Judge: Audra Mori, Case: 20STCV14720, Date: 2023-01-04 Tentative Ruling

Case Number: 20STCV14720    Hearing Date: January 4, 2023    Dept: 31

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

1. Background

Plaintiff Aubrey Rodriguez (“Plaintiff”), a minor by and through her guardian ad litem, Jennifer Berrios, filed this action against Defendants Kaiser Foundation Hospitals and Southern California Permanente Medical Group (collectively, “Defendants”) for medical negligence relating to a surgery performed on Plaintiff on or about December 4, 2019.  

Plaintiff provides that the action settled with Defendants at mediation for $4,500,000.00 on August 25, 2021.  On December 3, 2021, a petition to confirm minor’s compromise pertaining to Plaintiff was granted. 

On November 4, 2022, Plaintiff filed the instant petition for an order determining the Department of Health Care Services (“DHCS”) lien claim.  On December 13, 2022, DHCS filed an objection to Plaintiff’s petition.  The Court has not received any reply to the objection.   

2. Petitioner to Determine DHCS Lien

Welfare and Institutions Code § 14124.76(a) provides in part:

(a) No settlement, judgment, or award in any action or claim by a beneficiary to recover damages for injuries, where the director has an interest, shall be deemed final or satisfied without first giving the director notice and a reasonable opportunity to perfect and to satisfy the director's lien. Recovery of the director's lien from an injured beneficiary's action or claim is limited to that portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided on behalf of the beneficiary. All reasonable efforts shall be made to obtain the director's advance agreement to a determination as to what portion of a settlement, judgment, or award that represents payment for medical expenses, or medical care, provided of behalf on the beneficiary. Absent the director's advance agreement as to what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision… 

Moreover, “Either the director or the beneficiary may seek resolution of the dispute by filing a motion, which shall be subject to regular law and motion procedures. In determining what portion of a settlement, judgment, or award represents payment for medical expenses, or medical care, provided on behalf of the beneficiary and as to what the appropriate reimbursement amount to the director should be, the court shall be guided by the United States Supreme Court decision in Arkansas Department of Health and Human Services v. Ahlborn (2006) 547 U.S. 268 and other relevant statutory and case law.”  (Id.) 

Welfare and Institutions Code § 14124.72(d) states:

The director's claim for reimbursement of the benefits provided to the beneficiary shall be limited to the amount of the director's lien, as defined in subdivision (d) of Section 14124.70. If the action or claim is brought by the beneficiary alone and the beneficiary incurs a personal liability to pay attorney's fees and costs of litigation, the amount of the director's lien that is reimbursed shall be reduced by 25 percent, which represents the director's reasonable share of attorney's fees paid by the beneficiary, and that portion of the cost of litigation expenses determined by multiplying the actual litigation expenses by the ratio of the amount reimbursed to the director as satisfaction of the director's lien, prior to deducting reasonable attorney's fees and litigation expenses, to the full amount of the settlement, judgment, or award.

Where an injured plaintiff received Medi-Cal benefits, Medi-Cal has a first lien against the portion of the settlement representing past medical expenses, reduced by (a) 25% to defray attorney fees and (b) the portion of litigation expenses that the reasonable value of the benefit bears to the beneficiary's total recovery.  (Welf. & Inst. Code §§ 14124.71(a), (d), 14124 .72(c), (d), 14124.76(a), 14124.78; see Branson v. Sharp Healthcare, Inc. (2011) 193 Cal.App.4th 1467, 1474.)  “The fundamental point is that a settlement that does not distinguish between past medical expenses and other damages must be allocated between these two classes of recoveries. Without such an allocation, the principle set forth in Ahlborn, that the state cannot recover for anything other than past medical expenses, cannot be carried into effect.”  (Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 752-53.) 

In Ahlborn, the United States Supreme Court held that the entire settlement is not subject to Medicaid reimbursement, but only to that portion of the settlement attributable to medical benefits. (Ahlborn, supra, 547 U.S. at p. 282, 126 S.Ct. 1752.) Ahlborn, however, does not mandate a particular formula for allocating medical benefits where the settlement makes no such allocation. Instead, the allocation must be made on the basis of a “rational approach.” (Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 754, 87 Cal.Rptr.3d 174.)

