Newsletter is the Source of Official Trust Policy Statements
It is important for all Trust constituencies to note that the Manville Trust Newsletter is the primary means by which official Trust policy is communicated to our constituencies. Please review the Newsletter carefully, and note any policy statements that impact the manner in which you process your claim(s). Trust Newsletters, indexed by topic, are available on the Internet at mantrust.org, beginning with the April 1, 1996 issue.
The Trust's subsidiary and claims resolution facility services provider, the Claims Resolution Management Corporation (the "CRMC"), will respond to your questions about the Trust, its operations and policies at inquiry@claimsres.com.
New claim filings have been unexpectedly increasing at an escalating rate in recent years (see story at page 2). In 1995, new filings exceeded expectations, but a reestimation of our liabilities and assets in early 1996 did not provide sufficient evidence to warrant a reduction in the pro rata share percentage being paid. During 1996, new filings exceeded 55,000, with an unprecedented total of about 25,000 being filed during the fourth quarter. Therefore, the Trust is once again formally re-calculating the pro rata share percentage. Resource Planning Consultants has been engaged to review their estimates in light of the new filings, and will not only be using the newer data to update their previous work, but will reexamine a number of the assumptions underlying their methodology, and will redesign their efforts to include assumptions about the impact of the Trust’s medical audit program and methods to assess potential claimants’ propensity to file claims. The results will then be incorporated into a mathematical model that encompasses a range of assumptions about potential asset values, the timing of the payment of claims, and a large array of other factors. We will be sharing this work with the Selected Counsel for the Beneficiaries ("SCB"), the Legal Representative for Future Claimants and the Special Advisor to the Trust.
Redesign of Estimation
Methodology Will Delay
First Quarter Payments
Given the complexity of the task and the suddenness of the surge of filings in late 1996, it will take approximately 12 weeks to complete the initial effort to reforecast future claims. Simultaneously, the Trust will work to update and clarify the underlying assumptions used to estimate asset value and other parameters. We will then meet with the SCB, the Legal Representative for Future Claimants and the Special Advisor on all these issues. Because the original date for release of first quarter 1997 payments was scheduled for late March, and those payments cannot be released until there is greater certainty regarding the appropriate pro rata share payment, this vital project will delay issuance of new offers on any claims with FIFO numbers higher than 226,400, originally scheduled to be made in the First Quarter 1997. (Except for Exigent Health and Hardship claims). We cannot predict how long it will take to both redesign the methodology for estimating Trust liability, and to reach consensus among all parties regarding the appropriateness of that design and what the pro rata share ought to be. We are moving forward as quickly as possible and will keep all our constituencies informed of our progress. In the meantime, the Trust will continue to honor outstanding offers at 10%, and make new offers on eligible claims with FIFO numbers less than 226,401.
For a variety of reasons, including becoming relatively current in the FIFO queue, and the 120/day deadline for law firms to respond to medical audit, the Trust will be changing its offer and deficiency notice release pattern in 1997. If we continued to release claim offers in four FIFO batches of 30,000 as done in 1995 and 1996, the Trust would be releasing offers on claims which had not yet completed the medical audit cycle. Therefore, the Trust expects to release three batches of claim offers in 1997:
FIFO RANGE:
A. 226,401 - 256,000
B. 256,001 - 271,000
C. 271,001 - 286,000CLAIMS FILED THROUGH:
A. August 1995
B. March 1996
C. May 1996
EXPECTED RELEASE DATE:
A. TBA*.
B. September 1997
C. December 1997*Note: There will be a substantial delay from original expected release date of March. See headline story above.
Through January 1997, the Trust received approximately 344,000 claims, 27,611 of which were settled prior to the implementation of the TDP. Under the TDP, 79% of the total claims received have been matrixed. Of the matrixed claims, 153,855 have received an offer or deficiency notice, and 115,136 have settled. The Trust has now settled 89% of the claims that received offers in 1995, and 55% of the claims that received their first offer in 1996. After receiving a matrix offer, 4,184 claimants rejected that offer in favor of individual evaluation. To date, the Trust has processed 1,162 (28%) of those individual evaluation requests. Of those processed, 865 (74%) accepted the Trust’s offer made as a result of individual evaluation (the majority of which were Exigent Health claims), and 254 (22%) ultimately requested recategorization or a reissue of the previous matrix offer. The balance remain in the individual evaluation queue. Since its inception in 1987, the Trust has paid almost $1.7 billion to Trust beneficiaries and has a Trust estate remaining at December 31, 1996 of over $2.4 billion.
