22-000614MTR Olvin Mejia Palacios vs. Agency For Health Care Administration Status: Appeal.

Summary: Petitioner failed to prove that ACHA's lien should be reduced. Petitioner's 80% comparative negligence in the work accident must be considered when valuing his case and applying the proportionality or prorata methodology he used to challenge ACHA's lien.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

O LVIN M EJIA P ALACIOS ,

Petitioner ,

vs. Case No. 22 - 0614MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F IN AL O RDER

Pursuant to notice, a final hearing was held in this case on April 26, 2022,

by Zoom video conference before the undersigned, Robert L. Kilbride, an

Administrative Law Judge ( Ñ ALJ Ò ) of the Division of Administrative Hearings

( Ñ DOAH Ò ).

A PPEARANCES

For Petitioner: Marc Ginsberg, Esquire

Mandina & Ginsberg, LLP

Laurel Court , Suite 107

15500 New Barn Road

Miami Lakes, Florida 33014

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Flo rida 32317

S TATEMENT O F T HE I SSUE

The issue to be determined is whether the A gency for H ealth C are

A dministration Ô s ( Ñ AHCA Ò ) Medicaid lien of $35,031.49 shall be paid in

full from the $238,500 .00 settlement recovery for Petitioner under

section 409.910(1 1)(f), Florida Statutes ; or if Petitioner proved by clear and

convincing evidence that a lesser amount is due to AHCA under section

409.910(17)(b).

P RELIMINARY S TATEMENT

On February 24, 2022, Petitioner filed a Ñ Petition Contesting Medicaid

Reimbursement Amount Pursuant to Fla. Stat. 409.910(17)(b) Ò with DOAH.

Petitioner later filed an Amended Petition on March 23, 2022.

The final hearing was scheduled for April 26, 2022. Prior to the final

hearing, the parties filed a Joint Pre - hearing Stipulation ( Ñ JPHS Ò ). The

stipulated facts have been outlined herein together with any other material

and relevant facts proven by clear and convincing evidence at the hearing.

At the final hearing, Petitioner presented two witnesses: Scott Feder,

Esq uire , and Marc Ginsber g, Esq uire. Petitioner submitted into evidence 15

exhibits (labeled 1 through 15), which were accepted into evidence. AHCA did

not call any witnesses and offered one exhibit (labeled A). However, AHCA

explained that it was duplicative of Petitioner Ô s Exhib it 9, and did not

separately submit it.

At the conclusion of the hearing, Petitioner indicated through his counsel

that he was not seeking any further reduction of his settlement amount for

other attorney Ô s fees he may have incurred.

Neither party ordere d the trial transcript, and the undersigned relied on

his recollection of the evidence and extensive notes taken during the hearing,

as well as exhibits admitted into evidence.

All references to statutes, laws , or rules are to those in effect on the date

that the act or omission occurred.

F INDINGS O F F ACT

Based on the JP H S 1 and the evidence presented, the undersigned makes

the following findings of relevant and material fact:

S TIPULATED F ACTS

1. On September 4, 2015, Petitioner, Olvin Mejia Palacios , suffe red severe

injuries when he fell over 20 feet from the roof of a building while performing

roofing work. The unlicensed individual that hired Palacios as a day worker

had no liability insurance, no workers Ô compensation insurance , and no

ability to pay wor kers Ô compensation benefits. A licensed contractor, whose

sole action in connection with this matter was to sign the permit application,

did have liability insurance. Accordingly, that licensed contractor was sued.

Discovery revealed that the licensed cont ractor received no financial

renumeration for signing the permit application. Further, fall protection

safety equipment was at the job, but Palacios declined to wear it , even though

he acknowledged it was supposed to be worn. Fall protection equipment

woul d have prevented hi s falling to the ground.

2. P alacios was taken to Memorial Regional Hospital where he was

diagnosed with multiple fractures, a head fracture, collapsed lung, and other

injuries.

3. Ultimately, Medicaid paid $35,031.49 for which it assert s a lien against

Palacios Ôs recovery.

4. In addition to the Medicaid lien for the hospital charges, Palacios also

incurred an additional $9,653.00 that was not paid by Medicaid.

5. Petitioner has deposited the full lien amount in an interest - bearing

trust account as required by the statute.

