The Canadian Medical Association (CMA) is pleased to provide the information below in
response to questions by the Canada Revenue Agency (CRA) for consideration as part of the
development of regulations following the enactment of the Disability Tax Credit Promoters
Restriction Act. This information is in follow up to CMA’s submission to the CRA dated
December 19, 2014, attached for reference.
As explained in the CMA’s submission attached, the CMA strongly encourages the CRA to
include an exemption for “a health care practitioner duly licensed under the applicable
regulatory authority who provides health care and treatment” from the reporting requirements
in the forthcoming regulations enabled by the Disability Tax Credit Promoters Restriction Act.
This exemption is necessary to ensure CRA does not impose duplicative regulatory oversight
of the medical profession, specific to the provision of this uninsured service. As fully explained
in the CMA’s brief, this exemption would not introduce a potential “loophole”.
Issue 1: Organizations Responsible for Physician Regulatory Oversight
The statutory authority for the regulatory oversight of physicians rests with the provincial and
territorial medical regulatory colleges. As explained on page 4 of the CMA’s submission,
medical regulatory colleges have statutory, comprehensive regulatory authority of physicians;
this authority captures: medical licensure, governing standards of practice, professional
oversight, and disciplinary proceedings. Included in this authority is broad regulatory
oversight for fees that physicians may charge for uninsured services, which would capture the
fee charged for the Disability Tax Credit form. The Federation of Medical Regulatory
Authorities of Canada (FMRAC) is the umbrella organization representing provincial and
territorial medical regulatory authorities in Canada and can address how best to contact
individual regulatory colleges.1
Issue 2: CMA’s Code of Ethics
In addition to policies, guidance and oversight by provincial and territorial regulatory
colleges, charging a fee associated with the delivery of an uninsured service, in this case a
fee associated with completing the form associated with the Disability Tax Credit, is captured
by Section 16 of the CMA’s Code of Ethics. Section 16 states: “In determining professional
fees to patients for non-insured services, consider both the nature of the service provided and
the ability of the patient to pay, and be prepared to discuss the fee with the patient.”2
Issue 3: Fee Structure for Uninsured Services
As the CRA does not provide remuneration to physicians for the completion of the Disability
Tax Credit form, the delivery of this service by physicians is an uninsured service. As an
uninsured service there is no set fee level. While provincial and territorial medical associations
Canadian Medical Association 3
May 15, 2015
may provide guidance to physicians within their jurisdiction on uninsured services, which may
be referenced in policies by regulatory colleges, this guidance does not constitute a set fee
schedule. As captured in the CMA’s Code of Ethics referenced above, physicians may
consider patient-specific and other factors in determining a fee for the delivery of an
uninsured service. The CMA encourages CRA to review relevant policies and guidance of
individual provincial and territorial regulatory colleges for a comprehensive understanding of
the oversight of uninsured services.
Once again, the CMA appreciates the opportunity to provide further information to support
the development of regulations to enable the new authorities of the Disability Tax Credit
Promoters Restriction Act and to ensure that CRA does not impose redundant and duplicative
regulatory oversight of the medical profession.
1 FMRAC’s Executive Director is Dr. Fleur-Ange Lefebvre and can be reached at firstname.lastname@example.org
2 CMA’s Code of Ethics may be accessed here: https://www.cma.ca/Assets/assetslibrary/
*Draft GST/HST Policy Statement - Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates (GST/HST Notices - Notice 286, October 2014)
The Canadian Medical Association (CMA) is the national voice of Canadian physicians. Founded in 1867, CMA's
mission is to help physicians care for patients.
On behalf of its more than 82,000 members and the Canadian public, CMA performs a wide variety of functions. Key functions include advocating for health promotion and disease prevention policies and strategies, advocating for access to quality health care, facilitating change within the medical profession, and providing leadership and guidance to physicians to help them influence, manage and adapt to changes in health care delivery.
The CMA is a voluntary professional organization representing the majority of Canada's physicians and comprising 12 provincial and territorial divisions and 51 national medical organizations.
The 2013 Federal Budget introduced amendments to the Excise Tax Act that extend the application of the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to supplies of reports, examinations and other property or services that are not made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care: new sections were added to the Excise Tax Act introducing additional conditions that must be met before uninsured health care services will be exempted from the GST/HST. These amendments are retroactive to March 22, 2013, for most provinces (exception: April 1, 2013, for Prince Edward Island).
