What Physicians Need to Know About Maximizing Income

incomeIt has been about six months since I posted here at Contract Doctor. I have been devoting my time to my new blog: The Vital Physician Executive.

But following a guest post on Future Proof MD, I was asked a question by a reader about optimizing his salary in the future. The circumstances are these:

  1. He began working on a fixed salary;
  2. After two years, he will be converted to a productivity model based 100% on worked RVUs;
  3. His wRVU rate (compensation per RVU) will be fixed and not open to negotiation in the future.

The question is this: Given that the wRVU rate is fixed, what tactics can he use to increase his income when negotiating his next agreement?

income-limitFirst Things First

Before getting into those possible tactics, let me start by saying that there are limitations on the income that a practicing clinician can achieve. Given the enormous debt that some physicians have accrued while attending medical school, I understand the need to maximize incomes quickly.

But medicine is a profession that is heavily regulated by the federal government, especially when caring for Medicare and Medicaid patients. So, there are some built-in constraints on  income. When compensation outpaces actual revenues generated, the OIG may get involved, as I explain in Five Actions New Physician Employees Should Take to Avoid the OIG.

If you practice a highly compensated specialty like orthopedics or invasive cardiology, incomes will grow much faster. If you’re in a primary care specialty, you will need to become a business owner or shift into consulting or a physician executive role in order to make higher levels of income.


  • The fixed wRVU rate needs to be investigated further. Setting that rate is as much art as science. The most common reason for it to be fixed would be that there are others working for the same employer in the same specialty. Given the nature of the RVU methodology, it makes sense to pay all parties equally for doing the same work.

But it might be possible for the specialists as a group to review whether the wRVU rate is appropriate. One validation of this is the that “conversion rate” that Medicare pays per total RVU (tRVU) changes over time, as do the rates paid by insurers. So, to say that the wRVU, which is a component of the tRVU, should never change does not sound logical on the face of it.

  • It will help greatly if you understand the system under which you will be paid, prior to its implementation. You should spend some time learning how wRVUs are used to monitor productivity. This blog includes two posts addressing that issue:

Thoughts on Salary
Thoughts on Salary (part 3)


  • Be sure to obtain and thoroughly review your productivity reports. These should include total wRVUs produced and a distribution of the most common wRVUs. For an office practice, this will include E/M codes of 99201 to 99205 and 99211 to 99215. If you are a hospitalist, it will include the new and established hospital visit codes. For proceduralists, it should include the most common visits and procedures that you do.
  • Obtain and review the income statement (also called a P & L) for your practice if you can. You want to track the expenses as well as net revenues and collections. Be aware that there is a long lag time between providing care and actually collecting the payments. Most practices have sizable accounts receivables due to insurer payment delays. When starting out, credentialing with insurers can also delay payments.

Tactics for Improving Compensation

Accepting for now that the value of the wRVU cannot be negotiated upward, let’s look at how you can increase the number of wRVUs you will generate and how to add payments for non-RVU producing activities.

  • An extremely important approach is to optimize your documentation and coding. Do not allow sloppy or hurried documentation to result in a visit generating a lower E/M code than is appropriate. Sometimes just documenting a single additional system review, past medical history item or physical exam finding will result in an E/M code that generates a significantly higher wRVU assignment for the visit.

This is discussed in some detail in Thoughts on Salary (part 3). As an extreme example, if all of your visits that were coded at a level 3 in the office (99203 or 99213) were somehow appropriately changed to level 4 visits (99204 or 99214) the wRVUs would increase by about 50%, as would your salary.

  • Generate more wRVUs by adding more encounters. See more patients. Take more call. Extend your hours. Try to be more efficient seeing patients by having staff such as medical assistants and nurses work to their full scope of practice for each patient, doing the routine work. Use protocols and pre-formatted orders for routine activities. You might even consider the use of a scribe to improve your efficiency.

procedure income

  • If you do procedures that are more effective at generating wRVUs per hour, try to promote the procedural side of the practice. As the procedural volumes increase, shift the non-procedural aspects to physician colleagues or non-physician providers (NPPs).
  • Negotiate payment for administrative activities, such as:

– Outpatient medical directorship (e.g., nursing homes, occupational medicine clinic, family planning center, college student health clinic, public health clinic, etc.);

– Inpatient medical directorships (e.g., ICU, observation unit, respiratory department, etc.); or,

– Inpatient physician adviser for case management and utilization review.

  • Leverage supervision of NPPs (physician assistant or nurse practitioner). If you are a surgeon, you will benefit directly by increased volumes if you effectively us an NPP. For primary care physicians, you may be able to negotiate a payment based on wRVUs generated by the NPP or a fixed payment per NPP FTE. For example, you might agree to compensation of $5,000 per year per NPP supervised, depending on the time commitment needed for each one.

Final Comments

Time constraints are going to place a cap on your ability to implement these tactics. If new challenges and some risk taking are attractive to you, then it may make more sense to become a business owner, entrepreneur, consultant or inventor and move away from full-time clinical medicine.

There are probably other ways to enhance compensation that I’ve missed. Please add your ideas in the comments below.

Also, if you’re interested in learning about non-clinical careers and tactics for the emerging physician leader and executive, sign up for my other blog at Subscribe to the Vital Physician Executive.

Finally, email me directly with questions or suggestions, or to report broken links here: John Jurica

About johnjurica

Podcaster, entrepreneur, and former hospital chief medical officer writes about physician leadership and career transition.
This entry was posted in Negotiating, Salary Considerations and tagged , , , , , , , . Bookmark the permalink.

1 Response to What Physicians Need to Know About Maximizing Income

  1. Pingback: What's Driving Physician Obsession with Compensation And How Can You Help? - The VITAL Physician Executive

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