The new 2024–2028 Physician Services Agreement (PSA) represents a significant step forward for Ontario’s healthcare landscape, introducing updates that aim to better recognize the full scope of physicians’ work and enhance the delivery of comprehensive, team-based patient care.
With significant enhancements to the Family Health Organization (FHO) model, new proposals include virtual care, modernization of the Schedule of Benefits, and a timeline for physician compensation increases. These changes are designed to create a more sustainable and transparent system for both physicians and patients.
This blog will provide you with information on key areas of the PSA affecting physicians in Ontario. From new compensation structures to evolving and improving aspects of healthcare and medical billing, we’re here to break down the details and provide the guidance you need to navigate the new PSA confidently.
Note: Some elements of the agreement are still under review and are subject to further clarification or change as implementation details are finalized.
What Are the Updated Components of the New PSA?
FHO Managed Entry
FHO managed entry is a system that regulates the number of new FHOs and physicians who can join them each month, ensuring controlled growth and an equitable distribution of physicians, particularly in areas of high need.
The current monthly allowance of 60 physicians, who are permitted to join FHOs across Ontario, will continue into years 2, 3, and 4 of the PSA. Any unused spots will roll over to the following year, and the FHG to FHO transition will also be exempt from the managed entry.
This allowance will keep expanding the opportunities for physicians wishing to join FHOs across the province.
Changes to the Physician Compensation Rates Under the 2024–2028 PSA
The new PSA introduces a series of compensation increases designed to better reflect the value and complexity of physicians’ work across Ontario. These adjustments include both general increases and targeted boosts for specific specialties, ensuring fairer, more sustainable funding for the years ahead.
Year 1: 9.95% increase + 2.8% increase = compound increase of 13.03% (implemented increase for services from April 1st 2024 – March 31, 2025, and January 1st 2025 – March 31st 2025).
Year 2: 11.75% relativity increase for all fee-for-service and automated payments (e.g., capitations, special premiums, fee-for-service payments for the services rendered, shadow billing payments, etc.) replaced the previous 13.03% increase for FHO physicians.
Years 2-4 of the 2024-28 PSA will provide a 9.5% total increase in physician compensation, including general increases and targeted physician compensation increases.
The Board of Arbitration awarded the following in September 2025: 7.3%
Year 2 (2025/2026): 2.8%
Year 3 (2026/2027): 2.5%
Year 4 (2027/2028): 2%
In addition, there is a further 2.2% in targeted physician compensation increase (both agreed and awarded) over Years 2, 3, and 4. Part of each year’s increase will be paid to physician specialties or groups based on relativity, with the remainder paid across-the-board.
Family Health Group (FHG) Premium Fee Increases
Currently, FHG physicians receive a 10% premium on their fee-for-service billing. With the 2024-28 PSA, they will see an increase in the FHG premium to 15% effective April 1st 2026, and will then be increased to 20% starting April 1st, 2027.
What’s New in the Updated FHO+ Model for Ontario Physicians?
During mediation earlier this year, the Ministry of Health and the Ontario Medical Association (OMA) made substantial progress in revising the FHO framework. The arbitration award confirms several key changes:
- Introduction of Hourly Time-Based Payments: FHO physicians will now receive an hourly rate to recognize both direct and indirect patient care and clinical administration, in addition to their existing capitation payments.
- Increases to Shadow Billing and After-Hours Fees: Significant increases were awarded for shadow billing, after-hours premiums, and group leadership funding. These adjustments better align FHO compensation with the real-world demands and workload of family physicians.
- New Patient Attachment Bonuses: New incentives will encourage physicians to roster unattached patients, supporting Ontario’s priority of improving patient attachment and access, effective July 1st, 2025. Physicians will continue to roster patients with the code Q200 until further notice from the Ministry about the bonus.
- Replacement of Access Bonus and Negation: The access bonus system and the long-criticized dollar-for-dollar negation tied to outside use have been removed. In their place, a new Continuity of Care threshold has been introduced as an accountability measure, promoting stronger patient-physician relationships.
- Improved FHO Co-Location Regulations: Guidelines for FHO co-location have been liberalized, reducing the number of doctors per co-location from 3 to 2, making it easier for physicians to form and sustain FHO groups.
You can watch a more in-depth breakdown of these updates in our latest webinar.
Additional OMA Proposals: What Changes Are Being Proposed for the 2024-28 PSA?
The OMA has put forward a series of proposals aimed at improving billing processes, expanding access to care, and reducing administrative barriers for physicians across Ontario. While these are still under review, they reflect ongoing efforts to create a more efficient, fair, and patient-centred healthcare system.
