Eleventh Circuit rules that Florida Medicaid may seek recovery of its past payments from those portions of the settlement agreement representing past and future medical care
In an interesting new Florida Medicaid decision, the U.S. Circuit Court of Appeals for the Eleventh Circuit, in Gallardo v. Dudek, 2020 WL 3478027 (11th Cir. June 26, 2020) ruled Florida Medicaid may seek recovery of payments made for a beneficiary’s treatment from the amounts of a settlement agreement representing both past and future medical care.
The parents of a severely injured minor (“Gallardo”), who received medical benefits from Florida Medicaid, settled their personal injury action with the alleged tortfeasors for $800,000. As part of this settlement, the parties agreed to designate $35,367.52 toward “past” medical expenses. The Florida Agency for Health Care Administration (“FAHCA”), which administers the Florida Medicaid program, did not participate in the settlement or agree to the amount allocated for past medical expenses.
A dispute then developed regarding the amount owed to FAHCA for recovery of its medical expenses. Gallardo argued that certain parts of Florida’s Medicaid law were preempted by federal Medicaid law, thereby limiting FAHCA’s recovery to only those amounts allocated for past medical expenses. FAHCA, on the other hand, argued that it was entitled to seek recovery from those amounts of the settlement representing both past and future medical care.
In reversing a lower court ruling, the 11th Circuit held that federal Medicaid law did not preempt the relevant Florida Medicaid statutes and that FAHCA was permitted to seek recovery of its payments from all medical expenses – past and future.
In the bigger picture, this decision involved, to a large degree, the 11th Circuit providing its interpretation and application of the U.S. Supreme Court’s ruling in Arkansas Dept. of Health and Human Svcs. v. Ahlborn, 547 U.S. 268 (2006), which, in general, limited a state Medicaid program’s recovery to that portion of the settlement attributable to medical damages. In a nutshell, the court in Gallardo interpreted this to mean both past and future medicals. In this regard, the decision will likely engender interesting debate going forward as to whether the court properly interpreted and applied the Ahlborn ruling – as already evidenced by a very lengthy and spirited dissenting opinion filed in Gallardo which, in part, argued that the court reached the wrong conclusions based on Ahlborn.
In terms of impact, this decision will enable Florida Medicaid to seek recovery of its past payments from those monies designated for past and future medical care as part of tort settlements, which would seemingly provide the agency with a larger pool of funds from which to obtain its reimbursement.
For those interested in a more detailed analysis of this lengthy court decision, the authors present the following:
Gianinna Gallardo, a minor, sustained severe injuries leaving her in a persistent vegetative state after she was hit by a truck coming off her school bus. Ms. Gallardo’s parents (“Gallardo” or “plaintiffs”) filed suit on her behalf in state court against the truck’s owner, the truck’s driver, and the school district. The Florida Medicaid program, which is administered by the Florida Agency for Health Care Administration (“FAHCA”), paid $862,688.77 for Ms. Gallardo’s medical care and attached a lien in this amount on Ms. Gallardo’s cause of action and any future settlement.
Parties reach a settlement, which includes a specific sum for “past” medical expenses
In 2015, the parties settled Ms. Gallardo’s personal injury suit for $800,000, which Ms. Gallardo’s parents viewed as covering only a “small fraction” of the total damages and future costs their daughter will likely incur, which they estimated to be $20 million. As part of this settlement, the parties agreed to allocate $35,367.52 from the settlement for past medical expenses. The settlement further stated that while some of the balance of the remaining amount may represent compensation for future medicals expenses, no portion of the settlement was for reimbursement of future medical expenses since none had yet been paid. The state court approved the parties’ settlement agreement. Of note and eventual importance to the 11th Circuit, FAHCA did not participate in or agree to the settlement terms.
Dispute develops regarding Florida Medicaid’s recovery amount
After settling, Ms. Gallardo’s counsel asked FAHCA how much it would accept in satisfaction of its lien. Receiving no response, Ms. Gallardo’s counsel placed $300,000 into a trust account and commenced an administrative action to challenge that amount per Fla. Stat. § 409.910(11)(f).
Under this section, where a Medicaid recipient secures a third-party tort settlement, FAHCA is automatically entitled to half of the recovery (after 25% attorney’s fees and costs), up to the total amount provided in medical assistance by Medicaid. The Medicaid beneficiary may then attempt to reduce this automatic allocation formula as part of an administrative hearing by proving through “clear and convincing evidence, that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by the agency.” Fla. Stat. § 409.910(17)(b).
Regarding other pertinent points of Florida law discussed by the court, it was noted that Florida’s Medicaid Third-Party Liability Act instructs FAHCA to “seek reimbursement from third-party benefits to the limit of legal liability and for the full amount of third-party benefits, but not in excess of the amount of medical assistance paid by Medicaid.” Fla. Stat. § 409.910(4) (emphasis added by the court). To help effectuate these rights, Florida law grants FAHCA “an automatic lien for the full amount of medical assistance provided by Medicaid to or on behalf of the recipient for medical care furnished as a result of any covered injury or illness for which a third party is or may be liable.” Fla. Stat. §409.910(6)(c).
Gallardo files suit to determine the amount owed to Florida Medicaid
Having reached an impasse as to the amount owed to reimburse Florida Medicaid, Gallardo sued FAHCA in federal district court seeking a declaration that FAHCA was only entitled to be reimbursed from that portion of the settlement representing compensation for past medical expenses. Gallardo also sought a declaration that Florida’s administrative procedure for challenging Medicaid’s automatic allocation formula violated federal law. In addition, Gallardo argued that the issue before the court was moot given the Florida Supreme Court’s ruling in Giraldo v. Agency for Health Care Admin., 248 So.3d 53 (Fla. 2018) holding that federal Medicaid law authorizes Florida Medicaid to obtain reimbursement from a personal injury settlement only from that portion of the settlement representing past medical expenses.
