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  • FMV negotiations with our group

    Hey everyone,

     

    Really need some help/advice here. We are a small ophthalmology/optometry group employed by large physician group, which includes most specialities. Compensation is strictly wRVU based and has been this way for over 20 years. Conversion Factors are determined by comp committee yearly and is set at 50th percentile of MGMA averaged for over 3 years. All good and dandy. Works great for most specialities (our heme/onc, GI, cards make bank. I mean BANK). Does not work out same way for ophthalmology. Problem is MGMA data is not very accurate for our specialty. There are very few groups reporting ophtho compensation to MGMA because very few ophthos work on wRVUs. We believe data is skewed toward lower end of the spectrum and does not represent FMV for our area. Plus, significant $$$ with private practice ophthalmology comes from optical sales (it can be as high as 40-50%). Our optical sales brought in several million dollars last year and our group gladly keeps all that. Our current CF is the lowest of all surgical specialities, and only higher then Peds.

    We have been back and forth with the group for many years and they are finally listening. We are at a stage where the group wants us to produce some concrete numbers is regards to why we feel our compensation does not represent FMV. Does anyone have any idea where to look for such data? Someone mentioned Contract Diagnostics in another thread. Could they help to compile such info? Other then asking my private practice ophtho buddy for his tax returns I don't have any other ideas where to obtain such info. TIA.

     

  • #2




    Hey everyone,

     

    Really need some help/advice here. We are a small ophthalmology/optometry group employed by large physician group, which includes most specialities. Compensation is strictly wRVU based and has been this way for over 20 years. Conversion Factors are determined by comp committee yearly and is set at 50th percentile of MGMA averaged for over 3 years. All good and dandy. Works great for most specialities (our heme/onc, GI, cards make bank. I mean BANK). Does not work out same way for ophthalmology. Problem is MGMA data is not very accurate for our specialty. There are very few groups reporting ophtho compensation to MGMA because very few ophthos work on wRVUs. We believe data is skewed toward lower end of the spectrum and does not represent FMV for our area. Plus, significant $$$ with private practice ophthalmology comes from optical sales (it can be as high as 40-50%). Our optical sales brought in several million dollars last year and our group gladly keeps all that. Our current CF is the lowest of all surgical specialities, and only higher then Peds.

    We have been back and forth with the group for many years and they are finally listening. We are at a stage where the group wants us to produce some concrete numbers is regards to why we feel our compensation does not represent FMV. Does anyone have any idea where to look for such data? Someone mentioned Contract Diagnostics in another thread. Could they help to compile such info? Other then asking my private practice ophtho buddy for his tax returns I don’t have any other ideas where to obtain such info. TIA.

     
    Click to expand...


    The group doesnt have this info for you? I mean, FMV or not, you're producing a large amount of revenue for them are you not? Pay should not really be set up as some survey or random xyz and totally be disassociated from your actual production, unless of course this skews in favor of the people writing the contracts. This producing concrete numbers is avoiding the obvious, they know what you bring to the table and your value, make them give you those numbers. What someone does in florida or north dakota shouldnt really matter that much.

    They know how much revenue you make and you should get a fair market value percentage of that. Are you saying the optho group doesnt receive anything based on optical sales? That doesnt sound right but wasnt sure.

    Lastly, besides your value to the overall group (and make sure you have that), what leverage do you have? Can your group walk away, are there restrictive covenants, etc...?

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    • #3
      Thank you for quick response.

      - No, group's position has always been: all our specialities are at 50th percentile of MGMA wRVU averaged over 3 years. I agree pay should not be set based in random xyz, but this is what it is right now.

      - Our ophtho group had brought in ~$3m gross in optical sales last year and we see absolutely zero from that.

      - We are in a very competitive area and even at current pay scale the group will have no trouble hiring additional/replacement docs, but this would cause a significant disruption given that all of us are well established and well liked.

      - No restrictive covenants or anything like that in place. So may easily walk away if we chose to.

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      • #4
        It wouldn't hurt to check with Contract Diagnostics. If they don't have the numbers (which may be difficult, given that your group is an outlier in determining compensation), they might be able to point you to other resources.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5




          Thank you for quick response.

          – No, group’s position has always been: all our specialities are at 50th percentile of MGMA wRVU averaged over 3 years. I agree pay should not be set based in random xyz, but this is what it is right now.

          – Our ophtho group had brought in ~$3m gross in optical sales last year and we see absolutely zero from that.

          – We are in a very competitive area and even at current pay scale the group will have no trouble hiring additional/replacement docs, but this would cause a significant disruption given that all of us are well established and well liked.

          – No restrictive covenants or anything like that in place. So may easily walk away if we chose to.
          Click to expand...


          Just the zero optical sales sharing would kill me. Not that they couldnt reestablish this, but still not cool if overall package isnt reflective of value.

          In the end you have to have certain targets of pay, an idea of what you could do on your own, and if really wanting to get what you feel are worth be ready to walk (or rather they have to be convinced of it and not want it). In the end if you just complain, negotiate and ultimately accept a crap offer its a death blow to real negotiation going forward as they know you cant/wont do anything.

          Of course dont do anything wild if you arent 100% willing to accept the consequences, ie leave. I always think about how strongly I feel about each portion of my practice and compensation before I bring issues up a notch.

          Comment


          • #6
            Hi there,

            I work for an independent FMV consulting group, and it should be known there are other compensation surveys besides MGMA.  AAMC, AMGA, HCS, Towers Watson... etc.  Some are better than others for certain topics, but focusing on one survey (like MGMA) especially for specialties that don't have a lot of data is a common compliance pitfall in our type of work.  From a statistical standpoint, if you don't have a proper sample size you can't make an educated assumption.  That's why firms like ours exist because it's our job to purchase all the data that is out there (it expensive) and make educated, independent decisions so that our clients stay within FMV.  If you have any questions, feel free to follow the link to resources more on our website or give us a call.

            https://www.healthcareappraisers.com/services/compensation-valuation/

            (561) 330-3488

            Comment


            • #7
              So not only is your CF thought to be low but they aren't giving you a piece of the optics?!

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