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.
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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.
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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.
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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.
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Judge Sets Deadline, But Payment Delays Likely

By Walter F. Roche Jr.

A federal judge Tuesday gave officials of the U.S. Department of Justice and attorneys for victims of the 2012 fungal meningitis outbreak an Aug. 25 deadline to try to reach an agreement that could free up payments from a $200 million trust fund.
U.S. District Judge Rya Zobel set the deadline following a 45 minute hearing in which the Justice Department attorney, Katherine Burnett, said she had just discovered new details of a related draft proposal that raised serious concerns.
"We've been proceeding as fast as we can," she said, adding that it did not appear those newly discovered problems could be resolved quickly.
"This is not going anywhere," Burnett said. "This is not going to be resolved this afternoon."
 While Zobel urged a quick resolution, the impasse virtually eliminates any possibility of victims getting payments this month, as had been promised.
Though Burnett expressed doubts about reaching a quick settlement, Zobel pushed on.
"Let's be optimistic and see what you can do," Zobel said.
Earlier in the session, Scott Sexton, a lawyer for Virginia victims of the outbreak, said the proposed global settlement to determine how much of the $200 million will go to reimburse Medicare and other insurers, could penalize victims in Virginia and Tennessee.
He said with a case by case approach his clients would fare much better. With the proposed global settlement he said some would end up paying liens two to three times larger.
"We literally have clients dying," Sexton said. "One died this weekend."
Sexton proposed that the court set a Sept. 6 deadline and if a global agreement was not in place by that time, lawyers could move forward and settle cases individually.
"It's been extremely frustrating," Sexton said, adding that the Centers for Medicare and Medicaid Services was refusing to allow his clients, who don't want the global settlement, to proceed on an individual basis.
"They won't let them open a claim," Sexton said. "This is a huge problem."
Burnett, who testified by phone, said she only learned late last week of a proposed settlement for victims covered by Blue Cross plans in Michigan and Tennessee.
She said that agreement conflicts with the proposed global settlement and there are "substantial differences."
She said that she was currently on vacation and would not be returning to work until Monday.
Zobel wished her well on the remainder of her vacation but stressed she still wanted an agreement by Aug. 25.
Contact: wfrochejr999@gmail.com

Tort Trustee Opposes Fund Release Motions

By Walter F. Roche Jr.

The trustee of the $200 million victims' fund in the fungal meningitis litigation is asking a judge to deny three motions that would, if granted, force the quick release of funds to victims within 30 days.
In a motion filed on the eve of a key hearing, Lynne Riley, the trustee, argued that approval of the motions would be counterproductive and could result in a smaller amount of money being available for victims.
"The requested relief would have the counterproductive effect of delaying (not expediting) distributions and could diminish tort trust assets available to plaintiffs," her motion states.
Riley said that were the money to be distributed immediately the victims' fund could be depleted by claims for damages from those who have liens against the trust.
"The tort trustee has efficiently and effectively supported the Plaintiffs' Steering Committee and lead counsels efforts to globally resolve the public and private liens and preserve opt out for claimants," the motion states.
The filing comes just ahead of tomorrow's hearing before U.S. District Judge Rya Zobel who has agreed to hear argument in her Boiston, Mass. courtroom for the release of funds to victims within 30 days.
Riley's arguments echoed concerns expressed by lead counsel for plaintiffs, who also have urged Zobel to deny the motions.
She also stated that some victims can still expect to get payments before the end of the month.
Lawyers for victims from Virginia, Tennessee, Indiana and Michigan filed the motions for immediate release citing the fact that victims have been waiting nearly four years for some compensation.
The outbreak caused by fungus laden steroids sickened 778 patients, killing 77 of them.
Contact:wfrochejr999@gmail.com

Victims' Attorneys in Pre-Hearing Rift on Trust Funds

By Walter F. Roche Jr.

