order.

The March 31, 2022 , final hear ing proceeded as scheduled, with Petitioner

calling two witnesses, A ttorneys Frank DiGiacomo and Karen Gievers.

Petitioner ' s Exhibits 1 through 7 were admitted into evidence. AHCA did not

call any witnesses or submit any exhibits into evidence.

The one - volume transcript of the proceeding was filed with DOAH on

April 21, 2022. After granting an extension of time, the parties filed their

respective Proposed Final Orders on May 9, 2022. Both parties ' Proposed

Final Orders were reviewed and carefully conside red in the preparation of

this Final Order.

Unless otherwise noted, all references to s ection 409.910 or other laws

refer to the version of the statute or laws in effect at the time of the action,

omission , or occurrence.

F INDINGS OF F ACT

Based on the st ipulations of the parties, evidence presented a t the

hearing, and the record as a whole, the following Findings of Fact are made:

1. On April 12, 2015, Brian Johnston, who was then 39 years old, was

assaulted by a patron at his wife ' s place of employment. In this assault,

Johnston was doused with gasoline and set on fire resulting in catastrophic

injuries. In this criminal assault , Johnston suffered burns to 33 percent of his

body. These burns required extensive medical intervention, including

multiple debr idement , skin grafts , and plastic surgeries. Johnston has

permanent scarring and will suffer the impact of his injuries for the

remainder of his life. (JPHS pg. 8 ¶1)

2. Johnston ' s medical care related to the injury was paid by Medicaid.

Medicaid through A HCA provided $118,062.09 in benefits. The $118,062.09

constituted Johnston ' s entire claim for past medical expenses. (JPHS pg. 8

¶2)

3. Johnston and his wife pursued a personal injury action against the

parties allegedly liable for Johnston ' s injuries ( " De fendants " ) to recover all

their damages. (JPHS pg. 8 ¶3)

4. The personal injury action was settled through a series of confidential

settlements in a lump - sum unallocated amount. (JPHS pg. 8 ¶4)

5. As a condition of Johnston ' s eligibility for Medicaid, John ston assigned

to AHCA his right to recover from liable third - parties medical expenses paid

by Medicaid. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat.

6. During the pendency of Johnston ' s personal injury action, AHCA was

notified of the ac tion. (JPHS pg. 8 ¶ 5)

7. AHCA did not " institute, intervene in, or join in " the personal injury

action to enforce its rights as provided in section 409.910(11), or participate

in any aspect of Johnston ' s personal injury action against Defendants. (JPHS

pg. 8 ¶ 6)

8. Instead, AHCA asserted a $118,062.09 Medicaid lien against Johnston ' s

cause of action and settlement of that action. (JPHS pg. 8 ¶5; Ex. 4)

9. By letter, AHCA was notified of Johnston ' s settlement. (JPHS pg. 8 ¶7)

10. AHCA has not filed a motion to set - aside, void, or otherwise dispute

Johnston ' s settlement. (JPHS pg. 9 ¶8)

11. The Medicaid program, through AHCA, spent $118,062.09 on behalf of

Johnston, all of which represents expenditures paid for Johnston ' s past

medical expenses. (JPHS pg. 9 ¶9)

12. Johnston ' s taxable costs incurred in securing the settlement totaled

$8,706.75. (JPHS pg. 9 ¶10)

13. Application of the formula at section 409.910(11)(f) to Mr. Johnston ' s

settlement required payment to AHCA of the full $118,062.09 Medicaid lien.

(JPH S pg. 9 ¶11)

14. Petitioner deposited the Medicaid lien amount in an interest - bearing

account for the benefit of AHCA pending an administrative determination of

AHCA ' s rights, and this constituted " final agency action " for purposes of

chapter 120, Florida Statutes, pursuant to section 409.910(17). (JPHS pg. 9

¶12)

15. Petitioner and AHCA agree that Johnston is no longer a Medicaid

recipient.

Testimony of Frank DiGiacomo, Esq uire

16. Frank DiGiacomo has been a trial attorney for 24 years and practices

with the Law Offices of Frank DiGiacomo in Stuart, Florida. DiGiacomo

practices exclusively plaintiff ' s personal injury law with a focus on cases

involving car accidents, slip - and - falls , and workers ' compensation. DiGiacomo

represents plaintiffs who have suffer ed catastrophic injuries.

17. DiGiacomo testified that he is familiar with working personal injury

cases up to trial by reviewing medical records, reviewing accident reports,

and meeting with clients. DiGiacomo testified that he stays abreast of jury

verdi cts by reviewing jury verdict reports and discussing cases with other

attorneys.

18. DiGiacomo is a member of a number of trial attorney associations

including the Florida Justice Association, Treasure Coast Justice Association,

Martin County Bar Associa tion , and the St. Lucie County Bar Association.

