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Legislative Overview & Analysis Bill 36, Local Health System Integration Act, 2005

Legislative Overview & Analysis Bill 36, Local Health System Integration Act, 2005. Status/Expected Timelines. Introduced for First Reading November 24 th Second Reading debates held November 29th to December 7 th and referred to Standing Committee on Social Policy

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Legislative Overview & Analysis Bill 36, Local Health System Integration Act, 2005

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  1. Legislative Overview & AnalysisBill 36, Local Health System Integration Act, 2005

  2. Status/Expected Timelines • Introduced for First Reading November 24th • Second Reading debates held November 29th to December 7th and referred to Standing Committee on Social Policy • Will likely pass Second Reading prior to House rising on December 15th • Dates for public hearings have not been yet set, but Ministry has indicated they will take place “early in the New Year” • Bill may be put to Third Reading during special sitting of Legislature scheduled for February 13 to March 2nd

  3. Key Issues • Governance/Accountability of LHINs • Role/Mandate of LHINs • Funding/Accountability Agreements • Integration Powers • Labour Relations implications • LGC/Ministerial powers • Implications for Providers • Consequential amendments

  4. 1. Governance/Accountability Governance • Corporations without share capital • Board members appointed by Lieutenant Governor in Council (LGC) and receive remuneration/expenses as set by LGC • LGC designates Chair and Vice-Chair • CEO compensation set by Board within ranges set by Minister • Required to have open board/committee meetings (unless regulations specify otherwise) • May pass by-laws, resolutions and establish committees • Minister may require proposed by-law be submitted for approval • Minister can specify by regulation committees the board is required to establish Accountability • Accountability agreements with Minister • Performance goals/objectives, reporting, etc. • If no agreement reached, can be imposed by Minister and Minister can set terms • Audited annually by Auditor General • Minister has power to direct an audit • Must provide Ontario Health Quality Council with any information it requests

  5. Governance/Accountability(cont’d) Summary Analysis • LHIN governance subject to significant control by the LGC and Minister • No Board selection criteria or process for appointment set out in legislation; no mechanism to ensure Board members selected from the community • Requirement of open meetings ensure some transparency, but may be overridden by regulation • Accountability agreements may be imposed by Minister

  6. 2. Role/Mandate of LHINs Corporate objects – plan, fund, integrate – s. 5 • Promote integration to provide appropriate, co-ordinated, effective and efficient health services • Identify and plan for health service needs in accordance with provincial plans and priorities and make recommendations respecting capital needs • Engage community in planning and priority setting • Ensure appropriate process to respond to concerns of community • Evaluate, monitor, report on and be accountable to the Minister for performance of local health care system, including access to services, utilization, co-ordination, integration and cost-effectiveness of services • Participate in provincial strategic plan and in development and implementation of provincial health care priorities, programs and services • Develop strategies and cooperate with providers, LHINs and providers of provincial services to improve integration

  7. Role/mandate(cont’d) Objects (cont’d) • Undertake joint strategies with other LHINs to improve access and enhance continuity of care across province • Disseminate information on best practices and promote knowledge transfer • Bring economic efficiencies to delivery of health care and make system more sustainable • Allocate and provide funding to providers in accordance with provincial priorities • Enter into agreement to establish performance standards • Ensure effective and efficient management of the human, material and financial resources of LHIN and to account to Minister for use of resources • Any other objects Minister specifies by regulation

  8. Role/Mandate(cont’d) • Planning – ss. 15/16 • Must develop an Integrated Health Service Plan (IHSP) within time and form specified by Minister • IHSP must be consistent with provincial plan by Ministry • Must engage community on an on-going basis about the IHSP • Must establish a “health professions advisory committee” consisting of members determined by LHIN or prescribed by regulation • Funding– s. 19 • May fund providers for services provided “in or for the LHIN geographic area” on terms and conditions LHIN considers appropriate • Funding must be allocated in manner consistent with accountability agreement and other regulatory requirements • Integrating – ss. 24-27 • LHINs and providers must separately and collaboratively identify opportunities to integrate services • May issue “integration decisions”

  9. Role/Mandate(cont’d) Summary Analysis • Nature and extent of community engagement in development of IHSP will be determined by regulation; no statutory requirement to consult with providers; requirement only for regulated health professions advisory committee • LHINs have authority to make decisions to fulfill their mandate, but are accountable to the Minister for the performance of the local health system • Role LHINs will play with respect to funding of providers not yet clear • No clear articulation of LHIN interface with provincial programs/services, nor role with respect to academic health science centres

