Experience with Pay Structure- Percentage of Collection

[TeslaCoil]

So, there is some turbulence in my practice currently and my employer, who I feel is being dishonest, is telling me he wants to renegotiate my contract. I am currently paid 500k with 5k quarterly bonuses plus benefits. I do approximately 12k RVU per year by myself and around 15k with the help of 2 midlevels. He is telling me that he wants to transition me to a 100% productivity based pay where I would be getting paid based on percentage of my collections. He hasnt told me what percentage exactly but it sound like he is trying to give me an even further squeeze. I am strongly considering leaving the practice. Can anybody help with any experience they've had with this type of pay structure? I havent come across this type of contract previously. Based on all MGMA data that I have, I am overworked/underpaid, but when I show him the MGMA data he just dismisses me and says he cant compete with that, and if thats what I want then I need to start looking for a new job. I am considering leaving at this point. I have one kid and another to be born in 2 months. I feel its pretty ridiculous that hes doing this to me right now... but he knows Im in a tough position and that he can try to give me the squeeze. Please help with any advice.

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[Baron Samedi]

Percentage of collections means your payer mix becomes significantly more relevant and that your ability to pay your bills is 100% dependant on the practice's ability to collect.

 

[TeslaCoil]

Percentage of collections means your payer mix becomes significantly more relevant and that your ability to pay your bills is 100% dependant on the practice's ability to collect.

Is this a common pay structure? And what percentage is reasonable?

 

[willabeast]

So, there is some turbulence in my practice currently and my employer, who I feel is being dishonest, is telling me he wants to renegotiate my contract. I am currently paid 500k with 5k quarterly bonuses plus benefits. I do approximately 12k RVU per year by myself and around 15k with the help of 2 midlevels. He is telling me that he wants to transition me to a 100% productivity based pay where I would be getting paid based on percentage of my collections. He hasnt told me what percentage exactly but it sound like he is trying to give me an even further squeeze. I am strongly considering leaving the practice. Can anybody help with any experience they've had with this type of pay structure? I havent come across this type of contract previously. Based on all MGMA data that I have, I am overworked/underpaid, but when I show him the MGMA data he just dismisses me and says he cant compete with that, and if thats what I want then I need to start looking for a new job. I am considering leaving at this point. I have one kid and another to be born in 2 months. I feel its pretty ridiculous that hes doing this me right now... but he knows Im in a tough position and that he can try to give me the squeeze. Please help with any advice.

Read this stuff and think thank goodness for my 23 years at TPMG. Almost makes me feel as good as 2 cups of coffee. Anyway my advice is call your accountant assuming he/she is not also your employer's accountant and seek advice there also. Lots to consider.

 

[bedrock]

Is this a common pay structure? And what percentage is reasonable?

This a common structure.

You should be paid everything minus overhead. (No extra charge or fee that goes to the surgeons)

They should be transparent regarding your total collections received per month and year.

Overhead can be high in ortho practice average is 55% overhead, compared to 45% overhead for solo pain practice.

If they want to charge you over 60% overhead, definitely leave.

They need to compensate you in other ways for time spent in PA supervision, if they switch to this model (or in your current model).

The most important question to ask is—-what would you have been paid for 2022 if they using this collections model. They should be able to tell you.
If the answer is less than your current 525k salary then definitely leave.

 

[RoloTomassi]

No issue with collections based, but I think you should leave:

-not valued
-underpaid for quite some time
-not willing to work with you
-not trustworthy to give accurate collections numbers

I don't see how this is a good long term plan. What are you going to do when the numbers look low? Go through all the claims data (if you're even allowed access) and do the math?

 

[callmeanesthesia]

My group is Ortho, private practice. Even our employees are paid on a collections basis. However, our current model is a very short track to partnership which is pure eat what you kill. Base expenses are very high but mostly fixed, so up to a certain threshold it’s a struggle to break even, then beyond that it’s almost pure profit.

If you don’t trust your employer, make your exit plan now. RVU data can be manipulated but collections data is even more opaque and easy to manipulate. When your salary drops it’ll be very hard to prove he’s screwing you over.