1 Findings 1 through 5 are taken from the JPHS .

F ACTS P RESENTED A T T HE H EARING

Scott Feder, Esq uire

6. Scott Feder is an attorney in Coral Gables, Florida. He has been an

attorney since 1982, and has been b oard c ertified in c ivil t rial law since 1992.

He handled over 100 jury trials in Alabama, Texas, Georgia, and Florida on

behalf of plaintiffs and defendants.

7. Feder explained the concept of considering liability issues in a personal

injury case. For instance, the responsibility of the injured person for the

incide nt is taken into account, as well as the responsibility of persons who are

not named as parties to a lawsuit.

8. I n a personal injury case, there are economic losses, including past

earnings, loss of future earning opportunity, past medical expenses, and

f uture medical expenses. There are also non - economic damages, such as pain

and suffering, mental anguish, inconvenience, scarring, and loss of capacity

for enjoyment of life for the past and future.

9. There is not necessarily any correlation between econom ic and non -

economic damages.

10. Feder briefly described Palacios Ô s injuries, including his severely

injured wrist, neck fracture, shoulder dislocation, rib fractures, and leg

fracture , where the femur connects with the knee. He underwent significant

surge ry to his wrist. He was hospitalized for 12 days and had follow - up care.

11. Palacios Ô s past medical expenses were in excess of $45,000.00,

consisting of what AHCA paid ($35,031.49), and approximately $10,000.00 in

non - Medicaid medical bills.

12. Feder exp lained that Palacios would have future medical expenses. He

estimated $3,000 per year for 40 years and approximated $75,000.00 to

$85,000.00 as the present value of future medical expenses.

13. Feder next explained Palacios Ô s lost earnings of $120,000.00 a nd loss

of earning capacity, which he estimated at $400,00.00 , with an approximate

present value of $250,000.00.

14. While the lost earnings are known and based on the facts, the loss of

future earning capacity is not. It is based on his opinion that Palac ios could

earn $150.00 per day.

15. Feder estimated that Palacios would have between $400,000.00 and

$1,000,000.00 in non - economic damages including both past and future.

16. Feder provided an expert opinion on the total value of Petitioner Ô s

case. Based on his experience and review of the file and medical records , he

testified that the total value of the case was from $1,000,000.00 to

$1,500,000.00.

17. Based on the facts of the case, Feder testified that Palacios would have

Ñ no chance Ò of recovering the full amount of his damages at trial. He felt

Petitioner would recover only 10 to 20 percent of his damages due to his own

comparative fault during the incident.

18. Upon questioning by the undersigned for clarification on this point,

Feder clarified that in his opinion , Palacios was 50 to 75 percent at fault for

the workplace accident that resulted in his injuries.

Marc Ginsberg, Esq uire

19. Marc Ginsberg is an attorney in Miami, Florida. He graduated from

law school in 1981 and has been Florida Bar board certified in civil trial law

since 1992.

20. He was the lead attorney for Palacios in his personal injury case.

Ginsberg described the incident that led to Palacios Ô injuries.

21. Palacios was working on a flat, two - story roof applying tar to the roof

su rface. Palacios worked his way backwards while near the roof edge. He was

pulling or dragging along a mop and a bucket of tar. When he reached the

back edge of the roof walking or edging backwards, he tripped over the raised

edge of the roof and fell 20 fe et to the ground.

22. As a stipulated fact, during this roofing work , Palacios declined to

wear an available safety harness. This harness would have prevented him

from falling to the ground.

23. This description of the building configuration and accident s ite is

supported by a photograph of the building. Pet. Ex. 1.

24. Ginsberg Ô s description of Palacios Ô injuries was substantially in

agreement with those described by Feder.

25. Ginsberg acknowledged that there were issues of contested liability ,

which woul d have limited Petitioner Ô s recovery at trial. This , together with

other factors and the lack of insurance coverage, led to a gross settlement in

the amount of $238,500.00.

26. Much of the settlement was from the contractor who was insured and

obtained the permit for the roofing work, but did not do any of the actual

work. The subcontractor furnished copies of the permit and a certificate of

insurance to the owner/tenant of the building, which protected them from

liability. The subcontractor was uninsured, and no recovery was available

from him. A nominal recovery was made from the owner/tenant of the

building.

