Dáil Éireann - Volume 387 - 28 February, 1989
Adjournment Debate. - VHI Cover in Accident Cases.
Mr. Yates Mr. Yates
Mr. Yates: I know there are always  many requests particularly on Tuesdays for the Adjournment. I thank the Chair for his indulgence in recognising that this is a very important matter and for allowing me to raise it this evening.
On Monday, 20 February it came to public attention that the VHI were changing the circumstances of their insurance and they were no longer giving satisfactory cover to people faced with substantial medical bills arising out of road traffic accidents. I am specifically relating to rule 6.15 and rule 1.8 of the VHI under which victims of road traffic accidents are now being told that under the Health (Amendment) Act, 1986, whereby hospitals were entitled to charge those victims for hospital maintenance and other medical bills, VHI would no longer in all cases pick up those tabs even though those people might have been in the VHI. This is very upsetting to many people in that they do not know where they stand in relation to cover for the simple reason that the VHI in clarification in a statement issued on 21 February said that the VHI will provide the normal benefits
through the discretionary powers contained in Rule 1.8. This rule has been included specifically for this purpose and reads “VHI reserves the right to waive the strict compliance with any of the Rules in exceptional circumstances and in the interest of an insured member”.
What they are now saying is that there are now discretionary powers under which they may or may not pay the bills. An accident is not something that occurs by design but victims of accidents now do not know whether or not they are covered. This is unacceptable and can only result in the VHI losing more members.
Where someone with full comprehensive insurance cover has an accident the insurance company will pay the bill, but because of this decision it seems that people will be forced to come up with very substantial up front cash outlays and they have no guarantee that they will  be covered. Where a person with only third party insurance cover has an accident which is his own fault he will not be covered by third party insurance.
There are two types of cases, one where the motor insurance company will eventually pay and the other where they definitely will not pay. I want a categoric assurance from the Minister that where there is no motor insurance liablility the VHI will cover the person, as 34 per cent of the population are in the VHI, and that where someone is not in the VHI and is in a public bed, the State will pick up the tab. I also want a clear cut commitment that people will not be faced with the hardship of substantial cash outlays.
My case may seem unreal but I will give a couple of cases where this will be a very practical concern. It has been brought to my attention that members of personnel working in our emergency services, the fire brigade for instance will be in difficulties. The fire service because of its nature has staff on a part time basis; they are on an on-call basis. What is their position? As of Monday, 20 February the VHI were saying one thing in their statement and on Tuesday The Irish Times of 21 February in referring to the assistant chief fire officer of County Cork said:
Mr. Donal Doonan, assistant chief fire officer for County Cork, said that when he rang the VHI in Dublin yesterday to ask about accident cover for himself and colleagues whose work involved intensive travel by road, he was informed by a senior supervisor that the change in the rules meant “absolute exclusion”.
“When I asked what would happen where there was no third party involved, I was told `Well, under the circumstances, you'd have to fall back on the State and go public'.” Mr. Doonan claimed.
This is no way to treat our essential emergency public services personnel whose life and limb are put at risk in the course of their duty. Are these people to  be left high and dry by the Minister and the VHI?
This is a problem that can be easily resolved. There are many cases where the motor insurance industry have lobbied this House for changes to help themselves. I refer to the very substantial pressure that was put on all parties to abolish juries in civil liability cases. Because of that pressure we have a committee in the Department of Industry and Commerce which deals with for instance cases of refusals of car insurance for young people and so on. Why could this Minister before a decision was taken not call in the Federation of Irish Motor Insurers and thrash out some agreement whereby in the event of a hospital bill some arrangement would be made so that the VHI would pay it or the bill would be left in abeyance until the motor insurance company would pay it so that whatever happens the victim would be covered one way or another? It is simply a matter of getting heads together and streamlining the procedure. That procedure should be based on the following principle: If a motor insurance company accepts responsibility for repairing a car it is only reasonable that they should be responsible for repairing the occupant of the car. There should be clearly established cases where there is responsibility for the motor insurance company and a victim should not be asked to pay the bill. In cases where people are not covered, for instance a person with a third party liability involved in an accident which is his own fault, the VHI should honour all of those cases and where a person is not a member of the VHI the State should pay the bill. In case this seems academic, I will refer to a bizarre case which was outlined in a letter I received from a parent:
In May-June 1987 my son was “knocked” down and hospitalised at Mullingar and then Temple Street. I had Plan B VHI cover. The situation re non-payment by the VHI applied and thereby followed a series of unbelievable events. Temple Street  Hospital issued bills to me to the value of £2,800 approximately, VHI would not pay and then they (Temple Street) issued a civil bill. Then they wrote at a later date to state that they would waive the action and await the outcome of civil proceedings but that their bill would now be £6,000 approximately.
