22-000654MTR Kai Hutchins vs. Agency For Health Care Administration Status: Appeal.

Summary: Petitioner proved he recovered only 16.67 per cent of value of his damages from a car accident. Applying that percentage to the amount of his actual past medical expenses (all paid by AHCA) was rational reduced lien from $148,055.20 to $24,685.20.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

K AI H UTCHINS ,

Petitioner ,

vs. Case No. 22 - 0654MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

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

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

May 13, 2022, in Tallahassee, Florida, by Zoom video conference.

A PPEARANCES

For Petitioner: Jason Dean La zarus , Esquire

Special Needs Law Firm

2420 South Lakemont Avenue, Suite 160

Orlando, Florida 32814

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 3 0 0

Tallahassee, Florida 32317

S TATEMENT OF T HE I SSUE

What amount of the personal injury claim settlement of Petitioner, Mr.

Hutchins , must be paid to Respondent, Agency for Health Care Administration

(Agency), to satisfy the Agency's Medicaid lien imposed by section 409.910(6)(c),

Florida Statutes (2021 ) ? 1

1 All c itations to Florida Statutes are to the 2021 codification unless otherwise noted.

P RELIMINARY S TATEMENT

Mr. Hutchins filed his Petition to Determine Medicaid's Lien Amount on

March 1, 2022. The matter was assigned to the undersigned to conduct a formal

administrative hearing and issue a final order. The matter was set for hearing to

begin on May 13, 2022, and was held as scheduled. The parties filed a P re - hearing

S tipulation that included a statement of eight admitted facts. They are incorporated

in the Findings of Fact, without substantive alteration.

The parties filed a Joint M otion for Protective Order on May 9, 20 22 . The Order

denying the motion was rendered May 10, 2022.

Mr. Hutchins testified and presented testimony from Clancey Bounds and

Dean Burnetti. Both were accepted as experts in damages valuation in personal

injury matters. Mr. Hutchins ' Exhibits 1 through 5 were admitted into evidence.

The Agency did not offer testimony or other evidence. The parties timely filed

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

F INDINGS OF F ACT

Acc ident, Injuries , and Medical Treatment

1. On September 4, 2020, Mr. Hutchins was driving a 2015 Ford Mustang on

Highway 60 in Mulberry, Florida, at 120 miles per hour. Some information

indicates Mr. Hutchins was racing a car in another lane. A turning dump truck

blocked Mr. Hutchins' lane. Mr. Hutchins crashed into the truck. He was traveling

approximately 79 miles per hour at the time of impact and was not wearing a seat

belt or shoulder harness. The force of the accident trapped him in the Mustang.

Emerge ncy personnel transported Mr. Hutchins to Lakeland Regional Hospital. He

was unconscious and spent the next 30 days in a coma. Providers at Lakeland

Regional treated Mr. Hutchins on an emergent basis due to his significant injuries.

Mr. Hutchins spent 68 d ays in the intensive care unit at Lakeland Regional. During

his

hospitalization and afterwards , h e also received treatment from Integrity

Prosthetics and LRHS Cardiovascular Surgery Clinic.

2. Mr. Hutchins suffered the following injuries: right femur -- com plete fracture --

resulting in amputation; permanent scarring on head face, hands, and arms;

fracture of multiple ribs (right -- 4th, 5th, 6 th , 7th and left -- 3rd, 4th, 5th, 6th, 7th,

8th); cervical spine fracture Ï posterior spinous process of C7; thoracic spine

fracture Ï T2 transverse process; lumbar spine fracture Ï r ight L2 transverse process;

thoracic aorta injury Ï transection of the thoracic aortic arch distal to the left

subclavian artery and extending into the proximal descending thoracic aorta with

active ext ravasation of contrast and a moderate hemopericardium; bilateral

hemothoraces in lungs; laceration of the right mandibular region; and groin

pseudoaneurysm.

3. The Agency, through its Medicaid program, paid $148,085.20 for

Mr. Hutchins ' medical care.

4. M r. Hutchins' injuries are permanent, serious, and disabling. He will not fully

recover and will require medical treatment and other support for the rest of his life.

Mr. Hutchins will not be able to return to his job as a motor transportation driver or

to hold any other employment. He also will not be able to perform many activities of

daily living without assistance.

Settlement and Claim by the Agency

5. In November of 2020, Mr. Hutchins demanded $1,000,000.00 from the

insurance carrier responsible for da mage s caused by the dump truck. This amount

was the limit of the applicable insurance policy. Mr. Hutchins and the carrier

settled his claim for policy limits.

