Non-Insured Health Benefits Program: First Nations and Inuit Health Branch: Annual Report 2016-2017

British Columbia Tripartite Agreement

The British Columbia Tripartite Framework Agreement on First Nation Health Governance was signed by Canada, the First Nations Health Council (FNHC) and the British Columbia Ministry of Health on October 13, 2011. A key commitment made in the Framework Agreement is the transfer of Federal Health Programs, including Non-Insured Health Benefits (NIHB), from Canada to the First Nations Health Authority (FNHA).

Between July 2nd, 2013 and October 1st, 2013, the FNHA assumed responsibility for the design, planning, management and delivery of the Non-Insured Health Benefits Program to First Nations clients residing in the British Columbia Region. The Department of Indigenous Services Canada has established and implemented measures so that Inuit clients, and First Nations who are in British Columbia temporarily, will continue to access benefits through the federal NIHB Program.

As a transitional measure, The Department of Indigenous Services Canada has continued to provide claims processing and certain adjudication services for the Pharmacy, Dental and MS&E benefits to First Nations clients in British Columbia on behalf of the FNHA. This arrangement will be in place for a term of up to four years. During 2016/17, the NIHB program and the FNHA continued working together in support of ongoing capacity building and to prepare for the full transfer of the NIHB Program in British Columbia following the conclusion of this transition period.

Figure 2.1: Eligible Client Population by Region

March 2017

The total number of NIHB-eligible clients at the end of March 2017 was 853,088, an increase of 1.7% from March 2016.

The Ontario Region had the largest proportion of the eligible population, representing 24.3% of the national total, followed by the Manitoba Region at 17.9% and the Saskatchewan Region at 17.5%.

Note that Figure 2.1 lists population values based on region of band registration, which is not necessarily the client's current region of residence. The majority of British Columbia clients previously covered by the NIHB Program are now covered by the B.C. First Nation Health Authority (FNHA) and are not represented in this chart. The remaining NIHB clients in B.C. are Inuit clients, or clients associated with B.C. bands, but residing in other provinces and territories of Canada (where they are covered under the federal NIHB Program).

Figure 2.2: Eligible Client Population by Type and Region

March 2016 and March 2017

Of the 853,088 total eligible clients at the end of the 2016/17 fiscal year, 806,117 (94.5%) were First Nations clients while 46,971 (5.5%) were Inuit clients. The number of First Nations clients increased by 1.6% and the number of Inuit clients increased by 2.2%

From March 2016 to March 2017, Alberta had the highest percentage change in total eligible clients with a 2.5% increase, followed by Nunavut and Saskatchewan with increases of 2.4% and 2.0% respectively.  

Figure 2.3: Eligible Client Population

Over the past 10 years, the total number of eligible clients in the SVS has increased by 6.7%, from 799,213 in March 2008 to 853,088 in March 2017.

The NIHB Program client population was significantly impacted during this period by amendments to the Indian Act, such as the passage of Bill C-31, Bill C-3, and the creation of the new Qalipu Mi'kmaq Band, which increased the NIHB client population. In contrast, the creation of the First Nations Health Authority (FNHA) in British Columbia and the settlement of First Nations and Inuit self-government agreements, such as those with the Nisga'a Lisims Government and the Nunatsiavut Government, have decreased the total NIHB client population, as these individuals no longer receive benefits through Indigenous Services Canada's NIHB Program.  The most notable such change occurred in 2013-14, when approximately 133,430 clients in BC were removed from the NIHB client population when they became eligible to receive non-insured health benefits through the FNHA.  

Over the past five years, the NIHB Program's total number of eligible clients decreased by 7.9% from 926,044 in March 2013 to 853,088 in March 2017. Nunavut  had the largest increase in eligible clients over this period, with a growth rate of 8.6%. The regions of Quebec, Manitoba, and Ontario followed with growth rates of 7.6%, 5.6% and 5.2% respectively.

Figure 2.4: Annual Population Growth, Canadian Population and Eligible Client Population

2008 to 2017

From 2008 to 2017, the Canadian population increased by 10.5% while the NIHB eligible First Nations and Inuit client population increased by 6.7%. Prior to the removal of First Nations Health Authority (FNHA) clients, the NIHB ten year eligible population increase was 24.4%, with an average annual growth of 2.4%. Population growth is expected to return to historical rates in future fiscal years as the transition of residents of British Columbia to the FNHA is completed.

The higher than average NIHB Program client population growth rate of 6.0% in 2011-12 and 3.3% in 2012/13 can be attributed to the registration of new Bill C-3 clients as status Indians, and to new Qalipu Mi'kmaq First Nations clients in the Atlantic Region.

Figure 2.5: Eligible Client Population by Age Group, Gender and Region

March 2017

Of the 853,088 NIHB eligible clients on the SVS as of March 31, 2017, 49.2% were male (419,787) and 50.8% were female (433,301).

The average age of the eligible client population was 33 years of age. By region, this average ranged from a low of 27 years of age in Nunavut to a high of 38 years of age in the Yukon.

The average age of the male and female eligible client population was 32 years and 34 years respectively. The average age for males ranged from a low of 26 years in Nunavut to a high of 36 years in the Quebec and Yukon Region. The average age for females varied from a low of 27 years in Nunavut to a high of 39 years in the Yukon and Quebec Region.

The NIHB eligible First Nations and Inuit client population is relatively young with nearly two-thirds (64.8%) under the age of 40. Of the total population, almost one-third (32.8%) are under the age of 20.

The senior population (clients 65 years of age and over) has been slowly increasing as a proportion of the total NIHB client population. In 2007/08, seniors represented 5.9% of the overall NIHB population. Most recently in 2016/17, seniors accounted for 7.8%. This demographic trend will contribute to cost pressures on the NIHB Program.

Figure 2.6: Population Analysis by Age Group

The overall First Nations and Inuit client population is relatively young compared to the general Canadian population. The share of the NIHB client population under 20 years of age was 32.8% compared to 21.6% of the same age group in the Canadian population. The average age of First Nations and Inuit clients is 33 compared to 41 years of age for the Canadian population.

A comparison of March 2013 to March 2017 eligible client population shows an aging population. The client population 40 and above, as a proportional share of the overall client population, increased from 34.4% in 2013 to 35.2% in 2017.

As the First Nations and Inuit client population ages, the costs associated with delivering Non-Insured Health Benefits, particularly pharmacy benefits, to this client population are expected to increase significantly.

Figure 3.1: NIHB Program Sustainability

2016/17

Cost and service pressures on the Canadian health system have been linked to factors such as an aging population and the increased demand for and utilization of health goods, particularly pharmaceuticals, and services. In addition to these factors, NIHB Program expenditures are driven by the number of eligible clients and their medical needs. The NIHB client population is growing at approximately two times the Canadian population growth rate. A significant proportion of NIHB clients live in small and remote communities, and require medical transportation to access health services that are not available locally.