The lead attorneys for plaintiffs in the civil suit stemming from a deadly outbreak say victims will have to wait even longer for any payments if the judge orders the immediate release of money from a $200 million trust fund.
In a nine-page filing today attorneys Kristen Johnson and Thomas Sobol, representing the plaintiffs steering committee, said the motions filed by lawyers for victims in four states would be "counterproductive" and further delay payments for many months "to most if not all claimants."
The two are asking U.S. District Judge Rya Zobel to reject the move to force the immediate release of funds by a court appointed trustee presiding over a victims' compensation fund.
The open rift between lawyers representing victims of the 2012 fungal meningitis outbreak will play out Tuesday in a hearing in Zobel's Boston, Mass. courtroom. The two sides have also disagreed about whether the Tuesday session should be by phone or in Zobel's courtroom.
Zobel's latest order indicates it will be in the courtroom.
Zobel earlier this week told the lawyers seeking immediate payments that one of them could make a 15 minute presentation during next week's session.
The motions calling for prompt release of the funds came from lawyers representing victims in Virginia, Tennessee, Indiana and Michigan.
Citing the fact that the outbreak is approaching its fourth anniversary, they all argued that victims, at least those that are still alive, deserve relief.
Johnson's brief, however, defends the actions taken by the fund trustee Lynne Riley, including her requirement that claims for reimbursement by the federal government and private insurers be resolved prior to the release of any funds. She said federal law and prior orders set the mandatory standards required  prior to any payments.
She noted that a proposed agreement with the federal government has been approved by one agency but still is under U.S. Justice Department review.
She said many claimants can still expect to get payments by the end of this month "or soon thereafter."
According to her filing, letters are being sent out to those whose claims are not subject to Medicare or Medicaid liens, informing them that they can expect payments as long as they fill out certification forms which will be included in the mailing.
"We acknowledge, however, that most claims remain tied up with the CMS (Centers for Medicare and Medicaid Services) deal," the motion states.
She said those that can expect prompt payment were on a list of 1,199 victims, but she did not disclose the percentage getting payment notices.
The filing does question why CMS has refused to process the claims and provide lien information for victims who have decided to opt out of the so-called global settlement.
"We do not know the basis for CMS' s refusal to process individual claims," the motion states.
The trust fund was created in the bankruptcy of the New England Compounding Center, the company blamed for the outbreak which sickened 778 patients, killing 77 of them.
Contact: wfrochejr999@gmail.com

Conigliaros Seek Bar on Victims' Impact Statements

By Walter F. Roche Jr.


The two defendants in the drug compounding criminal case who recently pled guilty to charges they violated a law governing bank account withdrawals are asking a federal judge to bar the use of victims' impact statements at their November sentencing.
The lawyer for Douglas and Carla Conigliaro filed a motion Thursday charging that use of impact statements from victims of the 2012 fungal meningitis outbreak was totally unjustified based on the crimes his clients were charged with.
"There is no basis legally, factually, procedurally or otherwise for the court to consider such statements at the Conigliaros' sentencing hearing," the filing states.
The two pled guilty to structuring bank account withdrawals to avoid triggering a federal law requiring the reporting of transactions exceeding $10,000.
In the 10-page motion filed by the Conigliaros' attorney, David Meier, said he heard for the first time when his clients submitted their guilty pleas that the government was planning to use victims' impact statements at the November sentencing hearing.
Stating that the charges against his clients were "in sharp contrast" to the charges pending against the other defendants, all with connections to the New England Compounding Center, the firm blamed for the 2012 fungal meningitis outbreak. The outbreak sickened 778 patients, killing 77 of them.
NECC, state and federal regulators have concluded, shipped thousands of vials of fungus laden steroids that were then shipped to health care facilities across the country.
"The approximately $124,000 in cash withdrawals that the Conigliaros structured was legitimately earned income that had been lawfully deposited into their neighborhood family bank accounts," the motion states.
Carla Conigliaro was the majority owner of NECC and Douglas headed an affiliated drug sales company. They were among 14 indicated in late 2014 by a federal grand jury probing the meningitis outbreak.
The other defendants face charges ranging from second degree murder to racketeering and mail and wire fraud. They have all entered not guilty pleas
The two facing second degree murder charges, Barry Cadden and Glen Chin, are scheduled to go on trial Jan. 5, 2017.
"Carla Conigliaro and Douglas Conigliaro had nothing to do with the day-to-day operations or management of NECC or with any criminal activity that may have occurred there," the Thursday motion states.
The motion noted that U.S. District Judge Richard Stearns, prior to the plea agreement, had dismissed many of the charges, including 18 counts of criminal contempt, brought against his clients in the 2014 indictment.
"In short, at no time throughout the pendency of this case has the government alleged that Carla and Douglas Conigliaro played any role in (or had any knowledge of) of the alleged criminal activity at NECC," the filing concludes

