# Help! … Need advice on this sample contract sent me.

Home Practice Management Help! … Need advice on this sample contract sent me.

•  thomasmd77
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I am a 3rd year FM resident and looking to move to the large city in the midwest.  I had a phone interview with a large non-profit hospital and they sent me their pay structure and I am trying to figure out some of the verbiage. I will be flying there in 2 weeks for a face to face but want to be prepared with questions.  I do plan on getting a lawyer to look at the final contract.   I am looking non-profit for my large student debt (> 400K) and currently on PSLF).  Outpatient Clinic. 4 Day work week.   Anyway … Here is their sample pay structure they sent me:

Projected Worked RVUs: 5000

Median Rate: \$47   (NOTE: all numbers have been rounded up or down)

Base Primary care compensation:  85% of the 25th% (subject to productivity adjustment) 192K x 0.85 = 163K

Base Value Compensation (assuming a perfect score in all measures)   15% of the 25th percentile  = 192K X 0.15 = 29K   (I am rounding the numbers)

Productivity Compensation:

Tier 1 – 35th percentile to 50th – 75% of the median rate (4800-4300) x (\$47 x 0.75) = ~19K

Value Compensation (assuming perfect score) 15% of the median rate (4800-4300) x (47 x 0.15) = ~ 3K

Tier 2 – 50th percentile met (4300-4000) x 47 + (4900 – 4300) x (\$47 x 0.10) = ~20K

Tier 3 – 50th-75th percentile met ( 5000-4900) x (47 x 0.8) = ~4K

Value Compensation (5000-4900 x (47 x 0.15) = ~1K

Tier 4 – GT 75th percentile (Same pay structure as Tier 3)

Added all up … Total Approx.  240K

Questions:

1) Is this fair for a new FM Attending (all outpatient)?

2) What should I be negotiating?

3) Is my math correct below?

99214 = 1.50 wRVU  and 99213 = .97 WRVU =  Average should be 1.24 wRVU per Patient   (If 50% 99213 and 50% 99214)

Monthly RVU   ~417  (5000 /12)

5 Days Work Week: 4 Weeks Vacation, 1 Week CME, 10 Holidays, = 45 Work weeks which for 5 day work week = 225 days per year worked.  So 5000 WRVU required / 225 = 22 wRVU a day.  Avg wRVU = 1.24.

• So then … 22 / 1.24 = 18 Patients per day.

4 Day Work Week: 4 Weeks Vacation, 1 Week CME, 10 Holidays, = 45 Work weeks which for 4 day work week = 180 days per year worked.  So 5000 WRVU required / 180  = 28 wRVU a day.  Avg wRVU = 1.24.

• So then … 28 / 1.24 = 23 Patients per day.

Thanks!

ACN
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They’re paying you in the 25%ile base then bonusing you on “Base Value Compensation” is what I’m understanding.  As a hospital employee, I’d figure you’d be getting 50%ile pay min.  Next, what’s the chance you get a “perfect score” in all measures; is that even achievable (I’d ask to see numbers and “scores” for the last 3 new hires)?  If they gave you \$1mil bonus but you could never get a perfect score, it’s all just for show.

If you're ever having a bad day, just remember in 1976 Ronald Wayne sold his 10% stake in Apple for \$2,300.

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HandFellow
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When I read this, all I think is that this RVU structuring is convoluted and a mess.  I have no idea what it means and I’m happy I don’t have to worry about it.

All I can say is that your visits for established patients, if they are complicated will be 99214 more than 3 if you have sick and complicated patients, just based documentation.  In my practice, even though they talk about the bell curve, my established patients tend to be on the 4 side since they don’t come back unless they have problems.  And don’t forget your new patients, for FM, I would imagine it isn’t unheard of to do 99204s mixed in with 203s.

ENT Doc
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Agree with HandFellow.  You are basing your math on established patients only.  If indeed that’s how things roll in outpatient FP then by all means use established office visits.  Keep in mind that in 2021 CMS is going to be bundling level 2-5s into one RVU – slightly more than a level 3.  Might be wise to use that number.

Why not come back at them in an effort to maintain simplicity – a fixed, known base with a productivity bonus?

Also, aside from knowing about the financial position of the hospital and market around it, you should be asking about current volumes, mix of new/established, what the patient flow is like and who controls it, what control you have over that flow, are you the one submitted the billing code or is someone else modifying it, etc.  You want to know about any and all things that affect throughput.  If you are dependent on productivity your salary will be dependent on the combination of complexity and throughput.  You can’t help the complexity other than to document well/accurately/efficiently.  Thus you want to focus your questions on things that may be out of your control and understand whether you can bring them into your sphere of influence.

thomasmd77
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Joined: 08/03/2019

Thanks for replies.  …

ACN: If I hit the 50% percentile min. then I should receive around the 235-240K pay … That is how I was reading it.

