Showing posts with label Physician Compensation. Show all posts
Showing posts with label Physician Compensation. Show all posts

Thursday, August 1, 2024

Is your physician compensation respectful? 8 guiding principles

Nothing happens in most health care organizations until a physician (or other provider) writes an order.Nothing! No diagnosis means no treatment plan, no treatment, nothing to bill for, and no revenue stream. While financial gain is not typically the primary reason people go into medicine, failure to compensate competitively and respectfully can be a major dissatisfier.

Physicians report increasing stress related to pressures to improve quality of care, while significantly reducing costs, factors exacerbated by the recent pandemic. In San Jose, Calif., 450 doctors in the Santa Clara County health system recently agreed on a contract over untenable working conditions. The contract was finally completed just days before the physicians were due to go on strike, which would have jeopardized health care services in that region. The physicians cited “dismissiveness” by leadership as a primary reason for their actions. These professionals did not feel respected. A follow-up survey of those physicians revealed that two-thirds of them did not plan on staying with the organization. Three out of five of those planning to leave cited not being respected by management. This is taking place at a time when the average pay for doctors declined by 24% in 2022. According to Gallup, compensation has become the most important motivator for job seekers, and a primary factor in retaining professionals. Make no mistake, compensation, as a factor in all of this, is complicated. In this article, we will address eight principles involved in respectful professional compensation, applied directly to medical professionals.

Eight principles to guide medical compensation.
  1. Compensation should be principle-based, or chaos will reign. Compensation on an individual basis, with no thought to how one person’s comp affects others in the organization, will create issues of fairness, polarization, back-biting, and a culture of resentment. People are not quiet about their compensation, despite policies or expectations to the contrary.
  2. Compensation should make professionals feel well treated. Not everyone will be compensated the same. Variables affect decisions, including role, experience, availability of talent, individual needs of candidates, and the degree of alignment between the professional and the organization. Some will claim that this is unfair. But everyone’s definition of “fair” is different. Instead, establish clear, transparent criteria for compensation decisions.
  3. Compensation should be based on now, not the past or future. Calibrate pay according to today’s needs and circumstances. Competition for talent is becoming more aggressive than ever, while inflation and the cost of living is rising, with people struggling to keep up.
  4. The “right thing to do” with compensation is seldom clear-cut.Due to the variables involved, it is possible for two professionals in HR to arrive at two different compensation decisions from the same data. Professional experience, training and education, licenses and certifications, and specialty knowledge often make a difference for two similar professionals.
  5. The organization must decide if it wants to be a compensation market leader, market competitor, or market laggard. All three positions could be legitimate, but you need to decide! That decision will affect the quality and caliber of medical professionals who will populate the business.
  6. Good practice requires credible compensation surveys to ascertain what others pay similar medical professionals. There are pluses and minuses to this process, including the difficulty in comparing, in many cases, “apples to oranges” in differing organizations in different locations. Surveys often lag the actual market, sometimes by as much as six to nine months, meaning the data is outdated when you get it.
  7. Take feedback from medical professionals on competitor salaries, but with a grain of salt. This data is quick, anecdotal, and likely inaccurate, but can give a picture of what the competition is doing. Understand the bias of the professional bringing the data to you. (The professional is unlikely to tell you about competitors who are paying less for talent; they’ll only tell you of those who are paying more.)
  8. Remember, things change rapidly. The organization must stay competitive to retain high-value medical professionals when the market changes. It means recalibrating compensation and updating limiting policies when the market signals that compensation must be increased or decreased. These decisions require courageous leadership



None of this is easy.

It is not easy to define what medical professionals should be paid. How do you compute the value of a physician? Based on surveys that are out of date, and in a market that is going though massive changes? Based on RVUs or patient load? Or maybe academic degree and specialty certifications? Or even the financial value of the patients being served? After all, surgical patients are more financially valuable to an organization’s bottom line than med-surg patients, on average.

Additionally, human factors affect compensation decisions, including the normal desire to have more, and the less positive urges of greed, envy, and the desire to “best” others. In our society, we are told “more is better,” and many are confused about what the words “fair” and “equitable” really mean. From the corporate side, practices like non-compete clauses, manipulation of pay ranges, mandated across-the-board pay cuts, and other practices cause medical professionals to feel devalued, as if they were somehow “owned” by their organization.


