Bill 138 Amendments to Auditing Process of Physicians’ Billings

Bill 138, the Plan to Build Ontario Together Act received Royal Assent on December 10, 2019. The impact of this wide-ranging legislation will be felt by a number of industries, not the least of which is the healthcare sector. As discussed in an earlier blog post found here, Schedule 15 of Bill 138 enacts amendments to the Ontario Health Insurance Act. These amendments set out significant changes through which Ontario oversees the administration of its provincial health insurance plan (OHIP). Among the more significant changes are those to the auditing process of physicians’ billings. This post will detail the audit process and how it will be impacted by Bill 138.

Payment Integrity Program

The current audit system has been in place since 2006. The system, known as the “Payment Integrity Program,” was implemented by the Ministry of Health and Long-Term Care (the “Ministry”) in response to a scathing report by Justice Peter Cory who reviewed the previous auditing system and found that it was outdated, overly harsh, and had a debilitating effect on both physicians and the greater health system as a whole. According to the Ministry’s resource manual, the Payment Integrity Program is a product of its “commitment to ensuring that physicians who provide insured services to insured persons in Ontario receive full payment.” The Ministry’s authority to investigate billing practices stems from Ontario’s Health Insurance Act (HIA), Commitment to the Future of Medicare Act (CFMA), and Independent Health Facilities Act (IHFA).

Review Processes

The goal of the Payment Integrity Program is to establish a mutual understanding between physicians and the Ministry with regard to the appropriate fee codes to be submitted for medical services provided. Therefore, the overarching mandate of payment review is education, rather than punishment.

During the initial stage of the submission process, billing claims undergo a series of computerized checks. However, this first stage of the Payment Integrity Program operates on the basis of an ‘honour system’; the computerized checks are not thorough, and claims are generally processed as submitted in order to ensure prompt payment. Therefore, the mere fact that a billing claim has passed through a computerized check does not by itself mean that it was submitted correctly.

Once OHIP billing claims have been paid, they are reviewed on a post-payment basis. Individual reviews can arise from concerns that are reported externally, or identified internally within the OHIP processing office. Further, the Ministry will conduct province wide reviews of OHIP accounting practices and known payment issues.

Examples of improper billing practices that fall within the scope of the Ministry’s investigatory authority can range from simple mistakes such as incorrectly noting the type of treatment provided, to inappropriately claiming a higher fee code to even fraudulently over-billing for insured services. The Ministry will also investigate charges for access to insured services, which offend the CFMA.

With regard to the review of individual physician billings, the initial stage of the post-payment review process involves an educational letter sent to the physician explaining the cause for concern. Specific patient records at issue may be requested for proof that the correct billing procedures were followed. The medical records must demonstrate that an insured service was provided to an insured person; that the claim submitted represented the service provided; and that the service was medically necessary. As billings will have already been submitted and paid, the records review is used to verify what service was provided and whether it corresponds with the fee that was claimed. Confirmation letters may be sent to patients to verify that they received a specified service from a physician on a specific day.

If warranted, the Ministry will provide further education to the physician on appropriate billing procedures. Further, a physician may be required to reimburse the province for previously paid billings that were improperly submitted. Generally speaking, should the physician disagree that an amount is owing, or disagree with the amount calculated, the matter will be referred to the Physician Payment Review Board (PPRB). The PPRB is independent of the Ministry and conducts hearings to resolve billing disputes upon the request of either the physician or the General Manager of OHIP. Both parties can make submissions regarding payments concerns, or the findings of the audit or review conducted by the Ministry.

If a review of the patient records or billing patterns indicates fraudulent billing activity, the Ministry may refer the matter to the Accounting Policy and Financial Reporting Branch, which will investigate the potential fraud and if warranted, refer the matter to the Ontario Provincial Police. Further, the Ministry may contact the College of Physicians and Surgeons of Ontario which will conduct its own investigation into possible misconduct.

Bill 138 Changes

The first iteration of Bill 138, introduced in November 2019, drew the ire of the Ontario Medical Association (OMA), which voiced concerns about the proposed legislation and the reintroduction of a much harsher auditing system. Although physicians shared the goal of increased transparency and accountability for the OHIP billing system, there was significant pushback against a proposed auditing system that afforded investigators wide-ranging powers to dig through a physician’s practice. In response to the OMA feedback and in an effort to collaborate with the province’s physicians, the Ministry made changes to Bill 138. The initial draft of Bill 138 proposed to completely remove the Physician Payment Review Process, which had previously been overseen by the Physician Payment Review Board. However, following consultations between the Ministry and the OMA, the legislation was further amended and instead transferred the oversight responsibilities of the Physician Payment Review Board to the Health Services Appeal and Review Board.

The OMA and the Ministry also collaborated to address the OMA’s concerns regarding the publishing of physicians’ personal information. Following consultations with the Ministry to revise the proposed legislation, the OMA made clear that while Ontario’s physicians understand the importance of transparency and the need to protect taxpayer money, proper context must be provided if physician billing information is to be released to the public. To that end, the Ministry agreed that additional information will be provided to clarify that payments made to physicians are not the same as salaries, but rather are gross billings out of which each physician pays the overhead costs to run their practice.

Despite the amendments, Bill 138 nonetheless brings with it reforms that will have the effect of increasing the intensity of audits, and will give the General Manager greater authority to prevent, investigate, and recover unauthorized payments to physicians. Physicians may be required to provide any records, including personal information, that the General Manager requests.

Further, the period of review of physician billings is extended from 12 months to a 24-month period. Importantly, the General Manager has the authority to refuse to pay a clam for payment for an insured service or pay a reduced amount if there is any suspicion that the nature of the service was misrepresented, or that the service was not medically necessary. Physicians who find themselves under the scrutiny of the General Manger may face an uphill battle in defending their billing practices.


It is clear that despite their shared goals of accountability and transparency, the province and its physicians may face difficulties in this period of transition. Should you have any questions about these changes, we are happy to help navigate these new waters.

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