Anthony Knight, the society's CEO, says Health Minister Hugh Flemming issued an ultimatum and wasn't willing to discuss their ideas for other ways to control health care spending.
He says the medicare cut violates their six-year contract that expires at the end of March 2014.
Flemming says he knows that many of the province's 1,600 doctors agree with him, rather than the medical society.
He took out a full-page letter in newspapers Thursday, saying he is willing to negotiate with doctors to find alternatives to a cap on medicare.
Flemming says the society should negotiate before considering a lawsuit.
Liberal health critic Donald Arseneault says Flemming is using taxpayers money for the ad in order to put a wedge between doctors and the medical society.Suggest a correction