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As reported by this newspaper in June, HSE hospitals spent a total of €603,137 employing debt collection agencies last year.
These figures were provided to the Medical Independent (MI) following a Freedom of Information (FoI) request and they are restricted to HSE statutory hospitals (see table).
The 2017 spend represents an increase of €15,696 from the 2016 total figure of €587,441, which the HSE also supplied to this newspaper.
During 2016-17, five different debt collection agencies have been employed by HSE public hospitals. In both years, at least 34 hospitals have employed debt collection agencies.
Concerns over the impact that the work of debt collection agencies has on patients has been raised by patient advocacy groups in recent years.
In strongly-worded comments, the Irish Cancer Society told this newspaper that it has serious concerns about the practice whereby hospitals refer statutory charges to debt collection agencies.
A spokesperson told MI that the charity would urge hospitals to cease employing such agencies.
“We have heard a number of worrying accounts from patients who are struggling to cope with the financial impact of cancer and are unduly stressed by the potential threat of debt collectors,” according to the spokesperson.
“We understand from speaking to patients that some hospitals do exercise discretion in collecting payments in cases of financial hardship, which is welcome. However, we believe that patients should not have to actively pursue a waiving of charges in the cases of ‘undue hardship’, which is ill-defined.
“We also understand that instalment arrangements can be put in place, but are at the discretion of the hospital manager or officer designate. It is clear that both of these scenarios place an unfair administrative burden on cancer patients, who should be focusing on their treatment and care.
“In the case of unpaid charges, we understand that within 47 days of the issuance of an invoice regarding hospital charges, if payment has not been progressed, a referral notice can be issued to a collection agency or legal representatives. Pursuing patients at a time of great physical, emotional and financial stress is patently unfair.”
As part of its response to this newspaper’s FoI request, the HSE said it sought to maximise the “recovery of income in a socially responsible, ethical, efficient and cost-effective way”.
“It should be noted that the collection of monies owed is a continuous, daily and large-scale process. The major part of amounts invoiced by HSE hospitals, and unpaid at any given moment, relate to private insurers.”
However, the spokesperson for the Irish Cancer Society said the charity wants the use of debt collection agencies by hospitals to end.
“We are calling for an end to this practice, which causes needless stress and fear for patients. It is the last thing patients need while going through treatment,” said the spokesperson.
“The Irish Cancer Society has continued to call for the abolition of inpatient charges, and is campaigning to remove these charges in Budget 2019. They place an unfair financial burden on patients undergoing treatment, either as an inpatient or a day case, at a time when they are dealing with a range of other costs including, but not limited to, medication, costs associated with attending appointments, additional childcare, heating and electricity bills, and other one-off costs associated with their diagnosis.”
Asked by this newspaper whether the HSE vets the debt collection agencies or if it provides an approved list of possible agencies to the Hospital Groups, an Executive spokesperson said that a framework for the provision of these services was put in place by the Office of Government Procurement (OGP). This framework approves particular debt collection agencies.
“The public sector framework for debt management services reduces the time and cost associated with procurement by pre-qualifying specialist service providers to this national framework and each hospital can procure the services of these suppliers,” the HSE spokesperson stated.
Asked whether the debt agencies write, phone or call to patients’ doors regarding outstanding payment, the spokesperson said that “the agencies write letters to the patients”.
“The framework is not particular to the health service and covers the entire public sector. Any stipulations are contained in the contract for the whole public sector as drawn up by OGP.”
The HSE has told this newspaper that it seeks to maximise the recovery of income in a “socially responsible, ethical, efficient and cost-effective way”, but how does the HSE ensure and define this?
“As per the OGP contract, the aim of this multi-supplier framework is to achieve easy access to these agencies, flexibility, best practice procurement, agreed terms and conditions, efficiency, value for money and demonstrating a high standard of service delivery, including in the area of governance and professional and ethical collection methods,” the HSE spokesperson said.
During 2016-17, the agency LCMS Ltd was employed by 19 different hospitals to carry out work, Intrum Justitia Ireland Ltd was employed by 12 different hospitals, Garwyn Group by four and Debitask Collection Services by five.
The HSE acute hospital that paid the highest amount to debt collection agencies in 2017 was Cork University Hospital, which paid €86,889 to Debitask Collection Services, having paid the same company €85,355 the previous year.
Last year, University Hospital Galway paid a total of €71,274 to two debt collection agencies.
Our Lady of Lourdes Hospital, Drogheda, paid €41,958 in total to two debt collection agencies, while Connolly Hospital, Blanchardstown, paid €41,651 last year to LCMS Ltd.
MI contacted debt collection agencies regarding the work they do for HSE public hospitals. A spokesperson for LCMS Ltd said: “I am sorry but we do not wish to contribute at this time.” At the time of going to press, none of the other agencies contacted had replied.
According to the HSE, there are three key income streams for public hospitals. These are private inpatient charges, statutory inpatient charges and emergency department charges. The Executive spokesperson told MI that in terms of the collection of outstanding debt, the private inpatient charge was the largest amount.
“The most significant income stream is the private inpatient charge,” the HSE said.
The Executive added that the amounts “owing by private insurance companies are monitored on an ongoing basis and are the subject of regular discussions between the HSE and the private insurers”.
“In recent years, the HSE has introduced a number of initiatives to improve the claims collection process and facilitate faster submission of claims to accelerate income collection within the public hospital system. The speed of HSE claims submission to insurance companies has improved.”
There are changes taking place in the patient income process across hospitals (see panel).
A new income process?
The HSE employed Grant Thornton to carry out a review of the patient income process in 2016.
Following a Freedom of Information request, this newspaper has seen a report on the progress of this review that was delivered at the HSE Audit Committee at the beginning of this year.
Grant Thornton’s review in 2016 identified “a number of initiatives required to improve the patient income process” for hospitals. Following a tendering process, Grant Thornton was also appointed to assist in the improvement process.
According to the Executive, Grant Thornton is tasked with assisting each hospital’s approach and operation of the patient income process and to introduce elements of standardisation.
This is a three-year project and includes plans to standardise the billing collection of statutory emergency department and inpatient charges, ensuring patient details are captured at the earliest point to facilitate the claims process, and assessing current staffing levels to match with activity levels.
Project governance is provided by the Patient Income Oversight Group, chaired by Mr Gerry O’Dwyer, CEO, South/South West Hospital Group. This group contains representatives of Hospital Groups; hospitals; Acute Hospital Division; National Finance Division; Health Business Service; Office of the CIO; Communications;and Human Resources.
According to the update delivered at the HSE Audit Committee and seen by this newspaper, phase one of the project involved one hospital from each Hospital Group. The initial proof of concept for the project was completed in two hospitals — Cork University Hospital and Portiuncula University Hospital. These two hospitals, along with Connolly Hospital, Blanchardstown, University Hospital Limerick, Children’s University Hospital, Tallaght Hospital and St Luke’s Hospital, Kilkenny, were involved in phase one.
“Phase one consisted of a site visit to each of the hospitals and an agreement of a project plan for deliverables with local management,” according to the review.
“The progress of these plans are reviewed on a weekly basis initially. These reviews are extended to fortnightly and monthly, as required. During the site visit, data for benchmarking of staffing levels is also gathered.”
The site visits have now been completed and, according to the HSE, reports of these visits are being prepared for the Patient Income Oversight Group.
The HSE also told MI that the work of phase two is currently underway.