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Doctors operate on a patient at Toronto General Hospital in February, 2012.Kevin Van Paassen

The Ontario government is halting plans to halve fees paid to doctors for certain diagnostic testing after heart specialists and others warned the cut could hurt patients' care and drive some physicians out of the province.

The 50-per-cent reduction to payments for self-referral testing, which applies to doctors who use their own equipment to perform exams such as ultrasounds and X-rays, was set to take effect July 1. But after an outcry from many physicians and patients, the province has backed down for now, suspending the fee cut while a government-appointed panel reviews the issue of diagnostic testing.

The Ontario Association of Cardiologists welcomed the reprieve and is cautiously optimistic a resolution can be worked out, but the Ontario Medical Association (OMA) has declined to participate in the panel, contending the matter should be part of its negotiations with the government.

The province announced the diagnostic testing payment cut in May, along with 36 other changes to the OHIP-fee schedule, after talks with the OMA broke down. The changes are expected to deliver $338-million in savings this fiscal year to a government facing a $14.8-billion deficit. The 50-per-cent reduction to fees for self-referral diagnostic testing was projected to save the government $44-million in 2012-13.

Health Minister Deb Matthews warned Thursday those savings must still be achieved, even if the government's advisory panel recommends scraping the self-referral cut. Ms. Matthews has repeatedly maintained that doctors who use their own equipment for testing are more likely to order exams.

"We know there's a problem with appropriateness [of testing] and everybody who works in health care knows there's a problem with that," Ms. Matthews said. "If there's a better way to achieve the goal of appropriate use of diagnostics, then we want to work with doctors to get it."

The advisory panel, whose membership is still being finalized, will be led by vascular surgeon Barry Rubin, chairman of the Peter Munk Cardiac Centre at the University Health Network in Toronto. The panel is expected to present recommendations to the minister later this summer.

The reduction to payments for self-referral testing would mostly affect cardiologists, radiologists and ophthalmologists. Heart specialists have warned the proposed cut, retroactive to April 1, would prompt many of them to get rid of their diagnostic equipment, a move that could dramatically increase wait times for echocardiograms, stress tests and other exams used to diagnose health problems, especially in smaller cities and rural areas.

For cardiologists the key issue is under a 50-per-cent cut, they would lose money on nearly every diagnostic test performed in their clinics. However, if they refer patients back to a family doctor with a recommendation for testing, they'd get full payment if the exam is ordered and done at their clinics.

Cardiologist Rajen Chetty, who works in Tecumseh near Windsor, Ont., said the extra appointments and longer waits are frustrating some of his patients, but the measure will allow him to keep the diagnostic side of his practice going. He signed five-year leases for his equipment not long before the government proposed the fee cut in May. Whether he renews those leases will greatly depend on what the government decides in the next few months.

Ontario Association of Cardiologists president Bill Hughes said the organization has already proposed criteria for echocardiogram testing to the government and is willing to suggest guidelines for other heart exams.

"Our commitment is to ensure that every test is done on the right patient at the right time for right reasons," Dr. Hughes said. "Modifying payment based on self-referral alone is not appropriate."

The Ontario Medical Association is taking a harder line with the government. Earlier this month, it asked the Ontario Superior Court of Justice to review the province's bargaining tactics, contending the Charter of Rights and Freedoms requires governments to negotiate in good faith.

The creation of a government-appointed panel to review self-referral diagnostic testing signals the government isn't interested in negotiating with the OMA, contended the association's president Doug Weir.

"We want them to deal directly with us on this and they're refusing to do that," Dr. Weir said. "Instead what they're doing is getting a handful of physicians, mostly from academic centres in Toronto, who aren't going to have the experience of working out in the community in more realistic settings to deal with this."