To start this quest you should talk to Phoibe once the Debt Collector quest has been completed.
When sickness spread in Kausos, many fell victim to its sweep. The only way to stop the spread, said a priest, was to kill any and all survivors.
The Blood Fever
Related points of interest
Objectives of The Blood Fever
1. Talk to the sick villagers
You have to choose whether to help the sick or leave without doing anything. If you decide to help, you will have to kill the priest and the guards.
2. Kill the priest and guards
If you have decided to help the villagers.
3. Talk to the sick villagers
They will be waiting for you near the village. You can accept the money or let them keep it.
4. Quest Completed
Rewards: XP, Drachmae (if you have not interfered or accepted money).