As for FAHCA, it sought to recover more than the $35,367.52 specifically allocated by the parties for past medical expenses, arguing that it was also entitled to recover the amounts it paid from the portion of the settlement representing compensation for the recipient’s future medical expenses. FAHCA argued federal law did not preempt it from seeking reimbursement for medical expenses it paid from the portion of a third-party settlement, to which it did not consent, representing both past and future expenses, or Florida’s statutory recovery formula and administrative challenge procedure.
District court limits Medicaid’s recovery
The district ruled in favor of Gallardo finding that Florida Medicaid’s recovery rights under Fla. Stat. § 409.910 were preempted by federal Medicaid law, thereby prohibiting FAHCA from “seeking reimbursement of past Medicaid payments from portions of a recipient’s recovery that represents future medical expenses.”
Also, the district court ruled the federal Medicaid Act prohibited FAHCA from requiring a Medicaid recipient to affirmatively disapprove Florida Medicaid’s formula-based allocation per Fla. Stat. § 409.910(17)(b) with clear and convincing evidence in situations “where, as here, that allocation is arbitrary, and there is no evidence that it is likely to yield reasonable results in the mine run of cases.”
FAHCA appealed this ruling to the 11th Circuit Court of Appeals.
An issue on appeal: Can Florida Medicaid recover its past payment made from that portion of the plaintiff’s settlement for both past and future medical expenses?
The 11th Circuit framed the issue before it as follows:
[W]hether [FAHCA] when it has not consented to the settlement agreement in a personal injury lawsuit … is limited to recovering the expenses it has paid only from amounts of a third-party recovery representing compensation for past medical expenses or whether it can also recover from those amounts that may be compensation for future medical expenses. That determination turns on whether federal Medicaid law preempts the way Florida pursues reimbursement from Medicaid recipients’ personal injury settlements.
Further, and importantly, the court referenced it was “worth noting what this appeal is not about” stating that the issue before it “[was] not about whether FAHCA can recover for medical expenses it has not yet paid” for Ms. Gallardo’s treatment but may have to pay in the future.
11th Circuit reverses the district court and rules that Florida Medicaid may seek recovery of its past expenses from those portions of the settlement representing past and future medical care
The 11th Circuit reversed the district court’s decision holding federal law did not preempt Florida Medicaid’s statutes in this instance and, thus, FAHCA could seek recovery of its past expenses from those portions of the settlement representing both past and future medical care.
In reaching this decision, the 11th Circuit’s reasoning can be broken down into the following four bases:
- Parties’ allocation of past medical expenses does not bind FAHCA
The 11th Circuit first ruled the parties’ allocation of the $35,367.52 for “past medical expenses” does not bind FAHCA. On this point, the court noted the U.S. Supreme Court in its recent Ahlborn and Wos decisions “worried about just this type of situation” noting that the court “anticipated the concern that some settlements would not include an itemized allocation” and “recognized the possibility that Medicaid beneficiaries and tortfeasors might collaborate to allocate an artificially low portion of a settlement to medical expenses.”
In this regard, the court rejected the idea that FAHCA’s recovery would be limited to what the parties had decided to allocate for past medical expenses stating that “[p]arties’ unilateral allocations as to what constitutes ‘past medical expenses’ do not, and should not, bind FAHCA.” 
As such, the court ruled when the parties do not seek FAHCA’s input on the settlement allocation for medical expenses, Florida’s statutory allocation formula is applicable and not preempted by federal law stating as follows:
[W]hen the parties do not seek FAHCA input on the settlement allocation for medical expenses on the front end, FAHCA has its statutory allocation formula on the back end to determine how much of the settlement should be allocated to medical expenses … to the extent that the Florida law permits FAHCA to recover monies it paid from settlement monies ultimately allocated to all medical care, past and future, “but not in excess of medical assistance paid by Medicaid,” (citation omitted) it does not conflict with the text of the federal Medicaid statutes and is thus not preempted on this basis.
Thus, based on this reasoning, the court ruled FAHCA is permitted to seek reimbursement from parts of the settlement money that represent medical care —including those the parties have designated as “future medical care.”
- Federal Medicaid law does not preempt FAHCA from seeking recovery from portions of a settlement representing all medical expenses – past and future
In the most detailed part of its ruling, summarized more generally here, the court ruled that the “text and structure” of the federal Medicaid recovery statutes do not conflict with Florida law and thereby not preempt it. In reaching this decision, the court, in part, noted under 42 U.S.C. 1396a(a)(25) federal law requires state Medicaid agencies to pursue recovery from liable third parties “to the extent of such legal liability” which is limited only to medical expenses, and not for other damages that may be covered by a tort settlement, such as lost wages or pain and suffering.
In addition, the court noted under 42 U.S.C. 1396a(a)(25)(H) federal law requires states to enact third-party liability laws under which “the State is considered to have acquired the rights ... to payment by any other party,” “to the extent that payment has been made under the State plan for medical assistance for health care items or services furnished.” (emphasis by the court).
Regarding this latter statute, the court rejected Gallardo’s and the district court’s interpretation that the past tense language utilized means that Medicaid would only be entitled to recovery from that portion of a settlement allocated for past expenses. Rather, from the 11th Circuit’s view the “plain language” of this provision “clearly contains no such limitation” stating as follows:
Gallardo, the district court, and the dissent … all make the same leap-in-logic mistake here and assert that because the agency is limited to recovering monies it paid in the past, it necessarily is limited to recovering these monies from what represents compensation in the settlement for “past medical expenses.” But while the language of the federal Medicaid statutes clearly prohibits FAHCA from seeking reimbursement for future expenses it has not yet paid (which it is not seeking to do in this case), the language does not in any way prohibit the agency from seeking reimbursement from settlement monies for medical care allocated to future care.
