HSE estimates that loss caused by dispute with private insurers could be €170m

The HSE’s chief financial officer has estimated for the High Court that the potential exposure to loss by public hospitals since the beginning of a dispute relating to the use of a waiver form for privately insured patients is almost €170m.

Stephen Mulvany gave the estimate in a statement for the court as part of the HSE’s action against Laya Healthcare in which it is claimed the private insurer has wrongfully withheld payment on hospital claims where an insured patient has agreed to formally waive their automatic right to be treated as a public patient.

The main effect of this is that the insurer must pay the actual bed cost for a patient in the public system, which is around ten times what used to be charged.

Laya denies the claims and says it has received hundreds, if not thousands, of complaints from its policyholders of being pressured by the hospitals to sign the waiver. Irish Life Health is a notice party.

Mr Mulvany told the court on Thursday that in 2016 Laya, without notice, decided it would only pay out on claims based on the date the waiver form was signed. As a result, hospitals started suffering shortfalls in payments.

The HSE set about trying to assess the amount of losses by taking a relatively large sample of cases involving the use of the waiver, Mr Mulvany said.

It extrapolated the losses incurred on them, across all four main insurers, where there had been a potential mismatch between the date of a patient’s admission and when the waiver was signed, he said. The HSE regarded the date of admission as the date of liability.

Between October 2014, the year the law was changed to effectively make it possible to designate as private all beds in public hospitals for insurance purposes, and May 2019, the HSE estimated its exposure at €169m, Mr Mulvany said.

Declan McGrath SC, for Laya, put it to Mr Mulvanny in cross examination that his figure was an overestimate. The court heard Laya, which the HSE found accounted for €32m of the total potential exposure, had estimated the “set off” it made in relation to the payments was around €10m.

Mr Mulvany said he was not confirming the figures because they were only an estimate. The HSE, he said, was only seeking to recover what it has lost.

He did not accept counsel’s suggestion it was largely a historic issue at this stage.

John McCaul, Laya’s director of claims and provider relations, said the purpose of introducing the waiver form was clearly to identify the insurers’ members and have them waive their right to public treatment.

He said Laya began receiving numerous complaints about how the forms were being presented to patients, in particular that they were being pressured to sign them by the hospital authorities. The complaints eventually ran into the “hundreds if not the thousands”, he said.