Giraldo v. Agency for Health Care Admin.

• Decision Date: 12 December 2016
• Docket Number: CASE NO. 1D16–0392
• Citation: 208 So.3d 244
• Parties: Maria Isabel GIRALDO and Juan Gonzalo Villa, as Co-Personal Representatives of the Estate of Juan L. Villa, Appellants, v. AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee.
• Court: Florida District Court of Appeals

208 So.3d 244

Maria Isabel GIRALDO and Juan Gonzalo Villa, as Co-Personal Representatives of the Estate of Juan L. Villa, Appellants,

v.AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee.

CASE NO. 1D16–0392

District Court of Appeal of Florida, First District.

Opinion filed December 12, 2016.

Rehearing Denied January 24, 2017.

Floyd Faglie of Staunton & Faglie, PL, Monticello; Celene H. Humphries and Maegen Peek Luka of Brannock & Humphries, Tampa, for Appellants.

Alexander R. Boler, Tallahassee, for Appellee.

WELLS, LINDA ANN, Associate Judge.

On September 12, 2010, Juan L. Villa suffered catastrophic injury to his spine when the all-terrain vehicle he was riding overturned. Villa, claiming both economic and noneconomic damages, brought products liability and negligence claims against those allegedly liable for his injuries. Florida's Agency for Healthcare Administration ("AHCA"), which administers Florida's Medicaid program,¹ paid for portions of Villa's medical care. By accepting Medicaid benefits, Villa automatically subrogated his right to third-party benefits for the full amount of medical assistance provided by Medicaid and automatically assigned to AHCA his right, title, and interest to those benefits, other than those excluded by federal law. See § 409.910(6)(a), (b), Fla. Stat. (2014) ; see also 42 U.S.C. § 1396k(a)(1) (requiring states participating in the federal Medicaid program to provide, as a condition of Medicaid eligibility, assignment to the state the right to payment for medical care from any third party). These same benefits also became subject to an automatic lien in AHCA's favor "for the full amount of medical assistance provided by Medicaid" as soon as Villa began to receive treatment for which AHCA became obligated to pay. § 409.910(6)(c), Fla. Stat. (2014).

On March 2, 2015, AHCA asserted a $322,222.27 Medicaid lien against any future settlement of, or recovery from, the action Villa had brought to recover for the injuries he had incurred in the all-terrain vehicle accident. AHCA later updated the Medicaid lien amount to $324,607.25.²

A month later, Villa settled his case against one of a number of defendants in his products liability/negligence action. Although the settlement agreement between these two parties did not itemize the different sums that Villa was to recover for each element of damage that he claimed,³ it did state that his "alleged damages have a value in excess of $25,000,000.00," and that Villa and the settling defendant had agreed to allocate $4817.56 of the undifferentiated settlement total to Villa's claim for past medical expenses.⁴

Shortly after settling, Villa's counsel notified AHCA of the settlement and provided AHCA with a copy of the executed settlement agreement, along with an itemization of Villa's litigation costs in the tort lawsuit. The letter asked AHCA to advise Villa of the amount AHCA would accept from the settlement proceeds to satisfy its Medicaid lien. AHCA responded claiming entitlement to $321,720.16 of Villa's settlement predicated on its calculation of the amount payable pursuant to the formula set forth in section 409.910(11)(f) of the Florida Statutes. See § 409.910(11)(f) 1., Fla. Stat. (2014) (capping AHCA's recovery at one half of the total amount of the settlement proceeds after deducting attorneys' fees and costs).⁵

Villa then petitioned the Division of Administrative Hearings (DOAH) for a formal administrative proceeding to contest the amount designated by AHCA "as recovered medical expense damages" and for a determination of the amount payable to AHCA to satisfy the agency's Medicaid lien. See § 409.910(17)(b), Fla. Stat. (2015) (providing that a Medicaid recipient may contest the amount designated as recovered medical expense damages under paragraph (11)(f)). The matter was tried before an administrative law judge (ALJ) the following October, but before a final order could be entered, Villa died, and the co-personal representatives of his estate stepped in.⁶

On December 30, 2015, a comprehensive final order was entered rejecting Villa's claim that less than the $321,720.16 allocated under the paragraph (11)(f) formula should be allocated as reimbursement for Villa's medical expenses. In doing so, the ALJ rejected the notion that the $13,881.79 allocation purportedly agreed to by Villa and the settling third-party tortfeasor (based on their $25,000,000.00 estimate of total damages) constituted clear and convincing evidence that an amount less than the paragraph (11)(f) amount should be allocated, because "neither the agreed total value of ‘alleged’ damages nor the agreed allocation of settlement proceeds [between Villa and the settling third-party tortfeasor] to compensate for past medical expenses ... can be credited as reasonable products of arms-length adversarial negotiation."

