Salary questions

[kdog362002]

Hi,
I am currently job hunting and have a received an offer in rural Delaware for a family medicine position.
They are offering a guaranteed salary plus productivity. They mentioned that the wRVU target will be 5000 annually and that I will receive $30 per wRVU over the target. This is calculated quarterly. They mentioned most providers see about 20-25 patients per day. They are also offering full benefits, t tail malpractice insurance, CME allowance, relocation expenses, sign on bonus, and more.

My questions are: how is wRVU calculated? How is the $30 number calculated? Are these numbers appropriate? Should I negotiate? What other questions should I ask?

Any help would be greatly appreciated. Thanks in advance.

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[JustPlainBill]

IIRC, RVU is relative value unit -- nice thing for bean counters --- and works out approximately as follows -- a 99213 office visit ~ 0.8 RVU whereas a 99214 ~1.2 RVU. So the target is 25 patients (they'll always want you on the high side) and after that you can do the math.

So -- income guarantee -- usually that means they will guarantee you a salary for the your first year and after that you're on your own but you owe them X number of years to pay back the first year salary. Which leads to a lot of questions:

1) Office -- do they pay for your office to be outfitted -- computers, copiers, pens, pencils, paper clips, tongue depressors, oto/opthalmoscopes, BP cuffs, steroids, antibiotics, staff members, credit card billing machines, copiers, EMR, lights, water, gas, etc. If so, is that paid back and for how long do they provide the money for just running the office;

2) Staff -- do you have to hire them or do they?

3) Responsibilities -- Is this outpatient only? if so, who does the advertising, getting you on insurance plans? Do you retain the right to refuse patients? Are you part of a group? does the group do hospital work? If so, how often are you on call? does the call include ICU/ER work? Are you expected to live close to the hospital? You need to see how the hospital works if this is part of the deal -- those small rural hospitals often dance to their own drummer with frequent fliers and the staff has the 'we've always done it that way' mentality. If there's an ER, what sort of stuff do you admit and what do you send on to the big centers? How is that facilitated? Do you get along with the other docs in the group/on staff? Do you get along with the administration or will they try to bully you into admits that you don't feel comfortable handling? Pay attention to the CNO -- some are ok in terms of realizing where they are in the food chain, others fancy themselves as clinicians who will "offer" input into your medical decision making --- that can be a pain in the ass as you have to slap them down pretty hard sometimes. Are you responsible for any nursing homes? what about when you're on call.

4) Make sure that the payor mix is good -- don't walk into an area where the only thing left is medicare/Medicaid -- you'll never make it. Find out where the non-medicare/Medicaid insurance is going and how much remains untapped in the city you're in.

Employed physician --

All the same questions apply -- but you also need to know your exit strategy -- when the newness wears off, how do you get out if you need/want to?

Now -- find a good lawyer who had worked with your state medical board -- determine who owns the medical records of the patients you see, the rules on notification re: closing a practice and all that sort of stuff ---

Do NOT rush into this -- make sure you can live in the town as it is , not as it's "going to be" when all the "new business" moves in -- ask around and find out if it's a dead town that isn't going anywhere or if it's thriving and growing --- Look around at what businesses are in the town and if they're in a growth market or going to die off or change in a few years -- this has impacts on your practice.

Hope this helps.

 

[VA Hopeful Dr]

Yes, RVUs are Relative Value Units. Numbers assigned to each CPT code to indicate value. Level 3 visit is worth about 1, level 4 is worth about 1.5. $30/RVU seems a bit low. I would try and get that number increased as the median is typically around $40.

 

[KnuxNole]

What about Level 1s and 2? Or do people outside of residency rarely see those...? Would they be like 0.5-1 RVU?

 

[deleted87716]

What about Level 1s and 2? Or do people outside of residency rarely see those...? Would they be like 0.5-1 RVU?

