Governing Body Meeting in Public

Agenda Item No: 16 Date of Meeting: 31 July 2014 Governing Body Meeting in Public Paper Title: Continuing Healthcare Redress Payments Policy Decision Discussion Information Follow up from last meeting Report author: Report signed off by: Anne Jones, Senior Clinical Lead Alan Pond, Chief Finance Officer Purpose of the paper: To ensure the CCG has a policy on continuing care redress payments. Conflicts of Interest involved: None Recommendations to the Board / Committee The Governing Body is asked to approve the policy Page 1 of 13

NHS Continuing Healthcare POLICY ON NHS CONTINUING HEALTHCARE REDRESS PAYMENTS Page 2 of 13

Document Approval Policy Owner Policy Author Directorate Ratifying Committee Date of Approval Date effective from Date of Review TBC Assistant Director, Adult Continuing Care Commissioning TBC TBC TBC TBC Document History Version Author Date First Draft Assistant Director, Adult October 2013 Continuing Care Second Draft Senior Clinical Lead, February 2014 Retrospective Reviews Third Draft Review June 2014 Page 3 of 13

Contents Section No. Section Name Page No. Terms / Acronyms Used 3 1 Introduction 4 2 Objective of this Policy 5 3 Content of this policy 5 4 Reimbursement of Care Costs 6 5 Other Financial Compensation 7 6 Loss of Asset Value 8 7 Additional financial costs incurred 10 8 Loss of income 11 9 Reasonable costs 11 10 Damages for Inconvenience or Distress 11 11 Interest 12 12 Ex Gratia Payments 13 13 Continuing Healthcare Redress Panel 14 14 Agreeing a Settlement 14 15 Over reimbursement 15 16 Precedents 15 Terms / Acronyms Used Clinical Commissioning Group National Health Service National Commissioning Board Primary Care Trust Local Authority Commissioning Support Unit CCG NHS NCB PCT LA CSU Page 4 of 13

1. Introduction 1.1. Legal responsibility for commissioning NHS Continuing Healthcare passed from Primary Care Trusts (PCTs) to Clinical Commissioning Groups (CCGs) on 1 st April 2013. For avoidance of doubt, this policy will apply to cases which predated the establishment of the CCG. 1.2. In March 2007, in response to the Parliamentary and Health Service Ombudsman s report Retrospective Continuing Care Funding and Redress, the Department of Health (DH) published best practice guidance to help PCTs to review the approach they took, and continue to take, to making redress where funding for NHS Continuing Healthcare (formerly known as NHS continuing care) had been wrongly withheld. This DH guidance NHS Continuing Healthcare: Continuing Care Redress (March 14 th, 2007 (ref Gateway 7976)) (2007 Guidance) is the most recent DH guidance applicable in this context. 1 1.3. The 2007 Guidance and this Policy apply to: 1.3.1. The review of cases dating back to 1 April 1996 ( Historic Redress Cases ) where: 1.3.1.1. as a result of eligibility reviews undertaken following the Ombudsman s report HC 399 NHS funding for long term care published in February 2003, the PCTs have made redress in accordance with the then DH guidance; and 1.3.1.2. there is a risk that the amount of the settlement made falls short of what the Ombudsman would expect; 1.3.1.3. cases where the NHS Continuing Healthcare funding has been wrongly withheld and redress has yet to be made ( Current Redress Cases ) 1.4. The 2007 Guidance reversed the DH s previous position on redress payments in respect of payment for other losses incurred resulting from maladministration of fully funded NHS Continuing Healthcare. The 2007 guidance advises Clinical Commissioning Groups (CCGs) to examine their overall approach to Historic Redress Cases and to examine whether their approach was consistent. It also reminds CCGs of their responsibilities concerning maladministration and redress and that: 1.4.1. Where financial loss can be shown to be demonstrably attributable to the wrongful denial of Continuing Healthcare funding, compensation payments should be aimed at returning the individual to the financial position they would have been in had the maladministration not occurred. 1.5. It also reminds CCGs that: 1.5.1. An appropriate level of interest should be paid on the reimbursed fees; 1.5.2. Payments can also be made in recognition of the inconvenience and distress caused to patients 1.5.3. Local Authorities (LAs) can offer deferred payment agreements to those not eligible for NHS funding who might have to sell their house to fund their care; 1 The DH issued a revised National Framework for NHS Continuing Healthcare and NHS-funded Nursing Care in November 2012 (which replaced the previous version of the National Framework, originally published in June 2007, and revised in 2009). The National Framework ostensibly concerns the process of assessing health needs; deciding on eligibility for NHS Continuing Healthcare and providing such care. As such, it does not directly address the issue of redress and the responsibilities PCTs had to provide redress where maladministration has resulted in fully funded NHS Continuing Healthcare being wrongly withheld. Equally, the NHS Continuing Healthcare Practice Guidance (March 2010) does not address this issue. Nor does the NHS Continuing Healthcare Refunds Guidance (March 2010), which provides guidance on responsibilities when a decision on NHS Continuing Healthcare eligibility is awaited or disputed. Page 5 of 13