Figure 3.2: NIHB Expenditures by Benefit ($ Millions)

2016/17

In 2016/17, total NIHB Program benefit expenditures were $1,207.5 million. This represents an increase of 9.7% over NIHB expenditures of $1,100.5 million in 2015/16.

Of the 2016/17 total, Pharmacy costs (including medical supplies and equipment) represented the largest proportion at $494.5 million (41.0%), followed by Medical Transportation costs at $417.0 million (34.5%) and Dental costs at $235.8 million (19.5%).

Figure 3.3: NIHB Expenditures and Growth by Benefit

2016/17

NIHB Program benefit expenditures increased by 9.7%, or $106.9 million overall from 2015/16. All NIHB benefit areas had an increase in expenditures over the previous fiscal year. The highest net increase in expenditures over fiscal year 2015/16 was in the NIHB Medical Transportation benefit at $41.1 million, followed by NIHB Pharmacy and MS&E benefits with an increase of $38.1 million and the NIHB Dental benefit which increased by $18.7 million. Factors affecting benefit expenditure growth are discussed in subsequent sections of this report.

Figure 3.4: NIHB Expenditures by Benefit and Region ($ 000's)

2016/17

The Manitoba Region accounted for the highest proportion of total expenditures at $292.0 million, or 24.2% of the national total, followed by the Ontario Region at $231.7 million (19.2%), and the Saskatchewan Region at $220.4 million (18.2%). In comparison, the lowest expenditure was in the Atlantic Region at $55.1 million (4.6%).

Headquarters expenditures by benefit type represent costs paid for claims processing services.  Headquarters expenditures in the 'Other Health Care' category include funding arrangements with the FNHA for Bill C-3 and Qalipu clients and for payment of Inuit premiums in British Columbia, as well as with national client stakeholder organizations (Assembly of First Nations and Inuit Tapiriit Kanatami), and regional Indigenous organizations. These expenditures account for 2.0% ($23.7 million) of NIHB expenditures, and do not include the $16.3 million in Headquarters administrative costs outlined in Figure 11.1.  

Figure 3.5: Proportion of NIHB Expenditures by Region

2016/17

In 2016/17, the Manitoba Region had the highest proportion of total NIHB expenditures (24.2%) and accounted for 35.3% of total NIHB Medical Transportation expenditures. This can be attributed to the large number of First Nations clients living in remote or fly-in only northern communities in the Manitoba Region.

The Saskatchewan Region accounted for the highest proportion of NIHB Pharmacy expenditures at 21.0%, followed closely by Manitoba and Ontario at 19.2% and 19.0% respectively.

The Ontario Region, which accounted for 19.2% of total NIHB expenditures in 2016/17, recorded the highest proportion of total NIHB Dental expenditures at 22.0%. This region also accounted for the highest proportion of the total NIHB population at 24.3%.

The proportion of NIHB Vision Care expenditures ranged from highs of 21.4% in the Alberta Region, 20.2% in the Saskatchewan Region and 19.2% in the Ontario Region to a low of 5.4 % in Quebec.

The Alberta Region (29.7%) and the Manitoba Region (25.9%) combined accounted for over one-half of total NIHB Mental Health expenditures in 2016/17.

Figure 3.6: Proportion of NIHB Regional Expenditures by Benefit

2016/17

At the national level, approximately three-quarters (75.5%) of total Program expenditures occurred in two benefit areas: pharmacy (41.0%) and medical transportation (34.5%). Dental expenditures accounted for one-fifth (19.5%) of total NIHB expenditures.

Medical Transportation expenditures accounted for half of benefit expenditures in the Manitoba and Northern Regions (50.1% and 50.4%, respectively). In the Atlantic Region, 16.9% of benefit expenditures were spent on medical transportation.

The proportion of dental expenditures ranged from 13.7% in the Manitoba Region to 24.2% in Alberta Region.

In the Atlantic Region, 57.9% of total expenditures were spent on pharmacy benefits. Pharmacy costs represented the highest percentage of total expenditures in all regions except in the Northern Region and in Manitoba, where transportation accounted for the largest share of costs.

Figure 3.7: NIHB Annual Expenditures by Benefit ($ 000's)

2007/08 to 2016/17

In 2016/17, NIHB Program expenditures totalled $1,207.5 million, an increase of 9.7% from $1,100.5 million in 2015/16. Since 2007/08, total expenditures have grown by 34.4%. The annualized rate of growth over this period was 3.5%.  There has been wide variation in growth rates between 2007/08 and 2016/17, with a low of -7.1% in 2013/14^{Footnote 1} to a high of 9.7% in 2016/17.  

Fluctuations in NIHB expenditure growth rates are impacted by a number of factors. Changes in the eligible client population have a direct impact on growth. Notable examples include the transfer of responsibility for First Nations clients residing in BC to the FNHA in 2013/14, the creation of the Qalipu Mi'kmaq Band in 2011, and court decisions such as Bill C-3 that have resulted newly eligible clients.

NIHB expenditure growth rates are also impacted by the introduction of new therapies and generic drugs to the market, changes to provincial pricing policies, and economic inflationary pressures.  In addition, rates of expenditure growth are impacted by new self-government initiatives, policy changes to improve access to benefits or promote sustainability, and changes in service delivery models within the Program, within the federal government, and between the provinces and territories.

Figure 3.8: NIHB Annual Expenditures by Benefit ($ 000's)

2007/08 to 2016/17

In the period from 2007/08 to 2016/17, expenditures for NIHB Medical Transportation and Dental benefits have grown more than other benefit areas. NIHB Medical Transportation expenditures grew by 59.0% from $262.3 million in 2007/08 to $417.0 million in 2016/17. NIHB Dental expenditures rose by 42.4% from $165.6 million in 2007/08 to $235.8 million in 2015/16.

Over the same period, NIHB Pharmacy expenditures increased by 22.6% and NIHB Vision expenditures had an increase of 26.3%.

NIHB Mental Health expenditures increased by 76.8% over this same time period from $12.3 million in 2007/08 to $21.7 million in 2016/17.

Decreases in 'Other' expenditures in 2009/10 and 2013/14 can be attributed to the Government of Alberta eliminating Alberta health care insurance premiums for all Alberta residents in 2009 and to the transfer of responsibility for health care insurance premiums for First Nations clients residing in British Columbia to the First Nations Health Authority (FNHA) in 2013. This expenditure category also includes funding arrangements with the FNHA for Bill C-3 and Qalipu clients and for payment of premiums for Inuit clients in British Columbia, as well as with regional Indigenous organizations that employ NIHB Navigators to act as a resource for communities, organizations or individuals who need assistance or information on the NIHB Program.

Figure 3.9: Per Capita NIHB Expenditures by Region

2016/17

The national per capita expenditure for all benefits in 2016/17 was $1,388. Manitoba had the highest per capita cost in 2016/17 at $1,910. The Northern Region followed with a per capita cost of $1,594. The higher than average per capita cost for these regions is partly attributable to high medical transportation costs due to the large number of First Nations and Inuit clients living in remote or fly-in only northern communities. In contrast, the Atlantic Region had the lowest per capita cost of $851, due to the comparatively low medical transportation expenditures in the region.

