2002 Annual Report

Previous | Table of Contents | Next

Schedule O - Revised Cost Recovery Budget Proposal for the Period June 1, 2002 to March 31, 2003

CANADIAN BLOOD SERVICES- Litigation Notification Program

A. Introduction

Canadian Blood Services (“CBS”) conducts Tracebacks for the Fund Administrator (“LNP Tracebacks”) pursuant to the Order of Mr. Justice Winkler dated April 13, 2000 (the “Order”).

CBS had previously submitted its initial Cost Recovery Budget Proposal for the period April 1, 2002 to March 31, 2003 to the Joint Committee in April 2002. CBS met with the Joint Committee to review the initial Budget Proposal on April 29, 2002. Subsequently, the Joint Committee has asked CBS to revise its Budget Proposal taking into account the Joint Committee’s response as per Bonnie Tough’s letter dated May 15, 2002.

The Joint Committee has asked CBS to revise its Budget Proposal to reflect an anticipated twenty (20) new traceback requests per month for the period ending March 31, 2003. CBS has also taken into account the other activities it conducts on behalf of the Fund Administrator including Hospital Record Confirmations (HRCs) and work done for appeals.

B. Staffing Costs

CBS conducted a detailed workload measurement study of its entire Lookback/Traceback program in the fall of 2001. Relying on national data, CBS determined that the average amount of time required to complete an average traceback investigation was about 26 hours and the average cost per hour of CBS’ traceback staff for the 2002/2003 fiscal period was $21.10 per hour. Using these figures, CBS calculates that the average staffing costs for an average traceback investigation are $548.60. CBS has used this average staffing cost per case to provide the estimate based on the anticipated influx of 20 traceback cases per month. In addition, CBS has added in additional costs for the administration of the Litigation Notification Program, namely the LNP Coordinator and the LNP Associate positions. These costs are summarized in Appendices 1 and 2.

1. Twenty (20) cases per month

   Based on an assumption that CBS will receive 20 cases per month or 240 cases for the fiscal year, CBS seeks to recover $233,664 for its staffing costs. Included in this sum is the average costs of the traceback investigation of $131,664 (240 cases at $548.60 per case) and an additional $102,000 for the salaries of the LNP Coordinator and the LNP Associate.

   CBS will charge $548.60 for each case it receives from the Fund Administrator. CBS understands that should the workload increase, it may be necessary for the Joint Committee to seek a court order varying the budget to accommodate the increased work load.

2. Deficient cases

   In addition to the anticipated influx of 20 cases per month, CBS has about 126 cases that are deficient. CBS’ practice is to prioritize its traceback work by working on clean cases in which the six-month time frame under the protocol has commenced. Therefore, it is likely that little work, if any has been done on the deficient cases. CBS seeks recovery of its costs for these deficient cases at the same rate of $548.60 per case or $69,123. A summary is set out in Appendix 3.

3. Ongoing cases

   In addition to the new cases and the deficient cases, CBS has approximately 100 cases that have not yet been completed. Given CBS’ prioritization of traceback work, we have assumed that these cases are in various stages of completion based on their reporting due dates. We have made this assumption in order to estimate the costs of completing this work. The total compensation sought for the traceback staffing costs is $27,611.86. A summary of these costs is set out in Appendix 4.

4. Hospital Record Confirmations

   In addition to the regular traceback investigation costs, there are about 256 cases that require hospital record confirmations (HRCs). We estimate that each HRC takes approximately 2 hours to complete for our field staff and an additional hour for administrative matters (ie. clarifications with Fund Administrator, interpreting results and report to Fund Administrator). As CBS’ administrative costs are built into its costs for the LNP Coordinator and LNP Associate, CBS has not added in this extra one hour of time. In summary, CBS seeks an additional 2 hours of funding for each HRC or $42.20 per HRC. The total sought for the 256 outstanding HRCs is $5,317.12.

   CBS anticipates that there will be additional requests for HRCs from the Fund Administrator and seeks $42.20 per HRC. CBS understands that, at the end of the fiscal period, the Joint Committee will account for any of these additional HRCs and payment for each additional HRC will be made at the rate of $42.20.

C. Additional Overhead Costs

1. Travel Expenses

   The Joint Committee has advised that CBS’ original proposal for travel expenses of $30,000.00 should be reduced to $20,000.00. CBS’ head office staff will only travel to a Centre in the next fiscal period if deemed necessary to assist with the investigation of LNP Tracebacks, to assist in training staff or to assist with ongoing staff retention or LNP management issues. Please note that there is an ongoing need to train new staff due to staffing turnover.

   As has been the practice in the past, CBS will continue to take advantage of seat sales and weekend travel to keep travel costs as low as possible. This practice in Years I and II resulted in significant savings for travel. As requested by the Joint Committee, CBS has prepared a separate budget, submitted to Fund Counsel, to address anticipated travel expenses for appearance at appeal hearings.

2. Office Supplies and Stationary

   The projected costs for office supplies and stationary are $15,000.

3. Mailing and Courier Costs

   The projected costs for mailing and courier are $350.00 per month or $4,200.00 per annum. It is the LNP Coordinator’s practice to courier our Reports on the LNP Tracebacks to the Fund Administrator. It is our practice to courier the LNP Traceback requests to the Centres to ensure that the requests are received by the Centres in a timely manner.

   The LNP Coordinator copies the interim and final Reports on the LNP Tracebacks to the claimants and these Reports are sent by regular mail. We are seeking to recover the costs of the mailings.

D. Stored Sample Costs

1. Database

   At our meeting on March 28, 2001, the Joint Committee authorized CBS to build a searchable database out of the stored sample test results such that both the positive and negative final test results can be searched. As we have previously reported, CBS has not yet been able to obtain the test results in electronic format necessary for the creation of this database from the testing facility.