2 7. G insberg testified that Palacios should have known to use the fall

safety equipment on this job, in part, because there was a previous job

Palaci os had worked w h ere he refused to wear the available fall equipment.

This resulted in either a shutting down of that job or other adverse

consequences to him.

28. As a result of all these factors, Ginsberg could not foresee recovering

more than 20 percent of Palacios Ô s damages from the general contractor.

29. Regarding the total valuation of the case, based on his experience in

personal injury cases and his extensive knowledge of Palacios Ô s injuries and

prognosis, Ginsberg opined that the total value of the personal injury case for

Palacios ranged between $1,000,000.00 and $1,500,000.00.

30. Ginsberg broke down his total valuation as follows:

• $45,000.00 for past medical expenses

• $80,000.00 for future medical expenses

• $120,000.00 for past lost wages

• $250,000 .00 for loss of earning capacity

• $300,000.00 - 400,000.00 for past non - economic

damages

• $300,000.00 - 400,000.00 for future non - economic

damages

31. Ginsberg stated that 23.85 percent of the settlement should be

allocated to determine AHCA Ô s lien. This is bas ed on the $238,500.00

recovery divided by the $1,000,000.00 total value he placed on Palacios Ô s

claim. ($238,500.00 is 23.85 percent of $1,000,000.00). 2

32. The burden was on Petitioner to present clear and convincing evidence

to prove that the Ñ proportion ality test Ò he relied on to present his challenge to

AHCA Ô s lien under section 409.910(17)(b) was a reliable and competent

method to establish what amount of his settlement was fairly allocable to

past medical expenses.

33 . Other than Petitioner Ô s use of the proportionality methodology as a

means to challenge AHCA Ô s lien, there was no other persuasive evidence or

arguments presented by him to prove that AHCA Ô s lien should be reduced.

34 . Conversely, however, no evidence was presented by AHCA to

persuasive ly contradict or rebut the testimony of Petitioner Ô s experts

regarding their valuation of Petitioner Ô s case at $ 1,000,000.00 . Nor did AHCA

convincingly assail their opinions regarding the total valuation of the case at

$ 1,000,000.00 .

35. Importantly, the f acts established at the hearing describing the

circumstances surrounding the accident and how it occurred and Petitioner Ô s

failure to use available fall safety equipment, as well as the evidence from

Petitioner Ô s expert regarding Petitioner Ô s high degree o f comparative

2 This method of proof is generally referred to as the prorata or proportionality methodology.

negligence, support a finding by the undersigned that Petitioner was at least

80 percent at fault in this tragic workplace accident.

36. Comments and testimony by Petitioner Ô s experts to questions posed by

the undersigned also underscore and support that it is reasonable and fair to

find that Petitioner was at least 80 percent at fault in the accident.

37. Consistent with the evidence and testimony of Petitioner Ô s experts,

and applying the proportionality method of proof advanced by Petition er and

accepted by the First District Court of Appeal in several recent cases,

Petitioner Ô s total recovery at trial would have been $200,000.00

($ 1,000,000.00 anticipated trial verdict reduced by Petitioner Ô s 80 percent

comparative negligence, equaling a $ 200,000.00 recovery).

38 . The proportionality methodology advanced by Petitioner as the proper

means to determine AHCA Ô s recovery, results in a finding that Petitioner, by

settling for $238,500.00, recovered more than 100 percent of the true total

value of his claim. Likewise, using the same methodology, AHCA is entitled

to recover the same proportion, or 100 percent of its Medicaid lien.

C ONCLUSIONS OF L AW

39. DOAH has jurisdiction of the parties and final order authority in this

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

40 . Petitioner is an individual who was the recipient of Medicaid funds to

pay for medical expenses related to his care and treatment arising from

personal injuries received in a serious workplace accide nt.

41 . Petitioner and AHCA agreed that application of the formula at

section 409.910(11)(f) to the $238,500.00 settlement requires payment to

AHCA of the full $35,031.49 Medicaid lien. JPHS, p. 5.

