Summary: Ms Z complained about an inaccurate invoice for outstanding care fees. Based on the information available, I intend to find fault in the actions of the Care Provider for failing to identify and prevent an accumulation of arrears. This fault has caused an injustice to Ms X, and we have proposed recommendations to the Care Provider.

The complaint

1. Ms Z complains on behalf of her mother, Ms X, that the care provider has not provided an accurate invoice for outstanding care fees. Ms Z says the care provider has incorrectly invoiced for care provided during Ms X’s notice period. Ms Z also says the Care Provider incorrectly set up a standing order that led to arrears accumulating and has not waived fees it agreed it would. Ms Z would like the Care Provider to provide an accurate invoice.

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The Ombudsman’s role and powers

Complaints about adult social care providers

2. We investigate complaints about adult social care providers from people who arrange and pay for their care privately (self-funders). We decide whether the care provider’s actions have caused an injustice, or could have caused injustice, to the person making the complaint. (Local Government Act 1974, sections 34B and 34C)
3. We normally name care homes and other providers in our decision statements. We will only not do so if we think someone could be identified from the name of the care home or care provider. (Local Government Act 1974, section 34H(8), as amended)
4. If an adult social care provider’s actions have caused an injustice, we may recommend a remedy. (Local Government Act 1974, section 34H (4))
5. Under our information sharing agreement, we will share this decision with the Care Quality Commission (CQC).

Additional

6. We normally name care homes and other providers in our decision statements. We will only not do so if we think someone could be identified from the name of the care home or care provider. (Local Government Act 1974, section 34H(8), as amended)

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How I considered this complaint

7. I considered information provided by Ms Z and discussed the complaint with her. I also considered the supporting information provided by the Care Provider. Ms X and the Care Provider will now have an opportunity to comment on my draft decision. I will consider their comments before making a final decision.

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Relevant legislation and guidance

8. Where a council assesses a person’s needs and agrees to provide care, it should set a personal budget in a care and support plan. A personal budget is a statement which specifies the cost to the local authority of meeting eligible needs, the amount a person must contribute and the amount the council must contribute. (Care Act 2014, section 26)
9. Councils can charge people towards the cost of a care home placement. They complete a financial assessment, applying charging rules in regulations and guidance to determine how much a person pays. People who have over £23,250 (including property) pay the full cost. However, once their capital has reduced to under £23,250, they pay an assessed contribution towards their fees. (The Care and Support (Charging and Assessment of Resources) Regulations 2014; Care and Support Statutory Guidance 2014 (CSSG))
10. People with eligible needs and financial assets above the upper capital limit of £23,250, may ask the local authority to meet their residential care needs, rather than organising this themselves. This could be for a variety of reasons such as the person finding the system too difficult to navigate or wishing to take advantage of the local authority’s knowledge of the local market of care and support services. Where the person asks the local authority to meet their eligible needs, and it is anticipated that their needs will be met by a care home placement, then the local authority may choose to meet their needs, but is not required to do so. Care and Support Statutory Guidance 2014 (CSSG))
11. Government guidance for care home providers states consumer law requires the provider to treat residents and their representatives fairly; provide key information upfront so residents can make informed decisions; and ensure that the wording of contracts and terms are: “simple, clear and informative, so that residents and their representatives can genuinely understand their rights and obligations before agreeing to them”. They should be “written in plain and simple language that an ordinary person would understand”.