Interested in moving to CA? State taxes are high but we are in a very conservative area so I’m sure you’d fit in fine.

 

[TeslaCoil]

My group is Ortho, private practice. Even our employees are paid on a collections basis. However, our current model is a very short track to partnership which is pure eat what you kill. Base expenses are very high but mostly fixed, so up to a certain threshold it’s a struggle to break even, then beyond that it’s almost pure profit.

If you don’t trust your employer, make your exit plan now. RVU data can be manipulated but collections data is even more opaque and easy to manipulate. When your salary drops it’ll be very hard to prove he’s screwing you over.

Interested in moving to CA? State taxes are high but we are in a very conservative area so I’m sure you’d fit in fine.

If the deal is fair and im not wondering if my boss is gonna screw me every 3 months, I'd move out there in a heartbeat...

 

[Baron Samedi]

Is this a common pay structure? And what percentage is reasonable?

So I'm in the job hunt right now and I've yet to find a reimbursement model that isn't collections based or a straight salary. I think getting paid by wRVUs is becoming less and less common.

Some places haven't even told me the overhead percentage. I'd have to defer to others regarding reasonable percentage.

 

[cowboydoc]

So I'm in the job hunt right now and I've yet to find a reimbursement model that isn't collections based on a straight salary. I think getting paid by wRVUs is becoming less and less common.

Some places haven't even told me the overhead percentage. I'd have to defer to others regarding reasonable percentage.

That is contrary to the trend in hospital employment. Hospital admin love RVUs because of the control and obfuscation they provide.

 

[Baron Samedi]

That is contrary to the trend in hospital employment. Hospital admin love RVUs because of the control and obfuscation they provide.

My experience has predominantly been with ortho groups and small private groups. I'm in early chats now with a hospital and there's might be different.

 

[deleted131481]

So, there is some turbulence in my practice currently and my employer, who I feel is being dishonest, is telling me he wants to renegotiate my contract. I am currently paid 500k with 5k quarterly bonuses plus benefits. I do approximately 12k RVU per year by myself and around 15k with the help of 2 midlevels. He is telling me that he wants to transition me to a 100% productivity based pay where I would be getting paid based on percentage of my collections. He hasnt told me what percentage exactly but it sound like he is trying to give me an even further squeeze. I am strongly considering leaving the practice. Can anybody help with any experience they've had with this type of pay structure? I havent come across this type of contract previously. Based on all MGMA data that I have, I am overworked/underpaid, but when I show him the MGMA data he just dismisses me and says he cant compete with that, and if thats what I want then I need to start looking for a new job. I am considering leaving at this point. I have one kid and another to be born in 2 months. I feel its pretty ridiculous that hes doing this to me right now... but he knows Im in a tough position and that he can try to give me the squeeze. Please help with any advice.

Do you know what your current collections are now? I think this should be very clear up front before agreeing to a new contract.

Also, are the two mid-levels shared? 3k wrvu between two highly paid mid-levels seems awfully low... even for one full-time it is low.

 

[Forwho]

Collections model is worse than RVUs. A lot more difficult to track, no control really over what you collect, insurance type all of a sudden becomes high priority, easier for employer to win. He wants to do this simply for one reason: he will make more money off your back

 

[anonperson]

So, there is some turbulence in my practice currently and my employer, who I feel is being dishonest, is telling me he wants to renegotiate my contract. I am currently paid 500k with 5k quarterly bonuses plus benefits. I do approximately 12k RVU per year by myself and around 15k with the help of 2 midlevels. He is telling me that he wants to transition me to a 100% productivity based pay where I would be getting paid based on percentage of my collections. He hasnt told me what percentage exactly but it sound like he is trying to give me an even further squeeze. I am strongly considering leaving the practice. Can anybody help with any experience they've had with this type of pay structure? I havent come across this type of contract previously. Based on all MGMA data that I have, I am overworked/underpaid, but when I show him the MGMA data he just dismisses me and says he cant compete with that, and if thats what I want then I need to start looking for a new job. I am considering leaving at this point. I have one kid and another to be born in 2 months. I feel its pretty ridiculous that hes doing this to me right now... but he knows Im in a tough position and that he can try to give me the squeeze. Please help with any advice.

