Wednesday, 20 May 2020
Department of Health
Under the agreement with the private hospitals payment to them will be on a cost only Open Book model whereby the hospitals will be reimbursed only for the operating costs properly incurred during the period. The costs that will be covered will be limited to normal costs of operating the hospital. The final cost will be verified by independent firms of accountants appointed by the HSE and the private hospitals and there will be an arbitration mechanism in place in the event of any disagreement. Since the purpose of the arrangement is to provide additional capacity to deal with the impact of the COVID-19 pandemic for which there is no definitive time horizon it is not possible to indicate a precise cost estimate attaching to the arrangement. The cost only open book model is therefore the most effective way of ensuring the arrangement is value for money for the State.
Under the arrangement a participating private hospital is due 80% of its estimated monthly costs in advance from the HSE. Actual costs incurred are subject to verification, as set out above and any difference is subject to a balancing payment or clawback in the subsequent month. The HSE has made advance payments for April totalling €90.2m and €22.2 in the first week in May. This is based on estimates provided by the participating hospitals and will be adjusted based on verified actual costs validly incurred over the period. As the hospitals are private enterprises, the detailed information regarding payments to individual hospitals or hospital groups is commercially sensitive and therefore in line with the Heads of Terms regarding confidentiality these details will not be published. In the interests of transparency, it is intended to publish summary financial information regarding the arrangement in due course.