Physician incentive compensation idea

Many physician incentive compensation plans are based on RVUs. This is because one of the problems with a straight productivity incentive program is that there are some practice building activities which are not RVU rich, such as a full day satellite office work. In these cases, some practices for example have calculated what a "normal" day's work RVU is and do not let the physician's RVUs for that visit fall below this floor.

You could possibly do something similar with an overall incentive bonus program. Take a basket of E&M procedures and calculate an average RVU per hour. Take a Level 1 Office Visit to equal 15 minutes and a Level 3 or 4 Consult for 45 minutes average them both up to an hour then average them together for the RVU value of an hour's work.

Then calculate your expectation of the baseline salary for a given amount of work and pay per RVU. That way the upside is strictly in the hands of the physician and how much he or she wants to work.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.