General Surgery contract question

[schlueme]

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Does anybody know if and where there is any info regarding gen surg. contracts. I have had numerous offers and the one I am interested in has a RVU incentive based plan with a base salary at the MGMA 25%. I can't find any info about RVU contracts and was wondering if this model is more advantagous for the surgeon or employer. Thanks

 

[Winged Scapula]

Depends on the environment and how well you can market yourself.

I would think that starting out at MGMA 25% plus RVUs would be beneficial for the employer, especially at the beginning when you aren't operating much or seeing many patients. After you establish yourself and get busy, then it may be to your benefit.

It can take months to get on insurance plans and to get credentialed at hospitals. So all that time they are underpaying you because you aren't bringing in the RVUs. For example, I had one hospital offer a salary guarantee for 3 months, after that I was on my own, "eat what I kill". Trouble is, it can take 6 - 12 months to get on insurance plans. 45-90 days to get on MediCare, etc. If you aren't on patient insurance plans, you will have trouble getting any patients.

What's 25% of MGMA - like $60K? I think I'd rather have a higher base salary, at least to start with. Are they guaranteeing you a certain minimum RVU that you can't go under?

 

[schlueme]

the 25th percentile of MGMA is presently 246,709 for hospital owned practices according to them. they have set an annual rvu target of 5763 and anything over that is paid at a rate of 32.44 x each rvu. they have offered a 1 year base salary of 320,000 then the 25th thing kicks in for years 2-5. I just can't find any good sites that address what is the best type of contract to get into when working as an employee. should I request 50th percentile in years 4 and 5. and what does that do to the rvu's and all that? also, what is the average rvus that a bread and butter community hospital surgeon is doing annually? is there a site that goes over rvu's? whats interesting is that the MGMA book was sitting in the OR lounge the other day. It is thick and very confusing. from what I can gather salaries and percentiles are all based upon a small sample size of physicians around the country that respond to questionairres? could this be right?
thanks

 

[Winged Scapula]

Sorry....when you wrote 25% of MGMA I thought you meant 25% of the average, not the 25th percentile.

 

[Pilot Doc]

the 25th percentile of MGMA is presently 246,709 for hospital owned practices according to them. they have set an annual rvu target of 5763 and anything over that is paid at a rate of 32.44 x each rvu. they have offered a 1 year base salary of 320,000 then the 25th thing kicks in for years 2-5. I just can't find any good sites that address what is the best type of contract to get into when working as an employee. should I request 50th percentile in years 4 and 5. and what does that do to the rvu's and all that? also, what is the average rvus that a bread and butter community hospital surgeon is doing annually? is there a site that goes over rvu's? whats interesting is that the MGMA book was sitting in the OR lounge the other day. It is thick and very confusing. from what I can gather salaries and percentiles are all based upon a small sample size of physicians around the country that respond to questionairres? could this be right?
thanks

Great example of something that, in my experience, no one gets a remotely adequate education for in residency.

I'll contribute what I can as a current resident who has done a decent amount of private practice moonlighting but has minimal contract negotiation experience.

It's really hard to say if their offer is good or not without knowing

1) what are the benefits
2) what are comparable groups paying in their location
3) desirability of job (i.e. trauma on all HIV+, surgicalist in nice suburb, etc.)
4) What is the RVU generating capability of the job? this thread says 7000 RVU's is typical for a GS practice. If you make that, you'll get 1300 * 32 ($42K) extra or a total of 288, less than your 320K guarantee the first year. Does the hospital have old records of other employee surgeons you can look at?

My impression is that the MGMA salary is as you say it is, a pretty sparse compilation of unverified surveys. Docs, particularly those doing really well or really poorly, probably don't tell the whole truth very often. I don't know of anyone with better data though.

Do you really want to be an employee for 5 years? If the reimbursement environment is decent, you should be able to go out on your own sooner than that and presumably make more money for yourself.

 

[gudog]

As a private practice person, who is also a hospital board member, I can say that an employed surgeon based on RVU's is going to make much more money than someone in private practice.

You get paid based on how much you work, irregardless of the patient's ability to pay.

Assuming the hospital doesn't go broke, I think the RVU based payment scale is very beneficial to the physician.

 

[Pilot Doc]

As a private practice person, who is also a hospital board member, I can say that an employed surgeon based on RVU's is going to make much more money than someone in private practice.

You get paid based on how much you work, irregardless of the patient's ability to pay.

Assuming the hospital doesn't go broke, I think the RVU based payment scale is very beneficial to the physician.

It might be predictable, but I don't know that beneficial is the right description. All depends on the patient population and the contract. The contract in question pays $247K for the first 5763 RVU's ($42.80/RVU) and $32.44 for every RVU thereafter. (Kind of a weird pay scheme, but I guess if you're losing money on every patient than production disincentives are appropriate.)

Anyway, if local private practices are averaging collections less than $43/RVU, this contract is a good deal. If they collect more than that, it's not.

 

[gudog]

Well said, much of this depends on your payor mix, which is something you should request from your potential employer.