19. As a routine part of his practice , DiGiacomo makes assessments

concerning the value of damages suffered by injured clients and he explained

his process for making these determinations. He is familiar wit h, and

routinely participates in, allocation of settlements in the context of health

insurance liens, worker compensation liens , and Medicare set - asides, as well

as allocations of judgements made by trial judges ' post - verdict.

20 . DiGiacomo represented Jo hnston in his personal injury claim.

DiGiacomo reviewed Johnston ' s extensive medical records, reviewed the

police reports, reviewed the surveillance videos, and interviewed witnesses.

Additionally, he explained that he knew Johnston personally even before he

became an attorney 24 years ago, and after the incident he met with

Johnston and his wife numerous times.

21 . Johnston ' s wife worked at a local bar that did not have security, so she

asked Johnston to be present at the bar while she worked. On the eve ning of

the incident, Johnston asked a patron to leave because he was intoxicated

and bragging that he had slipped a pill into someone ' s drink.

22. This individual left the bar, but returned 20 minutes later with a cup

of gasoline. He confronted Johnston and then threw the gasoline on Johnston

and lit him on fire. Johnston suffered catastrophic burns on his face, chest ,

and both arms.

23. Johnston was in a medically induced coma for 21 days while he

underwent numerous skin grafts and debridement. There wa s a period of

time where medical staff did not think he would survive, but fortunately, he

eventually recovered and was able to be released from the hospital.

24 . The assailant, who threw the gasoline on Johnston and lit him on fire,

fled the scene. Law en forcement was unable to locate him for over a year.

25. E ventually the FBI arrested the assailant in Puerto Rico. The

assailant was criminally prosecuted and Johnston and his wife testified at

the criminal trial. The assailant was convicted and sentenced to life in prison.

26 . T he criminal incident and the burn injuries have had a profound

impact on Johnston and his wife. The burns left deep scarring over

Johnston ' s face, neck, arms , and upper body. These scars are light and heat

sensitive, and Johnston is unable to spend time in the sun.

27. Johnston had been employed in a home remodeling business. He was

not able to return to his business for approximately a year after the incident.

Now he can only take jobs that involve inside work.

28. Further, John ston has had issues of fear, anxiety , and depression

associated with both the trauma and the process of the criminal prosecution

subsequent to the arrest of the assailant. Additionally, Johnston ' s wife ' s life

has likewise been negatively impacted from havi ng her husband injured and

she suffered extensively seeing her husband on fire and dealing with his

subsequent care.

29 . DiGiacomo testified that based on his professional training and

experience, Johnston and his wife ' s damages have a total value in exces s of

$4,400,000.00 , stating:

[M]y opinion based on, again, my 25, 24 years of

experience handling significant catastrophic

casesÈ My opinion of anywhere between 4.5 to 5.5

[Million] was what I thought the full value of the

claim was going to be.

30 . DiGia como explained that there is no future medical care expected so

there was no claim for future medical expenses. However, DiGiacomo

testified, the vast majority of the claim for damages was for the past and

future pain and suffering of Johnston and his wife .

31. DiGiacomo offered that juries understand burn injuries and assign a

high value to the pain and suffering associated with a burn injury. Unlike

soft tissue injuries that may not be easily apparent, jurors more readily

relate to how a severe burn hur ts and understand the horrific nature of

catastrophic burns.

32. DiGiacomo indicated that by showing the jury the pictures of the

injury and the video of the incident, he was confident that the jury would

award a significantly high award for the pain an d suffering of Johnston and

his wife (who witnessed the event and the aftermath of the extensive medical

care).

33 . He noted that during the litigation of the case , there was a mediation

with a mediator with extensive trial experience. This mediator was a sked to

give his valuation of the damages and he valued the damages for Johnston at

$4 to $5 million and $400,000 to $500,000 for his wife. DiGiacomo testified

that this valuation " was something that I relied upon as another tool in

assessing what I alread y thought Ï basically, that was my range to begin

with on the full value of the claim. " 1

34 . DiGiacomo testified that valuing Johnston and his wife ' s damages at

$4,400,000.00 is conservative and on the very low - end of his valuation of the

full value of the damages . 2

35 . DiGiacomo detailed that the personal injury claim was pursued

against the bar where the incident occurred and the shopping center with the

theory of negligent security and nuisance. Later the action was amended to

include a dram shop count a gainst the liquor license with the theory that the

assailant was a known drunk/trouble maker. Ultimately, the bar owner had

limited funds, the shopping center had limited liability , and the dram shop

1 While the mediator's comments were hearsay , they supplemented or explained DiGiacomo's

testimony and can be relied upon by an expert.

2 A H CA did not advance the argument that the wife's claim should be excluded from the tot al

value of the case for purposes of applying the pro - rata methodology. Needless to say, A H CA

did not offer any evidence to that effect. Regardless, in this case , there was no direct or

express evidence presented to determine exactly how much of the total value of the case

should be attributable to the wife's claim or how that would affect the total value analysis or

the proportionality methodology under the prevailing case law.

case was difficult to prove. As a result, the case was s ettled with all parties

for $1,350,000.00 .

