Outbreak Victims Face Insurance Payback Demands

By Walter F. Roche Jr.

When Ray Sharer, a victim of the 2012 fungal meningitis outbreak, opened a letter from his insurance company recently he got an unpleasant surprise.
The letter informed him that if he ever gets any money from the parties blamed for the outbreak that put him in a hospital for eight weeks, the insurance company will be coming after him to recover the money it paid for his care.
Sharer, as he soon found out, is not alone. Dozens of other victims of the deadly outbreak have been getting similar notices, even as they still try to recover from the lingering effects of a crippling disease. Its a legal process called subrogation.
The notices come as the third anniversary of the outbreak approaches. It was in early October of 2012 when state and federal officials first announced that a deadly fungal meningitis outbreak was spreading across the country.
Eventually federal and state health officials concluded  that thousands of vials of fungus laden steroids shipped from a Massachusetts drug compounding firm had caused the deadly outbreak.
The latest available figures from federal officials shows the outbreak sickened 778 patients, killing 76 of them.
"I have been left with the permanent loss of my urinary tract, with having to catheterize myself and problems with my bowel tract.  In addition, I have lost feeling in my feet and have problems with my balance," Sharer said.
Sharer, like many other living outbreak victims, has been following the developments in Massachusetts courtrooms, where a slowly moving judicial process is playing out. Earlier this year they learned that  some recompense might finally be available from the settlement of the bankruptcy case of the New England Compounding Center, the company responsible for the fungus tainted drugs.
The trustee in that case, Paul Moore, has expressed hope that payments from a $200 million trust fund, can begin to flow to victims before the end of 2015.
That ray of hope however, is now being dimmed by that 11-letter word, subrogation.
"I talked to several others who also got notice. People don't expect this," Sharer said.
While many victims were surprised to learn that insurance companies would be demanding a piece of any winnings, others, like Dennis O'Brien, another Tennessee victim, were not.
O'Brien, a Cookeville resident, said he knew that his insurance company would be trying to recoup its payments made for his care.
Nashville attorney Gerard Stranch said efforts to get insurance companies or the federal Medicare program to limit or drop any subrogation claims have so far been unsuccessful
"It is an unfortunate aspect of our current legal system that victims are going to have to pay back large sums of money to their insurance carriers and Medicare when they were not made whole by the settlement," said Stranch, who represents several victims.
He said he and other attorneys for victims have asked Medicare to waive any claims, but the agency has "not agreed to any reduction, let alone a complete reduction."
Sharer, who gets his Medicare coverage through HealthSpring, has responded to the company notice by sending dozens of letters to public officials expressing outrage.
"The purpose of this letter is to put you on notice of this matter. I feel that your office should be reviewing same to see if we can get relief from this preposterous position being taken by the various health insurance companies.  So many of us are suffering tremendously, not only from our medical conditions, but also financially," the letter states.
HealthSpring and officials did not respond to requests for comment on subrogation efforts. Medicare officials said that by law they are required to seek reimbursement.
"Statute requires Medicare to recover its conditional payments once primary payment responsibility has been demonstrated through a settlement, judgment, award, or other payment," a Medicare spokesman said.
Carol Snyder, a New Mexico resident, who lost her mother, Pauline Burema, in the outbreak, said she was aware that Medicare would be seeking reimbursement.
Burema was 89 and suffering from chronic back pain when she began getting shots at an Indiana clinic.
She had put off additional back surgery and agreed to get the steroid shots for interim relief, Snyder recalled in a recent interview.
After the first shot in August she was already feeling sick. And then things got worse.
Snyder said she tried to reach her mother repeatedly by phone after that last shot on Oct. 1 and got no answer.
"So I called my brother. He found her on the bathroom floor. She had probably been there for a day. She was rushed to the hospital. They thought it was a stroke," Snyder continued.
 As her mother's condition worsened, the CDC made the first public announcement of the outbreak.
She said that ultimately she suffered seven strokes and died on Oct. 10.
 "It was a horrible, horrible death. She looked so miserable," Snyder said.
Now Snyder says her one goal is to be in the courtroom for the criminal trial of the owners and employees of the NECC.
That trial is scheduled for April, 2016.
"If I could just be there. I would like to be there to speak for her. She was 89 and wanted to live to be 100," Snyder said. "She probably would have."