1.5.4. Complainants need to provide causal evidence of financial loss and; 1.5.5. The amount of effort put into assessing the extent of the injustice and remedy should be proportionate. 1.6. The 2007 guidance provides that, in making redress payments, CCGs are advised to use a transparent rationale and clear calculations, to seek legal advice where necessary 1.7. The 2007 guidance confirms that there is no expectation that every restitution claim will be re-visited. Instead, it suggests that cases should be re-examined if unremedied injustice is identified, either directly or indirectly, and that any claim made by an individual should be entertained. 2. Objective of this Policy 2.1. This Policy has been prepared to ensure the compliance of the East & North Herts Clinical Commissioning Group with the 2007 Guidance. 2.2. It has been drawn up to guide the East & North Herts CCG and Commissioning Support Unit with whom they contract, to ensure clarity of the process of making redress for the wrongful withholding of fully funded NHS Continuing Healthcare. 3. Content of this Policy 3.1. This Policy describes four elements which will be considered in calculating an appropriate redress payment: 3.1.1. Reimbursement of care costs - how to calculate the level of any payment that ought to be made in respect of care costs met by patients or their families or carers that ought properly to have been paid by the NHS; 3.1.2. Other financial compensation what other financial losses (other than care costs), including sums in respect of anxiety and distress suffered by patients or their estates, ought to be compensated and how to calculate what an appropriate payment might be; 3.1.3. Interest how much interest should be added to compensate for delay in making payment; 3.1.4. Ex gratia payments when an ex gratia payment may be appropriate. 4. Reimbursement of care costs 4.1. The 2007 Guidance states that the amount of any reimbursement of care costs should be based on the following formula: 4.1.1. care costs incurred, e.g. nursing home fees which the patient or their family paid which ought to have been met by the NHS; 4.1.2. together with interest calculated at the County Court judgment debt rate applicable at the time (currently 8%); 4.1.3. after deducting any retained benefits, i.e. benefits which the patient had continued to receive, but which they would not have continued to receive had they been awarded NHS funded Continuing Healthcare. 4.2. Annex 2 to the 2007 Guidance sets out a list of state benefits and allowances that ought to be taken into account when calculating the amount of any reimbursement of Page 6 of 13

