22-000835MTR Tyler Dagenhart vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Wednesday, July 6, 2022.

Summary: Petitioner failed to prove by clear and convincing evidence that a lesser portion of his settlement should be allocated as medical expenses than the amount determined via section 409.910(11)(f).

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

T YLER D AGENHART ,

Petitioner ,

vs. Case No. 22 - 0835MTR

A GENCY F OR H EALTH C ARE

A DMINISTRATION ,

Respondent .

/

F INAL O RDER

Pursuant to notice, a formal administrative hearing was conducted via

Zoom on May 23, 2022, before Administrative Law Judge Garnett W.

Chisenhall of the Division of Administrative Hearings (ÑDOAHÒ).

A PPEARANCES

For Petitioner: Mark N. Tipton , Esqui re

Daniel L. Hightower, P.A.

7 East Silver Springs B oulevard

Ocala, Florida 34470

For Respondent: Alexander R. Boler, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Florida 32317

S TATEMENT O F T HE I SSUE

The issue to be dete rmined is the amount Respondent, Agency for Health

Care Administration (ÑAHCAÒ), is to be reimbursed for medical expenses paid

on behalf of Tyler Dagenhart (ÑPetitionerÒ or ÑMr. DagenhartÒ), pursuant to

section 409.910, Florida Statutes (2021). 1

P RELIMINA RY S TATEMENT

If a Medicaid recipient receives a n injury settlement from a third party,

then section 409.910 mandates that those settlement proceeds shall

be used to reimburse the Medicaid program for medical expenses paid on the

Medicaid recipientÔs behal f. This mandate is facilitated by a statutory lien

in AHCAÔs favor on the settlement proceeds, and federal law mandates that

MedicaidÔs lien applies to past and future medical expenses that the Medicaid

recipient actually recovered through the settlement . When a Medicaid

recipientÔs settlement proceeds are less than the recipientÔs total

damages (which may consist of multiple components, such as past medical

expenses, future medical expenses, economic damages, and noneconomic

damages), a question can aris e as to how much of the medical expenses were

actually recovered by the Medicaid recipient and thus subject to the Medicaid

lien. Section 409.910(11)(f) sets forth a formula to determine the amount

Medicaid shall recover from the settlement proceeds, and s ection

409.910(17)(b) provides that a Medicaid recipient can request a formal

administrative hearing to demonstrate , by clear and convincing evidence,

that the past and future medical expenses actually recovered through the

settlement were less than the am ount calculated via section 409.910(11)(f).

On May 26, 2021, Mr. Dagenhart filed a ÑPetition to Determine the

Amount Payable to [AHCA] and Wellcare in Satisfaction of Medicaid LienÒ to

challenge Medicaid liens filed by AHCA and Wellcare Health Plans, Inc.

(ÑWellcareÒ) , against settlement proceeds recovered by Mr. Dagenhart via a

1 Unless indicated otherwise, all statu tory references will be to the 2019 version of the

Florida Statutes because PetitionerÔs exhibits indicate his workersÔ compensation case

settled in 2019 . See Suarez v. Port Charlotte HMA , 171 So. 3d 740 , 742 (Fla. 2d DCA 2015).

workersÔ compensation claim. Mr. Dagenhart valued his total damages as

being well in excess of $2,500,000.00. After accounting for attorneyÔs fees and

costs, M r. Dagenhart asserted that his net recovery was $183,951.77, or

approximately 7.3 percent of the full value of his damages. Accordingly,

Mr. Dagenhart asserted that AHCA was only entitled to recover 7.3 percent

of the medical expenses it paid on his behalf, i.e., $8,143.16.

The parties filed a Joint Pre - hearing Stipulation in which they identified

stipulated facts for which no further proof would be necessary. Those

stipulated facts have been accepted and considered in the preparation of this

Final Order.

The final hearing w as held as scheduled on May 23, 2022. During the final

hearing, Petitioner presented no live testimony. The undersigned accepted

PetitionerÔs Exhibits 1 through 15 into evidence. In the process of doing so,

the undersigned noted AHCAÔs hearsay objections t o PetitionerÔs Exhibits 13

and 14 .

AHCA offered no witnesses and did not move any exhibits into evidence.

The one - volume Transcript from the final hearing was filed on June 6,

2022.

