Candidate Corner

Physician Compensation and RVUs: Part II

Posted by Anonymous at 6/7/2011 1:28:48 PM

Ten Tips for RVU Compensation

Part II

Last week in this blog we explored the fact that Relative Value Units (RVUs) have rapidly become the most common productivity measure in compensation methodology for physicians.  According to the MGMA, over the last 4 years there has been a 112% increase of medical practices using RVUs as a factor in determining physician remuneration, and a 79% increase of physicians reporting their income is influenced by the RVUs they generate.

While legislators, the media and executives have debated healthcare reform, our industry has experienced this very noteworthy and substantial trend affecting the way a majority of doctors are paid.  Merritt Hawkins, the nation’s leader in physician recruitment, has received numerous inquiries regarding prudent ways to structure an RVU Productivity Model for employed physicians.  We therefore offer these Ten Tips for RVU Compensation.   I will review five of the ten this week and discuss the remaining five in next week’s blog.

1.) Keep it simple.  One of the benefits of utilizing an RVU compensation model is the ability of physicians to focus on patient care as opposed to spending an extensive amount of time managing the business of medicine.  This can be a positive attribute for recruiting and retaining quality providers, but that value is diminished if the formula being used to determine the doctor’s pay is overly complex and confusing.  One simple solution is to establish an affordable and predetermined dollar amount the physician will receive per Work RVU generated.  This “Compensation per Work RVU” figure can be benchmarked for the physician’s respective medical specialty using an annual report by organizations such as the Medical Group Management Association (MGMA), the American Medical Group Association (AMGA), or with the help of a knowledgeable physician search firm.  The physician’s guaranteed base salary can be divided by this dollar amount to set a threshold of Work RVUs that must be generated before the physician begins receiving a Productivity Bonus.  The physician would receive this Compensation per Work RVU for each Work RVU exceeding the threshold.  Salary and bonuses can be calculated annually or on a quarterly basis.

2.) Ensure administrators and physicians have a clear understanding of the difference between the CMS Resource-Based Relative Value Scale (RBRVS) method, which functions on the “Total RVU” system, and the specific formula being used in the compensation section of the physician’s employment contract to determine how the provider will be paid.  These are not identical.  CMS reimburses for services based on Total RVUs (which includes the Work RVU, the Practice Expense RVU and a Malpractice Expense RVU), and this Total RVU is adjusted by locality according to the Geographic Practice Cost Index (GPCI) and then multiplied by their current Conversion Factor (CF) in calculating the reimbursement for a service.  However, physicians are most frequently compensated by their employer per the “Physician Work RVUs” they generate.  Very few physicians have an incentive bonus based on Total RVUs.  In either case, all of the RVUs generated by the physician are typically tracked and credited toward the doctor’s overall productivity since they will see patients from payers other than CMS.

3.) Stay informed of developments with the RBRVS method.  Every Current Procedural Terminology (CPT) code used in billing for services has a corresponding Relative Value.  These are periodically updated and can be downloaded from the CMS website by navigating to the Physician Fee Schedule (PFS), and clicking on the PFS Relative Value Files.  The most recent version was posted on 05/24/2011 as revised for the July 2011 release.

4.) Don’t’ believe the myth that an RVU Productivity Model will always pay a physician uniformly based on the amount of work they perform.  No system is perfect.  As an example, the national median Compensation per Work RVU for a Pediatrician is $38.89; however, the median Compensation per Work RVU for an Orthopedic Surgeon is $60.05, according to the 2010 MGMA report.  Discrepancies occur amongst physicians within the same medical specialty as well.  Internal Medicine residency trained physicians report their compensation per Work RVU is 30% higher on average when they are employed as a Hospitalist, instead of working in a traditional inpatient and outpatient general Internal Medicine practice.

5.) Discuss hospital and physician alignment.  In an era where health systems and large practices are moving toward Accountable Care Organization models with an emphasize on providing lower cost preventive medicine and a potential return on investment from shared savings, implementing an RVU compensation program can act as a bridge allowing doctors to treat all people in the service area (regardless of insurance status) without concern for having these patient encounters negatively affect the physician’s personal income.  This is likely one of the primary reasons we’ve seen the proliferation and growth of RVU compensation models in the last several years.