Figure 4.1: Distribution of NIHB Pharmacy and MS&E Expenditures ($ Millions)

2016/17

In 2016/17, NIHB Pharmacy and  MS&E benefits totalled $494.5 million or 41.0% of total NIHB expenditures.

Figure 4.1 illustrates the components of pharmacy and MS&E expenditures under the NIHB Program. The cost of prescription drugs paid through the Health Information and Claims Processing Services (HICPS) system was the largest component, accounting for $360.2 million or 72.8% of all NIHB Pharmacy expenditures, followed by over-the-counter (OTC) drugs and controlled access drugs (CAD) which totalled $70.4 million or 14.2%. Medical supplies and equipment (MS&E) items paid through HICPS was the third largest component in the pharmacy benefit at $36.1 million or 7.3%.

Drugs and MS&E (Regional), at $2.0 million or 0.4%, refers to regionally managed prescription drugs and OTC medications. This category also includes MS&E items paid through Indigenous Services Canada regional offices.

Contribution agreements, which accounted for $9.7 million or 2.0% of total pharmacy and MS&E benefit costs, are used to fund the provision of pharmacy benefits through agreements such as those with the Mohawk Council of Akwesasne in Ontario and the Bigstone Cree Nation in Alberta.

Other costs totalled $16.3 million or 3.3% in 2016/17. Included in this total are Headquarters contract and claims processing expenditures related to the HICPS system.

Figure 4.2: Total NIHB Pharmacy Expenditures by Type and Region ($ 000's)

2016/17

Prescription drug costs paid through the HICPS system represented the largest component of total costs accounting for $360.2 million or 72.8% of all NIHB Pharmacy costs. The Saskatchewan Region had the largest proportion of these costs at 22.4%, followed by Manitoba at 20.3% and the Ontario Region at 19.6%.

The next highest component was over-the-counter (OTC) and controlled access drug (CAD) costs at $70.3 million or 14.5%. The regions of Manitoba (22.0%), Ontario (21.0%) and Saskatchewan (19.8%) had the largest proportions of these costs in 2016/17.

The third highest component was the combined medical supplies and equipment (MS&E) category at $36.1 million (7.3%). The Alberta Region (22.8%) had the highest proportion of MS&E costs in 2016/17. This was followed by the Saskatchewan  Region (22.2%), the Manitoba Region (17.6%), and the Ontario Region (15.2%).

Figure 4.3: Annual NIHB Pharmacy Expenditures

2012/13 to 2016/17

NIHB Pharmacy expenditures increased by 8.3% during fiscal year 2016/17.  Over the past five years, growth in pharmacy expenditures has ranged from a high of 8.3% in 2016/17 to a low of -10.1% in 2013/14. If expenditures for FNHA eligible clients are excluded from 2012/13 and 2013/14 total NIHB expenditures, then the growth rate for 2013/14 would have been 1.5%.

The five year annualized growth rate for NIHB Pharmacy expenditures is 1.5%. Growth has been low and steady over the past five years. Reasons for this stability include the introduction of lower cost generic drugs as they become available on the market, optimizing drug utilization, policy changes designed to promote NIHB Program sustainability, such as the implementation of the NIHB Short-Term Dispensing Policy in 2008/09, and changes in generic pricing policies in key provinces (Quebec, Ontario, Saskatchewan and British Columbia).

Figure 4.4: Per Capita NIHB Pharmacy Expenditures by Region

2016/17

In 2016/17, the national per capita expenditure for NIHB Pharmacy benefits was $560. This was an increase of 6.9% from the $524 recorded in 2015/16.

The Saskatchewan Region had the highest per capita NIHB Pharmacy expenditure at $699, followed by the Quebec Region at $669.

The Northern Region had the lowest per capita expenditure at $415 followed by the Ontario Region at $454. A relatively low per capita expenditure in the North is attributed to lower than average utilization rates and also a younger population utilizing lower cost medications. (Refer to Figure 4.6)

Figure 4.5: NIHB Pharmacy Operating Expenditures per Claimant by Region

2016/17

Expenditures per claimant are based on the total cost of pharmacy claims processed through the HICPS system, divided by the number of clients who submitted at least one pharmacy claim. 

In 2016/17, the national average per claimant expenditure was $891, an increase of 7.0% over 2015/16.

The Quebec Region had the highest average NIHB Pharmacy operating expenditure per claimant at $1,105, followed by Saskatchewan at $989.

Figure 4.6: NIHB Pharmacy Utilization Rates by Region

2012/13 to 2016/17

Utilization rates represent the number of clients who received at least one pharmacy benefit paid through theHICPS system in the fiscal year, as a proportion of the total number of eligible clients.

In 2016/17, the national utilization rate was 61% for NIHB Pharmacy benefits paid through the HICPS system.

The rates understate the actual level of service as the data do not include pharmacy services provided through contribution agreements and benefits provided through community health facilities or provided completely via alternate health coverage. For example, if the Bigstone Cree Nation client population were removed from the Alberta Region's population because the HICPS system does not capture any data on services used by this population, the utilization rate for pharmacy benefits in Alberta would have been 71% in 2016/17. Similarly for the Ontario Region, if the Akwesasne client population were removed from the Ontario Region's population, the utilization rate for pharmacy benefits would have been 58%. If both the Bigstone and Akwesasne client populations were removed from the overall NIHB population, the national utilization rate for pharmacy benefits would have been 63%.

Figure 4.7: NIHB Pharmacy Claimants by Age Group, Gender and Region

2016/17

Of the 853,088 clients eligible to receive benefits under the NIHB Program, a total of 523,386 claimants, representing 61% of the NIHB client population, received at least one pharmacy item paid through the Health Information and Claims Processing Services (HICPS) system in 2016/17. Of this total, 295,340 were female (56%) and 228,046 were male (44%). This compares to the total eligible population where 51% were female and 49% were male. 

The average age of pharmacy claimants was 35 years. The average age for female and male claimants was 35 and 34 years of age, respectively.

Figure 4.8: Distribution of Eligible NIHB Population, Pharmacy Expenditures and Pharmacy Incidence by Age Group

2016/17

The main drivers of NIHB Pharmacy expenditures are the cost of medications, the volume of claims^{Footnote 2} submitted and the professional fees associated with filling these claims. In 2016/17, 6.1% of all clients were in the 0 to 4 age group, but this group accounted for only 1.0% of all pharmacy claims made and only 1.1% of total pharmacy expenditures. In contrast, 7.8% of all eligible clients were in the 65+ age group, but accounted for 23.6 % of all pharmacy claims submitted and 17.8 % of total pharmacy expenditures.  

During 2016/17, the average claimant aged 65 or more submitted 94 claims compared to 66 claims for their counterpart in the 60 to 64 age group and 6 claims for the average claimant in the 0 to 4 age group.

