Kaitlyn Harrell, a minor, individually etc. v. State of Florida, Agency for Health Care Admin. , 143 So. 3d 478 ( 2014 )

IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
KAITLYN HARRELL, a minor, NOT FINAL UNTIL TIME EXPIRES TO
individually and through her FILE MOTION FOR REHEARING AND
natural parents and guardians, DISPOSITION THEREOF IF FILED
JOY D. HARRELL and GREG A.
HARRELL, husband and wife, CASE NO. 1D12-5597
and JOY D. HARRELL and
GREG HARRELL, individually,
Appellants,
v.
STATE OF FLORIDA,
AGENCY FOR HEALTH CARE
ADMINISTRATION, et. al.,
Appellee.
_____________________________/
Opinion filed July 28, 2014.
An appeal from the Circuit Court for Bay County.
Hentz McClellan, Judge.
Floyd B. Faglie of Staunton & Faglie, P.L., Monticello, for Appellant.
Adam J. Stallard of Agency for Health Care Administration, Tallahassee, for
Appellee.
MAKAR, J.
Appellants, Joy D. Harrell and Greg Harrell, appeal an order of the trial
court determining that the Agency for Health Care Administration (AHCA) is
entitled to the full amount of its Medicaid lien from the personal injury settlement
the Harrells entered on behalf of their daughter, Kaitlyn Harrell. For the reasons
that follow, we reverse and remand.
In 2002, Kaitlyn was deprived of oxygen during the birthing process and left
with catastrophic injuries, including mental retardation, cerebral palsy, and
quadriplegia. The Harrells sued the hospital for damages, eventually accepting a
confidential settlement. Florida’s Medicaid program, administered through AHCA,
paid medical expenses for Kaitlyn’s care in the amount of $360,741.48, for which
AHCA asserted a lien in the full amount from the settlement proceeds. The
Harrells filed a petition to determine the amount of the Medicaid lien, specifically
arguing that the formula in section 409.910(11)(f), Florida Statutes, used to
determine the amount of the State’s recovery had been “overruled” by the United
States Supreme Court in Arkansas Department of Health & Human Services v.
Ahlborn, 547 U.S. 268, 292 (2006), which held that the federal anti-lien provision
affirmatively barred states from asserting a lien on a settlement in excess of the
medical expenses. They argued that because the past medical expenses they
recovered were less than the lien asserted by AHCA, it could only recover its
proportionate share. Relying in part on the decision in Russell v. Agency for
Health Care Administration, 23 So. 3d 1266 (Fla. 2d DCA 2010), AHCA opposed
the petition, arguing that use of the statutory formula was mandatory, and under the
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formula, it was entitled to full satisfaction of its lien. At the hearing on the petition,
the trial court agreed with AHCA, concluding that “at this juncture at least, this
court is obligated to render a decision in favor of [AHCA] for the full amount of its
lien.”
At the time of the hearing, the trial court acknowledged that the United
States Supreme Court had granted review of a case similar to the one before it:
Wos v. E.M.A., 133 S. Ct. 1391 (2013). The Supreme Court in Wos subsequently
held that North Carolina’s statutes, which established a set proportion (one-third)
as the amount of the state’s reclamation from a beneficiary’s tort recovery, was
pre-empted by the Medicaid Act to the extent they required payment beyond that
shown to be for medical expenses. Id. at 1399 (“An irrebuttable, one-size-fits-all
statutory presumption is incompatible with the Medicaid Act’s clear mandate that a
State may not demand any portion of a beneficiary’s tort recovery except the share
that is attributable to medical expenses.”).
The decision in Wos has undermined the reasoning of the decisions that
AHCA and the trial court have previously relied upon, so much so that three of
five district courts in Florida have, when presented with the issue of whether
section 409.910(11)(f) has been preempted, uniformly changed course by issuing
opinions consistent with Wos. 1 See, e.g., Ag. for Health Care Admin. v. Riley,
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Because section 409.910 was substantially amended, effective July 1, 2013, to
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119 So. 3d 514 (Fla. 2d DCA 2013) (applying Wos, abrogating Russell, and
expressly adopting the holding in Roberts v. Albertson’s Inc., 119 So. 2d 457 (Fla.
4th DCA 2012)); see also Dillard v. Ag. for Health Care Admin., 127 So. 3d 820(Fla. 2d DCA 2013) (holding that recipient entitled to present evidence to rebut
amount of claimed Medicaid lien); Davis v. Roberts, 130 So. 3d 264, 269 (Fla. 5th
DCA 2013) (holding that statutory formula in section 409.910(11)(f) is not
mandatory; parents of Medicaid recipient child were entitled to opportunity to
demonstrate AHCA’s lien exceeded portion of settlement allocated to medical
expenses); Ag. for Health Care Admin. v. Williams, 127 So. 3d 854 (Fla. 4th DCA
2013) (holding similarly). As the Fifth District recently noted, “Ahlborn and Wos
make clear that section 409.910(11)(f) is preempted by the federal Medicaid
statute’s anti-lien provision to the extent it creates an irrebuttable presumption and
permits recovery beyond that portion of the Medicaid recipient’s third-party
recovery representing compensation for past medical expenses.” Davis, 130 So. 3d
at 270.
The Harrells urge that we fall in line with these decisions, which is
warranted because our district’s jurisprudence is outdated in light of the change
that Wos has wrought. As an example, in Storey ex rel. Storey v. Hickcox, 44 So.
provide a mechanism for the hearings envisioned by Wos to challenge the
presumptive lien amount, see § 409.910(17)(b)-(e), Fla. Stat. (2013), much of the
debate regarding the continued viability of the prior case law is now largely
academic.
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3d 600 (Fla. 1st DCA 2010), we specifically relied upon Russell to affirm, in a per
curiam decision, the trial court’s denial of a motion for equitable distribution. But
Russell is no longer valid, the Second District forswearing its continued
applicability. See Riley, 119 So. 3d at 516. Because Wos has altered the Medicaid
reimbursement field, we must recede from Hickcox, and we decide expressly to
adopt the holding of Riley (as adopted from Albertson’s Inc.). Riley, 119 So. 3d at
516. That is, we now hold 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 section 409.910(11)(f), by demonstrating, with evidence, that the lien
amount exceeds the amount recovered for medical expenses. When such evidence
is introduced, a trial court must consider it in making a determination on whether
AHCA’s lien amount should be adjusted to be consistent with federal law.
At the time the trial court issued its ruling in this case, it could not apply this
new legal principle, concluding instead that it was bound to follow the statutory
formula at issue and could not consider the Harrells’s evidence. On remand, the
trial court may consider evidence in the record from the prior hearing and, as
appropriate, any additional relevant evidence in determining the appropriate
amount of medical evidence subject to the lien. See Riley, 119 So. 3d at 516.
REVERSED and REMANDED
RAY and SWANSON, JJ., CONCUR.
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