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wRVU based compensation? What's good/what's not?

ViewMaster

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    When it comes to compensation or bonus compensation based on wRVUs in private practice, whats good? What's not?

    How many wRVUs per month should a base be set at per month before bonuses kick in? What percentages of the wRVUs generated should I get to keep?

    Thanks for your input!
     

    musom

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      OOOOO YUMMY. My favorite topic. Allow me to divulge.

      First and foremost, you need to grab a copy of the latest MGMA statistics that breaks compensation into regional groups. It also allows you to see medium and median compensation per specialty. That is the best place to begin. I believe most contracts go kinda like this.... Base salary is somewhat arbitrarily set around MGMA mean. I don't recall that number off hand, but it is upper 200's. Let's say base is $275k. That's the first piece of the puzzle, but not the most important piece. Now it's time to decide RVU value. MGMA also has data on what the mean RVU value should be per specialty. I believe that is around $52ish/RVU for Path. So now you have a base salary which is set at $275k and an RVU value of $52. You now have an RVU base which is $275k/$52 = 5288 RVU/year. So if you're able to sign out 5288 rvu's/year then your compensation is only your base (275k) and do won't get to walk to Bonusville. Oftentimes employeers will want to insert an "RVU Floor". Mine (I think) was 90% of my base. The clause stated that if I did not meet my FLOOR per anum, then my BASE would be renegotiated the following year. I've never had a problem hitting floor. So any RVU's above base should kick into bonusville. Bonusville is a very delightful place to visit every quarter. I get 100% of the RVU's (wRVUs) after I meet my base RVU. I chose to have mine tallied and paid quarterly, as I just didn't trust the corporation to agree to paying me such a large sum once a year.

      You should be able to keep 100% of the RVU's you generate after meeting your BASE. The most important part of the contract negotiating is your RVU $ value. I've known individuals that landed in a sweet spot because they had leverage. If you're in the mid to low 50's for a dollar value on RVU's, you should be making at least medicare rate, if not a little better (depending on your region/expenses etc). On average I at least double my RVU goal per month. PM me if you'd like more details.
       
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      ViewMaster

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        OOOOO YUMMY. My favorite topic. Allow me to divulge.

        First and foremost, you need to grab a copy of the latest MGMA statistics that breaks compensation into regional groups. It also allows you to see medium and median compensation per specialty. That is the best place to begin. I believe most contracts go kinda like this.... Base salary is somewhat arbitrarily set around MGMA mean. I don't recall that number off hand, but it is upper 200's. Let's say base is $275k. That's the first piece of the puzzle, but not the most important piece. Now it's time to decide RVU value. MGMA also has data on what the mean RVU value should be per specialty. I believe that is around $52ish/RVU for Path. So now you have a base salary which is set at $275k and an RVU value of $52. You now have an RVU base which is $275k/$52 = 5288 RVU/year. So if you're able to sign out 5288 rvu's/year then your compensation is only your base (275k) and do won't get to walk to Bonusville. Oftentimes employeers will want to insert an "RVU Floor". Mine (I think) was 90% of my base. The clause stated that if I did not meet my FLOOR per anum, then my BASE would be renegotiated the following year. I've never had a problem hitting floor. So any RVU's above base should kick into bonusville. Bonusville is a very delightful place to visit every quarter. I get 100% of the RVU's (wRVUs) after I meet my base RVU. I chose to have mine tallied and paid quarterly, as I just didn't trust the corporation to agree to paying me such a large sum once a year.

        You should be able to keep 100% of the RVU's you generate after meeting your BASE. The most important part of the contract negotiating is your RVU $ value. I've known individuals that landed in a sweet spot because they had leverage. If you're in the mid to low 50's for a dollar value on RVU's, you should be making at least medicare rate, if not a little better (depending on your region/expenses etc). On average I at least double my RVU goal per month. PM me if you'd like more details.

        Awesome! this is super helpful, thank you so much! I will also PMing you. This would be a partnership track in a private group and not a Corporate lab, so I don't know if that would be different or not, but I'll PM you. Thanks.
         
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        musom

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          Yes, I'd be very much so interested in the structuring of an RVU-based model on a private practice side versus employed (which I am). You all own TC...? PM Me.
           

          LADoc00

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            OOOOO YUMMY. My favorite topic. Allow me to divulge.