3 6. DiGiacomo felt that the $1,350,000.00 settlement did not fully

compensate Johnston and his wife for the full value of their damages. He

testified that , based on a conservative value of all damages at $4,400,0 00.00,

Johnston recovered only 30.7 percent of the total value of the damages.

Consequently, since Johnston recovered only 30.7 percent of his total

damages, he only recovered 30.7 percent of his past medical expenses in his

settlement, or $36,245.06.

3 7. DiGiacomo opined that it was reasonable to conclude that $36,245.06

of the settlement was fairly allocable to past medical expenses.

38 . Di Giacomo felt that , because there was no expectation that Johnston

will need future care related to the incident, there was no claim for future

medical expenses at the time of settlement. Accordingly, he testified that no

portion of the settlement represented compensation for future medical

expenses.

Testimony of Karen Gievers, Esq uire

39 . Gievers has been a member o f the Florida Bar since 1978 and Board

Certified in Civil Trial Law by the Florida Bar since 1985. Gievers began her

legal career in Miami , Florida, where she was a civil trial attorney handling

cases involving personal injury. Over the years, her practice evolved into a

civil litigation practice representing injured children statewide.

40. In 1999, Gievers moved her law office to Tallahassee, Florida, where

she continued her trial practice until she was elected as a Second Circuit

Court Judge in 2010. As a Circuit Court Judge, Gievers handled civil

litigation cases, as well as other civil matters. In April 2019, Gievers retired

from the bench and reopened her Tallahassee law office.

41 . Gievers is a member of numerous trial attorney organizations,

includi ng the Florida Justice Association, Capital City Justice Association,

American Board of Trial Advocates, and the Trial Lawyer Section of the

Florida Bar. She is a past president of the Academy of Florida Trial Lawyers,

the Dade County Bar Association, the Dade County Trial Lawyers

Association , and the Tallahassee Chapter of the American Board of Trial

Advocates. She co - founded, and served on the Board of Directors , of both

Florida ' s Children First and Children ' s Advocacy Foundation.

42 . During her practice , Gievers handled jury trials and represented

plaintiffs with catastrophic injuries. She also testified that she stays abreast

of jury verdicts by reviewing jury verdict reports and discussing personal

injury cases with other attorneys.

43 . Gievers testifi ed that as a routine part of her practice she makes

assessments concerning the value of damages suffered by injured parties. She

explained her process for making these assessments. Gievers testified that

she is familiar with, and has participated in, settl ement allocations in the

context of health insurance liens, Medicare set - asides , and workers '

compensation liens, and she has worked through the process of allocation of

settlements in the context of Medicaid liens both as an attorney and as a

j udge.

44 . G ievers was familiar with Johnston ' s injuries and, in addition to

listening to DiGiacomo ' s testimony, she had reviewed the exhibits filed in

this proceeding and reviewed the JPHS. Gievers testified regarding the

nature and extent of Johnston ' s injuries.

4 5. Gievers went on to explain that burn injuries are injuries that juries

understand well because they know the pain suffered with a minor burn, and

they can deduce the extent of pain based on the extent of the injury suffered.

Gievers additionally noted t hat Johnston ' s wife suffered a grievous injury in

that she had to watch her husband burn and then watch her husband go

through the extensive medical interventions to save his life.

46. Gievers testified that both Mr. and Mrs. Johnston ' s lives had been

ne gatively impacted due to the catastrophic injuries suffered and this impact

will last the remainder of their lives. 3

47 . G ievers testified that based on her professional training and

experience, she placed the low - end value of the Johnstons ' total damages at

$5,000,000.00, and stated:

I did determine that a Ï in my view, the lowest end

of the full value for this case would be in the 5

million range. Seeing that the case was in the Port

St. Lucie area, that ' s not quite as high - end verdict

as any Broward Coun ty and West Palm Beach

County to the immediate south of that part of our

state. And for that reason, since I was also made

aware that plaintiff ' s counsel had assessed the

damages and in the 4.5 to 5.5 million range. I don ' t

dispute that, but my personal as sessment would

have been in the higher - a little higher range as

likely whole value.

4 8 . Her valuation of the total damages did not include future medical

expenses because there was no expectation that Johnston would need future

medical care. Instead , her valuation of the total damages included the

$118,0 62 .0 9 claim for past medical expenses, Johnston ' s claim for past and

future non - economic damages , and Mrs. Johnston ' s claim for both loss of

consortium and mental pain and suffering.

