The Guide to Physiatry Compensation – All You Need to Know
The Guide to Physiatry Compensation – All You Need to Know
PLEASE VISIT THE OPENINGS PAGE AS MORE INFORMATION IS AVAILABLE THERE ABOUT COMPENSATION FOR VARIOUS PRACTICE OPPORTUNITIES
Whether you’re looking into physiatry as a career or you are an established practitioner interested in a new position, compensation is a significant consideration that will guide your decision. This is our guide to everything you need to know about physiatry compensation. Farr Healthcare prides itself on relaying accurate and updated information regarding physiatry trends. Information ranges from compensation considerations, contribution articles from fellow physiatrists and others who work in the medical field and the recent physiatry trends and benefits for the year. With an accurate picture of the physiatrist salary landscape, you can confidently approach negotiations and ensure you will receive a physical medicine and rehabilitation salary on par with your skills and experience.
Reliable physiatry compensation information is hard to find. The American Academy of Physical Medicine & Rehabilitation (AAPM&R) last conducted a compensation survey in 2017, so that is one source to start with. Websites list compensation information, but it’s hard to say how reliable they are because they usually don’t list the sample size, and it’s often a national average. Physical medicine and rehabilitation compensation varies greatly by area of the country as well as by the physical medicine and rehabilitation (PM&R) subspecialty. Compensation from ad information may be misleading as it may have inflated numbers or may not even include the compensation.
Per Farr Healthcare, Inc. experience as of October 30, 2020, the numbers vary from area to area:
New Graduates: $200,000 plus incentive
Medical Director: $300,000 plus incentive
New Trends in 2019 Physiatry Compensation
PM&R compensation fluctuates frequently. It’s important to work with the latest data if you want to receive fair pay, especially if you have not been in the market for a new job in a while. Here are the results of MedScape’s 2019 physiatry survey. The data was collected between October 2018 and February 2019.
The average physiatry compensation is $306,000. This is up from $269,000 in 2018.
Seventy percent of the benefits packages for physiatrists stayed the same, 21% got worse, and 9% got better.
The overhead for solo practice physiatrists is 44%, 62% for the owner of a group practice, and 44% for a partner.
Twenty-eight percent of physiatry practices use PAs, 34% use NPs, and 52% use neither.
The salaries of Physician Interventional Pain Medicines in the US range from $360,000 to $540,000 , with a median salary of $450,000 . The middle 67% of Physician Interventional Pain Medicines makes $450,000, with the top 67% making $540,000.
What follows is physiatry compensation by state for 2020 per ZipRecruiter. Below is the average Physiatrist salary to provide information about which state will pay more. The first amount being an hourly salary and the second being the yearly salary.
AVERAGE PHYSIATRY SALARIES –
From payscale.com-On the web on 10/30/20
Average Physiatrist Salary
$147,000 LOW $290,000 MEDIAN $286,000 90%
What is the Pay by Experience Level for Physician / Doctor, Physiatrists?
An entry-level Physiatrist with less than 1 year experience can expect to earn an average total compensation (includes tips, bonus, and overtime pay) of $200,503 based on 19 salaries.
An early career Physiatrist with 1-4 years of experience earns an average total compensation of $204,452 based on 52 salaries.
A mid-career Physiatrist with 5-9 years of experience earns an average total compensation of $223,335 based on 26 salaries.
An experienced Physiatrist with 10-19 years of experience earns an average total compensation of $219,380 based on 34 salaries.
In their late career (20 years and higher), physiatry employees earn an average total compensation of $226,000.
The average physiatrist in the US makes $244,218. The average bonus for a physiatrist is $13,862 which represents 6% of their salary, with 100% of people reporting that they receive a bonus each year. Physiatrists make the most in Seattle at $303,094, averaging total compensation 24% greater than the US average.
Salary Ranges for Physiatrists
The salaries of physiatrists in the US range from $144,008 to $348,097, with a median salary of $227,662 . The middle 57% of physiatrists make between $227,665 and $267,795, with the top 86% making $348,097.
