PracticeLink Magazine

FALL 2018

The career development quarterly for physicians of all specialties, PracticeLink Magazine provides readers with feature articles, compensation stats, helpful job search tips—as well as recruitment ads from organizations across the U.S.

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48 F A ll 2018 Practice l features in orthopedics, anesthesiology, cardiac and other surgeries, what you do will likely put you in the cat bird seat in commanding a top salary. Of course, other forces, such as supply and demand, can help shape any package. At its core, however, compensation is often less about the number of patients that you see and more about the nature of your services and the value assigned to them. RVUs lead the way Wherever you are in your medical career, you can't underestimate the role of two acronyms — RBR v S and R v U — in how much you're ultimately paid for your work. Shorthand for resource-based relative value scale and relative value unit, both terms have been integral to most physician practices since 1992, when the Centers for Medicare & Medicaid Services (CMS) launched RBRVS to bring consistency to the way that it pays physicians and health facilities for their services. By assigning specific values — the R v U part of the system — to every CP t (current procedural terminology) code, Medicare, Medicaid, and some private insurers alike have a standard methodology by which to issue reimbursements. But how do those values eventually turn into compensation? Hiring entities have their own formulas for parlaying work product into salaries and productivity bonuses. Many still use volume- related metrics such as number of patients or the amount of fee-for-service collections to craft a plan. As more payers rely on RV u s in calculating reimbursement, however, those values become increasingly critical compensation measuring sticks. If your package depends on RV u s, you want to make sure you understand the particular schema, given the plethora of complicated methodologies using them today. In determining production and incentive bonuses, employers are primarily interested in physician work or wR v Us because they account for the time, training, technical skills and judgment a physician employs in diagnosing and delivering care. Other components — practice expense or peR v Us and malpractice R v U or mR v Us — are baked into the reimbursement pie to account for the higher direct, indirect and liability costs of providing the service. "This is all about the effort expended in order to provide a service," says Fred Horton, president of AMGA (American Medical Group Association) Consulting. "We're not going to pay you based on some other type of overhead or malpractice methodology. We're going to pay you based on your work." Adds Travis Singleton, senior vice president of Dallas-based physician recruiting firm Merritt Hawkins: "The net outcome is to equate difficulty and value to what the physician does." Comp models THERE ARE MANY PHYSICIAN COMPENSATION MODELS in effect today, each having their own risks and rewards. As a new physician, however, you'll likely encounter payment methods that blend security and risk in one way or other. Straight salary/minimum-income guarantee plus bonus or incentive The most prevalent model in place today for physicians just starting out, it's a frequent standard in large corporate or physician-owned practices as well as academia and major HMOs. The structure is basically worry-free since you'll have a set salary and monthly income for starters. If there is a bonus, it behooves you to inquire as to how it's formulated and under what conditions and time frame it's paid. Production- or productivity- based compensation This model pays you a percentage of billings, collections or r VUs assigned to procedures or patient visits. You'll be paid via the same relative value units whether or not the person has Medicare, Medicaid, private insurance or pays cash. If production involves a fee-for-service form of collections minus expenses, it behooves you to not only determine the percentage of billings the group typically collects and the time frame, but also the patient mix. Capitation or productivity plus capitation A concept with roots in the late 1980s and early 1990s as a way to reward providers for delivering cost-effective, efficient care, it still exists in some HMO-intensive markets such as California, Minnesota and the n ortheast. Compensation involves an equal or formula distribution of prepaid health care premiums allocated to the groups for services rendered. In a similar vein, you may see an equality/equal shares type of structure if you're headed for a single-specialty group. Although this model allocates revenues equally after expenses, it also presumes that the physicians will be equally skilled, motivated and productive.

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