Proposed Final Orders were timely filed on June 16, 2022, and both

Proposed Final Orders were considered during the preparation of this Final

Order.

F INDINGS O F F ACT

The following findings are based on exhibits accepted into evidence,

admitted facts set forth in the Pre - hearing Stipulation, and matters subject

to off icial recognition.

Facts Pertaining to PetitionerÔs Injuries, the Settlement, and the Medicaid

Lien

1. On November 28, 2018, Mr. Dagenhart was catastrophically injured

when he slipped and fell approximately 30 feet from the roof of an airplane

hangar. M r. Dagenhart was transported from the accident scene by

ambulance to Ocala Regional Medical Center (ÑORMCÒ). He remained at

ORMC until he was discharged on approximately February 13, 2019.

2. Mr. Dagenhart had the following injuries: (a) severely comminu ted and

angulated distal tibial and fibular fractures in both ankles; (b) a severe

complex burst type compression fracture in the lumbar spine with traumatic

grade 1 anterolisthesis and extensive hematoma from T12 through the sacral

canal; (c) spinal steno sis; and (d) a left wrist fracture.

3. Mr. Dagenhart underwent multiple surgeries and extensive

rehabilitation. Nevertheless, he still relies on a wheelchair for mobility.

4. Mr. DagenhartÔs charges from ORMC total $1,448,817.80. He incurred

additional med ical expenses for multiple surgeries, and he also suffered lost

wages.

5. Because Mr. Dagenhart was in the course and scope of his employment

at the time of the November 28, 2018, accident, he filed a workersÔ

compensation claim.

6. The Employer/Carrier (Ñthe E/CÒ) denied that Mr. Dagenhart was

entitled to workersÔ compensation benefits. In doing so, the E/C asserted that

he tested positive for marijuana metabolites while in the hospital. 2

Mr. Dagenhart also refused to submit to a drug/alcohol test as req uested by

the E/C. 3

7. Because of the substantial uncertainty associated with pursuing a claim

for workersÔ compensation benefits, Mr. Dagenhart elected to accept

$250,000, inclusive of attorneyÔs fees and costs, as payment for past and

future medical and indemnity benefits.

8. Non - compensatory damages, such as pain and suffering, are

unavailable under FloridaÔs WorkersÔ Compensation Act.

9. Mr. DagenhartÔs net recovery was $183,951.77 because he paid

attorneyÔs fees of $62,500 and costs of $3,548.23.

10. AHCA and WellCare paid $98,238.31 and $13,311.87, respectively, for

Mr. DagenhartÔs past medical expenses. AHCA and Wellcare, through their

respective collection contractors, have asserted liens totaling $111,550.18.

11. Pursuant to the formula set forth i n section 409.910(11)(f), AHCA and

WellCare would be entitled to half of Mr. DagenhartÔs net recovery after

deducting the taxable costs and 25 percent for attorneyÔs fees. Because

Mr. DagenhartÔs net recovery after deducting attorneyÔs fees and costs was

$ 183,951.77, the maximum lien allowable under the statutory formula would

be $91,975.88 ($183,951.77 x .5 = $91,975.88) .

12. Mr. Dagenhart has deposited $91,975.88 into an interest - bearing

account pending an administrative determination regarding the amount of

AHCAÔs Medicaid lien.

2 Section 440.09(3), Florida Statutes (2019), provide s that Ñ[c]ompensation is not payable if

the injury was occasioned primarily by the intoxication of the employee; by the influence of

any drugs, barbiturates, or other stimulants not prescribed by a physician; or by the wil lful

intention of the employee to injure or kill himself, herself, or another.Ò

3 Section 440.101(2), Florida Statutes (2019), provid es that Ña drug - free workplace program

must require the employer to notify all employees that it is a condition of employ ment for an

employee to refrain from reporting to work or working with the presence of drugs or alcohol

in his or her body and, if an injured employee refuses to submit to a test for drugs or alcohol,

the employee forfeits eligibility for medical and indem nity benefits.Ò

Valuation of Mr. DagenhartÔs Damages

13. Lynne Shigo has been practicing workersÔ compensation law in Florida

since January of 1994. She estimates that workersÔ compensation accounts

for 90 to 95 percent of her current practic e. In the course of representing her

clients, she must evaluate the full value of particular claims. 4

14. Ms. Shigo offered the following testimony regarding the value of

Mr. DagenhartÔs workersÔ compensation claim:

Q: And can you tell us if Mr. Dagenhart Ôs

entitlement to workersÔ compensation benefits had

not been in dispute, what would be the full value of

his case, if you have an opinion?

