About the allocation

July 31, 2018

Dr. Neil D.J. Cooper, AMA President

Hello Members:

I’m writing today with news about payment of the retroactive April 1, 2017, Schedule of Medical Benefits cost-of-living increase, as well as the partial 2017 Retention Benefit payment. This was provided for by the recently ratified 2018-20 Amending Agreement. These are amounts owed to physicians in exchange for reducing the rate of growth in the Physician Services Budget for 2016-18. Since ratification, we have been working with Alberta Health to determine how and when the allocation will occur.

Allocation is a two-party process (conducted through the Physician Compensation Committee) in which the AMA and AH both bring proposals to the table. The AMA’s submission for this allocation was developed by our internal Fees Advisory Committee and AMA Compensation Committee. AMACC’s recommendations were reviewed and finalized by the Board of Directors in June. Our proposal then went to the bilateral Allocation Working Group of the PCC, where a consensus was reached. Normally the PCC would sign off the final allocation details, but the committee is currently without a chair (because the current chair’s contract has expired and the chair for the next term has not yet been selected). Therefore, for this allocation the consensus proposal went to the Management Committee.

It took the last two months to complete all these steps and the Management Committee’s decision was provided to the Board on Friday, July 20. Therefore, we can now proceed via our usual processes to implement the allocation:

  • Macro allocation: Funds are allocated off the top, across three traditional pools: (i) targeted items that the parties believe require extra support at this time; (ii) overhead; and (iii) dollars per physician (referred to as Section Allocation Equivalent). This year, a one-time fourth pool was added in order to provide some recognition of savings contributions from sections associated with the impact of the SOMB Rules Changes Initiative.
  • Micro allocation: The AMA works with each economic section to distribute their allocated funds to their respective fee codes in accordance with intra-section relativity.

We are targeting November to pay out the retroactive amount and implement the SOMB adjustment.

Regarding the partial Retention Benefit payments, you may recall that the new Amending Agreement allowed the AMA to retain up to $5 million (of the $45 million provided for Retention Benefit purposes) toward other services and programs to support physicians. The Board, however, has determined that we will not retain funds for this purpose and thus the entire $45 million will be paid to physicians. (Please note that the $45 million represents just over half of the previously paid Retention Benefit and, therefore, physician payments will be pro-rated accordingly.) This will be done according to the same years-of-service method that the Retention Benefit program has always used. We expect to make these benefit payments in the fall.

Watch for more information to come with details of timing, macro and micro allocation amounts and the final Retention Benefit payments.

I hope you are having a great summer, full of family and fun and some time away from thinking about work. As always, I am glad to receive your thoughts, comments or questions by the usual three methods:

At your service,

Neil D.J. Cooper, MD, FRCPC, Dip. Sport Med.

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