Date: 03-22-2013

Case Style: Maria Ramirez v. Oklahoma Health Care Authority

Case Number: CJ-2012-343

Judge: Rebecca B. Nightingale

Court: District Court, Tulsa County, Oklahoma

Plaintiff's Attorney: Daniel B. Graves, William C. McLain, and Rachel Gusman

Defendant's Attorney: Matthew Sloan Wood

Description: Maria Ramirez sued the Oklahoma Health Care Authority claiming:

1) Maria Rarnirez (“Ramirez”) is now and at all times relevant to this action has been a resident of Tulsa County, Oklahoma.

2) The OHCA is an Oklahoma governmental agency that administers Oklahoma’s Medicaid program throughout the State of Oklahoma including Tulsa County, Oklahoma.

3) The motor vehicle collision giving rise to this action occurred in Tulsa County, Oklahoma.

4) The healthcare facilities and individual providers treating Ramirez are all located in Tulsa County, Oklahoma. The medical expenses and the payment for such medical expenses giving rise to this action were incurred and paid in Tulsa County, Oklahoma.

5) This Court has jurisdiction over the parties and the subject matter, and venue is properly lodged with this Court.

6) On January 23, 2011, Ramirez was a passenger in a vehicle driven by Andres Bustos-Trujillo (“Trujillo”) at a high rate of speed traveling west on State Highway 11 near North Harvard Avenue.

7) Trujillo crashed into a vehicle illegally parked in the inside emergency lane of State Highway 11. The crash resulted in horrific personal injuries to Ramirez.

8) Ramirez suffered multiple fractures and a liver laceration requiring her to be hospitalized for approximately six (6) days. She underwent open reduction and internal fixation for a left distal radius fracture leaving a metal plate, screws in her wrist and permanent scarring and disfigurement.

9) Ramirez’s medical expenses totaled the approximate amount of $58,029.63.

10) The value of Ramirez’s injury claim far exceeds all available insurance coverage.

11) At the time she sustained these injuries Ramirez was and still is an OHCA Medicaid recipient.

12) OHCA claims to have paid and asserts a lien on the settlement proceeds in the amount of $31,918.14.

13) Ramirez entered into a contingency attorney fee agreement with the undersigned counsel which requires the payment of costs and an attorney fee of thirty-three and one-third percent (33 1/3%) after filing of a lawsuit.

14) Plaintiffs counsel undertook a hill investigation of the facts and circumstances of the collision, liability, damages and available coverage. The investigation revealed that the vehicle in which Ramirez was a passenger had no liability insurance effective for the date of loss.

15) The illegally parked vehicle carried a $25,000 liability insurance policy applicable to Ramirez’s injury claim. The insurance company, Pride National Insurance Company, has tendered the limits of its policy.

16) Plaintiffs counsel requested that OUCA waive its lien under the provisions of 63 U.S. §5051.l(D)(1)(d), and OHCA refused Plaintiffs request.

17) The relevant portions of 63 U.S. §5051.1 read, as follows:

D. If the injured or diseased person asserts or maintains a claim against another person or tortfeasor on account of the injury or disease, the Authority:

1. Shall have a lien upon payment of the medical assistance to the extent of the amount so paid upon that part going or belonging to the injured or diseased person of any recovery or sum had or collected or to be collected by the injured or diseased person up to the amount of the damages for the total medical expenses, or by the heirs, personal representative or next of kin in case of the death of the person, whether by judgment or by settlement or compromise.
The lien authorized by this subsection shall:

d. be applied and considered valid as to the entire settlement, after the claim of the attorney or attorneys for fees and costs, unless a more limited allocation of damages to medical expenses is shown by clear and convincing evidence; [Emphasis Supplied]

18) Pursuant to the statutory reduction formula mandated by 12 U.S. §994.1, OHCA did reduce its lien from $31,918.14 to $18,717.59. The formula mandated by 12 U.S. §994.1 only reduces URCA’s lien by the amount of attorney fees and costs leaving no compensation for Ramirez’s pain and suffering, permanent scarring or disfigurement.