Arising out of this the question must be asked why is it that when it goes to litigation they want £6,000 when there are no costs involved for the hospital concerned? The second question that arises is that this person was a category 2 person and had a hospital services card. Why is the full economic cost being charged to this patient who has statutory entitlement to a free hospital bed under the 1970 Health Act?
To add insult to injury she goes on to say that not only did she get letters from the hospitals but that the consultants went after her separately and were not prepared to accept the circumstances of waiting until subsequent litigation would take place. This was all because her son was unfortunate enough to be a pedestrian on a particular street at a particular time and knocked down. In my view this is not acceptable. The outcome of this episode, which is typical, is that she and her family have left the VHI because they are not prepared to accept this type of treatment.
Recently we had a debate in this House in relation to another aspect of the VHI recovery programme. I will deal with it very briefly. It related to the drugs refund scheme. A very strong argument was put forward by the Minister and the Department that they would not countenance continuation of that scheme because for long term illnesses there would be a predictable need for this medication, that next year and the year after an asthmatic would need this medication, that that was not an actuarial risk, that it was not real insurance because these were predictable needs. How more unpredictable can one get than to be involved in a car accident? It is quite extraordinary that the VHI and the Minister are having it both ways so  far as both predictable and unpredictable illnesses are not being covered.
The Minister said — and it is quite extraordinary — in the same article in The Irish Times of 27 February 1989 that he did not know how hospitals and health boards would react if no VHI funding was available for accident cases and if patients asked for their bills to be deferred until their cases went through the courts. The new practice has interesting implications which the Department should be looking into immediately. Here we have the Department sitting back again with no preparation or no anticipation of these decisions at a time when it is clear that the whole basis of the VHI goes back to the Voluntary Health Insurance Act, 1957. This is very important because this Minister seems to be unaware of the provisions of the establishment of the VHI. Section 4 (1) and (2) states that:
The Board shall make and carry out a scheme of voluntary health insurance for defraying, to such extent as the Minister may from time to time specify, the cost to persons paying subscriptions to the Board in respect thereof, and to dependants of such persons, of such medical, surgical, hospital and other health services as the Minister may from time to time specify.
The Board may make and carry out such other schemes of voluntary health insurance as it may think fit, subject to the consent of the Minister in regard to the scope and extent of the benefits.
This legislation is not in any way ambiguous. It says that the VHI cannot alter their plans without ministerial approval. Either the Minister is not discharging his duty or he is not fully aware of the fact that he is ultimately responsible. Therefore, this is very appropriate. The Health (Amendment) Act, 1986, specifically entitles the authorities of the hospital to charge the cost of providing treatment where there is a likelihood of damages or compensation from a third party. There  are two roles in which the Minister is involved, first, because his hospitals are producing these bills the problem has arisen and, secondly, he is responsible for the VHI.
I call on the Minister to initiate talks immediately between the VHI and the motor insurers to ensure that the public know that whether they are in the VHI or are public patients, they will be fully protected from the stress and tribulation of these bills. If the VHI are saying that the sole problem here is that, say, someone has an accident and is injured and the hospital come up with their bill, the VHI pay the bill, a settlement is made on the steps of the court for the victim, the motor insurance company pay the victim but the victim does not pay the VHI that is fair enough but why is it in every other respect in relation to civil damages that we have a standard accepted practice whereby solicitors can issue letters of understanding, whereby a solicitor where he is confident that he will win a case can issue to any third party a letter of understanding stating, “we are expecting a claim to be successful”? He would then go along to a bank and say “I will personally authorise clearance of, say, £4,000 to pay this”. If the VHI could only make payments in instances where there is a letter of understanding that would get over the problem. I have spoken to members of the Incorporated Law Society and they said it would not be difficult, given the nature of other types of claims where there are other types of bills and services provided in the event of accident, to devise such a system. All in all, and I do not wish to detain the House too long, it is unacceptable that the public should be treated in this cavalier way.
I am not satisfied with the Pontius Pilate way in which the Minister has tried to wash his hands of this problem. I now call on the Minister of State at the Department of Health, Deputy Leyden, to give an assurance that, first, where there is a motor insurance liability people would not be forced to pay cash outlays and, secondly, where there is no motor insurance cover that people will be  assured, if they go public, they will be fully covered and if they are in the VHI their bills will be honoured fully. If that can be done and a streamlined arrangement for payment can be brought into effect through practical negotiations which ensure that the VHI are not left holding the baby it would be a welcome step. I call on the Minister without further delay to attend to this matter.
Minister of State at the Department of Health (Mr. Leyden) Terry Leyden
Minister of State at the Department of Health (Mr. Leyden): I am pleased to have the opportunity, on behalf of my colleague, the Minister, Deputy O'Hanlon and the Department, to clarify the position. I would like to remind Deputy Yates that at the start of February 1989 this House passed the following resolution:
Dáil Éireann acknowledges that under the legislation establishing the VHI responsibility for the management of its affairs is vested in the board, subject only to the approval of the Minister for Health, and accepts that the Minister had no alternative but to approve the board's recovery programme which was prepared in accordance with the best actuarial advice available and designed to ensure the continued viability of the VHI.
