BRYAN v. STATE (2020)

Emily Bryan seeks review of a final order entered by the Division of Administrative Hearings (“DOAH”) compelling her to fully pay off a Medicaid lien, which was imposed by the Agency for Healthcare Administration (“AHCA”), on her settlement of a medical malpractice lawsuit. Because the Administrative Law Judge (“ALJ”) rejected the unrebutted competent substantial evidence presented by Ms. Bryan that the lien should be reduced without a reasonable basis in the evidence, we reverse.

On April 12, 2010, Ms. Bryan was roughly one year old when she was sent to the ER after suffering head trauma followed by episodes of vomiting and excessive sleeping. She returned to the ER four times after bouts of excessive vomiting and seizures. No further diagnostic imaging was performed. On May 14, 2010, while at daycare, Ms. Bryan suffered a grand mal seizure and respiratory distress. After she was taken to the ER, brain scans revealed that she suffered debilitating injuries to her brain.

This brain damage left Ms. Bryan unable to speak, walk, ambulate, eat, toilet, or care for herself in any manner. The medical care related to the accident was paid by Medicaid in the total amount of $379,599.90, while her total expenses were $381,062.84. Thus, the $379,559.90 in Medicaid benefits only constitutes 99.6% of Ms. Bryan’s $381,062.84 claim for past medical expenses. As a condition of her eligibility for Medicaid, Ms. Bryan assigned to AHCA her right to recover medical expenses paid by Medicaid from liable third parties.

Ms. Bryan’s guardian sued the medical providers responsible for the medical care (the “Defendant Medical Providers”) to recover all of Ms. Bryan’s damages associated with her injuries as well as her mother’s individual damages. AHCA asserted a $379,599.90 Medicaid lien against Ms. Bryan’s cause of action pursuant to section 409.910(6)(c), Florida Statutes.

Ms. Bryan entered into a confidential settlement to release the Defendant Medical Providers from liability for $3,000,000, which was approved by the court. She filed a Petition to Determine Amount Payable to AHCA in Satisfaction of Medicaid Lien under section 409.910(17)(b), Florida Statutes. AHCA and Ms. Bryan stipulated that under the formula located in section 409.910(11)(f), Florida Statutes, AHCA would be entitled to full payment of the lien—$379,599.90. Ms. Bryan claimed that because the $3,000,000 settlement only represented 10% of her conservatively estimated $30 million of damages, she only recovered 10% of each and every element of her damages, including her $381,062.84 claim for past medical expenses.^* She requested that DOAH determine that $38,106.28 is the portion of her settlement which should be allocated to past medical expenses under section 409.910(17)(b) and reduce her lien accordingly.

At the administrative hearing, Ms. Bryan offered the testimony of two trial attorneys who were both admitted as experts in the valuation of damages. They testified that based on their experience, their knowledge of Ms. Bryan’s injuries, the life care plan, and the economist report—which were filed as exhibits—and their comparison of Ms. Bryan’s case to jury verdicts in similar cases, the value of her damages exceeded $30 million. Ms. Bryan’s experts both testified that, using the conservative figure $30 million, the $3 million settlement only represented a 10% recovery. Further, based on that figure, it would be reasonable to allocate 10% of her $381,106.28 claim for past medical expenses—$38,106.28—from the settlement to satisfy AHCA’s lien.

Ms. Bryan also submitted an affidavit of a former judge. Based on her training, the former judge affirmed that Ms. Bryan’s method of calculating the proposed allocation of $38,106.28 “is reasonable, rational, logical, and results in an accurate estimation of the portion of the settlement which should be allocated to past medical expenses.”

In turn, AHCA did not: (1) call any witnesses, (2) present any evidence as to the value of Ms. Bryan’s damages, (3) propose a differing valuation of the damages, or (4) present evidence contesting the methodology used to calculate the $38,106.28 allocation to past medical expenses.

In its final order, the ALJ recast Ms. Bryan’s pro rata allocation formula as a “one size fits all” approach which placed each element of her damages at an equal value and stated that:

The allocation of 10 percent of the Settlement Amount to each and every element of [Ms. Bryan’s] damages is not proven by the evidence presented at final hearing.

The ALJ concluded by stating that to rebut the (11)(f) formula, Ms. Bryan had to prove that it was more probable than not that it was the parties’ intention that only $38,106.28 be allocated for past medical expenses, and that she had not met her burden. Based on these conclusions, the ALJ ordered Ms. Bryan to pay $379,599.90, in full satisfaction of the Medicaid lien.

