What To Know About Physician Compensation Payment

Fresh out of training, it’s hard to get your head around compensation. The modest stipend you’ve been making won’t prepare you for what you will earn now. This means you could either underestimate or dramatically overestimate what you think you’ll get. Some practices still base compensation on the physician’s share of collections, which is a pretty easy concept to understand. Increasingly, however, payment even in practices is based on productivity.

As a new physician, it can be hard to understand the concept of compensation claims & physician contracts. There are many questions that come up when you hear the term medical compensation, and in this article, we’ll aim to answer some of the ones you may have


Work Relative Value Units


  • Depending on your payment type, there are a few different ways a physician is paid, one of which is production evaluation through work relative value units (wRVUs). Each employer has a different set of wRVUs that a physician is expected to carry out, and this standard has to be consulted with the Medical Group Management Association (MGMA). As long as the reimbursement policy complies with MGMA standards, there shouldn’t be any problem.

There are six factors that MGMA takes into consideration when they’re reviewing the wRVUs: practice ownership, group type, geographic region, demographics, number of partners, and call responsibilities. These factors play a major role in how much you can get out of your compensation negotiation. It’s difficult to gauge how much you can expect to get paid, but these factors will give you a general idea of your salary range.

What You Need to Know About Compensation

  • The wRVUs can be considered as a commission, as you will still have a baseline salary. If your salary is quite high already, the practice may pay the physicians a fixed rate that isn’t based on their performance. If that’s the case, you shouldn’t expect the compensation to be very high either.

Your first-year salary doesn’t determine what you will get later on
The first year salary is not indicative of how much you will get later on, especially if the compensation plan of the practice is focused more on future growth and retention. On the contrary, some practices will actually offer you a high signing bonus, but they may limit your growth in some other ways. You will have to consider your options and think about how you would like to go about your salary situation going forward.

Keep your eye on productivity targets

  • You have to look at productivity targets realistically. You don’t want the practice to take advantage of you by setting unrealistic expectations that you can’t meet, as this is sadly a rather common tactic businesses use to increase productivity. If you feel like you’re being taken advantage of, you have to take a step back and reevaluate your position.

Income-based compensation can be quite difficult

If the majority of your salary and that of your coworkers depends on compensation, it will result in a very competitive work environment. You may have to work harder in these practices than you would in a practice where the salary plan is more lenient. The decision will depend entirely on how you choose to work, as every person has their own idea of a good work environment.

Different productivity targets for specialized practitioners

  • The productivity targets may be different for a specialized practitioner. They usually have fewer patients, but the nature of their work may be more complicated than a general physician. If you’re a special type of surgeon, for example, you will have to review your wRVUs to ensure that they are fair and attainable.

Romanowsky Law specializes in physician contract reviews to ensure that you are getting fair employment – get in touch today to see how we can help.