How to handle denied claims in a phyisician work RVU compensation formulary


I often find physician compensation plans that use a Work RVU based formulary fail to take in to account denied claims/charges. When this happens, the physician gets more credit than what he or she deserves, thus creating the possibility of excess compensation. The following is a sample clause taken from an actual physician employment agreement that addresses this issue:

Employer shall adjust wRVUs granted to Physician for claims denied (due to Physician actions or inactions). Each Employment Year quarter, Employer shall reconcile any Overpayment to Physician made as a result of such denied claim(s) by adjusting Physician’s Draw Amount for the then current quarter. A log of denied claims (with ANSI reason codes) shall be maintained and made available to Physician upon request. Employer shall reasonably provide all necessary information to any payor in order to substantiate any denied claim. If a payor subsequently approves payment the Work RVU Productivity Calculation Model calculation will be adjusted accordingly for the period the services were provided.

Have questions? I’m here to help.