When Farr Healthcare, Inc. finds out about a physiatry position, we try to get compensation information so you have a more complete idea of whether the position is viable for you. Sometimes the practice or hospital will provide a figure. Other times, they don’t. They likely don’t want to be pigeon-holed into a number, or perhaps they don’t like to engage in compensation dialogue up-front as, usually, this conversation happens during an initial visit. If you ask about compensation upfront, the PM&R practice may be turned off, thinking that money is your only motivation.
Actually, sometimes the practice doesn’t know the going compensation and asks a recruiter for that information to arrive at a figure.
Physiatry practices and hospitals may quote a low compensation number, knowing that you can’t start at a higher rate with an interested physiatrist and then offer a lower figure. This does happen during the negotiation process, but it’s not a great start for either PM&R party.
To the defense of the physical medicine and rehabilitation practice, it’s impossible to quote compensation accurately for experienced physiatrists because they have different qualifications and skills. In general, the longer you are in practice, the more compensation you can earn. Board certification is a big factor in compensation. Physiatrists certified by the American Board of Physical Medicine and Rehabilitation (ABPMR) in one or more of these subspecialties typically receive significantly higher salaries and benefits:
Brain injury medicine
Spinal cord injury medicine
Hospice and palliative medicine
Whether you have Medical Director experience and the level of interventional procedures you are capable of doing are factors for different compensation amounts for the same position.
At the end is a yearly update on the average compensation for a physiatrist. Although, keep in mind the above factors of compensation fluctuation.
Incentive arrangements are too numerous to mention. There are so many variations to the basic methods. A standard incentive physiatry arrangement is for a practice to consider the income you generate from your services. Then, the practice will consider the expenses associated with having you in their practice – your salary, your share of the overhead, the cost of the benefits they provide to you, malpractice, billing costs and more. The practice then subtracts these expenses from the income you’ve generated. Then the practice provides a percentage of that difference to you. The percentage ranges all over the place. The standard for a resident finishing their first year is typically 25%. However, as with compensation, it’s hard to give a percentage because it will depend on the cost of the expenses.
These are insights of our owner, Kathy Jefferies, whose expertise comes from years of working at a hospital in physician relations.
“One physiatrist expressed an interest in building a part-time practice performing only electromyography (EMG). That physician was obviously well informed about medical billing, and he desired to build a practice with only high-level billable codes. If you entered into practice with this physiatrist on a production-based compensation, what type of practice could you expect to build and how much money might you earn monthly? First, you need to determine the primary needs of the patient population in the practice area.
“As an employee, you will receive financial compensation based on a salary guarantee, production or a combination of both. A salary guarantee is an amount you can bank on, literally, and it may be a great way to start up your practice. However, no group will want to continue to pay you more than you earn. It just isn’t good business. That means it is expected that your gross charges will increase as you build your practice. Your earning potential will typically be production-based, or tied to the revenue you generate for your group. This is an important point to consider as you begin your contract negotiations.
“Production is typically not the best option for a start-up practice for several reasons. It takes an investment of time and money to build a practice, and this may be one of the most underestimated aspects of medical practice start-up. Retirement benefits within a group practice may exceed those available in hospital-owned practices — a notable advantage. Group practices tend to invest the maximum allowable amount — $30,000 annually — into each retirement plan for each physician in the group. In some groups, that money is self-directed, so each physician can elect their own investment options independently of the group. Hospitals, however, have a different set of governmental guidelines as not-for-profit or for-profit entities and are thereby limited in the amount that they can invest in the retirement plan for their employed physicians.
“In addition, there may be limited investment options for physicians in those plans. This is an important point to include in physician compensation when comparing practice opportunities and negotiating salary compensation. I have worked with many physicians who have built medical practices through trial and error. If some of these shared experiences help to shorten that course for you, I have met my goal.”
According to the American College of Physicians (ACP) Online, in practices that use nurse practitioners (NPs), physician assistants (PAs), or other non-physician providers, there may be some time spent doing oversight. In practices that use production-based compensation, such as Work Relative Value Units (wRVUs), this can be an issue because the time spent supervising is non-productive time despite being necessary for the proper operation of the practice. It is possible to structure compensation to include a production credit or a supervisory stipend. The important thing to keep in mind is that, in the end, in any compensation formula, the total compensation should be fair and end up in the fair market value range.
