InMobley, the First District reversed an order of the Division of Administrative
Hearings determining that AHCA was entitled to a full reimbursement of
its Medicaid lien from the appellant’s personal injury settlement.
The case stemmed from an incident in 2005 when the plaintiff nearly drowned
at a party, and suffered permanent and irreversible anoxic brain damage
leaving him unable to live independently. The total claim for past medical
expenses amounted to $627,804.14, which included $515,860.29 paid by a
self-funded ERISA plan and $111,943.89 paid by Medicaid. After years of
litigation, the case settled for $500,000. The ERISA plan asserted a lien
for its full amount of medical expenses, but accepted $120,000 in satisfaction
of its lien. AHCA asserted a lien for the full amount of the Medicaid
expenses. The plaintiff/appellant filed a petition pursuant to Fla. Stat.
409.910 to determine the proper amount of the Medicaid lien. The plaintiff
argued that the parties, which did not include AHCA, agreed to use a proportional
methodology to determine the allocation of the settlement. The parties
determined that $500,000 was about 3.3% of the estimated total damages
suffered by the plaintiff/appellant, and so the parties allocated 3.3%
of the actual medical expenses to the Medicaid lien, which amounted to
The administrative law judge ruled that the settlement allocated at least
$140,717.54 towards past medical expenses, which included the $120,000
paid to the ERISA plan and the $20,717.54 to AHCA. Because the amount
allocated to past medical expenses exceeded the Medicaid lien, AHCA was
entitled to reimbursement of its total lien amount of over $111,000.
The First District began by explaining that Fla. Stat. 409.910 provides
that Medicaid must be repaid in full and prior to any other person, program
or entity if a Medicaid beneficiary receives a settlement from a liable
third party. In
Ahlborn v. Arkansas Department of Health, however, the United States Supreme Court held that the federal Medicaid
anti-lien provision in 42 U.S.C. 1396p(a)(1) bars a state from asserting
a lien on the portions of a settlement not allocated to medical expenses.
The Supreme Court later, in
Wos v. E.M.A., found that a Medicaid beneficiary must be given the opportunity to show
that the amount apportioned for medical expenses by the parties is less
than the amount of the lien asserted by the state. Florida instituted
a formula for AHCA to use to determine the amount of Medicaid reimbursement,
but in compliance with
Wos, the Florida Legislature passed section 409.910(17)(b) which provides
that a Medicaid beneficiary can rebut the result of the formula by proving
by clear and convincing evidence that the lien amount exceeds the amount
recovered for medical expenses.
Here, the statutory formula resulted in an amount recovered for past medical
expenses greater than the total Medicaid lien. Therefore, the plaintiff/appellant
sought to prove by clear and convincing evidence that a lesser portion
of the total lien was allocated to medical expenses in the settlement.
The administrative law judge made several findings of fact in reaching
its decision. The First District found that the administrative law judge
erred in adding the amount allocated for the ERISA plan and the amount
allocated for the Medicaid lien together to determine the total amount
of the settlement allocated to past medical expenses. “Unlike Medicaid
liens, ERISA liens can be paid from any portion of the settlement.”
As such, the ERISA settlement amount did not provide evidence of allocation
of medical expenses. Therefore, the administrative law judge’s finding
regarding allocation was not supported by competent, substantial evidence.