A: The full value I believe would be approximately

about 2.5 million. When you look at the present

value of [perman ent total disability] that was

supplied to me, that was $804,418.96. So also look

at the Ï how much the carrier would approximately

pay, which is between 50 and 60 percent of that.

Then I looked at the outstanding medical bills

which were about 1.5 million . And then at the time

of the settlement, he was in a wheelchair and not

walking, so I conservatively estimated the medical

at 600,000, which really is conservative based upon

the fact that his life expectancy was 42.6 years.

That would give medical benefi ts [of]

approximately $14,084 and some odd cents a year.

Q: The 600,000, if I understand correctly, would be

a future medical projection?

4 Counsel for Petitioner took Ms. ShigoÔs deposition in lieu of live testimony and offered her

as an expert in the field of workersÔ compensation. Counsel for AHCA did not raise an

objection. The undersigned accepts Ms. Shigo as an expe rt in workersÔ compensation.

A: Yes. [ 5 ]

Q: Okay. And then as youÔre aware, the settlement

amount, the amount that Mr. Dagenhart received,

was a total of $250,000; is that correct?

A: Yes.

Q: Can you tell us under the workersÔ compensation

act if an accident is occasioned primarily by the

intoxication of the employee, what impact does that

have on their eligibility for workersÔ compensation

benef its?

A: Huge. Basically the settlement of 250 was a

wonderful settlement based upon the fact that he

denied taking the drug test. Right there thatÔs a

presumption that he was under the influence at the

time of the accident which was the reason that he

was injured.

Q: Okay. And so his refusal to take the drug test

would be Ï would raise a presumption that he Ï

that this accident was occasioned by intoxication?

* * *

A: Yes.

Q: And if, in fact, he is found to have refused to

submit to the drug test and that presumption

arose, would that disqualify him from any workersÔ

compensation benefits?

A: Yes. ThatÔs why the 250,000 settlement was a

wonderful settlement because he could have

[gotten] zip, meaning zero.

* * *

Q: Very good. And in terms of your testimony and

opinions regarding the full value of

5 Ms. Shigo testified that the future medical expenses would consist of additional surgeries,

pain management, physical therapy, and perhaps occupational therapy.

Mr. DagenhartÔs case, are those opinions you can

state within a reasonable degree of legal certainty?

* * *

A: The Ï based upon the evidence that I looked at,

thereÔs a Ï the presumption that the intoxic ation

defense would hold with the judge, there would not

be clear and convincing evidence to show that the

accident would have happened without the alcohol

defense. In other words, the intoxication defense is

the reason that he was injured, because he was

impaired.

Findings Regarding the Testimony Presented at the Final Hearing

15. The undersigned finds that the testimony from Ms. Shigo was

compelling and persuasive with regard to the full value of Mr. DagenhartÔs

claim, his past and future medical expense s, and the present value of his

permanent total disability.

16. Ms. Shigo did not provide any testimony that a pro - rata reduction

would accurately or correctly determine the portion of Mr. DagenhartÔs

settlement that accounts for past and future medical expenses. Therefore,

Petitioner failed to prove , by clear and convincing evidence , that a lesser

portion of his settlement should be allocated as past and future medical

expenses than the amount determined via the statutory formula in section

409.910(11)(f ).

C ONCLUSIONS O F L AW

17. DOAH has jurisdiction over the subject matter and the parties in this

case pursuant to sections 120.569, 120.57(1) , and 409.910(17), Florida

Statutes.

18. AHCA is the agency authorized to administer FloridaÔs Medicaid

program. § 409.902, Fla. Stat.

19 . The Medicaid program Ñprovide[s] federal financial assistance to

States that choose to reimburse certain costs of medical treatment for needy

persons.Ò Harris v. McRae , 448 U.S. 297, 301 (1980).

2 0 . ÑThe Medicaid program is a c ooperative one. The Federal Government

pays between 50 percent and 83 percent of the costs a state incurs for patient

care. In return, the State pays its portion of the costs and complies with

certain statutory requirements for making eligibility determina tions,

collecting and maintaining information, and administering the program.Ò

Est . of Hernandez v. Ag. for Health Care Admin. , 190 So. 3d 139, 141 - 42

(Fla. 3rd DCA 2016)(internal citations omitted).