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What I found

What happened

12. I have detailed below some of the key events in respect of this complaint. This is not intended to be a detailed account of what took place.
13. Following a decline in Ms X’s health, she was placed into residential care in December 2016. Ms X was on supported funding, paying a portion of her care costs until the sale of her property in 2018. Ms X’s contributions to her care fees were paid by standing order.
14. After the sale of Ms X’s property, she was transferred to self-funding payments. This required the standing order to be amended or set up again to reflect the changes in fees that were owed.
15. The standing order was set up in August 2018 to be paid monthly, resulting in 12 payments to be made annually for Ms X’s care fees, instead of 13, 4-weekly payments.
16. In September 2020, Ms Z received a letter from the Care Provider requesting payment of £7,440 and so Ms Z set up a meeting to discuss the letter. In October 2020, Ms Z met with representatives of the Care Provider. Ms Z says the Care Provider acknowledged that human error and accounting methods were responsible for the arrears and agreed it was an unacceptable expectation to pay the arrears that had accrued.
17. Following the meeting, Ms Z wrote to the Care Provider and proposed to pay 6 months of arrears and amend the standing order to resolve the situation. In this letter, Ms Z also highlighted that a payment of approximately £1040 from 2017 had not been accounted for.
18. The Care Provider wrote to Ms Z in November 2020 advising her that its member of staff at the time had made a mistake which contributed to omitting the payment made in 2017. The Care Provider advised Ms Z that its bookkeeper was undertaking a review and would be looking after all company finance moving forward. Ms Z wrote back to the Care Provider advising it that all issues were resolved.
19. In January 2021, Ms X’s capital had reduced beneath £23,250 thus making her eligible for funding from the Council to support her care. In March 2021, Ms Z received a statement of invoices for a balance of approximately £10,888. Ms Z says she attempted to contact the Care Provider to discuss the statement of invoices but was unable to speak with someone directly.
20. Ms Z says she spoke with the manager of the Care Provider in March 2021, who emailed their bookkeeper and copied in Ms Z to the thread. In the email, it is stated by the Care Provider’s manager that its director agreed to waive all outstanding fees.
21. Later in March 2021, Ms X was moved to another residential home.
22. Ms Z says she requested meetings with the Care Provider to discuss the situation and requested information on its calculations to little avail. Later in March 2021, the Care Provider wrote to Ms Z advising her that it had not agreed to waive any fees that were owed. The Care Provider requested a copy of the written agreement otherwise the outstanding debt would remain payable.
23. In November 2021, Ms Z sent the Care Provider a copy of the email from March 2021 where its manager stated that its director had agreed to waive the fees. The Care Provider advised Ms Z that it would look into the validity of the email.

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Analysis

Outstanding care fees and the standing order

24. The Care Provider has provided an updated record of the outstanding fees that are owed. This is for an amount of approximately £4,668.
25. The Care Provider says payments should have been set up as four-weekly but were instead set up as monthly. Ms Z does not dispute this, and it is acknowledged that this error is the cause of the accumulated arrears.
26. Ms Z says the Care Provider amended the standing order once Ms X moved to self-funded care in August 2018. The Care Provider says that individuals are responsible for setting up the standing order payment using the information it provides.
27. In October 2018, the Care Provider wrote to Ms Z, enclosing a standing order form which it asked her to action with her bank. The standing order form specified for the payment to be made once every four weeks.
28. On the evidence available to me, I can see the Care Provider sent the correct details to Ms Z to set up the standing order, but these were processed incorrectly by either Ms Z or the bank when the standard order was set up or amended. This should have been set up as four-weekly, but instead was set up as monthly thus creating a deficit in payment.

Accumulation of arrears

29. The Care Home says its payments system would not have picked up on the arrears until an individual reaches two 4-weekly invoices behind schedule. The Care Home says this would not have flagged, as Ms Z paid 4-weekly in arrears from the end of each 4-weekly period, rather than payment on commencement of each period.
30. The Care Home contacted Ms Z in September 2020 to notify her of the arrears and to make a request to bring the account up to balance. Whilst the Care Home were proactive in contacting Ms Z prior to November 2020, it still allowed arrears to generate between October 2018 and September 2020. Had this come to the attention of the Care Home sooner, the accumulation of such arrears could have been prevented and this is fault leading to an injustice.

Did the Care Provider agree to waive the fees?

31. Ms Z met with representatives of the Care Provider in October 2020. The Care Provider has not provided a record of the meeting. Ms Z says it was agreed in this meeting that the Care Provider would waive the fees, which it acknowledged was due to human error and incorrect accounting practice. The Care Provider says the meeting was to gather information and that nobody present had the authority to waive the fees.
32. Ms Z says that in correspondence thereafter, the Care Provider agreed that to resolve the situation, she should pay only six months of the arrears and amend the standing order to four-weekly. Ms Z sent the Care Provider an email in October 2020 that included details of her proposal in it. Ms Z also queried an amount of approximately £1040 that had not been accounted for.
33. In November 2020, the Care Provider responded to Ms Z’s letter, advising that staff error and incorrect accounting practice had contributed to the payment being missed. The Care Provider also advised that its bookkeeper was undertaking a review and would be looking after all company finance moving forward. I could not see any evidence in this correspondence that the Care Provider agreed to waive the fees or agreed to Ms Z’s proposal.
34. Ms Z says she did not get the agreement in writing that the Care Provider would waive the fees, however she says the email sent to its bookkeeper in March 2021 is evidence it agreed to. It is stated in this email that a director at the Care Provider agreed to waive the fees, but this is not evidence of an agreement being in place.

