Medicare Settlement Will Tap Clinic Awards

By Walter F. Roche Jr.


A proposed global settlement of Medicare liens for victims of the 2012 fungal meningitis outbreak will also trigger reductions in the amounts those victims may eventually get from suits filed against the healthcare facilities where they were treated.
Interviews with attorneys involved in the litigation, victims and a review of court documents shows that deductions of 10.5 percent to 21.5 percent will apply not only to the so-called national settlement fund but also to some $70 million in awards from settlements with clinics or other health care providers in Michigan, New Jersey, Virginia and North Carolina.
According to some victims and attorneys the dual reductions could, in some cases, result in Medicare being paid more than it actually spent on the care of some of the victims.
The settlement agreement, which has been approved by a federal court judge and the Centers for Medicare and Medicaid Services specifically mentions settlements with Insight Imaging, Inspira Health Network, Michigan Pain Specialists and High Point Surgery Center.
The agreement does give victims the right to opt out and attorneys representing victims in Virginia and Tennessee have indicated that most of their clients will be doing just that. That means they will settle each case on an individual basis.
The global settlement, which still needs formal approval from the U.S. Justice Department, is the latest development in the civil litigation stemming from the 2012 fungal meningitis outbreak. It comes as the fourth anniversary of the outbreak approaches and victims have yet to receive any payments.
The outbreak, caused by fungus tainted injectable steroids, sickened 778 patients, killing 77 of them.
William Leader, a Nashville, Tenn. lawyer, said that while precise numbers are not yet available for his clients, the settlement agreement could likely result in Medicare being reimbursed for larger amounts than would normally occur in the individual settlement of such cases.
In some cases, he said, Medicare could conceivably be paid more than it spent on an individual victim.
A settlement with Nashville's Saint Thomas Outpatient Neurosurgical Center apparently has not been finalized and it was not specifically mentioned in the settlement agreement. But Tennessee victims contacted recently said they just learned deductions of up to 21.5 percent would be made from any awards from that litigation.
Scott Sexton, a Virginia attorney for outbreak victims, told U.S. District Judge Rya Zobel at a recent hearing that the proposed global settlement was not advantageous for victims from Virginia or Tennessee.
Leader said that a remaining concern for his clients is the fact that opting out of the settlement agreement is very likely to lead to even longer delays in victims getting any award.
"But most of our clients will be a lot better off by opting out," he concluded.

National Settlement Fund $120 million (increases are possible)
High Point Settlement Fund $3.5 million
Inspira Settlement Fund $16 million
Insight Settlement Fund $40 million.
Michigan Pain Specialists Settlement Fund $10.5 million.

NECC Defendant Wants Access to Civil Trial Data

By Walter F. Roche Jr.


A former drug company executive who is facing multiple second degree murder charges is seeking approval to use records from a related civil case to prepare his defense before a January trial.
The lawyer for Barry Cadden, former part owner and officer of the defunct New England Compounding Center, filed a five-page request this week in U.S. District Court in Boston, Mass. seeking access to thousands of pages of discovery materials in civil suits against NECC and related companies.
Stating that Cadden previously had access to much of the same material because he was also a defendant in the civil case, the motion states that Cadden now needs access to the files "to defend himself against second degree murder charges."
NECC, a Framingham, Mass. drug compounding firm, has been blamed for a nationwide fungal meningitis outbreak that has killed 77 patients and sickened hundreds of others.
Stating that her client is not seeking access to health information of outbreak victims, Michelle R. Peirce, one of Cadden's lawyers, noted that her client had complied with an existing  protective order covering the discovery materials.
"He seeks to use the materials he already possesses as well as other material added to the repository more recently to defend himself," the motion states.
Federal prosecutors have not yet indicated whether they will oppose Cadden's motion, which will be considered by U.S. District Judge Rya Zobel, who is presiding over hundreds of cases filed by victims of the 2012 outbreak.
Peirce wrote that the discovery material in the civil cases is "critical to his (Cadden's) defense of murder and other charges related to contaminated methylprednisolone acetate at the core" of those civil cases.
Cadden and Glenn Chin, a former top pharmacist at NECC, are scheduled to go on trial on 25 counts of second degree murder along with racketeering and mail fraud charges on Jan. 5, 2017.
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Judge Declines Request to Set Meningitis Claim Deadlines

By Walter F. Roche Jr.

