Title: Giraldo v. Agency for Health Care Administration

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC17-297 
____________ 
 
MARIA ISABEL GIRALDO, et al., 
Petitioners, 
 
vs. 
 
AGENCY FOR HEALTH CARE ADMINISTRATION, 
Respondent. 
 
[July 5, 2018] 
 
LAWSON, J. 
We accepted review of the decision of the First District Court of Appeal in 
Giraldo v. Agency for Health Care Administration, 208 So. 3d 244 (Fla. 1st DCA 
2016), on the ground that it expressly and directly conflicts with the Second 
District Court of Appeal’s decision in Willoughby v. Agency for Health Care 
Administration, 212 So. 3d 516 (Fla. 2d DCA 2017), regarding whether the 
Agency for Health Care Administration (AHCA) may lien the future medical 
expenses portion of a Florida Medicaid recipient’s tort recovery.  We have 
jurisdiction.  See art. V, § 3(b)(3), Fla. Const.  For the reasons that follow, we hold 
that under federal law AHCA may only reach the past medical expenses portion of 
 
 
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a Medicaid recipient’s tort recovery to satisfy its Medicaid lien.  Because the First 
District held otherwise, we quash the decision below, approve the Second 
District’s decision, and remand with instructions that the First District direct the 
administrative law judge (ALJ) to reduce AHCA’s lien amount in this case to 
$13,881.79. 
BACKGROUND 
After Juan L. Villa suffered extreme injuries in an all-terrain vehicle 
accident, Florida’s Medicaid program (administered by AHCA) paid $322,222.27 
for Villa’s medical care.  Villa later settled with one of multiple alleged tortfeasors 
for $1 million.  Claims against other alleged tortfeasers were still pending.  Using 
the formula outlined in section 409.910(11)(f), Florida Statutes (2015), AHCA 
calculated the presumptively appropriate amount of its lien at $321,720.16, and 
asserted a lien in that amount against Villa’s settlement.  Section 409.910(17)(b) 
authorizes Medicaid recipients to contest the amount of a Medicaid lien at a 
hearing before the Division of Administrative Hearings (DOAH), by proving 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 paragraph (11)(f).”  § 409.910(17)(b), Fla. Stat. 
(2015).  Villa timely petitioned for this hearing.      
 
 
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At the DOAH hearing, Villa presented uncontested expert testimony 
establishing that only $13,881.79 of the $1 million tort recovery represented 
compensation for Villa’s past medical expenses and argued that AHCA’s lien 
should be limited to this amount.  AHCA argued that the law authorizes recovery 
of Medicaid expenditures from third-party payments for past medical expenses and 
reasonably anticipated future medical expenses.  Because Villa had the burden of 
rebutting the lien amount derived from the statutory formula—and put on no 
evidence to show that the lien exceeded the amount of his recovery properly 
allocated to his anticipated future medical expenses—AHCA argued that it should 
recover in the full amount of its lien.   
 
Villa unexpectedly died weeks after the hearing, and his parents, as personal 
representatives of his estate, were properly substituted into this case as Petitioners. 
The ALJ’s final order affirmed AHCA’s lien amount and determined that Villa had 
failed to rebut the statutory formula because he did not establish that the lien 
exceeded the portion of his recovery allocated to future medical expenses.  
Petitioners appealed, and the First District affirmed the ALJ’s final order, holding 
that Florida law1 and the federal Medicaid Act allow AHCA to secure 
                                          
 
 
1.  The First District correctly observed that Florida law plainly 
contemplates recoupment of AHCA’s expenditures on behalf of a Medicaid 
recipient from portions of the recipient’s tort recovery “allocated as reimbursement 
for past and future medical expenses,” Giraldo, 208 So. 3d at 249 (quoting             
§ 409.910 (17)(b), Fla. Stat. (2014) (emphasis added)), but also recognized that 
 