Judge Will Hear Distribution Pleas

By Walter F. Roche Jr.

A federal judge ruled today that lawyers can present arguments for quick distribution of payments from a $200 million trust fund to victims of a 2012 fungal meningitis outbreak.
In a brief one-page order U.S. District Judge Rya Zobel said she will hear arguments for the fund distribution at a previously scheduled Tuesday hearing in her Boston, Mass. courtroom.
Lawyers representing victims from Virginia, Tennessee, Indiana and Michigan recently filed motions calling for the trustee overseeing the victims' fund to begin making payments within 30 days.
In her order, Zobel said that she will allow one attorney to speak for all three motions for a total of 15 minutes.
While her order does not specifically address the issue, it does indicate that she expects to conduct a formal hearing in her courtroom. Another recent emergency motion had requested that the Tuesday hearing be conducted only by phone.
Distribution of funds from the victims' trust fund has been delayed by negotiations with the Centers for Medicare and Medicaid Services (CMS) and U.S. Justice Department lawyers over the amount of the $200 million that will go to CMS as reimbursement for medical bills the agency paid in behalf of the victims.
As Zobel noted, a proposed settlement with CMS is already on the agenda for the Tuesday court session.
Contact: wfrochejr999@gmail.com

Saint Thomas Settlement Talks Hit a Snag?

By Walter F. Roche Jr.

Settlement talks for more than a hundred Nashville, Tenn. area victims of the 2012 fungal meningitis outbreak have apparently stalled and the attorney for 17 of those victims is asking a federal judge to set a quick deadline.
In a two-page motion filed today in U.S. District Court in Boston, Mass. the attorney, William Leader of Nashville, stated that the parties "have conferred in good faith to resolve or narrow the issue presented in this motion but have been unable to reach an agreement."
The victims involved in the motion were all injected with fungus laden spinal steroids at Nashville's Saint Thomas Outpatient Neurosurgical Center. The center and related Saint Thomas entities along with the Howell Allen Clinic, also in Nashville, are defendants in the cases.
The motion asks U.S. District Judge Rya Zobel to "set an early deadline to conclude these actions."
Zobel had put the Nashville cases on hold for 90 days after getting word that settlement talks were proceeding. The 90 days runs out Aug. 22.
In a July 28 session in her court, Nashville attorney Mark Chalos reported that all parties had signed a memorandum of understanding that would settle some 110 cases.
"We remain hopeful," Chalos said during the hearing.
Leader is requesting that his motion be considered during a previously scheduled court session in Zobel's court on Aug. 24, two days after the expiration date of the existing stay.
Officials of Saint Thomas and their attorneys have declined requests for comment on the settlement talks.
Contact: wfrochejr999@gmail.com

Virginia Attorney Wants Key Hearing in Courtroom

By Walter F. Roche Jr.