New Claim Filings
Over 55,000 new proofs of claim were received in 1996. This represented the highest annual volume since 1989; the last two years combined contributed over one quarter of all claims filed with the Trust. Quarterly receipts fluctuated widely over the year from a low of 6,600 in the quarter ended March 31, 1996 to a high of about 25,000 in the fourth quarter. (This pattern of reduced receipts in the first quarter is fairly typical, and is being replicated in the first quarter of 1997 to date.) From both a monthly and an aggregated annual perspective, claims receipts show a significant and steady acceleration over the last four years. A comparison of filings over the last four years is illustrative.
Year No. Claims
1993 15,000 1994 25,600 1995 39,600 1996 55,000 est.
As of December 31, 1996 the Trust had recorded 325,000 claims in its automated database, and it had another 18,300 claims in its inventory not yet reviewed and recorded. The new TDP-based proof of claim form introduced in mid-1996 has been a success from many perspectives. From the Trust perspective, the usefulness and relevance of the claim information, particularly the injury allegation and supporting documentation, is significantly improved and leads to much more efficient claim review. Similarly, most feedback from law firms using the POC has been favorable.
As previously announced, effective December 2, 1996, the Trust requires all PFT results to be fully documented by submitting the tabular and graphical data from the PFT test. Absent this information, the PFT test results will not be taken into consideration in the categorization of the claim.
For spirometry, the documentation must show the tabular results for at least three maneuvers along with the corresponding exhalation and flow-volume curves. For DLCO, results from two efforts and the corresponding loops need to be provided. All test printouts must identify the testing facility by name and location, the claimant by name or social security number, the date the test was performed, and the claimant’s height, age and weight. The tests must be performed pre-bronchodilator.
Tests must be performed according to ATS standards. The test results submitted will be examined for acceptability and reproducibility using the guidelines as outlined by ATS. For example:
No matter when a claim is filed, the Trust expects all tests submitted to have been conducted in accordance with recognized medical standards regarding equipment, testing methods and procedures and will periodically request evidence and audit to ensure compliance with these standards.
Identify Exigent Health Claims When Filing. Exigent health ("EH") claims are processed the day they are received even when the Trust has a backlog of regular claim filings. When submitting EH claims, mark them boldly on the cover so they will not be missed, or send them in a separate package from other new claim filings.
Reactivating Expired Claims and Reissuing Expired Offers. A claim may be reactivated by written request to the Trust’s Claims Processing Department. The date of receipt of the request is assigned as the claim’s new FIFO date at the end of the queue. The reactivated claim will receive a new offer when the Trust reaches its new position in the FIFO queue. Once a claim is reactivated to a new FIFO position, no activity on this claim will transpire until we reach that segment of the FIFO queue.
If a claimant wants to accept an expired offer and has signed a release so stating, the Trust will reissue the offer "without options" (e.g. the response portion above the check is not provided, and ADR or individual evaluation options are not available). To have an offer reissued, send a letter requesting the "offer without options," and state that the law firm has a release signed by the claimant on file.
Important note: Once a claim has been reactivated with a new FIFO number, it is no longer expired, and the offer cannot be reissued without options.
Offer Extensions. When an extension is requested on an offer, the time that the offer remains valid increases from 180 days to 360 days.
Second Injury Claims. For a claim to qualify as a second injury under the TDP, the initial claim must have settled as a non-malignancy, and a malignancy must have been diagnosed after the settlement date. The malignancy will be settled as a second claim, under a new claim number. The original TDP claim remains settled and no set-off is taken for the original settlement amount. (See Section C.6. of the TDP.)
If a claimant is diagnosed with cancer within a six month period prior to the (non-malignancy) settlement date and the Trust is notified within the six months following the settlement date, the Trust will allow the law firm to return the first settlement monies and resettle the case as a malignancy. This is not a second injury; it is a re-settlement of the original claim with updated medical documents.
Same Name Confusion. Firms with large numbers of claim filings often have two or more claimants with the same name. To avoid any confusion, correspondence regarding these claimants should include the POC number (if known) and the injured party’s Social Security number.
During the Individual Evaluation process, in order for us to provide you our best offer, it is essential that the information we are reviewing is as accurate, current and complete as possible. We require that evidence be provided in support of the claim. Naturally, the best evidence that you possess to support the damages claimed is essential for us to arrive at an equitable evaluation.
For example, if a claim for lost wages is being alleged, we believe the "best evidence" is W-2's or signed, legible tax returns for the last three (3) years of employment prior to the claimed date of disability. If this information is not available, we will consider Social Security records.
If a claim for medical expense is alleged, a summary of the asbestos-related expenses and supporting medical bills or insurance statements is necessary.
