High Court: HSE cannot make patients liable for private hospital charges until they clearly consent

About this case:

• Citation:
  [2021] IEHC 737
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Denis McDonald

The ruling came after the HSE has sought to recoup €170 million in losses from Laya Healthcare, which disputed the entitlement of the HSE to charge them for the entire stay of a private patient rather than from the date they elected to use their insurance cover.

Background

The case concerned the proper interpretation of the Health Act 1970, which provided the basis for nationwide care to patients by the HSE. In 1991, the State greatly expanded the scope of individuals who were eligible for public in-patient services. The 1991 Act also provided for the Minister for Health to make regulations, including applying charges for care.

Under the powers, the Minister created a system of designated public beds and designated private beds. A report from the Comptroller and Auditor General in 2008 identified serious issues with this system, resulting in loss of maintenance charges or income on both private and public beds. This was calculated as a loss of income on 83,541 bed days.

Accordingly, the Health (Amendment) Act 2013 was enacted to resolve the situation. The 2013 Act made significant amendments to the 1970 Act. Section 52(3) was amended to provide that a person who “does not avail of or waives his or her right to avail of”, hospital services but instead received care from a private service, was not eligible for public in-patient service. As such, section 52(3) introduced the concept of a waiver to public care by patients.

Further, section 55(1) was amended to empower the HSE to make in-patient services available for persons who do not establish entitlement to such services. Accordingly, private patients could still use public services in a hospital, but would simply not be deemed public patients.

The result of these two amendments was that a patient could opt for private care but still receive a similar level of care as if they were a public patient. For example, they might be unlikely to get a private room and would still be on the public ward. However, they may get direct access to the private consultant.

The cost of being a private patient was approximately ten times higher than being a public patient. As such, insurance companies were paying either €813 or €659 for each bed day incurred by their customers, whereas the statutory charge was €80 for public patients.

Arising from this, Laya insisted that their customers had to sign a waiver form outlining the effects of “going private”. Further, the insurer argued that a patient could only be deemed a private patient from the exact time that they provided such informed consent to private treatment. As such, Laya only paid the statutory charges on this basis. Further, Laya alleged that its customers were being unduly pressured by HSE workers to use their insurance.

The HSE adopted the position that an individual who opted for private care should be deemed to be a private patient for the entire episode of care, even if the consent to private treatment was given halfway through their stay in hospital.

Following lengthy correspondence between the parties, the HSE eventually issued proceedings seeking declarations that the HSE’s interpretation of the legislation was correct and that Laya was liable to pay the monies.

High Court

Delivering the 108-page judgment in the case, Mr Justice Denis McDonald began by noting that most of the direct evidence adduced by the parties was irrelevant to assisting with the core issue of statutory interpretation. The court also reiterated the principles of interpretation found in Dunnes Stores v. The Revenue Commissioners [2019] IESC 50 and Bookfinders Ltd v. The Revenue Commissioners [2020] IESC 60.

The court noted that section 52(1) of the 1970 Act created a right to avail of public in-patient services, which was highly relevant to interpreting the statute. Further, it was important that the HSE was required to charge a substantial charge to anyone who did not avail of public in-patient care and it was the individual who was liable for the charge.

It was also noted that, due to the scarcity of resources in hospitals, a private patient would pay “a very substantially higher charge than a public patient notwithstanding that both [private and public patients] are likely to be housed in precisely similar accommodation.” This showed that the right to public in-patient services was a valuable right with potentially significant consequences for a person who chose not to avail of it, the court said.

The court considered the dual concepts contained in section 52(3) of 1) not availing of public services and 2) waiving the right to avail of such services. In seeking to interpret why the Oireachtas legislated for both these options, the court outlined that there were several circumstances in which a person may present themselves to hospitals. The court held that some patients would immediately wish to be treated privately for various reasons, and so they were not waiving anything by so choosing.

However, at the other end of the spectrum, there might be people who, for whatever reason, were not persuaded to be treated privately. For example, they may choose to remain public because they would not get a private room. These people would have to waive their right to public care if they subsequently changed their mind, the court said.

The court held that there was nothing in the legislation which required the waiver to be in writing, but that it was good practice to do so. Accordingly, the court held that waiver forms were very useful tools for hospitals/insurers. The court also held that any patient who was asked to sign a waiver should be informed of their statutory entitlements and the consequences of their decision.

As such, it was held that the HSE was not automatically entitled to levy charges on a patient/insurer for the period prior to a patient choosing to be privately treated. The court held that there was nothing in the legislation which showed any intention to confer such a power to the HSE.

The court stated that the HSE’s position would lead to anomalous results. For example, a patient may choose public services for a number of days and only switch to private care when a private room was confirmed. If the HSE was correct, that person would be deemed to have been private for the entire stay.

Mr Justice McDonald examined section 55(1) and noted that the HSE could not make private facilities available to patients until they were deemed to be eligible or had already waived their right to public care. As such, this strongly indicated that the HSE could not retroactively apply charges to a private patient.

However, the court stated that a short interval between admission and opting for private services did not prevent the HSE from levying charges either. It was also correct to say that the charges could be levied for the entire episode of care if the patient had orally stated that they wanted to be treated privately on admission, even if they did not sign a waiver until days later.

Conclusion

As such, the court was not persuaded that the HSE was automatically entitled to charge patients at the private rate for an entire hospital stay simply because they chose to go private at a certain point. Rather, it was only from the point that they consented to private treatment that private charges applied. Having made these findings, the court stated that the matter would be listed for mention to allow the parties to liaise on the form of order and costs.