Compensation With an Independent Contractor Affiliation
Some practice opportunities don’t offer a salary because the affiliation is as an independent contractor. Companies such as Encompass and Kindred typically affiliate with a physiatrist as an independent contractor. They offer a stipend if it’s a Medical Director position. The stipend varies based on the bed size, the reasonable and fair compensation for physiatry in the area and more. Medical Director stipends can range from $60,000 – $120,000.
An income guarantee may also be offered when it’s an independent contractor affiliation. The guarantee amount is similar to the amount a salary would be for the same position. The guarantee is usually a loan with payback. In these arrangements, failing to meet your guarantee amount results in having to pay back the difference, which is a significant drawback when it happens. However, most of these cases are large rehab institutions with a good census, so there’s usually no worry that you wouldn’t make your guarantee amount and would have to reimburse them.
Negotiating your physiatry compensation should start with a plan. First, outline your qualifications, skills and accomplishments so you can approach your employer with that information. This information will help you to sell yourself and get your desired compensation.
Second, find out what the pay is for someone with your experience. A new residency graduate may command anywhere from $175,000 – $300,000 depending on where it is in the U.S. Once you’re onsite, take advantage of any opportunity to ask doctors with similar experience to your experience what compensation amount you might expect.
Third, practice what you’re going to say and how to respond to questions. Don’t have reservations about asking for more money. It is an expected part of the negotiation process, and won’t be seen as abnormal as long as you make your case politely. Only your employer, not you, know how much they will pay you. Here are a few more tips to keep in mind as you proceed through the outlined three steps:
Consider the employer’s perspective and think about what you can do to make yourself more appealing for each specific position.
Check offers against the AAPM&R to make sure they are competitive but don’t fixate on the base salary without taking incentives into account.
Become familiar with the metrics and activities — like productivity, cost and quality — that will affect your compensation.
Operate under the assumption that you won’t obtain any productivity bonuses and negotiate for a base physiatrist salary that is adequate on its own.
Also, ensure the contract specifies the following:
The average Medical Director Stipend for a 15-bed rehab unit varies from facility to facility. It depends on the individual facility and what their needs and expectations are. The exact amount the Director receives is based on an hourly pre-determined fee for administrative costs only. The contract usually stipulates a mandatory 20 hours per week of administrative time. The facility typically generates a form for the Medical Director to use to document their time. The average hourly rate is from $100 to $150 per hour.
When negotiating the contract for the per hour rate, the physician must be aware of what encompasses the administrative time. The easiest way to determine this is to ask to see their reporting form. This should list each of the categories that you would spend administrative time on.
(Contributed by Elizabeth Lee, PRS, Former President)
Questions to Ask & Issues to Consider When Evaluating Compensation Plans
Determine how the compensation plan works, initially and at different points in time. It is perfectly reasonable for a physician to ask how much he or she will be paid in the first year and in subsequent years. For example, if the first one or two years’ salaries are fixed, and compensation then moves to a productivity basis, ask for details on how the transition is handled and how other physicians have fared in year two or three. The bottom line, Merritt Hawkins EVP Mark Smith says, is that “if physicians can’t determine how much they will earn while they’re brushing their teeth, the (plan) is too complex.”
Inquire about how overhead expenses are allocated. In most cases, newly hired physicians will receive a “grace period” in the first year from financial responsibility for overhead. But those expenses, which could equal up to half of a group’s revenues, may be a significant consideration when the physician becomes a partner or shareholder. “Physicians should ask whether there are any limitations based on overhead,” Smith advises. “For example, if there’s a net income guarantee of $175,000 and only$5,000 monthly is allowed for overhead, that won’t work well.”
What is the income distribution methodology for partners or stockholders? Even if the position will be straight salary initially, physicians should inquire about how income is distributed among the group’s partners, and which factors, if any, affect the proportional distribution among individual physicians.
What is the buy-in and how does it work? Since many practice positions involve either net income guarantees or salaries in the early years, entrepreneurial physicians who desire an ownership position should request the details if they’re considering more than one position. A five-year partnership track may be far less appealing than a two-year track, for example, and the longer route to partnership may mean less long-term earning potential.