49 . After she reviewed the case and developed her valuation of the

damages, Gievers located an article on a burn victim case where the Florida

Supreme Court had affirmed a $5.2 million verdict (just a few days prior to

the Final Hearing in this matter). Gievers testified that w hile she had

already developed her opinion concerning the value of Mr. and

Mrs. Johnston ' s damages, the Florida Supreme Court ' s affirmance of a $5.2

3 As previously alluded to, the extent of the wife's injuries may largely be ir relevant to the

fair allocation analysis herein.

million jury verdict in a similar burn victim case supported her valuation of

the damages . 4

5 0 . Gievers exp lained that she was aware that the case settled for

$1,350,000.00. She opined that the settlement did not fully compensate

Mr. and Mrs. Johnston for all the damages they had suffered.

5 1 . Using a conservative value of total damages of $4,400,000.00, the

$1,350,000.00 settlement represents a recovery of 30.7 percent of the value of

the total damages. Gievers testified that because the settlement represented

only 30.7 percent of the total damages, 30.7 percent of the $118,062.09 lien

amount was a fair alloc ation for past medical expenses recovered in the

settlement.

5 2 . As a result, Gievers testified that it would be reasonable to allocate

$36,245.06 of the settlement to past medical expenses.

Other Evidence

5 3 . A HCA did not call any witnesses or present an y persuasive evidence

as to a different total value of the damages. Nor did A H CA propose a

different valuation of the damages or persuasively challenge the pro - rata

methodology used to calculate the $36,245.06 allocation to past medical

expenses. As a resu lt, Petitioner ' s testimony and evidence presented was

essentially unrebutted and uncontradicted.

5 4 . Based on the methodology of applying the same ratio the settlement

bears to the total value of all damages, $36,245.06 of the settlement fairly

represents past medical expenses. Stated another way, the $1,350,000.00

settlement represents 30.7 percent of $4,400,000.00. Applying 30.7 percent to

the $118,062.09 lien amount results in a finding that $36,245.06 of the

settlement is fairly allocable to past medica l expenses.

5 5 . As a result, Petitioner has proven that $36,245.06 of the settlement is

fairly allocable to past medical expenses.

4 While the article she relied on is arguably hearsay, it explained or supplemented her

testimony, and was also information that can be relied upon by an expert.

C ONCLUSIONS OF L AW

5 6 . AHCA i s the s t a te ag e n c y r e sp on s ibl e f or a d m i n i s te r i ng F l o r i d a ' s

M e di c ai d pr o g r a m. § 4 09 . 910 ( 2 ) , F l a . St a t.

5 7 . D O A H h a s j u r i sdic t i on of th i s m a tte r p u rs u a nt to s e c t i on

409 . 910 ( 17 )( b ) and t h e standard of pr oof i n th i s pr o c e e d i ng i s clear and

convincing evidence by Petitioner that he is entitled to a reduction of the lien

claimed by A H CA.

5 8 . " M e d i c ai d i s a c o o p e r a t iv e f e d e r al - s t a te w e l f a r e pr o g r a m pr o vi d i ng

me d i c a l a ss i s t a n c e to nee d y p eo p l e . " Ro b er t s v. Al b er t s on ' s I n c . , 11 9 So. 3d

45 7, 458 ( F la . 4 th D C A 2 0 12 ) . A l thou g h s t a te p a r t i c i p a t i on i n th i s f e d e r a l

pr o g r am i s v o l unt a r y , on c e a s t a te e l e c ts to p a r t i c i pa te, i t mu s t c om p l y wi t h

the f e d e r al M e d i c ai d law . I d.

59 . F e d e ra l l a w r e q u ir es th a t p a r t i c i p a t i ng s t a tes s eek r e i m b u rs ement f or

me d i c a l e x p en s es i n c u rr ed on b eh al f of M e d i c ai d r e c i p i ents w ho la ter r e c o v er

fr om l e ga l ly - l i a bl e t h ir d p a r t i e s .

6 0 . U n d er the U n i ted St a tes Su pr eme C ou r t ' s r e a s on i ng i n Ar k a n sas

D epa r tm e nt of H e a l th a nd H um a n S er v i c e s v. A h l b o r n , 54 7 U. S. 2 6 8 ( 2 0 06 ) ,

the f e d e r a l M e d i c ai d a nt i - l i en pr o vi s i on a t 4 2 U . S . C . § 13 9 6 p( a )( 1 ) pr oh ibi ts a

M e d i c ai d li en on a ny pr o c e e d s fr om a M e d i c ai d r e c i p i ent ' s to r t s e tt l ement.

6 1 . H o w e v e r , the pr o vi s i ons r e q u i r i ng s t a tes to s eek r e i m b u rs ement of

the i r M e d i c ai d e x p en d i tu r es fr om liabl e th i r d p a r t i e s a l s o cr e a te a n e x pr e s s

e xc e p t i on to the a n t i - li en la w, a nd a utho r i ze s t a tes to s eek r e i m b u rs ement

from the medical expense portion of the recipient ' s tort recovery.

