Second District Court of Appeal Reviews Medicaid Reimbursement From Multi-million Car Accident Settlement

Following an accident, the idea of receiving financial compensation for the injuries and expenses sustained seems very distant and very difficult to achieve. When an injured party finally receives damages through a settlement or verdict, she or he may not realize that additional considerations must be made. If the recipient of medical care was covered by Medicaid, any judgment, award, or settlement received would be subject to Section 409.910(6)(c) of Florida Statutes (2015), which places a lien on the amount to reimburse Medicaid for the medical bills it paid on the injured person’s behalf. The Second District Court of Appeal recently dealt with this scenario in Willoughby v. Agency for Health Care Administration (Case No. 2D15-4845).

The serious injuries at the base of this case stemmed from a car accident that greatly affected the injured man’s life. He was no longer able to perform basic activities nor enjoy an active life. Rear-ended carFor a portion of the treatment, Medicaid paid over $147,000 for medical expenses. The injured man filed suit against the at-fault party and eventually his auto insurer for bad faith. The injured man had originally filed for Uninsured Motorist benefits but was denied coverage. The insurer eventually settled, paying the injured man $4 million. Another insurer provided $20,000 from a different insurer for bodily injury and UM benefits. Following this settlement, the administrator of Medicaid, AHCA, sought to recover the amounts paid on his behalf for medical expenses. AHCA is able to recover half of the remaining damages left after attorney fees and taxable costs are paid, pursuant to the Florida Rules of Civil Procedure. The lien can only cover the total amount owed. The injured man in this case petitioned to decrease the lien amount after the AHCA calculated past and future medical expenses in its formula for the lien. The injured man protested, arguing that it should be limited to the past medical expenses.

The Court of Appeal agreed with the AHCA that bad faith damages are subject to a Medicaid lien. The injured party assumed that the bad faith damages were punitive in nature and not subject to the lien. The court pointed out that the settlement was to help cover all of the damages sustained, including medical damages, which are subject to the Medicaid lien. However, the appellate court did agree with the injured man that the AHCA can only satisfy its lien through funds allocable to past medical expenses. If the settlement or judgment is designated for anything other than medical care, the AHCA cannot impose its lien. The court determined that the settlement from the bad faith insurer did not include all of the injured man’s medical expenses, and there was no way to infer this from the case. The court reversed and remanded on this issue, certifying a conflict with the First District’s ruling in Giraldo v. AHCA (Fla. 1st DCA Dec. 12, 2016).

Willoughby illustrates the need for competent counsel at your side at all stages of a Florida car accident case. Many people are looking to get paid and reimbursed as quickly as possible, and our attorneys at Donaldson & Weston can help ensure that this is done properly. Contact our office today at 772-266-5555 (Stuart) or 561-299-3999 (West Palm Beach) for a free, confidential consultation.

More Blog Posts:

Florida District Appellate Court Reviews Future Medical Expenses in Multi-Car Accident Case, Florida Injury Lawyer Blog, November 28, 2016

Federal Circuit Court of Appeal Declines to Find Equitable Tolling in Slip and Fall Case, Florida Injury Lawyer Blog, October 21, 2016