An examination of pharmacy benefit cost per NIHB claimant indicates that these expenditures vary according to age. For example, in 2016/17 the average cost per child aged 0 to 4 years was $185. The cost increased steadily for every age group, with claimants aged 35-39 having an average cost of $941, comparable to the total average claimant cost of $891. Claimants over 65 years of age had the highest cost per claimant with an average of $1,893 for all pharmaceutical services received throughout the fiscal year.

Figure 4.9: NIHB Top Ten Therapeutic Classes by Number of Claimants

2016/17

Figure 4.9 ranks the top ten therapeutic classes according to number of claimants. In 2016/17, Non-Steroidal Anti-Inflammatory Drugs (NSAID) had the highest number of distinct claimants at 200 thousand, an increase of 1.4% over 2015/16.  Penicillins such as Amoxil (Amoxicillin) ranked second in number of claimants with 162 thousand followed by Opioid Agonists with 121 thousand claimants.

Figure 4.10: NIHB Prescription Drug Claims Incidence by Pharmacologic Therapeutic Class

2016/17

Figure 4.10 demonstrates variation in claims incidence by therapeutic classification for prescription drugs.

Central nervous system agents, which include drug classes such as analgesics and sedatives, accounted for 43.3% of all prescription drug claims in 2016/17. Central nervous systems agents are used in the treatment of diverse health conditions such as arthritis, depression or epilepsy.

Cardiovascular drugs had the next highest share of prescription drug claims at 17.4% followed by hormones and synthetic substitutes, which consist primarily of oral contraceptives and insulin, at 11.4%. Cardiovascular drugs are used to treat clients with arrhythmias, hypercholesterolemia or ischemic heart disease. Hormones and synthetic substitutes are given to clients to treat conditions such as diabetes or hypothyroidism.

Figure 4.11: NIHB Over-the-Counter Drugs (Including Controlled Access Drugs - CAD) Claims Incidence by Pharmacologic Therapeutic Class

2016/17

Figure 4.11 demonstrates variation in claims incidence by therapeutic classification for over-the-counter (OTC) drugs. The NIHB Program covers the cost of some OTC drugs. To be reimbursed by the NIHB Program, all OTC drugs require a prescription from a recognized health professional who has the authority to prescribe in their province or territory of practice.

OTC central nervous system agents, which are drugs used to manage pain such as headaches (e.g. acetaminophen), accounted for 25.9% of all OTC drug claims.

Vitamins are the next highest category of OTC medication at 25.1%, followed by gastrointestinal products such as antacids and laxatives, which are used to treat heartburn and constipation, at 9.3%. 

Figure 4.12: Medical Supplies by Category and Claims Incidence

2016/17

Figure 4.12 demonstrates variation in medical supply claims incidence by category.

In 2016/17, incontinence supplies such as liners and pads accounted for 24.7% of all medical supply claims. Hearing aid supplies, such as batteries, represented 23.5% of all medical supply claims, followed by wound care supplies at 23.2%.

Figure 4.13: NIHB Medical Equipment by Category and Claims Incidence

2016/17

Figure 4.13 demonstrates variation in medical equipment claims incidence by category.

Claims for hearing aids accounted for 24.9% of all medical equipment claims in 2016/17. Oxygen equipment was the next highest at 24.1%, followed by limb orthoses at 9.2% and walking aids at 8.6%.

The most significant increase in the proportion of total medical equipment claims over the fiscal year 2015/16 was in hearing aids which increased by 3.0 percentage points.

Figure 5.1: Distribution of NIHB Dental Expenditures ($ Millions)

2016/17

NIHB Dental expenditures totalled $235.8 million in 2016/17. Figure 5.1 illustrates the distinct components of dental expenditures under the NIHB Program. Fee-for-service dental costs paid through the Health Information and Claims Processing Services (HICPS) system represented the largest expenditure component, accounting for $212.2 million or 90.0% of all NIHB Dental costs.

The next highest component was contribution agreements, which accounted for $12.6 million or 5.3% of total dental expenditures. Contribution allocations were used to fund the provision of dental benefits through agreements such as those with the Mohawk Council of Akwesasne in Ontario and the Bigstone Cree Nation in Alberta.

Expenditures for contract dentists providing services to clients in remote communities totalled $8.1 million or 3.4% of total costs.

Other costs totalled $2.9 million or 1.2% in 2016/17. The majority of these costs are related to benefit claims processing through the HICPS system.

Figure 5.2: Total NIHB Dental Expenditures by Type and Region ($ 000's)

2016/17

NIHB Dental expenditures totalled $235.8 million in 2016/17. The regions of Ontario (22.1%), Saskatchewan (20.1%), Alberta (18.8%) and Manitoba (17.0%) had the largest proportion of overall dental costs.  The Ontario Region had the highest total dental expenditure at $52.1 million and the Atlantic Region had the lowest total dental expenditure at $9.6 million.

Figure 5.3: Annual NIHB Dental Expenditures

2012/13 to 2016/17

NIHB Dental expenditures increased by 8.6% during fiscal year 2016/17. The decrease in overall NIHB Dental expenditures recorded in fiscal years 2013/14 and 2014/15 can be attributed to the transfer of eligible First Nation clients residing in British Columbia to the First Nations Health Authority (FNHA). If expenditures for FNHA eligible clients are excluded from 2012/13 and 2013/14 total NIHB expenditures, then the dental expenditure growth rate for 2013/14 would have been 3.8%.

Over the last five years, annual growth rates for NIHB Dental expenditures have ranged from a high of 8.6% in 2016/17 to a low of -7.0% in 2013/14.

Figure 5.4: Per Capita NIHB Dental Expenditures by Region

2016/17

In 2016/17, the national per capita NIHB Dental expenditure was $273, an increase of 7.0% from $255 recorded in 2015/16.

The Alberta Region had the highest per capita dental expenditure at $366, followed closely by the Northern Region at $328 and Saskatchewan Region at $317. The Atlantic Region had the lowest per capita dental cost at $148 per eligible client. The lower per capita cost in the Atlantic Region can be partly attributed to an increase in the eligible client population in this region as a result of the registration of 24,745 Qalipu Mi'kmaq First Nations clients. A large number of these clients have alternative dental coverage, so the lower level of dental benefit utilization for these new clients has impacted the dental per capita cost for the Atlantic Region as a whole.

Per capita values reflect NIHB Dental expenditures only, and do not include additional dental services that may be provided to First Nations and Inuit populations through other Department of Indigenous Services Canada programs or through transfers and other arrangements.

Figure 5.5: NIHB Dental Fee-For-Service Expenditures per Claimant by Region

2016/17

In 2016/17, the national NIHB Dental expenditure per claimant (i.e. eligible clients who received at least one dental benefit) was $692. This represents an increase of 6.2% over the $652 recorded in 2015/16.

The Alberta Region had the highest dental expenditure per claimant at $853 followed by the Northern Region at $802, an increase of 7.4% and 4.6% respectively from $794 and $767 in the previous year.

