Alternative Payments Program

The Alternative Payments program works with and funds health authorities or similar agency and works to improve service delivery and patient’s access to services through alternative physician compensation models to fee-for service.

Alternative Forms of Physician Payment

Alternative payments is the term used to describe the funding of physician services through means other than the fee-for-service method.

Alternatives to fee-for-service funding are increasingly being sought by physicians and health-care provider agencies. The budget for alternative funding has increased steadily over the last decade and now represents about twenty per cent of the overall available amount for physician services.

Alternative funding is a shift from the conventional method of physician funding in Canada; although, alternative funding is common in other countries such as Britain, Sweden, Holland and the U.S.

The Alternative Payments program aims to secure sufficient access to care in situations where fee-for-service arrangements may not guarantee physicians the financial support or stability to be able to provide needed care. Examples include teaching hospitals, community and hospital-based psychiatric services, and physician services in rural areas.

Benefits of Alternative Payments Funding

Alternative funding may be preferable to fee-for-service in some circumstances, such as:

  • it offers a more predictable rate of income for physicians;
  • it provides more reasonable compensation for certain time-consuming services; and
  • it allows compensation for indirect client care (e.g. telephone consultation, client conferences with a multidisciplinary team), as payment is not linked solely to client visits/procedures.

Types of Alternative Payments Funding

The two alternative funding methods provided through the Ministry of Health are service agreements and sessional arrangements.

Service Agreement

A service agreement is a contract between the Ministry of Health and a health authority or similar agency, which in turn retains the required physicians through contract, direct employment or some other negotiated arrangement. This type of funding arrangement may be appropriate for programs requiring one or more full-time equivalents (FTEs).

Sessional Arrangements

A sessional arrangement is based on a contract between the physician and health authority or similar agency. A session is defined as 3.5 hours of service. Rates are defined in the Physician Master Agreement. 

Applying for Funding

For more information regarding the Alternative Payment program contract or sessional funding process, please contact the Physician Compensation Branch.

The following forms can be found on the Physician Compensation Forms page.