2 1 . Though participation is optional, once a s tate elects to participate in

the Medicaid program, it must comply with federal requirements. Harris ,

448 U.S. at 301.

2 2 . One condition for receipt of federal Medicaid funds requires states to

seek reimbursement for medical expenses incurred on behalf of Medi caid

recipients who later recover funds from legally liable third parties. See Ark.

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

Est . of Hernandez , 190 So. 3d at 142 (noting that one such requirement is

that Ñeach participa ting state implement a third - party liability provision ,

which requires the state to seek reimbursement for Medicaid expenditures

from third parties who are liable for medical treatment provided to a

Medicaid recipient . Ò).

2 3 . Consistent with this federa l requirement, the Florida Legislature

enacted section 409.910, designated as the ÑMedicaid Third - Party Liability

Act,Ò which authorizes and requires the state to be reimbursed for Medicaid

funds paid for a recipient's medical care when that recipient late r receives a

personal injury judgment, award, or settlement from a third party. Smith v.

Ag. for Health Care Admin. , 24 So. 3d 590 (Fla. 5th DCA 2009); see also

Davis v. Roberts , 130 So. 3d 264, 266 (Fla. 5th DCA 2013)(stating that in

order Ñ[t]o comply w ith federal directives the Florida legislature enacted

section 409.910, Florida Statutes, which authorizes the State to recover from

a personal injury settlement money that the State paid for the plaintiffÔs

medical care prior to recovery.Ò).

2 4 . Section 4 09.910(1) sets forth the Florida LegislatureÔs clear intent that

Medicaid be repaid in full for medical care furnished to Medicaid recipients

by providing that:

It is the intent of the Legislature that Medicaid be

the payor of last resort for medically n ecessary

goods and services furnished to Medicaid

recipients. All other sources of payment for medical

care are primary to medical assistance provided by

Medicaid. If benefits of a liable third party are

discovered or become available after medical

assista nce has been provided by Medicaid, it 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

w hether a recipient is made whole or other

creditors paid. Principles of common law and equity

as to assignment, lien, and subrogation are

abrogated to the extent necessary to ensure full

recovery by Medicaid from third - party resources.

It is intended tha t if the resources of a liable third

party become available at any time, the public

treasury should not bear the burden of medical

assistance to the extent of such resources.

2 5 . In addition, the Florida Legislature has authorized AHCA to recover

the moni es paid from any third party, the recipient, the provider of the

recipientÔs medical services, and any person who received the third - party

benefits. £ 409.910(7), Fla. Stat. AHCAÔs effort to recover the full amount

paid for medical assistance is facilitate d by section 409.910(6)(a), which

provides that AHCA:

[I]s automatically subrogated to any rights that an

applicant, recipient, or legal representative has to

any third - party benefit for the full amount of

medical assistance provided by Medicaid.

Recove ry pursuant to the subrogation rights

created hereby shall not be reduced, prorated, or

applied to only a portion of a judgment, award, or

settlement, but is to provide full recovery by the

agency from any and all third - party benefits.

Equities of a recipi ent, his or her legal

representative, a recipientÔs creditors, or health

care providers shall not defeat, reduce, or prorate

recovery by the agency as to its subrogation rights

granted under this paragraph.

See also § 409.910(6)(b)2., Fla. Stat. (provi ding that AHCA Ñis a bona fide

assignee for value in the assigned right, title, or interest, and takes vested

legal and equitable title free and clear of late nt equities in a third person.

Equities of a recipient, the recipientÔs legal representative, his or her

creditors, or health care providers shall not defeat or reduce recovery by the

agency as to the assignment granted under this paragraph . Ò).

2 6 . AHCAÔs efforts are also facilitated by the fact that AHCA has Ñan

automatic lien for the full amount of medical assistance provided by Medicaid

to or on behalf of the recipient for medical care furnished as a result of any

covered injury or illness by which a third party is or may be liable, upon the

collateral, as defined in s. 409.901.Ò £ 409.910(6)(c), F la. Stat.

