The Dail's Public Accounts Committee (PAC) is to call in the board of St. Vincent's Hospital after claims of fraud by Senator John Crown.
Cancer specialist Professor John Crown has accused a hospital he works in of fraudulently charging insurance companies for drugs it gets for free.
The consultant oncologist claimed that the issue at St Vincent's University Hospital in Dublin has been covered up and whistleblowers were intimidated when concerns were first raised in 2002.
Using parliamentary privilege, Prof Crown called for Health Minister Dr James Reilly to launch a new inquiry into allegations that the VHI and other health insurers were charged for medicine that the hospital sourced for free.
"It will become apparent that the board of St Vincent's Hospital does not enjoy my confidence," he said.
"This began in 2002 when I discovered that members of the staff of the hospital had been deliberately and fraudulently charging private health insurers in respect of cancer drugs that had been provided to that institution for free."
Prof Crown told the Seanad that he had long been troubled on many fronts about the way the board of St Vincent's and other hospital boards do their business.
"Documents have recently come into my possession which I'm quite happy to discuss and share with the Minister of Health because they refer to money fraudulently taken from the Voluntary Health Insurance (VHI) of which he is sole shareholder and other private insurers - documents which show conclusively that there was a cover-up conducted by the management board of St Vincent's Hospital," he said.
Prof Crown, an independent senator, said that he first notified regulatory authorities in the Irish Medicines Board about 10 years ago but that an investigation was stopped shortly after it began and reformatted.
He said there was no explanation as to why the original inquiry was stopped.
Prof Crown said he wanted to personally disassociate himself and the research organisation he runs from any connection with St Vincent's.
He called on the leader of the Seanad Maurice Cummins of Fine Gael to bring his allegations to Dr Reilly's attention.
The VHI Healthcare insurance company said it was made aware of the claim in 2002.
It said that more than €1m was recouped following an investigation into the allegations by accounting giant PriceWaterhouseCoopers.
In a statement, the company said: "VHI Healthcare is totally committed to managing costs and reducing inefficiencies. As part of this commitment, we have a special claims investigations unit (SIU) which is dedicated to ensuring that incidences of error or overcharging by healthcare providers are fully investigated and rectified."
A hospital spokesman said the chairman of St Vincent's Healthcare Group, Professor Noel Whelan, has written to Senator Crown about the allegations.
"He has asked Senator Crown to forward to him, as a matter of extreme urgency, all information that he has in relation to this matter so that it can be fully considered by the board of St Vincent's Healthcare Group," he said.
"It appears that the matter raised by Senator Crown relates to issues at St Vincent's Private Hospital that pre-date the establishment of St Vincent's Healthcare Group.
"An independent investigation by PWC at the time stated: 'Our work on the clinical studies has not indicated any evidence of collusion or fraud by staff or within the hospital'."