With the new Physicians Service Agreement underway, the OMA and the Ministry have been gradually releasing updates on physician compensation and how it will be structured in the coming year.
We understand that keeping up with these changes can be overwhelming and time-consuming, and we know you likely have questions. Our goal is to simplify this information by providing a clear summary of the updates in this blog, helping you manage these changes while maximizing your revenue potential and opportunities.
What is the PSA?
The Physicians Service Agreement (PSA) is a contract between Ontario physicians and the Ministry of Health regarding funding. To address the revenue losses experienced by physicians over the years, the OMA and the Ministry have been exploring solutions that benefit doctors and improve access to patient care throughout the province for the 2024-2028 PSA.
Recent PSA Compensation Increases
Here are the compensation changes that physicians can expect to see in the upcoming year.
Starting November 1st, 2024
Exciting news for doctors! The Ministry of Health and the OMA have agreed to increase physician compensation by 2.8% for services provided from April 1, 2023, to March 31, 2024. If you’re wondering when this increase will take effect, you would have received this on your November 2024 remittance advice (RA).
If you haven’t received the increase, please contact the Ministry at SSContactCentre.MOH@ontario.ca
Starting January 1st, 2025
To further address compensation losses, the Ministry and the OMA have decided to temporarily increase physician payments by 9.95%. This will be combined with the 2.8% compensation increase from Year 3 of the 2021-2024 PSA, resulting in a combined increase of 13.03% to Fee-for-Service (FFS) payments from January 1, 2025, to March 31, 2025.
This increase will be a general ‘across-the-board (ATB)’ raise to the service fee codes.
The Schedule of Benefits will not change to reflect this temporary increase, but an update to the Fee Schedule Master (FSM) will help facilitate this. It will also appear on your Remittance Advice (RA) starting in February 2025.
The 9.95% increase includes:
- 9.95% “catch-up” increase to make up for the lower amounts physicians received over the period of the 2021-24 PSA.
- An additional 3% general increase for the 2024-25 year.
Source: Ontario Medical Association (OMA)
Here are the tables with the updated fee codes to reflect the increases:
What does this mean for physicians? Doctors will receive higher compensation for their patient visits, which also means that they need to pay closer attention to their Outside Use, as it will cost them more than in previous years due to the increasing service fees for patient visits.
Starting February 1st, 2025
If you are a physician who billed hospital technical fees and received a 2.8% increase in your November RA and Compensation increase reports, changes were made to exclude these technical services performed in hospital. Hospital technical fees were not eligible for the temporary 2.8% increase, and due to a processing issue, some physicians received this payment.
These payments would have been corrected on the February 2025 RA with the adjustment ‘2023-2024 Compensation Increase’.
Starting April 1st, 2025
For Year 3 (2023-2024) of the PSA, the 13.03% across-the-board increase will be replaced with the relativity allocation – 25% of the increase applied across-the-board and 75% allocated based on relativity, and will be paid on each monthly RA for services provided.
A model called the ‘Hybrid CANDI/RAANI Scores’ will determine this relativity allocation for Year 3 of the 2021-2024 PSA and Year 1 of the 2024-2028 PSA.
The CANDI model considers a physician’s daily income, overhead rate, return on education and hours worked per day. While the RAANI model takes into consideration annual income, clinic overhead costs, training, after hours adjustment and full-time equivalent (FTE).
This change was implemented to consider the costs that physicians incur through many factors, including the impact of inflation and gender equity.
This new implementation starts on April 1, 2025, with increases applied to all physician billings according to their specialty.
Starting May 1st, 2025
Physicians should keep an eye out for their May RAs as they will receive a 9.95% retroactive lump sum that will apply to services provided to patients from April 1 to December 31, 2024.
To determine the amount you will receive based on your specialty, use this calculator.
Starting October 1st, 2025
Physicians will receive a final payment reconciling for any amounts from April 1, 2024, to March 31, 2025, which will include group level funds like access bonus payments, OPAP and GMLP.
Starting April 1st, 2026
The combined increase from Year 3 and Year 1 will maintain the same 75/25 split but will be distributed based on a permanent relativity-based increase to fee codes in the Schedule of Benefits, as mentioned earlier in this blog.
Source: Ontario Medical Association (OMA)
Conclusion
With each new PSA announcement come important questions about physician compensation and medical billing in Ontario. By staying prepared and well-informed, you can navigate these changes effectively, ensuring accurate compensation while maintaining high-quality patient care.
Have questions?
For more information or if you have any questions regarding the new compensation increases, contact us below.
