Bonus based on RVU. How do I earn the practice $ with only 85% reimbursement for RVUs?

Oldmahubbard · Sep 3, 2019

This is extremely confusing. And it is true that Medicare reimburses NPs at 85% of the MD rate.

In our practice, NPs and PAs have one RVU number, and MDs have a slightly higher number.

For a 30-hour work week, with an amazing six weeks of paid time off, the salary seems very competitive.

Be assured the practice is profiting from your work. If I had to guess, you are bringing in around 200k.

My practice pays by RVUs, and they also publish detailed financials of the practice.

Imagine my surprise when I discovered certain people were still being paid a full-time salary but in no way carrying a full load.

Some of these people have since left or have been downgraded to a part-time position, but the practice carried them for years, and it came directly out of my check.

core0 · Sep 4, 2019

ilovensg said:

I'm negotiating my contract. Currently, I make just a salary. However, the new contract would give me a salary plus an RVU bonus if I see a certain number of pt's/generate so many RVUs. I don't understand how the practice is making any money from me when NPs are reimbursed at 85% for RVUs.

The expectation is that I'd make need to make 2275 RVU annually before I would be eligible for a bonus. Since I'm an NP, I would be getting reimbursed at 85%, which would mean I need to make 3264 RVU annually (85% of 3264 = 2275). That would equate to making 23.919 RVUs per day (I work 3 - 10 hour shifts, so 46 weeks), which would equate to seeing 24 patient's a day (about 12 (99213) and 12 (99124)). I can't meet that standard b/c most I can handle is 18 patients a day. I see complex patients and have a very non-user-friendly EMR. So I don't want to depend on the expectation of 24 patients a day.

Even if I see up to 18 patients a day, that would mean 18.89 RVUs per day which equals $98,801 in revenue annually (I work 46 weeks of the year); based upon that, I would only be able to get my baseline salary due to not meeting the RVU minimum, and they would profit about $20,000 off of me. Where am I messing up in my math on this? I thought I generated more income than just $20,000 a year! I understand the practice needs to make overhead, and this doesn't seem like enough. Thanks in advance for the help. I listed my math below:

Rate of return for RVUs: 99213 is 0.97, so 85% is 0.8245, and 99214 is 1.5, so 85% is 1.275.

We need to make 2275 RVU annually for MD, but NP would equate to 3264 (85% of 3264).

1 RVU is $37.89

Realistic RVU per day is 18.89 x $37.89 x 138 days = $98,772

Three issues:

1. The RVU bonus should be based on the RVUs you earn. The deduction comes on the payment per RVU, not the RVU, so they shouldn't make you earn more.

2. Since you don't work full-time, the RVU bonus structure should be adjusted.

3. Your math is off. The 0.97 is the wRVU, and there is practice expense RVU and malpractice RVU, so the practice gets 2.09 RVUs, of which 0.97 is work RVUs and usually credited to the provider. This varies slightly by practice location. In addition, you assume all RVUs are paid the same. Medicare reimburses around $37 per RVU (depending on location). Other insurance may pay more (or occasionally less). You need to know what the blended RVU is for your practice (the average reimbursement for all insurances per RVU). In our market for inpatient work, blended RVUs range between $16 per RVU and $60 per RVU depending on the amount of Medicare, Medicaid (which pays less), private insurance (which pays more), and uninsured (which doesn't pay). My guess is that if your practice management knows what they are doing, 2275 RVUs is somewhere around 125% of your salary, and if you go above that, then both sides make money.

Finally, this ignores other areas, such as in-house labs and procedures, which can add quite a bit to the bottom line.

djmatte, ADN, MSN, RN, NP · Sep 4, 2019

How your work equates to the value of an RVU will vary and depend on what they equate to the cost of overhead, which includes your salary/benefits. At 18ppd, from what I could gauge from CMS, a clinic at NP reimbursement rates that works 46 weeks a year brings in about $156,079 annually. That's $120 on a 214 and $82 on a 213, and then reducing the total by 15%. And that's going off strictly Medicare. Odds are there are higher paying and lower paying insurances, which could vary what you are reimbursed.

My job has a pay-per-visit tier if we choose it. $25 for 213, $27 for 214, $30 for 215, and $32 for physicals. We see a ton of Medicaid, so the reimbursement is significantly less. They estimate an average of what we see at $70 a patient. So if we don't choose RVU payment, they tell us our salary/benefits and what they estimate rent, ma, and PTO costs and push for patient numbers that meet or exceed that.