Medicare Lien Proposal Filed With Court

By Walter F. Roche Jr.

A detailed proposal to resolve millions of dollars in liens faced by victims of the 2012 fungal meningitis outbreak has been filed in U.S. District Court in Boston, Mass. although the plan is still awaiting approval from the U.S. Justice Department.
Under the so-called global settlement, victims receiving awards from a $200 million trust fund will have between 10.5 to 21.5 percent deducted to reimburse the federal Medicare program for the costs paid in their behalf. A small percentage would pay more than 15 percent, the plan states.
Those percentage deductions would be made not only from money recovered from the company blamed for the deadly outbreak, but also any allotments from settlement funds with healthcare provider groups where the victims were injected with fungus loaded steroids.
The details were included in a massive late day filing including four attachments.
Under the plan the higher percentage will apply to those who were hospitalized or under treatment for longer periods of time. The plan utilizes the same matrix and point system previously established under a closely related bankruptcy case.
Claimants in the lowest injury category (VII) would have liens waived.
Medicare, according to the 12-page proposed settlement, would only seek reimbursement on medical claims incurred for victims in a nine month period from Sept. 1, 2012 to May 31, 2013.  That means victims who have continued to incur costs covered by Medicare past May 31, 2013 will not face the loss of additional amounts from any award due to that care.
The plan, which supporters say provides the simplest and quickest method to resolve the hundreds of pending claims comes before a key hearing on Aug. 16 before U.S. District Judge Rya Zobel.
The 14-page motion asks Zobel to approve the proposal even if it has not been approved by the Justice Department.
The petition asserts that the plan utilizes "a simple and easily administered formula" and, if approved, would "resolve the vast majority of claims."
"In general, the higher the injury category and the higher number of points awarded for the long term hospitalization adjustment and for the long term fungal treatment adjustment, the larger the percentage of their total recovery a claimant will pay to resolve CMS (Medicare) liens," the filing by lead attorney Thomas Sobol states/
The filing comes after lawyers for victims in two states, Tennessee and Virginia, filed motions aimed at forcing a final resolution of the Medicare and other liens controversy.
The motion filed in behalf of Tennessee victims asks the court to order the trustee of the trust fund to immediately release payments to at least some of the victims.
The proposed agreement does allow individual claimants to opt out and seek a separate settlement with Medicare. In addition the Center for Medicare and Medicaid Services has agreed to provide "a special person" to handle such opt out claims.
Nonetheless, the initial reaction Thursday from some plaintiff attorneys was concern that victims seeking their own negotiated settlement could face extensive delays not only in getting a final settlement but in even finding out exactly how much Medicare is seeking to recover.
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