Mr. Seamus McCarthy:

The special report for consideration by the committee today presents the findings of an examination by my office of the nursing homes support scheme, generally referred to as the fair deal scheme. Members are probably already aware that it is a complex means-tested scheme, and one that is vital to many members of our communities. I wanted to look at how the scheme was operating about ten years on from its establishment.

I should first make a couple of points about the scope of the examination. Nursing homes are regulated by the Health Information and Quality Authority where standards of care are concerned. We decided not to look at issues in that area and to focus instead on the financial and administrative aspects. The year, 2018, was the latest available period of account when we were doing our fieldwork and drawing up the report. Where we could, we have provided relevant later data.

Where we could, we have provided relevant later data.

Finally, we completed the report in the first weeks of the Covid-19 lockdown. It was already evident that the pandemic was impacting enormously on residents of nursing homes and that it might impact significantly upon the nursing home sector as a whole. I decided that it would nevertheless be useful to publish the report as an input to the debate about how the sector should operate in the future.

In 2018, some 23,300 residents of nursing homes were being provided with financial support under the scheme, at a cost of €969 million to the HSE. This included €51 million worth of loans provided to help residents pay their contributions to the cost of their care. The HSE estimates that residents paid an additional €343 million directly to nursing homes. Approximately 550 nursing homes participate in the scheme, with the majority, 80%, being privately-run for-profit and not-for-profit operations. The remainder are public nursing homes run by the HSE.

The types of goods and services provided under the scheme were set out by the Department of Health and the HSE in 2009. They comprise accommodation, bedding, food, nursing and personal care, laundry and standard aids and appliances to assist with day-to-day living. No review of these components has taken place since 2009. Nursing homes also provide other services not covered by the scheme, such as access to social programmes, and transport and assistance for residents who need to attend medical appointments. These additional services may result in additional charges for the resident. From a review of nursing home contracts, the examination found that the level of detail on additional fees charged by nursing homes varied. In addition, it appears residents of private nursing homes are more likely to incur additional charges for those services than those in public homes.

The way in which the weekly charge rates are determined for individual nursing homes is prescribed in the scheme legislation. For public homes, the cost of care method must be used. For private nursing homes, the agreed maximum price method must be used. In 2018, the average charge for public nursing homes was €1,564 a week, while the average charge for private homes was €968 a week. Because the methods used to determine these rates differ, a meaningful comparison cannot be drawn. The weekly rates are the same for each resident supported by the scheme regardless of his or her care needs, including his or her level of dependency. By law, the weekly charge for public nursing homes must not exceed the cost incurred by the HSE in providing care. The HSE calculates the rates it charges by reference to prior period scheme costs and an expected 95% bed occupancy. As the HSE does not currently have a single financial system, the process to identify and isolate these costs is not a straightforward one. This creates risks around the completeness and accuracy of the weekly charges calculated and published by the HSE.

Funding shortfalls occur in public homes where current operating costs run at a higher rate than the prior period or where bed occupancy is less than anticipated. In 2018, additional funding of €23 million was allocated to public homes by the HSE from other Exchequer resources to cover such shortfalls.

The National Treatment Purchase Fund, NTPF, is responsible for negotiating the prices to be charged by private nursing homes. The NTPF has outlined the many factors it takes into account in arriving at the weekly charge rate it is prepared to allow for a nursing home. However, it has not provided to the examination team a model explaining how the various criteria are weighed and combined, stating that all the criteria are considered in the aggregate. Consequently, it is unclear how these criteria influence the negotiation. I will explain more about this when representatives from the NTPF appear before the committee in two weeks.

The scheme is a cash limited one meaning that an individual will only receive financial support once funding becomes available. A placement list is used by the HSE to manage access to the scheme. The examination found that the HSE's target waiting time of four weeks was generally met.

For individuals in an acute hospital setting awaiting access to scheme funding, the HSE also has in place short-term transitional care arrangements to facilitate discharge from the acute setting to a residential care setting. Payments of approximately €12 million were made to private nursing homes in 2018 for transitional care. The cost of transitional care in public homes is not known, and transitional care payments are not counted as part of the scheme cost. Resident contributions are also not collected while transitional care is being provided.

The scheme's optional loan element is to ensure that an individual does not have to sell his or her home or other property assets in order to pay for long-term care. By the end of 2018, just over 10,600 individuals had availed of this facility with loans advanced totalling €239 million. The loan normally falls due for repayment upon an individual's death and Revenue has statutory responsibility for collection. By the end of December 2018, the HSE had notified Revenue of 5,650 loans worth €114.1 million that could be collected. We found that 94% of the debt had been recovered by the end of February 2020.