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COMMITTEE of PUBLIC ACCOUNTS debate -
Tuesday, 18 Dec 2001

Vol. 3 No. 29

Nursing Home Subventions - Special Report No. 3.

Mr. Purcell

To introduce this and to refresh the committee's memory on these matters, the entitlement of a person to a nursing home subvention depends on the level of dependency and on an assessment of their means. In calculating a person's means, regulations made in 1993 provide that health boards should disregard a sum of money equal to one fifth of the non-contributory old age pension. This money was to be retained by the person for personal use.

As a result of a lack of clarity about how the regulations should be implemented, even within the Department itself up to December 1996 - the Ombudsman has been critical of the Department in that respect - different interpretations of the regulation emerged between the health boards. Definitive legal advice was obtained by the Department at the end of 1996, but this conflicted with the practise in most health boards. The effect of the incorrect interpretation was to reduce the amount of subvention towards the cost of maintaining eligible persons in nursing homes. In 1998, the Department provided an additional £4 million to six health boards to enable them eliminate the arrears and meet other liabilities in connection with the scheme.

Earlier this year, as the committee is aware, the Ombudsman issued a report on his investigation into nursing home subventions which established, among many other things, that most health boards had not been applying the rules regarding means properly and had been slow to pay arrears to those who had been underpaid as a result of the misinterpretation. In his report the Ombudsman stated that untangling the detail of what precisely happened the additional allocation would involve a separate investigation.

Consequently in my capacity as statutory auditor of the health boards, I instigated a special audit to determine the extent to which the health boards in question had met their obligation to pay arrears of the subvention to the affected persons from funds provided for that purpose by the Department. I established that the six health boards in question, the Midland Health Board, the Mid-Western Health Board, the North-Western Health Board, the Southern Health Board, the South-Eastern Health Board and the Western Health Board, were slow in paying the arrears. Even though the money was provided in 1998, four of the six health boards did not start paying arrears until 2000. Looking at it another way, the total amount of arrears payable was £2.2 million, but by June 2001 just over half this amount had been paid out. Funds provided for the payment of arrears were generally used for otherservices for the elderly within the health boards.

In the report I also make reference to an inconsistency in the awarding of a discretionary top-up payment to nursing home patients and this is in addition to the matter that Iinvestigated. For example, in the case of the Western Health Board, which makes these discretionary payments on a particular basis, it has been estimated that arrears of £2.25 million could be payable. As I understand it, thepractice in other health boards may differ from that.

In the light of what happened on nursing home subventions, I would have had a concern that the use of different criteria across health boards for deciding on the award or the level of award of discretionary payments could ultimately have negative financial implications for the Exchequer. The Department's view does not foresee such an outcome. I hope they are right on this occasion.

In summary, the initial failure on the part of the six health boards to correctly apply the means provisions to nursing home regulations was compounded by the inordinate delay in paying arrears to those who had been disadvantaged by the misinterpretation. In my opinion it is incumbent on public bodies such as health boards to have procedures in place to ensure that those who are deprived of their entitlements because of administrative error have the matter remedied within a reasonable period. All six health boards were less than diligent in this regard.

Finally, Chairman, I wish to put on record that I received a letter today from the chief executive officer of the North-Western Health Board informing me that the figure for arrears of subvention furnished by that board for the purpose of my report was overstated by £83,243 due to an error on their part in classification. The relevant figures in my report should therefore be adjusted accordingly.

Thank you, Mr. Purcell. Mr. Kelly, we received your opening statement. Are you agreeable to us publishing this open statement?

Mr. Kelly

Yes, Chairman.

Chairman, before my colleague speaks, may I clarify one point with the Comptroller and Auditor General? Were the moneys deliberately and knowingly used in some health boards because they were short of money for other facilities for the aged or was it an administrative error?

Mr. Purcell

No. When I referred to the administrative error, I was referring to the misinterpretation by a number of health boards on what the particular regulation 8.2 meant. On the other point, it is clear that in some health boards they did use the money to shore up other areas of services for the elderly, for the greater part. That is true.

That is one of the points I wanted to make. First, we should put on record our thanks to the Ombudsman and, indeed, to the Comptroller and Auditor General for highlighting what was a glaring misinterpretation and, in my opinion, a deliberate misinterpretation of the regulations under that section. For many years I have been following this matter and I am particularly glad that it has been highlighted. This is just another typical example of the way health boards are operating.

