Willoughby v. Agency for Health Care Administration

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
RANDY R. WILLOUGHBY, )
)
Appellant, )
)
v. ) Case No. 2D15-4845
)
AGENCY FOR HEALTH CARE )
ADMINISTRATION, )
)
Appellee. )
)
Opinion filed March 10, 2017.
Appeal from the Agency for Health Care
Administration.
Brent G. Steinberg, Brandon G. Cathey,
and Rachel M. Batten of Swope, Rodante
P.A., Tampa, for Appellant.
Alexander R. Boler of Boler Legal, PLLC,
Tallahassee, for Appellee.
LaROSE, Judge.
Randy Willoughby, a Medicaid recipient, appeals a final administrative
order denying his petition to reduce the amount owed to the Agency for Health Care
Administration (AHCA) to satisfy a Medicaid lien that attached to settlement proceeds
he recovered in an insurance coverage dispute.1 We have jurisdiction. See Fla. R.
App. P. 9.030(b)(1)(C). Mr. Willoughby advances two arguments. First, he maintains
that the Administrative Law Judge (ALJ), in calculating the funds available to satisfy the
lien, improperly included the bad-faith portion of a $4 million settlement Mr. Willoughby
obtained from his uninsured motorist (UM) carrier. Second, he contends that the ALJ
erred by not reducing the amount of the lien to correspond with that portion of the
settlement allocable to past medical expenses. We affirm as to the first issue. Because
the final order requiring reimbursement for all Medicaid-paid expenses is not supported
by competent, substantial evidence, we reverse and remand as to the second issue. In
doing so, we certify conflict with Giraldo v. Agency for Health Care Administration, 41
Fla. L. Weekly D2743 (Fla. 1st DCA Dec. 12, 2016).
Facts
Mr. Willoughby sustained serious injuries in an automobile accident. As a
result, Mr. Willoughby requires assistance to perform basic activities; he no longer
enjoys a normal and active life. Medicaid paid $147,019.61 for medical expenses he
incurred. He is no longer eligible for Medicaid benefits. Mr. Willoughby sued the
tortfeasor for damages; that lawsuit remains pending in the Thirteenth Judicial Circuit.
After the accident, Mr. Willoughby sought UM benefits from his insurer,
21st Century Centennial Insurance Company. 21st Century denied coverage and
refused to pay. Mr. Willoughby sued, claiming that 21st Century acted in bad faith and
1
AHCA administers the Florida Medicaid program. See § 409.902, Fla.
Stat. (2015).
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engaged in unfair claims settlement practices.2 21st Century eventually settled, paying
Mr. Willoughby $4 million. He also received $20,000 from Esurance Property &
Casualty Insurance Company for bodily injury and UM benefits under the driver's
insurance policy.
Procedural History of the Medicaid Lien
Section 409.910(6)(c), Florida Statutes (2015), imposes a lien on
judgments, awards, or settlements received by an injured person in order to reimburse
Medicaid for medical bills it pays on the injured person's behalf. "[AHCA] is entitled to,
and has, 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 . . . ." § 409.910(6)(c).
After Mr. Willoughby settled with 21st Century, AHCA sought to recover
from the settlement proceeds the approximately $148,000 it had expended through
Medicaid on his behalf. AHCA proceeded pursuant to section 409.910(11)(f), which
provides as follows:
Notwithstanding any provision in this section to the contrary,
in the event of an action in tort against a third party in which
the recipient or his or her legal representative is a party
which results in a judgment, award, or settlement from a
third party, the amount recovered shall be distributed as
follows:
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 [AHCA] up to the total
amount of medical assistance provided by Medicaid.
2
"Florida law allows insureds to sue insurers whose denial of meritorious
claims is in bad faith." Harris v. Geico Gen. Ins. Co., 619 F. App'x 896, 898 (11th Cir.
2015) (citing § 624.155(1)(b) Fla. Stat. (2009)); see also Fridman v. Safeco Ins. Co. of
Ill., 185 So. 3d 1214, 1220 (Fla. 2016).
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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.
Mr. Willoughby filed a petition with the Department of Administrative Hearings (DOAH)
seeking to decrease the lien amount. See §§ 120.569, .57(1), Fla. Stat. (2015) (stating
the procedure for proceedings and petitions for hearing with an agency). Florida law
allows such action:
A recipient may contest the amount designated as recovered
medical expense damages payable to [AHCA] 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 [AHCA] or after the date of placing the full
amount of the third-party benefits in the trust account for the
benefit of [AHCA] . . . .
