Physician employment agreements between a physician and a hospital can become complicated, especially in terms of compensation. As many hospital systems are currently undergoing many changes including cutbacks, it is essential that doctors carefully negotiate their agreements to ensure appropriate compensation.
Before the signing of any employment agreement, physicians should deal with physician employment contract negotiations with the assistance of experienced health care lawyers. Doing so will ensure the best protection in terms of work requirements and fair compensation for services provided.
Work Relative Value Units
Most hospitals pay their physicians based on Work Relative Value Units (WRVUs), which is the same volume-driven system used in most practices. Many hospitals also state that they will not pay above the 75th percentile of current market surveys. While hospitals do this to ensure they are paying fair compensation in comparison to other facilities, it also means a doctor who is more productive than his or her peers will not see an increase in their pay as a result.
Health care lawyers stress the importance of understanding the WRVU pay system and what should be expected when agreeing to this type of compensation plan.
Concerns with WRVU Compensation Plans
When signing WRVU compensation agreements, doctors must pay specific attention to the details regarding new payment models that may be used over time. If new compensation systems such as bundled payments, case rates, or global capitation are introduced, the WRVU system may no longer provide an accurate view of productivity on which payment is based.
Not all physician employment agreements will even mention these payment models, so it is imperative to discuss them ahead of time. Doctors must be aware of the ways their compensation plan can change and how those changes may affect their pay.
Other Compensation Questions to Ask
Besides the possibility of different payment models over the length of the employment contract, health care lawyers emphasize that physicians should also be concerned with some other payment questions that may affect their compensation. Physician employment contract negotiations must address how a hospital handles PQRS bonuses and reporting and any other bonuses, as well as how the new Medicare fee schedules will affect payment models.
Physicians must inquire as to how the hospital intends to handle payment in the event of financial challenges that prevent it from continuing according to the initial agreement. With more hospitals seeing fewer admissions and readmissions as well as the ever-changing base of WRVU plans, doctors need to know ahead of time what they may have to deal with in terms of compensation cutbacks or changes to payment models. This question also leaves physicians in a prime position to negotiate different parts of their compensation agreement.
With so many variables and questions surrounding hospital payment models, it is imperative that doctors seeking employment with hospitals understand their physician employment agreements and the many complexities surrounding compensation. To help ensure the most favorable compensation terms, physician employment contract negotiations can be best completed with the assistance of experienced health care lawyers.
The Stevenson Law Firm, PC
6302 W. Broadway, Suite 120
Pearland, TX 77581
Phone: (832) 481-4548