Further, the court viewed its position on this point to align with the Supreme Court’s ruling and reasoning in Ahlborn noting, in part, that although Ahlborn did not resolve how to determine what portion of a settlement represents medical care, “the Supreme Court repeatedly made clear that the State’s assignment and reimbursement was from the portion of a settlement that represented “medical expenses” and “medical care” and did not limit it solely to “past” medical expenses.” On this point, the court noted in Ahlborn, the state Medicaid agency, unlike in Gallardo, had stipulated at trial to an amount in the settlement agreement attributable to “medical payments made.”
In contrast, the court noted in Gallardo, FAHCA never agreed to an amount to be attributable to past and future medical expenses. Accordingly, the court found that Florida’s Medicaid Third Party Liability Act allowed FAHCA to recover monies it paid up to the amount allowed under Florida’s allocation formula per Fla. Stat. § 409.910(17)(b), “unless Gallardo is able to show that the amounts she recovered from a third party for her medical expenses, past, and future, are less than that amount” as permitted under Florida law. As such, the court concluded “that 409.910(17)(b) of Florida’s Medicaid Third-Party Liability Act does not conflict with federal law and is not preempted.”
- Prior Florida Supreme Court ruling is not binding on the 11th Circuit
The court also rejected Gallardo’s argument that the Florida Supreme Court’s 2018 ruling in Giraldo v. Agency for Health Care Admin., 248 So.3d 53 (Fla. 2018) holding that federal Medicaid law authorizes Florida Medicaid to obtain reimbursement from a personal injury settlement only from that portion of the settlement representing past medical expenses, rendered the issue before the 11th Circuit moot on grounds that it is not bound by a state court’s interpretation of federal law. Further, the court noted from its view, the Florida Supreme Court in the Giraldo case “makes the same mistake in logic” about section 1396a(a)(25)(H) that the district court made. Based on this reasoning, the court ruled “[b]ecause we can give meaningful relief, this case is not moot.”
- Federal Medicaid law does not preempt Florida’s statutory formula and challenge procedure
The court then addressed the district court’s conclusion that federal law preempts Florida’s statute allocating Medicaid’s reimbursement share of a personal injury settlement under Fla. Stat. § 409.910(11)(f), along with its procedure allowing a recipient to challenge that allocation formula by clear and convincing evidence as part of an administrative hearing.
In reversing on this point, the court rejected the district court’s reliance on Wos where the U.S. Supreme Court ruled, in part, that federal law preempted a North Carolina statute which automatically allocated one-third of a recipient’s tort settlement as reimbursement for medical expenses finding North Carolina’s law statutory scheme conflicted with federal law since it “[set] forth no process” for determining what portion was actually for medical expenses.” The district court ruled that Florida’s process also suffered from this same flaw finding that the formula’s allocation “is nearly impossible to rebut” and this standard basically amounted to a “quasi-irrebuttable presumption.”
However, the court rejected the district court’s view of Florida’s statute, finding “[Florida’s allocation] scheme differs significantly from the North Carolina scheme … [and] does not directly conflict with federal law,” noting, in the main part, that Florida’s statute allows a recipient to challenge the statutory formula. On this latter point, the court rejected the district court’s assessment was “nearly impossible” to rebut noting the “clear and convincing” standard is a widely used standard of proof and, “most importantly for our preemption analysis, nothing about this standard of proof stands in clear on conflict with federal law ….”
The court concluded “[b]ecause we find that Florida’s approach to threading the needle of federal third-party reimbursement requirements does not directly conflict with them, we conclude that it is not preempted.”
Based on the above analysis and reasoning, the 11th Circuit reversed the district court’s ruling.
Medicaid recovery – claims considerations
The Gallardo case is the latest decision in the continuing roller coaster ride regarding Medicaid reimbursement rights. While Medicare is entitled to recover its conditional payments up to the full amount of the settlement under federal law, Medicaid’s recovery rights have been found, in general, to be more limited by the U.S. Supreme Court as highlighted by its 2006 Ahlborn decision and its 2013 Wos ruling. In relation to these cases, the court, in part, limited the state Medicaid recoveries claims at issue to that portion of the settlement attributable to medical damages.
In Gallardo, the 11th Circuit was called upon to address the extent to which Medicaid could seek recovery from the medical damages aspect of the settlement – more specifically whether Florida Medicaid could only seek recovery from the amount designated by the parties for “past” medical expenses, or whether future medical amounts were also at play. For the reasons outlined above, based on its interpretation of Ahlborn, we learned the 11th Circuit ultimately concluded that Florida Medicaid could seek recovery from all medical care – past and future. In this sense, from the majority’s view in Gallardo, its ruling fell in line with the court’s conclusions and reasoning in Ahlborn. As mentioned above, Judge Wilson, in dissent took a strong contrary view, and this aspect of the 11th Circuit’s decision will likely spur much debate and discussion.
In terms of Gallardo’s actual claims impact, this decision, at least with respect to Florida Medicaid recovery actions, could result in Florida Medicaid being able to seek recovery from all medicals (past and future) related to the settlement – meaning it could have a larger pool of money to draw from. Furthermore, based on this decision, parties dealing with a Florida Medicaid recovery action should keep in mind that their designation of monies regarding past versus future medical care, without FAHCA’s approvals, will likely not prevent Florida Medicaid from seeking its recovery from the entire amount designated for medicals (past and future). These considerations may also arise outside of Florida depending on how courts in other jurisdictions address similar issues under their specific state Medicaid recovery statutes for that state.
