Canada Health Act

Overview

"The principles of the Canada Health Act began as simple conditions attached to federal funding for medicare. Over time, they became much more than that. Today, they represent both the values underlying the health care system and the conditions that governments attach to funding a national system of public health care. The principles have stood the test of time and continue to reflect the values of Canadians."

(Roy J. Romanow, Q.C. November, 2002)

What is the Canada Health Act?

The Canada Health Act (CHA or the Act) is Canada's federal legislation for publicly funded health care insurance.

The Act sets out the primary objective of Canadian health care policy, which is "to protect, promote and restore the physical and mental well-being of residents of Canada and to facilitate reasonable access to health services without financial or other barriers."

The CHA establishes criteria and conditions related to insured health services and extended health care services that the provinces and territories must fulfill to receive the full federal cash contribution under the Canada Health Transfer (CHT).

The aim of the CHA is to ensure that all eligible residents of Canada have reasonable access to insured health services on a prepaid basis, without direct charges at the point of service for such services.

Key Definitions under the CHA

Insured persons are eligible residents of a province or territory. A resident of a province is defined in the CHA as "a person lawfully entitled to be or to remain in Canada who makes his home and is ordinarily present in the province, but does not include a tourist, a transient or a visitor to the province."

Persons excluded under the CHA include serving members of the Canadian Forces or Royal Canadian Mounted Police and inmates of federal penitentiaries.

Insured health services are medically necessary hospital, physician and surgical-dental services provided to insured persons.

Insured hospital services are defined under the CHA and include medically necessary in- and out- patient services such as accommodation and meals at the standard or public ward level and preferred accommodation if medically required; nursing service; laboratory, radiological and other diagnostic procedures, together with the necessary interpretations; drugs, biologicals and related preparations when administered in the hospital; use of operating room, case room and anaesthetic facilities, including necessary equipment and supplies; medical and surgical equipment and supplies; use of radiotherapy facilities; use of physiotherapy facilities; and services provided by persons who receive remuneration therefore from the hospital, but does not include services that are excluded by the regulations.

Insured physician services are defined under the Act as "medically required services rendered by medical practitioners." Medically required physician services are generally determined by physicians in conjunction with their provincial and territorial health insurance plans.

Insured surgical-dental services are services provided by a dentist in a hospital, where a hospital setting is required to properly perform the procedure.

Extended health care services as defined in the CHA are certain aspects of long-term residential care (nursing home intermediate care and adult residential care services), and the health aspects of home care and ambulatory care services.

Requirements of the Canada Health Act

The Canada Health Act (CHA or the Act) contains the following nine requirements that the provinces and territories must fulfill to qualify for the full federal cash contributions:

• five program criteria that apply only to insured health services;
• two conditions that apply to insured health services and extended health care services; and
• extra-billing and user charge provisions that apply only to insured health services.

The Criteria

1. Public Administration (section 8)
   The public administration criterion, set out in section 8 of the CHA, applies to provincial and territorial health care insurance plans. The intent of the public administration criterion is that the provincial and territorial health care insurance plans are administered and operated on a non-profit basis by a public authority, which is accountable to the provincial or territorial government for decision making on benefit levels and services, and whose records and accounts are publicly audited.
   
   
2. Comprehensiveness (section 9)
   The comprehensiveness criterion of the CHA requires that the health care insurance plan of a province or territory must cover all insured health services provided by hospitals, physicians or dentists (i.e., surgical-dental services which require a hospital setting) and, where the law of the province so permits, similar or additional services rendered by other health care practitioners.
   
   
3. Universality (section 10)
   Under the universality criterion, all insured residents of a province or territory must be entitled to the insured health services provided by the provincial or territorial health care insurance plan on uniform terms and conditions. Provinces and territories generally require that residents register with the plans to establish entitlement. Newcomers to Canada, such as landed immigrants or Canadians returning from other countries to live in Canada, may be subject to a waiting period by a province or territory, not to exceed three months, before they are entitled to receive insured health services.
   
   
4. Portability (section 11)
   Residents moving from one province or territory to another must continue to be covered for insured health services by the "home" jurisdiction during any waiting period imposed by the new province or territory of residence. The waiting period for eligibility to a provincial or territorial health care insurance plan must not exceed three months. After the waiting period, the new province or territory of residence assumes responsibility for health care coverage.
   
   Residents who are temporarily absent from their home province or territory or from Canada, must continue to be covered for insured health services during their absence. This allows individuals to travel or be absent from their home province or territory, within a prescribed duration, while retaining their health insurance coverage.
   
   The portability criterion does not entitle a person to seek services in another province, territory or country, but is intended to permit a person to receive necessary services in relation to an urgent or emergent need when absent on a temporary basis, such as on business or vacation.
   