Victims' lawyers are asking a federal judge to deny a motion to hold a key court session next week on distributions from a $200 million trust fund by telephone only.
In a three-page filing today a Virginia attorney representing victims of the 2012 fungal meningitis outbreak said that holding the Aug. 16 hearing in a Boston, Mass. courtroom would present no financial hardship.
J. Scott Sexton told Judge Rya Zobel he had already purchased a nonrefundable round trip plane ticket for $306 to attend the session.
He said he did so after being told by a court clerk that a motion he and other Virginia lawyers filed could be heard at the Tuesday session and could be argued either by telephone or in person.
The motion filed in behalf of 154 Virginia victims asks Zobel to issue an order freeing up a $200 million victims' trust fund so that distributions can be finally made to victims of the deadly outbreak. Similar motions have been filed in behalf of victims from Tennessee, Indiana and Michigan.
Earlier this week the lead attorney for plaintiffs in the case filed an emergency motion asking Zobel to require the session be held by telephone only. Thomas Sobol argued that  travel costs and schedule conflicts made a telephone conference the best choice.
Sobol also argued that allowing some parties to appear in person while others participated by phone might inadvertently leave the impression that those appearing in person held an advantage.
"No undue financial burden will come to the Virginia claimants as a result of appearing in court for the hearing Aug. 16," Sexton wrote in rebuttal, adding that his $306 plane ticket cannot be canceled.
Another key issue to be discussed at the Tuesday session is the status of a so-called global settlement of reimbursement claims by the federal agency running the Medicare and Medicaid programs. Sobol filed a copy of that proposal with the court last week.
The Centers for Medicare and Medicaid Services is seeking to recoup at least part of the costs it paid for the treatment of outbreak victims.

Key Hearing May Be By Phone

By Walter F. Roche Jr.

The lead attorney for victims of the 2012 fungal meningitis outbreak has filed an emergency motion requesting that a key hearing set for next week be held by phone and not in the judge's Boston, Mass. courtroom.
The Aug. 16 hearing will be focused on efforts to negotiate a global settlement of claims for reimbursement for the federally funded Medicare and Medicaid programs.
U.S. District Judge Rya Zobel has asked for representative of the U.S. Justice Department and the Centers for Medicare and Medicaid Services to participate in the session. CMS is seeking reimbursement for the money it paid to provide medical treatment to victims.
The agreement is a critical element in efforts to finally provide outbreak victims with payments from a $200 million trust fund. Without a settlement the trustee has stated that none of the $200 million can be released.
 In the motion filed today, lead attorney Thomas Sobol, citing travel costs, stated that vacations and other conflicts would make it difficult for all parties to attend.
"In lead counsel's view conducting the hearing on the 16th by telephone is the most efficient path forward," Sobol wrote.
"Permitting counsel to choose whether to attend in person may inadvertently suggest that appearance in person is preferable or advantageous," he added.
Meanwhile attorneys for victims in Virginia, Tennessee, Indiana and Michigan have filed motions in advance of the hearing asking Zobel to intervene and order the release of at least some of the money.
The trust fund was created in the bankruptcy of the New England Compounding Center, the firm blamed for the deadly outbreak.
State and federal regulators concluded that NECC shipped thousands of vials of fungus loaded steroids to health facilities around the country. The outbreak sickened some 778 patients, killing 77 of them.
Contact:wfrochejr999@gmail.com

Judge Dismisses Product Liability Claims on Clinic

By Walter F. Roche Jr.

