Why We Love/Hate wRVU Models of Reimbursement
Dear Colleagues:
Sometimes I find posts that are so compelling I want to make sure I bring them to your attention. We are all subject to so much “noise” in social media and the academic literature, that we often miss important information. The enclosed document, which I have titled above, is from a Medscape post. Medscape is a source you should consider making a routine for your information, as such posts can give real clarity to challenges you now face as well as those coming to you in the future.
The enclosed is a post from Medscape on wRVU models for compensation. While this may represent a minority of practices, I think we all would agree that Fee-for-Service (FFS) may be an anachronism, or at least, at risk as a payment model in the USA. Unfortunately, value-based care models have struggled to gain traction. That said, all of us work in systems that are progressively straining against financial cost pressures with diminishing operating margins. As our organizations consider alternative payment models we should, at least, be familiar with these.
In my own organization we have moved from a traditional FFS model to a wRVU model with a variety of additional incentives for added compensation. This has been of particular interest for me as 20 years ago my colleagues and I wrote an article entitled “An Academic Compensation Plan for an Orthopedic Department” (See enclosed). Clearly, times have changed since we wrote our article.
The compensation model in our department blends wRVU’s with a dollar value based on a metric decided by our organization and consultants (This dollar value is based on MGMA data). In addition to this, there are several other performance metrics which are tied to our combined mission of scholarly work, research, teaching, citizenship and clinical care performance. In this regard, our compensation plan values our mission in an Academic organization. However, there is a downside to this model.
First, the determination of wRVU’s is somewhat arbitrary and ultimately values quantity of care not quality. Secondly, those who have more favorable payor mix (less government insurance or under-insured patients) may have a discount on earnings relative to what a FFS model would offer them. In contrast, those with a less favorable payor mix (Medicaid, Medicare, uninsured) may have a more favorable compensation vs a traditional FFS model. In this regard, there is a relative redistribution of funds to provide an equitable support of our shared mission. Moreover, in cases with complex procedures that result an added complexity modifier to a given code (22-modifier) or an unlisted code, there is a standard multiple applied by our organization which insures payment to the physician regardless of the outcome of back-end billing office appeals. This mitigates some of the risk for the surgeon with denials of payment after a given service and transfers this risk to the institution.
The bottom line is that the culture and structure of our work environment define how we feel about our role in our organization. One thing is for sure, and that is the status quo for physician payment is changing. What do you think? Please share your thoughts on our WhatsApp group or our LinkedIn page or my own LinkedIn page.
I’m also enclosing a few additional articles on physician compensation.
Kind Regards,
Jon “JP” Warner MD
Founder, The CSS
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