I’ve written a number of articles on supplier compensation plans and a few of their nuances. Supplier compensation plans have deployed work relative worth unit (wRVU) designs/arithmetic for years. In truth, wRVUs (associated to “complete RVUs”) have been round for greater than 30 years. Whereas well being methods think about and deploy clinician compensation plans with a big portion of their suppliers, wRVU comp fashions don’t at all times make sense vis-à-vis the agricultural setting.
Exterior of the agricultural house, reimbursements are sometimes paid primarily based on a billed Present Procedural Terminology (CPT®) code and its related allowable. Even in a “managed reimbursement” surroundings, the billed CPT code delivers a “work worth” that may be tied again right into a compensation system.
Nonetheless, owing to Medicare and Medicaid All Inclusive Charges (AIR) for licensed Rural Well being Clinics (RHC), a pure wRVU comp mannequin is probably not tenable relying on reimbursement and payer combine. That mentioned, all healthcare is native so payer combine, native demographics, comp fashions, and general compensation are predicated on market dynamics together with, however not restricted to, payer payment schedules and affected person demographics.
Let’s have a look at some simple arithmetic delineating the potential struggles of a wRVU compensation mannequin in a rural setting:
Determine 1
Affected person Go to
Gorke
I’ve said earlier than, and it’s price noting right here, my examples could also be exaggerated however are so to show some extent. Additionally it is price noting that I’m not a Licensed Procedural Coder (CPC) and have no idea for those who can invoice a 99213, 11406, 11765, and 93010 in the identical go to with out modifiers and/or denials for “similar date of service,” and so forth. Whereas my CPT choice and the way they “play collectively” in a go to (e.g., Determine 1) is up for debate, I do know, and have seen, a number of codes billed within the rural setting in a given hour-long go to. Once more, this mannequin is constructed to think about supplier compensation challenges.
In Determine 1, Dr. Schmoe is in a rural setting (Rural X) in Wisconsin. He has a block of time (an hour scheduled go to slot) for Affected person X, who’s a Medicare affected person. Affected person X arrives and, primarily based on wanted and clinically indicated companies, has a Degree 3 established affected person go to and, while there, has a lesion faraway from her shoulder and one other eliminated close to a fingernail. Dr. Schmoe additionally interprets (“reads”) the outcomes of a world electrocardiogram (ECG).
Determine 2
wRVUs & Pt Accountability
Gorke
Rural X costs, and receives, 150% of Medicare allowables for its industrial affected person charges/allowables. (Notice “MC Permit” and the “Chg” columns in Determine 2.) Owing to the peculiar machinations of cost-based RHC reimbursement for Medicare sufferers, Affected person X could be answerable for a 20% co-pay for every CPT billed (20% of the clinic’s costs). Rural X additionally receives 80% of its AIR from Medicare.
On this case, the RHC will obtain $251.83. Rural X receives 80% of its Medicare AIR of $175 ($140) and $111.83 (20% of the fees) for Affected person X’s co-pay for every CPT billed.
On this go to, Dr. Schmoe generated 6.21 wRVUs whereas performing these companies. Dr. Schmoe’s employment contract states that he’s paid $50/ wRVU in his clinic.
Determine 3
Loss/Go to
Gorke
As evidenced in Determine 3, Dr. Schmoe generated 6.21 wRVUs throughout Affected person X’s go to at $50/wRVU compensation which yields $310 in compensation for Dr. Schmoe. That mentioned, if the clinic acquired the Medicare AIR and the 20% for the affected person co-pays (once more, owing to the truth that all of those CPTs are billable and don’t “battle” out), the clinic loses $58.67 on this encounter.
In Determine 4 (when it comes to knowledge), we take one other leap from our good senses (and away from Dr. Schmoe’s wRVU comp plan) to color a separate image.
Determine 4
Comp v Income
Gorke
Dr. X has 535 encounters throughout 2022. Of these, 60% are Medicare sufferers whereas 40% are industrial payers. Assuming, absurdly so, that he delivers the identical 6.21 wRVUs on each affected person go to, he has mounted comp of roughly $259,000 (the approximate median), and given our allowables in Determine 2, we see that Dr. X would barely cowl his compensation when producing 3,300 wRVUs. That mentioned, that wRVU era is properly under the 25th percentile whereas he could be comped $77.91/wRVU.
The aim of this text is to elucidate the challenges inherent in compensation plans in a rural setting. Apart for the conventional inputs, the Medicare and Medicaid reimbursement schemes add an attention-grabbing twist to an already muddied deliverable.
Supplier compensation modeling is decidedly native and should embrace elements equivalent to affected person demographics, payer dominance, payment schedules and allowables, and payer combine apropos of Medicare/Medicaid inhabitants base. Care should be taken to know all the countervailing forces to drive a compensation plan that’s honest and protects the well being system’s funds.
