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.
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