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Message from Special Master Sheila Birnbaum - Update on VCF Reauthorization

February 22, 2016

Dear Friends,

On January 20, 2016, one month after the reauthorization bill was signed into law, we posted information to our website that included Frequently Asked Questions (“FAQs”) explaining updated policies and procedures, and our expected timeline for processing Group A payments and reviewing Group B claims.

Our plan has required a significant re-allocation of people and resources, and our team has been working long hours to implement it. I am pleased to provide this update of our accomplishments thus far, and also take the opportunity to explain some necessary changes to our original plan.

Group A Payments

  • We met the goal of paying the initial 10% payments for all claims that were already in the payment process when the reauthorization was signed. We completed these almost 750 total payments by the end of January, which kept us on track with our original timeline.
  • Consistent with our timeline, we began authorizing payments for expedited claims. We have a total of 213 Group A expedited claims and have authorized payment on all of these claims except those where we encountered issues preventing payment. These issues include PI claims where the claimant has since passed away and we do not have a verified Personal Representative, claims with missing documents that are required in order to make the payment, and claims where the claimant received a recent payment from the Captive settlement and we need to reduce the amount of the loss calculation to reflect the additional offset before processing the payment. We have received all of the data needed from the Captive Insurer and expect to finish sending updated loss calculation letters to affected claimants within the next few weeks. These claims will then move into the payment process. We are working with claimants and their representatives to resolve any other open issues so payment can be made as quickly as possible.
  • We are currently processing payments for claimants who previously received a 10% payment. We initially planned to issue payments working from the oldest claims to the newest claims. We have now determined that it is more efficient to process claims as they become “payment ready” – meaning the claim does not have any outstanding issues such as those identified above that could prevent payment. By implementing this more efficient process, we may process some of the newer claims before some of the older claims. Again, we are working to contact claimants to resolve any issues preventing payment as quickly as possible.
  • Please understand that prior to the reauthorization, our shutdown planning included making sure every claim was ready for final payment well in advance of the final payments being processed in 2017, and we would have identified these issues earlier as part of that plan. With the reauthorization, we did not have the benefit of the advance time needed to review each claim for payment readiness.
    • We have updated our timeline to show the change in the order of payments being made. There is no change in the overall timeline and we still plan to authorize by the end of March the full payments for Group A claimants who previously received their 10% payment and whose claims do not have missing information, are in the appeals process, or have other issues that prevent payment.
    • Finally, as a reminder to claimants who were represented by an attorney at the time their loss calculation letter was issued, the payment on your claim will go to the bank account specified in your claim at the time the decision was rendered. The VCF will authorize payment to the prior law firm account even if you have since removed the attorney from your claim. For more information on the policy for changing attorneys and payment instructions, please click here.

Group B Claims

  • We continue to review claims and contact claimants to request missing information, when needed, and have rendered over 300 Eligibility decisions since the beginning of January.
  • Our team is reviewing compensation claims and contacting claimants for any missing information. We will soon start calculating preliminary loss amounts based on our proposed updated regulations. My personal goal – consistent with our published timeline – is to have every possible claim calculated, confirmed, and ready for a determination to be entered beginning on June 15, 2016 when the final regulations take effect. The distribution of payments for Group B claims will be dependent upon when Group B funding becomes available.

Policies, Procedures, Updated Regulations, and Claim Forms

  • We posted FAQs explaining changes to our policies and procedures and have updated – and will continue to update – the FAQs as we have more information to provide.
  • We have drafted the updates required by the new law to our loss calculation methodology and the models used to calculate economic loss so that we can begin reviewing and valuing Group B claims.
  • The first draft of the updated regulations has been completed and is being reviewed by my leadership team. We expect to begin the required government review process shortly and will then post a timeline for publishing the regulations and soliciting public comments. The final regulations will be effective no later than June 15, 2016, though we are aiming to finalize that process before that time.
  • Our team has drafted updated claim forms that I believe are easier to complete while still gathering the information we need in order to process a claim. We sought input from law firms who represent a large number of claimants and are familiar with the forms and incorporated their suggestions and feedback. We are now working to get the draft forms into the required review and approval process.

As always, I encourage you to call the VCF Helpline at 1-855-885-1555 with any questions you may have. For the hearing impaired, please call 1-855-885-1558 (TDD). If you are calling from outside the United States, please call 1-202-514-1100.