As a 14-year-old boy, Appellant attended a beach party thrown by off-duty employees at a hotel in Destin wherein he became intoxicated and drowned in the Gulf of Mexico. Fortunately, Appellant was revived, but, unfortunately, Appellant suffered irreversible anoxic brain damage that left him unable to live independently.
Appellant’s parents sought damages in tort against third parties, and Appellant alleged damages for past medical damages (specials) as follows post settlement:
- $515,860.29 paid by a self-funded ERISA plan;
- $111,943.89 paid by Medicaid/Agency for Health Care Administration (AHCA);
The Appellant reached a settlement with the third parties, and AHCA/Medicaid asserted a lien in the full amount of its expenses. The Appellant and the tort parties, without AHCA, agreed to use a proportional methodology to determine the allocation of settlement. The settlement, without offset for comparative negligence, was $500,000.00, and this figure yielded $20,717.54 as the actual lien expense to Medicaid yielding a 3.3% allocation based on a simple, ratio assessment. This figure was less than both the actual amount and likely the statutory offset amount. The ERISA plan agreed to a negotiated sum of $120,000.00 as part of the tort settlement.
The Administrative Law Judge (“ALJ”) concluded that the Appellant failed to prove by clear and convincing evidence that the statutory lien amount exceeded the amount actually recovered in the settlement for medical expenses, and therefore, the ALJ ordered that AHCA was entitled to a full reimbursement of the Medicaid lien. The ALJ’s calculations noted that the $120,000.00 ERISA negotiated settlement was added to the proportionate Medicare Amount of $21,717.54 yielding $140,717.54 as the reimbursement amount for past medical expenses.
The ALJ concluded that the Appellant failed to prove by clear and convincing evidence that the statutory lien amount of $111,943.89 exceeded the amount actually recovered in the settlement for medical expenses, and as such, he ordered that AHCA was entitled to a full reimbursement of the Medicaid lien.
(Editor’s Note: federal law preempts Florida’s statutory default allocation prohibiting Medicaid from recovering any settlement money beyond the portion allocated to past medical expenses.) See, Davis v. Roberts, 130 So. 3d 264 (Fla. 5th DCA 2013); Wos v. E.M.A., 133 S. Ct. 1391 (2013).
Florida’s statutory formula for AHCA reimbursement found in § 409.910(11)(f) is subject to federal limitations, now statutorily found in § 409.910(17)(b), provides that a Medicaid recipient can rebut the result of the formula by proving:
……by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency…
The ERISA settlement of $120,000 plus the $20,717.53 Medicaid Settlement (the Appellant’s settlement statement) was added to determine the sum of lienable amounts for medical expense. Since ERISA liens can be paid from any portion of the settlement including general damages, the proposed lienable amounts failed to provide competent, evidence of allocation of medical expenses.
The First DCA reversed and remanded. The trial Court was to exclude the ERISA settlement and determine whether the Appellant proved by clear and convincing evidence that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the formula.
(Editor’s Note: § 409.910(11) reduces the gross settlement amount by 25% to account for attorneys’ fees, then subtracts taxable costs, then divides that number by two, and awards Medicaid the lesser of the amount of benefits paid or the resulting number. )
(Editor’s Note: The practitioner will need to address ERISA and ACHA liens independently. This compromise by the ERISA plan in this case is not typical.
The entire opinion may be found at: