Wrongful
death — Medicaid lien on wrongful death settlement — Trial court properly
apportioned settlement amount based on formula in Florida’s Medicaid
Third-Party Liability Act — Federal Medicaid Act’s anti-lien provision does
not preempt Florida’s Medicaid Third-Party Liability Act where a Medicaid lien
is imposed on a wrongful death settlement — Medicaid Act’s anti-lien provision
does not apply to a Medicaid lien imposed against the property of a Medicaid
recipient after the recipient’s death — Estate’s personal representative may
not allocate wrongful death settlement proceeds among survivors and Agency for
Health Care Administration without fully satisfying Agency’s lien

THE ESTATE OF BETSY GLADIS HERNANDEZ, Appellant, vs. AGENCY
FOR HEALTH CARE ADMINISTRATION, Appellee. 3rd District. Case No. 3D14-2115.
L.T. Case No. 12-470. Opinion filed February 17, 2016. An Appeal from the
Circuit Court for Miami-Dade County, Maria M. Korvick, Judge. Counsel: Marlene
S. Reiss, for appellant. Alexander R. Boler (Tallahassee), for appellee.

(Before SUAREZ, C.J., and LAGOA and LOGUE, JJ.)

(LOGUE, Judge.) The Estate of Betsy Gladis Hernandez appeals
an order allocating a portion of proceeds from a wrongful death settlement to
pay the Medicaid lien held by the Agency for Health Care Administration. The
trial court apportioned the settlement amount based on the formula in Florida’s
Medicaid Third-Party Liability Act. See § 409.910(11)(f), Fla. Stat.
(2012). We affirm.

FACTS
AND PROCEDURAL HISTORY

In 2010, Ms. Hernandez died from complications from a rare
condition. She was survived by her husband and child. Her death was allegedly
caused by Baptist Hospital physicians’ misdiagnosis and treatment of her
condition. Prior to the Estate filing suit, Baptist Hospital agreed to settle
any wrongful death claims against it for $700,000. It is undisputed that the
written settlement agreement did not apportion the monies between the Estate
and survivors.1

Due to Florida’s participation in the Medicaid program, the
Agency had paid $409,676.36 of Ms. Hernandez’s medical expenses. These payments
resulted in an automatic lien on “collateral” for medical expenses paid on Ms.
Hernandez’s behalf. See § 409.910(6)(c), Fla. Stat. “Collateral”
includes wrongful death settlements. See §§ 409.910(6)(c) &
409.901(7)(b), Fla. Stat. (2012).

In 2012, the Estate filed a petition in probate court to
determine the Agency’s lien. The petition requested that of the $700,000
settlement amount, $500,000 be apportioned to cover the survivors’ wrongful
death statutory damages. The remaining $200,000 would be apportioned for the
Medicaid lien and other economic damages incurred by the Estate, including
attorney’s fees. In response, the Agency argued that, under the formula in Florida’s
Medicaid Third-Party Liability Act, it was entitled to $262,500 prior to any
wrongful death apportionment. See § 409.910(11)(f). The Estate
disagreed. Citing to Arkansas Department of Health & Human Services v.
Ahlborn, 547 U.S. 268 (2006), it contended that the federal Medicaid Act’s
anti-lien provision, 42 U.S.C. § 1396p(a)(1), preempts Florida’s Medicaid
Third-Party Liability Act. The Estate explained that the Agency sought monies
allocated to the survivors and that, under Ahlborn‘s interpretation of
the anti-lien provision, the provision bars states from asserting a lien on the
portions of a settlement not allocated to medical expenses.

Prior to any ruling on the petition, the United States
Supreme Court issued its decision in Wos v. E.M.A., 133 S. Ct. 1391
(2013). The Estate then moved for an evidentiary hearing, arguing that Wos
required an evidentiary hearing to determine what portion of the settlement
qualifies as medical expenses. The Agency disagreed and argued that Ahlborn
and Wos are inapplicable where the Medicaid recipient is deceased. Thus,
the Agency reasoned that an evidentiary hearing was unnecessary because the
petition turned on a straightforward application of the formula in Florida’s
Medicaid Third-Party Liability Act.

The trial court ultimately agreed with the Agency and denied
the Estate’s motion for an evidentiary hearing. It entered an order requiring
the Estate to reimburse the Agency $262,500 from the $700,000 wrongful death
settlement. The Estate moved for rehearing, which was denied, and then filed
its notice of appeal in this court. The Florida Supreme Court subsequently
issued its opinion in Garcon v. Florida Agency for Health Care
Administration, 150 So. 3d 1101 (Fla. 2014), essentially recognizing that
Florida courts must apply Wos.

ANALYSIS

The Estate argues that the trial court erred in one of two
ways. First, citing to Ahlborn, Wos, and Garcon, the
Estate contends that Florida’s Medicaid Third-Party Liability Act is preempted
by federal law which requires an evidentiary hearing to determine what portion
of the settlement qualifies as medical expenses. In the alternative, the Estate
argues that an evidentiary hearing is necessary because Florida’s Wrongful
Death Act prohibits the Agency from asserting a Medicaid lien on the portions
of the settlement allocated to Ms. Hernandez’s survivors. We will address each
issue in turn.2

I.
No Federal Preemption

The first issue involves the interplay between Florida and
federal law. In 1965, Congress created the Medicaid program to provide joint
federal and state funding of medical care for individuals who cannot afford to
pay their own medical costs. See 42 U.S.C. § 1396 et seq. State
participation in the program is voluntary. However, once a state elects to
participate, like Florida, the state must comply with certain requirements
imposed by federal Medicaid statutes. Pub. Health Trust of Dade Cty., Fla.
v. Dade Cty. Sch. Bd., 693 So. 2d 562, 564 (Fla. 3d DCA 1996).

In the early years of the program, Congress adopted the
anti-lien provision. It provides:

(a)
Imposition of lien against property of an individual on account of medical
assistance rendered to him under a State plan

(1)
No lien may be imposed against the property of any individual prior to his
death on account of medical assistance paid or to be paid on his behalf
under the State plan, except-

(A)
pursuant to the judgment of a court on account of benefits incorrectly paid on
behalf of such individual, or

(B)
in the case of the real property of an individual-[who is in a nursing home and
required by law to spend his own income on those expenses, and who cannot
reasonably be expected to return home.]

42 U.S.C. § 1396p(a)(1) (emphasis added).

The Medicaid program is a cooperative one. The Federal
Government pays between 50% and 83% of the costs a state incurs for patient
care. Ahlborn, 547 U.S. at 275. “[I]n return, the State pays its portion
of the costs and complies with certain statutory requirements for making
eligibility determinations, collecting and maintaining information, and
administering the program.” Id. (citing 42 U.S.C. § 1396a). One such
requirement is that each participating state “implement a ‘third party
liability’ provision which requires the state to seek reimbursement for
Medicaid expenditures from third parties who are liable for medical treatment
provided to a Medicaid recipient.” Roberts v. Albertson’s Inc., 119 So.
3d 457, 459 (Fla. 4th DCA 2012) (citing § 42 U.S.C. 1396a(a)(25)).

To comply with this federal mandate, Florida enacted the
Medicaid Third-Party Liability Act. It provides the Agency with three ways to
recover expenses from third parties: (1) automatic subrogation to any rights of
a Medicaid recipient to third-party benefits; (2) automatic assignment of the
recipient’s rights to any third-party benefits; or (3) automatic lien on
“collateral.” § 409.910(6)(a)-(c), Fla. Stat. “Collateral” and “third-party
benefits” include “[a]ll judgments, settlements and settlement agreements
rendered or entered into and related to such causes of action [related to a
covered injury necessitating Medicaid payments].” § 409.901(7)(b) & (28),
Fla. Stat.

Although the entire amount of any settlement may be subject
to a Medicaid lien, the amount of recovery is limited by the amount of Medicaid
assistance provided. § 409.910(11)(e), Fla. Stat. It is also limited by a
statutory formula. § 409.910(11)(f), Fla. Stat.

A body of law has developed which further limits the
Agency’s ability to assert a lien on portions of settlements. In Ahlborn,
a case arising out of a personal injury lawsuit, the federal Medicaid Act’s
anti-lien provision preempted a state law which automatically imposed a lien on
tort settlement proceeds obtained by the Medicaid recipient. In that case, the
settlement apportioned the recovery between medical and non-medical expenses.
The United States Supreme Court held that the anti-lien provision barred the
state from asserting a lien on the portions of the settlement not allocated to
medical expenses. Ahlborn 547 U.S. at 284.

In Wos, the Court went a step further in a case
arising out of a medical malpractice settlement which did not divide the
recovery between medical and non-medical expenses. The Court analyzed a state
statute which could be interpreted as creating a conclusive presumption that
one-third of a Medicaid beneficiary’s tort recovery represented compensation
for medical expenses. To the extent the statute created such a presumption, it
was preempted by the Medicaid Act’s anti-lien provision. The Court held that
the Medicaid beneficiary must be provided with an opportunity to show that the
parties to the settlement apportioned an amount for medical expenses that was
less than the amount of the Medicaid lien. Wos, 133 S. Ct. at 1402.3

Recently, the Florida Supreme Court issued an opinion which
essentially recognized that Florida courts must apply Wos. Garcon,
150 So. 3d at 1102 (vacating a decision and remanding the case for further
proceedings consistent with Wos). However, the Ahlborn, Wos,
and Garcon decisions arose in the context of a living Medicaid
recipient.

The issue of whether these decisions apply in the context of
a deceased Medicaid recipient appears to be an issue of first impression in
this state. In Austin v. Capital City Bank, No. 111,894, 2015 WL 4366519
(Kan. Ct. App. June 26, 2015), however, the Court of Appeals of Kansas
addressed a post-Wos case where a state agency sought to recover
Medicaid payments from a special needs trust after the Medicaid recipient had
died. There, a medical malpractice suit was filed on behalf of a child who had
suffered permanent disabilities. The suit was ultimately settled. Under the
terms of the settlement, a special needs trust was created which was designed
to allow the child to keep the settlement funds and remain eligible to receive
medical assistance through Medicaid. See 42 U.S.C. § 1396p(d)(4)(A)
(2012). The child was the trust’s primary beneficiary, her mother was the
remainder beneficiary, and a bank was named trustee. After the child passed
away, the bank eventually stopped making payments from the trust to the mother.
Id. at *1. The mother then filed suit and named the state as a necessary
party. Among other points, she argued that Ahlborn and Wos
represent rules of general applicability for all Medicaid recipients. Id.
at *4. Because the trust had no designation for medical care expenses, the
mother contended that the state was not entitled to recover Medicaid payments
from assets in the trust. Id. at *3.

The Austin court disagreed and concluded that the
mother’s reliance on Ahlborn and Wos was misplaced. It cogently
explained why those decisions do not represent rules of general applicability
for all Medicaid recipients:

In
those cases, the [United States Supreme] Court considered the anti-lien
provision of the federal Medicaid statute, which states, in relevant part, that
“[n]o lien may be imposed against the property of any individual prior to
his [or her] death on account of medical assistance paid or to be paid on
his [or her] behalf under the State plan.” (Emphasis added.) 42 U.S.C. §
1396p(a)(1). The plain language of 42 U.S.C. § 1396p(a)(1) clearly reflects
Congress’ intent that the anti-lien provision apply only to living
Medicaid recipients.

Id. at *4.

We agree with Austin and find this authority to be
persuasive. By its express terms, the Medicaid Act’s anti-lien provision does
not apply to a Medicaid lien imposed against the property of a Medicaid
recipient after her death. We cannot ignore the plain meaning of this
provision. As our Supreme Court has repeatedly stated, “[i]f the language of
the statute is clear and unequivocal, then the legislative intent must be
derived from the words used without involving incidental rules of construction
or engaging in speculation as to what the judges might think that the
legislators intended or should have intended.” Hess v. Philip Morris USA,
Inc., 175 So. 3d 687, 692 (Fla. 2015) (citation omitted). Thus, we hold
that the federal Medicaid Act’s anti-lien provision does not preempt Florida’s
Medicaid Third-Party Liability Act where a Medicaid lien is imposed on a
wrongful death settlement.