On this latter note, it will be interesting to see how courts in other jurisdictions view Gallardo in the context of their applicable Medicaid statutes. Likewise, it will be interesting to see whether the plaintiffs in Gallardo request a review of this decision before the full 11th Circuit panel and potentially to the U.S. Supreme Court which, if accepted for review by the court, could set the stage for the Supreme Court to revisit its prior rulings in this area.
While these items will be interesting to watch, going forward parties should make sure they are addressing potential Medicaid recovery issues as part of claims handling and settlement practices. Also keep in mind ISO Claims Partners can help you address and resolve Medicaid lien issues. Feel free to reach out to the authors if you have any questions or need our assistance in address Medicaid recovery actions.
In the interim, ISO Claims Partners will continue to closely monitor all developments at both federal and state levels regarding Medicaid recovery issues and provide updates as warranted.
 The 11th Circuit has jurisdiction over the U.S. District courts for Alabama, Florida, and Georgia.
 On this point, the authors have prepared their analysis primarily from the standpoint of breaking down the court’s opinion in Gallardo in terms of its ruling, analysis, and potential impact. With that said, the authors recognize that this decision presents larger issues, many of which are outlined in the dissenting opinion, regarding the court’s application and interpretation of Ahlborn, various federal Medicaid statutes, and other considerations. However, for the purposes of this article, the authors’ main focus is breaking down the 11th Circuit’s decision so that the reader has an understanding of how the court ruled and what it may mean, as opposed to analyzing it in terms of whether it has properly applied Ahlborn. Notwithstanding, the authors understand that this decision can certainly be analyzed and dissected from a more interpretative and comparative analysis.
Gallardo, 2020 WL 3478027 at 1 and n. 4.
 As noted by the court, $300,000 is the amount Florida Medicaid is presumptively entitled to under the statutory formula: 25 percent was deducted from the $800,000 settlement for attorney’s fees ($200,000), then half of the remaining $600,000 was $300,000. Gallardo, 2020 WL 3478027 at n. 7.
Gallardo, 2020 WL 3478027 at 2.
 The named defendant in this case is Elizabeth Dudek who was the Secretary of FAHCA when this suit was filed. That office is now held by Mary Mayhew, who was later substituted as a party. Gallardo, 2020 WL 3478027 at n. 8.
Gallardo, 2020 WL 3478027 at 3.
 Id. at 3.
 Id. at 1.
 Id. at n. 2.
 Id. at 4.
 A significant part of the court’s decision involves references to the United States Supreme Court’s recent rulings in Arkansas Dept. of Health and Human Svcs. v. Ahlborn, 547 U.S. 268 (2006) and Wos v. E.M.A. ex rel. Johnson, 568 U.S. 627 (2013). In Ahlborn, the Supreme Court ruled, in part, that federal Medicaid statutes limit a state program’s recovery to that portion of the settlement attributable to medical damages. In Wos, the court ruled, in part, that federal law preempted a North Carolina statute which automatically allocated one-third of a recipient’s tort settlement as reimbursement for Medicaid’s expenses.
Gallardo, 2020 WL 3478027 at 4.
 Id. at 5.
 Court citing Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 284–85, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).
Gallardo, 2020 WL 3478027 at 6.
 Id. at 6.
 Id. at 7.
 Id. at 8.
 Id. at 9.
 See e.g., 42 CFR 411.37(c).
Arkansas Dept. of Health and Human Svcs. v. Ahlborn, 547 U.S. 268 (2006) and Wos v. E.M.A. ex rel. Johnson, 568 U.S. 627 (2013).
 It is noted that Judge Charles R. Wilson filed a separate opinion concurring in part and dissenting in part. Judge Wilson concur with the majority’s ruling that federal law did not preempt Florida’s statutory calculation formula and administrative challenge process given the rebuttable nature of the statute. However, in a detailed, lengthy, and spirited dissent, Judge Wilson disagreed with the majority’s decision regarding FAHCA’s right to access allocations to future medical costs. In general, Judge Wilson believed the majority misapplied Ahlborn and that under that decision FAHCA’s ability to recover its payments was limited only to those monies allocated as “past payments.” On this point, Judge Wilson commented that “today this court tells Florida that it can pocket funds marked for things it never paid for.” From another angle, Judge Wilson noted his concern that the majority’s decision opened the door to the potential for jurisdiction shopping given the difference in state and federal court rulings on this point.
(1) It is the intent of the Legislature that Medicaid be the payor of last resort for medically necessary goods and services furnished to Medicaid recipients. All other sources of payment for medical care are primary to medical assistance provided by Medicaid. If benefits of a liable third party are discovered or become available after medical assistance has been provided by Medicaid, it is the intent of the Legislature that Medicaid be repaid in full and prior to any other person, program, or entity. Medicaid is to be repaid in full from, and to the extent of, any third-party benefits, regardless of whether a recipient is made whole or other creditors paid. Principles of common law and equity as to assignment, lien, and subrogation are abrogated to the extent necessary to ensure full recovery by Medicaid from third-party resources. It is intended that if the resources of a liable third party become available at any time, the public treasury should not bear the burden of medical assistance to the extent of such resources.
(2) This section may be cited as the “Medicaid Third-Party Liability Act.”
(3) Third-party benefits for medical services shall be primary to medical assistance provided by Medicaid.
(a) Claims for which the agency has a waiver pursuant to federal law; or
(b) Situations in which the agency learns of the existence of a liable third party or in which third-party benefits are discovered or become available after medical assistance has been provided by Medicaid.
