Hernandez, the plaintiff appealed an order allocating a portion of the proceeds
from a wrongful death settlement to pay a Medicaid lien held by ACHA.
The trial court had apportioned the settlement amount based on the formula
in Florida’s Medicaid Third Party Liability Act. The Third District affirmed.
In 2010, the plaintiff’s decedent passed away from complications
from a rare condition. She was survived by her husband and child. The
death was allegedly caused by a misdiagnosis and improper treatment at
Baptist Hospital. The case settled for $700,000 before suit was filed.
The settlement did not apportion the proceeds between the Estate and the
survivors. Medicaid had paid over $400,000 in medical expenses for the
decedent. These payments resulted in a Medicaid lien under Fla. Stat.
409.910(6)(c). The Estate later petitioned the probate court to apportion
the settlement as $500,000 to cover the survivor’s wrongful death
statutory damages and $200,000 to cover the Medicaid lien and other economic
damages incurred by the Estate. ACHA argued that under Florida’s
Medicaid Third-Party Liability Act, it was entitled to $262,500 prior
to any wrongful death apportionment. The plaintiff responded arguing that
Arkansas Department of Health & Human Services v. Ahlborn provides that the federal Medicaid Act’s anti-lien provision preempts
Florida’s Medicaid Third-Party Liability Act. The plaintiff argued
that AHCA was seeking monies allocated to survivors.
AHCA argued that
Wos v. E.M.A. were inapplicable where the Medicaid recipient is deceased, and that instead,
Florida’s Medicaid Third-Party Liability Act provides the formula
the court must use to determine the amount to be paid to cover the Medicaid
lien. The trial court agreed with AHCA, and the plaintiff appealed.
On appeal, the plaintiff argued (1) that Florida’s Medicaid Third-Party
Liability Act is preempted by federal which requires an evidentiary hearing
to determine what portion of the settlement qualifies as medical expenses,
and (2) that an evidentiary hearing is necessary because Florida’s
Wrongful Death Act prohibits AHCA from asserting a Medicaid lien on the
portions of the settlement allocated to the survivors. The Third District
disagreed with both arguments.
First, the Third District ruled that Florida’s Medicaid Third-Party
Liability Act was not preempted by federal law. The Third District explained
the background and history of the federal Medicaid Act and its anti-lien
provision, as well as Florida’s Medicaid Third-Party Liability Act.
The Third District additionally discussed the cases of
Wos, which limited AHCA’s ability to assert a lien on portions of settlements.
The court also explained that the Florida Supreme Court, inGarcon, recognizing that Florida courts must apply
Wos, which requires an evidentiary hearing to apportion the settlement proceeds
such that the recovery for medical expenses can be determined. The Third
District noted that whether
Garcon apply in the context of a deceased Medicaid recipient is an issue of first
impression in Florida. The court relied on a case from Kansas, which found
that the plain language of the federal anti-lien provision suggested the
decisions do not apply in the context of a deceased Medicaid recipient.
The anti-lien provision provides that “no lien may be imposed against
the property of any individual
prior to his death on account of medical assistance paid or to be paid on his behalf under
the State plan . . . .”
The Third District agreed with the Kansas’ court’s rationale,
and found it to be persuasive. The court noted, “by its express
terms, the Medicaid Act’s anti-lien provision does not apply to
a Medicaid lien imposed against the property of a Medicaid recipient after
her death. We cannot ignore the plain meaning of this provision.”
Accordingly, the Third District held that the federal Medicaid Act’s
anti-lien provision does not preempt Florida’s Medicaid Third-Party
Liability Act where a Medicaid lien is imposed on a wrongful death settlement.
The Third District next rejected the plaintiff’s second argument,
relating to Florida’s Wrongful Death Statute. The Third District
noted that the Wrongful Death Act permits a personal representative to
bring a single action to recover damages for survivors and the estate.
The damages recoverable by the survivors are distinct from the damages
recoverable by the estate. Accordingly, certain cases have found that
certain liens, such as workers’ compensation liens, do not attach
to wrongful death proceeds attributable to survivors. However, cases have
found that Medicaid liens attach to wrongful death proceeds attributable
to survivors, because of the plain meaning of the Medicaid Third-Party
Liability Act, which provides that AHCA’s lien has priority. The
Third District ruled that
Garconhave not undermined prior District Court opinions that held that Medicaid
liens may attach to wrongful death proceeds attributable to survivors,
because those cases only apply to living Medicaid recipients.