 
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reimbursement for its Medicaid expenditures from the portions of Villa’s third-
party settlement recovery allocated to both past and future medical expenses.  The 
Second District later reached the opposite conclusion in Willoughby, holding that 
the federal Medicaid Act prohibits AHCA from placing a lien on the future 
medical expenses portions of a recipient’s recovery.   
ANALYSIS 
This case concerns interpretation of the federal Medicaid Act.  Questions of 
statutory interpretation are reviewed de novo.  See Borden v. East-European Ins. 
Co., 921 So. 2d 587, 591 (Fla. 2006).   
I.  Overview 
Medicaid is a joint federal-state cooperative program that helps participating 
states provide medical services to residents who cannot afford treatment.  Arkansas 
Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 275 (2006).  The 
federal Medicaid Act—title XIX of the Social Security Act—governs regulation of 
the program, and it mandates that participating states follow the Medicaid Act by 
“compl[ying] with certain statutory requirements for making eligibility 
determinations, collecting and maintaining information, and administering the 
program.”  Ahlborn, 547 U.S. at 275.  Significantly, the Act contains a general 
                                          
 
because states participating in the Medicaid program must follow federal law, 
resolution of the conflict question is ultimately governed by federal law.  Id. 
 
 
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anti-lien provision protecting Medicaid recipients by broadly prohibiting state 
Medicaid agencies from imposing liens against any of a recipient’s property.  42 
U.S.C. § 1396p(a)(1) (2012).  However, the Act contains a narrow exception to the 
anti-lien prohibition requiring states to seek reimbursement for their Medicaid 
expenditures by pursuing payment from third parties legally liable for the 
recipients’ medical expenses.  Ahlborn, 547 U.S. at 284-85.  These provisions 
“pre-empt[] a State’s effort to take any portion of a Medicaid beneficiary’s tort 
judgment or settlement not ‘designated as payments for medical care,’ ”  Wos v. 
E.M.A., 568 U.S. 627, 630 (2013) (quoting Ahlborn, 547 U.S. at 284), and set “a 
ceiling on a State’s potential share of a beneficiary’s tort recovery,” id. at 633. 
II.  Construing the Medicaid Act 
We first examine the Act’s plain language, applying the principle that 
“[w]hen the language of the statute is clear and unambiguous and conveys a clear 
and definite meaning, . . . the statute must be given its plain and obvious meaning.”  
Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984) (quoting A.R. Douglass, Inc. v. 
McRainey, 137 So. 157, 159 (Fla. 1931)).   
The portion of the Medicaid Act defining the “ceiling”—the limitation on 
what portion of a recipient’s tort recovery a state can be subject to a lien—reads in 
relevant part: 
[T]o the extent that payment has been made under the State plan for 
medical assistance for health care items or services furnished to an 
 
 
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individual, the State is considered to have acquired the rights of such 
individual to payment by any other party for such health care items or 
services.  
 
42 U.S.C. § 1396a(a)(25)(H) (2012) (emphasis added).  “Such health care items or 
services” is most naturally and reasonably read as referring to those “health care 
items or services” already “furnished” and for which “payment has been made 
under the State plan.”  Id.  Those are the health care items and services for which 
“the State is considered to have acquired . . . rights” by assignment “to any 
payments by any other party,” id., and they are past medical expenses only.  We 
see no reasonable way to read this language as giving states a right to assignment 
of that portion of a tort recovery from which the injured party will be expected to 
pay his or her anticipated medical expenses in the future, without aid from the 
government.   
As explained by the Second District, this reading of the Act is consistent 
with the “majority view that the Medicaid lien does not attach to settlement funds 
allocable to future medical expenses,” Willoughby, 212 So. 3d at 524, and appears 
to be compelled by Ahlborn and Wos, id. at 523-25.  Even if not compelled by 
Alhborn and Wos, because we read the plain language of the Medicaid Act as 
limiting Florida’s assignment rights (and lien) to settlement funds fairly allocable 
to past medical expenses, no further analysis is needed.   
 
 
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III.  On Remand 
Because we hold that the federal Medicaid Act prohibits AHCA from 
placing a lien on the future medical expenses portion of a Medicaid recipient’s tort 
recovery, we remand with instructions that the First District direct the ALJ to 
reduce AHCA’s lien amount to $13,881.79.  Although a factfinder may reject 
“uncontradicted testimony,” there must be a “reasonable basis in the evidence” for 
the rejection.  Wald v. Grainger, 64 So. 3d 1201, 1205-06 (Fla. 2011).  Here, Villa 
presented uncontradicted evidence establishing $13,881.79 as the settlement 
portion properly allocated to his past medical expenses, and there is no reasonable 
basis in this record to reject Villa’s evidence.  For this reason, no further 
factfinding is required. 
CONCLUSION 
We quash the decision below in Giraldo, approve Willoughby, and hold that 
federal law allows AHCA to lien only the past medical expenses portion of a 
Medicaid beneficiary’s third-party tort recovery to satisfy its Medicaid lien.  We 
remand this case to the First District with instructions to direct the ALJ to reduce 
the awarded amount to $13,881.79 for satisfaction of AHCA’s lien. 
It is so ordered. 
CANADY, C.J., and PARIENTE, LEWIS, QUINCE, and LABARGA, JJ., concur. 
POLSTON, J., concurs specially in part and dissents in part with an opinion. 
 