care costs for adults in care homes or similar institutions. In each case the circumstances applicable to that individual should be taken into account. 2 4.3. In Historic Redress Cases the 2007 Guidance requires that when information about benefits is available a comparison should be made between the settlement already made and the amount that ought to have been paid when calculated according to the formula above. 3 4.4. In both Historic Redress Cases and Current Redress Cases the 2007 Guidance requires that where a comparison can be made, if the amount that ought to have been paid exceeds by a large amount, the amount of the settlement actually paid, the CCG should address the difference. The 2007 Guidance suggests that amounts under 5,000 are not large enough to warrant payment of an additional sum. 4.5. In Current Redress Cases where compensation has not yet been paid, reimbursement of care costs will be calculated, wherever possible, on the basis of the formula from the 2007 Guidance as set out above. However, where there is no available evidence as to the value of any retained benefits, the CCGs will assume that the patient would have received basic state pension and higher rate attendance allowance. 4.6. In some cases, where the full cost of care is reimbursed to the patient, this may result in the local authority seeking to recover from the claimant or a deceased patient s estate the amount of any care costs met by the local authority which ought properly to have been met by fully funded NHS Continuing Healthcare. In these cases the CCG will advise the claimant of the amount of any such claim and will offer to settle the claim on behalf of the claimant out of any settlement sum agreed to be paid by the CCG. If the claimant declines any such offer the CCG will advise the local authority accordingly and it will be for the local authority to pursue any such claim it may have in this respect. 5. Other financial compensation 5.1. There are five main types of other financial compensation that may be claimed: 5.1.1. Loss of asset value resulting from having to liquidate assets early to raise funds to meet care costs that the NHS ought to have met - see paragraph 6 below; 5.1.2. Additional financial costs incurred because of the necessity of meeting care costs that the NHS ought to have met, e.g. the cost of insurance premiums see paragraph 7 below 5.1.3. Loss of income by a person who gave up work or reduced their working hours in order to look after a patient who continued to live in their own home see paragraph 8 below; 5.1.4. Reasonable costs directly incurred in the pursuit of a claim for restitution e.g. legal fees see paragraph 9 below; and 2 The 2007 Guidance provides that the amount of effort put into assessing the extent of the injustice and remedy should be proportionate and recognises that There may be cases where it is not reasonable, or possible, to calculate the exact extent of loss (paragraph 12). The PCTs will: firstly, examine their records of evidence of the value of any retained benefits and will request claimants to confirm any information already provided to the PCTs; secondly, request evidence of the value of any retained benefits from the claimant where no evidence is available from the PCT s own records; thirdly, seek such evidence from the Department of Work and Pensions (DWEP) where no evidence is available either from the PCT s records or the claimant 3 Until the 2007 Guidance, the DH had advised that patients or their estates should be reimbursed for care fees which they had paid, and which ought properly to have been paid by the NHS, plus an interest payment calculated on the basis of the annual rate of increase of the Retail Prices Index applied as a compound figure to the payment from the date when it should have been paid to the date when the cheque was dispatched. This advice was based on the understanding that patients would not be required to pay back benefits which they had continued to receive but which would have been withdrawn had the patient been awarded fully-funded NHS continuing care. Page 7 of 13

5.1.5. Damages for inconvenience or distress suffered by the patient, their family or carers or their personal representatives or executors, as a result of the NHS not awarding Continuing Healthcare funding or indeed from the process or making a claim for reimbursement of care costs paid see paragraph 10 below 5.2. In all cases where the CCG may be required to provide compensation, it will proceed on the basis that compensation should be awarded so as to put the claimant into the position he or she would have been in had the maladministration not occurred. 6. Loss of asset value 6.1. In the Ombudsman s report it states that the Ombudsman did not consider that financial loss due to the premature sale of property would be an issue because it would be unlikely that individuals could demonstrate a causal link between the NHS's failure to fund their care and a decision to sell a property, or take other financial decisions, to enable care home costs to be met. 6.2. The Ombudsman recognised that there are circumstances where the financial loss claimed by individuals cannot simply be attributed to the denial of continuing care funding without considerable speculation and that it is difficult to establish exactly what their financial position would have been, given the passage of time since the events took place. Furthermore, the Ombudsman indicated that many individuals can only speculate as to what they would otherwise have done with property at the time and that it is arguable that it would be unreasonable to make the NHS financially liable for the vagaries of the property market. 6.3. In taking these factors into account, the Ombudsman did not consider that payments for claimed financial loss should be made in the absence of clear evidence that the denial of continuing healthcare funding has led to that loss. However there was a clear indication that there should be appropriate recompense for demonstrable financial loss which can be evidenced by the claimant. 6.4. The CCG must therefore be satisfied that the disposal of any asset was directly linked to the need to meet care costs and that the disposal did not take place at that time wholly or partly for other reasons e.g. to pay debts related to care costs incurred before the patient became eligible for fully funded NHS Continuing Healthcare. 6.5. It is considered that claims will arise most frequently as a result of the premature sale of a residential property, though it could relate to the disposal of other capital assets, e.g. investments, antiques, heirlooms, etc. sold earlier than would otherwise have been necessary to raise cash to pay care costs. Loss will only have been incurred where those assets were sold at a lower price than might have been obtained had they been sold at a later date. 6.6. In order to assess the extent of any loss of asset value the CCG will: 6.6.1. consider the context of the sale, i.e. is the CCG satisfied that the sale was directly linked and necessitated by the need to meet care costs and can be attributed to the fact that NHS funded continuing healthcare had not been awarded at the time, or whether there is evidence that the sale took place at that time wholly or partly for other reasons. The onus will be on the claimant to prove that the sale was forced because they had insufficient income, including rental proceeds that could have been received, to pay the costs. The CCG s Continuing Care Redress Panel (see below) will consider and adjudicate on this issue where relevant. 6.6.2. in the case of residential property sold in the period since 1October 2001, consider whether the deferred payment scheme was offered and applied by the relevant local authority. If not, the CCG should discuss with the patient/family or their representative and the local authority whether the patient or the claimant was eligible to enter into a Deferred Payment Agreement and if so, whether this was considered. Page 8 of 13