  10. 3. Funding/Accountability Agreements • Funding – s. 17 • Minister may fund LHINs on terms and conditions the Minister considers appropriate • Can adjust funding to take into account and savings from efficiencies generated by the LHIN in the previous year • Funding of Health Service Providers – s. 19 • May fund for services “in or for the LHIN geographic area” on terms and conditions the LHIN considers appropriate • Must be allocated in a manner consistent with the funding the LHIN receives from the Minister, the accountability agreement between the LHIN and Minister, and other regulatory requirements. • Regulations can require provider to repay LHIN for excess payment of funding, and allow LHIN to recover excess funding by deducting it from subsequent payments to the provider. – (s. 36)

  11. Funding(cont’d) • LHIN Accountability Agreements – s. 18 • LHINs must enter into multi-year accountability agreements with Minister • Include performance goals, objectives, standards, targets and measures for the LHIN and local health system, reporting requirements for performance, a plan for spending of funding, a progressive performance management process, other matters prescribed • Minister may set terms of agreement for LHIN if no agreement reached, must be made public • LHINs to provide to the Minister and information the Minister needs to administer the Act

  12. Funding(cont’d) • Service Accountability Agreements – s. 20 • LHINs and providers must enter into “service accountability agreements” under Part III of the Commitment to the Future of Medicare Act. • LHINs cannot enter into any arrangement that restricts or prevents an individual from receiving services based on geographic area of residence • The Minister has the power to assist all or part of an agreement between the Minister and a provider to a LHIN, including an agreement to which a person or entity that is not a provider is also a party. (s. 19) • LHIN audit – s. 21 and 22 • LHINs may at any time require a provider that receives funding from the LHIN to engage or permit an audit it’s accounts and financial transactions • Providers that receive funding, as well as other prescribed entities, may be required to provide plans, reports, financial statements and other information to the LHIN.

  13. Funding(cont’d) Summary Analysis • Legislation provides only a broad enabling provision that grants LHINs funding authority, specifics to be set out via regulation • Funding to providers must be consistent with the LHINs accountability agreement with the Minister (which may be imposed) and other regulatory requirements • Amount of funding available for providers within their geographic area is determined solely based on the funding provided to the LHIN by the Minister • No provisions for the negotiation of LHIN/Minister accountability agreements, unclear as to when the Minister could unilaterally set the terms of the agreement • Minister’s ability to assign existing agreements to LHINs, will likely devolve responsibility for the Hospital Accountability Agreements to LHINs • Ambiguity as to whether agreements such as AFAs (Alternative Funding Agreements) will be assigned to LHINs

  14. 4. Integration Powers • Both LHINs and Minister have integration powers • LHINs may integrate by: (s. 25) • Providing or changing funding to provider • Facilitating and negotiating integration between providers or between provider and non-provider (which may result in wind-up of operations) • Issuing a decision that requires a provider to proceed with integration • Issuing a decision that orders a provider not to proceed with integration* • LHIN may issue integration decisions that: (s. 26(1)) • Require providers to start or stop providing all or part of a service • Provide a certain quantity of a service • Transfer all or part of a service from on location or entity to another • Take any action necessary to implement the integration (e.g., transfer property) *Other ways may be added by way of regulation

  15. Integration Powers (cont’d) • LHIN integration decisions cannot: (s. 26(2)) • Be contrary to IHSP or accountability agreement • Require a provider to dissolve, cease operating or wind up operations • Change the composition or structure of its membership or board • Amalgamate with another provider • Require two or more providers to amalgamate, transfer property held for a charitable purpose to a person/entity that is not a charity • “Unjustifiably” require a denominational entity to provide a service that is contrary to the religion of that organization • LHIN also approve provider integration initiatives (s. 27) • Providers must notify LHIN of integration of services (clinical and non-clinical) with another person or entity; cannot proceed for period of 60 days • If LHIN considers it in the public interest to do so, may issue a decision, ordering provider not to proceed