In a ruling that was not unexpected, a federal judge has dismissed product liability claims against a Tennessee clinic by victims of the 2012 fungal meningitis outbreak.
In a decision issued Friday in Boston, Mass. U.S, District Judge Rya Zobel concluded that Tennessee's health care liability law trumped claims under the state's product liability statute.
The decision effects some 24 suits filed by patients of the Specialty Surgery Center in Crossville, Tenn.
As she noted in the brief decision, Zobel previously ruled out product liability claims in more than 100 suits filed against the Saint Thomas Outpatient Neurosurgical Center in Nashville, Tenn.
"Given that the statutes conflict only the latter (Health Care Liability Law) may apply," Zobel wrote in the three-page decision.
The decision means the cases will go forward on the health care liability claims alone.
In another development lawyers for victims of the outbreak filed a list of 58 cases filed against health care providers across the country by outbreak victims which are now going to be sent back to the courts where they originated.
Nearly all of the lawsuits stemming from the outbreak had been consolidated in Zobel's court, but now they are being sent back to courts from Nevada to New Jersey for final resolution. The transfers become effective when Zobel signs the proposed order.
The suits are the result of the 2012 fungal meningitis outbreak caused by fungus tainted steroids shipped across the country by the now defunct New England Compounding Center. The outbreak sickened 778 patients. Seventy-seven of them died.
Contact:wfrochejr999@gmail.com

More Victims Demanding Fund Release

By Walter F. Roche Jr.

Lawyers for another hundred victims of the 2012 fungal meningitis outbreak are calling on a federal judge to force the immediate release of payments from trust funds locked up in negotiations with federal agencies.
Representatives of outbreak victims in Indiana and southwest Michigan say their clients have already waited too long for promised payments and are asking U.S. District Judge Rya Zobel to order a court appointed trustee to begin distributing the money within 30 days.
The six-page motion filed Friday in U.S. District Court in Boston, Mass. is the third such motion to be filed this week. Others were filed in behalf of victims in Tennessee and Virginia.
The growing frustration comes as the fourth anniversary of the deadly fungal meningitis is fast approaching. The outbreak, triggered by thousand of vials of fungus ridden steroids, sickened 778 patients across the country, killing 77 of them. It first became public in September 2012.
The motions filed this week stem from the lack of a final agreement with federal officials over how much from a $200 million victims trust fund will go to reimburse the federal Medicare and Medicaid programs for the medical bills it paid in behalf of victims.
Citing the long wait for reimbursement, the motion filed Friday states, "There are claimants who have encountered financial distress, in addition to severe physical/medical hardships, as a result of injuries from the contaminated epidural injections," the new motion states, noting that some victims died.
Citing repeated promises that an agreement was imminent, the filing adds, "None of those have proven true."
The motion asks Zobel to order the trust fund administrator to distribute the fund to  each victims lawyers within 30 days.
In the alternative the motion asks Zobel to order the U.S. Justice Department to make an immediate response to the requested approval of a proposed settlement with the Centers for Medicare Services.
Like the two prior motions, the one filed Friday also asks Zobel to order CMS to allow victims to formally file their claims and have them processed.
Zobel already has scheduled a session on Aug. 16 to get a report from plaintiffs' lawyers and federal officials on the release of the $200 million.
In another development this week, the lead attorney for outbreak victims filed a copy of a proposed Medicare/Medicaid settlement that still awaits U.S. Justice Department approval.
Under that proposal victims would have any awards from the trust fund reduced by 10.5 to 21.5 percent to reimburse the federal government.
Victims also will have to hand over a share of any awards to the attorneys  who have represented them in the longstanding court battle.
Contact: wfrochejr999@gmail.com

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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TN Outbreak Victims Seek Payment Orders

By Walter F. Roche Jr.

