Work RVU-based production compensation programs need to be designed and administered correctly to avoid miscalculations in payment and regulatory noncompliance.

As an increasing number of physicians choose hospital employment over private practice, health systems are facing the associated financial, regulatory, and operational challenges that come with the employment of physicians. Of the many variables that affect this relationship, the physician compensation plan is one of the most important for health systems. Consequently, the compensation plan often presents the greatest set of challenges to the hospital and employed physician relationship.

To compensate physicians in a method considered “fair,” many health systems have implemented compensation plans that tie total compensation to the level of clinical work produced. To this end, one of the most common means of measuring clinical work performed is the work relative value unit (RVU).

Because of the importance and use of work RVUs as a basis for compensation, valuators, physician organization finance managers, and other key decision makers need accurate work RVU data. Although the calculation of a physician’s work RVUs is relatively simple, seemingly small errors in the development of this information can have a significant impact on the regulatory compliance of compensation arrangements, the accuracy of financial projections related to employed physicians, and trust between physicians and health systems.

Use of tools like maxRVU for charge capture is a great solution to accurately track RVUs generated. Find out more about a free trial at http://maxrvu.com.

Main article written by Herd Midkiff & Elizabeth Cordaro of J. Taylor & Associates, LLC, Fort Worth. Published in healthcare financial management.

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