First Meningitis Victims' Checks Expected in August

By Walter F. Roche Jr.

Some 1,200 victims of the 2012 fungal meningitis outbreak will not get their first settlement checks until August and final payments could be two to three years away, according to court testimony given Wednesday.
In a nearly 90 minute session in U.S. District Court in Boston, Mass. attorney Thomas Sobol told Judge Rya Zobel the first checks will go to those victims whose claims have been settled and are not being appealed.
Previously attorneys involved in the case had expressed hopes that initial payments could be made in July.
Sobol's disclosure on the timing was one of several major developments to become public during the lengthy session.
A Nashville attorney disclosed that a settlement is but a paragraph away in claims filed by more than 116 victims against the Saint Thomas Outpatient Neurosurgical Center and related entities.
Gerard Stranch told Zobel the last details of a draft memorandum of understanding between the parties was being prepared and should be finalized in a week. He said the parties were "wordsmithing" the final details.
Saint Thomas' officials and attorneys declined to comment.
In another major development Sobol disclosed that a final agreement is also in the works with the Centers for Medicare and Medicaid Services on a formula that will be used to reimburse the federal agency  for  a portion of the costs it paid to provide health care to victims.
He said that letters should be going out shortly to the attorneys for victims explaining the formula and informing them that they can "opt out" and try to negotiate a separate deal with CMS.
Sobol did not disclose the details of the tentative agreement.
"We have virtually reached agreement," Sobol said of the negotiations with the federal government.
The settlement will determine how much of the $200 million settlement fund will go to the federal treasury and how much will be left for victims.
Sobol stressed the agreement with CMS must be in place before any of the trust fund monies can be disbursed.  He said talks are also ongoing with major insurance companies who will be claiming a share of the trust fund.
Fredric Ellis, another Boston attorney representing victims of the meningitis outbreak said there are a total of 2,350 claimants.
Sobol said the first wave of 1,200 checks will go out in August and another in October and the final wave in December.
But he noted the first checks will represent only  a partial payment and second and third checks could come at later dates. He said final checks could be two to three years away because they hinge on tax refunds being sought by owners of  the New England Compounding Center, the company blamed for the deadly outbreak.
According to court records, fungus tainted drugs from NECC sickened 778 patients across the country, killing 76 of them. NECC shipped thousands of vials of fungus laden spinal steroids to health care facilities in dozens of states.
Also discussed Wednesday were the legal fees that will be drawn from the $200 million fund to pay the lawyers who performed various roles for the plaintiffs in the case. Zobel was told a tentative assessment of 8 percent was proposed for a so-called common benefits fund. That could total some $16 million, based on the $200 million trust fund total.
Attorneys also debated over proposals to send many of the cases now before Zobel, back to the states where they were originally filed. Lawyers for a Crossville, Tenn. clinic are asking Zobel to send those cases back to Tennessee, but Stranch said plaintiffs oppose that action.
Kristen Johnson, a partner with Sobol, said some 17 cases involving nine clinics are ready to be shipped back to courts from Ohio to Nevada. In another nine cases, lawyers have objected to being sent back to their home states.
Zobel also must still rule on whether some 26 other cases should be sent back to Maryland or kept in her court.They were among hundreds of cases consolidated before Zobel more than two years ago by a special judicial panel.
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