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Medical Law - Integrated Community Health Services Centres Act (ICHSA). Dixie X-Ray Associates Ltd. v. Ontario (Minister of Health)
In Dixie X-Ray Associates Ltd. v. Ontario (Minister of Health) (Ont Divisional Ct, 2025) the Divisional Court allowed an appeal, this from a decision of the HSARB that upheld decisions of the Minister of Health that required the appellant "to reimburse the Minister for payments totalling over $1.1 million for facility fees that Dixie billed to the Minister for radiology services".
The court considers the recently-repealed Independent Health Facilities Act (IHFA), and transition provisions where the IHFA still applied despite replacement by the Integrated Community Health Services Centres Act (ICHSA) - here in passages which set out steps taken in an 'investigative audit' by the Ministry of Health:II. Legislative scheme
[5] The Decision under appeal relates to facility fees that Dixie billed to the Minister in the years 2016 to 2019 under the Independent Health Facilities Act, R.S.O. 1990, c. I.3 (the “IHFA” or “Act”). During that period, Dixie’s diagnostic imaging clinics were licenced as independent health facilities (“IHFs”) under s. 3(1) of the IHFA.
[6] On September 25, 2023, the IHFA was repealed and replaced by the Integrated Community Health Services Centres Act, 2023, S.O. 2023, c. 4, Sched. 1 (the “ICHSA”). The IHFA as it read immediately prior to its repeal continues to apply to any proceeding not finally determined on that date, including the facility fees at issue here: see ICHSA, s. 62(1).
[7] The IHFA set out the legislative regime governing the licensing, funding and quality of services provided by IHFs. The IHFA provides for the payment of facility fees by the Minister directly to IHFs for overhead costs associated with the provision of an “insured service”, being a medical service insured under the Health Insurance Act, R.S.O. 1990, c. H.6: see IHFA, s. 1(1). The facility fees that are eligible for payments to IHFs are listed in the Schedule of Facility Fees for Independent Health Facilities (the “Schedule” or “SOFF”), published on the website of the Ministry of Health (the “Ministry”).[1]
[8] The IHFA requires IHFs to promptly prepare and maintain records to support their facility fee claims, including whether a service provided is medically or therapeutically necessary: IHFA, ss. 24.1(1)-24.1(4). In the absence of such records, it is presumed that that amount payable for the service is nil: IHFA, s. 24.1(5).
[9] Under the IHFA and the Schedule, the IHFs bill facility fees to the Minister, which are paid on an honour system. Facility fees are paid after standard computerized checks are performed. The payment of facility fees is not an acknowledgment that the IHF met the requirements for the payment: see Schedule, General Preamble, s. 3. The Minister retains the authority under s. 24.3 of the IHFA to conduct post-payment reviews of claims that have been submitted. Under s. 24.3(4), the Minister may require the reimbursement of an amount paid to the IHF if the Minister is of the opinion that a circumstance described in s. 24.3(1) exists.
[10] Section 24.3 provides in part:Refusal to pay, pay reduced amount or substitute amount: circumstances
24.3 (1) Under any of the following circumstances, the Minister may, with respect to a claim for payment for a service provided by a licensee or potential licensee, refuse to pay for the service, pay a reduced amount for the service, pay for the service the Minister considers to have been provided and not the service described in the claim that was submitted or require reimbursement of the amount paid for the service:
1. If the Minister is of the opinion that any or all of the following apply:
i. all or part of the service was not in fact rendered,
ii. the service has not been rendered in accordance with a requirement under this Act, or
iii. there is an absence of a record described in section 24.1.
2. If the Minister is of the opinion that the nature of the service is misrepresented, whether deliberately or inadvertently.
3. If the Minister is of the opinion that all or part of the service was not provided in accordance with prescribed quality and standards or, in the absence of regulations, not provided in accordance with generally accepted quality and standards for the facility and the service or services to be provided in the facility.