§ 409.910(17)(b).3 To prevail on his petition, Mr. Willoughby had to demonstrate "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 [AHCA] pursuant to the formula." § 409.910(17)(b).
Mr. Willoughby and AHCA stipulated that the full value of Mr. Willoughby's
personal injury damages was at least $10 million. They also stipulated that Mr.
Willoughby suffered at least $23,800 in lost wages, and a loss of future earning capacity
between nearly $800,000 and $2,000,000. The parties also agreed that his past
medical expenses paid by Medicaid were almost $148,000, and that Mr. Willoughby's
3
Mr. Willoughby placed the disputed funds in an interest-bearing
trust account pending final decision by the ALJ.
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future medical expenses will exceed $5 million. Finally, AHCA and Mr. Willoughby
stipulated that his past noneconomic damages exceed $1 million. Notably, the parties
stipulated that, under the 21st Century settlement, Mr. Willoughby recovered less than
$147,019.61 as payment for his past medical expenses. Nothing suggests that the
parties made these stipulations in anything other than good faith arm's-length
negotiations. AHCA posited that its Medicaid lien could be satisfied from settlement
funds allocable to past and future medical expenses. Mr. Willoughby, on the other
hand, argued that AHCA could satisfy its lien only on a portion of the settlement
representing past medical expenses. Despite the parties' stipulations as to medical
expenses, the ALJ concluded that the entire $4 million settlement was available to
satisfy the Medicaid lien. He then denied Mr. Willoughby's petition to reduce AHCA's
lien.
Standard of Review
We review the final administrative order to determine if it is supported by
competent, substantial evidence. Mobley ex rel. Mobley v. Agency for Health Care
Admin., 181 So. 3d 1233, 1236 (Fla. 1st DCA 2015). "If supported by competent,
substantial evidence, an appellate court must accept those findings." Id. "However, if
the agency's decision is not supported by substantial, competent evidence established
in the record of the administrative hearing, it will be overturned." Wise v. Dep't of Mgmt.
Servs., Div. of Ret., 930 So. 2d 867, 870-71 (Fla. 2d DCA 2006). "[T]his court reviews
the agency's conclusions of law de novo." Peace River/Manasota Reg'l Water Supply
Auth. v. IMC Phosphates Co., 18 So. 3d 1079, 1082 (Fla. 2d DCA 2009). "An appellate
court may set aside an agency action where the court finds that the agency erroneously
interpreted a provision of law and a correct interpretation compels a particular result."
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Lutheran Servs. Fla., Inc. v. Dep't of Child. & Fams., 199 So. 3d 286, 288 (Fla. 2d DCA
2015).
Analysis
Bad Faith Damages Are Subject to the Medicaid Lien
Mr. Willoughby pressed strenuously before the ALJ that $3.99 million of
the $4.02 million settlement4 was for bad faith damages that could not be used to satisfy
the Medicaid lien. He argued to the ALJ, and maintains here, that no more than
$30,000, the UM policy limits, can be used to satisfy the lien. We note that AHCA and
Mr. Willoughby stipulated that "[o]f the $4 million paid by 21st Century, $3.99 million was
bad faith damages, paid to settle [Mr. Willoughby's] claim for damages . . . on account of
21st Century's wrongful failure to pay [Mr. Willoughby's UM] claim." Mr. Willoughby
argued that no part of the bad faith recovery could be allocated to his medical
expenses. Apparently, he assumed that bad faith damages were exclusively a
punishment for failure to settle an insurance claim properly. His assumption was
misplaced. The settlement compensated Mr. Willoughby for damages he sustained in
the automobile accident and was available to satisfy the Medicaid lien.
UM benefits cover a panoply of losses. See Fridman v. Safeco Ins. Co. of
Ill., 185 So. 3d 1214, 1220 (Fla. 2016); State Farm Mut. Auto Ins. Co. v. Rutkin, 199 So.
2d 705, 706 (Fla. 1967) ("[T]he insured is entitled to recover under the policy all
damages he or she would have been able to recover from the offending motorist if that
motorist had maintained a policy of auto liability insurance."). Section 624.155, Florida
4
The amount Mr. Willoughby obtained from 21st Century and Esurance
totaled $4,020,000. For ease, unless the context requires otherwise, we refer to the
$4.02 million settlement obtained by Mr. Willoughby from 21st Century and Esurance.
