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How to measure physician compensation per RVU

By Madeline Hyden, Meghan Wong
August 14, 2013
Body of Knowledge Domain(s): Financial Management, Organizational Governance

 

This article was updated on Oct. 20, 2016

Many practices compensate their physicians using an RVU model, which compensates based on the work performed rather than the number of patients seen since the level of work required can vary by patient. The Association provides physician compensation per RVU data in the MGMA Physician Compensation and Production Survey Report, however, data experts say that this is a commonly misused benchmark. Understanding how MGMA survey data is compiled and arranged in the reports can alleviate any confusion regarding this benchmark.

Why is it misused?

Data experts say that people tend to misuse these data because they often assume that if a physician’s RVU volume falls within a certain percentile, they can use that same percentile to find compensation per RVU data and calculate the physician’s salary.

For example, the 75th percentile of work RVUs generated in a year for a gastroenterologist is 10,051 (according to the MGMA DataDive Provider Compensation 2016). If a practice pays that physician by multiplying median work RVUs by the 75th percentile compensation per work RVUs ($77.37, according to this year’s report), the physician’s salary would be $777,646.

10,051 RVUs x $77.37 per RVU = $777,646

This salary is 12 percent higher than the reported 75th percentile compensation in the survey data – $695,424

Another way these data are misused is when users do not take respondent populations into consideration when determining a compensation-to-RVU ratio. Each table in an MGMA survey report will have a slightly different physician count because survey participants are required to submit total compensation data for their physicians, while they are not required to submit RVU data. Therefore, the sample size will vary based on the survey participation in a given data set - they are two unique participant populations.

For example, if you divide the 2016 median total compensation for orthopedic surgeons by the 2016 median work RVUs for orthopedic surgeons to achieve a compensation-to-RVU ratio, this would yield an incorrect result. This is because the total compensation table for orthopedic surgeons has a different participant population (841) than the work RVU table (635).

What is the best way to determine physician compensation per RVU?

Use ratio tables

Instead of calculating compensation per RVU data by manually dividing compensation by RVUs found in the survey data, use ratio tables in the survey report to give you a more accurate compensation per RVU ratio.

Ratio tables in MGMA survey reports calculate the correct compensation-to-production ratio benchmark by including only those survey participants who provided both compensation and work RVUs.

Use the median compensation per wRVU figure

Data experts recommend that practices multiply the median compensation per wRVU benchmark to estimate total compensation for any level of production (wRVUs). This is because the lowest producers per wRVUs often have the highest compensation per wRVU figures simply because the denominator is smaller.

More detail on the impact of production on compensation and compensation-per-RVU can be found in the Quartile Report Builder, a feature of the Enterprise License version of MGMA DataDive Provider Compensation. Read more in "There is no substitute for hard work." 

More from MGMA:


Physician Compensation Research & Analysis Reports

Real-time data in MGMA Stat

Madeline Hyden, digital editor, Corporate Communications, MGMA

Meghan Wong, Senior Manager, Data Solutions, MGMA

Article Comments


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Andrew Beland - 9/2/2015 1:25:38 AM
Thank you for sharing all such details.Well it will definitely help me in getting future success.I am eagerly waiting to get posted in physician recruitment.Have a peek at this site http://doctorschoiceplacement.com and share your views.

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