Re-negotiating contract with wonky MGMA data

[SwanSong]

I am in the midst of re-negotiating my contract, and I could use some pointers how to approach this situation.  There may be some odd eccentricities to my field that may complicate things, or perhaps it's the data.  I am in a non-surgical specialty that probably has a very high percentage of part-time physicians and has a very high percentage of female practitioners, which further lends itself to working part-time and lifestyle changes.  Many don't take call, though I certainly take call, both at home and rounding.  My previous contract was base + collections above base salary, and they are leaning towards my converting me to a base + RVU bonus.  I'm learning that this initial contract, which seemed great to me at the time (when calculating potential total earnings), perhaps wasn't.  The below figures are based on MGMA data:

• Last year's productivity based on wRVU's: About the 80th percentile for my field


• Last year's total payment for my work (base + collections bonus): About the 80%ile for my field


• This year's projected pay based upon wRVU's for my field: About the 80%ile, but slightly higher.


• Extrapolating my last year's pay ($ per wRVU): the 30th percentile ???!!!


• My pay vs. collections from last year: the 30th percentile???!!!

My issue is that the data from MGMA just doesn't make sense to me.  How did I hit the 80% in pay AND productivity all the while being paid at around the 30th percentile for either pay/collections ratio or by the wRVU model?  It tells me either this data is wonky, or there are people with very screwed up salary structures in my field, with the most productive being paid the least per wRVU and with most making much higher rates of money per wRVU but working less.  I don't see how that plays out across the country on a broad scale; it just doesn't make sense.

Regarding their initial offer, they are basically offering me a wRVU target that pays the 50%ile wRVU for my base and then after that, I revert to a bonus structure that pays me <10th %ile for my field per wRVU.  Obviously, on the surface, that is not good, if not terrible.  But somehow, my pay would still fall in the 85th percentile and align with my wRVU's, assuming I again am in the 85th percentile for productivity.  I'm sure they are going to look at the comparison between total compensation and wRVU total and be quite pleased with that and view it as fair.

Meanwhile, when I extrapolate out the offer of (50%ile base and <10%ile for bonus), my total payment per wRVU is less than the 25%ile combined, yet my productivity and total pay would be in the 80%ile.

Any thoughts on how to approach this?  My thoughts are that if they are paying me based on wRVUs, I want to be paid based upon a $/RVU total approaching the 50th percentile.  This is in a rural area, FYI.

[childay]

SwanSong wrote:

My issue is that the data from MGMA just doesn’t make sense to me.  How did I hit the 80% in pay AND productivity all the while being paid at around the 30th percentile for either pay/collections ratio or by the wRVU model?  It tells me either this data is wonky, or there are people with very screwed up salary structures in my field, with the most productive being paid the least per wRVU and with most making much higher rates of money per wRVU but working less.  I don’t see how that plays out across the country on a broad scale; it just doesn’t make sense.

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So I believe the MGMA total compensation numbers include bonuses, stipends, medical director stipends etc.  The wRVU numbers would not necessarily reflect total compensation.

Can you clarify what they are offering you?  A guarranteed base salary plus a crappy dollar factor wRVU conversion once you reach the base?

Perhaps you could post the actual numbers?  You can PM me if you are a psychiatrist.

[q-school]

For every hospital I know of, if you consistently are higher RVU generator, you get paid less per RVU

It's all a big scam.

They will allege they have to keep fair market values and outliers in salary or per rvu payments invite investigations for fraud.

Are you hospital employed? If so, my feeling is that they generally try to stick with mgma or amga or lcs data. You would be more likely to be successful at negotiating call pay or some special circumstance pay than if they have already committed to rvu multiplier model.

Not to worry though because this contract won't be forever and the next one likely will be much less fee for service/rvu oriented. At least that's my guess.

[Stein]

In my limited experience, yes MGMA will give general guidance, but your local practice environment and local provider saturation (or lack of providers in rural areas) is going to matter much more for your specific circumstances/negotiating power. Based on your post, you are a psychiatrist (if not, feel free to ignore), which gives you tremendous negotiating power in 95% of the country. If you are in a truly rural, underserved area, you are in the driver's seat - as q-school said, there may not be any leeway regarding a specific rvu multiplier or incentive system, but there certainly could be changes made to benefits, time off, CME credit, conference time, perhaps base salary, bonus, call schedule, especially if you are willing to walk away and/or willing to find a position nearby that offers more.

If it were me, I'd be less fixated on MGMA percentiles for every little aspect, and more interested in 1)What are my hours and workload, call load, and do I feel overworked/burned out by this. 2) What is my total compensation for all of this, and does it seem fair given #1. and 3) What is my support like and do I like who I am working with/for and how they treat me.  If you're taking home call and rounding, make sure this is reflected in your total compensation package, as most psychiatrists are not eager to do that, which gives you significant value to the employer.

[PhysicianOnFIRE]

My hospital uses an average of MGMA, Sullivan & Cotter, and AMGA. MGMA has the highest reported salaries for anesthesia in my area, so I wish that's all they used.

It's not unusual to earn less per RVU (or ASA unit) when producing a lot of them. Docs in low volume / rural areas, or spending lots of time in house with less production tend to earn more per unit but less overall. If I could drop only the low production time (after we drop to 1 or 2 rooms and all night and all weekend long), I would. But they need us for those times too, and pay accordingly.

[Doctor Money Matters]

Its pretty common for many places to now "penalize" docs as they produce more. So for the first 50-75 percentile you earn standard mgma and then if you exceed you actually make less per RVU. Its particularly bad if you are more than 2 deviations above the mean. It really makes you not want to work harder.

[pulmdoc]

If I'm understanding you, your historical pay and production have been aligned (80th % pay, 80th % production) and now your employer wants to change the model. Clearly, they are not out to be more generous.

Hospitals employing physicians do have extra regulatory demands to avoid potentially running afoul of Stark compliance as well as IRS regulations if a nonprofit. However, the key phrase is "fair market value." As long as a compensation agreement leads to fair market value compensation and there are no inducements for referrals, it should be kosher.