Handfellow/ ENT Doc:  With the 213 and 214s, I just used for a rough estimate so I could see how many patients at the minimum that they want me to see a day. I know the new patients pay more.  I heard about that CMS bundlings … I am wondering will that be better pay for us FM docs.

ENT Doc:  I heard they use Tier pay structures for the docs that want to work a little harder and get paid more.  It is very confusing too.

During the actual interview I will be asking the questions of who sets my schedule, No Shows, and how many they typically book me a day for patient count.

So it sound like my RVU of \$47 and 5000 wRVU is around the going rate for FM outpatient?    Thanks

aCMD
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I am an FP no OB in the Midwest at a mid sized city working for a not for profit Health System. The listed pay system is confusing to say the least. Have them walk you through the numbers.

1. So where is the 5000 coming from? your number or their number? If it is their number is it fixed for every year you are employed or is it variable? If it is variable how is it determined? Mine is based on the prior year MGMA numbers.

2. Your Tier 2 pay is not set up like your other tier pay calculations- is it written correctly? I would look at this more as tiered Pay per wRVU and calculate it at each tier based on \$47 multiplied by whatever reduction factor they are using. So at tier 1 you are only being paid \$35.25 for wRVUs, what is it for Tier 2 and Tier3? What happens if you exceed the 75%ile? It does not look like you will earn any more money for more work. Also what happens if you do not ever clear the 35%ile? As a point of reference: MGMA 2018 wRVU for FP no OB are: 50%ile = 4824, 75%ile= 5768 and 90%ile= 6,890 for 1 FTE.

3. Are you going to have an established panel of patients from day 1 of work or are you taking over a practice?

Where I currently work I believe we offer \$180,000 guarantee salary for the first 18 months of practice for new physicians – regardless if they need to build a practice or are getting a ready to work practice (typically taking over a retired physicians practice)

4. What measures are being used for the Value Compensation?  one example: my employer uses- percentage of patients with HgbA1c <8.0.

5. Benefits??

6. You list the time off- is it paid?

Questions:
1) Is this fair for a new FM Attending (all outpatient)? I have no idea what is “fair”. Recommend you speak with others at your training program. Also speak with other places you may want to work. Speak with the other physicians at the place you are interviewing to see how ‘hard’ it is to get the maximum at each tier.
2) What should I be negotiating? There may not be any negotiating- especially as this will be your first job.
3) Is my math correct below? I have averaged about 1.3- 1.4 wRVU per office visit for the last 3 years. My office partner has been around 1.15 during same time frame. This based on wRVU for all visit types in FP no OB- new, est, well adult, well child, etc.

Good Luck

thomasmd77
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Thanks aCMD for your post and suggestions.  They gave 5000 as an example.  I am not sure what the final contract will be.  They stated the salary of 195K will be fixed for 2 years.  This is good to know: MGMA 2018 wRVU for FP no OB are: 50%ile = 4824, 75%ile= 5768 and 90%ile= 6,890 for 1 FTE.

Good to know that you are avg 1.3-1.4.  I hope to be able to get those numbers too once I am established.

The benefits are good.

• Salary \$195,000 (guaranteed for 2 years; after the first year base on productivity you could roll onto the new plan)
• Sign-on bonus \$20,000
• Relocation bonus \$15,385
• 5 days PTO for CME and \$3,500 stipend each calendar year
• 28 days a year in PTO plus 40 hours a year in paid sick time
• Medical malpractice coverage, licensure and certification fees

I will post after my interview next week with them.

DocNextDoor
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Before retiring last year, FP no OB not for profit system, similar comp plan, I was averaging 1.4-1.45 RVU per visit over the past few years. Comp average \$38-\$42/RVU (after end of year measure adjustment). You should have >% 99214 vs 99213.

Make sure they will provide monthly assessment (verified by your own monitoring) of your productivity during the first year to be able to make the decision on converting to RVU vs guarantee for year 2.

Agree with aCMD finding out measures used for Value Comp also ask what percent of docs meet those numbers.

Ask how often the comp plan changes, our plan would change every year and we would sometimes not know the new plan for months into the new year. Monitored measures changed and value to get perfect score changed, patient satisfaction sometimes in the mix. Medicare AWV and HCC coding for medicare advantage plans undoubtedly will be added to your formula in future years.

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thomasmd77
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Thanks everyone for replying. I have my face to face on Thursday.  They are paying to fly me in with hotel and rental car paid as well. Which another place that I had a phone interview said they would not.

The questions I will be asking:

1) What does “Perfect Score” mean and what happens if I do not make it. (See above posts)

2) Average wRVU. I am hoping around 1.25 at least.  I wish I can get 1.4 like DocNextDoor but that might take me sometime

3) What is the yearly wRVU expected after the first 2 years(They guarantee 195K for the first two years).  In their sample contract they sent me (See above) it was 5000 per year or 417 wRVUs per month.

4) Will I have an established panel already

Any other concerning questions to ask then please let me know. Thanks!