06/12/2013 04:00 EDT | Updated 08/11/2013 05:12 EDT

New Brunswick government defends cut to medicare payments in court

FREDERICTON - New Brunswick is within its rights to cap medicare payments to doctors, a lawyer for the provincial government argued Wednesday as a legal challenge over the matter headed to court.

"The province does have the ability to cap medicare payments," Rick Williams told the Court of Queen's Bench in Fredericton, disputing an assertion from the New Brunswick Medical Society that a cap breaks an agreement with its members.

The medical society is challenging the government's planned $20 million cut and subsequent cap to annual medicare payments to $425 million. The group, which represents the province's 1,600 doctors, says it violates a six-year agreement that expires at the end of March 2014.

Williams argued that the cap is just a target.

"The cap may never kick in — it just depends on the demand for service," he said.

"The province hasn't breached the agreement and may never breach the agreement."

David Young, the lawyer for the medical society, said his client wants assurance that the agreement, signed in 2009, is binding.

"We seek a declaration that the agreement is enforceable between the medical society and the province," he said.

That deal sets out payments to doctors, including a freeze on wages during the final two years of the agreement.

Dr. Robert Desjardins, the medical society's president, said the case is about ensuring that the government upholds its end of that agreement.

"If this one is not respected, what's the point of negotiating in the future?" he said outside court.

"It's hard to negotiate and agree to something for the future when what you agreed in the past is not respected right now."

The medical society has accused Health Minister Hugh Flemming of refusing to negotiate with them before introducing the medicare cut.

But Flemming has said the medicare cut is a separate matter from the doctors' contract and the government is willing to talk with the medical society at any time to find ways to control health care spending.

Flemming has said the government must get control of the $2.5 billion annual health budget.

He declined to comment Wednesday on the court case, pending a decision.

Judge Judy Clendenning reserved her decision.