(5) An applicant, recipient, or legal representative shall inform the agency of any rights the applicant or recipient has to third-party benefits and shall inform the agency of the name and address of any person that is or may be liable to provide third-party benefits. When the agency provides, pays for, or becomes liable for medical services provided by a hospital, the recipient receiving such medical services or his or her legal representative shall also provide the information as to third-party benefits, as defined in this section, to the hospital, which shall provide notice thereof to the agency in a manner specified by the agency.
(a) The agency is automatically subrogated to any rights that an applicant, recipient, or legal representative has to any third-party benefit for the full amount of medical assistance provided by Medicaid. Recovery pursuant to the subrogation rights created hereby shall not be reduced, prorated, or applied to only a portion of a judgment, award, or settlement, but is to provide full recovery by the agency from any and all third-party benefits. Equities of a recipient, his or her legal representative, a recipient’s creditors, or health care providers shall not defeat, reduce, or prorate recovery by the agency as to its subrogation rights granted under this paragraph.
1. The assignment granted under this paragraph is absolute, and vests legal and equitable title to any such right in the agency, but not in excess of the amount of medical assistance provided by the agency.
2. The agency is a bona fide assignee for value in the assigned right, title, or interest, and takes vested legal and equitable title free and clear of latent equities in a third person. Equities of a recipient, the recipient’s legal representative, his or her creditors, or health care providers shall not defeat or reduce recovery by the agency as to the assignment granted under this paragraph.
a. Endorsing any draft, check, money order, or other negotiable instrument representing third-party benefits that are received on behalf of the recipient as a third-party benefit.
b. Compromising claims to the extent of the rights assigned, provided that the recipient is not otherwise represented by an attorney as to the claim.
1. The lien attaches automatically when a recipient first receives treatment for which the agency may be obligated to provide medical assistance under the Medicaid program. The lien is perfected automatically at the time of attachment.
a. The name and last known address of the person to whom medical care was furnished.
b. The date of injury.
c. The period for which medical assistance was provided.
d. The amount of medical assistance provided or paid, or for which Medicaid is otherwise liable.
e. The names and addresses of all persons claimed by the recipient to be liable for the covered injuries or illness.
3. The filing of the claim of lien pursuant to this section shall be notice thereof to all persons.
4. If the claim of lien is filed within 3 years after the later of the date when the last item of medical care relative to a specific covered injury or illness was paid, or the date of discovery by the agency of the liability of any third party, or the date of discovery of a cause of action against a third party brought by a recipient or his or her legal representative, record notice shall relate back to the time of attachment of the lien.
5. If the claim of lien is filed after 3 years after the later of the events specified in subparagraph 4., notice shall be effective as of the date of filing.
6. Only one claim of lien need be filed to provide notice as set forth in this paragraph and shall provide sufficient notice as to any additional or after-paid amount of medical assistance provided by Medicaid for any specific covered injury or illness. The agency may, in its discretion, file additional, amended, or substitute claims of lien at any time after the initial filing, until the agency has been repaid the full amount of medical assistance provided by Medicaid or otherwise has released the liable parties and recipient.
7. No release or satisfaction of any cause of action, suit, claim, counterclaim, demand, judgment, settlement, or settlement agreement shall be valid or effectual as against a lien created under this paragraph, unless the agency joins in the release or satisfaction or executes a release of the lien. An acceptance of a release or satisfaction of any cause of action, suit, claim, counterclaim, demand, or judgment and any settlement of any of the foregoing in the absence of a release or satisfaction of a lien created under this paragraph shall prima facie constitute an impairment of the lien, and the agency is entitled to recover damages on account of such impairment. In an action on account of impairment of a lien, the agency may recover from the person accepting the release or satisfaction or making the settlement the full amount of medical assistance provided by Medicaid. Nothing in this section shall be construed as creating a lien or other obligation on the part of an insurer which in good faith has paid a claim pursuant to its contract without knowledge or actual notice that the agency has provided medical assistance for the recipient related to a particular covered injury or illness. However, notice or knowledge that an insured is, or has been a Medicaid recipient within 1 year from the date of service for which a claim is being paid creates a duty to inquire on the part of the insurer as to any injury or illness for which the insurer intends or is otherwise required to pay benefits.
8. The lack of a properly filed claim of lien shall not affect the agency’s assignment or subrogation rights provided in this subsection, nor shall it affect the existence of the lien, but only the effective date of notice as provided in subparagraph 5.
9. The lien created by this paragraph is a first lien and superior to the liens and charges of any provider, and shall exist for a period of 7 years, if recorded, after the date of recording; and shall exist for a period of 7 years after the date of attachment, if not recorded. If recorded, the lien may be extended for one additional period of 7 years by rerecording the claim of lien within the 90-day period preceding the expiration of the lien.
10. The clerk of the circuit court for each county in the state shall endorse on a claim of lien filed under this paragraph the date and hour of filing and shall record the claim of lien in the official records of the county as for other records received for filing. The clerk shall receive as his or her fee for filing and recording any claim of lien or release of lien under this paragraph the total sum of $2. Any fee required to be paid by the agency shall not be required to be paid in advance of filing and recording, but may be billed to the agency after filing and recording of the claim of lien or release of lien.
11. After satisfaction of any lien recorded under this paragraph, the agency shall, within 60 days after satisfaction, either file with the appropriate clerk of the circuit court or mail to any appropriate party, or counsel representing such party, if represented, a satisfaction of lien in a form acceptable for filing in Florida.
1. Any third party;
2. The recipient or legal representative, if he or she has received third-party benefits;
3. The provider of a recipient’s medical services if third-party benefits have been recovered by the provider; notwithstanding any provision of this section, to the contrary, however, no provider shall be required to refund or pay to the agency any amount in excess of the actual third-party benefits received by the provider from a third-party payor for medical services provided to the recipient; or
4. Any person who has received the third-party benefits.
1. To itself, an amount equal to the state Medicaid expenditures for the recipient plus any incentive payment made in accordance with paragraph (14)(a).