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Statutes (2015), requires "an insurer to act in good faith in handling claims brought by
its own insured under a UM policy and expose[s] the insurer to the consequences of
failing to do so." Fridman, 185 So. 3d at 1220.
We cannot agree with Mr. Willoughby's contention that bad faith damages
are not subject to the Medicaid lien because they were not allocable to medical
expenses. "[D]amages in first-party bad faith actions are to include the total amount of
a claimant's damages, including any amount in excess of the claimant's policy limits
without regard to whether the damages were caused by the insurance company." Id. at
1223 (emphasis added) (quoting State Farm Mut. Auto Ins. Co. v. Laforet, 658 So. 2d
55, 60 (Fla. 1995)). Moreover, Mr. Willoughby and 21st Century acknowledged in their
settlement that "all sums set forth . . . herein constitute[d] damages on account of
personal injuries or sickness."
AHCA may "seek reimbursement from 'third-party benefits,' § 409.910(6),
including those benefits received from any 'causes of action, suits, claims,
counterclaims, and demands that accrue to the recipient or to the recipient's legal
representative, related to any covered injury, illness, or necessary medical care, goods,
or services' for which Medicaid paid." Goheagan v. Perkins, 197 So. 3d 112, 117 (Fla.
4th DCA 2016) (quoting 409.901(7)(a), Fla. Stat. (2014)), review denied, No. SC16-
1510 (Fla. Dec. 6, 2016). Mr. Willoughby's settlement with 21st Century provided
compensation for all injuries Mr. Willoughby suffered. Medicaid paid medical bills
related to those injuries. Thus, the bad faith portion of the settlement was available to
satisfy the lien. The ALJ's decision on this issue was supported by competent,
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substantial evidence and was a proper interpretation of section 409.910(7)(a). We
affirm on this issue.
AHCA Can Satisfy Its Lien Only From Settlement Funds
Allocable to Past Medical Expenses
Medicaid is the "payor of last resort for medically necessary goods and
services furnished to Medicaid recipients." § 409.910(1). The Medicaid law requires
participating states to seek reimbursement of medical expenses incurred by tort victims
who later recover from liable third parties. Davis v. Roberts, 130 So. 3d 264, 266 (Fla.
5th DCA 2013). The right to reimbursement, however, is not unbridled. Under
Medicaid's anti-lien provisions, AHCA cannot impose its "lien upon settlement proceeds
which are not 'designated as payments for medical care,' as those [nonmedical]
proceeds qualify as a recipient's property." Goheagan, 197 So. 3d at 116 (quoting Ark.
Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 283-86 (2006)); see also 42
U.S.C. § 1396p(a)(1) ("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 [Medicaid] plan . . . .").
As noted earlier, section 409.910(11)(f) provides a formula to determine
the amount available for Medicaid reimbursement from a third-party settlement. The
formula "caps recovery at half of the total amount of the settlement, after deducting
attorney's fees and costs." Davis, 130 So. 3d at 266. "Although the entire amount of
any settlement may be subject to a Medicaid lien, the amount of recovery is limited by
the amount of Medicaid assistance provided. It is also limited by a statutory formula."
Estate of Hernandez v. Agency for Health Care Admin., 190 So. 3d 139, 142 (Fla. 3d
-8-
DCA 2016) (citing § 409.910(11)(e), (f)), review denied, No. SC16-930 (Fla. Sept. 28,
2016).
AHCA stipulated that the 21st Century settlement did not make Mr.
Willoughby whole for his past medical expenses. Yet, applying the formula, AHCA
contends that the settlement provided ample funds to satisfy the entire lien. But,
echoing Ahlborn, Wos v. E.M.A. ex rel. Johnson, 133 S. Ct. 1391, 1398 (2013), like
Goheagan, teaches that "[t]he Medicaid anti-lien provision prohibits a State from making
a claim to any part of a Medicaid beneficiary's tort recovery not 'designated as
payments for medical care.' " (quoting Ahlborn, 547 U.S. at 284). Thus, the formula is
not always conclusive. Indeed, since 2013,5 Florida law enables Medicaid recipients,
such as Mr. Willoughby, to rebut the presumption yielded by the formula.
