Enhancing Transparency in Canadian Healthcare

11.15.17 | By Prianka Patel

On September 27, 2017, the Ontario Minister of Health, Eric Hoskins, introduced Bill 160: Strengthening Quality and Accountability for Patients Act 2017 to strengthen openness and transparency within the healthcare industry.

One of the provisions of Bill 160 is the Health Sector Payment Transparency Act (the “Act”), which requires that the financial relationships that exist within Ontario’s health care system be reported and published. If adopted, this legislation would be the first of its kind in Canada and would be similar to the requirements set forth under the U.S. Physician Payments Sunshine Act.The Act would require that transfers of value provided directly or indirectly by a payor[1] to a recipient[2] be reported to the Minister of Health (including payments, gifts, dinners, trips and other benefits). Intermediaries or affiliates involved in the transaction may also be required to report the transfer.

The Act would require that the following information be reported:

1. The name of the parties to the transaction including:

· If a party is a business, its legal and operating names; and

· If a party is an individual, the individual’s name, profession or title and any other prescribed identifying information.

2. If requested by the Minister from an intermediary or an affiliate of an intermediary under subsection (3), the source of the transfer of value.
3. The parties’ respective business addresses.
4. The date of the transfer of value.
5. The transfer of value’s dollar value or, in the case of a non-monetary transfer of value, its approximate dollar value.
6. A description of the transfer of value, including the reasons for it.
7. Any other prescribed information.

The frequency and method of reporting are yet to be announced, however payors will be responsible for collecting any necessary information from the recipient in order to make the required disclosures to the Minister of Health.

In an effort to maintain compliance and promote transparency within the healthcare industry, the Act would provide several rights to the Minister of Health. Firstly, the Minister would retain the right to disclose and publish the information it receives from the payor, including personal information, on an online database. Next, the Minister would be permitted to allow inspectors[3] to enter a premise without a warrant, at any reasonable time, if there is reason to believe that pertinent financial records or accounts may be located there. If the Minister or an inspector has any reason to believe that a payor has failed to comply with the Act, they would have the ability to serve a compliance order to that individual. Any individual who is served this compliance order would have fourteen (14) days to make the required submissions. Failure to do so would result in substantial fines[4] as well as publication of the individual or corporation’s name and report of their non-compliance on an online database.

While the legislation approval process is in its infancy, the proposed requirements already suggest that companies will need to have a high level of internal operational readiness in order to comply with them. This includes the ability to understand where spend occurs within the organization, as well as designing an efficient process for tracking and eventually reporting those transfers of value. We anticipate the Ontario legislation, if approved, to come into effect in 2019 with 2019 transfers of value being reported in 2020. With this in mind, it is critical that companies begin to establish their internal processes in a compliant manner and assess their readiness in advance of the passage of the legislation.

Outside of Ontario, other provinces are paying close attention to the proposed legislation. British Columbia may follow Ontario’s lead. NDP Health Minister Adrian Dix stated, “I’m going to be carefully looking at the Ontario bill. In general, I agree with it and we’ll be looking perhaps to develop something similar here.”

For more information on how to prepare your organization or to discuss our experience in implementing transparency solutions, please reach out to GMerariu@ca.imsbrogan.com.

To learn more about Canada’s evolving pharmaceutical compliance landscape and its potential effects on your business, read our recent blog post. You can also read Prianka’s article from August that shares her Insights from PCC Canada and a Look at Innovative Medicines Canada’s Voluntary Reporting Framework.

 

The information contained in this article has been prepared for educational and informational purposes only. It does not constitute legal advice, nor does it substitute for legal advice. 

 

[1] A payor is defined as any person who provides a transfer of value to a recipient and is: a) a manufacturer selling a medicinal product; b) a person who fabricates, produces, processes, assembles, packages or labels a medical product on behalf of a manufacturer; c) a wholesaler, distributor, importer, or broker of a medicinal product; d) a marketing firm or person who markets or promotes a medical product; e) a person who organizes continuing education on behalf of a manufacturer; or f) a person otherwise prescribed in regulation.

[2] A recipient is a person, prescribed by regulation, who receives a transfer of value.

[3] The Minister may appoint, in writing, any person as an inspector for the purposes of this Act.

[4] The Act specifies fines for corporations of CDN$50K/day for the first offence, and CDN$100K/day for the second and subsequent offences. The Act specifies fines for individuals as up to CDN$10K/day for the first offence, and up to CDN$25K/day for the second and subsequent offences.