FAQ: What we know and don't know about MSU's termination of the Healing Assistance Fund
Michigan State University announced Tuesday it discontinued its beleaguered Healing Assistance Fund, opened earlier this year to assist survivors of abuse at the hands former school doctor Larry Nassar. Citing the payment of a $500 million settlement reached with survivors in May into a court-created fund, the university said it would redirect the remaining money in the healing fund into the settlement fund.
The healing fund was a $10 million endowment created to help pay the counseling and mental health bills of survivors and their parents, but distributions from the fund were suspended in July after reports of fraudulent activity. An investigation by Michigan State police determined none of the survivors had made fraudulent claims, and the school assured the fund would be reopened, but it remained closed until Tuesday's announcement.
So, what has happened since this fund opened earlier this year, and what will happen next? Here's what we know and don't know.
What was the purpose of the healing fund and how did it work?
The fund set aside $10 million to help survivors, and their parents, pay for counseling and mental health services that were not covered by their insurance policies.
"We established this fund to express our concern for and commitment to these brave young women," Michigan State board of trustees chairman Brian Breslin said in a statement in January. "We are deeply saddened by the stories of abuse and grateful for the courage the victims showed in coming forward."
Heather Swain, Michigan State's vice president for communications and brand strategy, told Michigan Radio that the school had "compiled a list of individuals potentially eligible for reimbursement based on student-athlete rosters and health team records." They had then shared the list with Commonwealth Mediation and Conciliation Inc. (CMCI), a Boston-based firm hired to help facilitate the distribution of the fund. Survivors would submit receipts and bills to CMCI, which would ensure they were reimbursed. The service, which also included a help line dedicated to assisting users with referrals to mental health professionals, began on Jan. 12, 2018.
Where did the $10 million come from?
The board of trustees allocated money to the fund, and as of July, more than $1 million had been distributed. The remaining $8.5 million will now be put toward the $500 million settlement -- reducing the school's borrowings for the settlement to $491.5 million, according to Tuesday's statement.
When and why was the fund suspended?
The fund was suspended in July, due to accusations of fraudulent claims. According to conversations with survivors and their parents, users of the healing fund were not directly notified of the suspension. Instead, many learned of the developments by reading the news or by submitting a receipt that was not covered.
Lynne Erickson, mother of survivor Ashley Erickson, said she was stunned about how they discovered the fund's suspension.
"We got a bill from the office where [Ashley] was receiving therapy. We got a rather large bill from them, that's how I knew it wasn't being paid. So I called [CMCI] and talked to my contact there and they told us that the fund had been temporarily cut off."
Survivors were told by the administrators at CMCI the fund would be resumed shortly. However, it never was, and for months survivors were left in limbo and told they would be allowed to submit their receipts once it was restarted. Several ultimately said they had to stop seeking treatment and counseling because they were unable to afford it without assistance. For families like the Ericksons, this resulted in having to take out a high-interest loan in order to pay for counseling bills -- a decision that was made more tolerable with the belief it would be fully reimbursed in the near future.
Who was committing the fraud?
That remains a crucial and unanswered question. Jim Dunlap, the chief of the Michigan State Police Department, said in October that none of the fraudulent claims were made by Nassar survivors who have filed criminal or civil complaints. The university said nearly half of the $1.16 million that had been distributed at the time was involved in the fraud. Michigan State fired CMCI.
"It's a fund that is deeply troubled," interim school president John Engler said at the time. "There are several individuals under criminal investigation for fraud, and we've now terminated the contract with the vendor [CMCI] who clearly was either not capable or not supervised in terms of their performance."
The Michigan State police investigation remains open.
Why was the fund shut down on Tuesday?
In Tuesday's statement, Breslin said the fund was "intended to be a bridge from the point of creation to when the survivors would receive payments from a settlement with the university."
"Now that the university has fulfilled its commitment and deposited the settlement funds, we support redirecting the remaining Healing Assistance Fund toward the $500 million lawsuit settlement," he said. "We hope survivors who need counseling support continue to seek out appropriate services including the several options available on campus."
It appears that school officials hadn't previously said the fund was meant to be a temporary financial holdover before Tuesday's statement. When asked about initial documentation about the fund's mission, a Michigan State spokesperson suggested looking on the "Our Commitment" page of the Michigan State website. However, the page currently refers only to the suspension and not its original goals. But an archived web search reveals the initial page on the site said nothing about the fund being a stopgap.
Was this move advised by experts on sexual abuse and trauma?
No. According to a report Tuesday from the State News, the MSU Relationship Violence and Sexual Misconduct (RVSM) Expert Advisory Workgroup, created by Engler in February and tasked with helping improve student safety, was asked by school officials about potentially setting an end date for the fund in an email, and the group strongly suggested the school keep it open.
"If sexual assault survivors have entered into treatment based on the understanding that there were dedicated funds available to cover the cost of therapy, and then learn that they are no longer eligible for those funds, they are likely to feel that such changes are a gross violation of trust," the group said in an email provided by chairwoman and psychology professor Rebecca Campbell to the State News. "This betrayal will likely cause significant distress that will compound trauma symptoms they are already experiencing."
The group went on in the email: "There are significant health risks for survivors if treatment is delayed or interrupted." The email was forwarded to Engler on Monday, and he responded to the group with the decision to move the fund to the settlement.
Campbell told the State News she and her peers were shocked to see the fund was being closed, and called the decision "completely inconsistent with anything we have discussed or recommended to any member of Engler's administration" in an interview with the State News.
How are the survivors responding to the closing of the fund?
According to interviews with and social media posts from survivors, it appears many feel blindsided by this development because they were not under the impression this was merely a "bridge" until the settlement came in; some feel it's the latest indefensible act by the university in a long chain of them.
"It is horrifying to me and my sister survivors to watch MSU betray survivors again today," Grace French, a survivor and founder of the "Army of Survivors" nonprofit organization, told ESPN. "This shows each and every survivor of sexual violence on campus, in the community, and in the nation that the Spartan administration's word means nothing. Each commitment they make to the community may be pulled out from under us when it becomes inconvenient for the administration."
Others cited the State News report, and the RVSM workgroup's ignored recommendations, as the source of their outrage.
What does this mean for those survivors not involved in the settlement?
According to MSU spokeswoman Emily Guerrant, those not involved in litigation won't receive any financial assistance for their counseling and mental health services from the school going forward.