6. Mr. Hutchins properly notified the Agency of his claim and the settlement of

it.

7. The Agen cy asserted a Medicaid lien for $148,085.20 against the settlement

proceeds. This is the full amount it paid for medical benefits. This is also the full

amount of Mr. Hutchins' past medical expenses. The Agency argues that

Mr. Hutchins' proof fails because he did not prove his past medical expenses as

required by Smith v. Ag ency for Health Care Admin istration , 24 So. 3d 590 (Fla. 5th

DCA 2009). The record establishes Mr. Hutchins' past medical expenses. Paragraph

eight of the statement of admitted and stipu lated facts in the Pre - h earing

Stipulation states: "AHCA, through its Medicaid program, provided $148,085.20 in

payment for Hutchins ' medical care related to his injuries. This $148,085.20

represents Hutchins ' entire claim for past medical expenses."

8. T he Agency maintains that it is entitled to application of the formula in

section 409.910 to determine the lien amount. Applying the statutory formula to

Mr. Hutchins ' settlement would result in payment of the full lien amount.

Credible, Persuasive, and Unr ebutted Evidence

9. Mr. Hutchins relies upon the opinion testimony of two witnesses to prove what

portion of the settlement amount is fairly allocable to past medical expenses.

10. One witness is his lawyer, Dean Burnetti. Mr. Burnetti is a skilled and

exp erienced plaintiff's lawyer. He is board - certified in w orkers ' c ompensation and

civil trial practice. Over the years Mr. Burnetti has handled workers ' compensation

claims, social security disability claims, trucking accident cases, medical

malpractice case s, and nursing home abuse cases. Trucking accident, malpractice,

and nursing home negligence cases constitute 50 to 60 per cent of his practice. Limb

amputation is among the injuries suffered by his clients in many of these cases. For

years, Mr. Burnetti h as evaluated cases for damages and liability. He routinely

evaluates damages in the scope of his practice. In 36 years, he has evaluated

thousands of claims, including their damages. Mr. Burnetti is also familiar with

Mr. Hutchins ' damages and suffering by virtue of representing him in his claim. He

reviewed Mr. Hutchins' medical records, spoke to experts, and consulted with

Mr. Hutchins (once he regained consciousness) and Mr. Hutchins' family during his

treatment and recovery.

11. Mr. Burnetti is well q ualified to value damages in cases involving injuries

and medical treatment in general and this case in particular. In addition to

applying his substantial experience, Mr. Burnetti consulted with other lawyers in

the field , reviewed reported cases, and stu died reports of jury verdicts in similar

cases. Jury verdict data reported damages ranging from 4 to 38 million dollars in

amputation cases.

12. The other valuation witness, J. Clancey Bounds, was also credible and

persuasive. He has practiced law in Flo rida since 1993. He is also licensed to

practice in California, Texas, Arizona, and the District of Columbia. Mr. Bounds has

practiced primarily in the area of medical malpractice and personal injury litigation

involving catastrophic injuries his entire ca reer. He has seen and evaluated cases

from the defen dants' and plaintiffs' viewpoint s . For his first eight years as a lawyer ,

Mr. Bounds worked in a medical malpractice defense firm. After that he joined a

national plaintiffs' firm to lead its medical malp ractice group. Following that he

established his own firm concentrating on medical negligence, large trucking

claims, asbestos, and other claims involving catastrophic damages.

13. As managing partner of his firm, Mr. Bounds regularly evaluates cases to

d etermine their value. His firm relies upon and makes business decisions based on

his evaluations.

14. Mr. Bounds is a member of the Melvin Belli Society and the American Board

of Trial Advocates. His credentials, experience, and presentation at the final

hearing make his testimony credible and persuasive.

15. In evaluating Mr. Hutchins' damages, Mr. Bounds applied the same process

he uses to value cases for his law firm. It also includes consideration of a data bank

of verdicts and settlements of his firm 's cases. Mr. Bounds reviewed hospital records

and emergency medical services records. He informed himself about Mr. Hutchins'

injuries and treatment including the amputation of his right leg, a revision of that

amputation, multiple fractures, massive bloo d transfusions, and vascular damage.

He also interviewed Mr. Hutchins.

16. When evaluating claims for his firm, Mr. Bounds reviews file materials,

considers the admissibility of evidence, considers the venue and likely venire,

considers similar claims, a nd consults with life care planners and economists when

time and resources permit. He also conducts jury verdict searches to help determine

the value of economic and non - economic damage claims. His evaluation process is

tho ro ugh and rational.