2 7 . The amount to be recovered by AHCA from a judgment, award,

or settlement from a third party is determined by the formula in

section 409.910(11)(f). Ag. for Health Care Admin. v. Riley , 119 So. 3d 514,

515 n.3 (Fla. 2d DCA 2013).

2 8 . Secti on 409.910(11)(f) provides:

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

follows:

1. After attorneyÔs fees and taxable costs as defined

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

the remaining recovery shall be paid to the agency

up to the 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 agencyÔs recovery

of medical assistance benefits paid, the fee for

services of an attorney r etained by the recipient or

his or her legal representative shall be calculated

at 25 percent of the judgment, award, or

settlement.

29 . Applying the formula in section 409.910(11)(f) to Mr. DagenhartÔs

$250,000 settlement results in AHCA being owed $91,9 75.88.

3 0 . As noted above, section 409.910(6) prohibits the Medicaid lien from

being reduced because of equitable considerations. However, when AHCA has

not participated in or approved a settlement, the administrative procedure

created by section 409.910(1 7)(b) serves as a means for determining whether

a lesser portion of a total recovery should be allocated as reimbursement for

medical expenses in lieu of the amount calculated by application of the

formula in section 409.910(11)(f).

3 1 . Section 409.910(17) (b) provides, in pertinent part, that:

A recipient may contest the amount designated as

recovered medical expense damages payable to the

agency pursuant to the formula specified in

paragraph (11)(f) by filing a petition under chapter

120 within 21 days af ter 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). . . . In order to successfully challenge

the amount payabl e to the agency, the recipient

must prove, by clear and convincing evidence, [ 6 ]

that a lesser portion of the total recovery should be

allocated as reimbursement for past and future

medical expenses [ 7 ] than the amount calculated by

the agency pursuant to th e formula set forth in

paragraph (11)(f) or that Medicaid provided a lesser

amount of medical assistance than that asserted by

the agency.

3 2 . Therefore, the formula in section 409.910(11)(f) provides an initial

determination of AHCAÔs recovery for medica l expenses paid on a Medicaid

recipientÔs behalf, and section 409.910(17)(b) sets forth an administrative

procedure for adversarial testing of that recovery. See Harrell v. State ,

1 43 So. 3d 478, 480 (Fla. 1st DCA 2014)(stating that petitioner Ñshould be

a fforded an opportunity to seek the reduction of a Medicaid lien amount

established by the statutory default allocation by demonstrating, with

evidence, that the lien amount exceeds the amount recovered for medical

expenses . Ò).

3 3 . In the instant case, the parties agree that Petitioner recovered 10

percent of the full value of his case. The parties also agree that the statutory

formula in section 409.910(11)(f) would result in AHCA recovering

$91,975.88.

3 4 . Mr. Dagenhart made the following argument in his Proposed Final

Order:

The only two categories of benefits that go into

calculating the full value of a workersÔ

compensation settlement according to Ms. ShigoÔs

testimony are medical and indemnity benefits.

Carving out $804,000.00, the approximate value of

the PetitionerÔs potential indemnity benefits, from

the $2,500,000.00 full value of the PetitionerÔs

6 See Gallardo by & through Vassallo v. Dudek , 963 F.3d 1167, 1182 ( 11th. Cir. 2020)(finding

no conflict between the clear and convincing evidence standard and federal law).

7 The United States Supreme Court recently determined in Gallardo v. Marstiller , 2022 WL

1914096 (U.S. 2022), that the Medicaid lien attaches to past and future medical expenses.

workersÔ compensation case, as testified to by

Ms. Shigo, reveals that approximately 68% of the

full value of the PetitionerÔs case, or approximately

$1,7 00,000.00, was attributable to past and future

medical care. Applying this percentage to

approximate how much of the gross settlement is

attributable to the medical care reveals that

approximately $170,000.00 of the settlement is

fairly allocated to past a nd future medical care.

($250,000.00 gross settlement * 68% =

$170,000.00). Thus, [Mr. Dagenhart]Ôs settlement

represents approximately 10% of the full value of

his past and future medical care.

($170,000.00/$1,700,000.00).

The statutory (11)(f) formula w ould result in AHCA

recovering $91,975.88. This represents a recovery

of approximately 82.4% of the total amount

expended by Medicaid, whereas the Petitioner only

recovered 10% of the full value of his case.