19) UHCA’s recovery statutes and the cases interpreting the statutes provide that UHCA’s lien may only be enforced against settlement proceeds allocated to medical expenses. See 63 O.S. §5051.1. OHCA still refused to waive its lien or reduce its lien further as provided by 63 O.S. §5051.l(D)(l)(d) to an amount that would provide some compensation to Ramirez for her pain and suffering, permanent scarring and disfigurement.

20) The value of Ramirez’s claim far exceeds the amount of insurance coverage available as compensation for this claim. Because the insurance coverage is inadequate the allocation to medical expenses is more limited than is reflected by the lien amount asserted by OHCA, and Ol-ICA’s lien should only be enforced against the settlement proceeds allocated to medical expenses.

21) Plaintiff Ramirez petitions this Court for an evidentiary hearing and for an Order detemiining the amount of OHCA’s lien.

WHEREFORE, Plaintiff Maria Ramirez prays that the Court, pursuant to 63 0.5. §5051.l(D)cj)(d), sets a date certain for an evidentiary hearing and for an Order to determine the amount of OHCA’s lien, for attorney’s fees, costs and for all other relief deemed appropriate by this Court.

The Oklahoma Health Care Authority appeared and answered as follows:

1 . C)HCA is without. suilicicut information to admit or deny the aIlegations contained ITt
Paragraph 1 oF the Plaintiffs Petition.

2. (iNCA is an Oklahoma governn-ieniaI agency that administers Oldahom&s Medicaid program thrOughott Ibe State of Oklahoma. Oklahoma’s Medicaid program is known by the name of Sooner Care.

3. OHCA is without SLLHIcidnt information to admit or deny the allegations contained in Paragraphs 3—8 of the Plainiifrs Petition.

4. As to Paragraphs 9 — 12, 01-WA does admit it. has paid claims related to the injuries sustained as a result of the accident ocdurnng on January 23, 2011 OHCA claims an interest in the- allocated Funds which is the subject of this Interpleader. 01 WA claims priority to said fttnds pursuant to applicable state and federal law subject oTily to attorneys lees and costs. 63 OS. §5051.1; Edwards v. Ardent. 2010 OK CIV APP 113, 243 P.3d 25; DHS v. Allstate Insurance 987 OK 91. 744 P.2d 186.

5. The OIICA has been billed $58.029.63 for Maria Ramirez and expended $31,918.14 as of December 31, 2011. The total amount of the UHCA lien is the expended amount $31.918.14. The difference between the billed amount and expended amount is a direct benefit to the Medicaid member as the providers who billed Medicaid are hound to accept the Medicaid rate as payment in full.

6. The lien file is Set up at the request of the Plaintiff's attorney. In this mailer, the lien amount and the a lien sheet listing all related claims was provided to Plaintiff's counsel on July 21, 2011. To date, the basis for (he lien amount has not been disputed by Plaintiff’s counsel.

7. ONCA is without sufficient information lo admit or deny the allegations contained in Paragraphs 13 - IS of the Plaintiff’s Petition.

8. As to Paragraph 16, ORCA did entertain a lien reduction request received on November
30, 201 1. ORCA was unable to approve a full waiver of the lien.

9. OHCA did agree to a reduction of the lien to $18,717.59. the amount provided by 12 0.5. §994.1, said amount representing the balance of settlement proceeds remaining after attorney lee and costs are paid. In addition. Plaintiff sought a lull waiver of the Medicaid lien to use the funds to set up a Special Needs Trust to maintain Medicaid eligibility.

10.. By virtue of Medicaid law, the approximately $26,111.49 difference between what was billed and what was paid by ORCA is completely discharged. Ibid Ms. Ramircz not been a Medicaid member, she would he responsible for the entire $58,029.63.

11. The State of Oklahoma is required by federal law to ensure that Medicaid Funds (taxpayer dollars) are used only as a last resort. 42 U.S.C. 1396ae)(25). This means every other resource which could he used to pay For medical care must. he used used to pay for medical care before the expenditure of taxpayer funds. In some instances Medicaid funds are paid prior to determining that another source should have been used as payment. In those instances UTiCA is required by federal law to recover the expended funds lu the extent of such legal liability. 42 U.S.C. 1396a(aX25). OHCA then must refund to the federal government its portion of i.hose funds, an amount of approximately 70-75% oF the lien amount. 42 U.S.C. § 1396k.