§ 409.910(17)(b); see also Garcon v. Agency for Health Care Admin., 150 So. 3d 1101,
1102 (Fla. 2014); Agency for Health Care Admin. v. Riley, 119 So. 3d 514, 516 (Fla. 2d
DCA 2013); Davis, 130 So. 3d at 270.
Before the ALJ, Mr. Willoughby relied on the parties' stipulation that he
recovered less than the amount of the lien as payment for his past medical expenses
from the 21st Century settlement. The ALJ was not persuaded. He observed that
"[a]lthough the parties . . . stipulated that [Mr. Willoughby] has recovered less than
$147,019.61 as payment for past medical expenses, the settlement agreement . . .
states that 'all sums set forth herein constitute damages on account of personal injuries
or sickness.' " But not all personal injury damages are for medical expenses. Even
AHCA conceded as much.
5
Ch. 2013-150, § 2, at 97, Laws of Fla. (2013).
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Mr. Willoughby urged the ALJ to employ a pro rata allocation to calculate
the amount of the 21st Century settlement allocable to past medical expenses. He
acknowledged that if the entire 21st Century settlement proceeds are available, AHCA
can recover no more than about $59,000 as reimbursement for past medical expenses
paid by Medicaid. Indeed, because the settlement represents but only some forty
percent of the total value of the case, Mr. Willoughby urges that AHCA can only recover
about forty percent of the expenses it incurred. We do not condemn this approach; we
recognize that ALJs frequently resort to this methodology in calculating amounts
available to satisfy Medicaid liens. See Osmond v. Agency for Health Care Admin.,
Case No. 16-3408MTR (Fla. DOAH Hrgs. Sept. 8, 2016); Bryant v. Agency for Health
Care Admin., Case No. 15-4651MTR (Fla. DOAH Feb. 12, 2016). But we also
acknowledge that the U.S. Supreme Court has not explicitly endorsed this method. The
Supreme Court "in no way adopted the formula as a required or sanctioned method to
determine the medical expense portion of an overall settlement amount." Smith v.
Agency for Health Care Admin., 24 So. 3d 590, 591 (Fla. 5th DCA 2009). We remain
mindful, though, that "[a]n 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." Wos, 133 S. Ct. at 1399. Mr. Willoughby offered a methodology to
demonstrate that AHCA is owed a lesser amount, and AHCA agreed that his past
medical expenses were not satisfied by the 21st Century settlement. The ALJ rejected
the agreement without analysis.
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There seems to be no question that AHCA cannot recoup its Medicaid lien
from settlement proceeds allocable to nonmedical expense damages. We struggle to
determine whether AHCA may satisfy its lien from funds allocated to future medical
expenses. We noted earlier that AHCA and Mr. Willoughby stipulated that his future
medical expenses will likely exceed $5 million. If Mr. Willoughby's forty percent
recovery versus total case value is applied to the total stipulated for all medical
expenses, $5,148,000, the result yields over $2 million, more than enough to satisfy the
entire lien. Yet, previous decisions from our sister districts suggested that the lien could
be satisfied only from funds allocable to past medical expenses. Cf. Davis, 130 So. 3d
at 270 (holding that recovery is limited to the "portion of the Medicaid recipient's third-
party recovery representing compensation for past medical expenses").
Recently, however, in Giraldo, the First District concluded that AHCA had
the "right to secure reimbursement for payments already made for medical costs from
not only that portion of the settlement allocated for past medical expenses but also from
that portion of the settlement intended as compensation for future medical expenses."
41 Fla. L. Weekly at D2744. In reaching this conclusion, the First District relied on
section 409.910(17)(b) which requires a Medicaid recipient challenging the lien amount
to demonstrate that AHCA has not properly allocated past and future medical expenses.
Id. Respectfully, we disagree with our sister district. Giraldo misinterprets Ahlborn, 547
U.S. 268. Under our federal system of government, the First District's understanding of
section 409.910 must yield to the United States Supreme Court's interpretation. See
Art. VI, cl. 2, U.S. Const. (Supremacy Clause). Ahlborn and its progeny are best read
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as limiting the recovery of the Medicaid lien to that portion of a settlement allocable to
past medical expenses.