In response, the Canadian Medical Association (CMA) detailed the concerns of its members in a formal letter to the Canada Revenue Agency (CRA) and requested that the CRA conduct a consultation with stakeholders.
On October 31, 2014, the CRA released a draft GST/HST policy statement, Qualifying Health Care Supplies and the Application of Section 1.2 of Part II of Schedule V to the Excise Tax Act to the Supply of Medical Examinations, Reports and Certificates, herein referred to as the draft policy.
The CRA notes that these "amendments clarify that [the] GST/HST applies to supplies of reports, examinations and other property or services that are not made for the purpose of the protection, maintenance or restoration of the health of a person or for palliative care."
The CMA has consulted with all provincial and territorial medical associations on this matter and is pleased to provide its comments with respect to the draft policy. This document is intended to (1) highlight CMA's concerns with respect to the draft policy and (2) provide recommendations to improve it.
Although the draft policy is intended to clarify CRA's position with respect to the meaning of the term "qualifying health care supply" (QHCS), it provides insufficient guidance with respect to the CRA's view on (1) the meaning of the different elements of a QHCS, (2) the factors to be considered when determining if a supply is a QHCS and/or (3) the documentation required to support a physician's conclusions regarding the nature of his/her supplies. The CMA is concerned that this ambiguity will ultimately lead to confusion for patients and clinicians alike.
Moreover, the CMA has identified the following high-level concerns with the draft policy:
* Changes in the draft policy are retroactive to March 22, 2013, for most provinces (exception: April 1, 2013, for Prince Edward Island). There is a prolonged gap between the coming into force date (budget date) and the date on which CRA issued guidance on the new tax rules.
* The draft policy places the responsibility for determining the purpose of a supply on the practitioner. The policy needs to provide additional guidance to practitioners on how to determine the purpose of a particular supply.
* The CRA must ensure that the audit process respects patient-physician confidentiality. The draft policy should indicate the record-keeping/reporting requirements a physician should consider.
The scope of the policy is also limited in some other ways. The policy does not address the implications for a physician of making a taxable supply, such as (1) how to apply the coming into force rule, (2) when to register for the GST/HST and (3) which rate of GST/HST to apply.
New purpose test
The CMA believes that physicians will find it problematic to apply the new purpose test in certain situations. This is because the purpose test is subjective and needs to be applied on a case-by-case, patient-by-patient basis. As a result, different individuals may reach different conclusions, depending on their expertise (i.e., physicians vs. CRA auditors).
Furthermore, the draft policy does not provide comments on the meaning of terms such as "for the purpose of" or the terms "maintaining health," "preventing disease" and "treating ... illness, disorder or disability." Moreover, the draft policy does not mention the first order supply principle or specify CRA's view on whose health must be maintained or whose disease, injury, illness, disorder or disability must be addressed. Must it be the recipient of the supply, the person to whom the services are rendered, or may it be another person? The answers to these questions are determined based on the particular scenario.
The draft policy places the responsibility for determining the purpose of a supply on the practitioner. However, the draft policy does not provide guidance on how to determine the purpose of a particular supply. Furthermore, it is conceivable that the purpose of a supply could change either during an initial visit (i.e., if an illness is identified) or over time (as a result of changing medical opinions on certain procedures).
Moreover, the draft policy does not recognize and consider that the diagnostic procedures performed by a practitioner when examining a patient are the same whether or not the practitioner is being paid by or providing a report to a third party. It also does not recognize and consider that even though the practitioner may be reporting to a third party, he/she is also discussing his/her recommendations for treatment with the patient.
1. Expand on the meaning of "for the purpose of," as follows:
* Discuss the first order supply principle and how it would apply to the purpose test in this circumstance (e.g., is the purpose the immediate reason for the supply or does one have to consider the eventual or ultimate goal?).
* Provide a list of factors that practitioners should consider when they are determining the purpose of the supply (see Appendix 1 for other CRA policy statements that include such lists).
* Discuss the impact of an additional purpose arising during the course of an examination.
