22-000782MTR Darius Poupas vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Wednesday, August 24, 2022.

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

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

D ARIUS P OUPAS ,

Petitioner ,

vs. Case No. 22 - 0782MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Pursuant to notice, a hearing was held pursuant to sections 120.569 and

120.57(1), Florida Statutes (2021), by Zoom Conference on July 12, 2022,

before Administrative Law Judge ("ALJ") Cathy M. Sellers of the Division of

Administrative Hearings ("DOAH") .

A PPEARANCES

For Petitioner: Jason Dean Lazarus, 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 300

Tallahassee, Florida 32317

S TATEMENT OF T HE I SSUE

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

Poupas, to Respondent, Agency for Health Care Administration, from the

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

lien, pursuant to section 409.91 0(17)(b), Florida Statutes ( 2021 ). 1

P RELIMINARY S TATEMENT

On March 14, 2022, Petitioner filed his Petition to Determine Medicaid

Lien's Amount to Satisfy Claim Against Personal Injury Recovery by the

Agency for Health Care Administration ("Petition") with DOAH. The final

hearing initially was scheduled for June 2, 2022, but pursuant to the parties'

request, was rescheduled for July 12, 2022.

On July 7, 2022, the parties filed a Joint Motion for Protective Order, the

purpose of which was to protect from disclosure confidential medical and

other information contained in certain exhibits which would be tendered and

admitted into evidence at the f inal hearing . On July 8, 2022, the undersigned

issued a Protective Order specifying the information to be kept confidential in

this proceeding.

The final hearing was held on July 12, 2022. Petitioner presented the

testimony of two expert witnesse s, Adam Finkel and Sean Domnick, and

Petitioners Exhibit Nos. 1 through 5 were admitted into evidence.

Respondent did not present any witness testimony or tender any exhibits for

admission into evidence.

1 All references to chapter 409 are to the 202 1 version, which was in effect at the time that

the underlying third - party case settled. The Agency for Health Care Administration's right

to reimbursement from third - party benefits vests when the third - party settlement agreement

is executed. The date on wh ich the right to reimbursement vests determines the version of

section 409.910 that applies in proceedings to determine the portion of the third - party

settlement payable to the Agency for Health Care Administration in satisfaction of its

Medicaid lien. See Cabrera v. Ag. for Health Care Admin ., 315 So. 3d 140, 142 (Fla. 1st DCA

2021); Eady v. State, Ag. for Health Care Admin ., 279 So. 3d 1249, 1250 n.1 (Fla. 1st DCA

2019)(citing Suarez v. Port Charlotte HMA, LLC , 171 So. 3d 740 (Fla. 2d DCA 2015)).

The parties did not order a transcript of the final hearin g. Pursuant to the

parties ' agreement extending the ten - day period in Florida Administrative

Code Rule 28 - 106.216 for filing proposed orders, the parties filed their

Proposed Final Orders on July 27, 2022. The undersigned has duly

considered the parties' P roposed Final Orders in preparing this Final Order.

F INDINGS OF F ACT

The Parties

1. Petitioner, Darius Poupas, is a person for whom Medicaid paid medical

care expenses for treatment of catastrophic injuries he suffered , as an

innocent bystander, as the result of a shooting that occurred in the parking

lot of an apartment complex in Miami - Dade County, Florida.

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

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

Fla. Stat.

Stipulated Facts

3 . On January 27, 2017, Petitioner , a 19 - year - old man, was visiting a

friend's apartment when he was the victim of a criminal attack. He was shot

two times by an assailant, who sprayed the complex, cars, and people with

more than 15 round s of ammunition.

4 . Petitioner was struck in the left flank, with the bullet hitting bone, and

then entering his colon. He also was struck by another bullet in the right

thigh. He was transported by Miami - Dade Emergency Medical Service to

Memorial Regiona l Hospital, where he underwent an exploratory laparotomy

and resections of his large and small bowels.

5 . As a result of th e attack, Petitioner suffered a gunshot wound to the left

flank, with large and small bowel resections, and a gunshot wound to the

right leg. Petitioner's significant physical injuries have caused him to suffer

permanent orthopedic disabilities and other permanent disabilities related to

the gunshot wound to his bowels .

6 . Respondent, through its Medicaid program , paid $88,396.00 for

Petitioner's medical care for treatment of his injuries.