A more detailed exposition of Ahlborn is useful. Ahlborn was injured in an
automobile accident. She sued the tortfeasor, seeking damages for past and future
medical expenses, loss of earnings, and pain and suffering. The total value of her claim
exceeded $3 million. Arkansas, through its Medicaid program, paid over $215,000 of
her medical expenses. Ahlborn settled her tort case for $550,000, roughly 1/6 of its
value. Under its state law, Arkansas sought full reimbursement of its Medicaid lien from
the total settlement. Ahlborn argued that the Arkansas law violated Medicaid's anti-lien
provision, see 42 U.S.C. § 1396p(a)(1), because it would reach funds recovered for
damages other than past medical expenses. Ahlborn and Arkansas stipulated that if
her interpretation of federal law was correct, only 1/6 of her settlement was allocable to
medical expenses, about $36,000 of the $215,000 actually paid by Medicaid. Ahlborn,
547 U.S. at 273-74. The Supreme Court agreed with Ahlborn. Although the Supreme
Court did not address specifically the availability of funds for future medical expenses to
pay the lien, it is clear that the Court accepted the parties' stipulation that only the
amounts allocable to past payments were subject to the lien. Indeed, the Court
observed that Medicaid acquires a lien "of no more than the right to recover that portion
of a settlement that represents payments for medical care." Id. at 282. Future medical
expenses have neither been incurred nor paid. More to the point, section
409.910(17)(b) specifically states that the recipient must demonstrate that "a lesser
portion of the total recovery should be allocated as reimbursement for past and future
medical expenses." (Emphasis added.) Reimburse means "to pay back to someone" or
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"to make restoration or payment of an equivalent to." Reimburse, Merriam-Webster
Online Dictionary, https://www.merriam-webster.com/dictionary/reimburse (last visited
Dec. 22, 2016). The statute contemplates that AHCA cannot be reimbursed for monies
it has not expended. See Bryant, Case No. 15-4651MTR.
Reaffirming Ahlborn, the Supreme Court in Wos, 133 S. Ct. at 1397,
stated that North Carolina's Medicaid program had a right to recover Medicaid expenses
paid on the recipient's behalf. North Carolina had no right to settlement proceeds
beyond such expenses. Wos, 133 S. Ct. at 1397. The North Carolina statute under
consideration required that up to 1/3 of any damages recovered by a Medicaid recipient
were payable to reimburse North Carolina for Medicaid benefits paid. Again, the
Supreme Court did not directly address whether a Medicaid lien could attach to
settlement funds allocable to future medical expenses. Yet, the underlying facts of Wos
indicate not. In Wos, the Supreme Court affirmed a decision of the Fourth Circuit Court
of Appeal. See E.M.A. ex rel. Plyler v. Cansler, 674 F.3d 290 (4th Cir. 2012), aff'd sub
nom. Wos v. E.M.A. ex rel. Johnson, 133 S. Ct. 1391 (2013). In its opinion, the Fourth
Circuit noted that E.M.A. challenged North Carolina's effort to collect the full amount of
its lien by encumbering "funds that are not payment[s] for medical expenses already
incurred." Id. at 295. Hewing to Ahlborn, the Fourth Circuit made clear that "federal
Medicaid law limits North Carolina's recovery to settlement proceeds representing
payment for medical expenses." Id. at 296 (emphasis omitted). As in Ahlborn, any
settlement proceeds allocable to future medical expenses are expenses not yet incurred
or paid. Such proceeds properly belong to the tort victim as compensation for future
medical expenses that will be incurred.
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Our survey of the cases since Ahlborn reflects a majority view that the
Medicaid lien does not attach to settlement funds allocable to future medical expenses.
See, e.g., E.M.A., 674 F.3d 290; McKinney ex rel. Gage v. Phila. Hous. Auth., No. 07-
4432, 2010 WL 3364400, at *9 (E.D. Pa. Aug. 24, 2010); Price v. Wolford, No. Civ-07-
1076-M, 2008 WL 4722977 (W.D. Okla. Oct. 23, 2008); State Dep't of Health & Welfare
v. Hudelson, 196 P.3d 905, 912-13 (Idaho 2008), abrogated on other grounds by
Verska v. St. Alphonsus Reg'l Med. Cent., 265 P.3d 502, 508 (Idaho 2011); Lugo ex rel.
Lugo v. Beth Israel Med. Ctr., 819 N.Y.S.2d 892, 895 (N.Y. Sup. Ct. 2006); Aguilera v.
