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Florida Second DCA rules that Medicaid lien for past medical expenses does not extend to amount of personal injury settlement allocated to future medical expenses

On March 10, 2017, in Willoughby v. AHCA, Case No. 2D15-4845, the Florida Second DCA ruled that a Medicaid lien for past medical expenses did not extend to the amount of a personal injury settlement that had been specifically allocated by the parties as applying to future medical expenses. In doing so, the Second DCA certified a conflict with the Florida First DCA’s contrary ruling in Estate of Villa v. AHCA, 41 Fla. L. Weekly D2743 (Fla. 1st DCA Dec. 12, 2016). The Second DCA cited the U.S. Supreme Court’s decision in Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268 (2006) in support of its decision, and noted that the majority of courts in other states had followed the Ahlborn precedent as well as a number of administrative law judges within Florida.

The Second DCA also ruled that it was irrelevant to the determination of the coverage of the Medicaid lien that the vast majority of the settlement was made possible because of the defendant’s potential bad faith liability for the full damages suffered by the plaintiff rather than the very limited UM limits otherwise available, quoting State Farm Mut. Auto Ins. Co. v. Laforet, 658 So. 2d 55, 60 (Fla. 1995) for the proposition that "damages in first-party bad faith actions are to include the total amount of a claimant's damages, including any amount in excess of the claimant's policy limits without regard to whether the damages were caused by the insurance company.”