MARIA ISABEL GIRALDO and JUAN GONZALO VILLA, as Co-Personal Representatives of the Estate of JUAN L. VILLA, Appellants, v. AGENCY FOR HEALTH CARE ADMINISTRATION, Appellee.
CASE NO. 1D16-0392
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
December 12, 2016
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED
Opinion filed December 12, 2016.
Floyd Faglie of Staunton & Faglie, PL, Monticello; Celene H. Humphries and Maegen Peek Luka of Brannock & Humphries, Tampa, for Appellants.
Alexander R. Boler, Tallahassee, for Appellee.
WELLS, LINDA ANN, Associate Judge.
On September 12, 2010, Juan L. Villa suffered catastrophic injury to his spine when the all-terrain vehicle he was riding overturned. Villa, claiming both economic and noneconomic damages, brought products liability and negligence claims against those allegedly liable for his injuries. Florida‘s Agency for Health Care Administration (“AHCA“), which administers Florida‘s Medicaid program,1 paid for portions of Villa‘s medical care. By accepting Medicaid benefits, Villa automatically subrogated his right to third-party benefits for the full amount of medical assistance provided by Medicaid and automatically assigned to AHCA his right, title, and interest to those benefits, other than those excluded by federal law. See
On March 2, 2015, AHCA asserted a $322,222.27 Medicaid lien against any future settlement of, or recovery from, the action Villa had brought to recover for the injuries he had incurred in the all-terrain
A month later, Villa settled his case against one of a number of defendants in his products liability/negligence action. Although the settlement agreement between these two parties did not itemize the different sums that Villa was to recover for each element of damage that he claimed,3 it did state that his “alleged damages have a value in excess of $25,000,000.00,” and that Villa and the settling defendant had agreed to allocate $4817.56 of the undifferentiated settlement total to Villa‘s claim for past medical expenses.4
Shortly after settling, Villa‘s counsel notified AHCA of the settlement and provided AHCA with a copy of the executed settlement agreement, along with an itemization of Villa‘s litigation costs in the tort lawsuit. The letter asked AHCA to advise Villa of the amount AHCA would accept from the settlement proceeds to satisfy its Medicaid lien. AHCA responded claiming entitlement to $321,720.16 of Villa‘s settlement predicated on its calculation of the amount payable pursuant to the formula set forth in section 409.910(11)(f) of the Florida Statutes. See
Villa then petitioned the Division of Administrative Hearings (DOAH) for a formal administrative proceeding to contest the amount designated by AHCA “as recovered medical expense damages” and for a determination of the amount payable to AHCA to satisfy the agency‘s Medicaid lien. See
The ALJ also concluded that two-year old hearsay reports from a vocational rehabilitation specialist and an economist failed to supply the evidentiary support essential to the current paragraph (17)(b) challenge because neither report segregated medical damages from non-medical damages and neither reflected circumstances existing at the time of the evidentiary hearing.7 Lastly, the ALJ rejected Villa‘s argument that section 409.910(17)(b) impermissibly required him to include any future medical expense award in calculating the amount that must be allocated from his total recovery as available to satisfy the lien at issue.
Villa8 here challenges the determination that he failed to “prove, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in [section 409.910](11)(f) or that Medicaid provided a lesser amount of medical assistance than that asserted by the agency.”
We find no error in any of the ALJ‘s factual findings or legal determinations. First, we reject Villa‘s claim that because the testimony of the two witnesses he called at the evidentiary hearing (one of whom was his trial attorney) was unrebutted, that the ALJ had no choice but to accept that testimony as probative. See Fox v. Dep‘t of Health, 994 So. 2d 416, 418 (Fla. 1st DCA 2008) (“It is well-established that the ALJ was not required to believe [witness‘s] testimony, even if unrebutted.“). “[T]he trier of fact is never bound to believe any witness, even a witness who is uncontradicted . . . . It is not our prerogative to judge the credibility of witnesses . . . . There is no substitute for seeing and hearing persons testify.” Walker v. Fla. Dep‘t of Bus. & Prof‘l Regulation, 705 So. 2d 652, 655 (Fla. 5th DCA 1998) (J. Dauksch, concurring specially).
that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.
Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).
