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.
I prefer income-based bonuses. The more or less income the practice earns based on the employee’s services, the more or less bonus the employee gets.
Also, to base a future bonus on current base-year RVU’s gives an incentive to the employee to work less in the current year, thereby raising the RVU-percentage increase for the next year. By the same token, it gives the employer an incentive to overload the new employee with work in the current year, making future year RVU-percentage increases relatively lower.
In summary. I like income-based bonuses WITHOUT REGARD to prior year income. What does one year have to do with the next? The RVU-based bonus looks like a way to “incentivize”the employee, but it is not based on actual income, only some theoretical calculation of work. It can be restated this way: Pay me based on what income I generate, not the number of hours (which will increase RVU’s) I work.
In addition, in this PM&R job market, the employee is in a good position to negotiate more favorable compensation terms.
This article Was contributed by Bruno Stillo, Physiatry Billing Specialists. 800-836-4482, [email protected]