Eligibility for supported funding

35. As stated in paragraph 9, where someone has over £23,250 (including property), they pay the full cost of their care fees. However, once their capital has reduced to under £23,250, they pay an assessed contribution towards their fees.
36. Had the standing order been set up correctly, Ms X’s capital would have reduced sooner, and she would have met the threshold for funding in mid-November. This means the Council would have supported Ms X in paying some of her care costs.
37. The Care Home contacted Ms Z in September 2020 to bring the account to balance, but Ms Z did not act. Although Ms Z had an opportunity to bring the account to balance prior to when Ms X would have reached the threshold in mid-November, her decision not to was reasonable, given the size of the invoice, and lack of clarity around the origin of the arrears.
38. This means that Ms X could have paid increased fees for care costs between November 2020 and January 2021 where she may have benefitted from supported funding from the Council.

Fees incurred during Ms X’s notice period

39. Ms Z says the Care Provider have not accounted for contributions made by the Council during Ms X’s notice period. The Council have confirmed it has made payment and the updated record of fees do not demonstrate any outstanding fees applicable to Ms X’s notice period.

Summary

40. The Care Provider sent the correct details to Ms Z to set up the standing order. This should have been set up as four-weekly, but instead was set up monthly, thus creating a deficit in the payment. Standing orders can only be set up by an individual with their bank and it is therefore likely that either Ms Z or her bank processed the details incorrectly when the standard order was set up or amended.
41. Ms Z says in the meeting she held with the Care Provider that it acknowledged the arrears were due to human error and incorrect accounting practice. In the Care Provider’s email to Ms Z in November 2020, it acknowledged human error and incorrect accounting in respect of the missed payment in 2017. It is therefore likely that when the Care Provider acknowledged human error and accounting mistakes in the October 2020 meeting, it was talking about the 2017 payment, and not the accumulated arrears.
42. Ms Z says the Care Provider agreed to waive the fees but the evidence available to me does not demonstrate that it did. In correspondence between Ms Z and the Care Provider in October and November 2020, there is no evidence of an agreement being reached. Further, the email sent internally in March 2021 is not evidence of an agreement being in place when considered in the wider context.
43. The Care Provider should have picked up on the matter by either identifying that the frequency of the payment was not correct or that there was a shortfall in payments. In any event, the Care Provider did not and as a result, this contributed to arrears accumulating between October 2018 and September 2020. This has caused injustice to Ms X. Had the Care Provider picked up on the standing order being set up incorrectly and there being a deficit in payment, arrears would not have accumulated.
44. Had the standing order had been set up correctly, or been rectified earlier, Ms X’s capital would have reduced sooner, and she would have become eligible for supported funding from the Council to help her with her care costs. This means that the invoice the Care Provider has provided to Ms Z does not accurately reflect what fees may be owed.

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Recommended action

45. To prevent similar issues occurring and to resolve the complaint, the Care Provider should:
1. Explain what it will do to prevent arrears generating/accumulating due to payments being set up incorrectly.
2. Undertake its own review and report on its findings in respect of whether any other service users have been impacted by standing orders being set up incorrectly.
3. Calculate and reissue an invoice for any outstanding fees. The charges should cover the period until Ms X’s capital would have fallen beneath £23,250 had the standard order have been set up correctly.
4. Calculate and reissue an invoice for any outstanding fees. The calculation should cover the total period of Ms X’s stay, had the standing order been set up correctly. The invoice should consider deductions for any funding that Ms X would have been eligible for from mid-November 2020 and for any amounts already paid toward her care.
5. Pay Ms Z an amount of £250 in recognition of the Care Home’s failure to identify and prevent arrears generating which caused stress and inconvenience having to resolve the matter.
46. The Care Provider should complete actions a-c within two months of the Ombudsman’s final decision and action d within one month. The Care Provider should evidence its compliance to the Ombudsman.

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Draft decision

47. Subject to further comments by Ms Z and the Care Provider, I intend to complete my investigation on the basis that the Care Provider’s failure to identify and prevent an accumulation of arrears amounts to fault. This fault caused Ms X an injustice.

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Investigator's decision on behalf of the Ombudsman