Financial Emergency Measures In The Public Interest Act 2009: New Government Powers To Reduce Payments To State Service Providers

Author:Ms Anne Bateman
Profession:Philip Lee Solicitors

The Financial Emergency Measures in the Public Interest Act 2009

was passed by the Irish legislature on Friday 27 February 2009, and

was signed into law by the President the following day. The Act

attracted most public attention for being the means by which the

Irish Government has introduced the "pensions levy",

effecting deductions from the pay packets of public sector

employees. However, possibly more contentiously, the Act introduces

potentially far-reaching powers for Government Ministers to reduce

payments to those who provide services to the State, covering not

only health professionals but also general service providers. The

powers override existing contractual arrangements in place between

the State and those service providers. It is clear that the

Government intends to use the new powers immediately and to their

full extent. Indicative of this, the Minister for Health commenced

a consultation process under the Act on 4 March 2009 intended to

effect reductions in payments to all health professionals.

Payments to health professionals are dealt with as a specific

category under Section 9 of the Act. Section 9 permits the Minister

for Health to introduce regulations to reduce payments to health

professionals (defined to include medical practitioners, dentists,

pharmacists, optometrists, ophthalmologists, podiatrists and

chiropodists), in respect of any services they render to health

bodies including to the Health Service Executive and State-funded

hospitals. This power overrides any existing legislation,

circulars, contracts or other documents or expectations which cover

current arrangements for payments to these professionals. Prior to

making any relevant regulations, the Minister is subject to a

30-day consultation requirement. This requirement is arguably not

absolute, nor must the consultation be extensive. Rather, Section

9(4) of the Act states that the Minister may herself or via the

relevant health body "engage in such consultations as

[she] considers appropriate". As long as she is satisfied

that payments designated by her under the regulations are

"fair and reasonable", the Minister retains the

ultimate discretion about the amounts involved. Certain matters are

listed under Section 9(5)(a)-(f) of the Act for the Minister to

consider in terms of setting the payments, including the impact on

the State's ability to continue to provide health services at

existing levels if the reductions are not made. These

considerations are...

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