Note: the below sections are described as proposals by the OMA and are subject to change at any time.
How Will the 2024–2028 PSA Improve Virtual Care for Ontario Physicians?
After the pandemic accelerated the shift to virtual care, the 2021–2024 PSA introduced a permanent framework that officially recognized video and phone visits as insured OHIP services when clinically appropriate. This framework emphasized “comprehensive virtual care,” ensuring patients continue to receive care within an ongoing physician–patient relationship.
Since its introduction, some barriers and gaps have surfaced, and as part of the 2024–2028 PSA, the OMA is now working with the Ministry of Health to refine the model, remove limitations, and expand access to virtual services across Ontario. The proposal is as follows:
Billing Comprehensive Virtual Care Codes by Physicians Practicing in Shared Care Models
The OMA is proposing updates to the OHIP Schedule that would make billing for virtual care more flexible. This includes allowing physicians in shared care models, such as specialists and general practice physicians, to bill comprehensive virtual care codes when collaborating within the same group practice.
To qualify, these groups must be able to offer in-person visits at the same hospital, clinic, or facility and have shared access to patient records, ensuring coordinated, high-quality care. Physicians would also need an established relationship with the patient through another physician in the same group.
Claims Submission Requirements for Virtual Care: Claims for comprehensive virtual care codes must be submitted using the group billing number.
These proposed updates by the OMA aim to improve access, efficiency, and quality of virtual care services through streamlined billing practices within shared care models, ultimately benefiting both physicians and patients.
Manual Review and Billing Proposals: How the OMA Plans to Streamline Payments
Over the past decade, many physicians, particularly those working in hospitals, have faced increasing challenges in receiving accurate and timely payments. From delayed or rejected claims to missing billing codes for complex procedures, these issues have created unnecessary administrative burdens. According to a recent OMA survey, time spent fixing billing errors often means less time for patient care, with many physicians reporting they could have seen several more patients each day if not for these billing frustrations.
In response to the feedback, the OMA proposes to revise the Claims Adjudication Sub-committee’s (CASC) terms of reference to address concerns about manual review. Here are some of the proposals below:
- Implement the ability to track claims under review on the Remittance Advice (RA) report.
- Establish a 3-month deadline on MOH to respond to billing claims, similar to deadlines on physician claim submissions or payment is made in full.
- Review and update the explanatory and error codes currently posted on the internet.
- Establish an Ombudsman role to investigate physician complaints on delayed/declined payments;
Together, these proposals highlight the OMA’s ongoing commitment to strengthening Ontario’s healthcare system, supporting physicians, improving patient access, and ensuring fair, modernized compensation for the care doctors provide every day.
The OMA’s Good Faith Proposal: Ensuring Fair Payment for All Physicians
Until 1998, Ontario physicians were supported by a “Good Faith” payment policy that ensured they were paid for services provided when a patient’s health number later turned out to be invalid, as long as the issue wasn’t something the physician could have identified at the time of care.
Since the policy was removed, many physicians have faced unpaid claims for care delivered in good faith, particularly for patients who were OHIP-eligible but had issues with their health cards, or for newborns with Pre-Assigned Health Numbers (PAHNs) that were later rejected.
To address this, the OMA is proposing to reinstate the Good Faith policy, or introduce an equivalent version, to ensure physicians are fairly compensated in situations where care is provided appropriately but administrative barriers prevent payment.
Specifically, the OMA is looking to implement a “good faith” payment policy in the following three scenarios:
- Newborns: Currently, physicians cannot validate a newborn’s Pre-Assigned Health Number (PAHN) at the point of service. Services can be billed to the PAHN until the baby reaches 90 days old. However, if the PAHN registration is incomplete, due to incorrect information entered by parents or hospital staff, services billed using the PAHN will be rejected with a VH9 error (Health Number not registered with MOH). In these cases, the physician will not receive payment for those services, even though the registration problem is beyond their control.
Resolution: The OMA proposes that all claims made under a Pre-Assigned Health Number (PAHN) for newborns, as outlined in the guidelines of the “Infant Registration Program Manual for Birthing Hospitals” document, be eligible for payment for a period of 90 days.
- Ontario residents who are OHIP eligible but do not have a valid health coverage and/or documentation: Another payment issue occurs when Ontario residents who are eligible for OHIP lack a valid health card because it has expired unexpectedly, face difficulties renewing it, cannot verify their status or residence, have no fixed address, have lost documents, or haven’t been able to visit a Service Ontario centre.
Resolution: Provide a generic billing number to be used for these individuals.
