Lieff Cabraser Civil Justice Blog
Waiver Sought for Medicare Liens on Meningitis Payments

Waiver Sought for Medicare Liens on Meningitis Payments in 2012 Outbreak Case

As reported in The Tennessean, the U.S. Department of Health and Human Services has been requested to waive Medicare liens on payments from the victims compensation fund slated for those sickened or killed in the 2012 nationwide meningitis outbreak resulting from contaminated medication.

The letter notes the “unique circumstances,” including a lack of state and federal oversight, that led to the outbreak, which killed 64 people and sickened 753 others in 20 states.

The outbreak was traced to the New England Compounding Pharmacy in Framingham, Massachusetts, whose later-recalled products were shipped to pain clinics and hospitals in 23 states. Victims will share in a $200 million settlement fund that was expanded under the confirmed bankruptcy plan of the pharmacy. If Medicare paid for medical services for people sickened in the outbreak, then it can recoup money by putting a lien on payments to victims.

Lieff Cabraser partner Mark Chalos spoke to The Tennessean on the story. “We have met with legislators from around the country, including [Tennessee] Senator Alexander, asking for help in persuading the government to waive part or all of the Medicare liens in recognition that this was a national tragedy.” Chalos is representing some of the victims of the outbreak. Tennessee was one of the hardest hit states, with a total of 153 people sickened and 16 deaths, according to the U.S. Centers for Disease Control and Prevention.

The U.S. Centers of Medicare and Medicaid Services has waived the Medicare lien in the past, including for the September 11th Victim Compensation Fund. A spokesperson for CMS was not immediately available to comment.

Lieff Cabraser represents patients injured or killed by a nationwide fungal meningitis outbreak in 2012. We serve as a member of the Plaintiffs’ Steering Committee in the multi-district litigation, and our attorneys act as federal-state liaison counsel. In May 2015, the U.S. Bankruptcy Court approved a $200 million partial settlement for victims of the outbreak. Bellwether trials against remaining defendants have been set for 2016. Lieff Cabraser is expected to play a lead role in the bellwether trials. Learn more about the case and your rights as a patient on our NECC Meningitis outbreak case page.