On behalf of the committee, I welcome the Minister of State at the Department of Health and Children, Deputy Seán Power, and his officials. We are considering the following Supplementary Estimate: Vote 40 — Health Service Executive. The proposed timetable has been circulated. It provides for opening statements by the Minister of State and Opposition spokespersons, followed by a question and answer session. Is that agreed? Agreed. Second Stage of the Hepatitis C Compensation Tribunal (Amendment) Bill 2006 will be taken in the Dáil at 12.30 p.m.
Vote 40 — Health Service Executive (Supplementary)
The Health (Repayment Scheme) Act 2006 was signed by the President on 23 June 2006. The Act provides a clear legal framework for a scheme to repay recoverable health charges for publicly funded long-term residential care. All those fully eligible persons who were wrongly charged and are alive, and the estates of all those fully eligible persons who were wrongly charged and died since 9 December 1998, will have the charges repaid in full.
The decision to limit repayments to estates of those who died since 9 December 1998 reflects the reference in the Supreme Court judgment to the application of the Statute of Limitations: "The State has available to it a defence of the Statute of Limitation i.e. a 6 year limit." The Government has a responsibility, in view of the very substantial sums involved, to have regard to what the Supreme Court said about the Statute of Limitations to place appropriate limits on the scale of total repayments which the taxpayer will have to fund.
Charges for publicly funded long-stay residential care have been raised by health boards from people under two sets of regulations: the Institutional Assistance Regulations 1954, as amended in 1965, which applied to all, including those with full eligibility; and the Health (Charges for In-Patient Services) Regulations 1976, as amended in 1987, from which medical card holders and those with dependants were exempt.
The Supreme Court judgment in the McInerney case in 1976 narrowed significantly the grounds on which a charge could be raised for institutional assistance. It could only be made for shelter and maintenance without any medical or nursing care being provided. A circular from the Department of Health to the health boards in 1976 authorised a practice by which the chief executive officer of a health board could regard patients as not meeting the criteria for full eligibility while being maintained in an institution — that necessary general practitioner and surgical services were being provided for them — and so withdraw their medical card. The withdrawal of full eligibility in this way allowed a charge for inpatient services to be raised.
The health boards, with the knowledge of the Department of Health and Children, continued to raise charges under both sets of regulations up to 9 December 2004. On the basis of advice from the Office of the Attorney General, the Department instructed the health boards to cease charging all fully eligible persons in receipt of inpatient services in public long-stay institutions and in contract beds in private nursing homes by virtue of a contractual arrangement with a former health board with effect from 9 December 2004. By way of a goodwill gesture, the Government agreed to have ex gratia payments of up to €2,000 made to those wrongly charged who were alive on 9 December 2004. The Health Service Executive made repayments in excess of €21 million to approximately 10,800 individuals.
The Health (Amendment) (No. 2) Bill 2004 was passed by both Houses of the Oireachtas on 17 December 2004. The purpose of the Bill was to provide a statutory basis for the imposition of charges on those to whom inpatient services were being provided in public long-stay institutions. It also contained a retrospective element which provided that charges levied prior to the enactment of the legislation were also lawful. The Bill was referred to the Supreme Court for a decision on its constitutionality. The retrospective element provided that a relevant charge levied under section 53 of the Health Act 1970 for long-stay care prior to the enactment of the legislation was lawful. The Supreme Court decision of 16 February 2005 found this retrospective element of the Bill to be unconstitutional because of the property rights of citizens.
Charging for long-stay care was put on a statutory footing under the Health (Amendment) Act 2005 and is being implemented by way of the Health (Charges for In-Patient Services) Regulations 2005. These regulations were signed on 14 June 2005 and they reinstated charges for inpatient services and provided for the levying of a charge in respect of the maintenance of persons in receipt of inpatient services. The regulations were prepared following extensive consultation with the Health Service Executive and others.
The Supreme Court, in its decision of 16 February 2005, did not consider the exposure of the State or the magnitude of the sums involved to justify the extinguishment of a property right. In light of the amount of repayment which would be due to individuals in certain cases and the overall amount of money involved, it was agreed a repayment scheme to repay fully eligible individuals who paid inpatient charges while in publicly funded residential care would be established and placed on a statutory basis. The Government agreed the key elements of the scheme for the repayment of these long-stay charges last year. It is estimated that up to approximately 20,000 people who are still alive, and a further 40,000 to 50,000 estates, will benefit from repayments under the scheme. The overall costs arising from the long-stay charges repayment scheme have been estimated at approximately €1 billion.