  16. Integration Powers(cont’d) • Minister can issue integration order – s. 28 • Upon advice of LHIN, if Minister considers it in the public interest to do so to, Minister may order provider to: • Cease operating, dissolve or wind up operations • Amalgamate with one or more providers • Transfer all or substantially all of its operations • Take any other action necessary to carry out these activities • Process for LHIN integration decisions/Ministerial orders – ss. 26(3)(4)(5), s. 27 and s. 28(3) • Affected parties (i.e., provider) receive a copy of the decision and the decision is made publicly available • Provider has 30 days to make submissions, requesting reconsideration • LHIN/Minister can confirm, amend it or revoke decision • No further consideration; decision is final • Statutory Powers Procedures Act does not apply (right to hearing, right to knowledge of documents/evidence upon which decision is based) • Opportunity for judicial review under Judicial Review Procedures Act • Decision/orders can be enforced Superior Court of Justice

  17. Integration Powers(cont’d) • Where transfers of property as a result or decision or order: (ss. 30/31) • If involve a charitable purpose, all gifts, trusts, bequests, devises and grants deemed to be those of transferee; if must be used for specific purpose; must do so • If loss suffered, may only recover value not acquired with government funds • Integration of non-clinical services – s. 33 • The LGC may make regulations ordering one or more hospitals to cease performing a non-clinical service and integrate the service by transferring it to a prescribed person or entity by a certain date • “Service” means a service or program that is offered directly to people; a service or program that supports a direct service (e.g., laundry); and a support function (e.g., payroll)

  18. Integration Powers(cont’d) Summary Analysis • Integration decisions cannot alter change composition or structure of a provider’s membership or board • Providers have no statutory right to be consulted • Very little in way of procedural safeguards or due process prior to making of decision/order • No criteria upon which decisions/orders are based • Unclear as to extent of protection for denominational hospitals (interpretation of “unjustifiably”) • No clarification as to factors considered in determining “public interest” in legislation (as in PHA and Bill 8)

  19. 5. Labour Relations Implications • T • The Public Sector Labour Relations Transitions Act,1997 (PSLRTA) extended to apply to: (s. 32) • Health services integration – defined as where every employer subject to the integration is either a “health service provider” or an employer whose primary function is or, immediately following the integration, will be the provision of services within or to the health services sector • Transfers of all or part of a service under an integration decision • A Minister’s order to transfer all or substantially all of the operations of a provider • The amalgamation of two or more entities under an integration decision or Minister’s order • Minister can order a health service provide to do any other action necessary to carry out an amalgamation, dissolution or transfer of its operations • PSLRTA not applicable where: • Successor employer and unions agree that it should not apply • The successor employer or union applies to the Ontario Labour Relations Board (OLRB) and it orders that PSLRTA is not applicable • The successor employer was not a health provider or where the primary function of that person or entity is not the provision of services within or to the health services sector

  20. Labour Relations(cont’d) Summary Analysis • Bargaining rights, collective agreements would follow any work being transferred or amalgamated at time of integration • The OLRB would have authority to determine whether PSLRTA applies before integration occurs (and the authority to an order in the interim which an application for integration is pending) • LGC has regulation-making powers to order public hospitals to cease performing any non-clinical services and transfer services to another designated person/entity • Labour issues that arise of the transfer of non-clinical services dealt with through PSLRTA • Non-clinical transfers will likely fall within the scope of partial integration amendments to PSLRTA

  21. 6. LGC/Ministerial Powers • Lieutenant Governor in Council (i.e., Cabinet) may by regulation: • Amalgamate, dissolve or divide a LHIN, change the name of a LHIN (s. 3(4)) • Determine LHIN Board remuneration and reimbursement for reasonable expenses (ss. 7(5)) • Designate the Chair and at least one Vice-Chair of the board (ss. 7(6)) • Order one or more hospitals to cease performing a non-clinical service and to integrate the service by transferring it to a prescribed person or entity by a certain date (ss. 33(1)) • Devolve to the LHIN any powers, duties or functions under any other Act for whose administration the Minister is responsible, of the Minister or a person appointed by the Minister or the LGC (ss. 34(1))

  22. LGC/Ministerial Powers(cont’d) • LGC may also make regulations – s. 36 • Governing anything described in Act as being prescribed (e.g., ways in which a LHIN may “integrate” or determining when LHIN meetings are closed to public) • Excluding entities from definition of “health service provider” • Specifying who may not be members of a LHIN • Determining how community engagement will occur • Respecting the function and membership of the health professionals advisory committee • Respecting funding that a LHIN provides to a provider • Requiring providers to set up a method of reconciling funding received • Respecting a matter relating to a transfer of property as a result of an integration decision or order • Governing compensation arising from transfers of property • Defining anything in the Act

