Judge: Lee S. Arian, Case: 19STCV12774, Date: 2024-04-18 Tentative Ruling


Case Number: 19STCV12774    Hearing Date: April 18, 2024    Dept: 27

Hon. Lee S. Arian

Department 27

Tentative Ruling

 

Hearing Date:           4/18/2024 at 1:30 p.m.

Case No./Name.:      19STCV12774 CASEY ARAGON vs KAISER FOUNDATION HEALTH

Motion Name:          MOTION TO DETERMINE AMOUNT OF MEDICAL LIEN AND REIMBURSEMENT

Moving Party:          California Department of Health Care Services

Responding Party:    Plaintiff

Notice:                    Sufficient

 

Ruling:                    MOTION TO DETERMINE AMOUNT OF MEDICAL LIEN AND REIMBURSEMENT IS GRANTED IN THE AMOUNT OF $66,225.89

 

Background

On April 1, 2019, Plaintiff filed the present medical malpractice case. The complaint alleges that Plaintiff was born prematurely at 30 weeks gestation, resulting in a bilateral Grade 4 intraventricular hemorrhage. The case was settled on December 14, 2020. As a Medi-Cal recipient, Plaintiff received services worth $151,920.04 for his injuries, paid by Medi-Cal. On April 22, 2021, the Department of Health Care Services (DHCS) sent Plaintiff a letter with an itemized list of services received from the Medi-Cal program, setting a final lien amount at $153,084.17, but reduced that to $112,157.75 pursuant to Welfare and Institutions Code section 14124.72. Plaintiff requested a further reduction, but DHCS refused. The parties dispute the appropriate amount to be reimbursed. Medi-Cal now moves the court to determine the amount of the Medi-Cal lien and reimbursement.

Analysis

Under Welf. & Inst. Code §14124.785, “The director’s recovery is limited to the amount derived from applying Section 14124.72 [reduction for attorney fees and costs only], 14124.76 [Ahlborn methodology], or 14124.78 [Department cannot recover more than plaintiff], whichever is less, to the total settlement . . . .” 

Welf. & Inst. Code §14124.72(d)

Under Welf. & Inst. Code §14124.72(d), “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 [reasonable value of benefits provided on behalf of the beneficiary].  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 . . . .”

Plaintiff received $151,920.04 worth of services arising out of his injuries and paid by Medi-Cal. (Declaration of Karina Valadez (Valadez Decl.), ¶ 31.) This amount is not disputed by Plaintiff in the opposition. With a reduction of 25 percent for director’s reasonable attorney’s fee, the total amounts to $112,157.75 under §14124.72(d).

Welf & Inst. Code 14124.76

Under Welf. & Inst. Code 14124.76(a), “. . . . Recovery of the director’s lien from an injured beneficiary’s action or claim is limited to that portion of a settlement . . . 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 . . . 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 . . . for medical expenses, or medical care, provided on behalf of the beneficiary, the matter shall be submitted to a court for decision.  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 . . . 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.”

“In Ahlborn, the United States Supreme Court held that in seeking reimbursement ‘the State's assigned rights extend only to recovery of payments for medical care.’  In response to Ahlborn, the California Legislature amended the California statutes governing claims for reimbursements made by the Department for funds expended on behalf of injured parties by the Medi-Cal program.  (Bolanos v. Superior Court (2008) 169 Cal. App. 4th 744, 747 . . . .)  Namely, from any settlement, judgment or award obtained by an injured party, the Department is limited to recovering payments it made for medical expenses.  (§ 14124.76, subd. (a).)  ‘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 . . . Ahlborn . . . and other relevant statutory and case law.’  ‘[W]hen the settlement, judgment or award does not specify what portion thereof was for past medical expenses, an allocation must be made in the settlement, judgment or award that indicates what portion is for past medical expenses as distinct from other damages.  The director’s recovery is limited to that portion of the settlement that is allocated to past medical expenses.’”  Aguilera v. Loma Linda University Medical Center (2015) 235 Cal. App. 4th 821, 827 (citations omitted).

“Settlements, however, are often not allocated between past medical expenses and other damages.  This was the situation in Ahlborn.  Thus, the parties in Ahlborn stipulated to the use of a formula (the Ahlborn formula) as an allocation method. . . . The Ahlborn formula is the ratio of the settlement to the total claim, when applied to the benefits provided by the Department.  Expressed mathematically, the Ahlborn formula calculates the reimbursement due as the total settlement divided by the full value of the claim, which is then multiplied by the value of benefits provided.  (Reimbursement Due = [Total Settlement ÷ Full Value of Claim] x Value of Benefits Provided.).”  Id. at 827-28.

“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, supra, at 753. 

In calculating the Full Value of Claim, the court eliminates the future expenses for medical care because plaintiff is covered by Medi-Cal, and it is reasonably probable that the Department will be paying those future expense. (Declaration of Sara McDonald, ¶ 8.)

The court accepts the amount of $3,293,040 for lost wages, as presented by Plaintiff, and $250,000.00 for pain and suffering for a medical malpractice case. The lien amount of $151,920.04 is undisputed.  Thus, the court finds the Full Value of Claim is approximately $3,694,960.04.

Using the Ahlborn formula,

Total settlement $2,200,000.00 ÷ $3,694,960.04. = .595

.595 x $151,920.04 = $90,392.42

Then using §14124.72(d) for the reduction of attorney’s fees,

$90,392.42– $22,598.11 (25% in attorney fees) = $67,794.31

 

Then, using §14124.72(d) for the reduction for litigation expenses,

$90,392.42÷ $2,200,000.00 = .0411 (ratio of Department’s share of settlement amount)

 

.0411 x $38,161(total costs) = $1,568.42

 

        $67,794.31- $1,568.42 = $66,225.89

 

Welf & Inst. Code §14124.79

“Notwithstanding any other provision of law, in no event shall the director recover more than the beneficiary recovers after deducting, from the settlement judgment, or award, attorney fees and litigation costs paid for by the beneficiary. If the director’s recovery is determined under this section, the reductions in subdivision (d) of Section 14124.72 shall not apply.”

The court finds that this section does not apply because plaintiff recovered more than the Department under the maximum recoverable by the Department.

Conclusion

Under Welf. & Inst. Code §14124.785, the lowest of the three sections (Section 14124.72 [reduction for attorney fees and costs only], 14124.76 [Ahlborn methodology], or 14124.78 [Department cannot recover more than plaintiff]) is $66,225.89. Thus, the Court orders Plaintiff to pay $66,225.89 to California Department of Health Care Services

 

PLEASE TAKE NOTICE: 

 

If a party intends to submit on this tentative ruling,¿the party must send an email to the court at¿sscdept27@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.