   CBS had proposed a budget of $5000.00 for the creation of this database once the electronic version of the test results become available. The Joint Committee has advised CBS that this item is to be deleted from CBS’ Budget Proposal and will be dealt with separately, if and when the requisite electronic information becomes available.

2. Storage Costs

   At our meeting on February 1, 2002, the Joint Committee advised CBS that it would oppose any move by CBS to destroy the stored samples that have undergone testing. As a result, CBS must continue to store these samples and incur costs of storage. CBS seeks the full recovery of its costs of the storage of these samples in the amount of $836.54 per month or $10,038.48 for the fiscal year as set out in Appendix 5.

   Please note that the Order of April 13, 2000 provided that CBS was entitled to recover one-half of the annual cost of storage of the stored samples to a maximum of $14,300 per annum for a period of two years. That two year period is now at an end.

E. Appeals

CBS has been required to participate in the appeals of the Fund Administrator’s decisions in a number of ways. For cases in which CBS’ traceback investigation plays an important role in the Fund Administrator’s decision to deny compensation, the Fund Administrator requests CBS to provide a summary letter of CBS’ traceback investigation (the “Appeal Letter”). The Appeal Letter is produced by Head Office. In order to prepare the Appeal Letter, a copy of the pertinent documentation must be obtained from the regional blood centre that conducted the traceback investigation. The LNP Associate is responsible for coordinating with the Centre staff to obtain this documentation and then drafts the Appeal Letter. The Appeal Letter is then reviewed, quality assessed and executed by assistant counsel for CBS. CBS estimates that it takes about ten (10) hours of staffing time to complete the Appeal Letter. It takes about three (3) hours for the Centre staff to pull the traceback file, review it and copy the relevant documentation. It takes about 4 hours for the LNP Associate to review the documentation and draft the Appeal Letter and it takes about three (3) hours for review and quality assessment of the Appeal Letter by legal counsel.

CBS has had approximately 35 requests for Appeal Letters from the Fund Administrator to date. CBS does not know the number of future Appeal Letters that will be requested. Based on the fact that there are currently over 330 negative traceback investigations and about 50 positive pre-class traceback investigations, CBS anticipates that about 20% of these, or 80 cases, will result in future appeals. Given that CBS has already been involved in 35 cases, it is anticipated that CBS will be asked to provide an Appeal Letter in about 45 appeal cases.

On the basis that CBS’ LNP Associate will be funded for the next year, CBS will seek recovery of the following costs of the Appeal Letters:

Traceback staff time of 3 hours x $21.10/hour totals $63.30; and

Legal counsel time of 3 hours x $75.00/hour totals $225.00.

Therefore the total sought for each Appeal Letter is $288.30 and CBS will charge only for those Appeal Letters that are requested by the Fund Administrator or Fund Counsel. On the assumption that CBS will be asked to provide 45 Appeal Letters for the fiscal period, the cost is estimated at $12,973.50, as set out in Appendix 1. CBS understands that an adjustment on the cost will be made at the end of the fiscal period based on the number of Appeal Letters actually provided.

In addition to the time spent to produce the Appeal Letter, CBS is increasingly involved in providing evidence and support for the appeals. The National Coordinator of the Lookback/Traceback program has testified at one hearing and is scheduled to testify at another hearing in May. We have had at least three additional requests for CBS staff to testify at future appeal hearings. CBS seeks to recover the costs of these appeals, including the staffing costs for attendance at and preparation for the appeals, and the ongoing costs of its legal counsel in coordinating with Fund Counsel and attending at appeal hearings. The Joint Committee has advised CBS that these additional appeal costs are to be submitted to Fund Counsel for submission to the Courts.

PART 2 - NOTIFICATION CAMPAIGN AND ANTICIPATED INCREASE IN CASES

At the meeting on February 1, 2002, CBS advised Joint Committee that it has identified about 1412 traceback cases in its regular traceback program, that are not Litigation Notification Program cases, with transfusions confirmed in the period January 1, 1986 to June 30, 1990 (the “Class Period”). CBS also advised Joint Committee that there are about 1436 cases in which transfusion history has not been determined. It is likely that there is a percentage of these cases which will also contain Class Period transfusions.

CBS recognizes that all of the recipients with Class Period transfusions are eligible to apply for compensation from the Fund. In order to assist these recipients to apply for compensation, CBS has proposed to conduct a notification campaign to notify the recipients of the Fund and to encourage these recipients to apply for compensation. CBS would seek to recover costs of this notification campaign from the Fund.

The Joint Committee has advised CBS that it will not consider CBS’ proposal at this time but will revisit the issue in the Fall of 2002 as part of its overall strategy to locate class members. As a result, CBS has deleted the proposed costs for this project from its Budget Proposal.

Overview of Costs to Be Recovered

Based on our projections for the costs, the staffing costs sought to be recovered for the 2002-2003 fiscal year based on an influx of 20 cases per month is $233,664.00. In addition, CBS seeks additional costs including the cost of the stored sample storage, various overhead costs, travel, and costs for preparing Appeal Letters. Based on an influx of 20 cases per month, the total estimated costs are $399,724.50. Please note that this total does not include any additional requests for HRCs which will be billed at the rate of $42.20 per HRC requested. A summary of these costs is set out in Appendix 1.

Appendix 1 - Annual Costs Based on 20 Cases Per Month
Appendix 2 - New Traceback Requests
Appendix 3 - Deficient Cases
Appendix 4 - Carry Forward Cases
Appendix 5 - Storage Costs for Stored Samples

Top