HSE makes €22.4m tax settlement with Revenue Commissioners
The HSE had to make a tax settlement with the Revenue Commissioners of €22.4m , including penalties it was revealed today.
The cash-strapped agency has now had to set up a tax department, director general Tony O’ Brien revealed.
“As part of its committment to continued improvements in internal controls and compliance, the HSE performed a detailed internal review of its tax heads for the years 2011, 2012 and 2013 in order to identify areas of risk in tax compliance.
“The HSE worked within the Revenue’s Co-operative Compliance Programme to submit a formal Unprompted Qualifying Disclosure of all identified underpayment of taxes.
“ As a result of this process the HSE and Revenue Commissioners agreed a full and final payment of underpaid taxes including penalties and interest of €22.4m which was formally accepted by Revenue in Aug 2015,” he told the Public Accounts Committee.
“This payment amounts to less than 0.05pc of the overall budget of the HSE for the years 2011, 2012 and 2013. Further it amounts to around 0.6% of the overall Taxes paid in 2011, 2012 and 2013. More importantly this payment has not impacted on the delivery of services.
“As a result of this tax review the HSE has set up a Tax Department which is currently being resourced and developed. Further the HSE is currently in the process of finalising its internal tax review of 2014 which it has formally agreed with Revenue.
“ It is expected that this review will conclude in Nov 2015. As the tax review of FY2011 – FY2013 was not completed and submitted to Revenue until Dec 2014, the HSE are aware that there may be broadly similar issues arising in 2014 and the expectation is that improvements will start to be reflected in FY2015 and will continue into FY2016”
Referring to delays in collecting patient income – highlighted by the Comptroller & Auditor General – he the HSE is developing a memorandum of understanding ( MOU) with the main private health insureres in the irish market to address outstanding debt issues by negotiating improved payment terms and cash collection for the HSE.
These MOU negotiations commenced in July 2014 initially with the VHI. Since then negotiations have been expanded to include Laya, Aviva and GloHealth. All MOU negotiations are at various stages with all 4 private insurers.
The Comptroller recommendations in the area of integrated claims processing. Currently the HSE are utilising the Claimsure claims processing system across 47 of the 48 acute hospitals, and, further can process almost 99pc of private insurance claims where the HSE has a direct payment agreement with a private insurer or occupational health scheme such as ESB, POMAS etc. Claimsure also manages any statutory levy from private insurers where private insured patients opt to be treated publically.
He also said expenditure on high tech medicines, which has increased from €315m (2009) to €485m (2014) – as a consequence of the introduction of highly expensive new medicines and the increased use of existing high tech medicines. In the future, the expectation is that new medicines will in the main be in the High Tech area.
“Such medicines are generally only prescribed or initiated in hospital and would include items such as anti-rejection drugs to transplant patients, medicines used in conjunction with chemo therapy or hormonal therapy and medicines for conditions such as Cystic Fibrosis, MS and Hepatitis C etc
“ The medicines are purchased by the Health Service Executive and supplied through Community Pharmacies for which pharmacists are paid a patient care fee. The cost of the medicines and fees are paid for by the Primary Care Reimbursement Service.
The challenge in this area – as in many others - is to ensure that the correct balance is struck between controlling costs on the one hand and ensuring where possible that Irish patients have access to new drug therapies as soon as possible after they are developed. The C&AG’s report on the issue is therefore timely and will assist the HSE in managing this growing area of expenditure”