Tuesday, January 19, 2016
First Approval Letters Going to Outbreak Victims
By Walter F. Roche Jr.
Approval letters for some 1,350 victims of the deadly 2012 fungal meningitis outbreak will be going out in the mail this week and the claimants will learn for the first time what they are likely to receive as a preliminary award.
Fredric Ellis, a Boston lawyer representing victims, said the letters will include the number of points being awarded to each victim. He said the dollar value for each point will be slightly under $1,300.
The letters are the latest development in the aftermath of the 2012 fungal meningitis outbreak which sickened some 778 patients across the country, killing 76 of them.
The victims will be sharing in an estimated $200 million which was amassed in the bankruptcy of the New England Compounding Center, the company blamed for the outbreak. NECC shipped fungus laden steroids to health facilities where unsuspecting patients were then injected in spines and joints.
Ellis said just when victims can actually expect payments is not clear although he said it was possible it could happen in 90 days.
Ellis said the initial payments will be approximately one half of the amount victims can ultimately expect.
"We decided not to wait for everything to be resolved," Ellis said, adding that withholding half the money would provide a buffer. "This won't be the final payment."
Under the court approved allotment system (see below), victims will be awarded points based on the severity of their illnesses. For instance, the survivors of a victim who died in the outbreak would be awarded 55 points, while a patient who suffered fungal meningitis would be allotted 30 points.
Ellis said payments were being made in two installments because of a variety of factors, including the fact that some claims that were initially denied, could later be approved on appeal.
Yet another major factor is the ongoing negotiations with the federal government over how much of the awards will be earmarked to repay the Medicare program for the costs it incurred in paying for the medical care of victims.
Four U.S. senators have called on HHS Secretary Sylvia Burwell to waive any Medicare claims. So far there has been no response to their letter.
Ellis said that if an overall agreement cannot be reached with Medicare then each case will have to be handled individually leading to even longer delays.
Additional expenses also are expected including the award of attorney fees. An 8 percent overall fee has been proposed for attorneys working on a steering committee for victims and creditors.
Here is a link to the seven payment categories: http://www.neccsettlement.com/Home/FAQ#SEC2