II.
Florida’s Medicaid Third-Party Liability Act and Wrongful Death Act

The second issue on appeal involves the interplay between
Florida’s Medicaid Third-Party Liability Act and Wrongful Death Act. As noted
above, the Medicaid Third-Party Liability Act governs the Agency’s right to
recover payments made for medical expenses and provides the Agency with several
ways to recover expenses from third parties. Regarding subrogation, the Act
specifically provides:

The
agency is automatically subrogated to any rights that an applicant,
recipient, or legal representative has to any third-party benefit for the
full amount of medical assistance provided by Medicaid. Recovery pursuant
to the subrogation rights created hereby shall not be reduced, prorated, or
applied to only a portion of a judgment, award, or settlement, but is to
provide full recovery by the agency from any and all third-party benefits.
Equities of a recipient, his or her legal representative, a recipient’s
creditors, or health care providers shall not defeat, reduce, or prorate
recovery by the agency as to its subrogation rights granted under this
paragraph.

§ 409.910(6)(a), Fla. Stat. (emphasis added).

The legislative intent behind this Act is clear. Medicaid is
to be repaid prior to any other person, program, or entity:

It
is the intent of the Legislature that Medicaid be the payor of last resort for
medically necessary goods and services furnished to Medicaid recipients. All
other sources of payment for medical care are primary to medical assistance
provided by Medicaid. If benefits of a liable third party are discovered or
become available after medical assistance has been provided by Medicaid, it is
the intent of the Legislature that Medicaid be repaid in full and prior to any
other person, program, or entity. Medicaid is to be repaid in full from,
and to the extent of, any third-party benefits, regardless of whether a
recipient is made whole or other creditors paid. Principles of common law and
equity as to assignment, lien, and subrogation are abrogated to the extent
necessary to ensure full recovery by Medicaid from third-party resources. It
is intended that if the resources of a liable third party become available at
any time, the public treasury should not bear the burden of medical assistance
to the extent of such resources.

§ 409.910(1), Fla. Stat. (emphasis added). This language
reflects the legislature’s interest in providing options to fund medical
assistance it has deemed important to public welfare.

When interpreting the Medicaid Third-Party Liability Act,
the Florida Supreme Court has warned the judicial branch to “be cautious when
evaluating the choices made by the legislative branch as to the appropriate
funding for programs it has deemed important to the public welfare. We must
avoid unnecessarily limiting the funding options available to the legislature
when addressing today’s policy problems.” Agency for Health Care Admin. v.
Associated Indus. of Fla., Inc., 678 So. 2d 1239, 1243 (Fla. 1996)
(determining the constitutionality of the Act). This recognition may appear
prescient. With Medicaid costs and qualified individuals on the rise, the
interest in protecting Florida’s ability to recover funds to maintain this
source of public benefits has also undoubtedly increased.

Against this backdrop, the Wrongful Death Act allows a
decedent’s personal representative to bring a single action against negligent
parties to recover damages for the decedent’s survivors and estate. See
§ 768.21, Fla. Stat. (2012); Cont’l Nat’l Bank v. Brill, 636 So. 2d 782,
784 (Fla. 3d DCA 1994). It is silent on the matter of Medicaid liens. It
contemplates, however, that the damages recovered by the decedent’s survivors
are distinct from the damages recovered by the decedent’s estate. See §
768.21, Fla. Stat.; S. Shore Hosp. v. Easton, 441 So. 2d 161, 163 (Fla.
3d DCA 1983). For this reason, one line of cases has held that certain
statutory liens do not attach to wrongful death settlement proceeds
attributable to survivors’ claims. See, e.g., Hartford Ins. Co. v.
Goff, 4 So. 3d 770 (Fla. 2d DCA 2009) (workers’ compensation lien).

However, another line of cases has allowed Medicaid liens to
attach to wrongful death settlement funds which may be attributable to the
survivors’ claims. The key distinction between the two lines of cases is the
plain meaning of the Medicaid Third-Party Liability Act. Unlike the statutes
giving rise to the liens in Goff and other similar cases, the Medicaid
Third-Party Liability Act’s provisions require that the Agency’s lien has
priority. See § 409.910(1) & (6), Fla. Stat.