Owing to the nature, volume and complexity of the repayments involved, it was decided, in line with the Government decision, to appoint an outside company with appropriate knowledge and experience in dealing with mass repayments. The HSE has selected a preferred service provider, a consortium comprising KPMG accountancy group and McCann Fitzgerald solicitors, to manage the repayment scheme within the agreed Government parameters. This company will also provide an independent assessment of the amount of repayment due to each applicant under the scheme, which will help to reassure the public that the scheme is being operated in the most equitable and effective way possible.
The HSE has indicated that all EU guidelines and directives have been complied with in the awarding of the contract. The costs of the company will be based on the number of repayments, but has been capped at €15 million exclusive of VAT. The HSE is satisfied that the successful consortium met the necessary criteria and is confident of its ability to deliver all aspects of the scheme. It has worked directly with the Data Protection Commissioner to ensure that all necessary measures are in place to protect the confidentiality of information.
It is understood from the Health Service Executive that a small proportion of the work to be undertaken by the company will be sourced outside the EU. This work is of a data entry nature and will not involve the operation of helplines, the provision of information or any related matters, all of which will be performed within the State.
The HSE has supported the decision to engage an outside company as the nature of the work is not one of its core functions. In any event, it would not be in a position to administer a repayment scheme of this magnitude within existing resources without having to divert staff from normal functions relating to the delivery of health services. The HSE is already committed to providing resources for the implementation of a unitary system for the delivery and management of health services at local, regional and national level following its establishment in January 2005.
Consideration was given to the involvement of public sector staff to assist in administering the scheme. However, the HSE informed the Department that the time constraints of the procurement process and the potential for significant logistical difficulties and protracted delays, with consequent implications for the commencement of the repayment scheme, do not allow for this option to be implemented. There would also have been a requirement to assign dedicated HSE resources to train and supervise such staff, thereby removing them from their normal duties with a subsequent effect on service provision.
In recognition of the importance of progressing repayments, the Tánaiste has asked the HSE to identify all those living patients who were wrongfully charged and to calculate the details of the repayment due to them in as many cases as possible during the period prior to the selection of the outside company. This will ensure that a significant proportion of patients should receive their repayments as soon as possible, with the repayment process commencing before the end of July.
The national repayment scheme will refund all those fully eligible persons who were incorrectly charged for publicly funded long-stay residential care. Medical card holders and those aged over 70 with effect from July 2001 are considered to be fully eligible for the purpose of the scheme. In addition, given the vulnerability of those in long-stay care, and cognisant of the fact that the former health boards did not make a determination on eligibility status in many instances, based mainly on the incorrect assumption that full eligibility could be removed from long-stay care patients as set out in the Department of Health and Children circular 7/76, it has been agreed that those who did not have a medical card on admission but who fell within the income or means threshold for a medical card, namely, those in receipt of the non-contributory old age pension, will be regarded as having full eligibility for the purpose of the scheme. This will ensure that the scheme is broadly inclusive and is implemented in a fair and equitable manner.
All those wrongly charged for inpatient services will be repaid in full. For the purposes of the scheme, community hostels which provide either medical or nursing care on a rostered basis are considered inpatient services, and residents will have any unlawful charges repaid in full.
Priority in making repayments will be given to those who are still alive to allow them to benefit from the repayment by availing of comforts which they may not otherwise be able to provide. In the case of estates, it will not be those who actually paid the charges that will receive the repayment. Many of these living patients have already been identified as a result of the ex gratia scheme announced in December 2004. As mentioned earlier, at the Tánaiste’s request, the HSE had already begun proactively calculating the amount of repayments due to living patients in advance of the selection of an outside company. This advance work will help to ensure that the repayments process will commence before the end of July.
It is important to note that the repayments will include both the actual charge paid and an amount to take account of inflation by reference to the consumer price index, CPI. The CPI is a widely accepted tool for monetary calculation over an extended period. CPI data is also available regularly, thereby facilitating a match with periods when payments are due. The CPI is also used by the Department of Social and Family Affairs in dealing with underpayments of social welfare entitlements.
The scheme will include an independent transparent, user-friendly appeals process which will be independent of the HSE and the company engaged to administer the scheme. The Minister will appoint suitably qualified independent appeals officers to consider appeals. The appeals process will allow both written and oral submissions to support an appeal. Applicants to the scheme will be advised of the outcome of their application as soon as possible and will be provided with details of their entitlement to appeal, if their application has been rejected or if they dispute the amount of the repayment. Applicants will also be informed of their right to bring a complaint to the Office of the Ombudsman. The legislation allows for regular reports on the operation of the appeals process, which will be laid before the Oireachtas.