For example, on the first paragraph of the second page of Mr. Kelly's report, he rightly highlights the fact that aids and appliances were actually being bought out of moneys belonging to elderly patients - that is quite clear. Indeed in some cases the people concerned were mentally infirm. In particular, those three health boards mentioned here should be brought before the committee and it should be established who gave them authority to do that. Who authorised it? Was it authorised by the Department or was it a decision of the health boards or of the chief executive officers of the health boards?

There is another issue on which I would like to ask Mr. Kelly for his opinion. It appears certain administrative and legal costs are being taken out of the moneys lodged in the names of elderly patients - that is my reading of it. Perhaps I am misinterpreting that but I get the impression that the cost to the health boards in the administration of these funds has been deducted from patients' moneys, and I want clarification on whether that is true.

Is interest being paid on these moneys which were held in bank accounts, normally under the signatures of the matrons of the hospitals? This is what happens. The person concerned goes into the geriatric unit or the nursing home, gives in their old age pension book and he or she is entitled to X amount back. However, there are two separate issues here, not one. There is the question of people who had to pay money to subvent their mother or father in a private nursing home. That was illegal anyway. The regulation applied in such cases was illegal for starters. Then there is the other section, where people who are in geriatric units which are covered by the health boards were supposed to be getting £15 a week for pocket money, as referred to in Mr. Kelly's report, and are not getting it. There has been a tendency to lump the whole lot together but they are two separate and distinct items. Does Mr. Kelly agree with that? Perhaps we could have a report on the two items. When I read the end of the document I am not clear about these two distinct, separate circumstances.

Mr. Kelly

I am at a bit of a loss in relation to the document. I have made a statement to the committee in response to the report of the Comptroller and Auditor General on the nursing home subvention scheme. Is it within that document there are points made about patients' property?

Two separate situations are highlighted.

The documentation relates to correspondence as a result of a previous meeting where you wrote to me and other members of the committee regarding patients in geriatric hospitals and the approach adopted in them. That is what Deputy Bell is referring to.

There are two separate and distinct situations as a result of which arrears are owed. Both were misinterpreted by the health boards which took money from individuals to support nursing home payments. The subvention from them was reduced accordingly. The other scenario involved patients having to pay their old age and any other public service pension, from which moneys they should have received £15. However, the money was lodged by the matron of the geriatric unit in an account under the person's name. That was illegal and should not have happened.

I ask the Comptroller and Auditor General to clarify those points before Mr. Kelly continues.

Mr. Purcell

Perhaps it will be helpful because the Ombudsman's report, published earlier this year, dealt with two discreet misinterpretations, of which one was, as I understand it, taking into account the circumstances of family members in deciding whether somebody was eligible for nursing home care and its extent. The second is colloquially called the pocket money issue - the arrears arising from the pocket money issue dealt with in my report. Perhaps that might help clarify to it. There is a third matter, to which the Chairman referred, which is more an historical problem. There is no problem about its interpretation and so on. It concerns patients' private property accounts where money is put by for them. The accounts are maintained by the health boards or hospitals and the issue was what was being done about the money to which there was no legal claim. There was a strong recommendation from the committee that it should be escheated to the Exchequer and in many cases that has been done. However, there are still patient private property accounts in hospitals, nursing homes and so on.

Does the Comptroller and Auditor General believe it is reasonable that several thousand claims are still outstanding, even though £4 million was allocated under the relevant heading in 1998?

Mr. Purcell

I clearly stated in my opening remarks and the published report that I did not regard that as reasonable and that it would be very difficult to do so, even taking account of the difficulties, particularly at the stage health boards are now at trying to seek perhaps people who have since died or left the particular nursing home where there may be some legal issues around entitlement. Certainly, the boards were dilatory in 1998 in the fact that four of the six did not start to pay out any arrears until almost two years later. I do not think that could be regarded as reasonable.

