Following a two-year effort to effectively supervise health service providers (HSPs) in Ontario, the Financial Services Regulatory Authority of Ontario (FSRA) has published its findings indicating that the sector is generally non-compliant with certain regulatory requirements.

Notably, only 16 per cent of the HSPs operating within insurers’ preferred provider networks (PPNs) which were reviewed by FSRA were in compliance with the Insurance Act, its regulations and FSRA’s rules (collectively known in the report as the requirements).

In addition to the examinations of HSPs participating in PPNs, focused compliance reviews and reviews of practitioners sanctioned by their respective regulatory colleges were also a focus during the review period. Based on its findings, the regulator announced that the supervision plan for HSPs is being continued for an additional year, until March 2027.

Fraud risk 

“Non-compliance increases the risk of fraud. FSRA expects HSPs to comply with regulatory requirements, and insurers to effectively manage their relationships with HSPs, especially those participating in PPNs,” the regulator states in its announcement about the publication of its compliance report.

As of April 2026, 5,213 HSPs were licensed by FSRA in Ontario, allowing them to be reimbursed directly for eligible expenses under the Statutory Accident Benefits Schedule (SABS). “FSRA’s supervision focuses on HSPs’ billing and business practices for auto insurance claims,” they write.

Licensed HSPs were responsible for approximately 99 per cent of the $1.58-billion processed through the Health Claims for Auto Insurance (HCAI) system between April 2024 and March 2026, with more than 361,000 accident victims accessing treatment. “While the reviews did not identify any direct consumer harm, non-compliance with the requirements increases the risk of fraud,” the 2024-26 HSP Compliance Report reiterates.

On-site examinations 

Among the 31 on-site examinations that FSRA staff conducted involving PPN-affiliated HSPs, only five were compliant with the reviewed criteria, 20 were issued a warning letter for failing to comply with the requirements, six entered into voluntary undertakings and one surrendered its licence rather than be examined.

“The main issue noted in the undertakings was HSPs using a form of agreement with their affiliate clinics that may have constituted a solicitation or a demand for a referral fee, contrary to the UDAP rule,” they write. “FSRA reminds insurers and HSPs that referral fees are prohibited under the UDAP rule and that all reasonable steps must be taken to ensure business arrangements do not create or appear to create referral fee arrangements." 

Unsigned invoices, inaccurate HCAI rosters and patient identities not being verified were identified as top findings related to PPN providers.

Low compliance rate  

“The results of these reviews indicated an overall compliance rate of 16 per cent, which is significantly below expectations and raises concern,” they write. “Insurers must bear some responsibility for ensuring that HSPs, particularly those within PPNs, conduct their business in a compliant manner.” 

They add that the low level of compliance also raises concerns about how insurers manage their PPNs, particularly in relation to the treatment of SABS claimants and the value proposition for consumers.