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May 02, 2012

RVU physician compensation model

I'm often asked about compensation modeling, especially during these times when there are continued pressures on physician practice net income. Many practices, especially those owned by hospitals, are moving to some sort of a RVU-based compensation model. If you are looking at this type of model, here is what I see as the most common one out there:

Base salary consistent with expected MGMA production

RVU target consistent with expected MGMA production and salary (based on physician work RVUs)

5-10% risk corridor either way

Physician gets a bonus of x% of base where X is the amount that total RVUs exceed RVU target, except that no bonus is payable if total RVUs are within risk corridor

Base salary is increased or decreased in following year by Y% where Y is the amount by which physician's annual total RVU's exceeded or failed to meet the target, outside of the risk corridor

Following year's RVU target is = to current year's total (actual)

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