6.7. If the patient/claimant was eligible for the scheme but the local authority did not offer any deferred payment arrangement, the CCG will recommend to the patient/claimant that the local authority was wholly or partly responsible for any financial losses suffered and the CCG s view as to the extent of that responsibility. 6.8. If the claimant was offered a deferred payment arrangement but declined it, the CCG should consider whether any premature sale of the property was in fact caused by the failure of the CCG to award NHS funded continuing care or the claimant s failure to enter into a deferred payment agreement with the local authority; 6.9. In calculating the extent of any financial loss: 6.9.1. The CCG will request documentary evidence of the sale of the assets and the price received: 6.9.2. If the claimant is unable to produce evidence of the sale price, in the case of a residential property sold since 1 April 2000, it is possible to obtain details of the sale price of the property from www.mouseprice.com this is a free service provided by statistical consultants Calnea Analytics, the creators of the official Land Registry House Price Index click on Free Land registry House Prices on the homepage; 6.9.3. if the claimant is unable to produce evidence of the sale price of a residential property sold before 1 April 2000, the average price of similar property may be calculated using the evidence of the sale price of other similar properties and average changes in house prices over the relevant period using the House Price Index from the Halifax Group Plc available at www.hbosplc.com by clicking on House Price Index on the right of the screen; 6.9.4. the CCG will consider at what later date the asset would otherwise have been sold for if it had been sold and what the asset could have been sold for if it had been sold at that later date e.g. after the death of the patient or the date when the patient ceased to be eligible for NHS funded continuing care for any other reason, or, if the patient is still living and still eligible, what the asset is valued at now; in order to calculate if there was a benefit related to the appreciation of the property that was denied to the claimant. 6.9.5. the CCG should request the claimant to obtain evidence of the likely change in value of the asset sold between the date of actual sale and any later date when it would otherwise have been sold; 6.9.6. in the case of residential property, the CCG can calculate the average change in value over the relevant period using the House Price Index from the Halifax Group PLC available at www.hbosplc.com by clicking on House Price Index on the right of the screen; and 6.9.7. where the value of a residential property would have increased over the relevant period, the CCG should consider deducting from that increase in value other costs and expenses that would have been incurred had the property been retained by the claimant, e.g. council tax, water rates, utilities and maintenance costs for the relevant period. Where the property was subject to a mortgage at the time of sale, the CCG should also consider what interest payments on that mortgage would have had to have been made over the period during which the property would have been retained; 6.9.8. The CCG should consider any investment income on any surplus sale proceeds of any asset sold that might have been earned by the patient or the claimant during any period for which those surplus proceeds were held by the claimant until such time as they were required to meet care costs and deduct any such investment income from the amount of compensation paid. Page 9 of 13