6 2 . A s note d , the F e d e r a l M e d i c ai d Ac t li m i ts a s t a te ' s r e c o v e r y t o c e r t ai n

p o r t i ons of the s ett l ement f un d s r e c e iv ed b y the M e d i c ai d r e c i p i ent. I n

Fl o r i d a , t h i s h a s b een r e c ent l y i nte rpr eted b y the F l o r i d a Su pr eme C ou r t to

b e the a mount i n a p e rs on a l i n j u r y s et t l em e nt w h i c h i s fa i r l y a l l o c abl e to p a s t

( not f utu r e) me d i c a l e x p en s e s . G ir a l do v. A g . f or Heal th C a r e A d m i n . , 24 8 So.

3 d 53 , 5 6 ( F la . 2 0 18 ) . 5

6 3 . I n th i s c a s e, Johnston s ett l ed his personal injury c l a i m ag ai n s t th i rd

p a r t i es l i a b l e to him f or i n j u r i es related to AHCA ' s M e d i c ai d lien . T he r e f o r e,

AHC A ' s l i en m a y b e en f o rc ed aga i n s t his to r t s ett l ement.

6 4 . T he un d e r lyi ng q u e s t i on i n t h i s c a s e, ho w e v e r , i s how mu c h i s AHC A

ent i t l ed to r e c o v er f r om P et i t i oner f or the me d i c a l payments it pr o vi d ed for

him?

6 5 . Se c t i on 4 0 9. 9 10 (1 1 ) e s t ab l i s hes a f o r mu l a to d ete r m i ne the a m oun t

AHC A m a y r e c o v er f o r me d i c a l a ss i s t a n c e b ene f i ts p ai d fr om a j u d g ment,

awa rd , or s ett l ement fr om a th i r d p a r t y . Se c t i on 40 9 .9 1 0 ( 11 )(f ) s t a te s, i n

p e r t i nent p a r t:

N ot wi th s t a n d i n g a ny pr o vi s i on i n th i s s e c t i on to

the c ont r a r y , i n the e v ent of a n a c t i on i n to r t

ag a i n s t a t h i r d p a r ty i n w h i c h the r e c i p i ent or h i s

or her l e ga l r e pr e s en t a t iv e i s a p a r ty w h i c h r e s u l ts

i n a j u d g ment, aw a r d , or s ett l ement f r o m a th i r d

p a r t y , the a mount r e c o v e r ed s h al l b e d i s t r ib uted a s

f o ll o w s:

1 . Af ter a tto r ne y ' s f e e s a nd t axa b l e c o s ts a s d e f i ned

b y the Fl o r i d a R u l es of C ivi l P r o c e d u r e, o n e - h al f of

the r em ai n i ng r e c o v e r y s h al l b e p ai d to the ag en c y

5 Recently, in Gallardo v. Dudek , 963 F.3d 11 67 (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 fe deral 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 numerous state

Supreme C ourts 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 courts are persuasive and usually followed

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

one or more announced interpretation s. ' ) " Carnival Corp. v. Carlisle , 953 So. 2d 461 , 465

(Fla. 2007). As a result, the undersigned has limited his inquiry to that portion of JohnstonÔs

settlement allocable to past medical expenses.

up t o the tot a l a mount of me d i c a l a ss i s t a n c e

pr o vi d ed b y M e d i c ai d.

2 . T he r em a i n i ng a m ount of the r e c o v e r y s h al l b e

p ai d to the r e c i p i ent.

3 . F or p u rp o s e s of c al c u la t i ng the a g en c y ' s r e c o v e ry

of me d i c a l a ss i s t a n c e b ene f i ts p ai d , the f ee f o r

s e r vi c es of a n a t to r n e y r et ai ned b y the r e c i p i ent or

h i s or her l e ga l r e pr e s ent a t iv e s h a l l b e c al c u la ted

a t 2 5 p e rc ent of the j u d g ment, a w a rd , or

s ett l ement.

4 . N ot wi th s t a n d i n g a ny pr o vi s i on of t h i s s e c t i on to

the c ont r a r y , the a g en c y s h al l b e ent i t l e d to all

me d i c a l c o v e r ag e b e n e f i ts up to the to t a l a mount of

me d i c a l a ss i s t a n c e pr o vi d ed b y M e d i c a i d . F or

p u rp o s es of th i s p a r ag r a p h, " me d i c a l c o v e r ag e "

me a ns a ny b ene f i ts un d er he al th i n s u r a n c e, a

he al th m a i nten a n c e o r ga n i z a t i on, a pr e f e rr ed

pr o vi d er a rr a n g eme n t, or a pr e p ai d he al t h c li n i c,

a nd the p o r t i on of b e ne f i ts d e s ig n a ted f o r me d i c a l

p ay ments un d er c o v e r ag e f or w o rk e r s '

c om p en s a t i on, p e rs o n a l i n j u r y pr ote c t i on, a nd

c a s u al t y .

