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Value-based physician compensation incentives are gaining momentum, but aren’t going away any time soon.
As value-based reimbursement gains momentum, physicians are seeing more of their compensation tied to value-based incentives, such as those for achieving high patient satisfaction scores or for high performance on quality indicators.
But that doesn’t mean productivity-based physician compensation is going away any time soon - nor should it, Peter Cebulka, director of recruitment development and training at physician search and consulting firm Merritt Hawkins, recently told Physicians Practice.
“I don’t think that RVUs are becoming less relevant, I think that perhaps they are becoming less accurate, and at the same time more prevalent which is certainly problematic,” Cebulka said, noting that the number of physicians and practices tying a portion of physician compensation to RVUs has nearly doubled in the past few years.
“Due to some of the changes in health reform and physician reimbursement as proposed in the Patient Protection and Affordable Care Act [ACA], as well as the new models that are under development with the CMS innovation center, such as bundled payments, value-based modifiers, population-based reimbursements like [accountable care organizations] ACOs ... there’s plenty of instances where using an RVU-compensation methodology for a physicians practice isn’t going to necessarily be the most prudent way to pay your physicians because reimbursements will be more closely tied to patient outcomes,” said Cebulka. “But I think measuring physician productivity and the amount of care they provide to patients in the community is still going to be important because there’s a shortage of physicians nationwide.”
That shortage, which the Association of American Medical Colleges predicts will reach about 91,000 physicians by 2020, 45,000 of them in primary-care, will become even more problematic as it’s estimated about 30 million patients will be newly insured in 2014 as a result of certain initiatives built into the ACA, such as the Medicaid expansion.
“It’s going to be important to continue to have productivity-based metrics in physician pay," said Cebulka. "The trick that I think most physician employers are trying to pull off at this point is balancing that with quality incentives in a way that will prepare their organization to be compliant and progressive in being in alignment with the health reform reimbursement models as they evolve over the coming years."
This effort among physician employers and physician practices to find balance between productivity and performance will translate to a need for physicians themselves to quickly adapt to changing compensation methodologies. “...Right now what we’re experiencing in the industry is more rapidly evolving physician compensation models than most people are accustomed to,” said Cebulka. “Organizations are dealing with the difficulty of planning compensation models that will be appropriate for several years down the road because the contracts they are signing with physicians they will be employing are several years long, and it’s difficult for them to know whether or not all of the metrics they are measuring and using in determining incentive pay ... are going to be the most prudent metrics to be using two years from now.”
As a result, Cebulka said the duration of a typical physician employment contract has decreased; a one- to two-year contract is “fairly standard” now.
So what exactly do the compensation plans within these contracts tend to look like? They typically include quality metrics as additional incentives, or they include a modifier on productivity based on the physician’s ability to meet a predetermined quality level, said Cebulka. “For example, a physician might be getting a productivity bonus based off their RVUs, but only a portion of that productivity [bonus] if their quality metrics aren’t also met.”
Has the use of RVUs to gauge physician productivity changed at your practice?