6.9.9. The CCG should consider alternative courses of action other than selling the asset, which could have offset the loss, e.g. renting out a vacant property. 6.10. The payment of financial compensation for loss of asset value may give rise to a, or an additional, liability of the claimant or a deceased patient s estate for Capital Gains or Inheritance Tax. Any such tax liability falls on the claimant or the deceased patient s estate and accordingly is not a liability of the CCG. No deduction for any such liability should be made but claimants should be advised to seek advice from their own financial or legal advisers as to the extent of any additional tax liability that may arise from receipt of financial compensation. 7. Additional financial costs incurred 7.1. The CCG will: 7.1.1. Request documentary evidence of the other financial costs incurred; and 7.1.2. Consider the context in which the costs were incurred, i.e. is the CCG satisfied that the costs were directly linked to the need to meet care costs or is there evidence that they were incurred wholly or partly for other reasons. 8. Loss of income 8.1. The CCG will: 8.1.1. consider the context of the loss of income, i.e. is the CCG satisfied that the claimant was operating in a caring role and not simply choosing to spend more time with their relative. 8.1.2. request documentary evidence of the carer s position and salary/wages immediately before the date of leaving work or reducing working hours and positions and salary since that date and also since the date when the patient died or ceased to be eligible for fully funded NHS Continuing Healthcare for any other reason; 8.1.3. request claimants to authorise the release of data by any relevant employers 8.1.4. consider the extent of the carer s loss of income taking into account direct loss of earnings s and formulate a proposal for any sum that ought to be paid to compensate for that loss. 9. Reasonable costs 9.1. The CCG will: 9.2. Request clear and detailed statements and invoices showing what costs have been incurred and what they related to; 9.3. Consider the extent of the claimant s costs and expenses and whether they are reasonable taking into account the value of any care costs paid or assets sold and formulate a proposal for any sum that ought to be paid to compensate for only those costs and expenses directly linked to claiming redress for the wrongful denial of fully funded NHS Continuing Healthcare. 10. Damages for inconvenience or distress 10.1. In respect of damages for inconvenience, there is no general legal liability for damages for inconvenience except in rare circumstances where: Page 10 of 13

10.1.1. there is a relationship giving rise to a duty of care, the nature of which includes an implied or express obligation, on the part of the party with that duty, to provide freedom from distress and inconvenience; and 10.1.2. that duty has been breached; and 10.1.3. there has actually been physical inconvenience as a result Consequently there are unlikely to be many, if any, circumstances where a legal liability to pay compensation for inconvenience has arisen. 10.2. In the case of claims for damages for distress, the CCG will: 10.2.1. request documentary evidence of distress suffered by patients or their carers as a result of the patient wrongly being denied fully funded NHS Continuing Healthcare; 10.2.2. such documentary evidence may include, but will not be limited to, medical evidence of physical or mental illness, including stress suffered by the patient or their carer which was primarily caused: (i) in the case of the patient, by having to arrange or meet the costs of care that ought properly to have been arranged or met by the NHS; or (ii) in the case of the carer, by having to provide, arrange or meet the costs of care that ought properly to have been provided, arranged or met by the NHS in each case, when compared to illness that might otherwise have arisen as a result of stress, concern or worry about the patient s state of health or their care. 10.3. The CCG will require evidence that the patient, their family or their carer: 10.3.1. Suffered distress over and above that which was to be expected taking into account the patient s state of health and need for care at the time this recognises that a degree of distress is to be expected when a member of the family or a close friend is very ill and/or coming to the end of their life; and 10.3.2. That such higher level of distress was as a direct result of the patient being wrongly denied fully-funded NHS Continuing Healthcare. 10.4. The CCG will consider this issue where relevant and make a decision on the level of distress experienced and the level of compensation to be paid to the claimant, if any, taking into account any legal damages that might be awarded to the claimant if he or she brought such a claim in a court of law. 11. Interest 11.1. The interest rate to be applied over any given period will be reviewed by the CCG in response to any changes in national guidance and/or county court rates. Guidance will be taken from the Ombudsman s position at any given time and legal advice may be sought in setting any interest rate. The interest rate starting point for this policy period is the current county court judgement rate of 8%. 12. Ex gratia payments 12.1. Ex gratia payments are payments made in cases where there is no obligation or legal liability but where, in all the circumstances, the payer considers it is responsible for loss or damage that ought properly to be compensated or desires to address a hardship that the payee has had to suffer as a result of failure or delay on the part of the payer. In the same way that it is difficult to envisage circumstances in which a party would be legally liable for inconvenience, the CCGs have been advised Page 11 of 13