6 6 . I n e ss en c e, s e c t i on 40 9 .9 1 0 ( 11 )(f ) pr o vi d es th a t the ag en c y may

r e c o v e r y the l e ss er o f : ( 1 ) i ts f u l l li e n ; or (2 ) one - h al f of the tot a l awa rd , a f ter

d e d u c t i ng a tto r ne y ' s f ees of 2 5 percent of the r e c o v e r y a nd t ax a bl e c o s t s , not

to e x c eed the tot a l a mount a c tu a l l y pa i d b y M e d i c ai d on the r e c i p i ent ' s b eh al f .

S e e A g . f or Heal th Car e A dm i n. v. R ile y , 11 9 So. 3d 51 4 ( F la . 2 n d D C A 2 0 1 3 ) .

6 7 . H e r e, the p a r t i es ag r eed th a t a pp li c a t i o n of the section 4 0 9 . 9 10 ( 11 )(f)

f o r mu l a to P e t i t i one r s ' s ett l ement w ou l d r e q u i r e p ay ment to A H C A of

$118,062.09.

6 8 . Notably , h o w e v e r , a nother corresponding s e c t i on, outlined below,

pr o vi d es a means b y w h i c h a M e d i c ai d r e c i p i ent m a y c h a ll en g e the a mount

AHC A s ee k s un d er the d e f a u l t f o r mu l a mentioned above.

69 . M o r e sp e c i f i c all y , f o ll o wi n g the U n i ted St a tes Su pr eme C ou r t ' s

d e c i s i on i n W os v. E . M . A . , 5 6 8 U. S. 62 7 , 6 3 3 (2 013 ) , th e Fl o r i d a L e gi s la tu r e

cr e a ted an a d m i n i s t r a t i v e pr o c e s s to c h all en g e a nd d ete r m i ne w h a t p o r t i on of

a j u d g ment, awa rd , or s ett l ement i n a to r t ac t i on i s pr o p e r l y all o c abl e to

me d i c a l e x p en s es . That s e c t i on, section 40 9 .9 1 0 ( 17 )(b ), s t a te s :

A r e c i p i ent m a y c o n t e s t the a mount d e s ig n a ted a s

r e c o v e r ed m e d i c a l e x p en s e d a m ag es p ayabl e to the

ag en c y p u rs u a nt to the f o r mu l a sp e c i f i ed i n

p a r ag r a p h ( 11 )(f ) b y f i l i ng a p et i t i on un d er c h a p ter

12 0 w i th i n 2 1 d ay s a f ter the d a te of p ay ment of

f un d s to the ag en c y o r a f ter th e d a te of p l ac i ng the

f u l l a mount of the th i rd - p a r ty b ene f i ts i n the t r u st

a cc ount f o r the b ene f i t of the ag en c y p u r s u a nt to

p a r ag r a p h ( a ) . T he p et i t i on s h a l l b e f il ed wi th the

Di v i s i on of Ad m i n i s t r a t iv e H e a r i n g s . F or p u rp o s es

of c h a p ter 120 , the p ay ment o f f un d s to t h e ag en c y

or the p la c ement of the f u l l a mount of t he th i rd -

p a r ty b ene f i ts i n the t r u s t ac c ount f o r the b ene f i t of

the ag en c y c on s t i t u tes f i n a l a g en c y a c t i on a nd

not i c e the r eo f . Fi n a l o rd er a utho r i ty f or the

pr o c e e d i n g s sp e c i f i ed i n t h i s s u b s e c t i on r e s ts wi th

the Divi s i on of A d m i n i s t r a t i v e H e a r i n g s . T h i s

pr o c e d u r e i s the e x c l u s iv e method f or c h a ll en g i ng

the a mount of th i rd - p a r ty b ene f i ts p aya bl e to the

ag en c y . I n o rd er to s u cc e s s f u ll y c h a l l e n g e the

a mount p ay a bl e to t he ag en c y , the r e c i pi ent mu s t

pr o v e, b y c l e a r a nd c on vi n c i ng e v i d en c e, th a t a

l e ss er p o r t i on of t h e tot a l r e c o v e r y s hou l d b e

all o c a ted a s r e i m b u rs ement f or p a s t a n d f utu re

me d i c a l e x p en s es th a n the a mount c al c u la ted b y

the ag en c y p u rs u a nt to the f o r mu l a s et f o r th i n

p a r ag r a p h ( 11 )(f ) or th a t M e d i c ai d pr o vi d e d a l e ss er

a mount of me d i c a l a s s i s t a n c e th a n th a t a s s e r ted b y

the ag en c y .

70 . I n s i m p l e t e r m s , i f P et i t i oner c a n d emon s t r a te th a t the p o r t i on of his

s ett l ement ag r eement f ai r l y a l l o c abl e a s p a y ment f or p a s t me d i c a l e x p en s es i s

l e s s th a n t he a mount the ag en c y s ee ks , then the a mount P e t i t i o n er is

o b l iga ted to pa y to A H CA for its lien should b e r e d u c e d.