2. Clarify the meaning of the following terms:
* maintaining health
* preventing disease
* treating, relieving or remediating an injury, illness, disorder or disability
3. Recognize and consider that the diagnostic procedures used by a practitioner when examining a patient are the same whether or not the practitioner is being paid or providing a report to a third party (e.g., insurance company, court) and that even though the practitioner may be reporting to a third party, the practitioner is also discussing their recommendations for treatment with the patient. The draft policy should address and explore this issue.
4. Provide examples of documentation that could be used to support a practitioner's decision, taking into account the need to maintain the confidentiality of patient records.
Assisting (other than financially) an individual in coping with an injury illness, disorder or disability
Without further guidance, the meaning of "assisting (other than financially) an individual in coping with an injury illness, disorder or disability" is subjective. Practitioners may disagree on whether or not a particular supply meets the definition.
The current policy provides insufficient guidance on how to determine if a report is for financial assistance or for coping with an injury, illness, disorder or disability. For example, reports to employers could be for either purpose.
5. Provide greater clarity with respect to the concept of "assisting (other than financially) an individual in coping with an injury illness, disorder or disability."
6. Provide comments on the meaning of the following terms:
* financial assistance
* injury, illness, disorder or disability
7. Provide factors to guide practitioners in determining when a report to a third party is for financial assistance or for another purpose.
8. Provide examples of documentation that would be sufficient to demonstrate to the CRA the validity of the practitioner's conclusion that a supply is a QHCS.
Single- versus multiple-supply analysis
The draft policy states:
"In cases where a supply is made for more than one purpose, all of these purposes would be considered when determining if the supply is a qualifying health care supply. If one of the purposes for the supply meets the definition of 'qualifying health care supply' then the supply would be a qualifying health care supply. However, it should be noted that supplies are generally made for a single purpose. In cases where a health care service, such as an examination or assessment, is supplied together with a report or certificate it is necessary to determine if the supplier has made a single or multiple supplies."
The addition of the single versus multiple supply analysis adds significant complexity to the process of determining whether a supply is a QHCS. If a service is considered by the CRA as constituting multiple supplies, each with a different tax treatment, the practitioner will have to apportion the fees between the supplies for tax application purposes.
It is not practical for a clinician to analyze whether a particular patient visit is a single supply or whether it constitutes multiple supplies. This responsibility would be an onerous burden for practitioners.
9. The draft policy should take the view that, in general, there is a single supply.
10. The draft policy should clearly indicate that the health care purpose is determinative and takes precedence over any other purpose. If a supply has multiple purposes, and one of the purposes is a qualifying health care supply, then the supply will be classified as a QHCS and thus exempt from GST/HST.
11. Provide practical examples of situations in which a practitioner could be making multiple supplies.
12. Provide a list of factors specific to the QHCS to help practitioners determine whether a supply constitutes a single supply or multiple supplies.
The draft policy includes 23 examples that each set out the CRA's view on whether or not a particular supply or combination of supplies qualifies as a QHCS and is therefore exempt. All of the examples involve a single supply; there are no scenarios involving multiple supplies.
Furthermore, although the examples provide the CRA's decision on whether or not the supply in question constitutes a QHCS, they do not discuss the various factors/elements that the CRA would consider in reaching that decision. For example, examples 3, 4 and 5 all involve an examination of a patient and a report or document that a patient provides to an employer or potential employer. The draft policy does not clearly explain why the supplies in examples 4 and 5 are QHCS but the supply in example 3 is not.
Moreover, in some cases, the examples provided by the CRA do not reflect all of the aspects of the scenario in question. For example, in Alberta, a driver's medical examination (and completion of the associated form) is an insured service after the age of 75 years, but example 10 makes the blanket statement that completion of such a form is not a QHCS. Another example is that in some cases there is a subtle distinction between sick notes and short-term disability forms, for time missed because of illness.
13. If both single- and multiple-supply concepts are included in the final version of the policy, examples with multiple supplies should also be included.
14. For each example, clarify in the rationale section how the tax status was determined in each example.
15. Include a linkage to the factors discussed in the draft policy statement suggested above in making its determination of the tax status of the supply.
16. The CRA should maintain a repository and distribute a list of additional examples not included in this iteration of the policy (e.g., annual executive medical examinations, applications for Disability Tax Credit).