17. Mr. Bo unds ' method is also essentially the same as that of Mr. Burnetti ,

although there were some understandable variances in amounts each assigned to

different components of the damages. In those instances, the undersigned gave

greater weight to Mr. Bounds' tes timony. Mr. Bounds and Mr. Burnetti reasonably

concluded that Mr. Hutchins' damages exceeded $6,000,000. The United States

Supreme Court has recognized that trial lawyers can project damages a plaintiff

would like l y prove if a case went to trial. Wos v. E. M.A. ex rel. Johnson , 568 U.S.

627, 640 (2013).

Valuation of Damages

18. The components of damages in personal injury cases are past medical

expenses, future medical expenses, lost earning capacity, and non - economic

damages, including pain and suffering. P ast medical expenses are $148,085.20. The

complexity and extent of Mr. Hutchins' injuries, including the amputated limb,

which will require a prosthesis and lifelong care for it, are significant factors in

valuing Mr. Hutchins' other damages. He has a life expectancy of 34 years. This is a

factor in calculating damages. Continuing medical care will cost at least $25,000 per

year, totaling at least $850,000 in future medical expenses for Mr. Hutchins'

remaining 34 years. He will require other care and suppor t beyond that.

19. Mr. Hutchins worked as a laborer earning $ 14.00 per hour. He will not be

able to return to work. Calculating conservatively, assuming no increase in

earnings, Mr. Hutchins economic damages from loss of employment are

approximately $990,0 80.00. Non - economic damages are harder to estimate. The

experience and analysis of Mr. Brunetti and Mr. Bounds were convincing in valu ing

damages. Reasonably and conservatively valued, Mr. Hutchins' past "pain and

suffering " are valued at 1.2 million dolla rs. Reasonably and conservatively valued,

Mr. Hutchins' damages for future pain and suffering are $3,000,000.00. Altogether ,

Mr. Hutchins ' damages amount to at least $ 6,188 , 165.20. This is the actual value of

actual damages. For purposes of t his proceedi ng, Mr. Hutchins' conservatively

values his damages at $6,000,000.00.

20. Actual damages are not the same as recoverable damages. A variety of

factors affect the recoverability of damages. They include comparative negligence,

uncertainty about liability, and the amount of insurance coverage and other

financial resources available. The se factors reduce the recoverable damages here. In

this case the comparative negligence of Mr. Hutchins' speed at the time of the crash

made any recovery from a jury verdict u nlikely. Because of this Mr. Hutchins

settled for $1,000,000.00.

21. Mr. Burnetti and Mr. Bounds divided the amount recovered by the value of

Mr. Hutchins' damages to determine what percentage of his actual damages

Mr. Hutchins recovered . This calculation is rational and results in a determination

that Mr. Hutchins recovered just 16.67 percent of the value of his damages.

Applying that percentage to the amount of his past medical expenses determines

how much of Mr. Hutchins ' settlement was for past medical expenses. Applying

16.67 percent to the past medical expenses of $148,085.20 demonstrates that

Mr. Hutchins recovered $24,685.80 for his past medical expenses.

C ONCLUSIONS OF L AW

22. Sections 120.569, 120.57(1), and 409.910(17), Florida Statutes, grant t he

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

23. The Legislature empowered the Agency to administer Florida's Medicaid

program. See § 409.902, Fla. Stat.

24. The Medicaid program "provide[s] federal financial assistance to St ates that

choose to reimburse certain costs of medical treatment for needy persons." Harris v.

McRae , 448 U.S. 297, 301 (1980). If a state participates in the Medicaid program, it

must comply with federal requirements governing the program. Id .

25. Federa l law requires states to seek reimbursement for medical expenses

incurred on behalf of Medicaid recipients who recover from third parties. See Ark.

Dep't of Health & Human Servs. v. Ahlborn , 547 U.S. 268, 276 (2006). Florida's

Legislature enacted section 4 09.910 to comply with that requirement. Section

409.910(7) requires the Agency to recover, for Medicaid, funds paid for a Medicaid

recipient's medical care when the recipient later receives a personal injury

judgment, settlement, or other payment from a th ird party. Smith v. Ag. for Health

Care Admin. , 24 So. 3d 590 (Fla. 5th DCA 2009). The statute imposes an automatic

lien on the proceeds of any judgment or settlement for the medical services provided

by Medicaid. § 409.910(6)(c), Fla. Stat.

