Court Opinion

ID: 3191102
Source: CourtListenerOpinion
Date Created: 2016-04-04 14:02:22.077717+00
Date Added: 2024-06-11T12:24:46.653680
License: Public Domain

IN THE DISTRICT COURT OF APPEAL
                                     FIRST DISTRICT, STATE OF FLORIDA

GABRIELLE GOODWIN,                   NOT FINAL UNTIL TIME EXPIRES TO
                                     FILE MOTION FOR REHEARING AND
      Appellant,                     DISPOSITION THEREOF IF FILED

v.                                   CASE NO. 1D12-4430

FLORIDA DEPARTMENT OF
CHILDREN AND FAMILIES
AND DONNA ANSLEY,

      Appellees.

_____________________________/

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
unpaid nursing home bills she incurred before becoming Medicaid eligible from co-

payment 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,

                                        2
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

                                         3
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, pre-

eligibility 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.
                                           4
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

                                         5
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—       *     *      *

                                         6
         (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
                                         7
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, pre-

eligibility 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).
                                          8
      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

                                          9
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

                                         10
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 65A-

1.7141(1)(g).

                                         11
                                       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.

                                        12