When a person on SSI and Medicaid concludes a lawsuit for personal injuries, the Florida Medicaid agency swoops in and takes a big bite of the settlement or jury verdict to reimburse itself for the doctor and hospital bills caused by the person or corporation that hurt the disabled SSI/Medicaid recipient. This action is based on the Florida Medicaid Third Party Liability Act, Florida Statutes, Section 409.910.
A few years ago, the U. S. Supreme Court substantially and appropriately reduced what Medicaid can get. Click here for the Alhborn case. Florida Medicaid has resisted the Supreme Court’s decision, but its position is now substantially weakened by a new U. S. Circuit Court of Appeals decision.
Based on a March 22nd U. S. Circuit Court of Appeals decision, more net settlement money is going to go to diasbled plaintiffs. The court’s decision completely eviscerates the Florida Medicaid agency’s defense to avoiding the reduction in the Medicaid lien based on the U.S. Supreme Court Ahlborn decision in 2006. This is going to allow substantially MORE money to go into plaintiff’s Special Needs Trusts funded from Personal Injury/Medical Malpractice settlements or jury verdicts.
The Ahlborn U.S. Supreme Court case severely limited the recovery by state Medicaid agencies for their liens on disabled personal injury plaintiffs. The Supreme Court formula basically said that if the injured person has to take less from the settlement than the case is worth (due to liability insurance limits or whatever), then Medicaid should reduce the Medicaid Third Party Liability lien in the same ration or percentage that the plaintiff had to endure.
ACS Recovery, a Xerox Corp division, that has the contract to collect third party liability liens for Florida Medicaid, has vigorously opposed the U. S. Supreme Court’s Ahlborn formula in Florida, arguing that the Arkansas statute in Heidi Ahlborn’ s case that took 100% of the full lien, even upt to the full recovery, was not what we have in Florida where they take a smaller percentage on a different formula. Florida Medicaid asserted that language in the Ahlborn case (footnote 18, I believe) allows states to craft different formulas to take money from PI plaintiffs. Because Florida has a different statute, Ahlborn doesn’t apply.
That argument has worked with some judges, and not with others in Florida.
I think as of March 22nd, the plaintiff’s position in Florida when attempting to reduce the repay Medicaid is substantially strengthened by the United States Circuit Court of Appeals case. In North Carolina, the NC Supreme Court had held that Ahlborn decision did not apply because a North Carolina statute precluded its application (same argument that Florida Medicaid makes). The Fourth U. S. Circuit Court of Appeals has now REVERSED the North Carolina Supreme Court’s decision and rationale, and held that Ahlborn applies even over a state statute to the contrary.
The EMA v. Cansler 4th Circuit decision that lays out very well the various Ahlborn-styled reduction arguments. This is a major case and deal in the Medicaid lien business that is going to have far-reaching impact on ACS Recovery’s ability to collect Medicaid liens in Florida Courts.
[By the way, there was an 11th U.S. Circuit Court of Appeals decision in 2010 that applied the Ahlborn methodology to MEDICARE LIENS as well, in case you have other cases where you need to reduce the MEDICARE lien] – see the Bradley case attached.]
While we were all watching the Supreme Court arguments on ObamaCare, out comes this dynamite decision in favor of our clients from the 4th Circuit, EMA v. Cansler. You go, 4th Circuit!!