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PA Bonus: Percent of Payments

Physician Assistant Bonus Based on Percent of Payments

It’s nice to feel compensated for the work that you are doing and for employers that offer a bonus plan they can offer this as incentive to work for them. There are a number of different bonus structures out there for Physician Assistants and it is important to know how they are calculated so that you can understand how to reach the bonus. Without a clear understanding of how the bonus is calculated you can’t expect to ever get a bonus.

We’ve previously discussed one way to calculate bonus based on workRVU. Using workRVUs we can calculate how productive a PA has been and using this number we can calculate a dollar amount that will go to them for their pay.

Using workRVUs can be a little complicated as you have to figure out how many RVUs other providers are generating and what is the right dollar amount they should be compensated per workRVU. There has to be surveys involved and a way to compare data.

A more straight forward approach is to look at payments and create a bonus off of the payments. When looking at a bonus like this you want to look at the actual payments and not the charges. The charges are irrelevant as it does not reflect what is actually coming in. I have heard of bonuses anywhere from 5 -30% of payments. Usually there is a set base salary and after the provider reaches that level they would get a percent of the payments above that.

Tiered Structure for Percent of Collection

One way to calculate the bonus would be to use a tiered structure; different levels are used and at each level a larger percentage would be calculated. With this structure the idea is that in order to cover the overhead you have to bring in a certain amount but as you bring in more most of the overhead is already paid for so a larger percentage goes to the provider. For example 10% of $200,000 to $400,000 and 20% on anything above $400,000; so there are three levels to reach.

If a PA brought in $500,000 we would first subtract the first $200,000 to get to the first bonus level. The next $200,000 we would multiply by 10% which would equal $20,000; anything above that we would multiply by 20%. In this scenario that would be $100,000 multiplied by 20% which would be another $20,000. When we add these two numbers together that would equal a total bonus of $40,000.


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Percent of Collections After Base

Another way to calculate a bonus is to have a percentage after a certain amount of earnings. The typical amount of earnings is the base salary or a multiple of the base salary and the percent of collection may range anywhere from five to twenty percent.

If the bonus is ten percent after the base salary we would calculate this by first getting the amount of payments. If a PA brought in $500,000 to the practice and the base salary was $100,000 the bonus would be calculated by ten percent of $400,000, which would be a bonus of $40,000.

Estimate on Payments

Let’s use some real numbers to figure out what payments might be. If we look at Medicare as a guide we can figure out the payment for every code by using the Physician Fee Schedule search tool on the Centers for Medicare and Medicaid Services website.

By using the tool we can look up the payment for a 99213 visit, which is a middle of the road follow up patient, and the national price is $73.93. On average if we say you see about 16 patients a day and work 48 weeks (4 weeks of vacation). 16 patients multiplied by 5 days in a week would equal out to 80 patients a week. Multiply this by 48 weeks and you would have seen 3840 patients in the year.

For 3840 Medicare patients in the year you would have been paid $283,891 if all you saw were level 3 follow up patients. If your bonus started after you hit the $70,000 mark you would still make a bonus of $21,389.

There are a lot of what-ifs in the situation and it is using low estimates. The $73.93 is probably the lowest payment you would get, as private insurance is going to pay more than Medicare. Assuming you see a payer mix of more than 100% Medicare you’d be earning more. The amount insurance pays depends greatly on contacts and negotiations between the insurance and your employer.

Also, there is a good chance that you see a better mix than all level 3 follow up patients; for level 3 new patient visits Medicare would pay $109.46 and a more complicated follow up patient (99214) would be $108.74.

Know Where You Stand

If your bonus is based on percent of collections it is important that you know exactly how your bonus is calculated. Is it a tiered structure where you have different levels to reach your bonus? What is the base level you have to reach before getting your bonus? What is the percent of collections?

Also, it is important that you know how much you’re billing out, but more importantly how much are the payments that you are bringing into the practice. If you don’t know how much you’ve brought in you can’t expect to reach your bonus as you don’t know what you need to do to reach your goal.

You should be able ask your billing department the exact numbers; if they don’t know then you don’t have to worry about staying at that job long because chances are they’ll be out of business soon for bad accounting. If you know exactly how your bonus is calculated and what you’re bringing into the practice you will be in great shape to make personal goals and expectations for your future bonus and can use this information for future jobs you may be interested in later.

Is your bonus based on percent of payments or do you have a different bonus structure? Please comment below the original article, sign up to receive future posts by email and share with your friends!

 

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