12. Oklahoma, like all states who participate in the Medicaid program, are required to prepare what is called a “State Plan” explaining how the stale of Oklahoma’s Medicaid program will operate. The State Plan (nor any amendment thereto) is not effective until approved by the Secretary of Health and Human Services. Pharmcare Oklahoma, Inc v. State Health Care Authority. 2007 OK CIV APP 5, 152 P.3d 267, 269-270 (the stales’ Medicaid program is primarily administered by the participating state, under a state plan, subject to federal guidelines and constraints. See 42 U.S.C. § 1396, 1396a). States are not required to participate in a Medicaid program. However, if it does participate. it must operate its program in compliance with federal statutes and regulations. iS (citing to 42 U.S.C. § I 396a; Alexander v. Choate, 469 U.S. 287, 105 S. Ct. 7(2. S3 L.Ld.2d 661 (1985)).

13. In this case, OHCA paid for care at the lime Maria Ranimrez was injured and since the time Maria Ramerez was injured. Now, funds have been recovered meant to compensate for those injuries. OHCA is required by federal law to recover those hinds (to the extent possible) that were expended for her medical care. In furtherance of its duty to he a payor of last resort, and in compliance with federal law, OHCA requires applicants to assign to OHCA their rights to receive payments for medical care. 42 U.S.C. § 1396k. Further. Plaintiffs are under a duty to cooperate with OHCA to disclose and/or recover From resources which should be utilized to pay for medical care. Id. ibis duty to cooperate and required assignment are part of the Medicaid program requirements and are in exchange for the significant benefits Medicaid provided at the time of injury.

14. Maria Ramirez was the beneficiary of the contracts entered into between OHCA and various: providers. Probably the most significant benefit is that Maria Ramirez has received the benefit of the “Medicaid rate” for services—-an amount significantly less than the marker rate of services. The providers are prohibited by federal law, and their OHCA contracts from receiving more than the Medicaid rate for covered services and must accept OHCA’s payment, as payment in full. The difference between what was billed to Medicaid and was paid by Medicaid in this case has been completely discharged. Essentially, OHCA has performed its obligation to Maria Ramirez by paying for her medical care and Ms. Ramirez accepted the henelits offered by OHCA —a significant discount from the market rate for medical services. Rather than fulfill their obligation to OHCA by repaying the discounted rate and a lien that has been reduced to $18,717.59, Plaintiff asks this Court ts further reduce the medical debt.

15. In addition. Ms. Ramirez has a duty to report any settlement proceeds she may receive and as such, the settlement. proceeds may be deemed to he income and may impact her Medicaid eligibility for a period o:f time.

WHEREFORE, ORCA requests that this Court enforce OHCA’s lien reduction of $18,171.59 and distribute said amount to OHCA for payment of Medicaid services rendered to Maria Ramirez, along with all other relief that is just and equitable including attorney’s lees and costs incurred in the litigation of this matter.

Plaintiff petitioned the Court for the Establishment of a Trust:

1. Applicant is a resident of Tulsa County, Oklahoma, and is a family friend of the beneficiary, Maria Ramirez,

2 Maria Ramirez is a resident of of Tulsa County, Oklahoma and receives, among other government benefits, needs based medical benefits.

3. On or about January 23, 2011 Ms. Ramirez sustained personal injuries in a motor vehicle collision for which she was not at fault. Ms. Ramirez received medical treatment and incurred medical expenses for her injuries.

4. Ms. Ramirez and one of the at-fault party’s liability insurance carriers have reached an agreement to resolve the injury portion of the case.

5. Ms. Ramirez’s medical expenses from her injuries were approximately $53,000.00 for which Medicaid paid. Ms. Ramirez’s counsel and counsel for the Oklahoma Healthcare Authority have reached an agreement to fully satisfy the Medicaid lien.