Stating that any last minute changes would just bollix things up, a federal judge today refused a request to impose deadlines on the federal government for handling some claims from victims of the 2012 fungal meningitis outbreak.
Instead U.S. District Judge Rya Zobel gave her approval to a 13-page agreement that spells out a process for the federal Centers for Medicare and Medicaid Services to get reimbursement for amounts it paid for the care of outbreak victims.
Nashville attorney William Leader had asked Zobel to set deadlines for CMS to respond to victims who want to opt out of the 13-page agreement. As written, Leader told Zobel, opt out victims could be left waiting for extended periods of time and forced to work through an administrative maze.
Without the agreement for federal reimbursement, however, the trustee of a $200 million fund has stated that no payments will be made.
The trust fund, which will also be tapped to pay lawyers fees and administrative expenses, was created in the bankruptcy of the New England Compounding Center, the company blamed for the deadly 2012 fungal meningitis outbreak which killed some 77 patients.
Leader said the final agreement reached this week struck out "a very important provision" to protect the rights of those choosing not to accept the global settlement. He asked that CMS be required to respond to opt out requests within 20 days.
Zobel, however, said she did not want to risk undoing the result of lengthy negotiations.
"I do not want to scuttle the agreement," said Zobel, adding that if she attempted a change "it's going to get all bollixed up again...I'm going to sign it right now."
She said that if disputes arise with the handling of claims, complaints can be brought to her since she will retain jurisdiction.
Leader in earlier testimony told Zobel that an agreement to settle more than 100 claims against Nashville's Saint Thomas Outpatient Neurosurgical Center has been reached and a Sept. 9 deadline has been set for signing a final settlement agreement.
"We've resolved it," Leader said of the Saint Thomas cases.
The details of that settlement, including a dollar value, have not been disclosed.
Also during the 75 minute session, Kristen Johnson, representing the plaintiffs' steering committee gave a report on the current status of cases, some of which will remain before Zobel while others will go back to the states where they originated.
Contact: wfrochejr999@gmail.com

Key Agreement Reached on Meningitis Funds

By Walter F. Roche Jr.

An agreement has been reached between lawyers for victims of a deadly outbreak and the U.S. Department of Justice that could finally free up some $200 million in a victims' trust fund.
In a two-page filing in U.S. District Court today Tom Sobol, the lead attorney for victims, reported that the agreement had been finalized.
U.S. District Judge Rya Zobel had strongly urged both sides to try to work out a pact prior to a hearing scheduled in her Boston, Mass. courtroom tomorrow.
Sobol reported that the agreement contained only  a few minor revisions to a proposed agreement he presented to the court recently.
"The parties are happy to report they have reached full agreement," the filing states, adding that the revisions "consist of further clarifications of concepts previously agreed to by the parties."
The agreement sets the amount of the $200 million that will go to the federal Centers for Medicare and Medicaid Services as reimbursement for the care the agency paid in behalf of victims enrolled in the two federal programs.
The trust fund administrator had stated that none of the money could be released until a settlement was reached with CMS and the U.S. Justice Department attorneys representing that agency.
Under the agreement victims' awards will be reduced by amounts ranging from about 10.5 percent to a little over 21.5 percent to cover the reimbursement costs. According to previous testimony the higher percentages will apply to those victims with higher hospitalization or anti-fungal drug costs.
The 13-page agreement was filed along with the report to Zobel. She is expected to act on it this week.
Under the agreement victims will have the option to drop out of the so-called global settlement and negotiate a settlement of their own with CMS.
Contact:wfrochejr999@gmail.com

Judge Sets Trial Date For Remaining NECC Defendants

By Walter F. Roche Jr.

A federal judge has set an April 10, 2017 trial date for the remaining 10 defendants in the criminal cases stemming from the deadly fungal meningitis outbreak.
In an order issued today U.S. District Judge Richard G. Stearns set the Spring date for the 10 who are facing charges ranging from mail and wire fraud to racketeering.
Four other defendants were named in the original indictment issued in late 2014. Two already have entered guilty pleas and are set for sentencing on Nov. 1. Two others are set for trial on Jan. 4 of next year.
All of those indicted were connected to the New England Compounding Center, the company blamed for the outbreak which has taken the lives of 77 patients.
Entering the guilty pleas to structuring charges were Douglas and Carla Conigliaro.
Barry Cadden and Glenn Chin are scheduled for trial in January and they face 25 counts of second degree murder along with other charges. Cadden was an owner of the Framingham, Mass. company and also the chief pharmacist. Chin was the supervising pharmacist.
Those scheduled for trial in April are Gene Svirskiy, Christopher M. Leary, Joseph Evanosky, Scott M. Connolly, Sharon Carter, Alla Stepanets, Gregory Conigliaro, Robert A. Ronzio, Kathy Chin and Michelle L. Thomas.
Kathy Chin is the wife of Glenn Chin and Gregory Conigliaro is the brother of Douglas Conigliaro.
Contact: wfrochejr999@gmail.com