On the record before us, we cannot disagree with the ALJ‘s rejection of trial counsel‘s unilateral determination of the amount to designate in the settlement agreement as that portion of the total settlement to be allotted to medical expenses. Likewise, we find no error in the ALJ‘s determination that out-dated hearsay expert reports, which did not segregate medical from non-medical damages, failed to support the relief sought by Villa—a determination that
Second, we find no error in the ALJ‘s legal determination relating to AHCA‘s 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. We do so initially because that is precisely what Florida law required the ALJ to do.
Likewise,
(17)(b) A [Medicaid] recipient may contest the amount designated as recovered medical expense damages payable to the agency pursuant to the formula in paragraph (11)(f) by filing a petition under chapter 120 . . . . In order to successfully challenge the amount payable to the agency, the [Medicaid] recipient must prove, by clear and convincing evidence,
that a lesser portion of the total [settlement] recovery should be allocated as reimbursement for past and future medical expenses than the amount calculated by the agency pursuant to the formula set forth in paragraph (11)(f) . . . .
Pursuant to prevailing law, Villa was obligated to establish as part of his challenge that portion of his recovery that he claimed was attributable to reimbursement by the third-party tortfeasor for both his past and his future medical expenses. Since Villa intentionally introduced no evidence as to the amount recovered for future medical expenses, the ALJ was correct in determining that he failed to satisfy his burden under
Moreover, notwithstanding Villa‘s assertion to the contrary, nothing in
Federal law requires that participating states seek reimbursement for medical expenses incurred on behalf of Medicaid recipients who later recover from legally liable third parties. This obligation is not, however, unbounded. As Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268, 282 (2006), confirms, these obligations are circumscribed by the anti-lien (and the anti-recovery) provisions of the federal Medicaid Act, which authorize payment to a state only from those portions of a Medicaid recipient‘s third-party settlement recovery allocated for payment of medical care. See
In Ahlborn, a Medicaid recipient filed a tort suit seeking to recover damages for past and future medical expenses, permanent physical injury, past and future pain and suffering, mental anguish, and lost earnings among other things. The Arkansas state Medicaid agency intervened in the action to assert a lien for the full amount it had paid for Ahlborn‘s medical care. After the action settled, without the agency‘s input and without allocation of the damage awards, Ahlborn sought a declaration that satisfaction of the state‘s lien “would require depletion of compensation for injuries other than past medical expenses.” Ahlborn, 547 U.S. at 274. The United States District Court for the Eastern District of Arkansas concluded that Ahlborn had assigned her right to any recovery from third-party tortfeasors to the full extent of Medicaid‘s payments for her benefit and thus the state Medicaid agency was entitled to recover the full amount of its lien even if that amount exceeded the amount of her recovery for medical care. The Eighth Circuit
On appeal to the United States Supreme Court, the state‘s claim was that it was entitled “to more than just that portion of a judgment or settlement that represents payment for medical expenses.” Id. at 278. The Court rejected that claim, concluding first that federal law authorizing the states to seek reimbursement from legally liable third parties for medical assistance to Medicare recipients extended only to the “legal liability of [the] third party . . . to pay for care and services available under [a state‘s Medicaid] plan.” Id. at 280 (citing
Accordingly, what §1396k(b) requires is that the State be paid first out of any damages representing payments for medical care before the recipient can recover any of her own costs for medical care.
Id. at 281 (citing
None of these determinations, as Villa argues here, “indicate” that a state Medicaid program may recover only from that portion of a Medicaid recipient‘s third-party settlement recovery allocated to past medical expenses. Rather, these determinations confirm that a state Medicaid program is to be paid “first” from “any” recovery from a third-party for the “medical care” of a Medicaid recipient before any others may be paid—this would include recovery of amounts allocated to both past and future medical care. In fact, the Court acknowledged that while the anti-lien prohibition of the Medicaid Act appears to ban “even a lien on that portion of the settlement proceeds [from a third-party tortfeasor] that represents payments for medical care,” the Act carves out exceptions where a Medicaid recipient assigns the right or a chose in action to receive payments for medical care or where the recipient “‘assign[s]’ in advance any payments that may constitute reimbursement for medical costs.” Id. at 284. Ahlborn does not, therefore, “indicate” that a Medicaid recipient‘s future medical expense recovery may not be considered in determining that recipient‘s total recovery for medical expenses when allocating the amount that should be paid to Medicaid under Florida law.