2. To the Federal Government, the federal share of the state Medicaid expenditures minus any incentive payment made in accordance with paragraph (14)(a) and federal law, and minus any other amount permitted by federal law to be deducted.
3. To the recipient, after deducting any known amounts owed to the agency for any related medical assistance or to health care providers, any remaining amount. This amount shall be treated as income or resources in determining eligibility for Medicaid.
The provisions of this subsection do not apply to any proceeds received by the state, or any agency thereof, pursuant to a final order, judgment, or settlement agreement, in any matter in which the state asserts claims brought on its own behalf, and not as a subrogee of a recipient, or under other theories of liability. The provisions of this subsection do not apply to any proceeds received by the state, or an agency thereof, pursuant to a final order, judgment, or settlement agreement, in any matter in which the state asserted both claims as a subrogee and additional claims, except as to those sums specifically identified in the final order, judgment, or settlement agreement as reimbursements to the recipient as expenditures for the named recipient on the subrogation claim.
(a) Appear at an office designated by the agency to provide relevant information or evidence.
(b) Appear as a witness at a court or other proceeding.
(c) Provide information, or attest to lack of information, under penalty of perjury.
(d) Pay to the agency any third-party benefit received.
(e) Take any additional steps to assist in establishing paternity or securing third-party benefits, or both.
(f) Paragraphs (a)-(e) notwithstanding, the agency shall have the discretion to waive, in writing, the requirement of cooperation for good cause shown and as required by federal law.
(9) The department shall deny or terminate eligibility for any applicant or recipient who refuses to cooperate as required in subsection (8), unless cooperation has been waived in writing by the department as provided in paragraph (8)(f). However, any denial or termination of eligibility shall not reduce medical assistance otherwise payable by the department to a provider for medical care provided to a recipient prior to denial or termination of eligibility.
(10) An applicant or recipient shall be deemed to have provided to the agency the authority to obtain and release medical information and other records with respect to such medical care, for the sole purpose of obtaining reimbursement for medical assistance provided by Medicaid.
(a) If either the recipient, or his or her legal representative, or the agency brings an action against a third party, the recipient, or the recipient’s legal representative, or the agency, or their attorneys, shall, within 30 days after filing the action, provide to the other written notice, by personal delivery or registered mail, of the action, the name of the court in which the case is brought, the case number of such action, and a copy of the pleadings. If an action is brought by either the agency, or the recipient or the recipient’s legal representative, the other may, at any time before trial on the merits, become a party to, or shall consolidate his or her action with the other if brought independently. Unless waived by the other, the recipient, or his or her legal representative, or the agency shall provide notice to the other of the intent to dismiss at least 21 days prior to voluntary dismissal of an action against a third party. Notice to the agency shall be sent to an address set forth by rule. Notice to the recipient or his or her legal representative, if represented by an attorney, shall be sent to the attorney, and, if not represented, then to the last known address of the recipient or his or her legal representative.
(b) An action by the agency to recover damages in tort under this subsection, which action is derivative of the rights of the recipient or his or her legal representative, shall not constitute a waiver of sovereign immunity pursuant to s. 768.14.
(c) In the event of judgment, award, or settlement in a claim or action against a third party, the court shall order the segregation of an amount sufficient to repay the agency’s expenditures for medical assistance, plus any other amounts permitted under this section, and shall order such amounts paid directly to the agency.
(d) No judgment, award, or settlement in any action by a recipient or his or her legal representative to recover damages for injuries or other third-party benefits, when the agency has an interest, shall be satisfied without first giving the agency notice and a reasonable opportunity to file and satisfy its lien, and satisfy its assignment and subrogation rights or proceed with any action as permitted in this section.
(e) Except as otherwise provided in this section, notwithstanding any other provision of law, the entire amount of any settlement of the recipient’s action or claim involving third-party benefits, with or without suit, is subject to the agency’s claims for reimbursement of the amount of medical assistance provided and any lien pursuant thereto.
1. After attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, one-half of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by Medicaid.
2. The remaining amount of the recovery shall be paid to the recipient.
3. For purposes of calculating the agency’s recovery of medical assistance benefits paid, the fee for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25 percent of the judgment, award, or settlement.
4. Notwithstanding any provision of this section to the contrary, the agency shall be entitled to all medical coverage benefits up to the total amount of medical assistance provided by Medicaid. For purposes of this paragraph, “medical coverage” means any benefits under health insurance, a health maintenance organization, a preferred provider arrangement, or a prepaid health clinic, and the portion of benefits designated for medical payments under coverage for workers’ compensation, personal injury protection, and casualty.
(g) In the event that the recipient, his or her legal representative, or the recipient’s estate brings an action against a third party, notice of institution of legal proceedings, notice of settlement, and all other notices required by this section or by rule shall be given to the agency, in Tallahassee, in a manner set forth by rule. All such notices shall be given by the attorney retained to assert the recipient’s or legal representative’s claim, or, if no attorney is retained, by the recipient, the recipient’s legal representative, or his or her estate.
(h) Except as otherwise provided in this section, actions to enforce the rights of the agency under this section shall be commenced within 6 years after the date a cause of action accrues, with the period running from the later of the date of discovery by the agency of a case filed by a recipient or his or her legal representative, or of discovery of any judgment, award, or settlement contemplated in this section, or of discovery of facts giving rise to a cause of action under this section. Nothing in this paragraph affects or prevents a proceeding to enforce a lien during the existence of the lien as set forth in subparagraph (6)(c)9.
