Goulet v. Woman’s Touch in Healthcare: Florida Circuit Court follows Ahlborn and significantly reduces Medicaid Lien
Kyra Pierson (“Kyra”) suffered brain damage during her birth on January 26, 2008. Her parents brought a medical malpractice claim to recover all of her damages related to her injuries. During pre-suit it was discovered that the only funds available from the tortfeasor were the tortfeasor's insurance policy limits. A demand was made for $10,000,000 and a settlement offer of the insurance policy limits was made in satisfaction of all Kyra's damages. All of Kyra's medical care related to her injuries was paid by Florida Medicaid and Florida Medicaid has asserted a $49,370.73 Section 409.910, Florida Statutes, Medicaid lien against Kyra's entire settlement.
After settlement, Kyra’s parents filed a Petition to Allocate Settlement and Determine Medicaid Lien requesting the Court allocate the settlement and determine the portion of the settlement representing compensation for past medical expenses under Ahlborn. Florida Medicaid objected to the petition. At the hearing on the petition, the plaintiff’s attorney testified that the value of the case absent limiting factors was $5,000,000 to $10,000,000. However, he testified that most of the child’s damages were for non-economic damages such as pain and suffering. He opined opined that based on a very conservative valuation of the total monetary value of all Kyra's damages of $5,000,000, she had recovered only 2% of the total monetary value of all her damages in the settlement and had recovered in the settlement only 2% of each and every element of damages suffered.
The Circuit Court Agreed with the plaintiffs that Ahlborn controlled and rejected Medicaid’s arguments for a strict application of the reduction formula found in Section 409.910. The court found that Medicaid’s arguments that the allocation of the settlement should follow the statutory mathematical calculation in Section 409.910(11)(f) are inconsistent with the decision in Smith (5th DCA opinion), and in this case would compel payment of more than the portion of Kyra's settlement actually representing compensation for past medical expenses -- a result prohibited by Ahlborn. The court went on to hold:
“Given the evidence presented it is apparent that Kyra has conservatively suffered between $5,000,000 to $10,000,000 in damages. The majority of these damages would be non-economic damages such as pain and suffering and mental anguish. Kyra's entire claim for past medical expenses is $49,370.73. This is the amount of medical expenses that Kyra has incurred in the first two and a half years of her life. Taking judicial notice of life expectancy / mortality tables that would call for life expectancy of 79 years, it is reasonable that Kyra's claim for both past and future medical expenses would total between $1,000,000 and $1,600,000. Based on a conservative value of all her damages at $5,000,000 (Medicals are 1/5 of that) and all the facts and circumstances of the limited settlement ($100,000), it is reasonable to allocate $20,000 (1/5 of the $100,000 settlement) of Kyra's settlement to both past and future medical expenses. Dividing this $20,000 by a life expectancy of 79 years would result in $253.00 per year. Kyra is two and a half so multiplying $253.00 by 2.5 would result in $632.50 of the gross settlement compensating Kyra for past medical expenses. Therefore, this Court allocates $632.50 of the gross settlement to past medical expenses.”
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