The Life Cycle of an OHIP claim
- 4 min read
What is a claim?
A medical claim is a bill that the physician submits to the patient’s insurance provider, usually OHIP. It includes billing codes that detail the visit or service performed. These codes and fee amounts are standardized, according to the Schedule of Benefits and Fee Schedule. Ultimately, it depends on the physician’s payment model.
Physician Payment Models
There are three relevant payment models to understand the life cycle of a claim. These payment models can affect how much money a physician receives from each medical claim.
Fee-for-service (FFS)
This is the most common payment model for Canadian physicians. A claim is submitted for every patient encounter or service provided. Payment is received if the claim is approved.
Alternative Funding Plan (AFP) /Alternative Payment Plan (APP)
This is a common payment model for academic physicians. Since these physicians often have more duties than just clinical work, such as research and education, a FFS model would not be equitable for payment. As such, Alternative Funding Plans and Alternative Payment Plans were developed to remunerate clinical service, education, research and associated administration.
These plans set out funding for a range of services which aligns the interests of the participating parties: academic physicians, teaching hospitals, the Ontario Medical Association, the MOH. In exchange for the funding, the parties agree to meet deliverables in each area.
Capitation
Capitation is a payment model where physicians are paid a fixed amount per patient in a specified period, for all or select services provided (e.g., primary care). These doctors still submit claims to OHIP.
OHIP claim life cycle
How are physicians paid for claims?
In Ontario, the main health insurance to cover patients is OHIP. If a patient has OHIP, the claim is processed and paid by OHIP. There is a monthly cycle of submission and payment.
If the patient does not have OHIP coverage, more details here, then the process is slightly different. There are two key scenarios:
The patient has out-of-province health coverage (excluding Quebec)
The physician can still submit a claim through OHIP. Reciprocal billing is an agreement with other provinces (except Quebec) which states most medical services can be billed to the patient’s home province and reimbursed through their provincial health plan. In this case, you would need the patient’s out-of-province insurance number, but OHIP will handle the rest.
The patient does not have valid provincial coverage
This is referred to as a “Direct Bill”. The physician directly bills the patient’s alternative health insurance plan (such as Interim Federal Health, UHIP, or third-party insurance) or the patient themselves. If the patient is from Quebec, they would submit their receipt to Quebec insurance for reimbursement. At RMA, we manage non-OHIP billing, invoice the responsible payor and follow up on these receivables.
Creating a Claim
The Medical Claims Electronic Data Transfer (MC EDT) system is the only way to send claim data to the Ministry of Health. You can create claims directly through MC EDT by logging in or you can use a third-party billing software that connects to MC EDT. These claims must be submitted in a specific file format.
Here is an example of the information required for a medical claim:
- Patient Name: Maria Young
- Health Card: 1234-456-678
- Version Code: YM
- Date of Birth: February 29, 2000
- Gender: Female
- Specialty: 20
- Fee Code: A204A
- Amount: 34.40
- Diagnosis: 218
- Date of Service: 16/09/2024
- Admit Date (if applicable to Fee Code): N/A
- SLT: HOP
- Master Number (if applicable): 4054
- Referring Physician (if applicable to Fee Code): Isabella Smith
Error Reports
A claim submitted to OHIP can be rejected if it did not pass validation or requires additional information. It will be sent back to you on an error report such that you can revise or add the extra information. You can read more about Error Reports on our blog post.
Remittance Advice
The Remittance Advice (RA) is a monthly statement of approved claims and is issued on the 5th working day of the month, prior to receipt of payment. If a claim is remitted or partially paid, it can be appealed through the Remittance Advice Inquiry (RAI). You can read more about the RA and the RAI process on our blog.
In summary, submitting claims can be a tedious process. Luckily, our team of billing agents know every error code and know how to handle RAIs with ease. RMA members can choose how much to be involved in the claim’s lifecycle, but they can leave most of the complexity to us.
Are you an RMA physician? You can reach out to your Billing Advisor representative, and they can help you with any further questions or provide assistance.
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