Master Settlement Agreement Offered for TN Victims

By Walter F. Roche Jr.

A master settlement agreement has been proposed for Nashville, Tenn. area victims of the 2012 fungal meningitis outbreak but paperwork has apparently stalled a final settlement.
In a two-page report to a federal judge filed Monday, lawyers for victims and the Saint Thomas Outpatient Neurosurgical Center said that while a settlement has been proposed by the plaintiff/victims, the clinic and related parties say they are awaiting further paperwork before going forward.
The report does not provide any details of the proposed settlement.
The report goes to U.S. District Judge Rya Zobel who is scheduled to hold a session on the Nashville and other plaintiffs' cases Wednesday.
As reported previously, the two sides signed a memorandum of understanding several weeks ago on some 110 cases and subsequently a master settlement was proposed.
But lawyers for the Saint Thomas clinic and related parties said they were awaiting conditional payment letters before processing further. Those letters, which CMS has thus far refused to release, would disclose how much the Medicare or Medicaid program paid for an individual victim's care.
The report does state that a neutral settlement administrator has been hired and efforts are underway to develop a distribution plan if and when a final settlement is in place.
Recently Nashville attorney William Leader filed a motion requesting that Zobel set a deadline for the completion of negotiations with the Saint Thomas parties. In his motion he cited the apparent lack of progress thus far.
Leader's motion is likely to be raised in Wednesday's hearing.
Zobel already has set a Wednesday deadline for an agreement between victims' lawyers and the federal Centers for Medicare and Medicaid Services (CMS) on how much of a separate $200 million victims' trust fund will go to reimburse the federal program for amounts it paid for the care of outbreak victims.
At a session last week the Justice Department attorney representing CMS expressed doubts about reaching a quick agreement. Zobel, however, urged both sides to do their best.
"Let's be optimistic and see what you can do," Zobel said at the close of the 45-minute session.
Contact: wfrochejr999@gmail.com

Judge Rejects Plea for Outbreak Victims' Impact Statements

By Walter F. Roche Jr.

A federal judge has denied a motion by federal prosecutors to present victims' impact statements at the sentencing hearing of a woman and her husband with ties to the company blamed for a nationwide fungal meningitis outbreak.
In a three-page order issued today, Judge Richard Stearns said that the crimes Carla and Douglas Conigliaro have pleaded guilty to were not related to the operations of the New England Compounding Center, the defunct Framingham, Mass. drug compounding firm blamed for the deadly 2012 outbreak.
"As the government itself conceded, the victims the government has in mind were not victims of any crime for which the defendants have been convicted," the ruling states.
The couple did enter guilty pleas to violations of a federal law governing large withdrawals from bank accounts. They admitted to "structuring" withdrawals to avoid triggering an automatic report to the federal government.
They face sentencing on Nov. 1 before Stearns.
Carla Conigliaro was the majority stockholder in NECC, while her husband headed a related sales company.
Stearns noted that prosecutors already had conceded that neither of them was involved in the "compounding of drugs or the day-to-day operations of NECC."
And as the judge noted under the plea agreement between the Conigliaros and federal prosecutors, the government agreed to make a recommendation that neither of Conigliaros be incarcerated.
"Presenting victims impact statements to the court at sentencing would likely be viewed as an implied effort to persuade the court to reject the government's recommendation and impose a harsher sentence," Stearns wrote.
"That," he continued, "would place the government in the ethically challenged position of implicitly undermining the position it bound itself to advocate in the plea agreement."
Stearns added that use of victims statements in this case would be "a misdirection of anguish and indignation that they (victims) no doubt genuinely feel."
"This is not the forum for impact statements," he concluded.
The 2012 outbreak caused by fungus laden steroids sickened 778 patients across the country, killing 77 of them.
Contact: wfrochejr999@gmail.com