For example, in Strafford v. Agency for Health Care
Administration, 915 So. 2d 643 (Fla. 2d DCA 2005), and Englich v. Agency
for Healthcare Administration, 916 So. 2d 994 (Fla. 4th DCA 2005), the
Second and Fourth Districts held, respectively, that a Medicaid lien must be
satisfied in accordance with the Medicaid Third-Party Liability Act prior to
apportioning a wrongful death settlement between the decedent’s estate and
survivors. In both cases, the estate’s personal representative sought to
allocate portions of a wrongful death settlement between the survivors and the
Agency without fully satisfying the Agency’s Medicaid lien. Both courts
rejected the personal representative’s arguments by relying on the plain
language of the Act, such as the provisions discussing subrogation and
requiring Medicaid to be repaid prior to any other person, program, or entity. Strafford,
915 So. 2d at 646 (“Admittedly, the settlement in this case occurred in the
context of a wrongful death action in which the recoverable damages for the
survivors and the decedent’s estate are distinct . . . . Even so, the [Medicaid
Third-Party Liability] Act’s provisions require that the Agency be paid prior
to any apportionment between the estate and the survivors.”); Englich,
916 So. 2d at 997 (“Given the plain meaning of the statute, and the cases
interpreting its provisions, the trial court correctly denied the plaintiff’s
request to reduce the Medicaid lien proportionately to the amount the
survivors’ recovery bore to their total claim.”).

In Ross v. Agency for Health Care Administration, 947
So. 2d 457 (Fla. 3d DCA 2006), this court expressly adopted the reasoning of Strafford
and Englich. Like Englich and Strafford, Ross
involved an estate’s personal representative seeking to allocate wrongful death
settlement proceeds among the survivors and the Agency without fully satisfying
the Agency’s lien. This court held that the Agency must be paid in accordance
with the Medicaid Third-Party Liability Act:

Contrary to the personal
representative’s contention, she does not have the right to allocate the
settlement funds in such a manner that the Agency receives less than the full
amount of its expenditures for medical assistance. Strafford v. Agency for
Health Care Admin., 915 So.2d 643 (Fla. 2d DCA 2005) (“Following a
settlement, the court is required to segregate an amount sufficient to repay
the Agency’s expenditures for medical assistance and shall order this amount to
be paid directly to the Agency.”). The Wrongful Death Act does not alter this
requirement. Englich v. Agency for Healthcare Admin., 916 So.2d 994
(Fla. 4th DCA 2005).

Ross, 947 So. 2d at 458. We are bound by
that decision.

Contrary to the Estate’s contention, Ahlborn, Wos,
and Garcon have not undermined Ross as authority. As explained
above, Ahlborn, Wos, and Garcon are inapplicable here
because the federal Medicaid Act’s anti-lien provision applies only to living
Medicaid recipients. In cases where, as here, a Medicaid lien was imposed
against a wrongful death settlement, Ross controls.

Affirmed.

__________________

1The written settlement agreement
does not appear in the record, but the Estate admitted to the trial court that
the agreement “made no reference to what type of damages the $700,000
represented.”

2Both issues are questions of law
reviewed de novo. See Vreeland v. Ferrer, 71 So. 3d 70, 73 (Fla.
2011) (“Whether state law is preempted by federal law is a pure question of law
that is subject to de novo review.”); Borden v. E.-European Ins. Co.,
921 So. 2d 587, 591 (Fla. 2006) (“This issue involves a question of statutory
interpretation and thus is subject to de novo review.”).

3In response to Wos, the
Florida legislature amended the Medicaid Third-Party Liability Act. §
409.910(17)(b), Fla. Stat. (2013). It now provides Medicaid beneficiaries with
the opportunity to rebut the Act’s statutory formula. Id. In this case,
the settlement was reached before the 2013 amendment took effect. Cf. Suarez
v. Port Charlotte HMA, LLC, 171 So. 3d 740, 742 (Fla. 2d DCA 2015) (holding
that the 2013 amendment applied because the settlement was reached after the
amendment took effect). Neither the Estate nor the Agency raised any issue
regarding the amendment’s application here. We therefore decline to reach the
issue.

* *
*