The Department of Health and Children had previously indicated that funding of €400 million would be required for the health repayment scheme in 2006. It was originally anticipated that repayments would begin in May of this year. However, due to a prolonged tendering process and the extensive consultation required in drafting of the Bill, repayments will not commence until late July or early August of this year. It is now estimated that the total funding required to service the health repayment scheme for 2006 is €340 million. The revised estimate is based on a reduced volume of repayments to be completed this year.
As already indicated, approximately 20,000 people who are still alive and approximately a further 40,000 to 50,000 estates will benefit from a repayment. To begin making repayments as soon as possible the HSE has indicated that the details of 7,600 living patients have been calculated. In addition, the HSE will also have completed 3,500 calculations in respect of those who are deceased, making an overall total of 11,100 calculations at an estimated cost of €222 million. It is envisaged that these initial repayments will be made in the first two months of the service provider's appointment with a further 4,000 living persons receiving payment in the current year at a further cost of €80 million.
In addition to the cost of the actual repayments, including interest, there will also be an additional funding requirement for the outside company. The total cost of the outside company has been capped at €I5 million, excluding VAT, but the actual cost of the company will be based on the number of overall repayments and will not be known until all the repayments have been completed. A costing of €5 million has been provided for 2006. A further €33 million has been set aside for other costs associated with the scheme. This will include the costs associated with any additional repayments which may be issued in the current year, establishing and resourcing the appeals process under the scheme and the cost of employing staff from the Probate Office to process streamlined applications for probate from estates.
The figures provided for the cost of the repayments outlined above are based on estimates provided by the HSE which indicate that the average repayment due to an individual is approximately €20,000. This average figure will vary, depending on length of stay and the type of institution in which the patient resided.
The total funding requirement for 2006 has been revised downward from €400 million to €340 million, with the balance of the funding, €660 million, required in 2007-08.
I thank the Minister of State for his opening statement. This all began as far back as December 2004 when the first legislation to make these repayments was put through the Dáil and both the Taoiseach and the Tánaiste said there would be no delay in making these repayments. From the information given by the Minister of State to the committee this morning we cannot expect this saga to be finished until at least 2008. This is quite a long time for the age group concerned who are to be repaid.
I presume a tendering document has been issued with regard to the scheme set up by the outside company. Will the committee have sight of this document to be informed of the criteria by which the group was chosen or will the document be held from us?
The Minister of State has not clarified the role of the HSE in this matter. It seems as if the HSE is more or less dealing with approximately 11,000 of these patients and that it will simply provide the outside company with a disc to make these repayments. It seems the HSE has done a substantial amount of work on behalf of the outside company. I question the reason the HSE or the Department of Social and Family Affairs, perhaps in conjunction with civil servants from the Department of Agriculture and Food who are no longer making regular annual payments to farmers, could not have been utilised? Why was Civil Service expertise not utilised, especially when so much of the work seems to have been undertaken already by the HSE? The repayments for 7,500 people who are still living have been organised by the HSE. It would seem to be well within its remit to look after the other 10,000 who are alive. If the period for repayment to estates is to extend over two or three years, I question the need for an outside company to do this work.
The Minister of State has informed the committee that staff will be taken from the Probate Office to speed up the processing of applications from the estates of those deceased. It is fair to presume that some of those deceased persons may not have left a will. State services will be used to speed up the process. This confirms our perception that there seems to be little need for the outside company to become involved in this scheme.
With whom has the Minister of State had discussions regarding these massive repayments to people who were the responsibility of the State? Have these discussions been confined to the HSE or have there been broader discussions?
The people most involved in the care of the elderly are in the service which administers the affairs of wards of court. Has the Minister of State had discussions with the officials who look after this service? Many elderly people are made wards of court because of their diminishing capacity to look after their own concerns and because they may not have any family or the family may not be in a position to look after their interests. There will be a massive transfer of money into private accounts belonging to wards of court. Has the Minister of State undertaken in-depth discussions with the HSE and the Courts Service regarding the management of this money? The potential for fraud is huge. The Minister of State will be aware this could be too tempting an offer for a few individuals to regard as an opportunity to defraud these individuals.
I wish to make a number of observations. I refer to the Minister of State's script in which he stated that the average figure will vary, depending on length of stay and the type of institution in which the patient resided. I ask the Minister of State to expand on that point. To what type of institution is the Minister of State referring? I have in mind somebody in a psychiatric institution or with an intellectual disability. The type of institution is a concern as the charges were illegal in both institutions.
