The Government's plans to repay tens of thousands of people for money illegally deducted from patients in public nursing homes and other accommodation have been delayed as a result of demands by external companies for fees of between €30 million and €50 million for processing claims, writes Martin Wall.
The Irish Times has learned that the Health Service Executive (HSE) has scrapped a competition for a company to design and manage the repayment scheme because of the level of fees being sought.
The HSE has now readvertised for companies to work on the nursing home repayment scheme.
In a report submitted to the Department of Health last month, the HSE said the new deadline for the receipt of tenders would be the end of March and that the contract for the design and management of the scheme would not be awarded until mid-April.
The HSE said it believed that this would be within the time period required for the Government to put in place the necessary legislation to underpin the repayments.
A HSE spokesman said last night it was confident repayments would begin in May.
Up to 20,000 people who are alive and a further 40,000-50,000 estates of deceased former residents of publicly funded, long-stay accommodation will benefit from the repayment scheme.
The Government has estimated that the overall cost of the repayment scheme would be around €1 billion.
In its report to the Department of Health, the HSE said Minister for Health Mary Harney had announced on May 11th last that an outside company with experience in handling mass claims would be engaged to design and manage the repayment scheme within the parameters of key principles approved by the Government.
It said that following advertisements placed in the Official Journal of the European Union and in Irish newspapers over the summer, 11 expressions of interest had been received. It is understood that three companies were shortlisted.
However, informed sources said yesterday that the HSE management believed that a deal could not be justified on value-for-money grounds given the fees being sought.
Sources said the companies' demands ranged from €30 million to €50 million.
It is understood that late last year the HSE procurement team for the project provided its management with a number of options.
These included continuing negotiations with the companies which submitted tenders; retendering for the full scheme with a view to seeking a more competitive market response; having the HSE process the applications itself from eligible persons who are still alive; or looking for an external company to manage repayments to the estates of those affected.
In its report to the Department of Health, the HSE said management had considered the matters raised by the procurement group.
"Following consideration of all the issues, in particular having regard to the necessity to ensure value for money while at the same time ensuring an early and effective commencement of the repayment scheme, it was decided that the existing process should be folded and a new one established," the report said.
It is understood that the HSE was concerned that any move to design and manage the repayment scheme itself could lead to staff, particularly in the community care area, being diverted from existing duties. It was felt that this could affect services for patients.
"The new process will build on the expertise developed to date and will be concluded in a short timeframe.
"The HSE understands that this will be within the period required to establish the necessary legislative instrument," the report to the department stated.
The decision by HSE management to reject the tenders for the repayment scheme and to start the process again comes at a time when the health service is already under pressure over the payments to consultants for the controversial PPARS computer project.
External consultants received nearly €60 million for work carried out on the PPARS system and a related project known as FISP.