"Level 1" (99211) is a nursing visit. You won't bill those. "Level 2" (99212) is typically a single VERY simple and straightforward problem requiring a minimum of HPI, ROS, and PE that will resolve on its own or with OTC treatment. These should occur very infrequently.

The majority of your coding should be 99214 and 99213.

 

[VA Hopeful Dr]

"Level 1" (99211) is a nursing visit. You won't bill those. "Level 2" (99212) is typically a single VERY simple and straightforward problem requiring a minimum of HPI, ROS, and PE that will resolve on its own or with OTC treatment. These should occur very infrequently.

The majority of your coding should be 99214 and 99213.

Exactly. If you ever bill 99211 then you're doing it wrong. My stereotypical example of a 99212 is someone who comes in with a few bug bites that you suggest OTC hydrocortisone cream for.

 

[deleted87716]

Exactly. If you ever bill 99211 then you're doing it wrong. My stereotypical example of a 99212 is someone who comes in with a few bug bites that you suggest OTC hydrocortisone cream for.

I'd give them a prescription steroid cream and bill 99213.

 

[cabinbuilder]

I'd give them a prescription steroid cream and bill 99213.

Me too. The only time I bill 99212 is with a private pay person who I know really doesn't have the money for both the visit and the medication. But this is rare.

 

[VA Hopeful Dr]

Having only ever been a salaried employee, I don't have the incentive to try and code higher if it means more work for me.

 

[deleted87716]

Having only ever been a salaried employee, I don't have the incentive to try and code higher if it means more work for me.

Which is why so few physicians are truly paid on salary.

http://www.aafp.org/fpm/1998/1000/p50.html

 

[KnuxNole]

Exactly. If you ever bill 99211 then you're doing it wrong. My stereotypical example of a 99212 is someone who comes in with a few bug bites that you suggest OTC hydrocortisone cream for.

Oops

 

[VA Hopeful Dr]

Which is why so few physicians are truly paid on salary.

http://www.aafp.org/fpm/1998/1000/p50.html

My current hospital system is very poorly run, so no surprise they would do things differently than pretty much everyone else...

 

[deleted87716]

Oops

The only thing we typically bill as 99211 are walk-in INR checks. I don't even see the patient in those cases. I just give orders re: Coumadin dosing and next INR check.

 

[MJB]

30/rvu for a conversion factor is very low unless your base is somewhere around 210-215. Then I might understand it



What's a 99211 or 99212? Never billed one of those.


I see all INR checks 99213


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[galactus]

Man. I remember in residency an attending told me that we needed to have permission to bill a 99212 lol.
Most everything should be a 99213/4.

 

[styphon]

Yes, RVUs are Relative Value Units. Numbers assigned to each CPT code to indicate value. Level 3 visit is worth about 1, level 4 is worth about 1.5. $30/RVU seems a bit low. I would try and get that number increased as the median is typically around $40.

That is a horrible reimbursement unless you have a great base pay

Medicaid (the lowest payee) pays 34$/RVU

And don't let administrators tell you they "need to take a cut to pay nurses/run the facility/make a living". We are paid in WORK RVU's, for each wRVU we bill, there is also a FACILITY RVU which goes completely to the facility/administrators and pays for staff/etc.

Remember. TotalRVU=facilityRVU + workRVU

Also I wish they taught this in medical school. Instead I had such relevant topics such as a 3 hour long lecture on placing an artificial valve even though I am family med.

 

[Postictal Raiden]

That is a horrible reimbursement unless you have a great base pay

Medicaid (the lowest payee) pays 34$/RVU

And don't let administrators tell you they "need to take a cut to pay nurses/run the facility/make a living". We are paid in WORK RVU's, for each wRVU we bill, there is also a FACILITY RVU which goes completely to the facility/administrators and pays for staff/etc.

Remember. TotalRVU=facilityRVU + workRVU

Also I wish they taught this in medical school. Instead I had such relevant topics such as a 3 hour long lecture on placing an artificial valve even though I am family med.