42 . The burden of proof for a Medicaid recipient to succes sfully contest the

amount claimed by AHCA pursuant to the formula in section 409.910(11)(f) is

clear and convincing evidence. § 409.910(17)(b) , Fla. Stat.

43 . DOAH has jurisdiction under section 409.910(17)(b) to determine the

portion of a personal injury settlement which should be allocated as past

medical expenses, including when the settlement is an unallocated lump sum

settlement.

44 . Respondent is the state agency responsible to administer Florida Ô s

Medicaid program. § 409.902, Fla. Stat.

O VERVIEW OF A PPLICABLE F EDERAL A ND S TATE M EDICAID L AW

45 . Medicaid is a cooperative federal - state welfare program providing

medical assistance to people in need. See generally Roberts v. Albertson Ô s Inc. ,

119 So. 3d 457 (Fla. 4th DCA 2012).

46 . To participate in the federal Medicaid program, the state agency is

obligated to comply with federal Medicaid statutes and must seek

reimbursement for what it has paid out for a recipient when the resources of

a liable third party become available. Id. ; § 409.910(4), Fla. Stat.

47 . Under Florida law, the agency providing the Medicaid support is then

subrogated to and assigned the recipient Ô s rights of recovery from any liable

third party. This results in a lien in favor of the agency for the full amount of

medical assistance pr ovided by Medicaid. § 409.910(6), Fla. Stat. The

recipient may challenge the lien amount at an administrative hearing under

the provisions of section 409.910(17)(b).

48 . The Legislature outlined its lien recovery objectives and intent

underlying the Florid a Medicaid recovery statute.

[I]t is the intent of the Legislature that Medicaid be

repaid in full and prior to any other person,

program, or entity. Medicaid is to be repaid in full

from, and to the extent of, any third - party benefits,

regardless of whet her a recipient is made whole or

other creditors paid.

§ 409.910(1), Fla. Stat.

49 . The Florida Legislature also emphasized that:

It is intended that if the resources of a liable third

party become available at any time, the public

treasury should not be ar the burden of medical

assistance to the extent of such resources.

Id.

50 . Thus, it is clear from a reading of these provisions that the s tate Ô s

intent is to be repaid in full for medical payments it made for the benefit of

the recipient, regardless of whether the recipient is made whole. The court in

Roberts emphasized these provisions. Roberts, 119 So. 3d at 460.

51 . Despite the lien recovery rights afforded to the s tate, there is a

limitation affecting the Florida Medicaid recovery program under

chapt er 409. Specifically, the s tate Ô s recovery program cannot run afoul of the

Ñ anti - lien Ò provisions of federal law.

52 . To that point, the anti - lien provisions of the federal Medicaid Act Ñ pre -

empt a s tate Ô s effort to take any portion of a Medicaid benefici ary Ô s tort

judgment or settlement not Ó designated as payments for medical care. ÔÒ Wos v.

E.M.A. , 568 U.S. 627, 630 (2013)(quoting Ark. Dep Ô t of Health & Human

Servs. v. Ahlborn , 547 U.S. 268, 284 (2006)). This sets Ñ a ceiling on a State Ô s

potential share o f a beneficiary Ô s tort recovery[.] Ò Id . at 633.

53 . Although the federal anti - lien provisions prohibit a state from

recovering reimbursement by placing a lien on any of the recipient Ô s property,

42 U.S.C. § 1396p(a)(1) (2012), a notable exception allows t he state to obtain

reimbursement from certain funds the recipient recovers from third parties

legally liable to the recipient. Ahlborn , 547 U.S. at 268, 275.

54 . So long as the Florida Medicaid recovery program outlined in

chapter 409 complies with the fe deral anti - lien provision and the instructions

in Wos and Ahlborn , it is enforceable and complies with federal law. 3

3 Section 409.910(17)( b), outlining how to challenge AHCA's lien, has been characterized as

compliant with the federal anti - lien provisions outlined in Wos . See generally Mobley v. State ,

181 So. 3d 1233, 1236 (Fla. 1st DCA 2015).

55. The statutory formula used by an agency to determine the Medicaid

lien amount under certain circumstances is straightforward. Section

4 09.910(11)(f) provides:

(f) 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 s ettlement from a third

party, the amount recovered shall be distributed as

follows:

1. After attorney Ô s 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 to tal 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 Ô s 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.