In the event that an unusual JM market share is alleged, clear and convincing documentation via sales records, or depositions with other corroborating evidence is required. This information may also need to be provided to establish JM product identification at locations for which we have not previously negotiated or settled claims. Absent information to the contrary, we will use up to a maximum market share of 30% when evaluating claims.
If you are unwilling or unable to supply documentation in support of lost wages or medical expenses, the Trust will estimate a value for these damages based on what is in the file, and thereafter will accept additional valuation information only for good cause shown.
Beginning with the first payment cycle of 1997, two changes have been implemented: 1) the audit of the pulmonary function tests submitted in support of claim for Category 3 - disabling asbestosis and 2) how the Trust calculates medical audit response and pass rates. The audit of PFT tests is covered in the article entitled "PFT Guidelines -- Pre And Post December 2, 1996" found on page 2 of this Newsletter.
Calculation of audit results for the claims randomly selected for each payment cycle will now pertain only to the FIFO range being audited. Previously, if a firm was placed on 100% medical audit for a payment quarter, claims eligible for payment in prior quarters were also subject to 100% medical audit. Under the new plan, a firm will be placed on 100% medical audit only for the FIFO range being audited. In other words, going forward, a firm could be on 100% audit for some FIFO ranges and not for others. Our reason for this change is twofold. First, to more closely tie the audit results to the population eligible for payment. (We recognize that the characteristics of the claimant population may change.) Second, this will give firms which have not passed medical audit for several quarters the opportunity for a fresh start in 1997. Firms which are on 100% medical audit based on audit results through Fourth Quarter 1996 will still have to meet the medical audit requirements for all claims with FIFO numbers less than 226,401, but they may still receive payments on later filed claims, depending on their quarterly audit results.
Shortly, some firms will be receiving lists of claims selected for a supplemental audit. Claims on this list were selected based on either: 1) new medical evidence for a previously audited claim; 2) random selection of claims previously categorized as zero; or 3) specific characteristics of the claim. The results of these audits will not change whether or not a specific firm is on 100% medical audit. The results may, however, affect the number of claims selected from certain populations in the future.
In keeping with recent changes in the tort system, the Trust will not offer payment for individually evaluated Category I claims where such claims are non-compensable under applicable state law. For these claims, the only opportunity for payment will be at the claims categorization stage. After May 1st, any claimant with pleural disease who has requested Individual Evaluation bears the risk that his or her claim will be found non-compensable under applicable state law, and he or she will be offered a payment of zero dollars (i.e., a denial letter).
Under the terms of the Trust Distribution Process ("TDP"), if a claim meets the Categorization Criteria for a Scheduled Disease, the Trust is obligated to tender an offer of the Scheduled Value for that Scheduled Disease. See TDP Section B.2. After this claims categorization process, any claimant may elect to have his or her claim individually evaluated by the Trust. See TDP, Section C. At Individual Evaluation, the Trust is directed to look at a number of factors to determine if a claimant has presented evidence of an asbestos-related injury resulting from exposure to Manville asbestos that will sustain a cause of action "under applicable law." TDP Section C.3. Among these factors are "current settlements and verdicts in the tort system in the claimant’s jurisdiction ...." Id.
Courts in several states recently have held that asymptomatic pleural disease does not constitute a compensable injury under their state law. See, e.g., Simmons v. Pacor, Inc., 543 Pa. 664, 674 A.2d 232, 237 (1996)("After examining the issue at great length, we agree that asymptomatic pleural thickening is not a compensable injury which gives rise to a cause of action."). This appears to be a trend in the law, as state courts attempt to trim growing asbestos dockets. More states can be expected to follow suit. The Trust cannot offer payment for Category I claims from such states during Individual Evaluation. Because such claims do meet the Categorization Criteria for a Scheduled Disease, the Trust will continue offering them the Scheduled Value during claims categorization.
Some of the states which hold pleural disease to be non-compensable have nonetheless permitted damage claims for medical monitoring. The Trust does not offer payment for medical monitoring costs. For Category I claimants, in any case, the Scheduled Value would likely exceed any amount that the Trust might be compelled to pay for medical monitoring were it available.
The Trust is offering an opportunity to claimants who have received offers of the Scheduled Value for Category I, to rescind (in writing) any requests for Individual Evaluation and for post-Individual Evaluation ADR ("AD-2"), and to accept the previously offered Scheduled Value. The Scheduled Value for Category I represents an opportunity to receive payment for a condition that might otherwise be non-compensable. If a claimant does not take this opportunity, and if the Trust determines at Individual Evaluation that his or her claim is non-compensable under then-existing applicable law, he or she will receive a notification that the Trust will not make a payment offer for that claim and the matrix offer will not be reinstated.