* * *

Contrary to the mandate in Wos , the (11) (f) formula

does not achieve a fair allocation where AHCA

would recover over 82% of the amount expended on

medical care, and the Petitioner recovered only 10%

of the value of his case. I find that AHCAÔs proper

lien recovery should be in the same proportio n as

[Petitioner]Ôs net recovery to the full value of his

settlement. Thus, AHCA is entitled to recover

$9,823.83, 10% of the amount paid by AHCA.

3 5 . In short, M r. Dagenhart argues that the statutory formula in section

409.910(11)(f) does not achieve a f air allocation when it would result in

AHCA recovering over 82 percent of the amount it spent on PetitionerÔs

medical care while PetitionerÔs settlement only represents 10 percent of the

full value of his workersÔ compensation claim. Therefore, Petitioner utilizes

the Ñpro rata methodÒ to argue that AHCAÔs recovery should be limited to

10 percent, i.e., $9,823.83, of the $98,238.31 AHCA spent on PetitionerÔs past

medical care. See generally Willoughby v. Ag. for Health Care Admin . , 212 So.

3d 516, 522 (Fla. 2d DCA 2017)(noting that Appellant argued for a pro rata

allocation Ñbecause the settlement represents but only some forty percent of

the total value of the case, Mr. Willoughby urges that AHCA can recover only

about 40 percent of the expenses it incurred .Ò).

3 6 . Mr. DagenhartÔs argument regarding what portion of his settlement

represents past and future medical expenses is limited to a computational

argument set forth in his Proposed Final Order. That argument is

unsupported by any expert testimony opin ing that this computational

argument is a reasonable method by which to determine what portion of

Mr. DagenhartÔs settlement amounts to a recovery of past and future medical

expenses. 8

8 M r . DagenhartÔs argument differs from those of other petitioners who have predominantly

relied on expert testimony to justify a pr o rata reduction in AHCAÔs Medicaid lie n.

The detailed opinion in Eady v. State , 279 So. 3d 1249 (Fla. 1 st DCA 2019), describes how

petitioners typically argue for a pro rata reduction. The Eady petitioner called two attorneys

as witnesses, and both were accepted as experts in the valuation of damages. Id. at 1251.

The first expert witnes s conservatively estimated the value of the petitionerÔs damages as

being at least $15,000,000. Id. at 1252. That witness then testified that the petitionerÔs

$1,000,000 settlement represented approximately 6.66 percent of his total estimated

damages.

Ñ Applying that same percentage difference to the $177,747.91

in past medical expenses claimed by AHCA, [the first witness]

testified that $11,838 would be a reasonable allocation of the

confidential settlement agreement for past medical expenses .

In other w ords, the $11,838 represented a pro rata share of

the million dollar settlement.Ò Id. (emphasis added)

The second expert witness agreed that $15,000,000 was a conservative estimate of the

petitionerÔs total damages. Id. at 1253. The second expert witness also agreed that the

petitionerÔs $1,000,000 settlement represented a 6.66 percent recovery of his total damages.

Ñ[The second expert] also agreed that if [the petitioner]

recovered only 6.66% of the full value of his case, that same

percentage should be allocated to past medical expenses

recoverable by AHCA. Furthermore, he added that applying

that ratio was not only reasonable, but was common practice

in the legal proceedings with which he historically had been

associated. Again, [the second expert wi tness] approved of the

notion that applying a pro rata formula to the settlement

amount would result in $11,838 allocated to past medical

expenses.Ò Id.

3 7 . As a result, the outcome of the instant case is controlled by Gray v.

Ag ency for Health Care Admin istration , 288 So. 3d 95 (Fla. 1 st DCA 2019).

3 8 . In Gray , an ALJ ruled that AHCA was entitled to recover the full

amount of its Medicaid lien. The Gray appellant argued, in part, that the ALJ

erred by failing to use a pro rata formula to calculate AHCAÔs portion of the

recovery. In rejecting that argument, the Court ruled as follows:

Gray argued that the $10,000 recovery represented

0.349% of the value of his $2.8 million verdict, so

AHCAÔs lien should be limited to 0.349% of the

total amount Medicaid expended in medical

benefits ($65,615.054), which would equate to

$229.49. AHCA argued that, under the statutory

formula, it was entitled to $3,750 from GrayÔs

recovery and that Gray failed to prove that AHCA

should be entitled to a lesser amount. Gray

conceded that no case law or other statute

authorized the ALJ to apply a pro rata formula

instead of the formula provided in the statute.