- Individuals presenting in critical conditions who are unable or who have nobody able to provide any information on their health coverage or related documentation: Uninsured individuals seek urgent care at Ontario hospitals, including emergency departments. This includes undocumented residents, those on work or study permits with gaps in coverage, uninsured travellers with medical emergencies in Canada, and people with complications from health or birth tourism. Although physicians are obligated to treat these patients, they often encounter difficulties in getting paid for the services rendered.
Resolution: Provide a generic billing number to be used for these individuals, specific to critical conditions.
Overall, addressing these billing challenges is essential to ensure that all patients receive timely and appropriate care, while ensuring physicians are fairly compensated for the care they provide without the burden of administrative or financial hurdles.
Proposed Improvements to the OHIP Schedule of Benefits: What’s Changing and Why It Matters
As part of the new PSA, the OMA proposed several updates to the Schedule of Benefits aimed at modernizing fee structures, addressing long-standing disparities, and ensuring physicians are fairly compensated for the evolving nature of medical practice in Ontario.
Closing the Gender Pay Gap in Physician Compensation: New Schedule of Benefits Proposals
The existence of gender-based disparities is well studied in Ontario. Physician earnings in Ontario, based on all OHIP billings, showed differences in clinical payments between male and female physicians of 32.8% annually and 22.5% daily. After accounting for practice characteristics, region, and specialty, a 13.5% gender pay gap remained.
Resolution: To respond to gender-based disparities in physician payments, it was agreed by the OMA to take the necessary steps to achieve gender pay equity by responding to submissions by physicians across Ontario. Three examples of the submissions include:
- A new fee for a pelvic exam with a speculum: Creating a new code for pelvic exams would help to ensure compensation is better aligned with the complexity and time associated with performing vital services for women’s health.
- Alignment of Surgical procedures related to male and female reproductive organs: The increase of the value for female genital procedures and surgeries performed by OBGYNs (predominantly female) to better align with the fees of similar procedures by urologists and general surgeons (predominantly male).
- A new time-based add-on fee to the A007 assessment exceeding 20 minutes in duration, based on the evidence that female physicians spend more time with patients during encounters.
New Medical Technologies and Procedures: Updates to the Schedule of Benefits
Many parts of the OHIP Schedule of Benefits have not kept pace with evolving clinical practices and medical advances, leading to outdated descriptions and compensation that no longer accurately reflect the care physicians provide today.
Physicians providing new or evolving services that are not clearly listed in the OHIP Schedule have had to find alternative ways of being remunerated. This has included billing under existing umbrella or “catch-all” fee codes, submitting claims directly to OHIP medical consultants on an independent consideration basis, billing patients directly, or securing funding from other sources such as academic experimental programs.
Resolution: Adding new fee codes to reflect new medical procedures and diagnostic tests, including 3D modelling, Ultrasound Elastography Evaluation of Liver, Digital Breast Tomosynthesis and more.
Modernizing the Fee Schedule: How the OMA Plans to Simplify and Streamline Physician Billing
For many years, the Schedule of Benefits has not undergone a comprehensive review to modernize its structure and content. Updates are needed to improve navigation, revise definitions, update or add fee codes, refine terminology, and remove codes that no longer reflect current clinical practice.
Resolution: The OMA proposes to give the Schedule of Benefits a modernized look and make the information provided to physicians clearer by revising the language, introducing new fee codes and revising the requirements and definitions for existing ones.
Key Takeaways: Supporting Ontario Physicians Through the 2024–2028 PSA Changes
The 2024–2028 Physician Services Agreement represents an important step toward modernizing Ontario’s healthcare system and better recognizing the realities of family practice today. With updates to the FHO model, new proposals to advance and support current practice, and a greater emphasis on accountability and patient access, these changes aim to create a more sustainable and supportive environment for physicians and patients alike.
At DoctorCare, our priority is to help you navigate these updates with confidence, providing the guidance, insights, and tools you need to stay informed and make the most of every opportunity under the new agreement.
If you have questions about the new PSA or would like to understand how these updates may impact your practice, contact our team today. We’ll be happy to walk you through the changes and help ensure your billing reflects the full value of the care you provide.
Additional Resources
Here are some resources to help you navigate the new PSA with ease:
Blog: Understanding the Proposed FHO+ Model: What Ontario Family Physicians Need to Know
Blog: The New FHO+ Model: Arbitration Explained
Disclaimer: This blog post is based on the OMA Arbitration Brief for Years 2, 3 and 4. All details are subject to change at any time. Physicians should consult with their professional associations for the most current information and personalized advice.