7 1 . Notably, the question of how to fa i r l y a l l o c a te the p a s t me d i c a l

e x p en s e p o r t i on of a n un d i ff e r ent ia ted s ett l ement ag r eement h a s b een the

s u bj e c t of c on s i d e r abl e and ongoing d e ba te. Unfortunately, this h a s not yet

b een s q u a r e l y decided b y the U n i ted St a tes Su pr eme C ou r t, as it

acknowledged:

A q ue s t i on the C ou r t h a d no o cc a s i on to r e s o lv e i n

A h lb o r n i s how to d ete r m i ne w h a t p o r t i on of a

s ett l ement r e pr e s e nts p ay ment f or me d i c a l c a r e.

T he p a r t i es i n th a t c a s e s t i p u la ted th a t ab out

6 p e rc ent of r e sp o n d ent A h lb o r n ' s to r t r e c o v e ry

( a ppr o xi m a te l y $ 3 5 , 6 0 0 of a $5 5 0 , 0 0 0 s ett l ement)

r e pr e s ented c om p en s a t i on f or me d i c a l c a r e. I d . ,

a t 274 , 12 6 S . C t. 1 752 . T he C ou r t n o nethe l e s s

a nt i c i p a ted the c o n c e r n th a t s ome s e t t l ements

w ou l d not i n c l u d e a n i tem i zed all o c a t i on. I t

al s o r e c o g n i zed the p o ss ibili t y th a t M e d i c ai d

b ene f i c ia r i es a nd to r t f e a s o r s m ig ht c o lla b o r a te to

all o c a te a n a r t i f i c i a ll y l ow p o r t i on of a s ett l ement

to me d i c a l e x p en s e s .

W o s , 5 6 8 U .S. a t 6 2 7 , 634.

7 2 . To ascertain the answer to the Ñfair allocation Ò question, s e v e ra l

Florida D i s t r i c t C ou r t of A pp e a l o p i n i ons h av e relied on the f o ll o wi ng

s t a tement b y t h e Fl o r i d a Su pr eme C ou r t as set tling the question . The Florida

Supreme Court noted:

B e c a u s e w e ho l d t h a t the f e d e r a l M e d i c ai d Act

pr oh ibi ts AHC A fr om p la c i ng a li en on t h e f utu re

me d i c a l e x p en s es p o r t i on of a M e d i c ai d r e c i p i ent ' s

to r t r e c o v e r y , w e r em a nd wi th i n s t r u c t i ons th a t the

Fi rs t Di s t r i c t d i r e c t t he A L J to r e d u c e A H CA ' s li en

a mount to $ 1 3 , 8 81 . 7 9 . A l thou g h a f a c t f i n d er m a y

r e j e c t " un c ont r a d i c t e d te s t i mon y, " the r e mu s t b e a

" r e a s on abl e ba s i s i n the e vi d en c e " f o r the r e j e c t i on.

W al d v. G r a i n g er , 6 4 So. 3 d 1201 , 1 2 0 5 - 0 6 ( Fla.

20 1 1 ) . H e r e, V i l l a pr e s ented u n c on t r a d i c ted

e vi d en c e e s t abli s h i ng $13 , 8 81 . 7 9 a s the s ett l ement

p o r t i on pr o p e r l y a ll o c a ted to h i s p a s t me d i c a l

e x p en s e s , a nd the r e i s no r e a s on abl e ba s i s i n th i s

r e c o r d to r e j e c t V illa ' s e vi d en c e. F or th i s r e a s on, no

f u r ther f a c t f i n d i ng i s r e q u i r e d. (Emphasis added).

G iral do , 24 8 So. 3 d a t 56 .

7 3 . Fortunately, the q ue s t i on th a t had e x i s ted i n t h e la w r e ga rd i ng the

proper metho d o l o g y to use h as b een r e s o lv ed b y the F i rs t Di s t r i c t C ou r t of

Ap p e a l i n a s e r i es of related o p i n i on s . Wh il e the Fl o r i d a S u pr eme C ou r t h a s

not i ss ued a d e f i n i t iv e or e x pr e s s o p i n i on on the m a tte r , the pr e va i l i ng l a w i n

the Fi rs t D is t r i c t C ou rt of App e a l a pp e a r s to b e s et t l e d when certain

evidentiary circumstances exist.

7 4 . More particularly, i n Ea dy v. A g e n c y f or He a l th C a r e A d m i n i s t r a t i o n ,

27 9 So. 3 d 12 4 9 ( Fla . 1 s t D C A 2 0 19 ); L arri g u i - N e g r on v. A g e n c y f or H e a l th

C a re A dm i n i s t r ati on , 28 0 S o. 3 d 5 5 0 ( F l a . 1 s t D C A 20 1 9 ); M o j ic a v. A g e n c y f or

Hea l th C a r e A dm i n is t rati on , 28 5 So. 3 d 3 9 3 ( Fla . 1 s t D C A 2 019 ) ; and Soto v.