7 . On July 13, 2021, Petitioner filed suit against multiple defendants ,

based on negligent security claims , to recover his damages related to the

attack .

8 . Petitioner settled h is tort action in November 2021.

9 . Respondent was notified of Petitioner's claims against the defendants,

and stated that it had paid benefits in the amount of $88,396.00 related to

Petitioner's injuries resulting from the attack .

1 0 . Respondent has asserted a lien for the full amount it paid Ð i.e.,

$88,396.00 Ð against Petitioner's third - party settlement proceeds. Respondent

maintains that it is entitled to application of the formula in section

409.910 (11)(f) in determining the amount to be paid in sati sfaction of the lien.

If th at formula were applied in this case , there would be no reduction in the

amount that Respondent asserts it is owed in satisfaction of its Medicaid lien .

Evidence Adduced at the Final Hearing

1 1 . Adam Finkel testified as an expert witness for Petitioner regarding

the valuation of Petitioner's tort case.

1 2 . Finkel is an experienced trial attorney whose practice focuses on

litigating significant personal injury cases, with a particular specialty in

negligent security cases . As part of his practice, he regularly evaluates the

damages suffered by injured persons, such as Petitioner , as a result of

third - party negligence .

1 3 . Finkel represented Petitioner in his tort case against the liable third

par ties. Consequently, h e is intimately familiar with Petitioner's damages

result ing from the injuries that he suffered , and continues to suffer, due to

the attack.

1 4 . Finkel testified regarding potential liability issues, which ultimately

led to a compromise settlement amount. As part of Finkel's preparation of

Petitioner's case, he evaluated all elements of the damages which Petitioner

suffered . Shortly before the trial on Petitioner's tort claims, Finkel negotiate d

a settlement with the d efendant/tortfeasor on Petitioner's behalf .

1 5 . Finkel credibly testified regarding his evaluation of, and his conclusion

regarding, the value of the Petitioner's damages. Through the course of his

representation, Finkel met with Petitioner and his family ; reviewed

Petitioner's pertinent medical information ; evaluated the facts of the case

and how the incident occurred ; reviewed all records and reports regarding the

injuries that Petitioner has suffered ; analyzed liability and fault issues ;

determined tota l damages amounts ; and determined the value of Petitioner's

non - economic damages , such as past and future pain and suffering , loss of

capacity to enjoy life, scarring and disfigurement , and mental anguish.

1 6 . Finkel testified regarding the impact of the shooting on Petitioner's

life. As a result of his injuries, Petitioner has ongoing physical and

psychological issues resulting from the trauma of being shot multiple times

and the permanent injuries he sustained as a result of being shot .

1 7 . Specifically, Petitioner's serious abdominal injuries have resulted in

him permanently suffering bowel control issues and related pain. He also

walks with a limp. His physicians have told him there is nothing further that

can be done to treat these injuries, so that he will suffer from these conditions

for the rest of his life, which is reasonably projected to be approximately 55

more years.

1 8 . As a result of his injuries, Petitioner has experienced significant

psychological trauma. He no longer participates in the at hletic activities or

maintains the social relationships he enjoyed before being injured. All of his

future plans, including his plans to attend college, were displaced or

destroyed as a result of being shot and permanently injured. Petitioner

effectively lost five years of almost every aspect of his life while he was

grappling with the emotional and physical trauma of his injuries. Although

he very recently has enrolled in college to become trained in information

technology, his career necessarily will entail a sedentary activity due to his

permanent injuries Ð a significant departure from Petitioner's life and future

plans as they existed before he was shot and permanently injured.

19 . Finkel testified that he ver y conservatively valued Petitioner's

damages at $2,000,000.00. That figure primarily was based on the value of

Petitioner's pain and suffering, disfigurement, mental anguish , and loss of

quality of life.

2 0 . Finkel's conservative valuation of $2,000,000.0 0 in damages for

Petitioner's case was based on his experience as a trial lawyer and his

knowledge of jury awards in similar cases in South Florida. Finkel testified,

credibly, that this amount represents the minimum damages award he would

have sought from a jury had the case gone to trial.