On the matter of the repayment of interest, the Minister of State referred to the consumer price index which is widely accepted as a tool for monetary calculation. On the question of moneys owed by people who were forced by the marriage bar to retire from health board employment, they are charged a rate of compound interest on the repayment of contributions. This is a penal rate. People who had worked for the health service are charged a compound rate of interest while the Minister of State is applying the consumer price index in this case. I ask him to comment on that.
I support Deputy Twomey's remarks about the cost of bringing in an outside company and making better use of existing resources. I question the use of a company based outside the EU for the simple task of data entry. I presume we have an abundance of labour to perform this task, which is not specialised work. This type of work should be kept at home in Ireland. I cannot understand the reason for allowing a company to outsource work such as this outside the EU. It is unthinkable. It would be a great experience for our many students. This group of people is very vulnerable, including old people and in some cases people who are not fully aware of their banking details. Such older people may be regarded by some as an easy target. What steps are being taken to ensure this money will go directly to that group? Some of them have accounts in institutions. Will the money be lodged to their accounts with such institutions or to their personal accounts, which in some cases would be downtown? Earlier in the year I raised the issue of people with intellectual disability having difficulty opening bank accounts. What steps are being taken to ensure that this money will be given to them and that the money will be put to best use? I am delighted that repayments will commence in July 2006.
I thank the two Deputies for their contributions. We discussed the appointment of an outside company at some length. There is clearly a difference of opinion as to whether we did the right thing. The company is in place and will start its work. I have given the details already. A cap of €15 million has been placed. Shortly after the Supreme Court decision, the Government needed to analyse the decision. We decided first to reassure those from whom the money was wrongly taken that it would be repaid with interest. Given that the State was involved in taking the money illegally, it was believed that it would be helpful, from the point of view of giving credibility to the scheme and to give confidence that people would get their full entitlements, to engage an outside company to run the scheme. A section of the Department of Health and Children was very much involved in taking this money illegally from people. We did not have the entitlement to do what we did.
Apart from the resources of the HSE it was important to have the involvement of an outside company. In recent months figures of €40 million and €50 million have been suggested. From what I have said, Deputies will be clear that we have a cap of €15 million. While we could all pick projects in our constituencies that could benefit from a few million euro, to assure people and give them the confidence that everything was above board and that they would get all to which they were entitled, and given that the State had been involved in the practice of taking money illegally, it is reassuring to have an outside company involved. We did not appoint an outside company for the sake of doing so.
People have stated that it is a particular hobbyhorse of the Tánaiste to have the private sector involved in everything. However, nothing could be further from the truth. Serious consideration was given to the matter and it was felt that appointing an outside company was in the best interest of running the scheme, having consulted with the HSE, which stated it was not in a position to administer the scheme, which will be the biggest repayment scheme ever undertaken here. While the HSE has been involved in compiling some of the details about applicants, in many respects that aspect was quite easy. As the legislation provided for an ex gratia payment of up to €2,000, considerable details were already available. However, most of the work for the outside company will relate to the estates of those who have died. The records for the people still living will not present the same kind of difficulties.
To ensure that the application process is as simple and user-friendly as possible and that adequate provision to protect the vulnerable people was put in place, complex legal and administrative issues required clarification. Consultations took place between the Department of Health and Children, the HSE, the Department of Finance, the Department of Social and Family Affairs, the Office of the Attorney General, the Revenue Commissioners, the probate office of the High Court, the Courts Service, the office of the wards of court and the Office of the Ombudsman to ensure that the necessary safeguards were in place and that the scheme was 100% safe to guarantee that the people from whom the money was illegally taken would be repaid.
Before much of this work was done an oversight committee was appointed. The committee included Dr. John Owens from the Mental Health Commission, Mr. Robin Webster from Age Action Ireland, Ms Barbara Fitzgerald who is a senior nurse, Ms Sylvia Meehan from the Irish Senior Citizens Parliament, Sr. Bernadette McMahon from the Daughters of Charity and Professor Walsh from St. James's Hospital, who is chairman. They have been involved in all aspects of drawing up the scheme and the appointment of the outside company. They were kept fully briefed on every move we made.
What about us?
We have tried to give the members as much information as possible. The Deputy asked for the details of the tender and specifications relating to the outside company. I do not have that information available, which we would be quite happy to release. While some of the information might be regarded as being commercially sensitive, we will make contact with the HSE, which is the client in this case.
