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Kaitlyn v. Harrell, et al. v. AHCA, Case No. 1D12-5597 (1st DCA)

In Harrell, the plaintiffs filed suit against a hospital arising from an infant’s oxygen deprivation at birth, which caused catastrophic permanent harm. Following a confidential settlement, AHCA asserted a lien against the settlement proceeds in an amount greater than $360,000, which amount was the totality of the medical expenses paid by Medicaid. The plaintiffs filed a motion to determine the amount of the Medicaid lien, arguing that the statutory formula in Fla. Stat. 409.910(11)(f) was effectively overruled by Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), which barred states from asserting a lien on a settlement in excess of the portion of settlement proceeds recovered for medical expenses. The trial court agreed with AHCA, which relied upon Russel v. Agency for Health Care Administration, 23 So. 3d 1266 (Fla. 2d DCA 2010), to argue that the statutory formula in Fla. Stat. 409.910 is mandatory.

On appeal, the First DCA noted that at the time the trial court made its ruling, the United States Supreme Court was reviewing Wos v. E.M.A., 133 S. Ct. 1391 (2013). In Wos, the Supreme Court ruled that a North Carolina statute which established a set proportion as the amount of the state’s reclamation from a beneficiary’s tort recovery, was pre-empted by the Medicaid Act to the extent it required payment beyond that shown to be for medical expenses. The First DCA found that Wos undermined the reasoning of those cases AHCA and the trial court relied upon. The First DCA further noted that three districts (the Second, Fourth and Fifth) had all issued opinions consistent with Wos. The First DCA found that its jurisprudence was outdated in light of Wos and the decisions of the Second, Fourth and Fifth districts.

Accordingly, the First DCA receded from prior First DCA precedent, and ruled that a plaintiff must be given the opportunity to seek reduction of the amount of a Medicaid lien established by the statutory formula outlined in Fla. Stat. 409.910(11)(f) by demonstrating, with evidence, that the lien amount exceeds the amount recovered for medical expenses.

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