Figure 5.6: NIHB Dental Utilization Rates by Region

2012/13 to 2016/17

Utilization rates reflect the number of clients who, during the fiscal year, received at least one dental service paid through the HICPS system as a proportion of the total number of eligible clients.

In 2016/17, the national utilization rate for dental benefits paid through the HICPS system was 36%, consistent with the previous four fiscal years. National NIHB Dental utilization rates have remained stable over the past five years.

Dental utilization rates vary across the regions with the highest dental utilization rate found in the Quebec Region (44%). The lowest dental utilization rate was in the Ontario Region (32%). It should be noted that the dental utilization rates understate the actual level of service, as this data does not include:

• Department of Indigenous Services Canada dental clinics (except in the Yukon);
• Contract dental services provided in some regions;
• Services provided by Department of Indigenous Services Canada Dental Therapists or other FNIHB dental programs such as the Children's Oral Health Initiative (COHI); and
• Dental services provided through contribution agreements. For example, HICPS data does not capture any services utilized by the Bigstone Cree Nation.  If this client population was removed from the Alberta Region's population, the utilization rate for dental benefits for Alberta would have been 43% in 2016/17. The same scenario would apply for the Ontario Region. If the Akwesasne client population in Ontario were to be removed, the utilization rate for dental benefits in Ontario would have been 35%. If both the Bigstone and Akwesasne client populations were removed from the overall NIHB population, the national utilization rate for dental benefits would have been 37%.

Over the two year period between 2015/16 and 2016/17, 412,479 distinct clients received NIHB Dental services resulting in an overall 48% utilization rate over this period.

Figure 5.7: NIHB Dental Claimants by Age Group, Gender and Region

2016/17

Of the 853,088 clients eligible to receive dental benefits through the NIHB Program, 306,705 (36%) claimants received at least one dental procedure paid through the HICPS system in 2016/17.

Of this total, 171,841 were female (56%) and 134,864 were male (44%), compared to the total eligible NIHB population where 51% were female and 49% were male. 

The average age of dental claimants was 31 years, indicating clients tend to access dental services at a slightly younger age compared to pharmacy services (35 years of age). The average age for female and male claimants was 32 and 30 years of age respectively.

Approximately 37% of all dental claimants were under 20 years of age. Forty percent of male claimants were in this age group compared to 34% of female claimants. Approximately 5% of all claimants were seniors (ages 65 and over) in 2016/17. 

Figure 5.8: NIHB Fee-for-Service Dental Expenditures by Sub-Benefit

2016/17

First Nations and Inuit experience a higher rate of dental disease such as periodontal disease and caries compared to other Canadians. Poor oral health can contribute to a greater incidence and severity of other medical conditions such as diabetes, respiratory illnesses and cardiovascular diseases. The broad range of dental services covered by the NIHB Program provides the opportunity to ensure that proper oral care required for overall good health is available to First Nations and Inuit clients. In 2016/17, through the NIHB Program's Dental Benefit, the oral health needs of approximately 202,000 clients who required intraoral radiograph services, 189,000 clients who received scaling procedures, and 142,000 clients who required restoration treatments were addressed.

In 2016/17, expenditures for Restorative Services (crowns, fillings, etc.) were the highest of all dental sub-benefit categories at $94.9 million. Diagnostic Services (examinations, x-rays, etc.) at $27.9 million and Preventative Services (scaling, sealants, etc.)  at $26.3 million were the next highest sub-benefit categories.  Rounding out the top 5 was Oral Surgery (extractions, etc.) at $24.3 million and Endodontic Services (root canal treatments, etc.) at $13.3 million. 

In 2016/17, the three largest dental procedures by expenditure were Composite Restorations ($80.1 million), Scaling ($20.2 million) and Extractions ($17.0 million).

Figure 5.9: Distribution of Eligible NIHB Population, Dental Expenditures and Incidence by Age Group

2016/17

The main drivers of NIHB Dental expenditures are increased rates of utilization and increases in the fees charged for services by dental professionals. The types of dental services provided also have an impact on expenditures.

The ratio of incidence to expenditures is relatively consistent across most age groupings; however, there are notable exceptions. For children aged 0 to 9, a larger number of low-cost procedures (e.g., low-cost restorative procedures such as fillings) are provided, so this group accounts for 24.9% of claims, but only 17.6% of expenditures.

Figure 6.1: Distribution of NIHB Medical Transportation Expenditures ($ Millions)

2016/17

In 2016/17, NIHB Medical Transportation expenditures totalled $417.0 million. Figure 6.1 illustrates the components of medical transportation expenditures under the NIHB Program.

Contribution agreements for the management of medical transportation benefits by First Nations or Inuit Health Authorities, organizations or territorial governments represented the largest component, accounting for $170.1 million, or 40.8% of total benefit expenditures.

Of benefits managed by the NIHB Program, scheduled flights at $77.4 million (18.6%), living expenses at $52.7 million (12.6%) and land ambulance at $49.8 million (11.9%) were the largest expenditures, accounting for a combined total of over 40%.

Rounding out medical transportation expenditures are costs for air ambulance at $39.1 million (9.4%), land and water at $20.4 million (4.9%) and chartered flights at $7.5 million (1.8%).

Figure 6.2: Annual NIHB Medical Transportation Expenditures

2012/13 to 2016/17

NIHB Medical Transportation expenditures increased by 10.9% in 2016/17 compared to the previous year.

Over the past five years, overall medical transportation costs have grown by 18.7% from $351.4 million in 2012/13 to $417.0 million in 2016/17.  As with other benefits, expenditure growth during this period was significantly impacted by the transfer of BC clients to the FNHA in 2013.   

On a regional basis, the highest growth rates over this period were in the Atlantic Region where expenditures grew by 34.9% from $6.9 million in 2012/13 to $9.3 million in 2016/17. This was followed by the Manitoba Region with an increase of 34.5% from $109.4 million in 2012/13 to $147.2 million in 2016/17.

The Manitoba Region had the highest total medical transportation expenditure at $147.2 million and had the largest net increase in expenditures over the past five years as medical transportation costs grew by $37.8 million over this period. The Ontario Region had the second largest net increase in expenditures over the past five years at $15.6 million followed by the Northern Region at $13.4 million.

*If expenditures for FNHA eligible clients are excluded from 2012/13 and 2013/14 total NIHB expenditures, then the growth rate for 2013/14 would have been 3.6%.

Figure 6.3: NIHB Medical Transportation Expenditures by Type and Region ($ 000's)

2016/17

National NIHB Medical Transportation expenditures increased by 10.9% to $417.0 million in 2016/17.

The Manitoba Region had the largest percentage increase in medical transportation expenditures in 2016/17, with an increase of 17.4% from the previous fiscal year. The Atlantic Region followed with a 10.7% increase in expenditures.