26. The formul a in section 409.910(11)(f) determines the amount the Agency may

recover from a judgment, award, or settlement from a third party for Medicaid

medical expenses. Ag. for Health Care Admin. v. Riley , 119 So. 3d 514, 515 n.3 (Fla.

2d DCA 2013). Section 409.91 0(17)(b) establishes the right to contest a Medicaid

lien before the Division and provides that section 409.910(11) establishes the

default allocation of damage amounts attributable to medical costs. The Medicaid

recipient may prove that a different alloc ation is the correct allocation.

27. Section 409.910(17)(b) requires a challenger to the statutory lien amount to

prove his claim by clear and convincing evidence. The parties disagree about

whether the standard of proof is clear and convincing or prepond erance of the

evidence. There is no need to address that issue here. Mr. Hutchins proved his case

by clear and convincing evidence.

28. Thorough record - based analyses like the one s Mr. Burnetti and Mr. Bounds

conducted have been found sufficient and pers uasive. See, e.g., Whitehead v. Ag. for

Health Care Admin., Case No. 21 - 388 (Fla. DOAH Apr . 15, 2022); D.T. v. Ag. for

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

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

for Health Care Admin., Case No. 20 - 4033 (Fla. DOAH Dec. 21, 2020). Their

analysis here is persuasive. Application of the statutory allocation formula in this

matter would result in Mr. Hutchins owing the Agency $148,085.20. The

pe rsuasive, unrebutted, unimpeached evidence in this matter proves that

$2 4 ,6 85 . 80 of the settlement amount is the amount fairly allocable to past medical

expenses. The evidence is clear and convincing. Thus $2 4 ,6 85 . 80 is the amount that

the Agency may recov er under its lien. The First District Court of Appeal accepts

the method used for this determination as sufficient proof of a fair allocation of a

settlement amount. See Soto v. Ag. for Health Care Admin. , 313 So. 3d 143 (Fla. 1st

DCA 2020) (reversing Soto v. Ag. for Health Care Admin. , Case No. 17 - 4556MTR

(Fla. DOAH Nov. 28 , 2017) for rejecting a pro rata allocation like the one proven in

this proceeding.). See also Bryan v. State , 291 So. 3d 1033 (Fla. 1st DCA 2020);

Larrigui - Negron v. Ag. for Health Care Admin. , 280 So. 3d 550 (Fla. 1st DCA 2019).

29 . In contrast to the credible , persuasive testimony of Mr. Burnetti and

Mr. Bounds, the Agency presented no evidence to contest, contradict, or impeach

Mr. Hutchins' evidence. Cross - examination elicited no inf ormation or flaws that

undermine the facts and theory upon which Mr. Hutchins relies. The Agency also

did not offer an alternative theory for allocating damages. This void adds additional

weight to the testimony and conclusions of Mr. Burnetti and Mr. Boun ds. See Eady

v. Ag. for Health Care Admin. , 279 So. 3d 1249 (Fla. 1 st DCA 2019) (A fact finder

must have a reasonable basis for rejecting evidence . ).

O RDER

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

that Respondent, Agen cy for Health Care Administration, is entitled to recover

$24,685.80 in satisfaction of its Medicaid lien.

D ONE A ND O RDERED this 3rd day of June , 2022 , in Tallahassee, Leon County,

Florida.

S

J OHN D. C. N EWTON , II

Admin istrative 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 3rd day of June , 2022 .

C OPIES F URNISHED :

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

20 73 Summit Lake Drive , Suite 300 Agency for Health Care Administration

Tallahassee, Florida 32317 Building 3, Roo m 3407B

2727 Mahan Drive

Jason Dean Lazarus, Esquire Tallahassee, Florida 32308

Special Needs Law Firm

2420 South Lakemont Avenue , Suite 160 Simone Marstiller, Secretary

Orlando, Florida 32814 Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Josefina M. Tamayo, General Counsel Tallahassee, Florida 32308 - 5407

Agency for Health Care Administration

2727 Ma han Drive, Mail Stop 3 Richard J. Shoop, Agency Clerk

Tallahassee, Florida 32308 Agency for Health Care Administration

27 27 Mahan Drive, Mail Stop 3

Thomas M. Hoeler, Esquire Tallahassee, Florida 32308

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

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

A party who is adversely affected by this Final Order is entitled to judicial review

pursuant to section 120.68, Florida Statutes. Review proceedings are governed b y

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 party resides or as otherwise provided by

law.