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Negotiating a salary increase based on production

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by googs googs Member

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Hey all,

I work in primary care for a hospital-owned medical group. I have a meeting Friday with the director of our medical group. Our RVU policy is currently garbage. Maximum amount that can be earned is $30,000 per year for NPs (Physician RVU is unlimited) and if one makes over $100k, the RVU is prorated. So if you make $130k, you get no bonus at all. 

 

I just ran my numbers in Epic. This fiscal year, which doesn't even include the rest of December, I've billed $1,182,026 and $621,000 of that was collected. At this rate, I earn over $1.2 million a year for the practice. I currently make $125k/ year plus a $5k bonus. I get 216 hours of PTO, $2500 and 5 days for CME and health insurance (I still have to pay premiums, they just cover part of it), as well as STD and LTD, etc. 

 

I've read that we should try to get 20% of what we bring in to the practice. Is this correct? Based on that, I should be earning $250k/year. With what I'm bringing in, would I be considered extremely productive? I earn 50-100% over my required RVU targets. Can I go into this meeting and show them what I'm bringing to the table and ask for a raise or at least an improvement in RVU structure to be unlimited. If I subtract the total cost of all my benefits (about $35,000 a year), I'm still WAY under the $250k/ year, if it is reasonable to ask for 20% of what I bring in. What do you think? Is the 20% thing only when one doesn't get offered benefits?

 

Any insight would be appreciated as I have this meeting on Friday.

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FNP2B1 specializes in Family Practice Nurse Practitioner.

162 Posts; 10,901 Profile Views

You can ask for whatever you want.  Whether they will give you that amount is another matter.  With new grads accepting any job at any salary the group probably views you as a commodity. YOU know your worth. If they can't meet your demands be prepared to walk but before you walk make SURE you have another position lined up.

Most providers I know who work on the 20% model get paid on net collections, not gross revenue although most MDs work on the gross revenue plan. 

Based on your numbers 20% of what your company netted would be $124,200 salary. 

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48 Posts; 2,252 Profile Views

1 hour ago, FNP2B1 said:

You can ask for whatever you want.  Whether they will give you that amount is another matter.  With new grads accepting any job at any salary the group probably views you as a commodity. YOU know your worth. If they can't meet your demands be prepared to walk but before you walk make SURE you have another position lined up.

Most providers I know who work on the 20% model get paid on net collections, not gross revenue although most MDs work on the gross revenue plan. 

Based on your numbers 20% of what your company netted would be $124,200 salary. 

Why would 20% of the net be 124k? I bill 2.4 million in a year. About half is collected. Can you explain how you got this number?

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FNP2B1 specializes in Family Practice Nurse Practitioner.

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You stated that $621,000 was collected so far this year. I just took 20% of that for my figure.  The practice will never collect on what you bill.  The net proceeds is what funds the practice. 

If the practice collects 1.2 million in net proceeds based on what you billed then 20% would be $240,000 but your initial figure stated $621k collected

 

 

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48 Posts; 2,252 Profile Views

10 minutes ago, FNP2B1 said:

You stated that $621,000 was collected so far this year. I just took 20% of that for my figure.  The practice will never collect on what you bill.  The net proceeds is what funds the practice. 

If the practice collects 1.2 million in net proceeds based on what you billed then 20% would be $240,000 but your initial figure stated $621k collected

 

 

I’m sorry, that was for the fiscal year that started in July. So double that for a whole year: 1.2 million. So am I right going in and asking for 240k? Should I subtract the benefits and ask for that? I’m pretty sure the physicians In my practice get around 220k plus RVUs and their benefits. 

Edited by googs

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djmatte has 7 years experience as a ADN, MSN, RN, NP.

2 Followers; 879 Posts; 7,759 Profile Views

I’m curious what your patients per day is to hit those numbers? 

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48 Posts; 2,252 Profile Views

29 minutes ago, djmatte said:

I’m curious what your patients per day is to hit those numbers? 

