Contract Negotiation

Some incentive arrangements are based on the achievement of reaching a certain dollar amount of collections and then paying a percentage of receipts thereafter.  For example, one position that has inpatient and outpatient work pays a salary for the inpatient work but for the outpatient work has an incentive formula based on productivity where during the first $50,000 in collections, the practice pays 50%.  Then for the collections over $50,000, the practice pays 65%.  Another example is an interventional practice that pays a doctor 5% of his/her collections exceeding $750,000 during the first and second years, and 10% of collections [ . . . ]

It’s that time of the year when many physiatrists are considering a contract. There are many parts of the PM&R contract that maybe negotiable so take the time to review the contract for items you may want to negotiate.  Also many parts of the contract may require further delineation to protect you.

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RVU-based bonus? Depending on the payor mix, either the practice or the employee may be shortchanged. In practices with a lot of self-pay (often becomes no-pay), the practice may be shortchanged because a certain level of RVU’s (i.e.-production) will result in lower practice income. In practices with a payor mix of traditional high-reimbursing carriers, the employee will be shortchanged because the same level of RVU’s (i.e.-production) will result in higher practice income.

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The Offer
One of the goals of a practice search is to obtain an offer. An offer can be in verbal form, a letter of intent or an agreement. A verbal offer should always be followed-up by a written offer. The letter of intent is often a brief summary of the terms of employment to include the benefits. If this is acceptable to both parties, then an agreement typically follows.

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