Global News has confirmed with sources within the military, provincial and federal governments that Ottawa made major changes this spring to the fees it reimburses to hospitals when they provide health care to military members – and that’s leading to fears some members could be denied health care services.
Under the Canada Health Act and provincial health acts, members of the military are not eligible for public health coverage under provincial plans.
Instead, the federal government is constitutionally responsible for providing comparable medical care to all members, although more advanced medical care like surgery or MRIs is provided at the same hospitals used by civilians.
The military then reimburses the cost of providing those services to the hospital.
But sources tell Global News that the Department of National Defence ordered a cut to military healthcare spending earlier this year, and the fees reimbursed to hospitals for seeing military patients was one of the first items on the chopping block.
Set fees for services are laid out by provincial health plans.
For example, Ontario has one set of rates for services to provincial residents — those covered through OHIP — and uses a set of fees laid out by the Ontario Medical Association for services not covered by OHIP, which would apply to military members not covered by the provincial plan.
The federal government used to reimburse the cost of those at Ontario Medical Association rates, which can be roughly three times more expensive than OHIP rates.
Physicians could bill $105 for a psychiatric assessment under OHIP fees, for example — but under the OMA fees, they can charge $240 for providing that same service to those not insured through provincial health plans.
What those changes mean concretely is that the military will cover less of the fees physicians charge for services, leaving hospitals on the hook for millions of dollars.
Documents obtained by Global News show many of those hospitals are already bracing for the hit.
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Pembroke Regional Hospital, located near the Canadian Forces Base at Petawawa, projects a shortfall of $3.4 million as a result of the change.
Sources say at least one hospital is no longer accepting military patients for some specialized services.
The Kingston Health Services Centre, located near the base at Kingston as well as the Royal Military College of Canada, estimates a shortfall of $2.3 million.
In total, Ontario hospitals are estimated to take a hit of at least $10 million.
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In August, Ontario Health Minister Christine Elliott wrote to her federal counterpart, Ginette Petitpas Taylor, as well as Defence Minister Harjit Sajjan, to express her concerns.
“I am sure we can agree that our brave men and women of our Canadian Armed Forces and veterans make countless sacrifices to protect our country and uphold our democratic values. They deserve our respect and gratitude for keeping us safe,” Elliott writes in her letter, a copy of which was obtained by Global News.
“That’s why I was surprised and extremely disappointed to learn that the federal government, through the Canadian Armed Forces, is attempting to unilaterally impose a new fee schedule for the delivery of health care to serving members and veterans. These changes, which were communicated without consultation, could result in either undue burden on hospitals or, worse yet, military members and veterans being charged to access health care services. Neither of these options are acceptable.”
A spokesperson for Alberta Health Minister Tyler Shandro also said that province had not been consulted and would be pushing the Department of National Defence to reconsider the change.
“We recently received new rates for payment by the Department of National Defense (DND) for hospital services provided to eligible Canadian Armed Forces (CAF) members,” said Steve Buick, press secretary to the minister.
“The new rates do not accurately reflect the full cost of delivering health care to CAF members. We were not consulted about the change.”
He added the new rates “will likely lead to a shortfall of at least $2 million in revenue to Alberta Health Services versus their actual costs” and added they will also lead to an income reduction for physicians.
Buick also noted the change had been discussed among provincial and territorial deputy health ministers at a recent meeting, and there are plans for the provinces to issue a joint statement of concern.
A spokesperson for Quebec’s Ministère de la Santé et des Services Sociaux said the province is currently in negotiations on the matter with the federal government, and declined to comment.
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Daniel Lebouthiller, a spokesperson for the Department of National Defence, said the military is engaging with the provinces and territories.
“The Canadian Forces Health Services Group has been actively working with provincial and territorial governments, and civilian hospitals and institutions with respect to recent billing changes for Canadian Armed Forces (CAF) members who receive health care from non-military facilities or providers,” he said.
“The CAF will continue to ensure that all its eligible members have access to appropriate health care, whether it is provided directly by the CAF or by non-military facilities or providers.”
Military sources say the health care budget has been ballooning for years and they are under pressure to bring down the costs.
The question being raised now by sources is whether those cuts could lead to military members being denied services or having to pay a greater amount to access the services they need.
“It all kind of depends on the way things get structured out,” said David Perry, vice president of the Canadian Global Affairs Institute and a defence expert.
“Because we tend to locate military members in areas that are more rural, more remote, harder to get specialized talent, the end result in this could be that you do have some increases in the demand for service, folks that are outside of the major metropolitan areas having to move, to travel to seek specialized care.”
He added that he isn’t surprised to hear the change isn’t landing well.
“For a Department of Defence that’s spent several years saying its people are its priority, it’s going to look bad if one of the areas where there is an effort to reduce spending is on the health side,” he said.
For more details, tune in to Global National at 6:30 p.m. ET.