Loma Linda Univ. Med. Ctr., 235 Cal. App. 4th 821, 831-32 (Cal. Ct. App. 2015);
Branson v. Sharp Healthcare, Inc., 193 Cal. App. 4th 1467, 1471 (Cal. Ct. App. 2011);
In re E.B., 729 S.E.2d 270, 292-93 (W. Va. 2012). Many of those decisions
painstakingly explain how Ahlborn compels that result. See, e.g., E.M.A., 674 F.3d at
300-01; McKinney, No. 07-4432 (rejecting the argument that Ahlborn allows states "to
encumber settlement monies attributable to future medical expenses"); In re E.B., 729
S.E.2d 270 ("After a thorough examination of the Ahlborn decision and the language
contained in [the West Virginia statute] . . . we find that [the statute] directly conflicts
with Ahlborn, insofar as it permits [the State] to assert a claim to more than the portion
of a recipient's settlement that represents past medical expenses.").
Even several Florida administrative law judges conclude that AHCA
cannot satisfy its Medicaid lien from proceeds set aside for future medical expenses.
See Weedo v. Agency for Health Care Admin., Case No. 16-1932MTR (Fla. DOAH
Sept. 27, 2016); Osmond, Case No. 16-3408MTR; Bryant, Case No. 15-4651MTR;
Quesada v. Agency for Health Care Admin., Case No. 15-3764MTR (Fla. DOAH Jan.
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28, 2016); Gibbons v. Agency for Health Care Admin., Case No. 13-4720MTR (Fla.
DOAH May 7, 2014); cf. Silnicki v. Agency for Health Care Admin., Case No. 13-
3852MTR (Fla. DOAH July 15, 2014).
Two more features of this case make clear that limiting the scope of the
lien to past medical expenses makes sense. First, AHCA agreed to the allocation of
damages. The parties' stipulation poses no risk of collusion. AHCA, the agency tasked
with administering Florida's Medicaid program, acknowledged that Mr. Willoughby was
not made whole as to his past medical expenses. AHCA had no incentive to skew the
allocations of the 21st Century settlement in a way that reduces its lien for paid medical
expenses. Cf. Giraldo, 41 Fla. L. Weekly at D2744 (holding that ALJ properly
concluded that allocation agreed to in settlement agreement between victim and
tortfeasor was not clear and convincing evidence and could not "be credited as
reasonable products of arms-length adversarial negotiation"). Second, Mr. Willoughby
is no longer eligible for Medicaid benefits. Thus, AHCA will expend no funds for his
future care. See I.P. ex rel. Cardenas v. Henneberry, 795 F. Supp. 2d 1189, 1197 (D.
Colo. 2011) ("Because Plaintiff intends on staying on Medicaid, any funds allocated for
future medical expenses should rightfully be exposed to the [S]tate's lien so that the
[S]tate can be reimbursed for its past medical payments.").
Conclusion
The ALJ had authority to reduce the Medicaid lien. See Davis, 130 So. 3d
at 270; see also § 409.910(17)(b). However, the ALJ did not analyze any methodology
provided by Mr. Willoughby to reduce the lien. Instead, the ALJ concluded that the 21st
Century settlement included all of Mr. Willoughby's medical expenses. The record
supports no such conclusion. We cannot ignore the fact that Mr. Willoughby and AHCA
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stipulated that, in his settlement with 21st Century, Mr. Willoughby recovered less than
$147,019.61 for past medical expenses. The ALJ should not have ignored the parties'
stipulation.
Mr. Willoughby provided clear and convincing evidence that a lesser
portion of his recovery was allocable to satisfy the Medicaid lien.6 Because the ALJ's
decision not to reduce the lien amount is not supported by competent, substantial
evidence and misapplies Ahlborn and Wos, we must reverse on the second issue. We
also certify conflict with Giraldo.
Accordingly, we affirm the ALJ's refusal to exclude the bad faith damages
from the Medicaid lien. We reverse and remand for the ALJ to reconsider, consistent
with this opinion, Mr. Willoughby's petition in light of the parties' stipulation as to the
apportionment of the settlement for Mr. Willoughby's past medical expenses.
Affirmed in part, reversed in part, and remanded. Conflict certified.
SILBERMAN and SLEET, JJ., Concur.
6
We do not address whether AHCA could pursue what is left of the lien
from any monies Mr. Willoughby receives in his action against the tortfeasor.
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