that it is equally difficult to determine circumstances where an ex gratia payment would be justified. 12.2. The 2007 Guidance reminds CCGs that they have the power to make ex gratia payments and encourages them to do so where appropriate. However, the 2007 Guidance also suggests that such payments might be made in respect of financial loss which significantly exceeded the actual care costs, or distress. These are losses for which the CCG may have legal liability and the CCG has been advised that, where legal liability exists, these losses should be compensated accordingly and are not an appropriate basis for the making of ex gratia payments. 12.3. However, where no legal liability has been established, the CCG may consider making a without prejudice ex gratia payment. The CCG has taken legal advice in respect of circumstances when it is appropriate to make an ex gratia payment and have been advised as follows: 12.3.1. GA 2000 provides that in the case of non-financial loss, careful judgement will be needed to decide whether financial redress is appropriate and, if so, what constitutes fair and reasonable financial redress. Payment for non-financial loss should be exceptional; in all cases, the normal requirements for the proper care and use of public funds apply. 12.3.2. The Department of Health 2010/11 Manual for Accounts (dated November 2010) at page 20 notes that ex gratia payments for maladministration may arise: As a result of a recommendation by the Health Service Commissioner (HSC); or In cases, not involving the HSC, where health bodies consider that the effect of official failure may justify such a payment. 12.3.3. Because of the difficulty in calculating an appropriate sum to compensate for inconvenience or distress, an ex gratia payment of up to 500 will be offered to claimants who request such compensation and where the CCG considers the request is justified 13. Continuing Healthcare Redress Panel 13.1. The CCG has set up a Continuing Healthcare Redress Panel consisting of: Company Secretary (Chair) Deputy Chief Finance Officer Clinical representative from the CHC Team 13.2. The Continuing Healthcare Redress Panel will: 13.2.1. review the evidence provided by the claimant of financial loss, costs and expenses incurred or distress suffered; 13.2.2. consider what settlement should be offered to the claimant in accordance with this Policy; 13.2.3. make a recommendation to the CCG on the settlement to be offered; 13.2.4. formulate an offer or a negotiating position; and 13.2.5. if all offers are rejected by the claimant, decide on an action plan. 13.2.6. Ensure responsible commissioners are identified in each case and appropriate use and monitoring of any shared risk budget for redress and restitution spend. Page 12 of 13

14. Agreeing a settlement 14.1. Once the CCG has approved the basis of settlement of each the Continuing Healthcare Team will write to the claimant to propose an agreed settlement of the claim. The offer will be calculated to include interest to the date of the offer. 14.2. If the CCG is unable to reach agreement with the claimant as to any settlement of their claim, the case will be referred back to the Redress Panel to consider any representations made by the claimant as to why the settlement offered is unacceptable. The Redress Panel will recommend a further offer or negotiating position to the CCG. Cases will normally be considered at the next Redress Panel meeting but, in order to speed up the settlement of claims, cases may be discussed by the Panel members by other means, e.g. email or telephone conference and decisions or recommendations may be made in this way between Panel meetings. 14.3. Any such further recommendation of the Redress Panel will be final and will be communicated to the claimant by the CCG. If the claimant is not willing to accept the CCG s offer of settlement, he or she may make a complaint to the CCG and the CCG s complaints procedure will be followed in the normal way. 15. Over reimbursement 15.1. Where in respect of any Historic Redress Case, the application of the formula in the 2007 Guidance indicates that the patient was over-reimbursed for all of their financial losses, including interest, taking into account any appropriate ex gratia payment that ought to have been made, the CCG will not attempt to recoup any overpayment, except in the case of misinformation or fraud. 15.2. The CCG will give assurances to patients and their families that if patients were financially advantaged by the method used to calculate their reimbursement prior to 2007 and received more than they would have received had the formula in the 2007 Guidance been applied, they will not be required to pay the difference. 16. Precedents 16.1. It is important that the CCG is consistent in respect of their decision making and negotiation stance for each claim considered. The CCG recognises that its decisions and any settlements made with claimants will form a precedent for other similar decisions or settlements they might make or negotiate in the future. 16.2. Therefore, the CCG will review this policy regularly in the light of decisions made in respect of redress and will make any necessary changes to the policy to reflect those decisions. Page 13 of 13