Charging that there is no justifiable reason for the lengthy delay, attorneys for Tennessee victims of the deadly fungal meningitis outbreak are asking a federal judge to order a court appointed trustee to release payments to at least some of those victims.
In an eight-page motion filed today, the victims' lawyers said some of their clients have died while waiting for payments while others have been forced to leave their homes and suffered other hardships.
The motion, similar to one filed Monday in behalf of 154 Virginia victims of the fungal meningitis outbreak, asks U.S. District Judge Rya Zobel to act on the petition at a hearing scheduled for Aug. 16 in Boston, Mass.
The motion charges that actions by tort trustee Lynne Riley and prolonged negotiations with the federal government have made it impossible for victims to even find out basic information on how much of any award from a $200 million fund would have to be paid back to Medicare.
Citing the multi-layered process, the motion states "it will be months before many Tennessee claimants receive any settlement money. There is no justifiable reason for the delay."
The motion was filed by Nashville attorney William Leader along with other lawyers representing Tennessee victims of the 2012 outbreak.
The 2012 outbreak, which is nearing its fourth anniversary, sickened 778 patients across the country killing 77 of them. The $200 million tort trust fund includes payments from the former owners of the Massachusetts drug compounding firm blamed for the outbreak. The company shipped thousands of fungus loaded steroids to healthcare providers across the country.
According to the motion, payments are even being blocked  to victims who are not on Medicare and can prove that there are no outstanding liens on their awards.
The motion asks Zobel to "order the trustee to make immediate distributions to the Tennessee claimants who are not Medicare beneficiaries" and can demonstrate there are no outstanding liens.
The motion also faults actions of the lawyers steering committee representing victims in the ongoing litigation in Zobel's court with adding to the delays.
That committee has been seeking a so-called global settlement of Medicare liens, but a tentative agreement has yet to gain final approval.
In addition to seeking immediate payments to non-Medicare victims, the motion asks Zobel to order the federal government to issue conditional payment letters so victims will be able to decide whether to opt in to the global settlement or negotiate an individual settlement.
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Ailing Virginia Outbreak Victims Seek End to Claim Logjam

By Walter F. Roche Jr.

Citing delays of nearly four years and the ongoing suffering and even death of some of their clients, lawyers for 154 Virginia victims of a deadly fungal meningitis outbreak are asking a federal judge to end the bureaucratic logjam holding up the payment of millions of dollars.
In a seven page motion filed Monday in U.S. District Court in Boston, the lawyers said an ongoing review by two federal agencies must be ended one way or another and vital information must be released to individual victims so they can individually pursue a settlement of any claims from the federally funded Medicare and Medicaid programs.
"While justice has remained illusory, certain Virginia victims have died while waiting for severely needed and already appropriated recovery," the brief states.
The filing is the latest development as victims in some 20 states seek to get their share of some $200 million already set aside in federal courts. The claimants are victims of the 2012 fungal meningitis outbreak which sickened 778 patients killing 77 of them.
While the motion filed Monday only applies to Virginia victims, similar efforts are expected from victims in other states including Michigan and Tennessee.
According to the motion negotiations with the Centers for Medicare and Medicaid Services over the recovery of payments made from those programs for the care of victims has been going on for a year without a final agreement.
The motion asks U.S. District Judge Rya Zobel to act at an already scheduled Aug 16 hearing to order the trustee of the $200 million "to make timely distributions without further delay" and to either end the ongoing negotiations or set a deadline for those negotiations to be completed.
"In short the CMS deal is holding up the entire disbursement process," the motion states, citing the increasing frustration of victims.
The motion also asks the judge to stop the trustee from imposing any further restrictions on the release of those funds.
The motion charges that despite this already "untenable situation," the trustee, Lynne Riley,  recently imposed a new requirement that claimants certify that there were no liens other than Medicare or Medicaid on the distribution.
According to the filing federal officials have refused to allow individual claimants to even open a claim, a necessary step before they can "opt out" of any global settlement agreement. That, the lawyers argue, means yet another 60 to 90 day delay before victims can even open a claim.
"These claimants are additionally and tragically further injured" by these delays, the motion states.
Contact: wfrochejr999@gmail.com

Ailing Virginia Outbreak Victims Seek End to Claim Logjam

By Walter F. Roche Jr.