On appeal, Ms. Bryan claims that the ALJ lacked a reasonable basis to reject her two unrebutted experts’ testimony and the hearsay affidavit of a former judge. This Court reviews an ALJ’s findings of fact to determine whether they are supported by competent, substantial evidence; whereas, conclusions of law are reviewed de novo. Moreland ex rel. Moreland v. Agency for Persons with Disabilities, 19 So. 3d 1009 (Fla. 1st DCA 2009).

The Florida Supreme Court’s decision in Giraldo v. Agency for Health Care Administration, 248 So. 3d 53 (Fla. 2018), and its progeny promulgated by this Court serve as lodestars in this case. It is noted that at the time of the final hearing, the ALJ did not have the benefit of these decisions.

In Giraldo, after suffering severe injuries, the appellant received $321,720.16 in Medicaid funds. Id. at 54. The appellant sued and settled with liable third-party tortfeasors for $1 million. Id. Relying on the (11)(f) formula, AHCA determined that it was entitled to full reimbursement of its lien. Id. The appellant challenged the (11)(f) formula’s conclusion at an administrative hearing, and presented uncontested expert testimony that, based on a pro rata methodology, AHCA was only entitled to $13,881.79. Id. The supreme court held that because federal law restricts “Florida’s assignment rights (and lien) to settlement funds fairly allocable to past medical expenses,” and there was no reasonable basis in the evidence before the ALJ to reject the appellant’s pro rata methodology, AHCA was only entitled to $13,881.79. Id. at 56. Because no further fact-finding was required, the court compelled DOAH to reduce the lien to $13,881.79. Id.

Further, in Eady v. State, 279 So. 3d 1249, 1259 (Fla. 1st DCA 2019), a case which is materially indistinguishable from Giraldo, this Court similarly found that: (1) the appellant presented “competent, substantial, and uncontradicted evidence” that his pro rata methodology reflected the share of the appellant’s settlement with liable third parties, which is “properly allocated to past medical expenses,” and (2) “there was no reasonable basis in the record to reject that evidence ․”. Thus, this Court compelled the ALJ to reduce AHCA’s lien to comport with the appellant’s pro rata methodology. Id.

Moreover, in Mojica v. State, 285 So. 3d 393, 394 (Fla. 1st DCA 2019), a case that factually mirrored Giraldo and Eady, the appellant—an eight-year-old girl who suffered catastrophic brain damage as a result of medical malpractice—settled her cause of action with liable third parties for $8.8 million. Of the $595,077.45 expended by Medicaid during the course of the appellant’s treatment, AHCA asserted a $322,048.83 lien on the award to recoup the expenses it paid. The appellant initiated an administrative hearing to rebut the (11)(f) formula and establish that, under a pro rata methodology, because her damages were estimated to be $25 million, she only recovered 35.2% of her claim for past medical expenses—or $209,467.26. Id. Further, “since the $322,048.83 in Medicaid benefits paid by AHCA only constitute[d] 54% of the $595,077.45 claim for past medical expenses, AHCA’s lien should be limited to 54% of $209,467.26, or $113,112.33.” Id. Because the appellant “presented unrebutted and unimpeached expert testimony” that the full value of her damages were $25 million and “AHCA did not present any evidence contesting the pro rata methodology used to calculate the $209,467.26 allocation to past medical expenses” we reversed the ALJ’s order compelling the appellant to pay AHCA the full amount owed under the lien. Id.

Likewise, in this case, Ms. Bryan presented unrebutted competent substantial evidence to support that the value of her case was at least $30 million. She also presented unrebutted competent substantial evidence that her pro rata methodology did indeed support her conclusion that $38,106.28 was a proper allocation to her past medical expenses. Such methodology was similar to the methodology employed in Giraldo, Eady, and Mojica. AHCA did not present any evidence to challenge Ms. Bryan’s valuation, nor did it present any alternative theories or methodologies that would support the calculation of a different allocation amount for past medical expenses. Without any evidence to contradict the pro rata methodology proposed by Ms. Bryan, the ALJ’s rejection of that methodology was not warranted. Accordingly, we reverse and remand to DOAH for further proceedings consistent with this opinion.

FOOTNOTES

FOOTNOTE.   Ten percent of $381,062.84 is $38,106.28

Duncan, J. Scott, Associate Judge.

Wolf and M.K. Thomas, JJ., concur.