Daniel C. v. White Mem'l Med. Ctr.
| Citation | 294 Cal.Rptr.3d 537 |
| Decision Date | 26 May 2022 |
| Docket Number | B308253 |
| Parties | DANIEL C., a Minor, etc., Plaintiff and Appellant, v. WHITE MEMORIAL MEDICAL CENTER et al. Defendants; State Department of Health Care Services, Claimant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Steven B. Stevens, Los Angeles; Law Offices of Martin Stanley and Martin Stanley, Santa Monica, for Plaintiff and Appellant.
Rob Bonta, Attorney General, Cheryl L. Feiner, Assistant Attorney General, Richard T. Waldow, Gregory D. Brown and Cristina M. Matsushima, Deputy Attorneys General, for Claimant and Respondent.
Appellant Daniel C. (Daniel) is a severely disabled child whose congenital abnormalities were undetected during his mother's pregnancy until after viability. Daniel sued various medical providers for wrongful life, settling with one, Dr. Kathryn Shaw, in 2018. The California Department of Health Care Services (DHCS) asserted a lien on Daniel's settlement to recover what DHCS paid for his medical care through the state's Medi-Cal program, and the trial court awarded DHCS the full amount of the lien.
We reverse. As we discuss, we reject Daniel's contentions that DHCS's lien is preempted by federal law and that there is no substantial evidence that Daniel's settlement included payments for past medical expenses. However, we find that the trial court erred by failing to distinguish between past medical expenses and other damages, and to apportion the settlement accordingly. We therefore will reverse and remand to the trial court to make the required findings and allocation.
Daniel was born on May 12, 2012, with profound mental and physical disabilities. He has severe cognitive and developmental impairments, is completely blind, and suffers significant hearing loss. At the age of five years, he was unable to stand independently because of skeletal abnormalities and is not expected ever to walk independently. He receives all of his nutrition through a gastrostomy tube because of difficulty swallowing. He is completely dependent on others for his daily care, including feeding, dressing, toileting, hygiene, and mobility, and he is unlikely to experience any meaningful improvement.
Through his mother and guardian ad litem, Rebecca Gutierrez, Daniel filed a wrongful life suit against his mother's prenatal health care provider, Dr. Shaw, alleging she negligently failed to diagnose serious abnormalities in his spine and bones that were evident on his ultrasound.1 Daniel settled his action against Dr. Shaw in April 2018 for $1,250,000, subject to court approval.
Since Daniel's birth, DHCS has paid for his medical care through the California Medical Assistance Program, known as Medi-Cal. In March 2018, Daniel's counsel notified DHCS of the pending lawsuit, and in April 2018, DHCS notified counsel of its right to assert a lien against any third party settlement or judgment.
On April 16, 2019, the trial court approved the settlement with Dr. Shaw and created a special needs trust for Daniel's benefit. It further ordered that $358,117 be held in Daniel's counsel's client trust account pending a determination of DHCS's lien.
On July 6, 2020, DHCS provided a revised final lien letter, stating that it had paid $358,061 for Daniel's medical care, of which it sought to recover $229,696.2
Daniel filed a motion pursuant to Welfare and Institutions Code 3 section 14124.76 to determine DHCS's lien. He contended that DHCS was not entitled to any portion of his settlement because the federal Medicaid Act ( 42 U.S.C., § 1396p ) preempted states from imposing liens on judgments or settlements recovered by Medi-Cal recipients. Alternatively, Daniel contended that his total past and future damages exceeded $13 million, and that his $1.25 million settlement thus represented just about 9 percent of his total damages. Daniel argued that DHCS's recovery therefore should be limited to 9 percent of the past medical expenses paid by Medi-Cal, or $32,517, as further reduced by DHCS's proportionate share of Daniel's attorney fees and costs.
In support of his motion, Daniel submitted a declaration and life care plan prepared by Certified Nurse Life Care Planner Jennifer Craigmyle. Craigmyle stated that Daniel's mother currently provided all of his daily care; although Daniel had been approved for in-home supportive services and respite care, his mother had difficulty finding nurses to provide the care Daniel required. Craigmyle stated Daniel's life expectancy was 35 to 40 years from his current age, and she created a detailed life care plan identifying the care and equipment he would need throughout his life, including medical care, attendant care, fiduciary and conservator fees, educational assessments, medical supplies, durable medical equipment, and physical and occupational therapy. Craigmyle also provided estimates of the costs of this care and equipment.