6. Ms. Ramirez’s net recovery will exceed the maximum amount she is allowed to possess in order to retain her needs based state aid. Applicant, Ms. Ramirez and Deputy General Counsel for the Oklahoma Health Care Authority Sloan Wood have agreed that the establishment and maintenance of a Medicaid Disability Trust is the proper and acceptable manner to protect Ms. Ramirez’s interest;

7. Applicant Timothy E. SMith has agreed to serve as the Trustee and bear all of the risks and responsibilities associated with this role. Applicant requests that bond be waived;

8. Applicant has obtaincd a federal tax identification number and will open the appropriate bank account(s);

9. Sloan Wood, Esq, Assistant General Counsel for the Oklahoma Health Care Authority, has approved the form and content of this Trust. Mr. Wood’s correspondence confirming that this Trust complies with Federal and State law is attached as Exhibit A. Also, Mr. Wood’s signature for the Trust document is provided contemporaneously with this filing attached to the Trust document;

10. Pursuant to 42 U.S.C. §1396p(d)(4)(A) this Court is authorized to establish this trust;

11. Applicant requests that the Court establish the Trust in the form and with the content presented with such Trust document being submitted contemporaneously with this filing for the Court’s review;

12. The Trust will be funded by the settlement proceeds from the motor vehicle collision tortfeasor’s liability insurance policy in the approximate amount of $8,764.31 after deduction of all costs, attorney fees, subrogation claims, liens and medical expenses. A copy of a proposed distribution statement including payment of costs, attorney fees, subrogation claims, liens and all medical expenses can be made available for the Court’s inspection;

13. Applicant is not aware of the existence of a will. Ms. Ramirez denies the existence of a will. Applicant and Ms. Rarnirez represent to this Court that Ms. Ramirez does not own any appreciable assets, other than scant home furnishings;

14. Because the corpus of this Trust will be relatively small and there will likely never be further capital contributions, Applicant requests that the Court waive bond;

15. For the reasons stated above, Applicant requests that the Court not appoint a Guardian Ad Litem (“GAL”), as a GAL will require payment of fees and further unnecessarily deteriorate the corpus of the Trust;

WHEREFORE Applicant requests that the Court establish the Maria Ramirez Irrevocable Trust, a Medicaid Disability Trust pursuant to 42 U.S.C. § 1396p(d)(4)(A). In the alternative, Applicant requests that the Court set a date and time certain for a hearing to establish the Maria Ramirez Irrevocable Trust, and for all such other relief allowed by law.


The Trust:

TRUST AGREEMENT

NOW on this _______ day of _______ ____, 2012, this Trust Agreement is made and entered into by and between, Maria Ramirez, (hereinafter “Settlor”), and Timothy E. Smith (Trustee). In consideration of the terms, conditions and provisions set forth hereafter, Settlor and the Trustee agree as follows:

ARTICLE I - NAME OF TRUST

The name of this Trust is the MARIA RAMU{EZ IRREVOCABLE TRUST.

ARTICLE II- ESTABLISHMENT OF TRUST

This trust is established for the reasons and purposes set forth hereafter, and is intended to comply with the applicable provisions of Title 42 United States Code §1396p(dX4)(A) and the Social Security Act (the Act). The Primary Beneficiary is under the age of 65 years and is disabled as defined by 42 U.S.C. §1382c(a)(3).

ARTICLE III - BENEFICIARIES

Maria Ramirez and the State of Oklahoma Medicaid Program shall be the sole beneficiaries of this trust and Maria Ramirez is the Primary Beneficiary and the State of Oklahoma Medicaid Program is the Secondary Beneficiary.

ARTICLE IV - PRIMARY PURPOSE

This trust is created primarily for the benefit of Maria Ramirez (hereafter, ‘Primary Beneficiary’), who suffers from a physical and mental disability and, as a result, will continue to need Supplemental Security Income and Medical Assistance benefits for an indefinite period of time. Medical needs will be provided for Maria Ramirez in part by the State of Oklahoma through the Oklahoma Health Care Authority. In addition to medical needs, Primary Beneficiary will have other needs throughout her lifetime that cannot be satisfied solely by Primary Beneficiary’s Supplemental Security Income. The primary purpose of this trust, therefore, is to furnish Primary Beneficiary during her lifetime, with such assistance with education, transportation, entertainment, and other assistance as he will need to assure of as natural and pleasant a life as is possible, It is also the purpose of this Trust to reimburse the State of Oklahoma Medicaid Program for all expenses paid on behalf of Primary Beneficiary from the trust at the time of her death.