The ALJ found that Gray failed to show by clear

and convincing evidence that AHCA was entit led to

less than the presumptive amount under the

statute - $3,750. The ALJ found no evidence in the

record to show that Ñthe $10,000 recovery does not

include at least $3,750 that could be attributed to

[GrayÔs] medical costs. Neither does the evidence

in dicate that the $3,750 amount includes payments

for expenses other than [GrayÔs] medical care and

services.Ò The ALJ ruled that AHCA was entitled to

$3,750 from the $10,000 recovery.

* * *

Even though he failed to produce evidence or

present testimony t o meet his burden to show that

the lien amount should be reduced, Gray maintains

that the ALJ should have used a pro rata formula

to calculate AHCAÔs share of the tort recovery.

Gray acknowledges that nothing in the statute

Mr. Dagenhart did not provide expert testimony of a similar nature.

authorizes the ALJ to use a pro rata formula to

calculate the lien amount. Rather, in situations

such as this case, when the plaintiff fails to produce

evidence or present testimony showing that the lien

amount should be reduced, the plain language of

section 409.910(11)(f) requires the ALJ to apply the

statutory formula. The ALJ did exactly that here

and did not err in calculating the lien amount .

Gray , 288 So. 3d 95. (emphasis added)

39 . Like the appellant in Gray , Mr. Dagenhart failed to carry his burden

of demonstrating that AHCAÔs M edicaid lien should be reduced. There is no

competent, substantial evidence on which the undersigned could base a

finding that a lesser portion of the total recovery should be allocated as

reimbursement for past and future medical expenses than the amount

calculated by AHCA pursuant to the formula set forth in section

409.910 (11)(f) . See § 409.910(17)(b) .

4 0 . Moreover, even if Mr. Dagenhart had presented evidence sufficient to

justify utilizing the pro rata method, the formula in section 409.910(11)(f)

wo uld still control. The United States Supreme Court recently ruled that a

Medicaid lien attaches to past and future medical expenses . See Gallardo v.

Marstiller , 2022 WL 1914096 at *5 (U.S. 2022) (stating that Ñ[t]he relevant

distinction is thus Ñbetween med ical and nonmedical expenses, not between

past expenses Medicaid has paid and future expenses it has not.Ò).

4 1 . Mr. DagenhartÔs past medical expenses include $1,448.817.80 in

outstanding medical bills, $98,238.31 in medical bills paid by AHCA, and

$13,31 1.87 in medical bills paid by Wellcare. Thus, Mr. DagenhartÔs total

past medical expenses are $1,560,367.98. With Ms. Shigo estimating

Mr. DagenhartÔs future medical expenses to be $600,000, then his past and

future medical expenses total $2,160,367.98. Be cause 10 percent of that total

results in a recovery far in excess of AHCAÔs lien (i.e., $216,036.80), the lien

must be paid via the statutory formula in section 409.910(11)(f) .

4 2 . In sum, Mr. Dagenhart failed to prove by clear and convincing

evidence that a lesser portion of his settlement should be allocated as past

and future medical expenses than the amount determined via the statutory

formula in section 409.910(11)(f).

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

$91,975.88 in satisfaction of its Medicaid lien.

D ONE A ND O RDERED this 6th day of July , 2022 , in Tallahassee, Leon

County, Florida.

S

G. W. C HISENHAL L

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 6th day of July , 2022 .

C OPIES F URNISHED :

Mark N. Tipton , Esquire Alexander R. Boler, Esquire

7 East Silver Springs Boulevard 2073 Summit Lake Drive , Suite 300

Ocala, Florida 33470 Tallaha ssee, Florida 32317

Shena L. Grantham, Esquire Josefina M. Tamayo, General Counsel

Agency for Health Care Administration Agency for Health Care Administration

Building 3, Room 3407B 2727 Mahan Drive , Mail Stop 3

2727 Mahan Drive Tallahassee, Florida 32308

Tallahassee, Florida 32308

Simone Marstiller, Secretary Thomas M. Hoeler, Esquire

Agency for Health Care Administration Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 1 2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308 Talla hassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 3230 8

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, accompanie d

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.