Practices, hospitals and other entities compensate physicians in many ways. Multiple variations of these formulas are possible, so your task is to identify the combination that works best for you. As the physician looking at the compensation formula that involves collections or office expenses, you need to get a handle on what these items realistically might total.
Partnership is one of the important things for physiatrists to consider, as it has a significant impact on PM&R compensation. Here are six formulas you might encounter for determining compensation along partnership tracks.
For these calculations, expenses typically include professional physician expenses and administrative expenses for the entire group. Professional physician expenses include the base salary, the cost of health and malpractice insurances and the cost of professional society dues, journal subscriptions and other professional fees. Administrative expenses of the practice include all items not included in professional physician expenses, such as rent, utilities, employees’ salaries and benefits, marketing and advertising, legal and accounting expenses and equipment purchase or lease payments.
1. Salary Plus Incentive
Compensation with this type of plan is typically a $175,000 – $185,000 salary plus an incentive. Incentive plans are often 20% of collections on physician-provided services after three times the salary. For example, a salary of $180,000 with collections of $600,000 would result in a $12,000 incentive bonus:
$180,000 x 3 = $540,000
$600,000 – $540,000 x 20% = $12,000
2. Salary Then Production
Another option is straight salary without incentives for the first two years, then a transition to compensation based 100% on your production.
3. Salary to Partnership
This track typically starts with a base salary of $250,000 with 10% share after expenses for the first year. The second year, the salary increases by $20,000 with a 15% share of expenses, and the third year is a partnership.
4. Salary Plus Incentive to Partnership
A formula like this is a little more complicated. The salary is usually between $160,000 and $175,000 plus an incentive, which changes each year. The first-year incentive formula is 20% of the difference between the net income minus expenses. The second year, the incentive is 30% of that difference, and the third-year incentive is 40%. The fourth year transitions to a partnership.
5. Salary Plus Bonus
This is similar to the incentive model, but the bonus is calculated differently. Since there is potential for a higher bonus, the base salary is a little lower, typically around $150,000. The bonus has no limit and is based on productivity and length of service. The bonus is calculated as a percentage of “net” revenue, once general practice overhead and physician expenses — including base salary — are deducted. The percentage is 40, 45 and 50% in the first, second and third years, respectively. Net earnings are defined as gross earnings minus professional physician expenses and 50% of the practice administrative expenses.
Partnership will be considered after two or three years in practice.
An example sometimes helps. This is all very hypothetical, and numbers are only used that make for easy calculations:
Gross collections for the quarter: $150,000
Overhead expenses: $60,000
Physician expenses: $60,000
Bonus at 40%: $12,000 for the quarter
6. Draw Plus Stipend Plus Productivity Bonus
You can set the draw up to $250,000. The physician plan allocates overhead in two ways. Part of the overhead — usually 20% — is distributed equally, and the rest is allocated based on receipts. Thus all physician partners have a basic share of the overhead, and those who produce more revenue and consume more resources are allocated a greater share for the rest of the overhead.
New physicians are paid the draw until their practice grows to the point that receipts cover the incremental costs incurred by adding the new doctor.
There are three main types of compensation possible for employee affiliation.
1. Income Guarantee Plus Incentive
This is typically an income guarantee of $200,000 and incentive of 33% of production after overhead is covered.
2.Income Guarantee With Possible Incentive
Because the potential incentive is higher with this method, the income guarantee is lower, usually between $160,000 and $180,000. If a straight percentage method pays more than the salary, then the candidate can switch over to it before the first year.
The incentive will be available if the candidate makes two times their income guarantee. The incentive formula is net income minus two times the salary. The doctor gets 50%, and the other 50% goes to cover overhead.
For example, if the net income is $400,000 and the income guarantee is $150,000, then the incentive payment is $50,000:
$150,000 x 2 = $300,000
$400,000 – $300,000 = $100,000
$100,000 x 50% = $ 50,000
A similar method is with a guaranteed salary of $120,000 to $135,000 plus an incentive which is 30% of triple the salary.
3. Salary Plus Bonus
This method offers a higher salary of $195,000 to $205,000 along with the potential to earn two separate bonuses. One is up to 10% of their salary, and the other bonus is 35% of their gross billings above their business plan.
