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How Can a Florida Medicaid Lien Affect My Estate Planning?


Many low-income Florida residents require assistance to pay their medical bills. Medicaid provides such coverage with an important caveat: Florida officials may seek reimbursement for any medical costs paid from the recipient’s assets. This includes the estate of any deceased recipient. This is why many people with a family member receiving Medicaid benefits choose to create a special needs trust, which sets aside assets for the recipient’s benefit but is not subject to a potential Medicaid lien.

Court Punishes Florida Medicaid for Reneging on Pretrial Agreement

Medicaid liens can also impact a wrongful death award obtained by the estate or heirs of a person killed due to the negligent acts of others. But such liens may be limited to that portion of the award that can be attributed to medical expenses, as opposed to other categories of damages such as the loss of the decedent’s support and companionship. Of course, Medicaid will put up a fight if they think they are entitled to more.

Recently a Florida appeals court had to intervene in just such a dispute. This case began with the tragic death of a four-year-old child. The child suffered a traumatic brain injury a year earlier and required extensive medical care, for which Medicaid paid approximately $350,000.

After the child passed away, her probate estate and her parents, as her next-of-kin, filed a wrongful death lawsuit, essentially alleging malpractice against a number of parties associated with their daughter’s care. These claims were ultimately settled for more than $2.2 million.

As required by state law, the estate and the parents notified the Agency for Health Care Administration (AHCA)–the Florida agency that oversees Medicaid–of the lawsuit and its settlement. AHCA maintained it was entitled to receive the full $350,000 from the proceeds of the wrongful death award. But the agency stipulated the parents had the right to appeal that determination, which they did.

An administrative law judge reviewed the case and determined that the “full measure” of damages arising from the child’s death was about $8.8 million. Since the parents settled for roughly 25 percent of that amount, then AHCA should only receive a 25 percent share of the full amount of its lien, or about $90,000. However, the judge also said the parents had no right to contest the amount of a Medicaid lien under federal law, so AHCA should get the full $350,000.

The Florida First District Court of Appeal disagreed with this last part of the judge’s ruling. In a January 26 opinion, the appellate court noted that all parties stipulated prior to the administrative law judge’s hearing that the parents had the right to contest the amount of the lien. And even setting aside that stipulation, the parents’ “substantial interests are being determined in the proceeding.”

Ultimately, while AHCA would normally be allowed to collect the full amount of its lien, its pretrial stipulation in this case came back to bite them. The First District said the agency was wrong to challenge the parents’ standing after initially conceding the issue. Accordingly, the appellate court ruled the agency could only collect the 25 percent share of $90,000 previously calculated by the administrative law judge.

Get Help From a Florida Probate Attorney

Medicaid often complicates estate planning. And even if you are not a Medicaid recipient, paying for end-of-life medical care is a subject you need to address before it is too late. If you need advice from an experienced Fort Myers estate planning attorney, contact the Kuhn Law Firm, P.A., at 239-333-4529 to schedule a free consultation today.


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