15-002563MTR Nakila Merriex, As Natural Parent And Legal Guardian Of Nivea Merriex vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, November 9, 2015.

Summary: Medicaid lien limited to expenditures related to third party liability determination.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NAKILA MERRIEX, AS NATURAL

PARENT AND LEGAL GUARDIAN OF

NIVEA MERRIEX,

Petitioner,

vs. Case No. 15 - 2563MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

On September 11, 2015, an administrative hearing in this

case was held by video teleconference in Tampa and Tallahassee,

Florida, before William F. Quattlebaum, Administrative Law

Judge, Division of Administrative Hearings.

APPE ARANCES

For Petitioner: Charles T. Moore, Esquire

Morgan and Morgan, P.A.

One Tampa City Center

201 North Franklin Street, 7th Floor

Tampa, Florida 33602

For Respondent: David N. Perr y, Esquire

Xerox Recovery Services, Inc.

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The issue in this proceeding is the amount payable to the

Agency for Hea lth Care Administration (Respondent) to satisfy a

Medicaid lien under section 409.910, Florida Statutes (2015). 1/

PRELIMINARY STATEMENT

On May 11, 2015, Nakila Merriex, as natural parent and

legal guardian of Nivea Merriex (Petitioner) , filed a Petition

for Equitable Apportionment (Petition) with the Division of

Administrative Hearings (DOAH).

By Notice of Hearing dated May 21, 2015, the hearing was

scheduled for July 28, 2015. Upon motion filed by the

Petitioner on July 22, 2015, the hearing was conti nued , without

objection , and subsequently rescheduled for September 11, 2015.

At the hearing, PetitionerÓ s Exhibits 1, 2 , and 5 through

10 were admitted into evidence. The Respondent presented no

witnesses and offered no exhibits.

The T ranscript of th e hearing was filed on October 19,

2015. Both parties filed proposed final o rders that were

reviewed in the preparation of this Order.

FINDING S OF FACT

1. Nakila Merriex is the natural mother and legal guardian

of Nivea Merriex (Nivea).

2. At the ti me of her birth on November 30, 2011, Nivea

suffered a shoulder injury and damage to the brachial plexus

nerve.

3. Nivea underwent surgery and subsequent physical therapy

to treat the deficit related to the shoulder injury and nerve

damage.

4. The Pe titioner filed a lawsuit against parties involved

in NiveaÓs birth and recovered monetary damages through

settlement of the lawsuit. The terms of the settlement are

confidential.

5. Nivea also required speech therapy to treat a disorder

wholly unrelate d to the shoulder damage and nerve injury.

6. The physical therapy and the speech therapy were

delivered by the same provider, LampertÓs Home Therapy.

7. For reasons unknown, LampertÓs Home Therapy utilized

the primary billing diagnosis code of Ð9534 - Brachial Plexus

InjuryÑ for both the physical therapy and the speech therapy

services in submitting the claims to Medicaid.

8. In calculating the Medicaid lien, the Respondent

included all the charges for services rendered by LampertÓs Home

Therapy. T he Medicaid lien at issue in this case is for

$37,679.56.

9. According to the billing records admitted into evidence

at the hearing, $5,603.54 of the charges billed by LampertÓs

Home Therapy and paid by Medicaid were solely attributable to

speech therap y services.

10. NiveaÓs speech disorder was not the subject of

litigation. The Petitioner has received n o award of damages

from a third party related to the speech disorder.

11. At the commencement of the hearing, the Petitioner

conceded responsibil ity for satisfying the amount of the

Medicaid lien related to charges for physical therapy services

provided to treat the shoulder injury and nerve damage.

12. Deducting the charges incurred for speech therapy from

the total Medicaid lien results in a r emaining lien of

$32,076.02.

CONCLUSIONS OF LAW

13. DOAH has jurisdiction over the parties to, and subject

matter of, this proceeding. §§ 120.569, 120.57(1), and

409.910(17) , Fla. Stat. (2015) .