            First and foremost, you need to grab a copy of the latest MGMA statistics that breaks compensation into regional groups. It also allows you to see medium and median compensation per specialty. That is the best place to begin. I believe most contracts go kinda like this.... Base salary is somewhat arbitrarily set around MGMA mean. I don't recall that number off hand, but it is upper 200's. Let's say base is $275k. That's the first piece of the puzzle, but not the most important piece. Now it's time to decide RVU value. MGMA also has data on what the mean RVU value should be per specialty. I believe that is around $52ish/RVU for Path. So now you have a base salary which is set at $275k and an RVU value of $52. You now have an RVU base which is $275k/$52 = 5288 RVU/year. So if you're able to sign out 5288 rvu's/year then your compensation is only your base (275k) and do won't get to walk to Bonusville. Oftentimes employeers will want to insert an "RVU Floor". Mine (I think) was 90% of my base. The clause stated that if I did not meet my FLOOR per anum, then my BASE would be renegotiated the following year. I've never had a problem hitting floor. So any RVU's above base should kick into bonusville. Bonusville is a very delightful place to visit every quarter. I get 100% of the RVU's (wRVUs) after I meet my base RVU. I chose to have mine tallied and paid quarterly, as I just didn't trust the corporation to agree to paying me such a large sum once a year.

            You should be able to keep 100% of the RVU's you generate after meeting your BASE. The most important part of the contract negotiating is your RVU $ value. I've known individuals that landed in a sweet spot because they had leverage. If you're in the mid to low 50's for a dollar value on RVU's, you should be making at least medicare rate, if not a little better (depending on your region/expenses etc). On average I at least double my RVU goal per month. PM me if you'd like more details.

            How is taking call in Pathology/Lab credited in a pure RVU system? What is the RVU/call day? Because all the data Ive seen from people at a $52 per RVU you would getting 1.2-2.0 RVUs per day of call and that is INSANELY low for being responsible for the entire lab 24-7.

            The RVU system has massive flaws the least of which is guys like me would game the living hell out of it.

            There are also an incredible number of flaws in your general argument:
            1.) Hospital based pathologists often have zero ability to affect their volumes. What comes in, comes in. So the entire idea that you are being incentivized to do more makes no sense when you have zero ability to do more.
            2.) This then creates the incentive to be absolutely as wasteful as possible. I need 3 immunos on a case before RVU, now I do 30. You might argue that happens now, but in a system where you pushed to count every little unit, this will get out of control fast.
            3.) You can guarantee the base level of RVUs needed each year will go up and up ad infinitum. Anyone with lots of experience in workplace productivity realizes most large organizational management strategies involve raising the bar inch by inch until it is literally impossible to meet. I dont see how you will win this game EVER.

            I would rather have a flat salary, zero bonus whatsoever and at least know what my slavemasters will let me keep at the end of the day than that trash business model.

            RVU based incentive pay systems are literally the worst hybrid of private practice and employment models I could imagine.

            Personally though I would love to negotiate a big RVU based contract with a hospital administrator because I can think of million different ways to hose an institution with this. I would assume they would fire me after my initial term, but I would walk away with an epic pile of loot and sit on the beach in Mexico sipping coronas for the remainder of my days!
             
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            musom

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              How is taking call in Pathology/Lab credited in a pure RVU system? What is the RVU/call day? Because all the data Ive seen from people at a $52 per RVU you would getting 1.2-2.0 RVUs per day of call and that is INSANELY low for being responsible for the entire lab 24-7.

              The RVU system has massive flaws the least of which is guys like me would game the living hell out of it.

              There are also an incredible number of flaws in your general argument:
              1.) Hospital based pathologists often have zero ability to affect their volumes. What comes in, comes in. So the entire idea that you are being incentivized to do more makes no sense when you have zero ability to do more.
              2.) This then creates the incentive to be absolutely as wasteful as possible. I need 3 immunos on a case before RVU, now I do 30. You might argue that happens now, but in a system where you pushed to count every little unit, this will get out of control fast.
              3.) You can guarantee the base level of RVUs needed each year will go up and up ad infinitum. Anyone with lots of experience in workplace productivity realizes most large organizational management strategies involve raising the bar inch by inch until it is literally impossible to meet. I dont see how you will win this game EVER.

              I would rather have a flat salary, zero bonus whatsoever and at least know what my slavemasters will let me keep at the end of the day than that trash business model.

              RVU based incentive pay systems are literally the worst hybrid of private practice and employment models I could imagine.

              Personally though I would love to negotiate a big RVU based contract with a hospital administrator because I can think of million different ways to hose an institution with this. I would assume they would fire me after my initial term, but I would walk away with an epic pile of loot and sit on the beach in Mexico sipping coronas for the remainder of my days!

              Yes LADOC. Lot's of what you say is true. However, one thing is not so true and thats you're #1. Since me being here, as a hospital-based employee I have grown this practice from a volume standpoint, about 75%. Even though I'm a hospital, I essentially manage my own practice that I'm my own separate entity. As a matter of fact, I just left my local dermatologists and urologists office from dropping off their Christmas peanut jug. I've reached out to sister hospitals (regional hospitals without an in-house pathologist which are owned by the same corporation) and gained their business. I've reached out to OB GYN offices, ultrasound/breast biopsy places and individual GI places, small local physicians offices and clinics..... I hustle, and that extra volume came from me and from me only. I only ask for admin to step in when I need to offer a new contract.....(and then wait impatiently for the standard 4-month long process to happen).