There is more to be said regarding this important topic, and next week I will review RVU tips for compensation six through ten.

Meanwhile, if you have questions, please feel free to contact me at peter.cebulka@merritthawkins.com or at 800-306-1330. 

Hi Dr. Wagers, The 25th and 75th percentiles for PMR compensation per Work RVU are $43 and $68 respectively. A typical comp per wRVU within the specialty is between $50-$60. A reasonable benchmark for productivity is around 5,000. I hope this is helpful information for you, thanks!
Posted by: Peter Cebulka at 1/21/2013 10:29:06 AM
Can you tell me the 25th and 75th percentiles for wrvu compensation for Physical Medicine and Rehabilitation? Also what is the wrvu benchmark for PMR, ie how many wrvu should I be generating per yr? Dr. Wagers
Posted by: Sarah Wagers at 11/17/2012 6:52:23 AM
Can you please tell me the mean, median, 25th and 75th percentile compensation per rvu for a generalist OB/GYN in mississippi? Thanks a bunch!
Posted by: Cynthia Jean-Pierre,MD at 10/10/2012 1:55:46 PM
Can you please tell me the median percentile compensation per wrvu for the eastern geosection for family medicine ambulatory. 2011. Thanks a lot
Posted by: Lanry atkins at 10/7/2012 2:07:20 PM
I would love to know what an internist in the 25th percentile is making in North Carolina according to the MGMA 2012 physician compensation report. Thank you
Posted by: Scott at 9/21/2012 9:45:16 AM
“Sure, the specialty summary tables published by the MGMA have breakdowns for the Eastern, Midwest, Southern and Western geographic sections; although, I usually benchmark to national figures. Are you looking for the mean and quartiles for Electrophysiology, Invasive, Invasive-Interventional or Noninvasive Cardiology?”
Posted by: Peter Cebulka at 9/18/2012 11:58:50 AM
What are the MGMA cardiology work RVU mean, and quartiles if available for 2012 and 2010. Thankyou for you assistance. By the way is there a breakdown by geographic area
Posted by: Navin Kedia at 8/30/2012 4:10:16 PM
What be the national average for low, mid and high RVU amounts for an experienced subspecialist (sports medicine surgeon) in orthopedics?
Posted by: Leon Paulos at 7/21/2012 2:05:09 PM
please inform me of the mean, median, 25 and 75 percentile compensation per wrvu for physical med. and rehab/pain mgmt specialist and where can I find this info? Thanks in advance
Posted by: thomas S at 7/12/2012 6:32:37 AM
I was recently employed by my hospital system My salary has a base predicated on 9444 rvu's per year I can get a bonus for excess rvu's but they cap this at 3555 rvu's per year I get a small stipend for administrative duties (well within FMV for hours spent and per hour comp) I get a small stipend for any night greater than 10 per month for ER call, i typically take 2 to 5 extra calls, my ER is the third busiest adult ER in our county with approximately 80K patient visits per year My productivity is very very high all self generated no mid levels no residents My coding is very accurate no unbundling no up coding A review of my productivity after 9 months reveals that I will seriously go over the MAX amount of RVU's that they have capped me at, possibly by more than 2000 They are telling me they cant pay me for all of the work I did because its outside of FMV Well my two junior docs are so far below their base RVU's productivity but they still get their base, next year they will have a cut in base but this year will be paid essentially at an rvu conversion rate which will be 1.5 to 2 times my conversion rate and my 2000 plus RVU's will be not compensated How can u cap comp if the conversion rate is conservative, the rvu's were generated and verified and the non rvu comp is low and fmv?
Posted by: George Tershakovec, M.D., F.A.C.S. at 7/7/2012 10:24:04 AM
very informative piece of article; btw could you please tell me the compensation per wRVU for 25th / 75th and 90th percentile for otolaryngology in Ohio
Posted by: S A Vanan MD at 5/6/2012 5:04:49 PM
I would love to know the range for compensation/wRVU for pain management in the East? Thank you!
Posted by: Ashleigh at 3/17/2012 5:55:43 AM
What is the number of RVU'S annual threshold / where does productivity bonus kick in for Internal Medicine 2010/2011.