If Medicaid pays 34/wRVU, how much does it pay for TotalRVU? I'm trying to figure out if the remaining amount, after deducting wRVU, is sufficient to cover the overhead costs.

 

[VA Hopeful Dr]

That is a horrible reimbursement unless you have a great base pay

Medicaid (the lowest payee) pays 34$/RVU

And don't let administrators tell you they "need to take a cut to pay nurses/run the facility/make a living". We are paid in WORK RVU's, for each wRVU we bill, there is also a FACILITY RVU which goes completely to the facility/administrators and pays for staff/etc.

Remember. TotalRVU=facilityRVU + workRVU

Also I wish they taught this in medical school. Instead I had such relevant topics such as a 3 hour long lecture on placing an artificial valve even though I am family med.

Apologies, I should have said wRUVs in my post.

 

[styphon]

If Medicaid pays 34/wRVU, how much does it pay for TotalRVU? I'm trying to figure out if the remaining amount, after deducting wRVU, is sufficient to cover the overhead costs.

They (medicaid) pay 34$/per RVU if its work or facility. Private payers range from 40s to 50s per RVU.

For a 99213 (established pt, level 3) wRVU 0.97, facility/practice RVU 1.10, and then RVU 0.07 is set aside for malpractice insurance (total RVU 2.14 for this visit)
Using the medicaid rate it would get the clinican 33$, the facility 37.40$, and malpractice 2.38$

Per the AAFP the average RVU a clinician gets per year is around 5,500 - assuming they are 99213 - that is about 5,670 visits (of course it would be less considering 99214, 99215, and new pts)
Which would work out to be 187,110/yr for the physician, and 212,058/yr for the facility and 13,495/yr for malpractice.

Now if we do a mixture of payers, with majority leaning to private pay - so lets pretend we have an avg of 40 per RVU.
Using 99213s, with 5,670 visits that would give us about 220,000 for the physician and about 250,000 for the facility.

 

[Postictal Raiden]

They (medicaid) pay 34$/per RVU if its work or facility. Private payers range from 40s to 50s per RVU.

For a 99213 (established pt, level 3) wRVU 0.97, facility/practice RVU 1.10, and then RVU 0.07 is set aside for malpractice insurance (total RVU 2.14 for this visit)
Using the medicaid rate it would get the clinican 33$, the facility 37.40$, and malpractice 2.38$

Per the AAFP the average RVU a clinician gets per year is around 5,500 - assuming they are 99213 - that is about 5,670 visits (of course it would be less considering 99214, 99215, and new pts)
Which would work out to be 187,110/yr for the physician, and 212,058/yr for the facility and 13,495/yr for malpractice.

Now if we do a mixture of payers, with majority leaning to private pay - so lets pretend we have an avg of 40 per RVU.
Using 99213s, with 5,670 visits that would give us about 220,000 for the physician and about 250,000 for the facility.

Thank you very much for this detailed explanation.

I can't help but noticing that ~60% of the income generated goes to covering the overhead costs. Therefore I wonder, wouldn't it be better to to cut down on the overhead costs and see less patients, while generating the same income?

I understand that there are some fixed expenditure (like malpractice insurance, rent, bills, and supplies) that one can't escape. However, most of the costs go toward staff salaries. Of course, if you are seeing 20-30pts/day you will need to have people doing the scheduling, billing, and charting. I'm wondering if, at least in theory, one could see half the half the number of patients and still generate the same income by cutting down on the costs of hiring office staff. If one is seeing, say 12-14 pts a day, he/she should be able to do the scheduling, billing and charting themselves, no?

I know that at this stage in my medical career ladder, there are billions of things I'm still unaware of.

 

[deleted87716]

I've always been paid based on revenue (revenue-expenses=what I keep), so I can't comment on RVUs except to say that I would never allow myself to be paid based on RVUs.