In 2016/17, the Manitoba Region had the highest overall NIHB Medical Transportation expenditure at $147.2 million, primarily as a result of air transportation which totalled $74.5 million. High medical transportation costs in the region reflect in part the large number of First Nations clients living in remote or fly-in only northern communities.

The Ontario Region represented the second highest medical transportation expenditure total in 2016/17 at $74.9 million. The regions of Saskatchewan and the North followed at $58.9 million and $55.1 million, respectively.

Figure 6.4: NIHB Medical Transportation Contribution and Operating Expenditures by Region ($ Millions)

2016/17

Figure 6.4 compares contribution funding to operating costs in NIHB Medical Transportation. Contribution funding is provided to First Nations bands, territorial governments and other organizations to manage elements of the medical transportation benefit (e.g., coordinating accommodations, managing ground transportation, etc.), whereas operating costs are medical transportation benefits that are managed directly by Department of Indigenous Services Canada regional offices.

Manitoba Region had the largest operating expenditure for NIHB Medical Transportation in 2016/17 at $118.2 million. This higher cost in the Manitoba Region is due largely to the high number of clients living in remote or fly-in only communities in the northern areas of the province who require air travel to access health services in Winnipeg. The Ontario Region had the next largest operating expenditure at $49.6 million, followed closely by the Saskatchewan Region at $44.6 million. Together these three regions accounted for 86.0% of all operating expenditures for medical transportation.

In 2016/17, the Northern Region had the largest contribution expenditures for NIHB Medical Transportation at $50.2 million, followed by the regions of Manitoba and Ontario at $29.0 million and $25.3 million, respectively. Almost all NIHB Medical Transportation services were delivered via contribution agreements in Quebec.

Figure 6.5: NIHB Medical Transportation Operating Expenditure by Type ($ Millions)

2016/17

In 2016/17, scheduled flights represented the largest portion of NIHB's Medical Transportation operating expenditures at $77.4 million or 31.4% of the total national operating expenditures. Living expenses, which include accommodations and meals, was the second highest at $52.7 million, or 21.3% of operating expenditures. Land ambulance followed at $49.8 million or 20.2%, and air ambulance costs comprised $39.1 million or 15.8% of medical transportation operating costs.

Private vehicle expenditures ($4.2 million) are the costs reimbursed through a per-kilometre allowance for private vehicle used by a client to access eligible health services. The NIHB private vehicle kilometric allowance rates are directly linked to the National Joint Council's (NJC) Government Commuting Assistance Directive Lower Kilometric Rates.

Figure 6.6: Per Capita NIHB Medical Transportation Expenditures by Region

2016/17

In 2016/17, the national per capita expenditure for NIHB Medical Transportation benefits was $489.

Manitoba recorded the highest per capita expenditure in medical transportation at $963, followed by the Northern Region at $803. These expenditures reflect the large number of First Nations and Inuit clients living in remote or fly-in communities that need to fly south for health services.

In contrast, the Atlantic Region had the lowest per capita expenditure at $143, a slight increase from $132 in the previous year. Compared to other regions, this lower per capita cost is reflective of the geography of the region, which allows easier access to health services with less need for air travel.

Figure 7.1: NIHB Vision Expenditures and Growth by Region ($ 000's)

2016/17

NIHB Vision expenditures totalled $32.4 million in 2016/17. Regional operating expenditures accounted for $27.6 million (85.3%) of total expenditures while contribution costs accounted for $4.8 million (14.7%).

In 2016/17, the Alberta Region had the highest expenditures in NIHB Vision benefits at $6.9 million, a percentage share of 21.4%, followed by the Saskatchewan Region at $6.5 million (20.2%) and the Ontario Region at $6.2 million (19.2%).

Figure 7.2: Annual NIHB Vision Expenditures

2012/13 to 2016/17

In 2016/17, NIHB Vision expenditures increased by 7.8% from the previous year.  Over the past five years, as with other benefits, vision care expenditures declined sharply in 2013/14 and 2014/15 due to the transfer of BC clients to the FNHA, and increased in subsequent years.

On a regional basis, the highest expenditure growth rate over this five year period was in the Alberta Region where expenditures grew by 18.7% from $5.8 million in 2012/13 to $6.9 million in 2016/17. The largest net increases in expenditures over the past five years took place in the Alberta Region where total vision benefit costs grew by $1.1 million over this period, followed by the Saskatchewan Region where costs grew by $857 thousand. The significant drop in Northern Region vision expenditures in fiscal year 2014/15 is due to a change in financial coding for specific Vision benefit contribution agreements in Nunavut and the Northwest Territories.

Figure 7.3: Per Capita NIHB Vision Expenditures by Region

2016/17

In 2016/17, the national per capita expenditure in NIHB Vision benefits was $38.

Alberta had the highest per capita expenditure at $57, followed by the Atlantic Region and the Northern Region at $54 and $47 respectively. The lowest per capita NIHB Vision benefit expenditure was in the Quebec Region at $25.

Figure 7.4: NIHB Mental Health Counselling Expenditures by Region ($ 000's)

2016/17

Prior to 2014/15, NIHB Mental Health Counselling expenditures were reported under Other Health Care. In this edition of the NIHB Annual Report, and going forward, expenditures associated with the provision of mental health counselling services to NIHB clients will be reported separately.

In 2016/17, NIHB Mental Health Counselling expenditures amounted to $21.7 million. Regional operating expenditures accounted for $14.3 million (65.9%) of total expenditures while contribution costs accounted for $7.4 million (34.1%).

In 2016/17, the Alberta Region had the highest percentage share of NIHB Mental Health Counselling expenditures at 29.7% followed by the Manitoba and Ontario regions at 25.9% and 18.8% respectively.

Figure 7.5: Per Capita NIHB Mental Health Counselling Expenditures by Region ($ 000's)

2016/17

In 2016/17, the national per capita expenditure for NIHB Mental Health Counselling was $25.

The Alberta Region had the highest per capita expenditure at $53, followed by the Manitoba Region at $37 per eligible client.

Figure 7.6: NIHB Other Health Care Expenditures by Region ($ 000's)

2016/17

In 2016/17, NIHB Other Health Care expenditures totalled $6.0 million. The majority of these expenditures are related to contribution agreements including funding arrangements with the FNHA for Bill C-3 and Qalipu clients, and for payment of health premiums for Inuit clients in British Columbia.

Other expenditures in this category include contribution agreements with national client stakeholder organizations (Assembly of First Nations and Inuit Tapiriit Kanatami), as well as with regional Indigenous organizations that employ NIHB Navigators to act as a resource for communities, organizations or individuals who need assistance or information on the NIHB Program.

Figure 8.1: Atlantic Region

2007/08 to 2016/17

Over the ten year period from 2007/08 to 2016/17, NIHB expenditures in the Atlantic Region were impacted by changes to the NIHB eligible client population.  The creation of the Qalipu Mi'kmaq First Nation band in 2011 resulted in a 2 year surge in Atlantic Regional expenditures. As of March 31, 2017, a total of 24,745 Qalipu clients were eligible to receive benefits through the NIHB Program. The decrease in expenditures in 2013/14 can be attributed to the transfer of authority to the First Nations Health Authority for clients registered to Atlantic First Nations, but residing in British Columbia.

