2022 RVU Bonus Compensation for PAs
There are many ways to determine compensation for PAs. There was a recent post where I discussed one of these examples. For a PA working in a nursing home, payment was based on the level of service. Every service has a different compensation value. A base salary was given, and the bonus was calculated on the level of service that was performed.
Compensation can also be calculated by workRVU. Every service performed in a medical office has a workRVU associated with it. For example, a level 3 service for an outpatient office visit is worth 1.3 workRVU; a level 4 service is worth 1.92 workRVU.
On any given day, a PA would see various patients, but for ease of calculation, we will assume, on average, the PA in our examples only sees level 3 patients.
For most compensation packages, a base salary is given. Once a PA hits a specified threshold, the bonus compensation begins. This can be divided quarterly, semiannually, or annually. We will go through several examples of payment based on workRVUs. We will also assume that the PAs in our models work an eight-hour day five days a week. With fifty-two weeks in a year and 8 hours a day, if the PA saw one patient every thirty minutes, that would be sixteen patients per day. If they saw only level 3 follow-up patients, we would multiply that by 1.3 workRVU. We would get a total of 20.8 workRVU per day. Multiply that by five days, which would be 104 workRVU per week. Multiplied by 52, and we would earn 5,408 workRVU per year.
Once the base salary is determined, the threshold for one the PA is profitable is determined. For example, if a PA has a base salary of $100,000, it takes a certain amount of collections to make it worth employing the PA. Over that amount is when the bonus can be paid out. Below are several examples of workRVU compensation
PA 1: In this first example, the PA is paid $11 per workRVU over 4,250 with a base salary of $115,000. So, for the PA to reach the bonus, they must have billed out at least 4,250 workRVU. Using the numbers above for average workRVU’s in the year, we subtract 5,408 from 4,250. We get a difference of 1,158 workRVUs, multiplied by $11, and the annual bonus would be $12,738 for total yearly compensation of $127,738.
PA 2: In example 2, the PA has a base salary of $104,000 and will begin to earn bonus compensation once they hit 3000 workRVU. They will be paid $10 per workRVU over the 3,000 workRVU threshold. Again, we will use the annual workRVU of 5,408 and subtract the 3,000 workRVU, and we would get 2,408 workRVU. Multiplied by $10, the PA would be compensated a $24,080 bonus for total compensation of $128,080. Even though the base salary was much lower than the PA in example 1, the total compensation was almost the same, showing that base salary alone does not always equate to the best compensation package.
PA 3: PA 3 had a lower base salary than the first two PAs at $101,000. However, their base compensation per workRVU was higher at $22.50. They needed to reach over 4,500 to get their annual bonus. If we used the 5,408 annual workRVU, they would be bonus 908 workRVU, multiplied by $22.50, and they would bonus $20,430, for total annual compensation of $121,430.
PA 4: With a base salary of $85,000, PA 4 had an even lower base salary than PA 3 and was the smallest of the five PAs. However, their workRVU threshold was reasonable at 3200 workRVU, and they had the highest compensation per workRVU at $34 per workRVU. Using the average annual workRVU of 5,408 if we subtract the 3,200 workRVUs to get to the bonus of 2,208 workRVU. When we multiply the bonus workRVU by $34, we get an annual bonus of $75,072 for total yearly compensation of $160,072. Although the base salary was much lower than any of the other examples, in the end, PA 4 had the highest annual wage of any of the other PAs.
PA 5: PA 5 had a base salary of $117,000, which was the highest of our five PAs, and will get to their bonus sooner than anyone else at 2,425 workRVU. The compensation per workRVU is $11. Again, using the 5,408 annual workRVU’s and subtracting the 2,425, they would earn a bonus on 2,983 workRVU. Multiply the bonus workRVU by $11, and they would make an annual bonus of $32,813 for total yearly compensation of $149,813.
The five PAs in our example each had different base salaries and bonus compensation. The bonus for each PA was calculated using workRVU but the threshold for when they would start receiving a bonus varied, as did the amount they would be given per workRVU. The 2021 AAPA salary report showed an average PA salary of $110,000; however, these examples show why an average does not tell the whole story. PA 4 clearly has the lowest base salary, but the total compensation is much higher than any of the other PAs once the bonus is calculated.
In these examples, there are a lot of assumptions. One of the main assumptions is how many patients will be seen. If you’re seeing patients every fifteen minutes, that would be twice as many as we used in our example. On the other side, if your practice uses the PA as overflow and only puts six patients a day on your schedule, you would be seeing half the number of patients. Also, you most likely see a variety of patient types. New patients versus follow-up patients would have different values, and the complexity of the patient would also change your values. Before signing an offer, these would all be questions to ask.
Also not mentioned in this post are other benefits. I’ve seen practices offer a ten percent non-matching contribution to 401k or complete health insurance coverage for the PA and their family. These are not typically negotiable as they are set across the organization but can be of considerable value to the PA, especially when you consider the compounding interest of a 401k.
What questions would you ask if you were given an offer with workRVU compensation?
How do you feel about workRVU compensation for PAs?
I’d love to hear what you think and do a follow-up post next week to answer some of these questions.
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I’m curious if anyone has knowledge of bonuses for an inpatient PA. I am employed by an organization working to grow their cancer program within a large hospital. My role is primarily inpatient but my employment terms are largely based on an outpatient model. I am eligible for a bonus however, the bonus structure has yet to be defined. I was very perplexed how a bonus structure for an inpatient provider would even exist since I do not control the number of patients I am assigned or the number of consults that come through. Despite my efforts to lobby for the bonus structure to be defined in more of clinical ladder-like criteria, I am being told it will be based on numbers. Being that it is an inpatient role, I just don’t understand the logic to this.
Any guidance would be greatly appreciated.
Of note, my prior inpatient role I held for nearly 8 years did not have a bonus. We did however have the opportunity for financial
Compensation for clinical ladder achievements.