The Department of Health saw "compelling" legal advice on three occasions in 2003 that nursing home charges were illegal, an Oireachtas Health Committee heard today.
South Eastern Health Board chief executive Pat McLoughlin said he first saw his own board's legal advice on the issue in November 2002 and raised his concerns with the department at three meetings up to December 2003.
"The legal opinion seemed to me to be compelling. It was still the department's view that they had legal advice which rebutted our opinion. There was no meeting of minds on the issue," he said today.
Members of the all-party committee are hearing submissions from high-ranking politicians and officials into the 29-year scandal, which could cost the taxpayer up to €2 billion to refund over 300,000 affected patients and their families.
Mr McLoughlin, who was not interviewed for the Travers report, confirmed he never raised the issue with the former minister for health Micheál Martin or his junior ministers or personal advisers.
He said the issue was on the agenda for an Annual Service Plan Meeting in February 2003, a bilateral meeting with the department in March 2003 and at the Management Advisory Committee in December 2003, where it was finally agreed to seek the attorney general's advice.
Mr McLoughlin, who is now director of the National Hospitals' Office, said: "We were of the opinion that the matter had been relayed to the attorney general, and we had no further information that was at variance with that fact over 2004."
However, a letter inviting the attorney general's legal opinion was never sent until Minister for Health Mary Harney uncovered the issue when she joined the department during October last.
The Travers report, later ordered by Ms Harney, found there were serious administration failures within the Health Department on handling the nursing homes charges, but that no minister was ever substantially briefed on the gravity of the issue.
Department secretary general Michael Kelly was immediately transferred to the Higher Education Authority when the report was published in early March.
Mr Martin will be called before the committee, as will Ministers of State Ivor Callely and Tim O'Malley, and a number of advisers.