(Martinez v. State Dept. of Health Care Services (2017) 19 Cal.App.5th 370, 374.) 

Here, Plaintiff asserts that DHCS sent an itemization for its lien claim on August 18, 2021, that totaled $66,898.74.  As of the filing of the petition, Plaintiff states that DHCS has not provided a final lien claim, so to expedite the action, Plaintiff has calculated the lien claim pursuant to Welfare and Institutions Code § 14124.72.  Plaintiff proposes the lien amount be reduced by 25%, or $16,724.68, to account for attorney fees, and by $1,143.80 to account for DHCS’s share of litigation costs.  Thus, Plaintiff seeks approval of payment to DHCS in the amount of $49,030.26 [$66,898.71 (lien claim) - $16,724.68 (attorney fees) - $1,143.80 (litigation costs)] as full satisfaction for DHCS’s lien. 

In its objection, DHCS asserts that it disputes the total amount of the lien that it is owed.  DHCS argues that Plaintiff’s calculations are inaccurate because they are based on a lien claim that was not finalized.  DHCS provides the total amount of its lien is $58,095.93, and it requests the Court approve payment to DHCS in this amount as full satisfaction of its lien.  DHCS asserts that its final gross lien amount was $79,373.63, which DHCS calculated after reducing the lien amount pursuant to its statutory obligations.  Alternatively, DHCS requests the Court set a briefing schedule to resolve the amount of the lien claim currently in dispute. 

            Insufficient information and evidence is provided with the petition and objection for the Court to make a determination regarding DHCS’s lien amount.  While Plaintiff states that the lien amount provided by DHCS on August 18, 2021 totaled $66,898.74, DHCS states that the lien claim was not finalized until November 10, 2022- after the instant petition was filed- with the total amount being $58,095.93.  Because Plaintiff did not file a reply to the objection, it is unclear whether Plaintiff disputes this second amount is the correct lien amount.  Furthermore, the allocation to DHCS must be made on the basis of a rational approach.  (Martinez, 19 Cal.App.5th at 374.)  However, the Court cannot make this determination with the limited information provided. 

For example, in Aguilera v. Loma Linda University Medical Center (2015) 235 Cal.App.4th 821, the reimbursement due to DHCS was calculated as follows:

Reimbursement Due = [Total Settlement ÷ Full Value of Claim] × Value of Benefits Provided.  This amount was then further be reduced by the Medi-cal statutory fee reduction of 25%. 

(Aguilera, supra, 235 Cal.App.4th at 828, 835, citing Bolanos v. Superior Court (2008) 169 Cal.App.4th 744.)  Plaintiff, in this case, does not submit any evidence regarding the total value of Plaintiff’s claim, or any evidence concerning Plaintiff’s special or general damages in this matter.  Without evidence of the total value of Plaintiff’s claim, the Court cannot rationally ascertain the portion of the settlement that represents payments for medical care. 

Therefore, Plaintiff’s petition is denied without prejudice.  Plaintiff is ordered to meet and confer with DHCS regarding the final amount of DHCS’s lien claim and resolving the lien amount to be paid to DHCS without judicial intervention. 

Plaintiff is ordered to give notice. 

PLEASE TAKE NOTICE:

• Parties are encouraged to meet and confer after reading this tentative ruling to see if they can reach an agreement.
• If a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept31@lacourt.org with the Subject line “SUBMIT” followed by the case number.  The body of the email must include the hearing date and time, counsel’s contact information, and the identity of the party submitting.  
• Unless all parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument.  You should assume that others may appear at the hearing to argue.  
• If the parties neither submit nor appear at hearing, the Court may take the motion off calendar or adopt the tentative ruling as the order of the Court.  After the Court has issued a tentative ruling, the Court may prohibit the withdrawal of the subject motion without leave. 

Dated this 4^th day of January 2023