Mr. Kelly

By way of overall comment, apart from the points I made in my statement, I absolutely accept the assessment of the Comptroller and Auditor General who has used the term "dilatory." I acknowledge the performance of the health system in responding to this issue has been poor. The Department was, in the first instance, slow to detect the problem and only got into action following discussion with the Office of the Ombudsman late in 1999. Having made the allocation in 1998 and written to the health boards at that stage on the basis that refunds should be addressed within the total sum of £4 million allocated, the expectation was this would have been followed through at health board level. The delay in us copping on that that was not the case is certainly open to criticism and the pace at which the subsequent response took place, even at that stage by the health boards in identifying who was due a payment and in "actioning" them, again does not reflect well on them. There is no ducking this.

The net position at this stage is that out of the sum of £4 million - I want to be absolutely clear about this and it is acknowledged in the Comptroller and Auditor General's report - a certain proportion was allocated for dealing with the payments due, but a range of other issues were to be addressed. That was the intention at the time the £4 million was allocated to the health boards. The net position now is that out of a total of £2.2 million due in payments by the boards, a sum of £1.8 million, which updates the figure to the present date, has been paid by them. The balancing figure is £312,000. The delay in making payments in the cases concerned, based on reports we have received from health boards, is due to difficulties in identifying relatives or next of kin in the case of those who have died or where there are legal problems around the payments that have to be made. It is a question of identification or legal problems.

We have pressed the health boards repeatedly about this and at this stage they are doing as much as they can to complete the job as quickly as they can allowing for the legal problems that have arisen in some cases.

I welcome the fact you have said the Department of Health and Children was responsible. The Ombudsman stated on page 29 of his report that at all stages the Department knew what was happening within the health boards and that, by definition, there was almost collusion in knowing what was happening. Were the officials in the nursing home subvention unit the same officials who were there in 1993 and did they see the sorry saga through?

Mr. Kelly

No, that is not the case.

We will leave it at that.

Mr. Kelly

May I just make one comment? You have interpreted what I said as a statement that the Department is responsible. I am saying it takes responsibility for one part of this. I do not take responsibility for the actions or inaction of health boards. I want to be absolutely clear about this. The Department, in making the allocation it did in 1998, addressed the problem. We wrote to the health boards, which is the way we operate. We asked them at that stage to take up this matter and deal with it. We are entitled in a situation where there is a certain formality about the way the boards operate to assume that funding allocated for a particular purpose is followed through on that basis by them. I am reinforced in my confidence in that system by the formal statements of accounts I receive signed by the chairmen, chief executives and finance officers of the boards and also by the audits done by the Comptroller and Auditor General. I want to be absolutely clear about this.

I accept what you are saying. I was referring to page 29 which shows that the Department of Health and Children was always aware, from day one, of what the health boards were doing and how they administered the scheme. The Department never said "stop."

Mr. Kelly

I will not get involved in a commentary on what is contained in the Ombudsman's report.

His report is damning. Many public representatives during the period had the experience of the families of elderly people coming to them who were appalled at being requested to supply details of their income when applying for nursing home subvention. The Ombudsman's report gave examples of letters issued from health boards, including my one, the Mid-Western Health Board, stating the applicant would not receive a nursing home subvention because his or her son would not reveal his income. How many people were deprived of nursing home subvention because the regulations were flouted? While people are being compensated and you mentioned the figure of £2.2 million, there is a body of people who would have been in receipt of subvention had the scheme been administered properly, but were not and are not within the system. There is no compensation for them.

Some £312,000 is outstanding between the different health boards. I do not know how this sum is distributed between them. Last week I met one person who is being paid arrears of nursing home subvention due to her. The arrears are paid in two phases. She received the first cheque of more than £400 and the final cheque is for £222. Documentation has been sent to her detailing how she should go about taking out probate and receiving letters of administration and stating she must now claim legal title because her father is deceased. She is being put through a legal process for £222 many years after the event. When I queried this with the Mid-Western Health Board it stated the Department of Health and Children instructed it to operate these guidelines. If the first phase of payment was made to the person concerned and the board was happy the daughter who received it was the person representing the family, why is she being put through the hoops of all this protocol at this stage on the instructions of the Department? Would you not call a halt at this stage and, if the board is happy with the status of the next of kin, pay the amount and not put her through this added expense?