   If insured persons are temporarily absent in another province or territory, the portability criterion requires that insured services be paid at the host province's rate. If insured persons are temporarily out of the country, insured services are to be paid at the home province's rate.
   
   Prior approval by the health care insurance plan in a person's home province or territory may also be required before coverage is extended for elective (non-emergency) services to a resident while temporarily absent from their province or territory.
   
   
5. Accessibility (section 12)
   The intent of the accessibility criterion is to ensure insured persons in a province or territory have reasonable access to insured hospital, medical and surgical-dental services on uniform terms and conditions, unprecluded or unimpeded, either directly or indirectly, by charges (user charges or extra-billing) or other means (e.g., discrimination on the basis of age, health status or financial circumstances). In addition, the health care insurance plans of the province or territory must provide:
   
   • reasonable compensation to physicians and dentists for all the insured health services they provide; and
   • payment to hospitals to cover the cost of insured health services.
     
     
   Reasonable access in terms of physical availability of medically necessary services has been interpreted under the Act using the "where and as available" rule. Thus, residents of a province or territory are entitled to have access on uniform terms and conditions to insured health services at the setting "where" the services are provided and "as" the services are available in that setting.

The Conditions

1. Information (section 13(a)) - the provincial and territorial governments shall provide information to the Minister of Health as may be reasonably required, in relation to insured health services and extended health care services, for the purposes of the CHA.
2. Recognition (section 13(b)) - the provincial and territorial governments shall recognize the federal financial contributions toward both insured and extended health care services.

Extra-billing and User Charges

The provisions of the CHA, that discourage extra-billing and user charges for insured health services in a province or territory, are outlined in sections 18 to 21. If it can be determined that either extra-billing or user charges exist in a province or territory, a mandatory deduction from the federal cash transfer to that province or territory is required under the Act. The amount of such a deduction for a fiscal year is determined by the federal Minister of Health based on information provided by the province or territory according to the Extra-billing and User Charges Information Regulations described below.

Extra-billing (section 18)

Under the CHA, extra-billing is defined as the billing for an insured health service rendered to an insured person by a medical practitioner or a dentist (i.e., a surgical-dentist providing insured health services in a hospital setting) in an amount in addition to any amount paid or to be paid for that service by the health care insurance plan of a province or territory. For example, if a physician were to charge patients any amount for an office visit that is insured by the provincial or territorial health insurance plan, the amount charged would constitute extra-billing. Extra-billing is seen as a barrier or impediment for people seeking medical care and is therefore, contrary to the accessibility criterion.

User Charges (section 19)

The CHA defines user charges as any charge for an insured health service other than extra-billing that is permitted by a provincial or territorial health care insurance plan and is not payable by the plan. For example, if patients were charged a facility fee for receiving an insured service at a hospital or clinic, the fee would be considered a user charge. User charges are not permitted under the Act because as is extra-billing, they constitute a barrier or impediment to access.

Other Elements of the Act

Regulations (section 22)

Section 22 of the CHA enables the federal government to make regulations for administering the Act in the following areas:

• defining the services included in the CHA definition of "extended health care services."
• prescribing which services to exclude from hospital services;
• prescribing the types of information that the federal Minister of Health may reasonably require from a province or territory to qualify for a full federal transfer; and
• prescribing how provinces and territories are required to recognize the CHT in their documents, advertising or promotional materials.

The only regulations in force under the Act are the Extra-billing and User Charges Information Regulations, which require the provinces and territories to provide estimates of extra-billing and user charges before the beginning of a fiscal year so that appropriate penalties can be levied, as well as financial statements showing the amounts actually charged so that reconciliations with the actual deductions can be made. (For reference purposes, view the office consolidation of the Extra Billing and User Charges Information Regulations of these regulations).

Penalty Provisions of the Canada Health Act

Mandatory Penalty Provisions

Under the CHA, provinces and territories that allow extra-billing and user charges are subject to mandatory dollar-for-dollar deductions from the federal transfer payments under the Canada Health Transfer. For example, if it has been determined that a province has allowed $500,000 in extra-billing by physicians, the federal transfer payments to that province would be reduced by that amount.

Discretionary Penalty Provisions

Non-compliance with one of the five criteria or two conditions of the CHA is subject to discretionary penalties. The amount of any deduction from federal transfer payments under the Canada Health Transfer is based on the gravity of the default.

The CHA sets out a consultation process that must be undertaken with the province or territory before discretionary penalties can be levied. To date, the discretionary penalty provisions of the Act have not been applied.

Excluded Services and Persons

Although the CHA requires that insured health services are provided to insured persons in a manner that is consistent with the criteria and conditions set in the Act, not all Canadian residents or health services fall under the scope of the Act. There are two categories of exclusion for insured services:

• services that fall outside the definition of insured health services; and
• certain services and groups of persons are excluded from the definitions for insured services and insured persons.