Citing delays of nearly four years and the ongoing suffering and even death of some of their clients, lawyers for 154 Virginia victims of a deadly fungal meningitis outbreak are asking a federal judge to end the bureaucratic logjam holding up the payment of millions of dollars.
In a seven page motion filed Monday in U.S. District Court in Boston, the lawyers said an ongoing review by two federal agencies must be ended one way or another and vital information must be released to individual victims so they can individually pursue a settlement of any claims from the federally funded Medicare and Medicaid programs.
"While justice has remained illusory, certain Virginia victims have died while waiting for severely needed and already appropriated recovery," the brief states.
The filing is the latest development as victims in some 20 states seek to get their share of some $200 million already set aside in federal courts. The claimants are victims of the 2012 fungal meningitis outbreak which sickened 778 patients killing 77 of them.
While the motion filed Monday only applies to Virginia victims, similar efforts are expected from victims in other states including Michigan and Tennessee.
According to the motion negotiations with the Centers for Medicare and Medicaid Services over the recovery of payments made from those programs for the care of victims has been going on for a year without a final agreement.
The motion asks U.S. District Judge Rya Zobel to act at an already scheduled Aug 16 hearing to order the trustee of the $200 million "to make timely distributions without further delay" and to either end the ongoing negotiations or set a deadline for those negotiations to be completed.
"In short the CMS deal is holding up the entire disbursement process," the motion states, citing the increasing frustration of victims.
The motion also asks the judge to stop the trustee from imposing any further restrictions on the release of those funds.
The motion charges that despite this already "untenable situation," the trustee recently imposed a new requirement that claimants certify that there were no liens other than Medicare or Medicaid on the distribution.
According to the filing federal officials have refused to allow individual claimants to even open a claim, a necessary step before they can "opt out" of any global settlement agreement. That, the lawyers argue, means yet another 60 to 90 day delay before victims can even open a claim.
"These claimants are additionally and tragically further injured" by these delays, the motion states.
Contact: wfrochejr999@gmail.com

2nd NECC Defendant Released from Home Detention

By Walter F. Roche Jr.

A federal magistrate judge, over the objections of federal prosecutors and victims, has released a second key defendant from 24-hour home detention while he awaits trial on charges including 25 counts of second degree murder.
In a two-page order issued today U.S. Magistrate Jennifer Boal granted the request of Glenn Chin to be released from all day home detention. She did, however, slightly reduce the number of hours he will be able to leave his Canton, Mass. home.
Chin is one of 14 persons indicted in late 2014 following a two year federal probe of the 2012 deadly fungal meningitis outbreak cause by fungus laden steroids shipped from the New England Compounding Center in Framingham, Mass.
Barry Cadden and Chin were charged with the second degree murder counts. Boal already had granted Cadden's motion allowing him to leave his home during the daytime hours.
In her brief decision Boal said the law required her to impose the least restrictive conditions necessary to ensure Chin would show up for his trial, scheduled for Jan. 5 of next year,
"The court recognizes the seriousness of the alleged offense. However, at this stage of the proceedings, Chin is entitled to a presumption of innocence," Boal wrote, adding, "the sole issue before the court is whether the proposed conditions are the least restrictive conditions that will reasonably assure the appearance of the defendant as required."
She said Chin's compliance thus far decreases the risk of non-appearance.
Not mentioned in her decision were the arguments offered by federal prosecutors including the fact the Chin was first arrested as he and his family were about to board a plane for China. The prosecutor also noted that Chin and Cadden's motions to dismiss the second degree murder charges were turned down.
Under Boal's order Chin will be allowed to leave his home with location monitoring from 7 a.m. to 7 p.m. He had asked for a 7 a.m. to 9 p.m. daily release period. Bail will remain at $50,000.
As with Cadden's request, victims of the 2012 fungal meningitis outbreak had asked that the request be denied.
Two other defendants in the case, Douglas and Carla Conigliaro late last week entered guilty pleas to a single charge apiece of violating a law requiring the reporting of bank transactions in excess of $10,000. Under their plea deal the two are unlikely to serve any jail time.
Carla Conigliaro was the majority shareholder in NECC. Her husband headed a related firm, Medical Sales Management, which marketed NECC products to health providers.
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