 

[TPBC]

Bluedog:
1. Of the revenue you bring in, do you keep a certain percentage (i.e. how is your share calculated)?
2. Is there a bonus structure, if so, how is that calculated?
3. What is your breakdown (%) of visits billed as a 3 or 4?
4. What are your top billable procedures to generate more income?

Thanks for you comments.

 

[deleted87716]

Bluedog:
1. Of the revenue you bring in, do you keep a certain percentage (i.e. how is your share calculated)?
2. Is there a bonus structure, if so, how is that calculated?
3. What is your breakdown (%) of visits billed as a 3 or 4?
4. What are your top billable procedures to generate more income?

I keep whatever is left over after overhead and expenses. The calculation is pretty straightforward (e.g., no RVU voodoo). All of our bonuses are based on real dollars earned (either corporate profitability or payer incentives).

I bill roughly twice as many 99214 compared to 99213. The other codes are negligible.

Procedures are limited to biopsies, cryotherapy, laceration repair, etc.

 

[VA Hopeful Dr]

I've always been paid based on revenue (revenue-expenses=what I keep), so I can't comment on RVUs except to say that I would never allow myself to be paid based on RVUs.

That's the ideal, but I've never seen a hospital agree to pay someone that way. Sadly, there are fewer and fewer private practices to join these days so most are stuck with hospital employment.

 

[deleted87716]

That's the ideal, but I've never seen a hospital agree to pay someone that way. Sadly, there are fewer and fewer private practices to join these days so most are stuck with hospital employment.

That's a big part of the reason why I didn't want to work for a health system.

 

[FiveRivers]

That's a big part of the reason why I didn't want to work for a health system.

Thanks for the input Blue Dog.
1. After completing residency, how do/did you find a private practice to join that is not part of a health system? It seems that most advertised positions are either part of a health system, or salary/employed positions.

2. How do certain private practices prevent themselves from being bought out by healthy systems do so, whereas others can not?

Thanks for any answers.

 

[Lets Get Free]

Thanks for the interesting discussion, and a bump to the previous comment. I'm also interested on what options are out there for new docs.

 

[VA Hopeful Dr]

Thanks for the input Blue Dog.
1. After completing residency, how do/did you find a private practice to join that is not part of a health system? It seems that most advertised positions are either part of a health system, or salary/employed positions.

2. How do certain private practices prevent themselves from being bought out by healthy systems do so, whereas others can not?

Thanks for any answers.

Private Practices rarely have to advertise. I suggest getting in touch with private offices personally and inquire if they are or have thought about adding another physician.

Doctors are notoriously bad at business. The few that aren't, have successful practices. Plus, it takes time and effort to run a practice. Few of us want to do that anymore.

 

[RustBeltOnc]

Private Practices rarely have to advertise. I suggest getting in touch with private offices personally and inquire if they are or have thought about adding another physician.

Doctors are notoriously bad at business. The few that aren't, have successful practices. Plus, it takes time and effort to run a practice. Few of us want to do that anymore.

It's not that we don't want to do it, per se. In hem onc, it's not an option. Even if it was, healthcare is moving in a direction that there won't be independent practices long term so, it's a pointless exercise.

I get really frustrated when the suits claim the new cohort of docs focuses on "work-life balance" and use it as an excuse to over hire (which the OP needs to watch out for). If you over hire and there is less work for me to do, then you think I am going to be in the hospital/office all the time? Of course not.

 

[VA Hopeful Dr]

It's not that we don't want to do it, per se. In hem onc, it's not an option. Even if it was, healthcare is moving in a direction that there won't be independent practices long term so, it's a pointless exercise.

I get really frustrated when the suits claim the new cohort of docs focuses on "work-life balance" and use it as an excuse to over hire (which the OP needs to watch out for). If you over hire and there is less work for me to do, then you think I am going to be in the hospital/office all the time? Of course not.

I can't claim to know much about other fields. Though what I do know is that in the 4 areas in SC where I have practiced, there are many more private practice heme-onc doctors than employed ones.

But then again, we are an independent, cantankerous bunch down here...