Annual expenditures in the Atlantic Region for 2016/17 totalled $55.1 million, an increase of 17.4% over the $50.8 million spent in 2015/16. Pharmacy expenditures in 2016/17 increased by 6.1% to $31.9 million, medical transportation costs increased by 10.7% to $9.3 million and dental expenditures increased by 8.4% to $9.6 million. Mental health expenditures increased by 43.3% and vision care expenditures increased by 15.9%.
Pharmacy expenditures accounted for more than half of the Atlantic Region's total expenditures at 57.9%. Dental expenditures ranked second at 17.4%, followed by medical transportation at 16.8%. Vision care and mental health expenditures accounted for 6.4% and 1.1% of total expenditures respectively.

Figure 8.2: Quebec Region

2007/08 to 2016/17

Annual expenditures in the Quebec Region for 2016/17 totalled $91.8 million, an increase of 8.5% from the $87.7 million spent in 2015/16.

Pharmacy expenditures increased by 7.3% to $47.4 million and dental expenditures increased by 5.6% to $17.6 million, while medical transportation costs in 2016/17 decreased slightly by -0.8% to $23.5 million. Mental health expenditures increased by 12.6% and vision care expenditures increased by 0.7%.

Pharmacy expenditures accounted for half of the Quebec Region's total expenditures in 2016/17 at 51.7%.  Medical transportation expenditures ranked second at 25.6%, followed by dental at 19.1%. Vision care and mental health expenditures accounted for 1.9% and 1.4% of total expenditures respectively.

Figure 8.3: Ontario Region

2007/08 to 2016/17

Annual expenditures in the Ontario Region for 2016/17 totalled $231.7 million, an increase of 14.1% from the $215.7 million spent in 2015/16.

In 2016/17, Ontario had the highest expenditures in dental care of all of the regions, at $52.1 million, an increase of 22.5%. Pharmacy expenditures in 2016/17 increased by 5.9% to $94.1 million, while medical transportation costs increased by 10.5% to $74.9 million. Vision care and mental health expenditures increased by 1.0% and 35.4% respectively.

Pharmacy expenditures accounted for 40.6% of the Ontario Region's total expenditures. Medical transportation costs ranked second at 32.3%, followed by dental at 22.5%. Vision care and mental health expenditures accounted fo 2.7% and 1.8% of total expenditures respectively.

Figure 8.4: Manitoba Region

2007/08 to 2016/17

Annual expenditures in the Manitoba Region for 2016/17 totalled $292.0 million, an increase of 22.1% from the $258.1 million spent in 2015/16. Pharmacy expenditures in 2016/17 increased by 7.7% to $94.8 million, while medical transportation costs increased by 17.4% to $147.2 million. Dental expenditures increased by 8.8% to $40.0 million. Mental health expenditures increased by 49.1% while vision decreased by -0.2%.

Unlike most other regions, pharmacy expenditures in Manitoba do not represent the largest proportion of total expenditures. Due to the higher proportion of clients living in northern or remote communities in Manitoba, medical transportation expenditures comprised half of the Manitoba Region's total expenditures at 50.4%. Pharmacy costs ranked second at 32.5%, followed by dental at 13.7%. Vision care and mental health expenditures accounted for 2.7% and 1.8% of total expenditures respectively.

Figure 8.5: Saskatchewan Region

2007/08 to 2016/17

Annual expenditures in the Saskatchewan Region for 2016/17 totalled $220.5 million, an increase of 22.4% from the $193.5 million spent in 2015/16.

Saskatchewan had the highest expenditures in pharmacy, followed closely by Manitoba and Ontario. In Saskatchewan, pharmacy expenditures in 2016/17 increased by 14.2% to $104.1 million, while medical transportation costs increased by 10.0% to $58.9 million and dental expenditures increased by 15.3% to $47.3 million. Vision care and mental health expenditures increased by 7.0% and 102.6% respectively. 

Pharmacy expenditures comprised the largest portion of the Saskatchewan Region's total expenditures at 47.2%, medical transportation costs ranked second at 26.7%, followed by dental at 21.5%. Vision care and mental health expenditures accounted for 3.0% and 1.5% of total expenditures respectively.

Figure 8.6: Alberta Region

2007/08 to 2016/17

The decreased growth rate recorded in 2009/10 is primarily the result of the NIHB Program no longer covering provincial health premiums in the Alberta Region because the Government of Alberta eliminated Alberta Health Care insurance premiums for all Albertans as of January 1, 2009.

Annual expenditures in the Alberta Region for 2016/17 totalled $183.1 million, an increase of 15.2% from the $168.2  million spent in 2016/17. Pharmacy expenditures in 2016/17 increased by 10.4% to $77.3 million, while medical transportation costs increased by 4.1% to $48.2 million and dental expenditures increased by 11.7% to $44.3 million. Vision care and mental health expenditures increased by 11.6% and 7.3% respectively.

Pharmacy expenditures accounted for 42.2% of the Alberta Region's total expenditures. Medical transportation costs ranked second at 26.3 %, followed closely by dental at 24.2%. Vision care and mental health expenditures accounted for 3.8% and 3.5% of total expenditures respectively.

Figure 8.7: Northern Region

2007/08 to 2016/17

Annual expenditures in the Northern Region for 2016/17 totalled $109.2 million, an increase of 15.7% from the $102.0 million spent in 2015/16.

Medical Transportation expenditures in 2016/17 increased by 8.2% to $55.1 million while Pharmacy costs increased by 3.9% to $28.5 million. Dental expenditures increased by 4.9% to $22.09 million. Vision care and mental health expenditures increased by 25.5% and 89.4% respectively.

Similar to Manitoba, Medical Transportation expenditures comprised the largest portion of the Northern Region's total expenditures at 50.5%. Pharmacy costs ranked second at 26.1%, followed by dental at 20.1%. Vision care and mental health expenditures accounted for 2.9% and 0.3% of total expenditures respectively.

Figure 9.1: Non-Insured Health Benefits Administration Costs ($ 000's)

2016/17

Figure 9.1 provides the Program administration funds expended by each region as well as NIHB headquarters (HQ) in Ottawa. In 2016/17, total NIHB administration costs were $54.0 million representing a decrease of $128 thousand over the previous fiscal year.

The roles of NIHB headquarters include:

• Program policy development and determination of eligible benefits;
• Development and maintenance of the HICPS system and other national systems such as the Medical Transportation Reporting System (MTRS);
• Audits and provider negotiations;
• Adjudicating benefit requests through the NIHB Drug Exception Centre and the Dental Predetermination Centre; and
• Maintaining productive relationships with stakeholders at the national level as well as with other federal departments and agencies.

