When talks broke down recently between the Ministry of Health and the OMA regarding a new contract – the last one expired March 31st, 2014 – the MOH announced a series of very important changes to the way physicians get compensated in this province. Probably the most wide-reaching announcement was that, beginning February 1st, 2015, the MOH was going to clawback an additional 2.65% of physician payments on top of the 0.5% they’d already been deducting.
What wasn’t specified in the bulletin was when the OHIP fee cuts would begin to impact physicians. The Ministry was not applying the new 3.15% rate on claims ‘received’ after February 1st, but on claims with a service date of February 1st. How many months was it going to take before the new rate ‘kicked in’?
Transition to -3.15%
It turns out that doctors didn’t have to wait very long. This month, doctors across the province will notice a large deduction on their compensation with the description “Payment Reduction – Opted In”. We call it what it is: the MOH Clawback. Here are some examples of the deduction for our physicians:
|Physician||Amount Deducted||Amount Paid in April||Percentage|
What’s going on here?
Why is the fee cut not exactly 3.15%? The answer is because some of the February 1st claims were submitted and paid last month before the MOH had set up their computers to deduct the entire 3.15%. So, any claims with service dates after February 1st that were submitted in February and paid in March only faced the previous 0.5% reduction. In April, those claims were further deducted by 2.65%, while any new claims with service dates of February 1st or after faced the full 3.15% deduction. To complicate matters further, any newly submitted claims with service dates prior to the 1st of February still only face a 0.5% reduction (that’s Doctor C in the above example, who is behind in his billing and is still sending us work from before Feb 1st). In other words, to figure out whether the amount is correct, we need to look at the March and April payments taken together. Here’s a table for Doctor A with March and April’s data listed separately. I’ve calculated what the MOH should have deducted each month, as well as what they’ve actually deducted.
|Doctor A||Service Date before Feb 1st||Service Date after Feb 1st||Should have deducted||Actually deducted|
As this table shows, the Ministry of Health has done their calculations properly. To make sure, we’ve checked the accuracy of the MOH calculations for several of our doctors, and in all cases, the clawback is accounted for correctly. So, if the amount deducted in April seems high, keep in mind that it’s because the amount they deducted in March was too low.
It’s important to remember that, going forward, the variability in the amount of the clawback will level off to the 3.15% targeted by the MOH. Once the negotiations between the OMA and the MOH resume and the contract impasse ends, it will be interesting to see what happens to the 3.15% clawback.