56 . In compliance with the Supreme Court Ô s comments in Wos , the statute

currently affords an opportunity for Medicaid re cipients to challenge the

agency Ô s lien.

57 . A recipient may contest the Medicaid lien set by the agency at an

evidentiary hearing as follows:

In order to successfully challenge the amount

designated as recovered medical expenses, the

recipient must prov e, 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.

§ 409.910(17)(b) , Fla. Stat .

E VIDENTIARY S TANDARD I N A H EARING U NDER S ECTION 409.910(17)( b )

5 8. With respect to a key evidentiary issue in this case , the proper legal

method to challenge the agency Ô s Medicaid lien , numerous district court

opinions and several very recent cases from the First District Court of Appeal

have addressed the issue.

59 . Until r oughly 2019, the question regarding what type of evidentiary

standard applied in cases challenging AHCA Ô s Medicaid lien appeared

unsettled. A variety of tests and methodologies were employed by the courts

and administrative law judges, with mixed reviews b y the district courts of

appeal.

6 0 . In 2019, the First District Court of Appeal issued a series of

instructive Medicaid lien recovery opinions. Those cases are straightforward

and provide new and useful guidance in Medicaid lien reimbursement cases

under section 409.910.

61 . More to the point, these recent cases settle, in large part, the

evidentiary question by acknowledging the propriety of utilizing the

proportionality methodology or prorata test advanced by Petitioner. 4

62 . Specifically, the First Di strict Court of Appeal has determined that in

the absence of evidence to contradict or rebut expert testimony using the

proportionality or prorata methodology, it is an abuse of discretion for an ALJ

to reject this methodology. See generally Eady v. Ag. fo r Health Care

4 This method typically involves the use of exp erts at a DOAH hearing to establish the

projected total value of PetitionerÔs case, had it gone to trial. The settlement amount

Petitioner recovered is compared against the expertsÔ total value to ascertain the percentage

of recovery. The percentage recove red is then multiplied against the agencyÔs lien amount.

Under this test, the lower resulting figure is then the amount the agency may recover from

Petitioner to satisfy its Medicaid lien.

Admin. , 279 So. 3d 1249 (Fla. 1st DCA 2019); Larrigui - Negron v. Ag. for

Health Care Admin. , 280 So. 3d 550 (Fla. 1st DCA 2019); Mojica v. State Ag.

for Health Care Admin. , 285 So. 3d 393 (Fla. 1st DCA 2019); Bryan v. State

A g. f or Health Ca re Admin. , 291 So. 3d 1033 (Fla. 1st DCA 2020); and Ag. for

Health Care Admin. v. Rodriguez, 294 So. 3d 441 (Fla. 1st DCA 2020).

63 . It is unmistakable that Eady, Larrigui - Negron, Mojica , Bryan , and

Rodriguez chart a clear and distinct course providing mu ch needed clarity to

the courts, ALJs , and practitioners.

64 . This is particularly helpful because the proportionality test or

methodology had previously been characterized by one court as Ñ problematic Ò

and of uncertain evidentiary use. Smith v. Ag. for H ealth Care Admin., 24 So.

3d 590, 591 (Fla. 5th DCA 2009). Even the Eady court recognized that the

proportionality test had Ñ been met with decidedly mixed reviews. Ò Eady, 279

So. 3d at 1256.

65 . To be clear, this Final Order will utilize and apply the prop ortionality

methodology advanced by Petitioner, and adopted in Eady . However,

adjustments are made to the Ñ total value Ò based on the uncontradicted

finding, supported by Petitioner Ô s experts, that there was a very high degree

of comparative negligence , by Petitioner , which contributed to causing this

workplace accident and his injuries.

T HE F LORIDA S UPREME C OURT Ô S O PINION I N G IRALDO

66 . A proper decision in this case must also take into account the Florida

Supreme Court Ô s opinion in Giraldo v. Agency for H ealth Care

Administration , 248 So. 3d 53 (Fla. 2018).

67 . In Giraldo , the Florida Supreme Court was asked to resolve a conflict

between the First and Second District Court s of Appeal regarding whether

AHCA could recover its lien and payments from the futur e medical expenses

portion of a Florida Medicaid recipient Ô s tort recovery.