The roles of the NIHB regions include:

• Adjudicating benefit requests for medical transportation, medical supplies and equipment, dental, vision benefits, and mental health counselling benefits;
• Working with NIHB headquarters on policy development, provider negotiations and audits; and
• Maintaining productive relationships with stakeholders at the provincial/territorial level as well as with provincial/territorial officials.

Claims processing contract costs are related to the administration of pharmacy, medical supplies and equipment and dental benefits through the Health Information and Claims Processing Services (HICPS) system, and include:

• Claim processing and payment operations;
• Claim adjudication and reporting systems development and maintenance;
• Provider registration and communications;
• Systems in support of pharmacy and MS&E benefits prior approval and dental predetermination processes;
• Provider audit programs and audit recoveries; and
• Standard and ad hoc reporting.

Figure 9.2: Non-Insured Health Benefits Administration Costs as a Proportion of Benefit Expenditures ($ Millions)

2012/13 to 2016/17

The NIHB Program is responsible for developing, maintaining and managing key business processes, systems and services required to deliver eligible non-insured health benefits. Figure 9.2 provides the percentage of NIHB Program administrative costs as a proportion of overall NIHB benefit expenditures. In 2016/17, total NIHB benefit expenditures were $1,207.5 million, of which direct benefit expenditures totaled $1,188.3 million and expenditures for claims processing administration amounted to $19.2 million. An additional $37.2 million was spent on salaries and operating costs associated with Program administration.

Total NIHB Program administration costs ($56.4 million, including claims processing and other program administration) as a proportion of direct benefit expenditures ($1.2 billion), was 4.7% in 2016/17.Over the past five fiscal years, the percentage of NIHB Program administrative costs as a proportion of total benefit expenditures has ranged from a high of 5.4% in 2014/15 to a low of 4.7% in  2016/17.

Figure 9.3: Health Information and Claims Processing Services (HICPS)

2016/17

Claims for the Non-Insured Health Benefits (NIHB) Program pharmacy, dental and medical supplies and equipment (MS&E) benefits provided to eligible First Nations and Inuit clients are processed via the Health Information and Claims Processing Services (HICPS) system. HICPS includes administrative services and programs, technical support and automated information management systems used to process and pay claims in accordance with NIHB Program client/benefit eligibility and pricing policies.

Since 1990, the NIHB Program has retained the services of a private sector contractor to administer the following core claims processing services on its behalf:

• Claim processing and payment operations;
• Claim adjudication and reporting systems development and maintenance;
• Provider registration and communications;
• Systems in support of pharmacy and MS&E benefits prior approval and dental predetermination processes;
• Provider audit programs and audit recoveries; and
• Standard and ad hoc reporting.

The current HICPS contract is with Express Scripts Canada (formally ESI Canada). This contract came into force on December 6, 2009, following a competitive contracting process led by Public Works and Government Services Canada (PWGSC). The NIHB Program manages the HICPS contract as the project authority in conjunction with PWGSC, the contract authority.

As of March 31, 2017, there were 26,120 active providers^{Footnote 3} registered with the HICPS claims processor to deliver NIHB Pharmacy, MS&E and Dental benefits. The number of active providers by region and by benefit is outlined in the table below. The number of claims settled through the HICPS system is highlighted in Figure 9.3.2.

Figure 9.4: Benefits Management

The NIHB Program is responsible for developing, maintaining and managing key business processes, systems and services required to deliver eligible non-insured health benefits. Many items or services covered by the NIHB Program are open benefits.  This means that prior approval is not required, and an enrolled provider can provide the service right away.  Some items or services require prior approval from NIHB to ensure that they meet criteria for coverage.

Drug Exception Centre (DEC)

The NIHB Drug Exception Centre (DEC) was established in December 1997 to process and expedite pharmacists' requests for drug benefits that require prior approval, to help ensure consistent application of the NIHB drug benefit policy across the country, and to ensure an evidence-based approach to funding drug benefits. The DEC handles requests for prior approval from pharmacy providers across Canada.

The DEC supports the implementation of the Prescription Drug Abuse Strategy to address and prevent potential misuse of prescription drugs. The Program has set limits on medications of concern, and developed a structured approach towards client safety which includes the implementation of the Prescription Monitoring Program across the country.

The DEC is a single call centre that provides efficient responses to all requests for drugs that are not on the NIHB Drug Benefit List or require prior approval, for extemporaneous mixtures containing exception or Limited Use (LU) drugs, for prescriptions on which prescribers have indicated "No Substitution," and for claims that exceed $1,999.99.

Open Benefit (unrestricted):

Drugs included on the NIHB Drug Benefit List for which the total dollar value exceeds Point of Sale limit, the pre-determined frequency limit has been reached or for which more than a three-month supply is requested.

Open Benefit (restricted):

Drugs included on the NIHB Drug Benefit List which have been restricted due to safety concerns. These drugs are part of the Prescription Drug Abuse Strategy, such as opioids, benzodiazepines, stimulants and gabapentin.

Exceptions:

Drugs not included on the NIHB Drug Benefit List, as well as requests for drugs for which the physician has indicated "No Substitution".

Limited Use:

Drugs covered only if they are prescribed for conditions which meet specific criteria for Program coverage.

Section 9.5: Claims Verification Activities

2016/17

The NIHB Program is a publicly-funded program that must account for the expenditure of those public funds. Claims verification activities contribute to the fulfillment of this overall requirement. As part of the program's risk management activities, Department of Indigenous Services Canada has mandated its claims processor to maintain a set of pre-payment and post-payment processes, including claims verification activities.

During 2016/17, the claims processor carried out claims verifications as directed by the NIHB Program. The verifications address the need of the NIHB Program to comply with accountability requirements for the use of public funds and to ensure provider compliance with the terms and conditions of the Program as outlined in the NIHB Provider Guide, Claims Submission Kit, Provider Agreement and other relevant documents. The objectives of the  claims verification activities are to detect billing irregularities, to validate active licensure of providers, to ensure that services paid for were received by eligible NIHB clients and to ensure that providers retained appropriate documentation in support of each claim. Claims not meeting the billing requirements of the NIHB Program are subject to recovery.  

There are four components within claims verification activities for the pharmacy, medical supplies and equipment and dental benefit areas. These are:

1. Next Day Claims Verification (NDCV) Program which consists of a review of a defined sample of claims submitted by providers the day following receipt by the claims processor;   
2. Client Confirmation Program (CCP) which consists of a monthly mail-out to a randomly selected sample of NIHB clients to confirm the receipt of the benefit that has been billed on their behalf;
3. On-Site claim verification Program which consists of the selection of a sample of claims for administrative validation with a provider's records through an on-site visit; and
4. Desk claim verification Program which consists of the selection of a sample of claims for administrative validation with a provider's records. Unlike on-site verifications, a desk claim verification serves to validate records through the use of fax or mail. Generally, a smaller number of claims are reviewed during a desk audit.

Completion of the claim verification process often spans more than one fiscal year. Although the complete recovery for any verification may overlap into another fiscal year, recoveries from claims verification activities are recorded in the fiscal year in which they are received.