GABRIELLE GOODWIN,

Appellant,

v.

FLORIDA DEPARTMENT OF 

CHILDREN AND FAMILIES 

AND DONNA ANSLEY,

Appellees.

IN THE DISTRICT COURT OF APPEAL

FIRST DISTRICT, STATE OF FLORIDA

NOT FINAL UNTIL TIME EXPIRES TO 

FILE MOTION FOR REHEARING AND 

DISPOSITION THEREOF IF FILED

CASE NO. 1D12-4430

_____________________________/

Opinion filed April 4, 2016.

An appeal from State of Florida Department of Children and Families, Office of 

Appeal Hearings. Susan Dixon, Hearing Officer. 

Christine Davis Graves, Robert W. Pass, Martha Harrell Chumbler of Carlton Fields 

Jorden Burt, P.A., Tallahassee, and Cyril V. Smith and William K. Meyer of 

Zuckerman Spaeder LLP, Washington, for Appellant.

Rebecca A. Kapusta, General Counsel, Herschel C. Minnis, Assistant General 

Counsel, Department of Children and Families, for Appellees.

OSTERHAUS, J.

Gabrielle Goodwin appeals the co-payment calculation made by the Florida 

Department of Children and Families (DCF) related to her Medicaid-covered 

nursing home care. She claims that federal law required the agency to deduct all
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unpaid nursing home bills she incurred before becoming Medicaid eligible from copayment amounts she was responsible to pay after joining the program. A DCF 

hearing officer rejected her argument below. And we affirm because DCF 

reasonably interpreted and applied the Medicaid law upon which Ms. Goodwin bases

her challenge.

I. 

Ms. Goodwin entered a skilled nursing facility in Tallahassee after a serious 

accident injured her spinal cord. She applied for Institutional Care Program (ICP) 

benefits through Florida’s Medicaid program to help cover her nursing home costs. 

She became eligible in March 2012, retroactive to December 2011. 

The federal and state government jointly manage Florida’s Medicaid 

program. See Title XIX of the Social Security Act (“The Act”), 42 U.S.C. § 1396a, 

et seq.; Harris v. McRae, 448 U.S. 297, 308 (1980); Lutheran Servs. Fla. Inc. v. 

Dep’t of Children & Families, 2015 WL 7566262 (Fla. 2d DCA 2015). At the federal 

level, the Department of Health and Human Services’ Centers for Medicare and 

Medicaid Services (CMS) oversees state Medicaid programs. In Florida, the Agency 

for Health Care Administration (AHCA) administers the Medicaid program, while 

DCF determines eligibility determinations and calculates participants’ co-payment

amounts. See § 409.902, Fla. Stat. (2011); Fla. Admin Code R. 65A-1.7141. The 

agencies set forth the operative terms of Florida’s Medicaid program, its scope, 
3

services, eligibility, and reimbursement policies, in a “State Plan” that CMS 

approves. 42 C.F.R. § 430.10 (2012). 

Beneficiaries in Florida’s ICP must contribute to the cost of their care by 

remitting a monthly co-pay, called a patient responsibility amount (PRA), based on 

their income. § 409.904(3), Fla. Stat. (2011). Federal Medicaid law instructs the 

states how to calculate PRAs. The formula begins with the beneficiary’s income, but 

allows for certain deductions, including unpaid medical care expenses. See 42 

U.S.C. § 1396a(r)(1)(A); 42 C.F.R. § 435.725(c)(4)(ii) (2012). See also Fla. Admin 

Code R. 65A-1.7141(1)(g). The program then covers the difference between a 

beneficiary’s PRA and the facility’s monthly charge. See § 409.905(8), Fla. Stat. 

(2011). The smaller the PRA, the greater a beneficiary’s Medicaid benefit.

In this case, DCF calculated Ms. Goodwin’s PRA at roughly $1000 a month, 

inclusive of deductions. Ms. Goodwin disputed the calculation. She argued that DCF 

should have deducted all of her unpaid, pre-eligibility nursing care expenses, 

lowering her PRA. She asked DCF to recalculate it, deducting approximately 

$70,000 of these expenses incurred from November 2010 to November 30, 2011. 

But DCF disagreed with her legal interpretation and refused to recalculate.