4. In such other circumstances as may be prescribed.
Statistical methods
(2) The Minister may, in determining amounts to be reimbursed under this section, use a random sample with a reasonable confidence interval of claims submitted by the licensee in respect of a service during a specified period of time and calculate the amount to be reimbursed for that service for that period or a portion of that period by assuming the results observed in the random sample are representative of all of the claims submitted by the licensee for that service during the period in question.
...
Post-payment notice that reimbursement is required
(4) Where the Minister has made a payment to a licensee or potential licensee and the Minister is of the opinion that a circumstance described in subsection (1) exists and that reimbursement to the Minister is required, the Minister shall notify the licensee or potential licensee of the decision to require reimbursement and the amount of reimbursement that is required.
[Emphasis added.] III. Ministry’s audit of facility fee payments to Dixie
[11] Dixie provides diagnostic imaging services at several clinics that are licensed as IHFs (the “Dixie IHFs”). Each Dixie IHF has its own billing number that it uses to submit and receive payment from the Ministry for facility fees.
[12] Each facility fee that is eligible for payment is assigned a facility fee code set out in the Schedule. As noted in the Decision, at para. 20, the facility fee codes that are relevant for this matter are found in the Schedule under the heading “Diagnostic Ultrasound”:a. Code J182: extremities [limb] ultrasound, “excluding vascular study”: see Schedule, under “Miscellaneous” subheading; and
b. Code J193: peripheral [blood] vessel assessment (a type of vascular study), using a “doppler scan or B scan, unilateral”: see Schedule, under “Vascular Systems” subheading. [13] During a routine review of facility fee claims data in early 2019, a medical advisor in the Ministry noticed that five Dixie IHFs appeared to be provincial outliers regarding the frequency that facility fee code J193 was billed for the same patient on the same day as facility fee code J182: Decision, at paras. 23-25. The matter was referred to the Ministry’s Provider Audit and Adjudications Unit: Decision, at para. 26. The Ministry requested that each of those IHFs provide a statistically significant, random sample of medical records related to fees paid for facility fee codes J182 and J193 between April 1, 2016 and July 23, 2019 (the “Review Period”): see IHFA, s. 24.3(2). Dixie provided the requested records to the Ministry: Decision, at paras. 27-28.
[14] The Ministry conducted an audit pursuant to the IHFA by reviewing the records that Dixie provided. As part of the audit, the Ministry asked Dixie for a written explanation why those facility fee codes were billed together when, in the records examined, “there were no requests for peripheral vessel assessments from the referring physicians and there were no images or reports to support that peripheral vessel assessments were rendered”: Decision, at para. 29. Dixie responded that it used Doppler technology to examine blood flow while completing an extremities ultrasound “to enhance images and assist in the diagnosis and evaluation of a number of conditions”: Decision, at para. 30.
[15] Based on its review, including consideration of Dixie’s written explanation, the Ministry concluded that for the Review Period, none of the examined medical records showed that a peripheral vessel assessment had been performed in any case: Decision, at para. 31. The review also confirmed the Ministry’s view that Dixie was a provincial outlier in that it billed J193 (peripheral vessel assessment) over 95 percent of the time when it billed for J182 (extremities ultrasound). For the rest of the province, facility fee codes J193 and J182 were billed together by IHFs in less than ten percent of cases: Decision, at para. 32.
[16] Based on the audit review of the documents Dixie submitted, the Ministry concluded that there was no documentary support to justify performing a separate peripheral assessment nearly every time Dixie performed an extremities ultrasound. The Ministry considered such documentary support to be necessary to claim facility fees for both services for the same patient on the same day: Decision, at para. 33.
[17] In letters to each of the Dixie IHFs dated August 11, 2022 (the “Ministry’s Decisions”), the Ministry notified Dixie that the Minister had determined pursuant to s. 24.3(4) of the IHFA that reimbursement was required for payment of facility fees in the Review Period for facility fee code J193 when billed with facility fee code J182 for the same patient on the same service date. The Ministry determined that each of the Dixie IHFs had been overpaid and the total amount required to be reimbursed by all five Dixie IHFs combined was $1,107,692.96.
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