You will probably get ripped off.

Are you a partner or employee?

Do you even have access to the financials of the practice?

How much is overhead? What does it entail exactly?

How much is he paying employees?
Who are even the employees?

Don't be surprised if his wife and kids are listed as bogus employees who are collecting a paycheck and retirement benefits. Guess who's supporting their paycheck ( Hint, you).

Ask me how I know about that scam.

The problem with collections is as follows:
Payor mix. Are you going to get stuck with crappy insurances trying to survive off insane volume?

What if an insurance doesn't pay? Who's chasing down these payments? If you think the biking company will, that typically isn't the case. They go for low hanging fruit and won't kill themselves trying to get every dollar owed.

It is easy to cook the books. It will be hard to keep track of what you are owed. You will leave thousands on the table.


The only reason he is suggesting this is because it benefits him.

Some of these physician owners are the biggest greediest scum bags. It's sickening.

 

[Espn123]

Transparent financials are key. A lot more factors to consider tho. Currently you make good money and have some family considerations so there’s more to it than just math. Work/life balance is key

 

[TeslaCoil]

I told him that if he touches my contract im walking. He immediately started singing a different tune. He said does eventually want to get me on a base salary+ production bonus pay structure. What are your guys thoughts on that? If I ask for a 400k base salary, what % of collections should I ask for and what collections threshold? Or if we use wRVU's then what threshold and per RVU amount should I target?

 

[GoBeers]

base salary x2 is when you hit collections. have tiered % collections the more you collect. that is the most fair i've seen discussed here and have negotiated that for myself as well. all owners are rightfully greedy, but they should know to fairly negotiate to keep hard working, honest workers because the time it takes to train and re-train new physicians must be exhausting.

 

[RoloTomassi]

I told him that if he touches my contract im walking. He immediately started singing a different tune. He said does eventually want to get me on a base salary+ production bonus pay structure. What are your guys thoughts on that? If I ask for a 400k base salary, what % of collections should I ask for and what collections threshold? Or if we use wRVU's then what threshold and per RVU amount should I target?

If you don't trust the collections numbers it doesn't matter if it's purely % or base+%. Best to stick with RVU based.

 

[Bostonspine]

Transparent financials are key. A lot more factors to consider tho. Currently you make good money and have some family considerations so there’s more to it than just math. Work/life balance is key

Agree my newest contract in ortho 55% with whatever base salary I want that is supported by last year's number, some EMR can estimate your collections for you (Athena). Transparency and trust is key. RVUs can be difficult if your working hard and careless so your collects can be poor. This was a problem with people on salary in our group. Look at the current collections and AR. If improving the collections is the problem they are trying to solve, then work together. it they are stiffing you leave. if you 12k RVUs don't match the equivalent in collections(over a million I imagine) then as hard as you working you could still be at a loss. A collection model forces you to know who needs Auth, Who needs a visit, and that your notes meet medical necessity so you actually get paid for what you do.

 

[jsaul]

RVU system is not going to work out in the long run in private practice . Your employer can only pay you based on the cash thats coming. They can't really pay you a number based on the CPT code submitted.
We rely on a stupid system of insurances and medicare paying us for services rendered. And it so happens that even if you bill appropriately and send out the claims correctly there will be claims that go unpaid. even if the practice does a great job of collections there will still be unpaid claims or claims that are delayed. this affects cash flow and thus affects what can be paid out. . I am solo private practice and I never get paid for 100 percent of all I do for the year. It just doesnt happen. That's the system we have. You have to understand that you will never get paid what you think you should get paid...it's just the way it is. thus, the fairest pay structure is PP is a percentage of actual collections. Do it that way and if you still feel you are being ripped off then go start your own practice somewhere and get better collections and see if you you can do better

The above is a moot point for hospital employees because each claim is paid way more than in PP because of SOS. so if several claims go unpaid it doesn't matter because there is still more cash coming in from higher reimbursements.