PM&R compensation is always an important feature of a practice opportunity. Doctors always ask about the compensation of a practice opportunity. However, doctors don’t often ask about the benefits of the position. Benefits are expensive and can contribute greatly to the total compensation of a practice opportunity. Health insurance is usually provided as a benefit. Another pricey benefit which is sometimes provided is an employer match to a retirement plan.
Benefits, such as a sign-on bonus, are also a great negotiation item. The incentive arrangement may also be negotiated. Student loan repayment is a possible benefit, although it’s rarer. When a sign-on bonus, loan repayment or moving expense coverage are on the table, find out if you have to repay it if you leave early. For physiatrists who want to keep their options relatively open, these types of incentives may not be ideal.
You may want to create a spreadsheet to compare different practice opportunities and their compensation plans by tallying the income provided through salary plus the various benefits. The employer will often be glad to share the costs of the various benefits. A position with a lower salary but good benefits may outpace a practice opportunity with a higher salary.
Another consideration is the expenses associated with living in the cities and states where you have practice opportunities of interest. Compensation in big cities tends to be less, but the cost of living is greater. Best Places’ Cost of Living Calculator can tell you how much you’d have to make in a new city compared to what you’re making now. A shorter commute will reduce expenses. The cost of housing, meals, entertainment will vary greatly from place to place.
There are so many different factors to consider beyond the base salary. Some states have a state income tax, and others do not. States without a state income tax are:
Your physiatry job selection is based on a multitude of factors. One factor worth considering is state income tax. States like California and Oregon take 9% or more in state income taxes, so it can cost you into the millions over a career. Seven states currently have no income tax: Alaska, Florida, South Dakota, Texas, Washington and Wyoming.
For example, all things being equal, if you were to take the $17,227 tax burden in CA and not have to pay it while living in Nevada and invested that amount yearly at a 5% annual gain, here are the results: In 10 years that would amount to $255,574.29, in 20 years to $643,816.91, 30 years to $1,276,223.23.
Coincidentally, I’m representing a mostly inpatient practice opportunity in Las Vegas, NV which is also available on a locum tenens basis. Information about it may be found at https://farrhealthcare.com/inpatient-outpatient-physiatry-practice-opportunity-las-vegas-2/ It’s listed as a Medical Director practice opportunity but it is also available as a staff position. It can be an employee or an independent contractor affiliation. I hope to hear from you!
Physiatry Reimbursement Rates Across Geographic Areas
Physiatrists often ask,” In which city or state would I earn the highest income?”
Medicare and other insurance carriers have different reimbursement rates depending on geographic locality, which in turn is based on factors such as practice costs like overhead and malpractice insurance. The most highly reimbursed areas are in the big cities and nearby suburbs. New York City reimburses more than Los Angeles, which in turn reimburses more than Houston.
Is the variation among localities significant?
Not as much as you may think. An analysis of I/P admission code 99223 shows that the National Average Medicare Allowed amount is $195. However, of the 90 localities in the country, 72 are within 6% of the national average! Only one locality is more than 6% below the national average — Puerto Rico. And only eight localities are more than 10% above the national average, including those you would expect:
San Francisco, Anaheim and the surrounding areas
Manhattan, Queens, Long Island and other New York cities
If you want to locate your practice in a highly-reimbursed location, bear in mind that there is a tradeoff. Although you will be reimbursed more, the cost of running your practice will be higher, and in all probability, your personal living expenses will also be higher.
Here is a recommendation: start with an area you could see yourself enjoying, and then look at the numbers because by far, the most important determinant of practice income is the quantity of procedures performed – not the reimbursement.
But if you are looking at numbers only, the most highly-reimbursed area of the country for an I/P admission is Alaska – a full 33% higher than the national average. So, by the numbers, Alaska is the place to be — just remember to pack your thermal underwear and sled dogs.
(Contributed by Bruno Stillo, Physiatry Billing Specialists, (800)835-4482, [email protected])
Find the Position You Deserve With Farr Healthcare
Farr Healthcare is the leading partner for physiatrists looking to begin their careers or find a new job. We have more than 30 years of experience recruiting physicians, and we make the process as simple as possible so you can find the right position based on your skills and experience. To get started, view our listed openings or fill out our physician application.