In months that Primary Beneficiary is eligible for Supplemental Security Income or Medical Assistance benefits, or has an application or applications for such benefits pending, the Trust shall not normally make a direct payment or payments to Primary Beneficiary, or to a vendor or vendors for the benefit of Primary Beneficiary, if such payment or payments shall disqualify Primary Beneficiary from receipt of Supplemental Security Income and!or Medical Assistance benefits or if such payment or payments shall reduce the benefits to which Primary Beneficiary would otherwise be entitled. However, if in the Trustee’s judgment, there are unusual or extraordinary circumstances so that it would be in Primary Beneficiary’s best interest for the Trustee to make a payment or payments directly to Primary Beneficiary, or to a vendor or vendors for the benefit of Primary Beneficiary, Trustee may make such payment or payments that disqualify Primary Beneficiary from receipt of Supplemental Security Income and/or Medical Assistance benefits or reduce the benefits to which Primary Beneficiary would otherwise be entitled.

When Primary Beneficiary dies, and the Secondary Beneficiary has been reimbursed for all expenses paid on behalf of Primary Beneficiary, the remainder of the Trust shall be, distributed as directed in Primary Beneficiary’s will or, in the absence of a will, by the State of Oklahoma laws of intestate succession.

ARTICLE V - FUNDING OF TRUST

The Trust shall be funded with: (I) Supplemental Security Income lump sum payment made to Primary Beneficiary and any portions of monthly Supplemental Security Income benefits that Primary Beneficiary may later chose to add to the Trust; and (2) assets of Primary Beneficiary recovered as proceeds from settlement of a personal injury claim arising from a motor vehicle collision that occurred on or about January 23, 2011.

ARTICLE ‘/1 - APPOINTMENT OF TRUSTEE

Timothy F, Smith is hereby appointed as Trustee of this Trust. Trustee shall serve without fee and without bond. A corporate trustee may charge a reasonable fee for services in accordance with its published fee schedule, as amended from time to time.

ARTICLE VII- RESIGNATION OR DEATH OF TRUSTEE

Any Trustee may resign by giving thirty (30) days written notice to Primary Beneficiary, or the guardian, conservator or other legal representative of Primary Beneficiary. Such resignation shall be effectiv6thirty (30) days from the date notice is given. In the event Trustee resigns, dies while holding office or otherwise is unwilling to serve, then a court of competent jurisdiction shall appoint a Successor Trustee. Every Successor Trustee shall have all the powers, duties and limitations conferred on or imposed upon the original Trustee.

ARTICLE VIII - POWERS OF TRUSTEE

The Trustee may perform every act reasonably necessary to administer the trust. In addition to all of those powers and duties specifically authorized in this instrument, the Trustee may exercise those powers and perform those duties set forth in the Oklahoma Trust Act together with any amendments to such Act subsequent hereto, and said Act as it exists at the date of the execution of this is incorporated herein by reference and made a part hereof as fully as if it were set out at length herein. For the purpose of administering this trust, the rules of the State of Oklahoma Medicaid Program shall supersede the provisions of the Oklahoma Trust Act.

ARTICLE TX - TRUST ADMINISTRATION

A. Modification or Termination. The terms and conditions contained in this Trust shall be irrevocable and not subject to amendment or by any person, except as set forth herein. This trust may be modified only by written agreement of the beneficiaries or written agreement of the Trustee and the Oklahoma Department of Human Services or its successor agency. This trust may be terminated prior to the death of Primary Beneficiary oniy by written agreement of the beneficiaries or written agreement of the Trustee and the Oklahoma Department of Human Services or its successor agency. Such written agreement must provide that the State of Oklahoma Medicaid Program be paid in full for the amount the State of Oklahoma Medicaid Program has paid on behalf of Primary Beneficiary since the establishment of the Trust or an amount agreed to by the Oklahoma Department of Human Services.

B. Trust Property Not Subject to Probate. Any property payable to this trust or contained in this trust shall not be subject to claims against the estate of Primary Beneficiary following death, nor shall such property be subject to the control of the personal representative of Primary Beneficiary nor be included in the property administered as part of the probate estate of the beneficiary. Upon the death of Primary Beneficiary, the property contained in the trust shall pass as set forth herein and under no circumstances shall the property in this trust be considered to be part of the probate estate of Primary Beneficiary.