2 1 . Because Petitioner's physicians have determined that there are no

additional medical treatments he could undergo to repair or alleviate his

injuries, this case does not involve economic damages for future medical

expenses. As a result, Petitioner's non - economic damages are the main

component of Finkel's valuation of Petitioner's case .

2 2 . Finkel testified that, based on the $2,000,000.00 valuation of

Petitioner's case, and given that Petitioner's case settled for $400,000.00,

Petitioner recovered only 20 percent of the full value of his damages. FinkelÔs

testimony on this point was uncontroverted.

2 3 . Sean Domnick testified on Petitioner's behalf as an attorney expert

regarding valuation of personal injury damages and application of the pro

rata methodology to determine the apportionment of settlement proceeds . He

is a personal injury attorney whose 32 - year practice focuses on litigating

serious medical malpractice and catastrophic injury cases in Florida and

across the United States. In the course of his practice, Domnick has

evaluated and reviewed numerous damages awards in personal injury cases.

2 4 . He provided s pecific, detailed testimony to support his opinion,

consistent with Finkel's, that Petitioner suffered, and continues to suffer

from, extensive injuries which have a damages value in excess of

$2,000,000.00 .

2 5 . Domnick also testified that the pro rata methodology , established in ,

and repeatedly ratified by , case law, is a fair and reasonable method for

allocating the total amount of settlement proceeds to the different types of

damages suffered by Petitioner.

2 6 . Given that the substantial majority of Petitioner's injuries are

comprised of pain and suffering, disfigurement , physical impairment, mental

anguish, and loss of quality of life, and because there is no additional medical

treatment that will alleviate Petitioner's injuries, Domnick concurred wi th

Finkel that applying the pro rata methodology to the settlement proceeds

results in 20 percent of the settlement proceeds being allocated to medical

expenses , all of which are in past medical expenses, and the remaining

80 percent being allocated to non - economic damages.

2 7 . As noted above, Respondent did not present any evidence to rebut

Finkel's and Domnick's clear, convincing, and persuasive testimony.

2 8 . Many components of damages combine to make up the full value of a

personal injury claim , such as Petitioner's case against the culpable

tortfeasors in this case . These components include the actual past medical

expenses paid by Medicaid; the projected future medical expenses , if any ;

past and future lost wages ; and non - economic damages, includ ing pain and

suffering ; disability ; physical impairment ; mental anguish ; and loss of quality

of life.

29 . As discussed above, conservatively valuing Petitioner's damages at

$2,000,000.00 dollars, and given that Petitioner recovered only $400,000.00

in settlement proceeds, the unrebutted evidence establishes that Petitioner's

settlement represent s 20 percent of the total value of his damages in this

case.

3 0 . Respondent paid $88,396.00 for Petitioner's past medical treatment.

As disc ussed above, Petitioner will have no future medical expenses.

3 1 . Based on the foregoing , and applying the pro rata methodology to

apportion the $400,000.00 in settlement proceeds to Petitioner 's damages,

20 percent of that amount, or $17,679.20, is prop erly allocated to Respondent

in satisfaction of its Medicaid lien for Petitioner's medical expenses.

C ONCLUSIONS OF L AW

3 2 . DOAH has jurisdiction over the parties to, and subject matter of, this

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

3 3 . Petitioner bears the burden of proof, by clear and convincing evidence,

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

Medicaid lien is less than the $88,396.00 that would be due if the formula in

section 409.91 0(11)(f) were applied in this proceeding.

3 4 . Medicaid is a joint federal - state cooperative program that helps

participating states provide medical services to residents who cannot afford

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

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

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

program comply with federal Medicaid statutes and regulations. Id. at 275.

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

seek reimbursement for medical expenses incurred on behalf of beneficiaries

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

3 5 . The Act contains a general anti - lien provision that protects Medicaid

recipients b y prohibiting state Medicaid agencies from imposing liens against

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

3 6 . However, the Act also contains a narrow exception to this anti - lien

provision which requires states to seek reimbursement for their Medi caid

expenditures by pursuing payment from third parties who are legally liable

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

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

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

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

3 7 . The Act limits the portion of a recipient's tort recovery on which a

state can impose a lien to medical expenses only , which includes both past

and future medical e xpenses. Gallardo v. Marstiller , 142 S . Ct. 1751 (2022).