(i) Upon the death of a recipient, and within the time prescribed by ss. 733.702 and 733.710, the agency, in addition to any other available remedy, may file a claim against the estate of the recipient for the total amount of medical assistance provided by Medicaid for the benefit of the recipient. Claims so filed shall take priority as class 3 claims as provided by s. 733.707(1)(c). The filing of a claim pursuant to this paragraph shall neither reduce nor diminish the general claims of the agency under s. 414.28, except that the agency may not receive double recovery for the same expenditure. Claims under this paragraph shall be superior to those under s. 414.28. The death of the recipient shall neither extinguish nor diminish any right of the agency to recover third-party benefits from a third party or provider. Nothing in this paragraph affects or prevents a proceeding to enforce a lien created pursuant to this section or a proceeding to set aside a fraudulent conveyance as defined in subsection (16).
(12) No action taken by the agency shall operate to deny the recipient’s recovery of that portion of benefits not assigned or subrogated to the agency, or not secured by the agency’s lien. The agency’s rights of recovery created by this section, however, shall not be limited to some portion of recovery from a judgment, award, or settlement. Only the following benefits are not subject to the rights of the agency: benefits not related in any way to a covered injury or illness; proceeds of life insurance coverage on the recipient; proceeds of insurance coverage, such as coverage for property damage, which by its terms and provisions cannot be construed to cover personal injury, death, or a covered injury or illness; proceeds of disability coverage for lost income; and recovery in excess of the amount of medical benefits provided by Medicaid after repayment in full to the agency.
(13) No action of the recipient shall prejudice the rights of the agency under this section. No settlement, agreement, consent decree, trust agreement, annuity contract, pledge, security arrangement, or any other device, hereafter collectively referred to in this subsection as a “settlement agreement,” entered into or consented to by the recipient or his or her legal representative shall impair the agency’s rights. However, in a structured settlement, no settlement agreement by the parties shall be effective or binding against the agency for benefits accrued without the express written consent of the agency or an appropriate order of a court having personal jurisdiction over the agency.
(a) If a cooperative agreement is entered into with any agency, program, or subdivision of the state, or any agency, program, or legal entity of or operated by a subdivision of the state, or with any other state, the agency is authorized to make an incentive payment of up to 15 percent of the amount actually collected and reimbursed to the agency, to the extent of medical assistance paid by Medicaid. Such incentive payment is to be deducted from the federal share of that amount, to the extent authorized by federal law. The agency may pay such person an additional percentage of the amount actually collected and reimbursed to the agency as a result of the efforts of the person, but no more than a maximum percentage established by the agency. In no case shall the percentage exceed the lesser of a percentage determined to be commercially reasonable or 15 percent, in addition to the 15-percent incentive payment, of the amount actually collected and reimbursed to the agency as a result of the efforts of the person under contract.
(b) If an agreement to enforce or collect third-party benefits is entered into by the agency with any person other than those described in paragraph (a), including any attorney retained by the agency who is not an employee or agent of any person named in paragraph (a), then the agency may pay such person a percentage of the amount actually collected and reimbursed to the agency as a result of the efforts of the person, to the extent of medical assistance paid by Medicaid. In no case shall the percentage exceed a maximum established by the agency, which shall not exceed the lesser of a percentage determined to be commercially reasonable or 30 percent of the amount actually collected and reimbursed to the agency as a result of the efforts of the person under contract.
(c) An agreement pursuant to this subsection may permit reasonable litigation costs or expenses to be paid from the agency’s recovery to a person under contract with the agency.
(d) Contingency fees and costs incurred in recovery pursuant to an agreement under this subsection may, for purposes of determining state and federal share, be deemed to be administrative expenses of the state. To the extent permitted by federal law, such administrative expenses shall be shared with, or fully paid by, the Federal Government.
(15) Insurance and other third-party benefits may not contain any term or provision which purports to limit or exclude payment or provisions of benefits for an individual if the individual is eligible for, or a recipient of, medical assistance from Medicaid, and any such term or provision shall be void as against public policy.
(16) Any transfer or encumbrance of any right, title, or interest to which the agency has a right pursuant to this section, with the intent, likelihood, or practical effect of defeating, hindering, or reducing reimbursement to the agency for medical assistance provided by Medicaid, shall be deemed to be a fraudulent conveyance, and such transfer or encumbrance shall be void and of no effect against the claim of the agency, unless the transfer was for adequate consideration and the proceeds of the transfer are reimbursed in full to the agency, but not in excess of the amount of medical assistance provided by Medicaid.
(17)(a) A recipient or his or her legal representative or any person representing, or acting as agent for, a recipient or the recipient’s legal representative, who has notice, excluding notice charged solely by reason of the recording of the lien pursuant to paragraph (6)(c), or who has actual knowledge of the agency’s rights to third-party benefits under this section, who receives any third-party benefit or proceeds for a covered illness or injury, must, within 60 days after receipt of settlement proceeds, pay the agency the full amount of the third-party benefits, but not more than the total medical assistance provided by Medicaid, or place the full amount of the third-party benefits in an interest-bearing trust account for the benefit of the agency pending an administrative determination of the agency’s right to the benefits under this subsection. Proof that such person had notice or knowledge that the recipient had received medical assistance from Medicaid, and that third-party benefits or proceeds were in any way related to a covered illness or injury for which Medicaid had provided medical assistance, and that such person knowingly obtained possession or control of, or used, third-party benefits or proceeds and failed to pay the agency the full amount required by this section or to hold the full amount of third-party benefits or proceeds in an interest-bearing trust account pending an administrative determination, unless adequately explained, gives rise to an inference that such person knowingly failed to credit the state or its agent for payments received from social security, insurance, or other sources, pursuant to s. 414.39(4)(b), and acted with the intent set forth in s. 812.014(1).