These exclusions are discussed below.

Non-Insured Health Care Services

In addition to the medically necessary insured hospital and physician services covered by the CHA, provinces and territories also provide a range of programs and services outside the scope of the Act. These are provided at provincial and territorial discretion, on their own terms and conditions, and vary from one province or territory to another. Additional services that may be provided include pharmacare, ambulance services and optometric services.

The additional services provided by provinces and territories may be targeted to specific population groups (e.g., children, seniors or social assistance recipients), and may be partially or fully covered by provincial and territorial health insurance plans.

A number of services provided by hospitals and physicians are not considered medically necessary and thus, are not insured under provincial and territorial health insurance legislation. Uninsured hospital services for which patients may be charged include preferred hospital accommodation unless prescribed by a physician, private duty nursing services, and the provision of telephones and televisions. Uninsured physician services for which patients may be charged include telephone advice, the provision of medical certificates required for work, school, insurance purposes and fitness clubs, testimony in court and cosmetic services.

Excluded Persons

The CHA definition of "insured person" excludes members of the Canadian Forces, persons appointed to a position of rank within the Royal Canadian Mounted Police, persons serving a prison term in a federal penitentiary, and persons who have not completed a minimum period of residence in a province or territory (a period that must not exceed three months). In addition, the definition of "insured health services" excludes services to persons provided under any other Act of Parliament (e.g., foreign refugees) or under the workers' compensation legislation of a province or territory.

The exclusion of these persons from insured health service coverage predates the adoption of the CHA and is not intended to constitute differences in access to publicly insured health care.

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Policy Interpretation Letters

There are two key policy statements that clarify the federal position on the CHA . These statements have been made in the form of ministerial letters from former federal Ministers responsible for health, to their provincial and territorial counterparts.

Epp Letter

In June 1985, approximately one year following the passage of the CHA in Parliament, Jake Epp, the federal minister responsible for Health at the time, wrote to his provincial and territorial counterparts to set out and confirm the federal position on the interpretation and implementation of the CHA.

Minister Epp's letter followed several months of consultation with his provincial and territorial counterparts. The letter sets forth statements on the federal policy intent, which clarify the criteria, conditions and regulatory provisions of the CHA. These clarifications have been used by the federal government in assessing and interpreting compliance with the Act. The Epp letter continues to be an important reference for interpreting the Act.

Marleau Letter - Federal Policy on Private Clinics

Between February 1994 and December 1994, a series of seven federal-provincial-territorial meetings dealing wholly or in part with private clinics took place. At issue was the growth of private clinics providing medically necessary services funded partially by the public system and partially by patients and its impact on Canada's universal, publicly funded health care system.

At the Federal-Provincial-Territorial Health Ministers Meeting of September 1994 in Halifax, all ministers of health present, except for Alberta's health minister, agreed to "take whatever steps are required to regulate the development of private clinics in Canada."

On January 6, 1995, Diane Marleau, the federal minister responsible for Health, wrote to all provincial and territorial ministers of health, to announce the new Federal Policy on Private Clinics. The Minister's letter provided the federal interpretation of the CHA as it relates to the issue of facility fees charged directly to patients receiving medically necessary services at private clinics. The letter stated that the definition of "hospital" contained in the CHA, includes any public facility that provides acute, rehabilitative or chronic care. Thus, when a provincial or territorial health insurance plan pays the physician fee for a medically necessary service delivered at a private clinic, it must also pay the facility fee or face a deduction from federal transfer payments.

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Dispute Avoidance and Resolution Process

In April 2002, the then-federal Health Minister A. Anne McLellan outlined in a letter to her provincial and territorial counterparts a Canada Health Act Dispute Avoidance and Resolution process, which was agreed to by provinces and territories, except Quebec. The process meets federal, provincial and territorial interests of avoiding disputes related to the interpretation of CHA principles, and when this is not possible, resolving disputes in a fair, transparent and timely manner.

The process includes the dispute avoidance activities of government-to-government information exchange; discussions and clarification of issues, as they arise; active participation of governments in ad hoc federal-provincial-territorial committees on Canada Health Act issues; and Canada Health Act advance assessments, upon request.

Where dispute avoidance activities are unsuccessful, dispute resolution activities may be initiated, beginning with government-to-government fact-finding and negotiations. If these are unsuccessful, either Minister of Health involved may refer the issues to a third-party panel to undertake fact-finding and provide advice and recommendations.

The federal Minister of Health has the final authority to interpret and enforce the CHA. In deciding whether to invoke the non-compliance provisions of the Act, the Minister will take the panel's report into consideration.