C. Inalienability. No beneficiary shall have any right to anticipate, sell, assign, mortgage, pledge or otherwise dispose of or encumber all or any part of the trust property nor shall any part of the trust be liable for the debts or obligations. including alimony, of any beneficiary or be subject to attachment, garnishment, execution, creditor’s bill or any other legal or equitable process. The interests of the beneficiary of this trust shall be held subject to a “spendthrift trust” as set froth in the Oklahoma Trust Act. This provision shall not bar any remedy sought by the State of Oklahoma Medicaid Program for the purpose of obtaining trust distributions in accordance with this trust declaration and applicable federal and state laws and administrative regulations.

D. Reports. Periodic reports shall not be made except as required by the regulations of the State of Oklahoma Medicaid Program. The trust records shall be open at all reasonable times to inspection by the beneficiaries of the trust, including the State of Oklahoma Medicaid Program and its designated representatives.

ARTICLE X - LIFETIME PROVISIONS

Trustee will receive, hold, manage, invest and distribute the trust estate for the benefit of the Primary Beneficiary upon the following terms:

A. Income Payments. During the life of the Primary Beneficiary, Trustee may pay the net income of the trust estate at such time, in such amounts, and in such maimer as Trustee deems best, in the absolute discretion of Trustee, in accordance with the purposes set forth in Article One of this trust agreement, for the direct or indirect benefit of the Primary Beneficiary, taking into consideration, however, all other sources of income available to the Primary Beneficiary. Any income not expended will be accumulated and added to principal.

B. Principal Payments. During the life of the Primary Beneficiary, Trustee may pay the principal of the trust estate at such times, in such amounts, and in such manner as Trustee deems best, in the absolute discretion of Trustee, for the benefit of the Primary Beneficiary pursuant to the general purposes stated in this trust.

ARTICLE XI- TERMINATION OF TRUST

This Trust shall terminate upon the death of Primary Beneficiary. Upon termination and payment by the Trust of outstanding expenses of trust administration, the principal and income of the trust shall be distributed to the Oklahoma Department of Human Services or its successor agency up to an amount equal to the total medical assistance paid on behalf of Primary Beneficiary by the State of Oklahoma Medicaid Program as reimbursement for the medical assistance provided for Primary Beneficiary subsequent to the establishment of this trust. If Primary Beneficiary has resided in more than one state, the principal and income of the trust must be distributed to each state in which the individual received Medicaid benefits, based on the state’s proportionate share of the total amount of Medicaid benefits paid by all of the states on Primary Beneficiary’s behalf. All trust property remaining thereafter shall be distributed under the terms of the last will and testament of Primary Beneficiary or according to the laws of intestate succession.

ARTICLE XII - DISPUTES/CLAIMS MADE AGAINST RESIDUAL ESTATE

Notwithstanding anything contained herein to the contrary, in the event that a dispute arises as to who is entitled to the residual assets, or if any claims or debts are asserted by any third party against this trust arid/or its residual assets, then the Trustee is specifically authorized to file an interpleader action in the appropriate court with jurisdiction over the parties, for the court to decide who is entitled to said residual assets.

ARTICLE XIII RELIANCE BY THIRD PARTIES ON TRUSTEE AUTHORITY

No person, firm or corporation dealing with the Trustee with reference to any of the trust property, if acting in good faith, shall be required to ascertain the authority of the Trustee, nor to see to the performance of the trust, nor be responsible in any way for the proper application of funds or properties paid or delivered to the Trustee for the account of the trust, but, if acting in good faith, may deal with the Trustee as though the Trustee was the unconditional owner of the property held in trust.

ARTICLE XIV - SAVINGS CLAUSE

In the event any clause, provision or provisions of this trust prove to be or be adjudged invalid for any reason, then the Grantor directs that such invalid or void clause, provision or provisions, shall not affect the whole of this instrument, but the balance of the provisions hereof shall remain operative and shall be carried into effect insofar as legally possible.

DATED: March, , 2012.

Maria Ramirez

Settlor


Timothy E. Smith

Trustee of the Irrevocable Trust

JUDGE OF TUE DISTRICT COURT

Outcome: Settled and dismissed with prejudice.

Plaintiff's Experts:

Defendant's Experts:

Comments: