TORONTO - Several hundred fees paid to Ontario doctors are going under the knife as the province's minority Liberals forge ahead with a wage freeze for physicians after labour negotiations fell apart last week.

The regulatory changes affecting Ontario Health Insurance Plan fees and premiums will retroactively take effect April 1, Health Minister Deb Matthews said Monday.

The latest salvo came after the Ontario Medical Association rejected her demand to hammer out a new four-year agreement over the weekend with a conciliator after months of negotiations.

"I was left with no choice," Matthew said. "We were very clear with the OMA. We campaigned on a wage freeze, our budget was explicit that we were looking for a real wage freeze with doctors."

But Matthews was at a loss to explain when the Liberals even mentioned a wage freeze in last fall's election campaign.

Despite the unilateral cuts — and the threat of further changes to physician compensation — Matthews said she hopes the OMA will still come back to the negotiating table.

"We will make better choices if we do it together, I know that," she said.

The changes will affect 37 procedures and services, from family care to cardiac care, diagnostic services, eye care and anesthesia. They'll also eliminate double payments, such as a fee for inserting a cardiac catheter, which is already included in cardiac services.

The regulatory changes include slashing payments in half for doctors who "self-refer" — those who refer their patients back to their own practice for diagnostic services like X-rays. The province currently spends $88 million a year on self-referrals, according to ministry officials.

The province is cutting fees in half for electrocardiograms to save $21 million, and reducing fees for interpreting results of diagnostic radiology by five per cent to save $30 million.

It's also lowering fees for colonoscopy and gastroscopy, dialysis teams and cataract surgeries. Cataract surgeries, for example, used to take two hours and now take about 15 minutes, officials said.

Some of the changes will affect patients, such as delisting joint/spine manipulation services and limiting optical coherence tomography for patients with retinal disease or glaucoma to four times a year.

The province is also putting new restrictions on X-rays, CT and MRI scans for those with chronic lower-back pain, as well as vein surgery and sclerotherapy, which is often used to treat varicose veins and hemorrhoids.

There is a silver lining: a new $16 fee for doctors who consult with other physicians via email. Consulting doctors get $20.50.

Doctors are now able to work more quickly and effectively due to new technologies but the fees haven't changed, Matthews said.

At $911, Ontario is second only to Alberta for per-capita spending on doctors, the government said.

The average Ontario doctor bills $385,000 each year, about 75 per cent more than in 2003, when the Liberals took office. More than 400 doctors in the province are billing over $1 million a year, and 20 earn over $2 million.

Ophthalmologists, cardiologists and radiologists will be hardest hit by the reductions, officials said.

The fee cuts will save the province $338 million this year, but it's only 80 per cent of what the province needs to meet its fiscal target to eliminate a $15-billion deficit, Matthews said.

And that's not everything the government's prepared to do to meet that target, she said. There are other programs that could be affected, such as retainer bonuses, if the OMA refuses to accept a "real" wage freeze.

The move should come as no surprise to the OMA, whose members were warned that doctors' fees would be cut if they didn't accept a wage freeze, she said.

Matthews insists the changes will actually improve patient care, despite warnings from the OMA that it will force patients to wait longer for health care and chase doctors out of the province.

"Other provinces like Alberta, Manitoba and Saskatchewan are increasing the fees they pay to doctors," said Dr. Doug Weir, a child psychiatrist who just took over as OMA president. "This government is making cuts."

He accused the Liberals of turning their back on doctors and patients, adding that the cuts will lengthen wait lists for tests like mammography and ultrasounds.

They're also cutting common fees that family doctors bill for baby care and pre-natal visits, Weir said.

"This is the first time in history that the government — which promised to protect patients and negotiate fairly — has behaved this way," he said. It's clear that the Liberals never intended to negotiate with doctors, he added.

"Where I come from holding your breath until you get what you want is not negotiating," Weir said.

The OMA also disputes the government's claims of how much doctors earn, saying they actually rank seventh in the country in terms of their fees, according to the Canadian Institute of Health Information.

The two sides have been battling it out since February, with the cash-strapped government insisting that they can't afford any new funding increases for doctors.

The minority Liberals are demanding the same from all broader public sector workers, including teachers, nurses and civil servants. They've also threatened to legislate the pay freeze if all other options at the negotiating table fail.

The OMA said it offered to freeze doctors' fees for two years and find an additional $250 million in savings, but Matthews rejected the proposal.

The minister said the OMA wants the government — which already spends $11 billion a year on doctors' fees — to pay for the rising costs of health care as the population ages. She wants the doctors to find the money to fill that gap.

The pay freeze for doctors and nurses is part of the Liberals' plan to reduce annual growth in health-care spending to 2.1 per cent a year from the current 6.1 per cent, in order to slay the deficit in 2017.

Opposition Leader Tim Hudak plans to introduce legislation to impose an immediate two-year wage freeze on more than one million public sector workers in Ontario, saying immediate action is needed following the province's credit downgrade by Moody's Investors Service on April 26.

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• What's In The Ontario Budget 2012

• Health Care

  The 2012 Ontario budget freezes pay for doctors, and extends a pay freeze for health care executives. The province will begin means-testing seniors' prescription drugs, paid for under the Ontario Drug Benefit Plan, effectively meaning that the 5 per cent wealthiest seniors covered by the plan will have to pay more into the plan. Seniors with incomes over $100,000 and senior couples with combined incomes above $160,000 will be affected. Increases in health care spending will be capped at 2.1 per cent per year.

• Education

  The budget freezes pay for teachers. A pay freeze for educational executives, already in place, will be extended. School boards in low-population areas will be amalgamated, and "under-utilized" schools will be shut. Student transportation will be cut by $34 million.

• Senior Citizens

  The province will begin means-testing seniors' prescription drugs, paid for under the Ontario Drug Benefit Plan, effectively meaning that the 5 per cent wealthiest seniors covered by the plan will have to pay more into the plan. Seniors with incomes over $100,000 and senior couples with combined incomes above $160,000 will be affected.

• Social Assistance

  Welfare rates will be frozen and planned increases to the Ontario Child Benefit will be delayed.

• Taxes

  There are no tax hikes in the 2012 Ontario budget, but it does freeze the corporate tax rate at 11.5 per cent, foregoing planned reductions in the tax rate to 10 per cent. The freeze is expected to save $1.5 billion over three years.

• Energy

  Ontario will cap the 10 per cent hydro bill rebate at 3,000 kilowatt-hours, a limit high enough that most homes won't be affected, but businesses could be. Reducing the tax credit will save $470 million over three years.

• Crime & Security

  On top of the four jails the province already plans to close, the budget adds two more to the closure list -- one in Brantford and one in Chatham. Overtime for jail guards and the Ontario Provincial Police will be reduced.

• Business Initiatives

  Ontario plans to reduce spending on business support programs by $250 million by merging a number of different programs.

• Gambling & Lotteries

  The province aims to increase revenue by increasing the number of gambling facilities. [Details to come]