Physician Compensation FMV Tip

If your physician compensation plan is structured as a straight comp-per-wRVU, be careful.

A unique phenomenon that’s revealed when analyzing compensation and productivity survey data is the inverse relationship between compensation-per-wRVU and total compensation level for each quartile of production.  All else being equal, as production increases, the median total compensation level increases, but the median compensation-per-wRVU rate usually decreases (see graph below). For many years, MGMA has commented on this inverse relationship in the executive summary findings from its annual Provider Compensation report. The MGMA data suggests that, as a physician produces more wRVUs, the physician earns more in total compensation. Conversely, as the physician produces more and earns more, the amount of compensation-per-unit of wRVU actually declines.

But, the way MGMA and AMGA presents the data is a bit confusing.  When looking at the survey data tables for compensation-per-wRVU, the 90^th percentile reports the highest value of compensation per wRVU – $115.24 (see Table below).  However, that datapoint is representative of the lowest-producing physicians, not the highest producing physicians. The highest-producing physicians are appropriately represented by the 10^th and 25^th percentile of compensation-per-wRVU.

So, if you’re paying a high-producing physician a comp-per-wRVU at the 75^th or 90^th, you’re likely overpaying them.