17. The policy could include comments on GST/HST registration, collection and reporting requirements, the association rules and the small supplier threshold as well as possible eligibility for recoveries of GST/HST by way of rebate or input tax credits (ITC) and ITC allocation requirements.
The CMA appreciates the opportunity to comment on the draft policy as part of CRA's consultation process. To ensure that clinicians can implement the new requirements with minimal impact on their patients and their practice, additional clarity is required with respect to the meaning of the various elements in the definition of a QHCS, the factors to be considered when determining if a supply is a QHCS, and the documentation required to support a physician's conclusions regarding the nature of his/her supplies.
The CMA would welcome the opportunity to comment on future iterations of this policy.
Examples of GST/HST policy statements that include a list of factors to assist the reader in determining whether a particular set of facts meets the CRA's policy:
* P - 244: Partnerships - Application of subsection 272.1(1) of the Excise Tax Act.
* P - 238: Application of the GST/HST to Payments Made Between Parties Within a Medical Practice Organization
* P - 228: Primary Place of Residence
* P - 208R: Meaning of Permanent Establishment
* P - 276R: Application of Profit Test to Carrying on a Business
* P - 167R: Meaning of the First Part of the Definition of Business
* P - 164: Rent-to-own Agreements
* P - 111R: The Meaning of Sale with Respect to Real Property
* P - 104: Supply of Land for Recreational Units Such as Mini-homes, Park Model Trailers, and Travel Trailers
* P - 090 Remote Work Site
* P - 077R2 - Single and Multiple Supplies
* P - 051R2: Carrying on Business in Canada
Review of the Personal Information Protection and Electronic Documents Act (PIPEDA) : CMA's Presentation to the House of Commons Standing Committee on Access to Information, Privacy and Ethics - December 13, 2006
The Canadian Medical Association (CMA) is pleased to be here today to participate in your review of the Personal Information Protection and Electronic Documents Act, or PIPEDA.
The CMA has had a long-standing interest in privacy-related matters, including enhancing measures to protect and promote the privacy of health information. We welcome the opportunity to share our policies and thoughts on these vital matters.
As a pediatric oncologist from Winnipeg and Chair of the CMA's Committee on Ethics, I come here today with one bottom line: Physicians have always- and continue to - take their patients' privacy very seriously. This is the cornerstone of the special bond between patients and their doctor and has been thus since the time of Hippocrates. In recognition of the importance of privacy, the CMA has produced such documents as the CMA Code of Ethics and the CMA Health Information Privacy Code to guide our more than 64,000 members across the country. These documents existed before the federal government introduced PIPEDA.
It is out of our concern for protecting and ensuring the privacy of medical information that we speak to you today.
There are three specific areas which we would like to raise:
1) Recognition in law of the unique nature of health care;
2) Physician information as "work product"; and
3) Emerging Privacy and Health information issues.
1. Recognition in law of the unique nature of health care
I would like to highlight the importance of recognizing in law the special circumstances of protecting health information. In fact, when PIPEDA was first being debated, CMA posed questions about the scope of the Act and was told that the legislation, originally designed for commerce and the private sector, would not capture health information. We were also told that even if it did, PIPEDA wouldn't change how we practiced medicine.
The passing of PIPEDA generated enough concern and uncertainty that government agreed to delay its application to health for 3 years. For example, PIPEDA failed to clarify the issue of implied consent for the sharing of patient information between health professionals providing care.
For example, when the family physicians says to a patient "I'm going to send you to see an oncologist to run some tests" and the patient agrees and follows that course of action, then clearly there is "consent" to the sharing of their health information with others. As an oncologist I assume there is consent to send the test results to other specialists that I may need to consult in order to advance the patient's care in a timely fashion. This, however, needed to be addressed before PIPEDA was applied to health care.
The delayed application allowed the federal government and health care community to work together and develop a set of guidelines for how PIPEDA would be applied. The resulting PIPEDA Awareness Raising Tools, known as PARTs, contain a series of questions and answers that make up guidelines for health care providers. They answered many of our concerns, provided necessary definitions and allowed for the implied consent model to continue to be used within the circle of care. The CMA applauds the government for this collaborative effort and the resulting guidelines have been used by health care providers ever since.