3 8 . To comply with the Act's requirement that states seek reimbursement

for Medicaid expenditures from judgments or settlements paid by third

parties to Medicaid recipients, Florida enacted section 409.910, the Medicaid

Third - Party Liability Act.

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

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

recipient for the amount of medical care furnished by Medicaid to the

recipient. The lien attaches automatically when a recipient first receives

treatment for which Respondent may be obligated to provide medical

assistance under the Medicaid program.

4 0 . Section 409.910(11)(f) establishes a formula for determining the

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

states, in pertinent part:

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

to enforce its rights under this section, institute,

intervene in, or join any legal or administrativ e

proceeding in its own name in one or more of the

following capacities: individually, as subrogee of the

recipient, as assignee of the recipient, or as

lienholder of the collateral.

* * *

(f) Notwithstanding any provision in this section to

the contrary, in the event of an action in tort against

a third party in which the recipient or his or her

legal representative is a party which results in a

judgment, award, or settlement from a third party,

the amount recovered shall be distributed as follo ws:

1. After attorneyÔs fees and taxable costs as defined

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

the remaining recovery shall be paid to the agency

up to the total amount of medical assistance

provided by Medicaid.

2. The remaining amount of the recovery shall be

paid to the recipient.

3. For purposes of calculating the agencyÔs recovery

of medical assistance benefits paid, the fee for

services of an attorney retained by the recipient or

his or her legal representative shall be calculated at

25 percent of the judgment, award, or settlement.

4. Notwithstanding any provision of this section to

the contrary, the agency shall be entitled to all

medical coverage benefits up to the total amount of

medical assistance provided by Medicaid. For

pur poses of this paragraph, Ñmedical coverageÒ

means any benefits under health insurance, a health

maintenance organization, a preferred provider

arrangement, or a prepaid health clinic, and the

portion of benefits designated for medical payments

under covera ge for workersÔ compensation, personal

injury protection, and casualty.

4 1 . This formula creates a presumptive "default allocation" of third - party

proceeds subject to a Medicaid lien when the Respondent does not participate

in the settlement. Roberts v. Albertson's Inc. , 119 So. 3d 457, 465 - 66 (Fla. 4th

DCA 2012); Ag. for Health Care Admin. v. Riley , 119 So. 3d 514, 516 (Fla. 2d

DCA 2013).

4 2 . Consistent with the holding in Wos that the Act's anti - lien provision

preempts state statutes that create a concl usive presumption regarding the

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

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

administrative process under chapter 120 to contest the amount designated

as recovered medical expense damages payable to Respondent pursuant to

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

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

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

409.910(17)(b) states:

(b) If federal law limits the agency to reimbursement

from the recovered medical expense damages, a

recipient, or his or her legal representative, may

contest the amount designated as recovered medical

expe nse damages payable to the agency pursuant to

the formula specified in paragraph (11)(f) by filing a

petition under chapter 120 within 21 days after the

date of payment of funds to the agency or after the

date of placing the full amount of the third - party

benefits in the trust account for the benefit of the

agency pursuant to paragraph (a). The petition shall

be filed with the Division of Administrative

Hearings. For purposes of chapter 120, the payment

of funds to the agency or the placement of the full

am ount of the third - party benefits in the trust

account for the benefit of the agency constitutes final

agency action and notice thereof. Final order

authority for the proceedings specified in this

subsection rests with the Division of Administrative

Hearing s. This procedure is the exclusive method for

challenging the amount of third - party benefits

payable to the agency. In order to successfully

challenge the amount designated as recovered

medical expenses, the recipient must prove, by clear

and convincing ev idence, 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.

4 3 . In compliance with section 409.910(17)(b), Medicaid recipients who

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

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

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

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

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

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

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

(Fla. 1st DCA 2014).

4 4 . In Giraldo v. Agency for He alth Care Administration , 248 So. 3d 53, 56

(Fla. 2018)(" Giraldo II") , the Florida Supreme Court held that the federal

Medicaid Act prohibits AHCA from placing a Medicaid lien on the future

medical expenses portion of a Medicaid recipient's tort recovery. Id. at 56.

4 5 . The court in Giraldo II also concluded , consistent with Ahlborn , that

where a Medicaid recipient presents uncontroverted evidence regarding the

proper allocation of the settlement proceeds pursuant to the pro rata

allocation methodology, and there is no reasonable basis in the record to

reject such evidence or methodology , then the pro rata allocation methodology

is an appropriate means for determining the amount of the reimbursement to

which Respondent is entitled.

