                                      IN THE DISTRICT COURT OF APPEAL
                                      FIRST DISTRICT, STATE OF FLORIDA

KAITLYN HARRELL, a minor,             NOT FINAL UNTIL TIME EXPIRES TO
individually and through her          FILE MOTION FOR REHEARING AND
natural parents and guardians,        DISPOSITION THEREOF IF FILED
JOY D. HARRELL and GREG A.
HARRELL, husband and wife,            CASE NO. 1D12-5597
and JOY D. HARRELL and
GREG HARRELL, individually,

      Appellants,

v.

STATE OF FLORIDA,
AGENCY FOR HEALTH CARE
ADMINISTRATION, et. al.,

      Appellee.

_____________________________/

Opinion filed July 28, 2014.

An appeal from the Circuit Court for Bay County.
Hentz McClellan, Judge.

Floyd B. Faglie of Staunton & Faglie, P.L., Monticello, for Appellant.

Adam J. Stallard of Agency for Health Care Administration, Tallahassee, for
Appellee.


MAKAR, J.

      Appellants, Joy D. Harrell and Greg Harrell, appeal an order of the trial

court determining that the Agency for Health Care Administration (AHCA) is
entitled to the full amount of its Medicaid lien from the personal injury settlement

the Harrells entered on behalf of their daughter, Kaitlyn Harrell. For the reasons

that follow, we reverse and remand.

      In 2002, Kaitlyn was deprived of oxygen during the birthing process and left

with catastrophic injuries, including mental retardation, cerebral palsy, and

quadriplegia. The Harrells sued the hospital for damages, eventually accepting a

confidential settlement. Florida’s Medicaid program, administered through AHCA,

paid medical expenses for Kaitlyn’s care in the amount of $360,741.48, for which

AHCA asserted a lien in the full amount from the settlement proceeds. The

Harrells filed a petition to determine the amount of the Medicaid lien, specifically

arguing that the formula in section 409.910(11)(f), Florida Statutes, used to

determine the amount of the State’s recovery had been “overruled” by the United

States Supreme Court in Arkansas Department of Health & Human Services v.

Ahlborn, 547 U.S. 268, 292 (2006), which held that the federal anti-lien provision

affirmatively barred states from asserting a lien on a settlement in excess of the

medical expenses. They argued that because the past medical expenses they

recovered were less than the lien asserted by AHCA, it could only recover its

proportionate share. Relying in part on the decision in Russell v. Agency for

Health Care Administration, 23 So. 3d 1266 (Fla. 2d DCA 2010), AHCA opposed

the petition, arguing that use of the statutory formula was mandatory, and under the

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formula, it was entitled to full satisfaction of its lien. At the hearing on the petition,

the trial court agreed with AHCA, concluding that “at this juncture at least, this

court is obligated to render a decision in favor of [AHCA] for the full amount of its

lien.”

         At the time of the hearing, the trial court acknowledged that the United

States Supreme Court had granted review of a case similar to the one before it:

Wos v. E.M.A., 133 S. Ct. 1391 (2013). The Supreme Court in Wos subsequently

held that North Carolina’s statutes, which established a set proportion (one-third)

as the amount of the state’s reclamation from a beneficiary’s tort recovery, was

pre-empted by the Medicaid Act to the extent they required payment beyond that

shown to be for medical expenses. Id. at 1399 (“An irrebuttable, one-size-fits-all

statutory presumption is 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.”).

         The decision in Wos has undermined the reasoning of the decisions that

AHCA and the trial court have previously relied upon, so much so that three of

five district courts in Florida have, when presented with the issue of whether

section 409.910(11)(f) has been preempted, uniformly changed course by issuing

opinions consistent with Wos. 1 See, e.g., Ag. for Health Care Admin. v. Riley,


1
    Because section 409.910 was substantially amended, effective July 1, 2013, to
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119 So. 3d 514 (Fla. 2d DCA 2013) (applying Wos, abrogating Russell, and

expressly adopting the holding in Roberts v. Albertson’s Inc., 119 So. 2d 457 (Fla.

4th DCA 2012)); see also Dillard v. Ag. for Health Care Admin., 127 So. 3d 820

(Fla. 2d DCA 2013) (holding that recipient entitled to present evidence to rebut

amount of claimed Medicaid lien); Davis v. Roberts, 130 So. 3d 264, 269 (Fla. 5th

DCA 2013) (holding that statutory formula in section 409.910(11)(f) is not

mandatory; parents of Medicaid recipient child were entitled to opportunity to

demonstrate AHCA’s lien exceeded portion of settlement allocated to medical

expenses); Ag. for Health Care Admin. v. Williams, 127 So. 3d 854 (Fla. 4th DCA

2013) (holding similarly). As the Fifth District recently noted, “Ahlborn and Wos

make clear that section 409.910(11)(f) is preempted by the federal Medicaid

statute’s anti-lien provision to the extent it creates an irrebuttable presumption and

permits recovery beyond that portion of the Medicaid recipient’s third-party

recovery representing compensation for past medical expenses.” Davis, 130 So. 3d

at 270.

      The Harrells urge that we fall in line with these decisions, which is

warranted because our district’s jurisprudence is outdated in light of the change

that Wos has wrought. As an example, in Storey ex rel. Storey v. Hickcox, 44 So.

provide a mechanism for the hearings envisioned by Wos to challenge the
presumptive lien amount, see § 409.910(17)(b)-(e), Fla. Stat. (2013), much of the
debate regarding the continued viability of the prior case law is now largely
academic.
                                       4
3d 600 (Fla. 1st DCA 2010), we specifically relied upon Russell to affirm, in a per

curiam decision, the trial court’s denial of a motion for equitable distribution. But

Russell is no longer valid, the Second District forswearing its continued

applicability. See Riley, 119 So. 3d at 516. Because Wos has altered the Medicaid

reimbursement field, we must recede from Hickcox, and we decide expressly to

adopt the holding of Riley (as adopted from Albertson’s Inc.). Riley, 119 So. 3d at

516. That is, we now hold that a plaintiff must be given the opportunity to seek

reduction of the amount of a Medicaid lien established by the statutory formula

outlined in section 409.910(11)(f), by demonstrating, with evidence, that the lien

amount exceeds the amount recovered for medical expenses. When such evidence

is introduced, a trial court must consider it in making a determination on whether

AHCA’s lien amount should be adjusted to be consistent with federal law.

      At the time the trial court issued its ruling in this case, it could not apply this

new legal principle, concluding instead that it was bound to follow the statutory

formula at issue and could not consider the Harrells’s evidence. On remand, the

trial court may consider evidence in the record from the prior hearing and, as

appropriate, any additional relevant evidence in determining the appropriate

amount of medical evidence subject to the lien. See Riley, 119 So. 3d at 516.

      REVERSED and REMANDED

RAY and SWANSON, JJ., CONCUR.

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