 

[clubdeac]

I didn’t think one dealt with collections and over head if one were on a wRVU model. That doesn’t make sense to me.

I will say the average $/wRVU is about $65 so if you’re doing 12-15k wRVUs you should be making $780-$1 million.

Get out

 

[Forwho]

I didn’t think one dealt with collections and over head if one were on a wRVU model. That doesn’t make sense to me.

I will say the average $/wRVU is about $65 so if you’re doing 12-15k wRVUs you should be making $780-$1 million.

Get out

same here. wRVU shouldn't be entangled with collections and overhead, at least in my experience. but then again I've never encountered a wRVU compensation model in a private practice so maybe i'm missing something there.

$/wRVU from what I've personally come across and heard from colleagues tends to hover around $55-60 in more desirable areas. although I've heard of some exceeding $70 in less desirable areas.

 

[Forwho]

I just signed with a group where I make a 400k base salary and keep 100% of collections after overhead. The practice is pretty busy and I should have work right away. Overhead is relatively standard across the other docs, but there's also individualized parts based on how much of equipment/inventory I specifically use. How often would be reasonable to check on overhead costs? How would you keep track of your own productivity if your productivity was based on collections rather than wRVU? Thank you

that's why collections is very cloudy. you can't keep track unless you literally follow up on every single thing you bill, and who's gonna do that? and even if their books are open, who's to say that they're showing you legitimate numbers? with an RVU system, you know you're getting paid for your services and you know what the value is for each service, makes it very easy to track.

 

[Bostonspine]

that's why collections is very cloudy. you can't keep track unless you literally follow up on every single thing you bill, and who's gonna do that? and even if their books are open, who's to say that they're showing you legitimate numbers? with an RVU system, you know you're getting paid for your services and you know what the value is for each service, makes it very easy to track.

It’s not that complicated there is what you billedlast month, contractual agreement(what you expect to get paid for last months work), what you got paid(collections) payments pending over the last 30,60,90 day(AR). As long as you’re busy and the number is decreasing from 30-90 days = profit. RVU can be manipulated(some hospitals down code visits to avoid audits) they set there own values to drive behavior (places that different conversion rates for procedures vs office visits) or they flatten you RVU after the 60th percentile

 

[cowboydoc]

I just signed with a group where I make a 400k base salary and keep 100% of collections after overhead. The practice is pretty busy and I should have work right away. Overhead is relatively standard across the other docs, but there's also individualized parts based on how much of equipment/inventory I specifically use. How often would be reasonable to check on overhead costs? How would you keep track of your own productivity if your productivity was based on collections rather than wRVU? Thank you

Mostly depends on the competency and integrity of the billing/management and your degree of anal retentiveness.

 

[filmfan10]

I worked for a multispecialty group under a collections model and an RVU model
I agree with the others here.
The collections model has many disadvantages.

With a collections model you are at the complete mercy of the insurance companies. The companies can literally change your compensation for the same service month-to-month.
And it is impossible to get 100% collections.

We used to have large amounts of collections that were never paid back by the insurance companies.

At least with an RVU model, you have a rough estimate of how much you will be compensated for your services.
The collections model compensation is up in the air

 

[callmeanesthesia]

For those of you in private practice groups, how do you allocate expenses? Is it largely fixed, or do more productive doctors pay more of the shared overhead?

For us, shared expenses are largely on a per-capita basis (rent, shared support and admin staff, furniture, etc). Each doctor is assigned one unit and each PA/NP contributed 0.35 units to the supervising doctor. So for example, if there are a total of 20 units and one doctor has 2 PAs, they’ll get 1.7/20 of the total expenses assigned to their provider account.

The result of this is that the overhead is high and fixed, with minimal productivity component to it. This makes it difficult for new doctors starting out to clear that hurdle and make a bonus. On the other hand, once you’ve built up business to be above the fixed threshold, it’s almost all profit beyond that.

 

[jsaul]

For those of you employed in a "RVU model " in private practice do you expect to get pain on a patient encounter even though the practice did not get paid by the insurance for that encounter? I am only asking the PP employed docs not the hospital employees.