Tim O'Malley (Limerick East, Progressive Democrats)

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 possible 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 light of the 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 today's 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 very 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, since necessary general practitioner and surgical services were being provided for them, and so withdrew 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 solely 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 and who were alive on 9 December 2004. The Health Service Executive made payments 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. This 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.

The 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 reinstated charges for inpatient services and provided for the levying of a charge in respect of the maintenance of persons in receipt of such 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.

Extensive discussions have taken place with the Office of the Attorney General, the Department of Finance, the Office of the Revenue Commissioners, the Department of Social and Family Affairs, the probate office of the High Court, the office of the wards of court, the Law Reform Commission, the Office of the Ombudsman, the Courts Service, the Data Protection Commissioner, the Mental Health Commission and the Health Service Executive regarding the provisions contained in this Act. In addition, the national oversight committee which the Tánaiste appointed, which is representative of service users, including Age Action Ireland and the senior citizens parliament, has provided an independent input into the repayment scheme design. It will monitor the operation of the scheme to ensure it is implemented quickly and in the most effective way possible. The committee is chaired by Professor J. Bernard Walsh, consultant physician, St. James's Hospital, and reports directly to the Tánaiste.

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 tender was awarded to the most economically advantageous tender. The award criteria was based on cost, technical capacity, legal expertise and economic and financial capacity.

The HSE has indicated that all EU guidelines and directives have been complied with in awarding the contract. The cost 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 the successful consortium met the necessary criteria and is confident of the ability to deliver all aspects of the scheme. The HSE 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 HSE that a very 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 help lines, 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 in 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 had been 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, did not allow for the implementation of this option. 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.

However, in recognition of the importance of progressing repayments, the Tánaiste has asked the HSE to identify 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 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 this scheme.

It has been agreed that those not having a medical card on admission but who fell within the income means threshold for a medical card, for example, those in receipt of the non-contributory old age pension, will be regarded as having full eligibility for the purpose of this scheme. This is because of the vulnerability of those in long-stay care, and being cognisant 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 circular 7/76. This action will ensure 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 purpose of this 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 these people 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 which was 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 ensure 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. The consumer price index is a widely accepted tool for monetary calculation over an extended period of time. Data from the CPI is also available on a regular basis, 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 a transparent and user-friendly appeals process that will be independent of the HSE and the company engaged to administer the scheme. Suitably qualified independent appeals officers will be appointed 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 they 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. Due to a prolonged tendering process and the extensive consultation required in the 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 repayments. In order 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 €15 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, which 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 the average repayment due to an individual is approximately €20,000. This average figure will vary depending on length of stay and the amount of health charge paid by the patient in the first instance.

In conclusion, the total funding requirement for 2006 has been revised downward from €400 million to €340 million, with the balance of the funding of €660 million required in 2007 and 2008.

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