14. Medicaid is a federal program, established in 1965 by

Title XIX of the Social Security Act, which provides medical

care to qualified individuals. The federal government provides

funds to state Medicaid programs, which use the funds to pay the

costs of medical care provided to qualified individuals.

15. Pursuant to section 409.902, the Respondent is the

state agency responsible for administering the Florida Medicaid

program.

16. States that participate in the federal Medicaid

program are required to comply with applicable federal

requirements, includi ng a requirement that a state must seek

reimbursement for medical expenses incurred on behalf of

qualified individuals if such individuals subsequently recover

funds from liable third parties. It is often said that Congress

wanted Medicaid to be a "payer of last resort, that is, other

available resources must be used before Medicaid pays for the

care of an individual enrolled in the Medicaid program."

S. Rep. No. 99 - 146, at 312 (1985), reprinted in 1986

U.S.C.C.A.N. 42, 279. See , e.g., Ahlborn v. Arkans as DepÓt of

Human Servs. , 397 F.3d 620, 623 (8th Cir. 2005), affÓd Arkansas

DepÓt of Health and Human Servs. v. Ahlborn , 547 U.S. 268

(2006).

17. In compliance with federal requirements, the Florida

Legislature adopted secti on 409.910, the ÐMedicaid Thi rd - Party

Liability Act.Ñ Section 409.910(1) provides as follows:

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 repai d 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 equi ty 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.

18. The essential concept underlying the Medicaid Third -

Party Liability Act is that when a recipient of Medicaid funds

recov ers damages from a liable third party for injur ies that

were treated using the Medicaid funds, the Medicaid program

should be reimbursed to the extent that such public funds were

expended to treat the injuries. Section 409.910(11), which

establishes the procedure by which the Respondent seeks

reimburs ement for Medicaid medical assistance provided to a

qualified individual, states as follows:

The agency may, as a matter of right, in

order to enforce its rights under this

section, institute, intervene in, or join

any legal or administrative proceeding in

its own name in one or more of the following

capacities: individually, as subrogee of

the recipient, as assignee of the recipient,

or as lienholder of the collateral.

(a) If either the recipient, or his or her

legal representative, or the agency b r ings

an action against a third party, the

recipient, or the recipientÓs legal

representative, or the agency, or their

attorneys, shall, within 30 days after

filing the action, provide to the other

written notice, by personal delivery or

registered mail, of the action, the name of

the court in which the case is brought, the

case number of such action, and a copy of

the pleadings. If an action is brought by

either the agency, or the recipient or the

recipientÓs legal representative, the other

may, at any tim e before trial on the merits,

become a party to, or shall consolidate his

or her action with the other if brought

independently. Unless waived by the other,

the recipient, or his or her legal

representative, or the agency shall provide

notice to the other of the intent to dismiss

at least 21 days prior to voluntary

dismiss al of an action against a third

party. Notice to the agency shall be sent

to an address set forth by rule. Notice to

the recipient or his or her legal

representative, if represented by an

attorney, shall be sent to the attorney,

and, if not represented, then to the last

known address of the recipient or his or her

legal representative.

(b) An action by the agency to recover

damages in tort under this subsection, which

action is deriv ative of the rights of the

recipient or his or her legal

representative, shall not constitute a

waiver of sovereign immunity pursuant to

s ection 768.14.

(c) In the event of judgment, award, or

settlement in a claim or action against a

third party, the court shall order the

segregation of an amount sufficient to repay

the agencyÓs expenditures for medical

assistance, plus any other amounts permitted

under this section, and shall order such

amounts paid directly to the agency.

(d) No judgment, award, or settlement in

any action by a recipient or his or her

legal representative to recover damages for

injuries or other third - party benefits, when

the agency has an interest, shall be

satisfied without first giving the agency

notice and a reasonable opportu nity to file

and satisfy its lien, and satisfy its

assignment and subrogation rights or proceed

with any action as permitted in this

section.