 
 
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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, 
IF FILED, DETERMINED. 
 
POLSTON, J., concurring specially in part and dissenting in part. 
 
I agree with the majority’s conclusion that federal law only allows AHCA to 
place a lien on the past medical expenses portion of a Medicaid beneficiary’s third-
party tort recovery, but I reach this conclusion for a different reason.  Additionally, 
I disagree with the majority’s reduction of the amount of AHCA’s lien on the 
settlement without a factfinder determining the portion of the settlement properly 
allocated to past medical expenses. 
I. 
Unlike the majority, I do not believe the federal Medicaid Act, considered as 
a whole, is clear and unambiguous regarding whether AHCA can place a lien on 
the portions of a settlement that represent past and future medical damages.  For 
example, the general anti-lien provision of the Medicaid Act uses both the past and 
future tenses, while the provision requiring beneficiaries to assign to the states any 
rights to third-party payments does not use either the past or future tense, while the 
provision providing that states acquire rights to third-party payments uses only the 
past tense.  Compare 42 U.S.C. § 1396p(a)(1) (2012) (employing both the past and 
future tenses when stating “paid or to be paid”), with 42 U.S.C. § 1396k(a)(1)(A) 
(2012) (requiring assignment to State “to payment for medical care from any third 
 
 
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party”), with 42 U.S.C. § 1396a(a)(25)(H) (2012) (employing only the past tense of 
“has been made” along with “such health care items or services”).   
Instead, I believe the United States Supreme Court’s opinion in Arkansas 
Department of Health & Human Services v. Ahlborn, 547 U.S. 268, 275 (2006), 
compels our construction of the federal Medicaid Act to only allow AHCA to place 
a lien on the portion of a tort recovery that represents past medical expenses.  In 
Ahlborn, the Medicaid beneficiary sought damages from a third party “not only for 
past medical costs, but also for permanent physical injury; future medical 
expenses; past and future pain, suffering, and mental anguish; past lost earnings 
and working time; and permanent impairment of the ability to earn in the future.”  
547 U.S. at 273.  “[T]he case was settled out of court . . . for a total of $550,000[, 
but t]he parties did not allocate the settlement between categories of damages.”  Id. 
at 274.  The state agency asserted a lien against the settlement “in the amount of 
$215,645.30—the total cost of payments made . . . for Ahlborn’s care.”  Id.  
Thereafter, Ahlborn sought 
a declaration that the lien violated the federal Medicaid laws insofar 
as its satisfaction would require depletion of compensation for injuries 
other than past medical expenses.  To facilitate the District Court’s 
resolution of the legal questions presented, the parties, [including the 
state agency,] stipulated that Ahlborn’s entire claim was reasonably 
valued at $3,040,708.12; that the settlement amounted to 
approximately one-sixth of that sum; and that, if Ahlborn’s 
construction of federal law was correct, ADHS would be entitled to 
only the portion of the settlement ($35,581.47) that constituted 
reimbursement for medical payments made.   
 
 
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Id. (emphasis added).  To be clear, the parties only stipulated that $35,581.47 
would be the correct figure “for medical payments made” if “Ahlborn’s 
construction of federal law was correct.”  Id.  And Ahlborn’s argument construed 
the federal Medicaid law to only allow the State to recover the portion of the 
settlement representing past medical expenses.  Id.    
In the end, the United States Supreme Court held that “[f]ederal Medicaid 
law does not authorize [the state agency] to assert a lien on Ahlborn’s settlement in 
an amount exceeding $35,581.47, and the federal anti-lien provision affirmatively 
prohibits it from doing so.”  Id. at 292.  Therefore, because the United States 
Supreme Court in Ahlborn held that, pursuant to federal law, a state agency cannot 
assert a lien on a tort settlement in excess of the amount stipulated by the parties to 
constitute reimbursement for past medical expenses, we are compelled to conclude 
that federal law prohibits AHCA from asserting a lien in an amount exceeding the 
portion of a tort settlement that constitutes reimbursement for past medical 
expenses.    
II. 
 