4 6 . In Gallardo , the Supr eme Court of the United States recently held

that the federal Medicaid Act provision prohibiting states from placing liens

against a Medicaid recipientÔs property to recover Medicaid expenses did not

preempt provisions of FloridaÔs Medicaid Third - Party Lia bility Act

authorizing Respondent to seek reimbursement of its Medicaid expenses from

portions of tort settlement proceeds that represented all medical expenses,

both past and future. Thus, Gallardo overruled the portion of Giraldo II and

other Florida cases which limited Respondent's right to seek reimbursement

to only the amount allocated to past medical expenses.

4 7 . However, importantly, Gallardo did not overrule the portion of the

holding in Giraldo II that ratified the use of the pro rata allocation

methodology in determining the amount of settlement proceeds that should

be allocated to medical expenses.

4 8 . In Eady v. Agency for Health Care Administration , 279 So. 3d 1249

(Fla. 1st DCA 2019), the co urt determined, under circumstances comparable

to those in this case Ð where the Medicaid recipient presented expert

testimony regarding the appropriate share of settlement funds to b e allocated

to medical expenses, and the agency did not present any evidence to refute

the experts' opinions Ð that utilizing the pro rata allocation method for

determining the amount of the third - party recovery to be allocated to past

medical expenses not only was appropriate, but was requ ired under the

circumstances. Id. at 1259.

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

Medicaid recipient presents unrebutted competent substantial evidence to

show that the pro rata allocation methodology supports a reduction of t he

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

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

determining the amount of reimbursement to which Respondent is entitled in

satisfaction of its Medicaid lien under section 409.910(17)(b), unless there is a

reasonable basis in the evidentiary record for doing so. See, e.g., Bryan v. Ag.

for Health Care Admin. , 291 So. 3d 1033, 1036 (Fla. 1st DCA 2020); Mojica v.

Ag. for Health Care Admin. , 285 So. 3d 393, 3 98 (Fla. 1st DCA 2019);

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

2019).

5 0 . Here, Petitioner proved by clear and convincing evidence that

Respondent should be reimbursed a lesser amount than the full amount of its

Medic aid lien under section 409.910(11)(f).

5 1 . Specifically, the clear and convincing evidence establishes that the pro

rata allocation methodology is a fair and reasonable method for allocating

Petitioner's third - party se ttlement proceeds in this case. This case involves

no evidence of, or claim for, future medical expenses.

52. Respondent did not present any countervailing evidence at the final

hearing . Thus, t here is no evidentiary basis in the record for rejecting

Petitioner's evidence, which, as fou nd above, credibly and persuasively shows

that the pro rata allocation methodology is a fair and reasonable method for

determining the amount of Petitioner's settlement proceeds allocated to

medical expenses Ð here, past medical expenses Ð for purposes of dete rmining

the amount payable to Respondent in satisfaction of its Medicaid lien.

5 3 . Under Eady and the other case law cited above , under the

circumstances, it would be reversible error for the undersigned to reject

application of the pro rata allocation m ethodology to Petitioner's third - party

settlement recovery to determine the amount of his medical expenses , for

purposes of satisfying Respondent's Medicaid Lien.

5 4 . Therefore, based on the foregoing, it is concluded that Respondent is

entitled to a paym ent of $17,679.20 in satisfaction of its Medicaid lien.

O RDER

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

O RDERED that the Agency for Health Care Administration is entitled to

payment of $ 17,679.20 from Petitioner's third - party settlement proceeds in

satisfaction of its Medicaid lien.

D ONE A ND O RDERED this 2 4 th day of August , 2022, in Tallahassee, Leon

County, Florida.

S

C ATHY M. S ELLERS

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2 4 th day of August , 2022 .

C OPIES F URNISHED :

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

(eServed) (eServed)

Jason Dean Lazarus, Esquire Richard J. Shoop, Agency Clerk

(eServed) (eServed)

Simone Marstiller, Secretary Josefina M. Tamayo, General Counsel

(eServed) (eServed)

Thomas M. Hoeler, Esquire

(eServed)

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

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

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

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

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, wit h 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.