Agency for Health Care Administration , 313 So. 3d 143 (Fla. 1st DCA 2020), the

appellate p a ne l s a cc e p ted the p r o p o r t i on al i ty te s t or pro - rata method

a d va n c ed b y P et i t i one r as one acceptable method of proof . 6

7 5 . As a result, a p et i t i oner m a y c a rr y thei r b u rd en of proof, and the

tribunal may reduce AHCA ' s lien, by the same ratio that a petitioner ' s

settlement bears to their total damage claim. This may be a cc om p li s hed

th r o u g h the te s t i mony of e x p e r t w i tne ss e s .

7 6 . Notably , under Eady and subsequent case s, if the p etitioner ' s expert

testimony and evidence is not adequately contradicted or rebutted, it stands

6 These cases do not exclude the possibility that the agenc y m ay present evidence to refute or

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

Larrigui - Negron , or Mojica define the exact par ameters of the pro - rata formula. N or 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 experts or other evidence

presented, which w arrant an adjustment to the proportionality methodology or to the total

damages projected b y 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 p etitioner at trial. H osek ex rel.

H osek v. Ag. For Health Care Admin. , Case No. 18 - 6720MTR (Fla. DOAH July 3, 2019) (Rev.

Apr. 27, 2020).

as the proper allocation in the settlement agreement and sets the amount

from which AHCA may recover.

7 7 . In this case, there was no persuasive ev idence presented by AHCA to

contest or contradict that $36,246.06 was a fair allocation of past medical

expenses in Petitioner ' s settlement, as presented by his experts.

7 8 . Counsel for AHCA cross - examined Petitioner ' s experts, but elicited no

compelling i nformation or persuasive evidence to assail their opinions that a

fair allocation of past medical expenses recovered in the Petitioners '

undifferentiated settlement was $36,246.06.

79 . In short, Petitioner ' s expert testimony concerning a fair allocation of

the settlement agreement was unchallenged by AHCA, without any contrary

facts or evidence in the record.

80 . In the aforementioned cases, t he Fi rs t D i s t r i c t C ou r t of A p p e a l has

d ete r m i ned th a t i t w o u l d b e an e rr or to r e j e c t this e x p e r t te s t i mon y , un l e ss

t he r e i s a b a s i s i n the r e c o r d to d o s o. T he r e wa s no ba s i s i n t h i s r e c o r d to d o

s o.

8 1 . A s s u c h, a nd ba s e d on th i s r e c o rd , the u n d e rs ig ned i s obliged to follow

Ea dy , L arri g u i - N e g r on , M o j ica, and Soto , and c on c l u d es th a t $36,246.06 is the

a mount d ue t o AHCA .

8 2 . The evidence and testimony presented established that the allocation

of Petitioner ' s past medical expenses in the amount of $36,245.06 constitutes

a fair amount to allocate as his past medical expenses recovered in the

settlement.

8 3 . This is calcu lated under the pro - rata or proportionality methodology

as follows: Using the total value of all the damages at $4,400,000.00, the

settlement of $1,350,000.00 is a recovery of 30.7 percent of the total value of

the damages. Applying this same 30.7 percent ratio to A H CA ' s claim of

$118,062.09, results in a fair determination that $36,245.06 of the settlement

is for past medical expenses. ($36,245.06 is 30.7 percent of $118,062.09).

8 4 . AHCA did not present any persuasive evidence disputing that

Petitioner ' s total damages had a conservative value of $4,400,000.00. Nor did

A H CA propose a different valuation of Petitioner ' s damages, or persuasively

contest the proportionality methodology approved by the First District Court

of Appeals.

8 5 . F or the f o r e going re a s o ns, P e tition e r h a s p r ov e n th a t $36,245.06 is

the po r tion of P e tition er ' s s e ttl e m e nt whi c h should be a llo ca t e d a s p a st

m e di ca l e xp e n s e s, and recoverable by A H CA.

O RDER

Upon consideration of the above Findings of Fact and Conclusions of Law,

it is hereby

O RDERED that:

The amount of Petitioner ' s settlement payable to the Agency for Health

Care Administration in full satisfaction of its Medicaid lien is $36,245.06.

D ONE A ND O RDERED this 20 th day of May , 2022 , in Tallahassee, Leon

County, Florida.

S

R OBERT L. K ILBRIDE

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 20 th day of May , 2022 .

C OPIES F URNISHED :

Alexander R. Boler, Esquire Floy d 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 Simone Marstiller, Secretary

Building 3, Room 3407B Agency for Health Care Administration

2727 Mahan Drive 2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308 Tallahassee, Florida 32308 - 5407

Josefina M. Tamayo, General Counsel Thomas M. Hoeler, Esquire

Agency for Health Care Administration Agenc y for Health Care Administration

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

Tallahassee, Florida 32308 Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

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 Statut es. 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

rendit ion 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.