Florida Can’t Revisit Order Blocking Medicaid Lien Formula

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By Matthew Loughran

Florida’s Medicaid agency couldn’t persuade a federal court to re-evaluate its order blocking the state’s Medicaid reimbursement law ( Gallardo v. Senior , 2017 BL 249677, N.D. Fla., No. 4:16-cv-116, 7/18/17 ).

In a scorching July 18 opinion, Judge Mark E. Walker of the U.S. District Court for the Northern District of Florida excoriated the state’s Agency for Health Care Administration (AHCA) for its “pernicious” attempt to use new attorneys and newly filed motions to seek reconsideration of the order. At times the court called the state’s arguments “nonsense,” comparing the effort to go back and rewrite the court’s order to the plot of the movie “Back to the Future.”

The court’s decision leaves in place its April opinion blocking the state’s Medicaid reimbursement law. Under that law the state could attempt to recoup from a Medicaid patient any portion of a legal settlement related to that patient’s underlying injury that represented payment for both past and future medical expenses.

According to the court’s April decision, that provision of state law was preempted by the Medicaid Act, which only allows recovery of the amount set aside for past medical expenses.

Back to the Future

The court opened its most recent opinion by comparing the state, unfavorably, to the protagonist in the 1985 film “Back to the Future.”

After recounting the movie’s basic premise, which involved the protagonist inadvertently changing his future by traveling into the past in a converted DeLorean, the court turned to the actions of the state agency. “The Florida Agency for Health Care Administration ('AHCA') has also tried to go back in time but, unlike the protagonist mentioned above, it hopes to change the future (more specifically, this Court’s prior judgment),” the court said.

The court then asserted many of the arguments the state made in its motions were previously available and thus provided no basis for reconsidering the April decision.

Relitigation Costs

The court also faulted the state for what it called a “pernicious” legal strategy of wasting public funds by changing attorneys and attempting to relitigate unsatisfactory outcomes with motions to vacate or amend earlier judgments. According to the court, this strategy isn’t unique to the AHCA but is practiced throughout state government.

“Despite numerous opportunities to adequately defend cases brought against it, Florida consistently drags its feet,” the court said. “Then, after receiving an unfavorable ruling, it complains about the original ruling and hires outside counsel (and spends, quite literally, hundreds of millions of taxpayer dollars) to essentially relitigate the case.”

In a footnote, the court said the state had paid out $237 million in legal fees to outside counsel, frequently to out-of-state attorneys, since 2011. The court compared that to the $86 million in legal fees paid over the same time by New York.

In this instance, while the AHCA did change counsel after the April decision from Xerox Recovery Services, it has enlisted the services of an in-state law firm, Gray Robinson PA in Tallahassee, Fla.

Representatives for the AHCA declined to comment on the case or on the issue of legal fees.

Medicaid Act Changes

Throughout the opinion, the court rejects the arguments presented by the AHCA, saying they are “just wrong” and “nonsense.”

The AHCA points to a scheduled change in the Medicaid Act that could revive the Florida statute. On Oct. 1, 2017, amendments to the Medicaid Act are scheduled to take effect which will allow a state to seek any part of a Medicaid patient’s settlement as reimbursement for the costs paid in caring for that patient.

The court dismissed that argument, however, pointing out the change had originally been signed into law in 2013 but had repeatedly been delayed by subsequent legislation.

“And even assuming the amendment does go into effect as planned and actually grants the states a more expansive right of recovery, other critical questions would remain unanswered—most relevant here, whether the amendment applies retroactively or prospectively,” the court said.

The court added the AHCA could return with yet another motion to amend the judgment in October if the change in law were to take effect.

The AHCA is represented by Gray Robinson PA in Tallahassee, Fla. The Medicaid patient, Gianinna Gallardo, is represented by Staunton & Faglie PL in Monticello, Fla., and Creed & Gowdy PA in Jacksonville, Fla.

To contact the reporter on this story: Matthew Loughran in Washington at mloughran@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

The court's opinion is at http://src.bna.com/qYa.

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