Health Law Daily Wrap Up, MEDICAID PAYMENT—Fla. Dist. App.: Federal anti-lien protection held to apply only to living Medicaid recipients, (Jul 22, 2016)

By Harold Bishop, J.D.

Florida’s state Medicaid agency was entitled to recover the full amount of its Medicaid lien against the estate of a deceased Medicaid recipient because the federal Medicaid Act’s anti-lien statute applies only to living Medicaid recipients. The court noted two logical reasons why this lien protection is limited to surviving Medicaid recipients: (1) it allows them to keep more of their property, including third-party settlements, with the goal of helping them avoid public assistance; and (2) it provides them with more resources from which to pay ongoing medical and non-medical expenses. Once a Medicaid recipient dies, they no longer need their assets to meet these obligations (Goheagan v. Perkins, July 20, 2016, Klingensmith, M.).

Background. In February 2007, a Medicaid recipient suffered a spinal cord injury in an auto accident and was in a coma for approximately three months before she passed away. Her medical expenses totaled $970,179, of which Medicaid paid $95,476. The deceased recipient’s estate brought a wrongful death action against the driver and obtained a multi-million dollar jury verdict, eventually settling with the driver’s automobile insurance carrier for one million dollars. The Florida Agency for Health Care Administration (AHCA) asserted a lien for $95,476 against the settlement proceeds based section 409.910(11)(f) of Florida’s Medicaid Third-Party Liability Act.

Trial court. The estate filed an action in Florida Circuit Court seeking to reduce the Medicaid lien, arguing that section 409.910(11)(f) was preempted by the federal Medicaid anti-lien law (42 U.S.C. §1396p(a)(1)). The court ruled that the formula under section 409.910(11)(f) applied in wrongful death cases, and the federal anti-lien provision of the federal Medicaid statute applied only in the case of living Medicaid recipients. It denied the estate’s motion to reduce the lien and ordered the estate to reimburse AHCA $95,476.60. The estate appealed.

Appeal. The AHCA claimed on appeal that the federal anti-lien statute and the cases allowing preemption of the Florida Medicaid Act were not applicable because the holdings in those cases did not apply to wrongful death actions. It argued that, according to the language of the anti-lien statute, which provides that "[n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the state plan," the Florida Medicaid Third-Party Liability Act is not preempted. The court of appeals agreed.

The court of appeals held that the plain language of the federal anti-lien statute clearly reflects Congress’ intent that the anti-lien statute apply only to recoveries by Medicaid recipients who are living when the settlement or judgment against the third party is obtained, and not to recoveries made by an estate or beneficiary in a wrongful death action. As such, the federal anti-lien statute did not prohibit the AHCA from imposing a lien against the deceased recipient’s recovery from third parties for the full amount paid for medical expenses.

The judgment of the trial court was affirmed.

The case No. is 4D14-4843.

Attorneys: Bard D. Rockenbach (Burlington & Rockenbach, PA) for Olive Goheagan. Alexander R. Boler (Xerox Recovery Services) for John Perkins.

Companies: Florida Agency for Health Care Administration

Cases: CaseDecisions MedicaidPaymentNews PreemptionNews FloridaNews