Effective July 1, 2013, Florida’s Medicaid Third-Party Liability Act now provides a mechanism for recipients of Medicaid to challenge the amount they must reimburse Florida’s Agency for Healthcare Administration (AHCA) after settling with or obtaining a judgment or award against liable third-parties. See § 409.910(17), Fla. Stat. (to see the amendments as reflected in the session law click here and go to the bottom of page 6; to read the legislative staff analyses on the new law click here and here). Under the Act, a Medicaid recipient who receives a settlement, award or judgment in a third-party tort action is required to reimburse AHCA for any related Medicaid medical costs. The medical costs are calculated as the lesser of 37.5% of the total recovery or the total amount of medical assistance paid by Medicaid. See § 409.910(11)(f), Fla. Stat. The Act contains a super-priority provision requiring repayment “in full and [p]rior to any other person, program or entity . . . regardless of whether a recipient is made whole or other creditors paid.” § 409.910(1), Fla. Stat.
The amendment is a direct response to the United States Supreme Court’s decision in Wos v. E.M.A., 2013 WL 1131709 (U.S. Mar. 20, 2013), invalidating a North Carolina statute that required up to one-third of any damages recovered by a Medicaid beneficiary to be repaid to the state. The Supreme Court held that North Carolina’s statute was preempted by the federal anti-lien provision due to the fact that the state statute created an irrebuttable, one-size-fits-all statutory presumption that one-third of a tort recovery is attributable to medical expenses. Such an irrebuttable presumption was found to be 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.
In light of Wos, the Act was amended to allow a Medicaid recipient to contest the amount designated as a medical expense by filing an administrative petition in Tallahassee, Florida. Prior to the amendment and like the stricken North Carolina statute, there was an irrebuttable presumption that AHCA was entitled to 37.5% of the total recovery. To prove that a lesser portion of the total recovery should be allocated as reimbursement, the recipient must present clear and convincing evidence. The amendment does not address the type of evidence a recipient may present at a hearing, although the high burden suggests that expert testimony will probably be required. The recipient must also bear its own fees and costs for the administrative proceeding.
This new statutory procedure is the exclusive method for challenging the amount of third-party benefits payable to AHCA. While it remains to be seen how many beneficiaries avail themselves of this new provision, the non-central venue, high burden of proof and unrecoverable fees and costs clearly reflect Florida’s intention to maintain its presumptive 37.5% recovery.