68 . The court examined the plain language of the federal Medicaid Act

and held that federal law limited Florida Ô s Medicaid assignment of rights

(and lien) to reach settlement fund s fairly allocable to past medical expenses,

but not to future medical expenses. 5

69 . In Eady , the First District characterized the Supreme Court Ô s holding

in Giraldo as decisive. Eady also noted that the Supreme Court emphasized

in Giraldo that the Medica id recipient, utilizing a prorata allocation, had

presented uncontested testimony establishing the propriety of the prorata

method of proof. Eady, 279 So. 3d at 1259.

70 . Based on these comments, the appellate panel in Eady determined

that Giraldo support ed the view that the proportionality methodology was an

acceptable approach when challenging a Medicaid lien submitted by AHCA.

71 . The Supreme Court in Giraldo remanded the case with instructions to

reduce the lien amount awarded to $13,881.79, since thi s amount was

established by the uncontradicted evidence, and there was no reasonable

basis in the record to reject using that amount.

C ONSIDERATION OF P ETITIONER Ô S C OMPARATIVE N EGLIGENCE

72 . Every Medicaid lien recovery case at DOAH presents a different a nd

unique set of facts. Since it is clear from Eady that the proportionality

method may be used as one method to challenge AHCA Ô s lien, it is important

to determine what factors and circumstances should be considered when

applying that method of proof.

73 . As previously noted, the testimony and facts from Petitioner Ô s experts,

as well as other evidence at the hearing established, without any question,

5 Recently, in Gallardo v. Dudek , 963 F.3d 1167 (11th C.A. 2020), t he 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 agencyÓs lien. This determination was recently upheld by the U.S. Supreme Court in

Gallardo v. Marstiller, Secretary of the Florida Agency for Health Care Administration , 596 U.S. _____

(2022), s lip o pinion in Case No. 20 - 1263 issued June 6, 2022. As a result, Florida courts are bound by this

new decision since the Supreme CourtÓs decision constr ues federal law. Chesapeake & O. Ry. Co. v.

Martin , 283 U.S. 209, 220 - 221 (1931).

Nonetheless, the updated Gallardo principle does not change the outcome of this case. This is due

primarily to the fact that the use of the default formula by AHCA under sec tion 409.910(11)(f) would not

permit it to be awarded any more than the $35,031.49 awarded herein, regardless of the amount of

PalaciosÓs past and future medical expenses. In short, AHCA has been awarded the full amount it claimed.

Palacios Ô very high degree of comparative negligence and fault in the

accident.

74 . In considering the ap plicability of Eady and similar Medicaid lien

recovery cases issued by the First District Court of Appeal, it is important to

note that comparative negligence was not discussed or examined under the

facts of those cases. Eady (car rollover to avoid hitting an animal); Mojica

(brain damage during a routine tonsillectomy); Larrigui - Negron (facts not

described in the opinion); Bryan (head trauma resulting in brain damage);

Rodriguez (partial paralysis from a motor vehicle crash Ï details not provided).

75 . An up dated research survey reveals that courts have not yet had an

occasion to address or provide guidance in any meaningful way as to how,

when, and under what circumstances the petitioner Ô s own comparative

negligence would affect the Ñ total value Ò of the case , when the proportionality

method is used to challenge AHCA Ô s lien.

76 . Notable as well, Eady did not discuss or analyze what specific factors

should be used by the experts or courts to estimate the total value of a

personal injury case when using the pro portionality methodology. This case

squarely presents the need to do so.

77 . Moreover, comments by the U.S. Supreme Court in Wos are

instructive on the open question of the effect of comparative negligence. For

example, while acknowledging the difficulty c ourts have in determining the

Ñ fair allocation Ò question, the Court noted:

Where no such judgment or stipulation exists, a

fair allocation of such a settlement may be difficult

to determine. Trial judges and trial lawyers,

however, can find objective bench marks to make

projections of the damages the plaintiff likely could

have proved had the case gone to trial.

* * *

What portion of this lump - sum settlement

constitutes Ñ fair and just compensation Ò for each

individual claim will depend both on how likely E .