So, what do we really know?

My take, after years of dealing with professional compensation, is that we should strive to never allow compensation to be an issue with medical professionals. Physicians are too valuable to make it a source of dissatisfaction. Pay them well and check the market rates often. When professional compensation becomes an issue for physicians, the organization must act. Transparency matters. When people don’t understand how their compensation is calculated, it is easy for them to believe they are being undercompensated compared to others. Compensation is one tangible measure that all professionals, including physicians, employ to gauge their value. If it becomes an issue, engagement will decline, turnover will increase, and business results will suffer. Outstanding leaders cultivate a culture in which people feel valued for the contributions that they make.

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Thursday, January 16, 2020

HHS’s revisions could add value and reduce burden

The Department of Health and Human Services (the “Department”) has proposed long-awaited revisions and updates to the Stark and Anti-Kickback Laws (the “Laws”). These changes would address concerns that the Laws as they currently exist (1) prevent participation in value-based arrangements and (2) are overly burdensome to non-abusive arrangements. For example, arrangements such as a hospital’s provision of care coordinators to physicians, which could currently violate the Laws, may become acceptable under the rules proposed by the Office of Inspector General and the Centers for Medicare and Medicaid Services (the “Proposed Rules”).


A significant portion of the Proposed Rules is dedicated to participation in value-based and coordinated care arrangements. These sections propose a complex framework of new exceptions and safe harbors that must be met before a value-based arrangement (“VBA”) could qualify. The new exceptions and safe harbors are tied to multiple newly defined terms and focus heavily on the existence of financial risk within the VBA including the new concept of a “value-based enterprise” (VBE). Overall, 4 new exceptions were proposed within the Stark Law and 4 new safe harbors were proposed within the Anti-Kickback Law for VBAs.


Careful attention to all value-based factors and definitions would be necessary in order to be confident that an arrangement falls within these exceptions and/or safe harbors. However, when finalized, they will offer parties greater flexibility to participate in these innovative arrangements. For example, a specialist could share its data analytic services with a primary care physician to improve care coordination without violating the Laws. A hospital could offer new technology to remotely monitor patients for possible healthcare intervention needs. Although these arrangements could violate the Laws currently, they are within the scope of the government’s intent to promote care based on value rather than volume.

The Proposed Rules revise various other aspects of the Laws to promote VBAs. For example, Stark Law group practice rules would allow distribution of profits to physicians in a manner directly attributable to their participation in a VBE. Proposed changes to the personal services safe harbor to the Anti-Kickback Statute would remove limiting language surrounding part-time arrangements and allow parties to set in advance a methodology for calculating compensation rather than a specified compensation number, in order to meet the safe harbor. Part-time arrangements could now fall within this safe harbor even without setting in advance the exact schedule of the part-time intervals.

Another significant portion of the Proposed Rules addresses the unnecessary burdens created by the Laws including responses to the Department’s request for information issued over a year ago. One such proposal would clarify the definition of “commercially reasonable” clarifying that an arrangement does not have to be profitable to make it commercially reasonable. For example, a hospital service line that operates at a loss may still be commercially reasonable if it fills a vital need in the community.


Additionally, the Proposed Rules would set forth a bright line test to the Stark Law’s “volume or value of referrals” standard and separate it from the definition of “fair market value”. The new volume or value standard would prohibit any linkage between referrals and compensation. For example, physician compensation based on personally performed wRVUs would be considered based on the volume or value of referrals if the wRVU multiplier is tiered based on the number of referrals made by the physician. The definition of fair market value would incorporate the concept of “general market value” and be re-organized for clarity into 3 definitions—one for general application, another for rental of equipment, and a third for rental of office space, due to the heightened risk involved in equipment and space leases. For example, a hospital proposing to employ a specialist who is the top specialist in the entire country might be permitted to pay this top specialist a salary that is significantly higher than what independent salary surveys would otherwise indicate appropriate if the general market value of the specialist is higher, and still fall within fair market value.

The Proposed Rules would help ease the transition to value based care while addressing many undue burdens of the Laws. Although we await the final version of these rules, we can be sure adding value and reducing burdens will remain a common theme.

