Regulation - LGIC

Implementing a Health Network System Processing Fee

Regulation Number(s):
O. Reg. 201/96 (ODBA)
Instrument Type:
Regulation - LGIC
Bill or Act:
Ontario Drug Benefit Act (ODBA)
Summary of Decision:
not approved
Analysis of Regulatory Impact:
The ministry does not anticipate any additional administrative costs to business.
The Health Network System is a province-wide computer system which links Ontario pharmacies and some doctors directly to the ministry. The HNS helps with the following:
o Expedited processing of Ontario Drug Benefit (ODB) Program claims;
o Guidance for the proper and safe dispensing of drugs in Ontario;
o Improve communication between pharmacies and the ministry; and
o Analytics to identify ways to improve the ODB Program.

In 2017/18 there were over 174 million accepted claims for processing and payment. The ministry currently bears the entire cost these services, even though pharmacies derive significant benefit from the processing and payment of drug claims.

The proposed changes would impact all pharmacies. The administration fee would result in reduced payment to pharmacies of between $1,000 and $9,000 annually.

Ontarians are not expected to be directly impacted by the proposed changes to introduce an administration fee. Ontarians could be impacted if pharmacies try to recoup some lost revenue through increased patient charges. Pharmacies may charge up to $2 or $6.11 copayment per drug claim (depending on the category of ODB program recipient); some pharmacies have chosen to waive $2.

Further Information:
Proposal Number:
Posting Date:
April 25, 2019
Summary of Proposal:
On April 11, 2019 the government tabled its 2019 Budget. This year's budget reflects the outcomes of a comprehensive multi-year planning process that built on the findings of EY Canada's line-by-line review, and the ideas identified in the Planning for Prosperity Survey and the Big Bold Ideas Challenge. The government conducted a thorough review of all government programs in order ensure investments are sustainable and modernized. The review is also meant to ensure that duplication is eliminated, and valuable programs and services are sustainable and delivering outcomes for the people of Ontario.
The Ministry of Health and Long-Term Care (MOHLTC) is proposing amendments to the regulation under the Ontario Drug Benefit Act that, if approved, would change pharmacy reimbursement policies to introduce an administration fee for the processing and payment of drug claims and establish a smarter, more efficient and fiscally responsible system to deliver publicly-funded health benefits.
The proposed regulatory amendments are conditional on the introduction and passage of legislative amendments relating to the Ontario Drug Benefit Act.
Together, the proposed legislative and regulatory amendments would introduce an administration fee of $0.10 for the processing and payment of drug claims. This fee would be deducted from each claim for payment submitted by a pharmacy for a drug funded under the Ontario Drug Benefit Program.
The government is committed to embedding a focus on efficiencies into future multi-year planning processes and into the culture of the Ontario Public Service more broadly. To that end, the government will undertake program evaluations on a permanent and ongoing basis to ensure government services are meeting people's needs and to identify ways to modernize programs and save money.
Contact Address:
Ministry of Health & Long-Term Care
Drugs and Devices Division
5700 Yonge St., 3rd Floor
Toronto ON M2M 4K5
Effective Date:
July 1, 2019