That is good. The last time representatives of the HSE appeared before the committee we asked them for the tendering documents for the out-of-hours co-operative in north Dublin and we have yet to receive them.
I do not want to tell the Deputy that I can give him something——
We are not even getting an answer on such issues.
——when it is possible that part of it might be commercially sensitive. I will contact the HSE and will come back to the Deputy on that aspect.
Is the sourcing of data entry work outside the EU an attempt to use cheap labour? It is not specialised work.
I understand that only approximately 5% of the data processing will be done outside, which is not unusual. If the tender amount ended up being considerably more than what we are paying, people might have questioned whether we could have got it cheaper. We wanted a competitive tender by a company with the professional capability to do what was required. That is the figure that has been given. I am sure that both the Deputy and I would be much happier if 100% of the work was done at home. However, we are living in the real world and it is not unusual——
How much is being saved?
How long is a piece of string? It is hard to know how much we are saving.
If I were paying the bill, I would like to know how much it was.
I do not have the details of the other tenders. The HSE was quite happy to appoint the company on the basis that this was a very competitive tender. Only a small percentage of the work is being outsourced.
Is the Minister of State confident that this work could not have been done using existing Civil Service resources?
It would be lovely if it could have been done but——
What did the Department do?
We consulted the HSE and it was strongly of the view that it was not in a position to do it. It is the biggest scheme we have ever undertaken and will require much work. It is possible it could last for several years.
I asked about the resources of the Civil Service, not just those of the HSE. After all, personnel from the Department of Agriculture and Food were to be sent out to conduct driving tests only a few months ago, and therefore there are obviously resources in the Civil Service that the Minister of State believes could be transferred.
There was consultation within the Civil Service to determine whether we could proceed using our own resources, but it did not prove possible. The Deputy's suggestion sounds lovely in some respects but also gives the impression that there are civil servants twiddling their thumbs all day for whom new jobs should be found.
Personnel from the Department of Agriculture and Food were to be sent out to conduct the driving tests 12 months ago.
One must be serious about this. Much hard work will be required over a long period before all the people are fully repaid.
On Deputy Connolly's point, I stated the average payment of approximately €20,000 will vary depending on the length of stay and the type of institution in which the patient resided. I refer to disabled people, patients with psychiatric illness and older people. Generally, the stay of older people is not as long as that of those in the other categories.
I raised the issue because I suspect somebody who has been in a nursing home will be entitled to a different sum of money from that received by a patient with a psychiatric or intellectual disability in a group home. Will all people who have spent the same amount of time in an institution, regardless of the type of institution, get the same amount of money?
I do not believe there will be any great difference. The only difference that will emerge will concern the length of stay.
The Minister of State said the average figure will vary according to the length of stay and "the type of institution in which the patient resided". Why is the type of institution included?
Older people stay in a different type of institution from that in which the disabled or patients with a psychiatric condition reside.
For the sake of argument, will somebody who spent two years in a nursing home, somebody who spent two years in a psychiatric institution and somebody who spent two years in a hostel for the intellectually disabled all receive the same amount of money?
I would understand that it should be more or less the same.
More or less? With respect, the payments should be the same and this should be stated very clearly.
I share the Deputy's view in that regard and do not expect there will be any great differences in the repayments to the three types of individuals.
I was making the point that the payment is associated with the length of stay. Disabled or psychiatric patients can spend long periods of their lives in institutions whereas older people do not stay in institutions for as long. The average stay of a woman in a long-stay institution for the elderly is close to two years while it is close to three for a man.
I am concerned about the rider, "type of institution".
Were discussions held with those who look after the affairs of wards of court?
Yes.
Did they concern their private accounts and how the money would be managed?
Detailed discussions were held on that matter and we realise how sensitive it is. Guidelines have been issued by the HSE and we are quite happy with them. The Deputy and others were quite critical about the fact that the introduction of legislation has taken so long, despite promises made by the Tánaiste, Taoiseach and myself, but we had to ensure everything was accounted for. Large sums of money are at stake and it is important that proper safeguards be in place to ensure they are given to those who deserve them. Ultimately, it was their own money.
Is the Minister of State satisfied that these accounts have been properly managed and that there is no risk?
I am satisfied they will be in future. We are aware of the lack of control that existed previously and we have made every effort to ensure we will have proper safeguards regarding PPP accounts in future.
In saying the guidelines will be tightened up, the Minister of State is acknowledging that there are some problems at present.
Absolutely.