              Your number 2 is correct, as every single month I tally up my RVUs, and tend to say "hmm...I did 17 less immunos this month versus last, I must be losing touch". I get that internal bias, and try to not let it influence my decisions I make each day.

              I don't even mess with the "24/7 CP call stuff" when it comes to RVUs. I am Medical Director and get a "fair" stipend for those duties. Being at a smaller facility in a rural area, there aren't many physical obligations to being a Medical Director.

              I'm fine if my RVU base goes up, as long as my salary goes up on a 1:1 ratio. No exceptions/negotiations there.
               

              LADoc00

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                I definitely think RVU base compensation CAN work for some pathologists especially if they benefit from an en masse repatriation of all the local business when hospital systems buy everyone out. BUT it makes me really nervous, I would be very buddy buddy with the hospital admin to make sure you arent on the bottom of any political struggle for the dollars. Puts another layer of concern on my daily life. Not impossible, but that alone might be enough to push me to change fields and go head first into lab testing for cannabis rather than sticking with medicine.
                 

                musom

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                  I definitely think RVU base compensation CAN work for some pathologists especially if they benefit from an en masse repatriation of all the local business when hospital systems buy everyone out. BUT it makes me really nervous, I would be very buddy buddy with the hospital admin to make sure you arent on the bottom of any political struggle for the dollars. Puts another layer of concern on my daily life. Not impossible, but that alone might be enough to push me to change fields and go head first into lab testing for cannabis rather than sticking with medicine.

                  Yes, the administration team got a jar of special peanuts today, too. I'm more than aware of the close relationship required with admin when you're on an RVU compensation model. But let me me the first to tell you that the constant ass-kissing eventually becomes draining.
                   

                  ViewMaster

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                    I definitely think RVU base compensation CAN work for some pathologists especially if they benefit from an en masse repatriation of all the local business when hospital systems buy everyone out. BUT it makes me really nervous, I would be very buddy buddy with the hospital admin to make sure you arent on the bottom of any political struggle for the dollars. Puts another layer of concern on my daily life. Not impossible, but that alone might be enough to push me to change fields and go head first into lab testing for cannabis rather than sticking with medicine.

                    Well, the set up I am looking at is not employed position within a hospital conglomerate, and not an employed position at a corporate lab. Rather it is a partnership position at a private group of medium size that works in a semi-subspecialized signout model with stable contracts. They are responsible for their own billing and collections but they only bill for and collect on the PC from the anatomic path, as the TC is collected by a national processing lab and logistics company that is local. Though the pathologists have direct oversight and workflow decisions about the physical processing in the lab. So this being said does this make you think of the RVU structure any differently?
                     

                    LADoc00

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                      Then Im confused, the only reason to use a RVU based system is a cross specialty comparison of compensation. If groups wants to divide work based on PC work load, why not just create billing categories for each pathologist and basically just "eat what you kill" like surgical subspecs do?

                      Why would a group of just Pathologists even bother with RVUs? Because the only reason to use something other than actual compensation via your PC income stream is because someone isnt happy with the $$ they were getting and thought they would engineer system they could game in their favor.....
                       

                      ViewMaster

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                        Then Im confused, the only reason to use a RVU based system is a cross specialty comparison of compensation. If groups wants to divide work based on PC work load, why not just create billing categories for each pathologist and basically just "eat what you kill" like surgical subspecs do?

                        Why would a group of just Pathologists even bother with RVUs? Because the only reason to use something other than actual compensation via your PC income stream is because someone isnt happy with the $$ they were getting and thought they would engineer system they could game in their favor.....

                        I don’t know why, I didn’t set it up. I don’t have any experience with any of the different ways that practices are set up, that’s why I’m asking what people’s oponions are.
                         

                        musom

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                          Then Im confused, the only reason to use a RVU based system is a cross specialty comparison of compensation. If groups wants to divide work based on PC work load, why not just create billing categories for each pathologist and basically just "eat what you kill" like surgical subspecs do?

                          Why would a group of just Pathologists even bother with RVUs? Because the only reason to use something other than actual compensation via your PC income stream is because someone isnt happy with the $$ they were getting and thought they would engineer system they could game in their favor.....


                          I'm in 100% agreement with LADOC. Maybe the practice believes that their is simplicity with an RVU-based model? There might be some truth to that, but the real truth is that based on your RVU value, the group is most likely retaining a portion of the PC and all (of course) of the TC.
                           

                          yaah

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                            I would not base any compensation on RVU. Too easy to game the system, particularly if you have no sense of teamwork or ethical sense. Individuals will cherry pick duties and leave the rest with having to do all the other stuff that is actually important to running the lab/hospital/business/etc but doesn't get paid like that. My group has tracked the RVU generated per partner but it in no way relates to how hard people work. The only way it would make sense is if you actually had the ability to increase your RVUs without taking it away from other people.
                             
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