(e) Except as otherwise provided in this

section, notwithstanding any other provision

of law, the entire amoun t of any settlement

of the recipientÓs action or claim involving

third - party benefits, with or without suit,

is subject to the agencyÓs claims for

reimbursement of the amount of medical

assistance provided and any lien pursuant

thereto.

(f) Notwithstan ding any provision in this

section to the contrary, in the event of an

action in tort against a third party in

which the recipient or his or her legal

representative is a party which results in a

judgment, aw ard, or settlement from a third

party, the amoun t recovered shall be

distributed as follows:

1. After attorneyÓs fees and taxable costs

as defined by the Florida Rules of Civil

Procedure, one - half of the remaining

recovery shall be paid to the agency up to

the total amount of medical assistance

prov ided by Medicaid.

2. The remaining amount of the recovery

shall be paid to the recipient.

3. For purposes of calculating the agencyÓs

recovery of medical assistance benefits

paid, the fee for services of an attorney

retained by the recipient or his or her

legal representative shall be calculated at

25 percent of the judgment, award, or

settlement.

4. Notwithstanding any provision of this

section to the contrary, the agency shall be

entitled to all medical coverage benefits up

to the total amount of medical assistance

provided by Medicaid. For purposes of this

paragraph, Ðmedical coverageÑ means any

benefits under health insurance, a health

maintenance organization, a preferred

provider arrangement, or a prepaid health

clinic, and the portion of benefits

designated for medical payments under

coverage for workersÓ compensation, personal

injury protection, and casualty.

(g) In the event that the recipient, his or

her legal representative, or the recipientÓs

estate b rings an action against a thir d

party, notice of institution of legal

proceedings, notice of settlement, and all

other notices required by this section or by

rule shall be given to the agency, in

Tallahassee, in a manner set forth by rule.

All such notices shall be given by the

attorn ey retained to assert the recipientÓs

or legal representativeÓs claim, or, if no

attorney is retained, by the recipient, the

recipientÓs legal representative, or his or

her estate.

(h) Except as otherwise provided in this

section, actions to enforce th e rights of

the agency under this section shall be

commenced within 5 years after the date a

cause of action accrues, with the period

running from the later of the date of

discovery by the agency of a case filed by a

recipient or his or her legal

represent ative, or of discovery of any

judgment, award, or settlement contemplated

in this section, or of discovery of facts

giving rise to a cause of action under this

section. Nothing in this paragraph affects

or prevents a proceeding to enforce a lien

during th e existence of the lien as set

forth in subparagraph (6)(c)9.

19 . Section 409.910(17) establishes the procedure by which

a recipient can contest the medical expens e damages payable to

the agency and provides as follows:

(a) A recipient or his or her legal

representative or any person representing,

or acting as agent for, a recipient or the

recipientÓs legal representative, who has

notice, excluding notice charged solely by

reason of the recording of the lien pursuant

to paragraph (6)(c), or who has a ctual

knowledge of the agencyÓs rights to third -

party benefits under this section, who

receives any third - party benefit or proceeds

for a covered illness or injury, must,

within 60 days after receipt of settlement

proceeds, pay the agency the full amount o f

the third - party benefits, but not more than

the total medical assistance provided by

Medicaid, or place the full amount of the

third - party benefits in an interest - bearing

trust account for the benefit of the agency

pending an administrative determination of

the agencyÓs right to the benefits under

this subsection. Proof that such person had

notice or knowledge that the recipient had

received medical assistance from Medicaid,

and that third - party benefits or proceeds

were in any way related to a covered i llness

or injury for which Medicaid had provided

medical assistance , and that such person

knowingly obtained possession or control of,

or used, third - party benefits or proceeds

and failed to pay the agency the full amount

required by this section or to hol d the full

amount of third - party benefits or proceeds

in an interest - bearing trust account pending

an administrative determination, unless

adequately explained, gives rise to an

inference that such person knowingly failed

to credit the state or its agent f or

payments received from social security,

insurance, or other sources, pursuant to

s. 414.39(4)(b), and acted with the intent

set forth in s. 812.014(1).