However, we remain concerned that the PARTs guidelines have no legal status. This limitation creates a degree of uncertainty that the CMA would like this legislative review to see addressed by ensuring the PARTs series of questions and answers are referenced in PIPEDA.
In addition to participating in the PARTS initiative, since PIPEDA's implementation, the CMA has designed practical tools for physicians and patients:
* adopted the CMA policy Principles Concerning Physician Information to address the importance of protecting the privacy of physician information;
* produced Privacy in Practice: a handbook for Canadian physicians to help physicians maintain best practices in the protection of patient health information; and
* created the PRIVACYWIZARD(tm) designed to help physicians record their current privacy practices, communicate these to patients and identify possible areas for enhancement.
2. Physician Practice Information as "Work Product"
I referred earlier to CMA's Policy document on physician information. The CMA strongly believes that physicians have legitimate privacy concerns about the use by third parties of information - such as prescribing and other practice data for commercial purposes. Currently deemed "work product" this information can be collected, used and disclosed without consent.
We feel PIPEDA inadequately protects this information. We recognize that it is information generated out of the patient-physician relationship. We disagreed with findings of the previous Privacy Commissioner that physician prescribing information is not subject to PIPEDA's privacy protection provisions for "personal information". The CMA has consistently advocated that physician prescribing data and other practice information is personal information and appeared as an intervener in a Federal Court review of this issue that was ultimately settled by the main parties.
Also, insufficient regard for the privacy of prescribing and other physician data could have a negative impact on the sanctity of the physician-patient relationship. Patients confide highly sensitive information to physicians with the expectation this information will be kept in the strictest confidence. This expectation exists because they know that physicians are under ethical and regulatory dictates to safeguard their information and that physicians take this responsibilities very seriously. The perceived and indeed actual loss of control by physicians over information created in the patient encounter, such as prescribing data, could undermine the confidence and faith of our patients that we are able to safeguard their health information. This concern is not hypothetical.
For physicians, so called "work product" information also encompasses practice patterns such as discharge rates, referral rates, billing patterns, hospital length of stays, complaints, peer review results, mortality and re-admittance rates. With the advent of electronic medical records and growth in pay-for-performance and outcome-based incentive programs for physicians, there is an enormous potential for the resulting physician "performance" data or "work product" to be "mined" by other parties and used to influence performance review (traditionally the purview of the medical licensing authorities) as well as decisions around treatment funding and system planning.
The lack of transparency in the sale and compilation of physicians' prescribing and other performance data means that physicians might find themselves to be the unwitting subject and targets of marketing research. We believe practice decisions must be made in the best interest of patients and not the bottom-line interests of businesses and marketers.
CMA therefore recommends a legislative change to include physician information as personal information under PIPEDA. Legislation in Quebec provides an example that is consistent with CMA's approach since it requires regulatory oversight and gives individuals the right to opt out of the collection, use and disclosure of "professional" information.
3. Emerging Privacy and Health information issues
With budgetary and demographic pressures, our health care system is under strain and physicians are striving to deliver timely, quality care to patients, often with competing and multiple demands. Physicians are therefore seeking assurances from law makers that any amendments to PIPEDA will take into account the potential impact on them and their patients. Therefore, we seek assurances that:
* health care is recognized as unique when it comes to the disclosure of personal information before the transfer of a business (one physician transferring his/her practice to another) because it is regulated at the provincial level through the appropriate licensing body. As a general rule, physicians must give notice to the public, whether via a newspaper ad or a notice in the office about the change in practice.
* the federal government will consider the impact of the trans-border flow of personal information on telehealth and Electronic Health Record activities. Communications between patients and physicians via electronic means are likely to increase and to move across geographic boundaries with increasing frequency; and
* the federal government will study the issue of international cross border data flows, particularly among Canadian researchers who receive funding from US drug companies. These arrangements should be governed by Canadian law (PIPEDA) not American (HIPAA or the US Patriot Act).
In closing, the privacy protection of personal health information is a responsibility that my colleagues and I do not take lightly. It is a key pillar of our relationship with Canadians, they not only expect it-they deserve it. I look forward to taking questions from Committee members.
Canadian Medical Association Ottawa, December 13, 2006