Daniel also submitted the declaration of economist David Fractor, which calculated the present value of Daniel's future needs. Fractor opined that the present value of Daniel's future care was $13.4 million.
DHCS opposed Daniel's motion. It asserted that its lien was not preempted by the Medicaid Act; to the contrary, the Medicaid Act required it to take all reasonable measures to seek reimbursement from third party tortfeasors for care and services paid through the Medi-Cal program. With regard to the amount of the lien, DHCS acknowledged that its reimbursement was limited to the portion of the settlement representing medical expenses, and that its recovery was further limited by 25 percent to account for its reasonable share of attorney fees. DHCS urged, however, that because Daniel's settlement arose from a wrongful life action, it necessarily included only medical and educational damages. Daniel's life care plan claimed only $23,000 in educational expenses, and thus the remainder of the $1.25 million settlement necessarily was for medical expenses subject to DHCS's lien.
DHCS further asserted that while the total value of a Medi-Cal beneficiary's claim ordinarily includes both past and future medical expenses, a claim must exclude future medical expenses that Medi-Cal will cover. In the present case, Daniel is eligible for "full-scope" Medi-Cal coverage, which means he is eligible to receive all services available through the Medi-Cal program that are determined to be medically necessary. In light of Daniel's medical condition and the reasonable probability that his condition will not improve, Daniel is likely to remain eligible for this coverage throughout his life. DHCS thus contended it was entitled to recover the full amount of its Medi-Cal lien.
In support of its opposition, DHCS submitted a number of declarations, including the following:
Declaration of Brooke Hennessy, Chief of Financial Eligibility Unit of Policy Development Branch of DHCS's Medi-Cal Eligibility Division: Hennessy stated that Daniel is eligible for full-scope Medi-Cal, meaning he is eligible to receive all services available through the Medi-Cal program that are determined to be medically necessary. He currently is receiving Medi-Cal benefits, including in-home supportive services, and is enrolled in L.A. Care, a Medi-Cal managed care plan. It is reasonably probable that Daniel will remain eligible for full-scope Medi-Cal so long as his income and resources remain at or below Medi-Cal eligibility limits.
Declaration of Raquel Sanchez, Staff Services Manager in DHCS's Medi-Cal Benefits Division: Sanchez stated that services are available to Medi-Cal beneficiaries through the State Plan (the formal contract between the state and federal government) and through waiver programs. For example, Medi-Cal provides home and community-based services, including skilled nursing services, to eligible individuals in their homes and in community settings. "[A]ll but a few of the medical services and items enumerated within it are State Plan services available through Medi-Cal to eligible full scope Medi-Cal beneficiaries," like Daniel. Further, it is "reasonably probable" that Medi-Cal will pay for most of the medical services and medical items enumerated in Daniel's Life Care Plan, including (1) physician services, (2) durable medical equipment and medical supplies including, for example, hearing aid replacements, gastrostomy supplies, incontinence supplies, shower chairs, and wheelchairs, (3) orthotic and prosthetic appliances, (4) diagnostic testing, (5) inpatient hospital services, (6) in-home supportive services, including, for example Licensed Vocational Nurse (LVN) services, and (7) transportation. The only items in the Life Care Plan that are not available through Medi-Cal are physical and occupational therapy, with an expected lifetime cost of $83,000.
Declaration of Nayeema Wani, DHCS Compliance Unit Supervisor: Wani stated that Daniel has cognitive deficits, hearing deficits, and physical impairments, which require him to have assistance with health care needs. Due to the severity of his condition, it is unlikely that his condition will improve. The Life Care Plan states that plaintiff presently requires 16-hour caregiving assistance provided by an LVN for the next 16 years, and then 24-hour caregiving assistance provided by an LVN. Twenty-four hour in-home LVN nursing is available through the Home and Community Based Services (HCBS) waiver program, so long as Daniel chooses to apply to receive such services and the services are deemed to be medically necessary. Currently, Daniel is receiving services through the State Plan's In-Home Supportive Services program, for which he has been eligible since April 2016. Daniel also may choose to apply for other in-home and community-based nursing services through the State Plan's Early Periodic Screening, Diagnostic and Treatment...
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