Medicaid Lien Payable in Full Before Apportionment of Settlement

A Florida appeals court rules that the state is entitled to a full recovery of Medicaid benefits paid before a wrongful death settlement is apportioned between the estate and the survivors. Strafford v. Agency for Hlt. Care Admin. (Fla. Dist. Ct. App., 2d, No. 2D04-5502, Oct. 7, 2005).

During her birth, Lexi E. Strafford-Luneke suffered a lack of oxygen to her brain and remained in a vegetative state until her death on August 3, 2003. She accumulated $74,903.41 in medical bills, paid by Florida's Agency for Health Care Administration (Medicaid). Lexi's unmarried parents, as co-personal representatives, filed a wrongful death action that was eventually settled for the undivided sum of $485,000. The parents subsequently petitioned the probate court to apportion the settlement amount between Lexi's estate and them in their individual capacities. They contended that their apportionment scheme would trigger a statutory reduction formula that provides that after attorney's fees and costs are deducted, one-half of the remaining recovery allocated to Lexi's estate would be paid to the Agency, up to the total amount of medical assistance provided. This would reduce the Agency's recovery from $74,903.41 to $4,986.49.

The Agency asserted that its lien attached to the entire settlement, not just the amount allocated to Lexi's estate. The probate court agreed that the Agency was entitled to a full recovery, ruling that the express provisions of Florida's Medicaid Third-Party Liability Act section 409.910, Florida Statutes (2001), prohibited the reduction of the Medicaid lien. The statute provides that Medicaid is to be repaid in full, "regardless of whether a recipient is made whole or others creditors paid."

The District Court of Appeal of Florida affirms. The court concedes that the recoverable damages for the survivors and the decedent's estate are distinct, but concludes that "[e]ven so, the Act's provisions require that the Agency be paid prior to any apportionment between the estate and the survivors."

To download the full text of this decision in PDF format, go to: https://www.2dca.org/opinion/October%2007,%202005/2D04-5502.pdf.
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