Posted by: north east MD at 3/12/2012 6:38:09 PM
what is median 25% and 90 % RVU compensation for nephrologists? Thanks you very much
Posted by: Gela Mchedlishvili at 2/15/2012 9:05:48 AM
I would be interested in finding the mean RVU value for an Ob-Gyn in southeast Florida.
Posted by: Dr Valdescruz at 2/13/2012 4:48:15 PM
What are the $$/wRVU for a urologist in the southeast? My gross charges are in excess of $2,000,000 and compensation is at $500,000. Thanks.
Posted by: David Benson, MD at 2/5/2012 6:14:24 AM
What are the rates for cardiology WRVU including general cardiology, Cardiac caths, PPM, PCIs, TEEs
Posted by: Hassan Kieso at 2/2/2012 9:48:04 PM
What is the average compensation per rvu for vascular surgery, mean, median, 25th and 75th percentile? Thank you very much.
Posted by: Sashi Kilaru at 2/2/2012 5:52:37 PM
Hi, very informative! How about the quartiles for rheumatology in the south east and west areas.Thank you for your assistance.
Posted by: Anonymous at 2/2/2012 5:40:37 PM
Hi, very informative! How about the quartiles for rheumatology in the south east and west areas.Thank you for your assistance.
Posted by: Anonymous at 2/2/2012 5:40:35 PM
cmon the RVU productivity model is a shell game. Lets make it real easy shall we - how much did you take in for professional activity? Subtract 6% for overhead and billing, doc you keep 94%. And we'll keep 100% of the technicals for blood, radiology, radonc, chemo, miscellaneous fees, room useage, billings for all other non-MD's etc. If you get 94% consider yourself lucky. If you are an -in demand- specialty who is responsible for referring lots of other business / hospital revenue, you might get better than 94% - you might get 120% (ie they are sharing). But remember, the devil always comes back to the table. Once 'employed' by the administration, you can be cut and REPLACED by younger and cheaper 'providers' (no longer whom consider themselves even autonomous physicians. Next thing you know, since we can't unionize, we'll be paid like the serfs we have allowed ourselves to become.. and deservedly so. IN SUMMARY: Never ever take a W-2. Never allow yourself to be 'employed' but insist on 1099 and do your own, highly efficient, tax deductions for legitimate business expenses, depreciate your own equipment etc etc etc. Try that on a W-2 Schedule C and see how far you get....
Posted by: Seriously Deluded at 2/2/2012 5:33:23 PM
How about neurology
Posted by: Namis at 2/2/2012 5:27:12 PM
What are the median RVU and the dollar value per rvu for interventional cardiologists. It would be very helpful if youcould give the value for 25th anfd 75th percentile as well. Thanks Sanjeev
Posted by: sanjeev at 2/2/2012 3:37:44 PM
If I forgot to ask the " RVU quartiles" for peds cardiology (invasive). Sorry.
Posted by: William Suarez MD at 1/25/2012 7:24:42 PM
Can you tell me the quartile RVU for pediatric cardiology(invasive) in the mid-west?
Posted by: William Suarez MD at 1/25/2012 7:23:28 PM
Dr. Koch, according to the 2011 MGMA Physician Compensation and Production Survey, the following are the national numbers for General Surgery: 25th%ile - $43.36 Median - $52.69 Average - $57.06 75th%ile - $62.93 Should you have any additional questions, please feel free to give us a call at (800) 876-0500. Thank you!
Posted by: Peter Cebulka at 12/21/2011 12:59:13 PM
Can you tell me the mean, median , 25 and 75 percentile compensation per wrvu for a general surgeon? Thank you very much.
Posted by: Eric Koch MD at 12/8/2011 8:28:39 PM
Dr. Chebuhyar, As found in MGMA's Physician Compensation and Production Survey, compensation per work RVU for general orthopedic surgery is as follows: Mean $65.78 25%tile $47.74 Median $60.39 75%tile 77.39 I hope this is helpful - should there be anything further that we can do to assist, please do not hesitate to call at 800 876 0500 or post another question. Thank you, Jeremy
Posted by: Jeremy Robinson at 12/5/2011 5:17:54 AM
where can i find the range of compensation per RVU for an orthopaedic surgeon. all i read about is the median but would love to know what the 25th and 75th percentiles get. thank you in advance for any assistance.
Posted by: craig chebuhar md at 11/28/2011 9:00:55 AM

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