Mr. Kelly

First, I empathise with the frustration felt by people put in that situation. The procedure, which sounds like an elaborate one in relation to the amount of money involved in that instance, is one that, based on our legal advice, we have to go through. However, the health boards have been advised that, where the administrative cost of making the payment is inordinately high in relation to the amount to be paid out, the process could be short-circuited.

Will I, therefore, have to send the facts of a specific case with an outline of what I mean to you to get someone within the Department to tell the Minister and the health board to cop themselves on? If more than £400 is issued in one payment to an individual whose father is dead for a good few years, why is she sent this frightening raft of documentation in a big blue folder from the Mid-Western Health Board which she must fill in if she wants to receive the balance of £222? She must obtain probate, letters of administration and so on for £222. If the payment of £400 did not require this, why is it required now? Will people not be reasonable at this stage, put this sorry chapter behind them and not put others through more trauma? People approached me recently stating they thought I had said this matter was resolved and that they had received the documentation from the health board. The Mid-Western Health Board states the Department insists on this.

Mr. Kelly will find that, when a patient is admitted to a geriatric unit or a nursing home for subvention, the next of kin is automatically recorded. That is the first question asked. I visit geriatric units frequently with people and that is the first entry on the admittance form. The next of kin is declared from the time a person enters a nursing home. All that legal jargon and so on is completely unnecessary.

Mr. Kelly

I accept what Deputy Bell says, but can only reflect to the committee what is reported to me by the health boards. Without interfering with the committee's business or the way it goes about it, perhaps it is an issue it might want to explore with the boards.

Let us take a look at the procedure and see what we can do. I am not talking about the particular case, but in terms of clarifying how we might simplify the procedure. I take the point the Chairman makes, that if the previous arrangements were good enough in relation to phase one, it does not seem totally logical to put all sorts of complications in the way in relation to stage two. I will take a look at this.

I emphasise that this is not about setting out to make life difficult for people. We deliberately set out at my insistence that whatever procedure was put in place to deal with this would stand the test of scrutiny subsequently based on the background to the nursing home subvention issue, and that we would have a standard uniform set of arrangements throughout the country in order that there would be equality of treatment. The arrangements arrived at were put together by a group representing the health boards and the Department and the legal advice they were given in this tricky area was taken on board. Maybe some aspects of what we have come up with——

I appreciate what you say.

Some 25 years ago when I was a member of the first North-Eastern Health Board committee we set down that whoever paid the funeral bill from the undertaker and presented it was paid whatever money was in the pocket money account. The same applied to the nursing home subvention. That is the way it was done, but, suddenly, the ball game has changed and people must go to solicitors.

The reason I make this point is that this is a sequence of events which should be brought to a conclusion. Mr. Kelly's departmental officials and the health boards should act on the basis of common sense at this stage. If one payment is made and they are satisfied with the credentials and bona fides of the next of kin who receives it, I do not see the logic in putting him or her through the hoops of this legal process for £222 in this case. I do not believe the people concerned will bother going through the legal process. Perhaps you might say at this stage, Mr. Kelly, that common sense should prevail. It is not that the people concerned are trying to fiddle £222. The father of the woman concerned is dead, her sister is in America and her brother is in Cork. She shouldered the entire onus of the nursing home subvention. I respect the fact that officials will examine this issue and simplify the process.

We will have a meeting with the health boards on 22 January. Mr. Kelly must forgive us for digressing into this area, but we will discuss many of these matters. It would be of assistance to the committee if Mr. Kelly could present his information by 15 January. We will possibly conclude the Vote at the end of the meeting with the health boards on 22 January. That will give us a chance to inquire into the nursing home subvention and other issues which concern members.

The committee will adjourn until 12 p.m. on Tuesday, 8 January 2002. That meeting will discuss the 2000 Annual Report of the Comptroller and Auditor General and Appropriation Accounts - Department of Justice, Equality and Law Reform - Vote 19, Garda Síochána - Vote 20, Prisons - Vote 21, Land Registry and Registry of Deeds - Vote 23, Courts - Vote 22 and the report and value for money examination regarding the purchasing of tyres by the Garda Síochána, Department of Justice, Equality and Law Reform.

I wish you all a happy Christmas.

The witnesses withdrew.

The committee adjourned at 4.40 p.m. until 12 noon on Tuesday, 8 January 2002.
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