M. A. and her parents would have been to prevail

on the claims at trial and how much they

reasonably could have expected to receive on

each claim if successful , in view of damages

awarded in comparable tort cases. ( e mphasis

added ).

Wos , 568 U.S. at 641 (2013).

78 . These comments by the Court suggest that the Ñ objective benchmarks Ò

mentioned and used by judges applying the proportionality method, should

include any reasonable and relevant factors affecting how much a plaintiff

could expect to receive at trial.

79. This, in turn, compels the conclusion that pertinent factors that affect

how much a Florida plaintiff could expect to receive at trial should be

considered as a part of the objective analysis required by Wos .

80 . Considering comparative neglig ence or other facts, when the

proportionality method is used, is also reinforced by comments from other

state courts. In a case cited by Eady , State of Colorado Department of Health

Care Policy & Financ ing v. S.P. , 356 P.3d 1033 (Colorado Court of Appeals,

Division Seven 2015), the court stated:

The Wos Court certainly recognized that, absent

stipulation, a fair settlement allocation Ñ may be

difficult to determine. Ò 568 U.S. at [sic], 133 S. Ct.

at 1400. Furthermore, Wo s acknowledged that

fact - specific cons iderations might be relevant

to judicial determinations in particular cases .

See id. (noting that apportioning settlement funds

will depend upon both how likely a plaintiff is to

prevail on his or her claims at trial and how much

he or she Ñ reasonably coul d have expected to

receive on each claim if successful, in view of

damages awarded in comparable tort cases Ò ); see

also Price v. Wolford , 608 F.3d 698, 707 - 08 (10th

Cir. 2010) (discussing considerations that might

justify reduced Medicaid repayment amounts ).

Nevertheless, the Court expressed confidence that

judges and lawyers would be able to Ñ find objective

benchmarks to make projections of the damages the

plaintiff likely could have proved had the case gone

to trial. Ò Wos , 568 U.S. at [sic], 133 S. Ct. at 1400.

( e mphasis added) .

8 1. In Florida, an objective and reliable analysis and opinion by an expert

concerning the total value of a personal injury claim must account for the fact

that any recovery for a personal injury claim is materially affected by th e

plaintiff Ô s own degree of fault in the accident. The concept of comparative

fault by an injured party has been has been imbedded in and part of the

decisional and statutory law in Florida for many decades. § 768.81, Fla. Stat.

82 . In this case, an import ant goal of the hearing was to arrive at a fair

allocation of the past medical component of Petitioner Ô s undifferentiated

settlement agreement. Since the proportionality method chosen and

advanced by Petitioner is premised on a comparison of the settlement amount

to the total value of a case, it is entirely reasonable and rational to consider

all factors affecting the total value Palacios might have been awarded.

83 . A trustworthy case value analysis by an expert must include any

factor a Florida jury woul d be instructed by the court to consider in its

deliberations Ð for instance, the plaintiff Ô s comparative negligence or fault.

§ 768.81, Fla. Stat.

84 . It is clear in Florida that at a personal injury trial, the jury is

instructed to consider the percentage or degree of the plaintiff Ô s own

comparative negligence. What could rationally or logically explain why

Palacios Ô s experts would exclude or overlook his very high degree of

comparative negligence when setting a valuation had the case gone to trial?

85 . Th is concern by the undersigned is particularly true since the concept

and application of comparative negligence is so deeply rooted in Florida

statutory law and jurisprudence. See generally Hoffman v. Jones, 280 So. 2d

431 (Fla. 1973) ; and Y.H. Invs. Inc. v . Godales , 690 So. 2d 1273 (Fla. 1997).

86 . Said differently, the total value of Palacios Ô s claim relied upon by the

experts would be an erroneous figure, lacking the required objectivity, if not

properly adjusted, as a jury would be instructed to do to ac count for

Petitioner Ô s comparative negligence.

87 . The undisputed and unfortunate circumstances surrounding

Petitioner Ô s fall from the roof of the building and the experts Ô uncontradicted

acknowledgement of Palacios Ô s own high degree of comparative neglige nce,

support a finding that his comparative fault was at least 80 percent.

