Florida Subrogation Laws

State Subrogation

YES – equitable and contractual

A health insurer may reserve a right of subrogation to itself by the inclusion of such a provision in the health insurance contract (Keith v. BEW Ins. Group, Inc., 595 So. 2d 178 (Fla. Dist. Ct. App. 1992)).

After an insurance company has paid a loss on behalf of its insured, it is entitled to subrogation either by express contract rights, or by equitable subrogation by operation of law (Hough v. Huffman, 555 So. 2d 942 (Fla. Dist. Ct. App. 1990)).

FSA §768.76(4): a provider of collateral sources that has a right of subrogation or reimbursement shall have a right of reimbursement from a claimant to whom it has provided collateral sources if such claimant has recovered all or part of such collateral sources from a tortfeasor.  Such provider’s right of reimbursement shall be limited to the actual amount of collateral sources recovered by the claimant from a tortfeasor, minus its pro rata share of costs and attorney’s fees – the provider shall have deducted from its recovery a percentage amount equal to the percentage of the judgment or settlement which is for costs and attorney’s fees.

Made Whole Doctrine

YES – can contract around

• Intended to apply only in limited fund scenarios, which is when the tortfeasor lacks funds or insurance coverage. Schonau v. GEICO General Ins., 903 So.2d 285 (Fla. App. 2005).
• Humana Health Plans v. Lawton, 675 So. 2d 1382 (Fla. Dist. Ct. App. 1996). Where insured has been made whole, and thus payments to insured over and above actual damages may be viewed as double recovery, the insurer has an equitable right to subrogation.
• Florida Farm Bureau Ins. Co. v. Martin, So. 2d 827 (Fla. Dist. Ct. App. 1979).

In the absence of express terms to the contrary, the insured is entitled to be made whole before the insurer may recover any portion of the recovery from the tortfeasor.  The general rule is that the insurer may recover from insured only the excess remaining after the insured is fully compensated for his loss and the costs and expenses of the recovery thereof. This case makes it clear that one can contract around the Made Whole Doctrine in Florida. However, this is one of the only cases that states it is acceptable to contract around the Made Whole Doctrine.

Common Fund

Yes, but…

“Where there is no evidence of substantial assistance to the insured by the insurer asserting a right to subrogation, such fees and costs are appropriately deducted before the fund or claim is paid over to the insurer. Where there is no evidence of substantial assistance to the insured by the insurer asserting a right to subrogation, such fees and costs are appropriately deducted before the fund or claim is paid over the insurer.” (Schwab v. Town of Davie, 492 So. 2d 708 (Fla. Dist. Ct. App. 1986)).

Collateral Source Rules

FSA §768.76 states that there shall be no damages reduction for collateral sources for which a subrogation or reimbursement right exists

Hospital Lien

Each county has their own laws/guidelines that govern hospital liens

Balance billing to an HMO subscriber is prohibited under FSA §641.315-, and most private health insurance agreements contain provisions prohibiting balance billing as well

Crowder v. Dade County, 415 So. 2d 732 (Fla. Dist. Ct. App. 1984) states that a lien of hospital on judgment/settlement is effective for the full amount and may not be impaired or diminished by the amount of attorney’s fees which may be due to the patient’s counsel.  Some counties, however, have laws that allow for a deduction for attorney’s fees in certain situations. Basically, check each county’s laws carefully

A good site for finding the laws of each county: https://www.mwl-law.com/wp-content/uploads/2020/12/Florida-Hospital-Law-Liens-chart.pdf

Medicaid Statute

FSA §409.910

• FSA §409.910(11)(f): in the event of a tort action, the amount recovered shall be distributed as follows:
• after attorney’s fees and taxable costs as defined by the Florida Rules of Civil Procedure, ½ of the remaining recovery shall be paid to the agency up to the total amount of medical assistance provided by medicaid
• the remaining amount of the recovery shall be paid to the recipient
• for purposes of calculating the agency’s recovery of medical assistance paid, the fee for services of an attorney retained by the recipient or his or her legal representative shall be calculated at 25% of the judgment/settlement
• *****The part of the statute entitling the Agency for Healthcare Administration to half of a Medicaid recipient’s tort recovery, after attorney fees and costs, up to the amount of its Medicaid lien (FSA §409.910(11)(f)) has been preempted by federal Medicaid law to the extent it creates an irrebuttable presumption and permits recovery beyond that portion of the recipient’s recovery representing compensation for past medical expenses. The formula is not mandatory (Davis v. Roberts, 130 So. 3d 264 (Fla. Dist. Ct. App. 2013))
  • A Medicaid recipient should be afforded the opportunity to seek the reduction of a Medicaid lien amount by demonstrating, with evidence, that the lien amount exceeds the amount recovered for medical expenses (Davis v. Roberts, 130 So. 3d 264 (Fla. Dist. Ct. App. 2013))
• FSA §409.910(5): The recipient shall inform the agency of any rights it has to third party benefits
  • FSA §409.910(11)(a): recipient must notify agency that it is pursuing a claim against a third party within 30 days after filing
• FSA §409.910(6)(a): the agency is automatically subrogated to any rights that a recipient has to any third-party benefit for the full amount of medical assistance provided by Medicaid
• FSA §409.910(6)(c): the agency has an automatic lien for the full amount of medical assistance provided by Medicaid as a result of any injury for which a third party may be liable
  • the lien is perfected automatically, and filing constitutes notice
• FSA §409.910(12): the agency’s rights of recovery shall not be limited to some portion of recovery from a judgment, award, or settlement; only the following benefits are not subject to the rights of the agency: benefits not related to a covered injury or illness; life insurance or proceeds from other types of insurance; proceeds of disability coverage; and recovery in excess of the amount of medical benefits provided by medicaid after repayment

Cases

Riera v. Finlay Medical Centers HMO 543 So.2d 372 (1989). This case reaffirms that reimbursement of the HMO cannot be greater than the Insured’s recovery from the tortfeasor. Additionally, it says in Florida, an Insured who takes action against an Insurer to force payment of medical bills and wins will be awarded attorney fees. FSA 641.28.