Calculating PA Salary Using RVUs
In a previous post we discussed what an RVU is and how to calculate Physician Assistant productivity using workRVUs. The next thing to look at is how to put a dollar amount to the workRVUs you may be generating and using workRVUs to calculate a bonus or negotiate a higher base salary.
Using some numbers we’ll figure out how many workRVUs one may be generating. Let’s say you work in primary care and see about 16 patients a day and work 5 days a week. For simplicity we will say you average a 99213 visit, a basic follow up. For a 99213 you would get .97 workRVUs. If you see 16 patients per day multiplied by 5 days in a week that would equate to 80 patients a week. Multiple this by 47 weeks (52 weeks in a year minus 4 weeks for vacation and 1 for CME to attend the AAPA conference) and you would have seen 3,760 patient visits in a year. To calculate total workRVU for the year you would multiply your visits by .97 workRVU and you would be generating 3,648 workRVU per year.
Now that we know how many workRVU you may be generating in a year the next step would be to put a dollar amount to it. Usually there is a tiered system so as you reach more workRVU amounts you get more dollars per workRVU. For example from 0 to 2,000 workRVU you would be compensated $30 per workRVU, from 2,000 to 4,000 workRVU you’re compensated $35 per workRVU and for anything above 4,000 workRVU you get compensate $40 per workRVU.
The above example is theoretical but is how a tiered system would work, usually there is two to four different tiers. I’ve heard the compensation per workRVU ranging anywhere from $30 – $40 per workRVU and is probably based on factors such as what region of the country you work, types of patients you see and other external factors. You most likely will be given a base salary and once you hit a certain amount of workRVU you’d be given a bonus based on how many workRVU you have generated. I’ve heard of bonuses given out monthly, quarterly or annually.
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Where do all these number come from? The group that you work for most likely gets numbers from a consulting company like Sullivan and Cotter who collects data for the American Medical Group Association (AMGA) on compensation and benefits for providers of medical groups. The Medical Group Management Association (MGMA) is a similar organization that is often consulted.
We now know how to calculate how many workRVUs you are generating and how to calculate compensation based on workRVU, but what does this look like in real life?
For this example their are only two tiers; and we will use a base salary of $104,000 as this is about average for 2017 with numbers for primary care in the Northwest. According to Sullivan and Cotter the median annual workRVU is about 3596. The high tier is set at 4134 annual workRVU and bonus is paid quarterly, so for the high tier you would have to generate more than 1033 workRVU (4134 divided by 4) in a quarter. Compensation per workRVU is $31.90 for tier 1 and $36.90 for Tier 2.
With a base salary of $104,000 the monthly paycheck would be $8,666 which would equal $26,000 quarterly. Bonus is not calculated until you’ve reached your base salary, $26,000 divided by $31.90 would be 815 workRVU. We previously calculated generating about 3,648 workRVU per year seeing about 16 patients a day. If we divide this into quarters you’d be generating about 912 workRVU a quarter. 912 minus 815 would be 97 workRVU, multiply this by $31.90 and your bonus would be $3,094.
If you were seeing more patients than 16 per day or your typical patient is more complex than a level 3 follow up patient you would be generating more workRVU than we have calculated. Your office might be using more than two tiers which would also change the calculations some. Also, the median workRVU can vary greatly depending on specialty, orthopedics is going to be much different than family medicine.
This compensation model is not used only for PAs. Physicians and Nurse practitioners are also compensated on similar models but with different numbers for median workRVU and dollar per RVU; however the workRVU is the same for everyone, a level 3 follow up is .97 workRVU if you’re a PA, NP or Physician.
Again worth noting is that this compensation model is only fair if all work performed by the PA is attributed to the PA. If your company bills out shared visits or incidence-to than this type of compensation model will not work. Also, it is important that you receive a copy of the data reports so you know where you are and can see how your bonus is being calculated. You can’t expect to reach a bonus if you don’t know how it is calculated or what numbers you’re trying to reach.
Wow! That was a lot of a numbers and makes me glad I’m not an accountant, but it is important to understand where the numbers come from if you are compensated based on workRVUs. The example in this post was based on primary care and used actual dollar amounts that I’ve seen for 2017. It is important to compare apples to apples so if you’re working in a specialty you would need to use the median workRVU for your specialty. Once you know how many workRVU you are generating and how you compare to others you can use that to help you negotiate a higher salary in the future.
If you are compensated based on workRVU how do your numbers for dollar per workRVU and median workRVU compare? If you’re not compensated on this model how is your bonus calculated? Please comment below or subscribe to take part in the discussions.