88 . Yet, in rendering their professional opinions regarding the total

valuation of the case, Petitioner Ô s experts inexplicably ignored this important

factor. They failed to explain why Petitioner Ô s comparative negligence should

not affect their opinions regarding the total value of the case. This omission

from their analysis in no way constitutes proper consideration of the

Ñ objective benchmarks Ò required by Wos.

89 . The undersigned concludes that the impact of Palacios Ô s comparative

negligence on the total value of his claim is high ly relevant and cannot be

disregarded when using and applying the proportionality methodology. 6

90 . Moreover, a plaintiff Ô s degree of comparative neglige nce contributing

to an auto accident is not just an Ñ external Ò factor influencing their desire to

settle the case. 7

9 1. Rather, in Florida, the plaintiff Ô s degree of comparative negligence is

an Ñ internal Ò factor, deeply woven into and inseparable from the fabric of the

case. It cannot be ignored when objectively benchmarking or evaluating the

total value of the case.

92 . Lastly, to abide by the instructions in Wos , Palacios Ô s comparative

negligence should be taken into account since it is necessary to det ermine

6 It is worth noting th at if the challenge to a Medicaid lien had been analyzed under the long -

standing principle of equitable distribution or apportionment, it could not be seriously

dispute d that PetitionerÔs comparative negligence would be considered by the judge .

7 Other ex ternal factors affecting the case may include the level of insurance coverage

available, statute of limitations issues, or statutory caps on damage s .

how much he could reasonably have expected to receive on his claim, had the

case gone to trial. Wos , 568 U.S. at 641.

93 . It is reasonable to conclude that the total value of the case under the

proportionality test must take into account all compone nts of a personal

injury claim Ð those that add to the value, as well as those factors that may

reduce the proposed total value Ð such as comparative negligence. There is no

other reasonable way to arrive at the true total value and respect the

Supreme Court Ô s mandate in Wo s to use objective benchmarks when making

the allocation determination.

O RDER

W HEREFORE , based on the foregoing Findings of Fact and Conclusions of

Law, it is hereby D ETERMINED and O RDERED as follows:

1. Based on the evidence presented in th is case, and as directed by the

court in Eady , the proportionality methodology is used to determine if

AHCA Ô s lien should be reduced.

2. Reducing the total value of Palacios Ô s claim to reflect his 80 percent

comparative negligence, results in a total value of his claim of $200,000.00

($ 1,000,000.00 reduced by Petitioner Ô s 80 percent comparative negligence).

3. Applying the total value of his claim of $200,000.00 to his settlement

amount of $234,500.00 results in a finding that Palacios recovered over

100 p ercent of the total value of his claim.

4. Therefore, under the proportionality methodology advanced by

Petitioner, A H CA is entitled to recover 100 percent of its lien, and is hereby

awarded the full amount of $35,031.49 from Petitioner.

D ONE A ND O RDERED this 7th day of June , 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 Administ rative Hearings

this 7th day of June , 2022 .

C OPIES F URNISHED :

Marc Ginsberg, Esquire Shena L. Grantham, Esquire

Mandina & Ginsberg, LLP Agency for Health Care Administration

Laurel Court , Suite 107 Building 3, Room 3407B

15500 New Barn Road 2727 Mahan Drive

Miami Lakes, Florida 33014 Tallahassee, Florida 32308

Alexander R. Boler, Esquire Josefina M. Tamayo , General Counsel

2073 Summit Lake Drive , Suite 300 Agency for Health C are Administration

Tallahasse e, Florida 32317 2727 Mahan Drive, Mail Stop 3

Talla hassee, Florida 32308

Thomas M. Hoeler, Esquire

Agency for Health C are Administration Simone Marstiller, Secretary

2727 Mahan Drive, Mail Stop 3 Agency for Health C are Administration

Tallahassee, Florida 32308 2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308 - 5407

Richard J. Shoop, Agency Clerk

Agency for Health C are Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Fl orida 32308

N OTICE O F R IGHT T O J UDICIAL R EVIEW

A party who is adversely affected by this Final Order is entitle d to judicial

review pursuant to section 120.68, Florida Statutes. Review proceedings are

governed by the Florida Rules of Appellate Procedure. Such proceedings are

commenced by filing the original notice of administrative appeal with the

agency clerk of t he 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 a gency maintains its headquarters

or where a party resides or as otherwise provided by law.