Canada: Ontario Government Re-Introduces Broader Public Sector Accountability Legislation Affecting Health Sector Organizations

On July 8, 2014, the Ontario government re-introduced Bill 8, formerly Bill 179, which proposes to amend several laws affecting health sector organizations. If enacted, Bill 8 will expand government oversight of broader public sector organizations including hospitals, community care access corporations, long-term care homes and air ambulance service providers. The government has also indicated that, if the Bill passes second reading, it intends to propose a change that will extend the Bill's application to Ornge, LHINs, eHealth and Cancer Care Ontario, among other government agencies.

New Compensation  Restraints

Bill 8 creates a new law called the Broader PublicSector Executive Compensation Act ("BPSECA") that will apply to designated broader public sector ("BPS") employers, including hospitals and community care access corporations ("CCACs"). BPSECA would authorize the government to make regulations establishing "compensation frameworks" that could impose compensation restraints for "designated executives," defined as persons who make or could potentially make at least $100,000 per year and who are: 

  • the head of an organization;
  • vice president or other executive (e.g., chief operating officer, chief administrative officer or chief information officer), regardless of title; or
  • a director of education or supervisory officer of a school board.

Full-time members of a board of directors, board of governors or board of trustees are not designated executives  under BPSECA.

The government could impose compensation frameworks to create limits on any aspect of an employer's compensation plan (salary, benefits, bonuses, perquisites) and these could be applied to all designated executives, a limited class of executives, or even a specific person. Any new limit imposed by  a compensation framework would not reduce current executives' compensation as long as they remain in their current positions. However, increases to those executives' compensation would not be permitted to the extent that the increase is contrary to an applicable compensation framework.

BPSECA contains several enforcement mechanisms to ensure that BPS organizations comply with their obligations under the Act:

  • new government power to require an organization to submit reports showing their compliance with applicable compensation frameworks
  • new audit power that permits the government to appoint a public accountant to confirm an organization's compliance with applicable compensation frameworks
  • new offences resulting in a fine of up to $5,000 for:

    • wilfully failing to provide a report, statement or attestation under the Act;
    • wilfully providing a false report, statement or attestation under the Act; or
    • obstructing an auditor in the performance of their auditing functions under the Act.
  • new liability for "overpayments":

    • the executive to whom an overpayment was made can be held personally liable for a corresponding debt to the organization; and
    • the organization that made an overpayment can be held liable for a corresponding debt to the Crown, which can be deducted from future financing.

New Accountability Measures Under The Broader Public Sector Accountability  Act

Executive compensation at hospitals and other  BPS organizations has been restrained under the Broader Public Sector Accountability Act ("BPSAA") since March 31, 2012. Bill 8 builds on existing measures, giving the government the power to issue directives requiring "designated broader public sector organizations" (including hospitals and CCACs) to prepare and publish business plans and other business or financial documents, and the ability to issue guidelines with respect to the preparation and publication of these documents by "publicly-funded organizations" (including long-term care homes).

New Requirements Regarding Preservation Of Records For Boards Of Health

Bill 8 amends the Municipal Freedom of Informationand Privacy Act requiring "institutions," which includes boards of health, to put reasonable measures in place to preserve records within their custody and control. The Bill also creates a new offence where a person has altered, concealed or destroyed a record in order to deny a right of access to the record or the information contained in it.

New Oversight For Air Ambulance Service  Providers

Changes to the Ambulance Act were previously proposed as part of Bill 11, Ambulance Amendment Act (Air Ambulances), 2014, which died on the order paper when a provincial election was called last spring. The proposed changes were re-introduced as part of Bill 8, which amends the Ambulance Actto allow the Minister to designate an air ambulance service provider, potentially causing the designated entity to be subject to increased regulation with respect to its performance and corporate affairs, among other things.

Bill 8 also proposes to give the government power to appoint a special investigator to investigate and report to the Minister on:

  • the quality of the administration and management of a designated air ambulance service provider;
  • the quality of the care and treatment provided by a designated air ambulance service provider;
  • the service provided by a designated air ambulance service provider; or
  • any other matter relating to a designated air ambulance service provider.

The investigator's report is provided to the chair of the board of directors of the air ambulance service provider.

To complement these new investigative powers, Bill 8 creates whistle-blower protection such that no action may be taken against a person who has disclosed information to an investigator or the Minister, for example.

Finally, the government will have the power to appoint a "supervisor" who would have the exclusive right to exercise all of the powers of the board of directors of a designated air ambulance service provider as well as its corporate officers and members if it is a corporation.

New Patient Ombudsman

Bill 8 proposes amendments to the Excellent Care for All Act, 2010, including the appointment of a provincial Patient Ombudsman to help patients and former patients resolve their complaints against hospitals, long-term care facilities and CCACs. As part of this role, the Patient Ombudsman will have investigative powers and may require a member of a health sector organization to provide information or produce documents relevant to the matter in issue. Privacy legislation will not apply to prevent a person from disclosing personal information or personal health information if the Patient Ombudsman requires them to do so as part of an investigation.

Since 2010, the Excellent Care for All Act, 2010 has required hospitals to have a publicly accessible patient relations process that is consistent with their Patient Declaration of Values. Patient surveys must be carried out annually, and data relating to patient surveys and the patient relations process must be considered in developing the annual quality improvement plan. If passed, Bill 8 will have additional implications for the patient relations process in Ontario.

Conclusion

Bill 8 has had its second reading and is being debated in the Ontario Legislature. As the government now has a majority in the House of Commons, it is likely that the Bill will eventually become law. At this early stage, the details of the amendments set out in the Bill are subject to change. However, it is clear that the government intends to enhance restraint, oversight and accountability in the broader public sector.

In anticipation of the changes proposed as part of Bill 8, health sector organizations should ensure  that they are in compliance with existing requirements and best practices, particularly with respect to executive compensation, business and financial planning and reporting, accounting, record-keeping and patient relations.

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