Beaumont Hospital in Dublin lost €2.7 million in revenue over five years when it failed to bill an adjacent private clinic for tests on its patients, an audit by the Comptroller and Auditor General has established.
The audit by the Comptroller, Mr John Purcell, discovered that despite assurances given by Beaumont Hospital in 1997 that it would invoice the adjacent Beaumont Private Clinic for tests carried out on its patients, this did not begin for years.
"The audit estimated that Beaumont Hospital had forgone some €2.7 million in revenue from BPC [the private clinic] between January 1998 and December 2002," it said.
Although the public hospital has since begun to invoice the private clinic - this began in May 2003 - no payment has yet been received.
The audit also found that the rate which Beaumont Hospital charged other external agencies for carrying out tests was 60 per cent of the commercial rate, and payment had only been received for some invoices.
When asked by the office of the comptroller why this was so, the hospital said it provided a range of pathology and a limited range of radiological services to the private clinic's patients on an outpatient basis only.
It had reviewed the situation in relation to invoicing these patients on a number of occasions in recent years, it said.
However, the Department of Health's policy stipulated that public hospitals were not entitled to charge for any outpatient services, irrespective of the insurance status of the patient.
"The hospital concluded that sufficient doubt existed as to the entitlement of patients from BPC to free services. In 2002, Beaumont Hospital reviewed the matter again and in 2003 commenced invoicing BPC and all other external agencies for services provided."
The Comptroller and Auditor General, after seeking comments from the Department of Health, concluded that the Department's policy did not provide specific guidance on charging for public hospital services provided to outpatients referred by the private clinic.
This situation on entitlements needed to be urgently clarified, Mr Purcell's report said.
The Department told him it had, however, by way of letter to the hospital's CEO, advised that charging private facilities for the use of public services was permitted.
The audit also found that health boards had spent €115 million on capital projects and equipment without permission from the Department of Health.Although the Department had not authorised the developments, it had no real option but to fund them.
The projects or the health boards involved are not specified in the report.
The unauthorised spending occurred after the Department wrote to health boards announcing that €2.54 billion was to be provided for capital investment in the health sector under the National Development Plan from 2000-2006.
The health boards submitted their plans for spending the money and then set about spending some of it, without approval.
When this became apparent, the Department wrote to the health boards in February 2002 directing them not to enter into further contractual commitments for capital projects without its approval.
The report said the Department was willing to reimburse the boards for €93 million of this as it related to contracts entered before it sent out its February 2002 letter.
Mr Purcell concluded that planning and management systems "were not sufficiently robust to secure effective control over the health capital investment programme envisaged in the NDP".