Wos v. E.M.A., 133 S.Ct. 1391, 185 L.Ed.2d 471 (2013), does not alter this conclusion. That decision does no more than confirm that a state may not take any portion of a Medicaid beneficiary‘s tort settlement not designated as “payments” for medical care and does not attempt to distinguish or address settlement provisions designated as payments for past medical expenses as opposed to payments for future medical care.9
In Harrell v. State, 143 So. 3d 478, 480 (Fla. 1st DCA 2014), this court did no more than likewise conclude “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.” More to the point, at no time did either Davis or Harrell discuss or determine that the amount recovered by the Medicaid recipient for future medical costs or expenses either could or could not be considered in determining whether the amount established by
While it is true that AHCA may only secure payment for the amount it actually expended on Villa‘s behalf, that does not mean that it cannot collect that amount from the sums that Villa recovers for both past and future medical expenses. And while we acknowledge that a few post-Ahlborn/Wos decisions have determined that a state Medicaid agency may be paid only from a recipient‘s past medical cost
reasoned decisions of those courts which have held that a state agency may secure payment from both past and future recoveries for medical expenses. See In re Matey, 213 P. 3d 389, 394 (Id. 2009) (holding that the state could recover past medical payments from an allocation for future medical care); Cardenas v. Henneberry, 795 F. Supp. 2d 1189, 1197 (D. Colo. 2011) (concluding that because the Medicaid recipient intended to remain on Medicaid, “any funds allocated for future medical expenses should rightfully be exposed to the state‘s lien“); see also Special Needs Trust for K.C.S. v. Folkemer, No. 08:10-CV-1077-AW, 2011 WL 1231319, at *12 (D. Md. Mar. 28, 2011) (“The fact that the settlement in this case contained unstipulated amounts that might represent payments for future medical expenses, and the fact that the Department is seeking to recover from this unstipulated amount does not violate the anti-lien provision, especially when Maryland‘s recovery statute only allows Maryland to recover the amount that it has spent on past medical care.“).
Finally, we reject Villa‘s argument that despite the fact that Villa and AHCA both agreed that Villa‘s death had no impact on what the ALJ was to determine, the final order reached the incorrect legal conclusion that Villa‘s death, nearly six months after the settlement, affected the analysis of how much of Villa‘s settlement
AHCA could recover. While the ALJ did indicate that with the litigation continuing, and Villa having died, a date different from the date of settlement might be applicable, a careful reading of the final order demonstrates that the ALJ‘s decision is premised on a total failure of proof, rather than the choice of dates on which calculations should have been based. Thus, we find no error meriting reversal in this regard.
As previously stated, “Medicaid is a cooperative federal-state welfare program providing medical assistance to needy people.” Roberts, 119 So. 3d at 458 (quoting Agency for Health Care Admin. v. Estabrook, 711 So. 2d 161, 163 (Fla. 4th DCA 1998)). To keep the Medicaid program viable, Congress recognized that it is necessary to obtain reimbursement when a third party makes payment to the Medicaid beneficiary
The order under review is, therefore, affirmed.
LEWIS and ROWE, JJ., CONCUR.
LINDA ANN WELLS
Associate Judge
Notes
9. Nearly all of Petitioner‘s past medical expenses following the ATV incident were paid for by Medicaid. As of March 2, 2015, the total amount of medical assistance provided by the Medicaid program was $322,222.27, representing over 92 percent of the $347,044.67 paid in total for past medical expenses. The rest of Petitioner‘s medical expenses were paid for by United HealthCare ($1457.40) and Medicare ($23,365.00).
. . . .
12. By letter dated March 2, 2015, AHCA asserted a $322,222.27 Medicaid lien against Petitioner‘s cause of action and any future settlement of, or recovery from, that action. Thereafter, AHCA updated the Medicaid lien amount to $324,607.25.
In Wos, the Court held that 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.” 133 S. Ct. at 1399. The Court suggested that a State could remedy this problem by providing a process for determining which portion of the recovery is attributable to medical expenses. Id. at 1401-02.