Contract Negotiation: Physician Compensation Models

  • There are two types of medical malpractice insurance: occurrence and claims-made.

As you are looking at different job opportunities, it is important that you understand the compensation model that the organization utilizes. This will determine how you negotiate your contract.

Fixed Salary

Also called 100% salary or straight salary, this is compensation model is exactly what it sounds like. Physicians are paid a set salary no matter the quantity or quality of productivity.

Salary Plus Incentive

Also called the salary plus bonus model, this allows physicians to make a set base salary while also giving them the chance to earn a bonus. The bonus can be based on different criteria, such as patient satisfaction, productivity, and personal performance. The criteria will vary between organizations.

Working Relative Value Units (wRVU)

The most popular compensation model, working Relative Value Units (or wRVUs), allows a physician to earn money based on the amount of examinations or procedures they perform. The wRVUs a physician receives is then multiplied by a specific dollar amount. Each CPT code used for billing has a coordinating wRVU and is pre-determined by the complexity of the procedure or patient visit. wRVUs are determined by looking at a physician's work, expenses incurred by the hospital or practice, and the cost of malpractice insurance premiums.

Pay for Performance

This model is set up so that pay reflects performance based on standard criteria. This helps ensure that physicians are meeting performance criteria set by the organization.

Pure Performance

Also called value-based compensation and pure productivity model, the pure performance model is where a physician is paid on a scale based on the procedures performed or the nature of the patient visit.

Equal Share

This model divides the organization's revenue equally among the physicians in the group once all costs are taken care of.

  • Join the Physician Ambassador Program to earn additional income during training;
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