Q&A: Controversy around State’s legal strategy on refunds for nursing home charges

What is this controversy around nursing home charges about?

Department of Health documents, newly released courtesy of a whistleblower, show that the State pursued an aggressive legal strategy to fight claims in order to limit refunds of long-term care fees to patients who could have been entitled to public nursing home care over 30 years.

The Government says the issue has been “misrepresented” and the strategy was to defend cases, where people had to pay for private care due to a lack of public beds, on several grounds, notably that medical card holders did not have an unqualified right to free private care.

The current focus is on which various ministers over the years knew about the strategy.

[ Nursing home charges: Whistleblower says he alerted Varadkar in 2019 ]

[ Micheál Martin was ‘not aware’ of two memos detailing State’s strategy on refunds ]

Did older people pay for nursing home care that should have been covered by the State?

Yes. This is well known and was a matter of controversy going back decades with various Ombudsman reports highlighting the fact that the successive governments and health chiefs had failed to rectify the grounds for the illegal charges being imposed on mostly older people.

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The problem stemmed from the Health Act 1970 that granted people with medical cards an entitlement to in-patient services and that this was later determined to cover long-stay nursing home care. From 1976, health boards withdrew medical cards from those in long-term care, which was deemed illegal. This continued until 2004 with people wrongly paying billions of euro they should never have had to pay for nursing home care, both in public and private nursing homes.

Why did this all remain an issue for so many years?

The failure by Government ministers and civil servants over 40 years to have the law amended allowed for the continuation of a practice that was deemed to be illegal.

The Travers report, published in 2005, found the Department of Health was well aware that there were legal concerns around the practice and there was a systemic corporate failure within the department to address the issue, involving civil servants and politicians, over years.

In 2005, the Supreme Court declared unconstitutional the Health Amendment Bill, which attempted to create a retrospective legal basis for the illegal charging for long-term care.

In the wake of the court ruling, the Health Repayment Scheme (HRS) was set up to repay people in public nursing homes who were illegally charged.

The Supreme Court in its 2005 ruling did not address the issue of repayments to those who could not get a public bed due to shortages and who were directed by their health boards to private nursing home care instead. This led to some in this group – 252 legal cases in 2011 – having to lodge legal claims against the State to recover the money that they paid for private care.

In 2010, the then Ombudsman Emily O’Reilly, dealing with more than 1,000 public complaints, investigated the issue and accused successive governments and State officials of having “a disregard for what the law actually requires and a failure (over 40 years) to have the law amended so that practice and the law are in harmony.”

She found vulnerable people who felt the State had failed them in their right to provide long-term care had incurred significant costs and endured serious upset in their efforts to secure those rights by having to take legal actions against the State to recover what they paid.

Since 2009, the Nursing Home Support Scheme, known as Fair Deal, has created a statutory basis for individuals to contribute towards their public or private nursing home fees.

How costly a problem was this for the State?

About 70,000 people were considered eligible for refunds but in the end 35,000 applications were received and the State paid out €486 million on almost 20,000 cases through the HRS.

People who were not eligible to apply to the scheme along with people appealing its decisions lodged legal claims. Internal department records from 2011 estimated that under “an absolute worst-case scenario” litigation relating to wrongly charged public cases could lead to about €5 billion having to be repaid to people based on the average HRS payment of €20,000.

The department said that it was unlikely that anywhere near this number of patients would have to be refunded given the number of people who applied for the HRS.

On the potential cost of litigation taken by people who had to pay for private care, the department estimated a potential exposure of about €7 billion on existing and private cases.

What has emerged in recent days?

Revealing documents showing the potential exposure of €12 billion to the State, whistleblower Shane Corr, a Department of Health official, has claimed in a protected disclosure that there was a secret legal strategy designed to limit State payouts to people wrongly charged for long-term care.

What was the State’s legal strategy towards the litigation?

The strategy, set out in the 2011 memo, involved fully defending cases but a central part of it was keeping any settlements confidential for fear that if they became known publicly, it would “spark a large number of cases.” The strategy appeared to work; the number of claims fell over the years.

Who was aware of the strategy?

Records disclosed by Corr show that Taoiseach Leo Varadkar was briefed about the strategy when he was Minister for Health in 2016 and agreed on cases being settled within 40 to 60 per cent of the claim’s value. Documents also show that in 2017 then Minister for Health Simon Harris and Helen McEntee, a Minister of State at the department, were also made aware of the containment strategy.

How has the Government responded?

Varadkar says the strategy had been “grossly misrepresented” and that it was instead a “sound policy approach and a legitimate legal strategy.” Minister for Health Stephen Donnelly has sought the Attorney General’s advice and a detailed briefing from his officials.