Negotiations on Meningitis Liens Already Underway

By Walter F. Roche Jr.

The administrator for the $200 million trust fund benefiting victims of a 2012 fungal meningitis outbreak says she already has begun negotiations with the federal government and major insurers to resolve liens that otherwise could vastly deplete those funds.
Lynne F. Riley, the trust fund administrator, said today in an email response to questions, that she and her staff already have reviewed some 2,500 claims. That number far exceeds the 778 victims that have been cited by federal prosecutors in court filings.
"There are ongoing negotiations regarding the medical liens on victims' distributions, which must be resolved before a first interim distribution can be made," Riley wrote in the email.
She said that preliminary values had been set on some 2,500 claims and efforts were underway to resolve claims "with inaccurate calculations or other major defects before the first interim distribution."
Riley, a partner in the Boston law firm of Casner and Edwards, did not predict how much time would be needed to resolve the remaining issues.
She said the ongoing negotiations were with the federal government on Medicare and Medicaid claims "as well as several private providers that have asserted liens on many of the National Settlement Fund distributions.
Riley said she was not aware that four members of Congress, including U.S. Sen. Lamar Alexander, a Tennessee Republican, had recently written to U.S. Health and Human Services Secretary Sylvia Burwell asking her to exercise her legal authority to waive any liens on victims' distributions.
HHS and private insurers have been notifying victims that they intend to seek reimbursement for costs they incurred for the medical care provided to outbreak victims.
For victims who underwent extensive and recurrent hospitalization, those liens could literally wipe out any distribution from the trust fund.
The trust funds were amassed during the bankruptcy proceedings of the New England Compounding Center, the defunct Massachusetts firm blamed for the 2012 outbreak. The company shipped thousands of vials of contaminated steroids to health provider across the country. Of the 778 known victims, 76 died.
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