Ms. Goodwin appealed to DCF’s Office of Appeal Hearings. She submitted a 

one-page memorandum arguing that § 1902(r)(1)(A) of the Social Security Act, 42 

U.S.C. §1396a(r)(1)(A)(iii), required DCF to deduct her outstanding, uncovered 
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nursing home bills from her PRA. She also alleged that the State Plan didn’t 

authorize DCF’s methodology, and that it was “the [only] mechanism through which 

the State could place reasonable limits on the amount of expenses it deducted from 

the [PRA].” Both parties waived a hearing and the hearing officer issued a Final 

Order in August 2012. The Order concluded that the federal statute did not require 

DCF to deduct all of Ms. Goodwin’s pre-eligibility nursing home expenses from her 

PRA because they were “Medicaid compensable” and “non-recurring” expenses.

Ms. Goodwin timely appealed the Final Order to this court in 2012. But then 

she quickly moved to stay her appeal two days after filing a class action lawsuit in 

circuit court. Her class action case raised the same claim and proposed a class of 

Medicaid recipients in nursing homes for whom DCF had not deducted unpaid, preeligibility medical expenses. DCF did not object to a stay, and our court granted it 

in October 2012.

The stay remained in place for two-and-a-half years until May 2015, when the 

circuit court denied Ms. Goodwin’s second motion to certify the class.1 DCF then 

moved to dismiss this appeal prior to briefing because Florida amended its Medicaid 

State Plan during the interim stay period to authorize DCF to deduct three months 

of pre-eligibility medical expenses from PRAs. And DCF subsequently recalculated

 

1 An appeal of the circuit court’s most recent order denying class certification has 

been decided concurrently with this case, see Goodwin v. DCF, et al., 1D15-2142, 

according to the parties’ request that the cases travel together.
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Ms. Goodwin’s PRA with this deduction, which DCF claimed mooted the appeal. 

But Ms. Goodwin disagreed, insisting that the Medicaid law required DCF to deduct 

all of her medical expenses, or almost a full year of additional expenses. This court 

denied the motion to dismiss, and her appeal proceeded apace. 

II. 

Ms. Goodwin argues that DCF’s failure to deduct all of her pre-eligibility 

nursing home bills from her Medicaid co-payment violates federal law, 42 U.S.C. 

§ 1396a(r)(1)(A). She also claims that the Final Order relied upon a non-applicable 

state regulation, Rule 65A-1.7141(1)(g)1 of the Florida Administrative Code, and 

that no administrative rule authorized DCF to limit her PRA deduction. 

A.

We review interpretations and conclusions of law de novo and findings of fact 

underlying agency action for competent, substantial evidence. See § 120.68(7)(b), 

Fla. Stat. (2003); Jacoby v. Fla. Bd. of Med., 917 So. 2d 358, 359 (Fla. 1st DCA 

2005). Because this appeal involves DCF’s interpretation of a Medicaid provision 

susceptible to more than one reading, we are mindful of our responsibility to “give

great deference to ‘an agency’s interpretation of a statute that it is charged with 

enforcing.’” See Lutheran Servs. Fla. Inc. v. Dep’t of Children & Families, 2015 

WL 7566262 *4 (Fla. 2d DCA 2015) (citing BellSouth Telecomm., Inc. v. Johnson,

708 So. 2d 594, 596 (Fla. 1998)). And we “will not depart from the contemporaneous 
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construction of a statute by a state agency charged with its enforcement unless the 

construction is ‘clearly unauthorized or erroneous.’” Id. (quoting Level 3 

Commc’ns, LLC v. Jacobs, 841 So. 2d 447, 450 (Fla. 2003) and P.W. Ventures, Inc. 

v. Nichols, 533 So. 2d 281, 283 (Fla. 1988)).

B.

Federal and state Medicaid law establish mandatory PRA deductions. They 

include unpaid medical care expenses “not covered” under a state’s Medicaid plan. 

The federal statute states:

there shall be taken into account amounts for incurred expenses for 

medical or remedial care that are not subject to payment by a third 

party, including—

(i) medicare or other health insurance premiums, deductibles, or 

coinsurance, and; 

(ii) necessary medical or remedial care recognized under State law 

but not covered under the State plan under this subchapter, subject to 

reasonable limits the State may establish on the amount of these 

expenses.

42 U.S.C. § 1396a(r)(1)(A) (emphasis added). A federal regulation tracks the 

statute’s requirement:

(c) Required deductions. In reducing its payment to the institution, the 

agency must deduct the following amounts, in the following order, from 

the individual’s total income, * * *

(4) Expenses not subject to third party payment. Amounts for 

incurred expenses for medical or remedial care that are not subject to 

payment by a third party, including— * * *
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(ii) Necessary medical or remedial care recognized under State law 

but not covered under the State’s Medicaid plan, subject to 

reasonable limits the agency may establish on amounts of these 

expenses.

42 C.F.R. § 435.725(c)(4)(ii) (2012) (emphasis added). 

In Florida, DCF promulgated a regulation in 2005, in response to federal law, 

to address deductions: 

medical expenses, not subject to payment by a third party, incurred by a 

Medicaid recipient for programs involving post eligibility calculation of a 

patient responsibility, as authorized by the Medicaid State Plan and in 

accordance with 42 CFR 435.725.

1. The medical/remedial care service or item must meet all the 

following criteria: . . . 

c. Not be a Medicaid compensable expense. 

Fla. Admin Code R. 65A-1.7141(1)(g) (emphasis added). Florida’s State Plan, 

which CMS approved in 2004, likewise provided that cannot deduct services 

covered and paid by Medicaid.

The parties agree that DCF must deduct unpaid medical expenses, which are 

not “covered” by Florida’s Medicaid program, from PRAs. But they vigorously

disagree on the definition of Medicaid “covered” care (or Medicaid “compensable” 

care as used in Florida’s regulation). Appellant defines “covered” care as that for 

which the ICP actually pays. She argues, as a result, that DCF must deduct all of her 

unpaid, pre-eligibility nursing home expenses because Medicaid did not pay for 

them. Her interpretation matches CMS’s position in defending a federal lawsuit 
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against the State of Maryland. See Maryland Dep’t of Health & Mental Hygiene v. 

Centers For Medicare & Medicaid Servs., 542 F.3d 424 (4th Cir. 2008). In that case, 

the Fourth Circuit deferred to CMS’s view that Maryland must deduct unpaid, preeligibility nursing home costs because it was a “reasonable interpretation of 

Congress’ intent in enacting § 42 U.S.C. 1396a(r)(1)(A).” Id. at 436.

DCF’s defines “covered” care, on the other hand, as medical expenses 

included in Florida’s ICP regardless of whether Medicaid pays them for a particular 

beneficiary. Florida’s Medicaid program routinely includes and covers the nursing 

home care that Ms. Goodwin received before joining the ICP. Thus, DCF considers 

them Medicaid-covered expenses. 

The Fourth Circuit in the Maryland case considered Maryland’s, DCF-like 

interpretation of “covered” to be reasonable. And it ultimately deferred to CMS’s 

interpretation over the DCF-like interpretation under agency deference principles, 

because it couldn’t determine the statute’s true meaning. 

We find that the phrase “not covered under the State plan” is susceptible 

to more precise definition and open to varying constructions. . . . 

Congress left an interpretive gap . . . Ultimately, we are not the arbiter 

of whether Maryland or CMS has correctly interpreted 

§ 1396a(r)(1)(A). * * *

CMS has neither exceeded its administrative authority nor clearly erred 

in its judgment. Thus, even if we agreed that Maryland’s SPA is more 

reasonable, CMS would still prevail because we must defer to its 

interpretation so long as it is reasonable.

Md. Dep’t of Health & Mental Hygiene, 542 F.3d at 434, 436 (citations omitted).
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Like the court in Maryland, we also think that the federal statute and 

regulation can be read in different ways. Both DCF and Appellant reasonably 

construe “covered,” and we too must fall back on agency deference. Here, we defer 

to DCF’s reasonable interpretation and enforcement practice because it is the 

enforcing agency. Its interpretation of Medicaid law prevails, irrespective of which 

interpretation we might prefer, because it is reasonable, and not clearly erroneous or 

contrary to law. See Level 3 Commc’ns, 841 So. 2d at 450; BellSouth Telecomm., 

Inc., 708 So. 2d at 596.

In ruling for DCF, we find no error in the administrative hearing officer’s 

treatment of the Maryland case below. Appellant argues that CMS’s litigation 

position in Maryland controls and binds DCF’s interpretation of “covered” in this 

case. But Appellant didn’t cite Maryland in the administrative appeal proceeding 

below. She argued only that the federal statute’s bare language required DCF to 

recalculate her PRA. But she needed to argue below that Maryland controls DCF’s 

interpretation before raising it here. See Verizon Bus. Network Servs., Inc. ex rel. 

MCI Commc’ns, Inc. v. Dep’t of Corrs., 988 So. 2d 1148, 1150 (Fla. 1st DCA 2008) 

(“an issue will not be considered on appeal unless the precise legal argument 

forwarded in the appellate court was presented to the lower tribunal.”). 

What is more, putting preservation aside, Appellant has not explained why 

CMS’s position in the Maryland litigation binds DCF’s calculation methodology 
10

here. Maryland involved another state’s Medicaid program and non-parties to this 

case. Florida wasn’t a party to that case, and CMS isn’t a party here. Appellant has 

cited no federal law, regulation, guideline, or other source purporting to adopt 

CMS’s Maryland litigation position in all states, or in Florida specifically. And we 

see no basis in Appellant’s argument for equating CMS’s litigation position 

in Maryland with an authority binding upon DCF. See, e.g., Heimmermann v. First 

Union Mortg. Corp., 305 F. 3d 1257, 1262 (11th Cir. 2002) (noting that litigation 

positions “are the kinds of informal policy positions that lack the force of law and 

are unentitled to Chevron deference”) (citing United States v. Mead Corp., 533 U.S. 

218, 234-35 (2001)); William Bros. v. Pate, 833 F.2d 261, 265 (11th Cir. 1987)

(“[W]e do not agree that the [agency’s] mere litigating position is due to be given 

deference.”).

B.

Appellant’s other arguments raise state rule-based concerns. She claims that 

Rule 65A-1.7141(1)(g) of the Florida Administrative Code doesn’t apply here, and 

that Florida had no rule authorizing DCF to limit PRA deductions when she became 

eligible for Medicaid. See 42 U.S.C. § 1396a(r)(1)(A) (allowing states to establish 

reasonable limits on the amount of deductible pre-existing medical expenses). 

But once again, Appellant did not preserve the issue. “It is well-established 

that for an issue to be preserved for appeal, it must be raised in the administrative 
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proceeding.” Dep’t of Bus. & Prof’l Regulation, Const. Indus. Licensing Bd. v. 

Harden, 10 So. 3d 647, 649 (Fla. 1st DCA 2009). “[A] party cannot argue on appeal 

matters which were not properly excepted to or challenged in the administrative 

tribunal.” Pullen v. State, 818 So. 2d 601, 602 (Fla. 1st DCA 2002). Appellant filed 

a one-page memorandum in the administrative appeal proceeding below challenging 

DCF’s PRA calculation. But her challenge didn’t address the applicability of Rule 

65A-1.7141(1)(g). Even after DCF cited and relied upon this state rule to defend its 

PRA calculation methodology, Appellant met the argument below with silence. The 

Final Order, with no reason to doubt its relevancy, cited and relied upon it. 

The rule appears plenty relevant on its face. DCF had promulgated it some six 

years before Appellant applied for Medicaid to address PRA calculations consistent 

with federal parameters. It broadly described how DCF should incorporate 

beneficiaries’ pre-eligibility medical expenses into PRAs. And it tracked the federal 

statute’s relevant language regarding deductions for non-compensable expenses: 

“[I]n accordance with 42 CFR 435.725 . . . [t]he medical/remedial care service or 

item must . . . [n]ot be a Medicaid compensable expense.” Rule 65A-1.7141(1)(g), 

F.A.C.; see also 42 U.S.C. § 1396a(r)(1)(A) & 42 C.F.R. § 435.725(c)(4)(ii). For 

these reasons, we find no error in the Final Order relying upon Rule 65A1.7141(1)(g).
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III.

We conclude that DCF need not deduct more from Appellant’s PRA than the 

three months of pre-eligibility nursing home expenses that it has already deducted.

The Final Order is AFFIRMED.

THOMAS and BILBREY, JJ., concur.