The ALJ also concluded that two-year old hearsay reports from a vocational rehabilitation specialist and an economist failed to supply the evidentiary support essential to the current paragraph (17)(b) challenge because neither report segregated medical damages from non-medical damages and neither reflected circumstances existing at the time of the evidentiary hearing.⁷ Lastly, the ALJ rejected Villa's argument that section 409.910(17)(b) impermissibly required him to include any future medical expense award in calculating the amount that must be allocated from his total recovery as available to satisfy the lien at issue.

Villa⁸ here challenges the determination that he failed to "prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in [section 409.910 ](11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency." § 409.910(17)(b), Fla. Stat. (2014) (footnote omitted). Villa claims that the factual findings detailed in the final order are unsupported by competent substantial evidence and that the legal conclusions underpinning the final order are erroneous.

We find no error in any of the ALJ's factual findings or legal determinations. First, we reject Villa's claim that because the testimony of the two witnesses he called at the evidentiary hearing (one of whom was his trial attorney) was unrebutted, that the ALJ had no choice but to accept that testimony as probative. See Fox v. Dep't of Health , 994 So.2d 416, 418 (Fla. 1st DCA 2008) ("It is well-established that the ALJ was not required to believe [witness's] testimony, even if unrebutted."). "[T]he trier of fact is never bound to believe any witness, even a witness who is uncontradicted .... It is not our prerogative to judge the credibility of witnesses .... There is no substitute for seeing and hearing persons testify." Walker v. Fla. Dep't of Bus. & Prof'l Regulation , 705 So.2d 652, 655 (Fla. 5th DCA 1998) (J. Dauksch, concurring specially).

More to the point, the burden was on Villa to prove by clear and convincing evidence that a lesser amount was to be allocated from the total recovery. Clear and convincing evidence requires:

that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

Slomowitz v. Walker , 429 So.2d 797, 800 (Fla. 4th DCA 1983).

On the record before us, we cannot disagree with the ALJ's rejection of trial counsel's unilateral determination of the amount to designate in the settlement agreement as that portion of the total settlement to be allotted to medical expenses. Likewise, we find no error in the ALJ's determination that out-dated hearsay expert reports, which did not segregate medical from non-medical damages, failed to support the relief sought by Villa—a determination that section 409.910(11)(f) should not be applied. Nor can we disagree with the ALJ's decision that it was proper to reject testimony that the formula used by the parties to the settlement agreement to arrive at a $13,881 allocation for medical expenses was a "reasonable" or "fair" approach, a fortiori because the settlement agreement prepared by Villa's counsel allocated not $13,881 but only $4,817.56 as the amount against which AHCA could draw, and only later modified that figure. We therefore find no error in the ALJ's factual determinations about which Villa complains.

Second, we find no error in the ALJ's legal determination relating to AHCA's right to secure reimbursement for payments already made for medical costs from not only that portion of the settlement allocated for past medical expenses but also from that portion of the settlement intended as compensation for future medical expenses. We do so initially because that is precisely what Florida law required the ALJ to do. Section 409.910(11)(f) sets forth the formula for determining that portion of a Medicaid recipient's "recovery" pursuant to a settlement with a third party that must be allocated to satisfy "the total amount" of medical costs Medicaid has provided. § 409.910(11)(f), Fla. Stat. (2014). Specifically, the formula allocates one half of the gross (or entire settlement) recovered (which would include the recipient's recovery for past and future medical costs) less only attorney's fees and costs as designated to repay the state's Medicaid agency for the medical expenses that it has paid.

Likewise, section 409.910(17)(b), which authorizes a Medicaid recipient to challenge the amount allocated under section 409.910(11)(f), expressly requires consideration of the amounts the Medicaid recipient has "recovered" to reimburse him or her "for past and future medical...