With last year's introduction of the Health Sector Payment Transparency Act (HSPTA), which is part of Strengthening Quality and Accountability for Patients Act, 2017, (SQAPA), Ontario became the first province or territory in Canada that requires the medical industry, including medical device manufacturers and pharmaceutical companies, to disclose payments made to healthcare professionals and organizations. The goal of the legislation is to increase oversight and enable patients to make more informed decisions about their health care. This week, the Ministry of Health and Long Term Care released draft regulations that lay out how the province’s health-sector transparency legislation will work in practice. The proposed regulations include a very broad scope of individuals and organizations that fall under the umbrella of “recipients”, including regulated health professionals, their colleges, and their associations. However, the onus for reporting any transfers of value remains on the payors (i.e. the drug and devices makers), not the recipients.

New Proposed Regulations

The proposed regulations lay the groundwork needed to implement the reporting scheme envisioned by the HSPTA. The regulations seek to:

• Specify the groups of individuals and categories of organizations that are considered “recipients” under the HSPTA;
• Define “transfer of value” and “intermediary”
• Add community pharmacies and laboratories to the list of payors;
• Establish exemptions to the reporting requirements;
• Establish the monetary threshold for reporting;
• Establish the information, manner, and frequency of reporting;
• Outline the process for requesting corrections of posted information.

Some of the key proposals are outlined in more detail, below.

Recipients

Under the HSPTA, financial relationships between “payors” (i.e. entities within the medical industry, including drug and medical device companies) and “recipients” (i.e. health care providers). The draft regulations propose a list of individuals and organizations that should fall under the definition of “recipients” under the Act including:

• Health regulatory colleges;
• Members of a health regulatory college;
• Licensed long-term care homes;
• Hospitals or psychiatric facilities;
• Associations that advocate for the interest of health care professionals;
• A person fulfilling the requirements to become a member of a regulated health profession;
• Universities, colleges, and post-secondary institutions;
• And others.

Transfer of Value

The HSPTA defines a transfer of value (TOV) as a “transfer of value of any kind an includes a payment, benefit, gift, advantage, perquisite or any other prescribed benefit”. The proposed regulations seek to clarify what a transfer of value entails, and proposes including the following under the definition:

• Cash or cash equivalents;
• Compensation for services, including speaking fees or consultant fees;
• Event sponsorships;
• Membership fees;
• Facility or rental fees;
• Entertainment, social, and sporting events;
• Food and beverages;
• Travel and accommodation;
• Referral fees;
• Charitable contributions;
• And others.

Exemptions

The regulations propose exemptions to the reporting requirements laid out in the HSPTA.Under the regulations, payors would not be required to report the following transactions:

• Transactions with a dollar value of less than $10;
• Salary and benefits provided as part of employment;
• Samples and educational materials;
• Compensation for expert testimony;
• And other exemptions.

The proposed regulations can be reviewed, in full, here. They are open for comment until April 5.

What Does This Mean Moving Forward?

It remains to be seen how many of the proposed regulations are ultimately passed. Under the HSPTA, drug and device companies operating in Ontario will be required to collect and disclose payment details starting in 2019. A searchable database of payment information is expected to be online in the fall of 2020. Any companies who recurrently refuse to follow their obligations under the HSPTA can face fines up to $100,000 for each day of non-compliance. We will continue to follow developments in this ongoing legislative change and will provide updates on how these changes may impact our clients as soon as more information is available. At Wise Health Law, we monitor trends and developments in health care and health law so that we can provide outstanding and forward-thinking legal advice to each of our clients. We regularly provide exceptional guidance on health law matters to regulated health professionals, regulated health professional associations, public hospitals, and other health-care organizations across the province. Contact us online, or at 416-915-4234 for a consultation.

To learn more about Wise Health Law and our services, please contact us!