I see between 14-18 patients per day but I have a high percentage of 99214 and 99204 because of good coding/documentation. 

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2 hours ago, googs said:

I’m pretty sure the physicians In my practice get around 220k plus RVUs and their benefits

So you are planning on asking for a salary higher than the physicians?

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7 hours ago, 203bravo said:

So you are planning on asking for a salary higher than the physicians?

Again, I'm not positive about their exact salary. But they also get unlimited RVUs so at the end of the day they probably earn another 50-60k on top of that or more, I'm not exactly sure. What I planned on doing was adding up the value of the benefits (about $38,000 per year) that I'm offered and adding them to my base salary ($125,000). That comes out to around $162,000. I'm still $80,000 short of earning 20% of my net collections, which I think is the standard. What I'm not sure of is, do people who earn based on collections also get benefits? I'm also not sure whether to negotiate a larger raise or a better RVU bonus structure. The current RVU structure doesn't pay NPs who earn $130k or over.  

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FNP2B1 specializes in Family Practice Nurse Practitioner.

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In negotiations  you always ask for something way higher than what you would expect to gain so sure, ask for $240k a year and work your way down.  

In my last position I was paid a bonus based on 20% of my net collected revenues minus cost of goods sold and minus my salary once I hit 3 times net revenue about my salary.  It works like this and understand I do mostly general and cosmetic dermatology so it may be different in the PCP world.

My monthly base salary $12500

Three times my monthly salary would be $37500

Once I reached that goal in net revenue anything above that I received 20%

Lets say in an average month I brought it $125,000 net revenue.  Subtract $37500  minus cost of goods sold which would average around $5000 and you get $82500.  20% of that would be $16500  So for the month I'd gross $29,000

For the year I'd bring into the practice $1,500,000 in net revenues, not billable but what we collected.  This was in the San Francisco area so my numbers are probably at the high end of compensation considering the astronomical cost of living in the bay area.  It wasn't that hard to reach those numbers as we did quite a few hair transplant procedures in office that cost $19,000.

 

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48 Posts; 2,252 Profile Views

48 minutes ago, FNP2B1 said:

In negotiations  you always ask for something way higher than what you would expect to gain so sure, ask for $240k a year and work your way down.  

In my last position I was paid a bonus based on 20% of my net collected revenues minus cost of goods sold and minus my salary once I hit 3 times net revenue about my salary.  It works like this and understand I do mostly general and cosmetic dermatology so it may be different in the PCP world.

My monthly base salary $12500

Three times my monthly salary would be $37500

Once I reached that goal in net revenue anything above that I received 20%

Lets say in an average month I brought it $125,000 net revenue.  Subtract $37500  minus cost of goods sold which would average around $5000 and you get $82500.  20% of that would be $16500  So for the month I'd gross $29,000

For the year I'd bring into the practice $1,500,000 in net revenues, not billable but what we collected.  This was in the San Francisco area so my numbers are probably at the high end of compensation considering the astronomical cost of living in the bay area.  It wasn't that hard to reach those numbers as we did quite a few hair transplant procedures in office that cost $19,000.

 

Nice, so you bring in well over $300k a year! In my case, should I not ask for 20% of my total billing? Is that not standard? I'd have to ask for 20% if I go over a certain threshold? Also, do you get benefits?

Edited by googs

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FNP2B1 specializes in Family Practice Nurse Practitioner.

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In that job I got benefits. In  my current one I do not but it is by choice.  I know my figures are on the high end and not the norm. I don't know where you are located so I can't tell you what the market is.  Every market is a lesson in microeconomics.  You can always ask.  They can always say no. If you don't ask you'll never know but I think 20% is reasonable.  If you have skills other NPs don't you can ask for more.  The owner of the practice knows what you bring in to his bottom line. He wants to maximize it. You want to maximize your earnings. There is a happy medium but like I said earlier always be prepared to walk away ONLY if you have another job immediately available. Good luck. Negotiations aren't for everybody and most nurses accept what ever is offered. I never have.

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