Monday, July 11, 2016

NECC Trust Expense Annual Report Filed

By Walter F. Roche Jr.

The first annual report filed by the administrator of a trust set up to aid victims of the 2012 fungal meningitis outbreak shows that nearly $3 million has been paid out in expenses and the total in the trust is below the $200 million some expected.
The annual report was filed Monday by Lynne Riley, the Boston attorney serving as the administrator of the trust fund. Her report also details the number of claims filed by victims, 2,361, and the number approved in full, 1,199.
Thus far none of the funds have been paid to victims of the outbreak which occurred nearly four years ago. The fund was established under the bankruptcy of the New England Compounding Center, the now defunct firm blamed for the outbreak which sickened 778 patients, killing 77 of them.
The victims were injected with steroids loaded with fungus due to unsanitary conditions at NECC's Framingham, Mass. headquarters.
Riley's report shows proceeds from the bankruptcy settlement of NECC have been divided into three funds. She reported $76,295,793.98 is in a tort trust fund, which will eventually be used to pay victims. An additional $44,182,046.58 is on deposit in a separate expense account. A total of $55,512,927 is in yet a third account known as a Qualified Settlement Fund.
That comes to a total of a little over $175 million.
According to the report a little over $1.1 million has been paid from the expense fund for bankruptcy trustee fees and an additional $392,120.96 was paid for professional services with non-professional fees totaling an additional $57,037.87.
In the tort trust account non professional fees were listed at $135,345.28 while professional fees totaled $1,354,724.41 U.S. Trustee fees were $30,255, according to the report leaving the balance of $76,295,793.98.
In the Qualified Settlement Fund $33,419.98 has been paid in tort trustee fees and $700,000 went to Edmund Gentle, listed as the Provider Funds Settlement Administrator.
Riley said in her report that addition to the 1,199 victims claims allowed in full, 262 additional claims have been approved. A total of 386 claims were denied in full while 451 were partially denied. She said 104 claims have been "finally denied."
Checks to the 1,199 approved claimants, the report states, are scheduled to be mailed out in August.
She reported that a settlement agreement has been reached with the U.S. Centers for Medicare and Medicaid Services for the reimbursement to the Medicare program for expenses it paid for the health care of victims. She did not disclose the details and added that the agreement was subject to approval by the U.S. Justice Department.
Riley reported that many additional reimbursement claims have been filed by private insurance carriers, but she provided no details.
She also reported on the status of claims filed against three clinics, for which three different settlement funds have been established. Some of the victims were injected with the tainted steroids at those three facilities, which subsequently agreed to settlements.
Twenty claims were filed against High Point Surgery Center, a North Carolina clinic and 19 of those were approved.
Claims against Inspira Health Network, a New Jersey clinic totaled 47, while 187 claims were filed against Insight Health, a Virginia clinic operator.
According to court testimony the amount available to victims could be boosted substantially by tax refunds, which the owners of NECC have agreed to forfeit when and if they are actually paid.


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