(b) If federal law limits the agency to reimbursement from the recovered medical expense damages, a recipient, or his or her legal representative, may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula specified in paragraph (11)(f) by filing a petition under chapter 120 within 21 days after the date of payment of funds to the agency or after the date of placing the full amount of the third-party benefits in the trust account for the benefit of the agency pursuant to paragraph (a). The petition shall be filed with the Division of Administrative Hearings. For purposes of chapter 120, the payment of funds to the agency or the placement of the full amount of the third-party benefits in the trust account for the benefit of the agency constitutes final agency action and notice thereof. Final order authority for the proceedings specified in this subsection rests with the Division of Administrative Hearings. This procedure is the exclusive method for challenging the amount of third-party benefits payable to the agency. In order to successfully challenge the amount designated as recovered medical expenses, the recipient must prove, by clear and convincing evidence, that the portion of the total recovery which should be allocated as past and future medical expenses is less than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f). Alternatively, the recipient must prove by clear and convincing evidence that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.
(c) The agency’s provider processing system reports are admissible as prima facie evidence in substantiating the agency’s claim.
(d) Venue for all administrative proceedings pursuant to 1this subsection lies in Leon County, at the discretion of the agency. Venue for all appellate proceedings arising from the administrative proceeding outlined in 1this subsection lies at the First District Court of Appeal in Leon County, at the discretion of the agency.
(e) Each party shall bear its own attorney fees and costs for any administrative proceeding conducted pursuant to 2paragraphs (b)-(e).
(f) In cases of suspected criminal violations or fraudulent activity, the agency may take any civil action permitted at law or equity to recover the greatest possible amount, including, without limitation, treble damages under ss. 772.11 and 812.035(7).
(g) The agency may investigate and request appropriate officers or agencies of the state to investigate suspected criminal violations or fraudulent activity related to third-party benefits, including, without limitation, ss. 414.39 and 812.014. Such requests may be directed, without limitation, to the Medicaid Fraud Control Unit of the Office of the Attorney General or to any state attorney. Pursuant to s. 409.913, the Attorney General has primary responsibility to investigate and control Medicaid fraud.
(h) In carrying out duties and responsibilities related to Medicaid fraud control, the agency may subpoena witnesses or materials within or outside the state and, through any duly designated employee, administer oaths and affirmations and collect evidence for possible use in either civil or criminal judicial proceedings.
1. Until such time as the agency takes final agency action;
2. Until such time as the Department of Legal Affairs refers the case for criminal prosecution;
3. Until such time as an indictment or criminal information is filed by a state attorney in a criminal case; or
4. At all times if otherwise protected by law.
(18) In recovering any payments in accordance with this section, the agency is authorized to make appropriate settlements.
(19) Notwithstanding any provision in this section to the contrary, the agency shall not be required to seek reimbursement from a liable third party on claims for which the agency determines that the amount it reasonably expects to recover will be less than the cost of recovery, or that recovery efforts will otherwise not be cost-effective.
(20)(a) Entities providing health insurance as defined in s. 624.603, health maintenance organizations and prepaid health clinics as defined in chapter 641, and, on behalf of their clients, third-party administrators, pharmacy benefits managers, and any other third parties, as defined in s. 409.901(27), which are legally responsible for payment of a claim for a health care item or service as a condition of doing business in the state or providing coverage to residents of this state, shall provide such records and information as are necessary to accomplish the purpose of this section, unless such requirement results in an unreasonable burden.
(b) An entity must respond to a request for payment with payment on the claim, a written request for additional information with which to process the claim, or a written reason for denial of the claim within 90 working days after receipt of written proof of loss or claim for payment for a health care item or service provided to a Medicaid recipient who is covered by the entity. Failure to pay or deny a claim within 140 days after receipt of the claim creates an uncontestable obligation to pay the claim.
(21) Entities providing health insurance as defined in s. 624.603, and health maintenance organizations as defined in chapter 641, requiring tape or electronic billing formats from the agency shall accept Medicaid billings that are prepared using the current Medicare standard billing format. If the insurance entity or health maintenance organization is unable to use the agency format, the entity shall accept paper claims from the agency in lieu of tape or electronic billing, provided that these claims are prepared using current Medicare standard billing formats.
(22) The agency is authorized to adopt rules to implement the provisions of this section and federal requirements.
History.—s. 4, ch. 90-232; s. 33, ch. 90-295; s. 38, ch. 91-282; s. 4, ch. 92-79; s. 4, ch. 94-251; s. 98, ch. 96-175; s. 3, ch. 96-331; s. 259, ch. 96-406; s. 1023, ch. 97-103; s. 32, ch. 98-191; s. 1, ch. 98-411; s. 184, ch. 99-8; s. 1, ch. 99-231; s. 1, ch. 99-323; s. 8, ch. 99-356; s. 9, ch. 99-393; s. 67, ch. 99-397; s. 58, ch. 2000-153; s. 449, ch. 2003-261; s. 3, ch. 2005-140; s. 13, ch. 2008-246; s. 13, ch. 2010-187; s. 6, ch. 2013-48; s. 2, ch. 2013-150; s. 19, ch. 2017-129.
1Note.—As amended by s. 6, ch. 2013-48. The amendment by s. 2, ch. 2013-150, referenced “paragraph (a)” instead of “this subsection.”
2Note.—Substituted by the editors for a reference to “this paragraph,” as referenced in the amendment by s. 6, ch. 2013-48, and which language became paragraphs (b)-(e) in the compilation of the text pursuant to renumbering by s. 2, ch. 2013-150. Section 2, ch. 2013-150, referenced “paragraph (a) or paragraph (b).”Sours: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0409/Sections/0409.910.html
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Subrogation florida medicaid
.Florida Medicaid Planning Guide
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