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Wednesday, August 14, 2019

5 questions to ask about wRVU compensation

Physicians employed by a medical group, hospital or academic institution are commonly compensated using a productivity formula based on work relative value units (wRVUs). Since wRVUs drive your paycheck, it’s to your advantage to ask questions in order to understand how the system works — and specifically how your employer counts wRVUs.



What are wRVUs?


Medicare establishes an RVU for each CPT code to determine reimbursement. The RVU has three components: physician work, practice expense and malpractice. The physician work RVU, or wRVU, is a "neutralized" way to quantify and compare the productivity of physicians because it eliminates variables such as fee schedules or geographical costs.

Most groups multiply the wRVUs for services provided by a conversion factor to determine all or part of a physician’s compensation. For example, a surgeon who is paid at $60.00 per wRVU and produces 6,000 wRVUs would be compensated $360,000.



What’s there to understand?


It seems pretty simple, but as the saying goes, the devil is in the details. Counting wRVUs is not entirely straightforward, and too often a lack of transparency between administrators and physicians, whether intentional or not, sows seeds of doubt that can grow into a tree of distrust and hostility.


5 questions to ask your administrator


To avoid this dismal destiny, ask your administrator these five questions to start the conversation of understanding how the system works. (Administrators, be sure you can answer the questions. Better yet, consider proactively discussing your institution’s wRVU methodology with employed physicians to keep communication lines open and clear.)


1. Are wRVUs credited on codes submitted or codes paid?


In most cases, you will be credited for the CPT codes submitted, regardless of the reimbursement received. But get clarification about that, anyway. Furthermore, understand if reports are generated using date of service or the date the charge was billed out. This will make a difference for those services performed in one month that are billed out the following month. Remember: Delays in billing, whether by you or by the billing team, can delay wRVU credit for your compensation.



2. Do modifiers impact the wRVU credit? If so, how?


Modifier impacts to wRVUs commonly cause physicians to believe they’ve been “cheated” out of compensation earned.

Some groups discount the wRVU for the second side of bilateral procedures, consistent with the reimbursement methodology used by most payers. For example, the CPT code 19318 for a breast reduction surgery has 16.03 wRVUs. When billed as a bilateral procedure (by attaching modifier 50), many payers will reimburse for 150 percent of the fee schedule, not 200 percent. Likewise, the hospital will credit the surgeon with 24.0 wRVUs, not 32.06. Physicians who discover this type of wRVU adjustment months or years into their employment are typically shocked at the perceived deception.

Other modifiers that may decrease wRVUs are:
  • modifier 51 - multiple procedure
  • modifier 59 - distinct procedural service
  • modifier 62 - two surgeons/co-surgeons
  • modifier 76 - repeat procedure
  • modifiers 80 - assistant surgeon
  • modifier 82 - assistant surgeon when a qualified resident surgeon is not available

3. What credit do I receive if I bill a code for an unlisted procedure?


CPT codes for unlisted procedures, such as 64999 (unlisted procedure, nervous system), are not assigned a wRVU by CMS. If you use any of the unlisted codes, have a discussion with your administrator about a suitable value for the service. Suggest a similar procedure to use as reference and discuss an appropriate adjustment to the wRVU to reflect the work required for the unlisted procedure.



4. Who is authorized to change the codes/modifiers I submitted?


Best practice is for physicians to assign the CPT codes for services performed. In most cases, after you submit your codes, a coder or biller reviews the charges and potentially changes the code(s) or modifier(s) based on documentation and payer rules. This directly impacts physician compensation, so you should take interest in who is handling your claims.

Understand the protocol for making changes and insist on a system for being notified. And, ensure that you, as well as the coders and billers, stay current on coding education.


5. Can I see a detailed transaction report each month of the codes submitted and wRVUs credited?


Shrewd physicians insist on reviewing the transaction report each month to ensure all services were billed and to confirm the correct wRVUs were credited for each code. Consider keeping your own log of codes submitted and reconciling it with the monthly report to confirm all services were captured. Doing this monthly is a good habit, allowing you to catch discrepancies early so they can be quickly addressed.

To ensure you are paid for the work you do, it’s essential for physicians to be actively involved with reviewing wRVU calculations. Likewise, it’s important to have open and ongoing communication between physicians and administrators to maintain an accurate compensation plan as well as high physician engagement.

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