I am therefore most surprised that an issue which relates entirely to the detailed management of its own affairs by the VHI Board should now be raised in the House in this manner but nevertheless I am pleased to clarify the position.
VHI rules have always excluded from cover, those expenses which were recoverable from a third party, except in so far as the board, at their own discretion, should decide otherwise. The board have over the years adopted a practice of paying such claims, subject to an undertaking that the member would include medical costs in a third party claim with the motor insurance company and refund the VHI benefit if that claim was successful. The board have now decided to cease this practice as they have found considerable difficulty over the years in recovering the moneys due to them in  such circumstances. To facilitate this, a rule has been inserted specifically excluding road traffic accident injuries from cover.
On 21 February the VHI board issued a press statement clarifying the operating practice which they now propose to adopt, which includes the following:
Where there is no other insurance or possibility of third party recovery, the board will provide the normal benefits through the discretionary powers contained in rule 1.8. This rule has been included specifically for this purpose and reads: “VHI reserves the right to waive the strict compliance with any of the rules in exceptional circumstances and in the interest of an insured member.”
In other words, the VHI board have given a commitment that no members will be left without cover for necessary treatment arising out of an accident, in circumstances where there is no third party liability and no other insurance applies.
I would also point out that accident and emergency treatment is generally carried out in public hospitals and is available to all who require it. The charges which, under the Health (Amendment) Act, 1986, can be made by public hospitals for treatment arising out of a road traffic accident, become payable by the patient only if and when compensation is received from a third party.
I would stress again that the VHI Board will continue, as before, to accept responsibility for the medical costs of their members arising out of road traffic accidents where these are not recoverable from any other party. However, the board do not believe it is appropriate, particularly given the need to secure the board's viability after their recent financial difficulties, that the VHI should meet costs for which other parties are legally liable.
I want to point out, by the way, that this principle is exactly the same as the principle enshrined in the Health (Amendment) Act, 1986, which was  introduced by the Coalition Government. The basis for that Act is that injuries caused by negligent drivers should be paid for by motor insurers and not by the State. Consequently, the Act empowers health boards to charge the full cost of treating such injuries where compensation is payable. In exactly the same way, the VHI Board are making sure that motor insurers and not the VHI meet the costs for which they are properly liable. Since the House accepted this principle in relation to the public health services we must be consistent and accept it also in relation to the VHI.
Deputy Yates does not appear to realise that nobody can be charged anything under the terms of the Health (Amendment) Act unless compensation is involved and the payment of such charges can only be collected when compensation has been paid.
Mr. Yates Mr. Yates
Mr. Yates: What about the bills?
Mr. Leyden Mr. Leyden
Mr. Leyden: The Deputy should look at section 3 (2) of the Act. In other words, people only have to pay if and when they get compensation. Nobody has to pay these charges upfront, as suggested by Deputy Yates, without knowing if they will ever get them back.
Mr. Yates Mr. Yates
Mr. Yates: I will send the Minister the bills.
Mr. Leyden Mr. Leyden
Mr. Leyden: I can give the Deputy a categorical assurance, as the VHI did in their statement on 21 February, that victims will be covered always and if there is no third party liability the VHI will pay.
Mr. Yates Mr. Yates
Mr. Yates: It is discretionary.
Mr. Leyden Mr. Leyden
 Mr. Leyden: It is very important that this issue is clarified in the media also because there have been some scare headlines about it.
In relation to the points made by Deputy Yates about the case sent to him by a constituent regarding Temple Street Hospital, under the legislation hospitals are entitled to the full economic cost. The statutory entitlements do not apply if the Health (Amendment) Act applies and that is made clear in the Act introduced by the Coalition Government. The Act provides for charges “notwithstanding anything in the Health Acts”. In fairness the second bill referred to in the example given by Deputy Yates related to the actual costs arising from the accident. I should like to stress that bills do not have to be paid until compensation is paid.
Mr. Yates Mr. Yates
Mr. Yates: What about the consultant's bills?
Mr. Leyden Mr. Leyden
Mr. Leyden: I want to make it clear that the bills apply as stated. The hospital have to present a bill so that it can be taken into account in assessing the damages from a particular accident. I know numerous cases — and I am sure the Deputy knows of numerous instances under the 1986 Act — where constituents received bills but because compensation was not involved they were not liable. This happened recently and the position was very easily clarified by the health board. I hope this clarifies the matter and makes it crystal-clear for the Deputy. I thank Deputy Yates for raising this matter.
The Dáil adjourned at 10.55 p.m. until 10.30 a.m. on Wednesday, 1 March 1989.
Dáil Éireann 387 Adjournment Debate. VHI Cover in Accident Cases.