  23. LGC/Ministerial Powers(cont’d) • Minister may: • Make regulations to specify additional objects of a LHIN (ss. 5(n)) and concerning which LHIN committees which must be established (ss. 8(5)) • Require approval of LHIN bylaws (ss. 8(2)) • Set the salary/benefit ranges of LHIN CEOs (ss. 10(4)) • Direct an audit at any time (ss. 12(2)) • Fund LHINs on terms and conditions the Minister considers appropriate (ss.17(1)) • Impose an accountability agreement on the LHIN if no agreement is reached and set the terms of the agreement for the LHIN (ss. 18(3)) • Issue integration orders (s. 28) • Impact CEO compensation under Bill 8 (ss. 42(36)) • Dispense with statutory requirement of consultation in development of regulations (ss. 36(7))

  24. LGC/Ministerial Powers(cont’d) New LGC/Ministerial powers under Bill 36 • Minister may order provider to cease operations, amalgamate, or transfer operations (in public interest) • Through regulation, the LGC can integrate non-clinical services • LHINs and Minister can enforce orders and decisions through application for court order Minister’s existing powers under PHA • An amalgamation requires Minister’s approval • Minister can direct a hospital subject to HSRC direction or notice (before April 30, 1999) to cease operations, amalgamate, cease or adjust services, or any other direction that Minister considers in public interest • Minister can recommend to the LGC for appointment of a supervisor who can exercise all the powers of the board, corporation, officers and members

  25. LGC/Ministerial Powers(cont’d) Summary Analysis • New” powers of Minister under Bill 36 • LHINs’ power to stop voluntary integration is broader than requirement for Minister approval of hospital amalgamations under PHA • LHIN/Ministry integration orders and decisions apply to all hospitals (and health service providers), not just hospitals subject to HSRC direction or notice • With Bill 36, Minister need not go through process of appointing supervisor, but can ‘directly’ pursue integration and restructuring activities • Court orders provide tool for ensuring compliance • While a significant number of LHIN powers are delineated in the legislation, the regulation-making authority of both the LGC and the Minister provide the ability to greatly extend these powers • But regulations subject to a 60-day consultation period, but this may be dispensed with where: • In Minister’s opinion, “urgency of the situation” requires it • Regulation clarifies intent of Act • Regulation is of minor or technical nature

  26. 7. Implications for Providers • Funding/Agreements –ss. 19/20 • If receive funding from LHIN, must enter into “service accountability agreements” under Part III, Commitment to the Future of Medicare Act, 2004, whichmay be based on a service plan developed with LHINs • Existing agreements between the Minister and providers may be assigned to the LHIN (e.g., HAAs) • Integration of clinical services – ss. 24-28 • Duty to separately and collaboratively (with LHINs) identify integration opportunities (ss. 24) • Will be subject to integration decisions of LHINs/Ministerial orders • Integration of non-clinical services – s. 33 • The LGC may make regulations ordering one or more hospitals to cease performing a non-clinical service and integrate the service by transferring it to a prescribed person or entity by a certain date • Regulation will set out hospital and specific functions to be integrated • Need LHIN approval to integrate services (clinical and non-clinical) – s. 27

  27. 8. Consequential Amendments • Commitment to Future of Medicare Act – s. 42 • LHINs now responsible for Part III of Act dealing with accountability agreements (“service accountability agreements”) • Minister retains provisions respecting CEO compensation re: performance agreements • Provision now only applies to hospital CEOs • Public Hospitals Act –s .50 • HSRC provision (s. 6) replaced with transitional provisions • Upon proclamation, Minister will use Bill 36 powers • Existing HSRC orders remain valid, but in event of a conflict, integration decisions/orders will prevail over s. 6 directions • Amends definitions of “hospital” and “patient • Hospitals may alter/revoke physician privileges as a result of an integration decision or order with no appeal • Minister may, by regulation, require hospital subsidiaries and foundations to provide financial reports and returns to the Minister and to a LHIN

  28. Summary of Key Issues Issues requiring further clarification • Extent, manner and timing of funding responsibilities • Assignment of HAAs to LHINs • Impact on hospital-physician relationship • Potential impact on foundations • Application of HLDAA to private sector • Implications for facilities with provincial programs • Impact on academic health sciences centres Areas of potential concern • Due process re: integration decisions/orders • Criteria for making decisions/orders • Requirement of LHIN approval to integrate services • Adequacy of safeguards for denominational hospitals • Labour relations implications • What’s not in legislation (affirmation of role of academic/speciality hospitals, physicians, provincial programs, etc.)

  29. Questions and Discussion

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