(b) A recipient may contest the amount

designated as recovered medical expense

damages payable to t he agency pursuant to

the formula specified in paragraph (11)(f)

by filing a petition under chapter 120

within 21 days after the date of payment of

funds to the agency or after the date of

placing the full amount of the third - party

benefits in the trust ac count for the

benefit of the agency pursuant to paragraph

(a). The petition shall be filed with the

Division of Administrative Hearings. For

purposes of chapter 120, the payment of

funds to the agency or the placement of the

full amount of the third - part y benefits in

the trust account for the benefit of the

agency constitutes final agency action and

notice thereof. Final order authority for

the proceedings specified in 1this

subsection rests with the Division of

Administrative Hearings. This procedure i s

the exclusive method for challenging the

amount of third - party benefits payable to

the agency. In order to successfully

challenge the amount payable to the agency,

the recipient must prove, by clear and

convincing evidence, that a lesser portion

of the total recovery should be allocated as

reimbursement for past and future medical

expenses than the amount calculated by the

agency pursuant to the formula set forth in

paragraph (11)(f) or that Medicaid provided

a lesser amount of medical assistance than

th at asserted by the agency . ( Emphasis

supplied ) .

20 . The Medicaid Third - Party Liability Act does not

provide that a Medicaid lien may include medical expenses

unrelated to those underlying the basis for recovery of damages

from a liable third party. The title of section 409.910 is

Ð[r] esponsibility for payments on behalf of Medicaid eligible

persons when other parties are liable.Ñ In spe cifically

designating the benefits that must be reported to the Respondent

by a recipient of su ch benefits, s ection 40 9.910(17)(a)

identifies the benefits as those Ðin any way related to a

covered illness or injury for which Medicaid had provided

medical assistance.Ñ

21 . The evidence in this case establishes by clear and

convincing evidence that Medicaid provided a les ser amount of

medical assistance rela ted to injuries for which third - party

liability has been determined than the total included within the

Medicaid lien.

22 . Medicaid expended $32,076.02 to treat the shoulder

damage and nerve injury that resulted from the birth process.

The Petitioner litigated a medical malpractice case against

third parties involved in the birth and obtained a financial

settlement. Medicaid is entitled to be reimbursed for the funds

expended to treat the deficit resulting from the s houlder damage

and nerve injury.

23 . The disorder which resulted in Medicaid expenditures

for speech therapy services is unrelated to the medical

malpractice case. There has been no determination of third -

party liability related to a speech disorder. The Medicaid

Third - Party Liability Act does not support inclusion w ithin the

Medicaid lien of the $ 5,603.54 expended for speech therapy

services.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is hereby ORDERED that the Age ncy for Health Care

Administration is entitled to reimbursement from the Petitioner

in the amount of $32,076.02 in satisfaction of its Medicaid

lien.

DONE AND ORDERED this 9th day of November , 2015 , in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with th e Clerk of the

Division of Administrative Hearings

this 9th day of November , 2015 .

ENDNOTE

1/ All statutory references are to Florida Statutes (2015),

unless otherwise indicated.

COPIES FURNISHED:

Frank Dichio

Agency for Health Care Administration

Mail Stop 19

2727 Mahan Drive

Tallahassee, Florida 32308

Charles T. Moore, Esquire

Morgan and Morgan, P.A.

One Tampa City Center

201 North Franklin Street, 7th Floor

Tampa, Florida 33602

(eServed)

Alexander R. Boler, Esquire

Xerox Recovery Services Grou p

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

David N. Perry, Esquire

Xerox Recovery Services

2073 Summit Lake Drive,Suite 300

Tallahassee, Florida 32317

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administ ration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Elizabeth Dudek, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stuart Williams, Gen eral Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 days o f rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of the District Court of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resid es or as otherwise provided by law.