Of course, the difference between this case and Ahlborn is that AHCA has 
not stipulated to the $4,817.56 allocation for past medical expenses outlined in the 
settlement at issue in this case (or to the testimony that $13,881.76 is a reasonable 
allocation of past medical damages here).  And the United States Supreme Court in 
 
 
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Ahlborn explained that this distinction may warrant procedural safeguards:  “[T]he 
risk that parties to a tort suit will allocate away the State’s interest can be avoided 
either by obtaining the State’s advance agreement to an allocation or, if necessary, 
by submitting the matter to a court for decision.”  Id. at 288.  Conversely, “just as 
there are risks in underestimating the value of readily calculable damages in 
settlement negotiations, so also is there a countervailing concern that a rule of 
absolute priority might preclude settlement in a large number of cases, and be 
unfair to the recipient in others.”  Id.   
To protect parties against such possible manipulation, the United States 
Supreme Court’s subsequent decision in Wos v. E.M.A., 568 U.S. 627 (2013), 
clarified that procedural safeguards are needed when there is no judicially 
approved allocation, stipulation, or judgment.  Specifically, in Wos, the United 
States Supreme Court explained that “[w]hen there has been a judicial finding or 
approval of an allocation between medical and nonmedical damages—in the form 
of either a jury verdict, court decree, or stipulation binding on all parties—that is 
the end of the matter.”  568 U.S. at 638.  However, “[w]hen the State and the 
beneficiary are unable to agree on an allocation, . . . the parties could ‘submi[t] the 
matter to a court for decision.”  Id. (quoting Ahlborn, 547 U.S. at 288).  The United 
States Supreme Court also mentioned the possibility of an “administrative 
proceeding” to determine the proper allocation.  Id. at 638-39. 
 
 
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Here, because there is no stipulation, judgment, or administrative finding 
regarding the portion of the settlement that represents past medical expenses, I 
dissent to the majority’s declaration on appellate review that $13,881.79 is the 
proper allocation.  The ALJ never found that $13,881.79 was the proper amount to 
allocate as past medical expenses in the settlement, and it is not proper that this 
Court do so on appellate review.  While the beneficiary presented testimony of two 
expert witnesses to prove the valuation of total damages was $25,000,000, and that 
$13,881.79 was a reasonable allocation of past medical damages, the ALJ’s final 
order noted that the testimony was questionable and based upon two-year-old 
hearsay reports.  Therefore, I would remand this case to the First District with 
instructions that the ALJ determine the proper allocation for past medical expenses 
and that this allocation be awarded for satisfaction of AHCA’s lien.2 
Accordingly, I concur specially in part and dissent in part. 
Application for Review of the Decision of the District Court of Appeal – Direct 
Conflict of Decisions  
 
 
First District - Case No. 1D16-392  
 
Celene H. Humphries, Philip J. Padovano, Maegen P. Luka, and Joseph T. 
Eagleton of Brannock & Humphries, P.A., Tampa, Florida; and Floyd Faglie of 
Staunton & Faglie, PL, Monticello, Florida, 
 
 
for Petitioners 
 
                                          
 
 
2.  AHCA stipulated that the beneficiary’s death does not affect the case. 
 
 
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Pamela Jo Bondi, Attorney General, Jonathan A. Glogau, Special Counsel, and 
Elizabeth Teegen, Assistant Attorney General, Tallahassee, Florida; Stuart F. 
Williams, General Counsel, and Tracy Cooper George, Chief Appellate Counsel, 
Agency for Health Care Administration, Tallahassee, Florida,  
 
 
for Respondent 
 
Twyla L. Sketchley of The Sketchley Law Firm, P.A., Tallahassee, Florida; Ellen 
S. Morris of Elder Law Associates, P.A., Boca Raton, Florida; Ron M. Landsman 
of Ron M. Landsman, P.A., Rockville, Maryland; and Jill J. Burzynski of 
Burzynski Elder Law, Naples, Florida,   
 
Amici Curiae National Academy of Elder Care Law Attorneys, Academy of 
Florida Elder Law Attorneys, Special Needs Alliance, and Elder Law 
Section of The Florida Bar 
 
Nichole J. Segal of Burlington & Rockenbach, P.A., West Palm Beach, Florida,  
 
 
Amicus Curiae Florida Justice Association