Provider Compensation In The Rural Health Clinic: Flexibility Is Key

I’ve written a number of articles on supplier compensation plans and a few of their nuances. Supplier compensation plans have deployed work relative worth unit (wRVU) designs/arithmetic for years. In truth, wRVUs (associated to “complete RVUs”) have been round for greater than 30 years. Whereas well being methods take into account and deploy clinician compensation plans with a big portion of their suppliers, wRVU comp fashions don’t all the time make sense vis-à-vis the agricultural setting.

Outdoors of the agricultural house, reimbursements are sometimes paid primarily based on a billed Present Procedural Terminology (CPT®) code and its related allowable. Even in a “managed reimbursement” surroundings, the billed CPT code delivers a “work worth” that may be tied again right into a compensation method.

Nevertheless, owing to Medicare and Medicaid All Inclusive Charges (AIR) for licensed Rural Well being Clinics (RHC), a pure wRVU comp mannequin might not be tenable relying on reimbursement and payer combine. That mentioned, all healthcare is native so payer combine, native demographics, comp fashions, and general compensation are predicated on market dynamics together with, however not restricted to, payer charge schedules and affected person demographics.

Let’s have a look at some simple arithmetic delineating the potential struggles of a wRVU compensation mannequin in a rural setting:

Determine 1

I’ve acknowledged earlier than, and it’s price noting right here, my examples could also be exaggerated however are so to show a degree. It’s also price noting that I’m not a Licensed Procedural Coder (CPC) and have no idea should you can invoice a 99213, 11406, 11765, and 93010 in the identical go to with out modifiers and/or denials for “identical date of service,” and so on. Whereas my CPT choice and the way they “play collectively” in a go to (e.g., Determine 1) is up for debate, I do know, and have seen, a number of codes billed within the rural setting in a given hour-long go to. Once more, this mannequin is constructed to contemplate supplier compensation challenges.

In Determine 1, Dr. Schmoe is in a rural setting (Rural X) in Wisconsin. He has a block of time (an hour scheduled go to slot) for Affected person X, who’s a Medicare affected person. Affected person X arrives and, primarily based on wanted and clinically indicated providers, has a Degree 3 established affected person go to and, while there, has a lesion faraway from her shoulder and one other eliminated close to a fingernail. Dr. Schmoe additionally interprets (“reads”) the outcomes of a worldwide electrocardiogram (ECG).

Determine 2

Rural X fees, and receives, 150% of Medicare allowables for its business affected person charges/allowables. (Word “MC Permit” and the “Chg” columns in Determine 2.) Owing to the peculiar machinations of cost-based RHC reimbursement for Medicare sufferers, Affected person X can be accountable for a 20% co-pay for every CPT billed (20% of the clinic’s fees). Rural X additionally receives 80% of its AIR from Medicare.

On this case, the RHC will obtain $251.83. Rural X receives 80% of its Medicare AIR of $175 ($140) and $111.83 (20% of the costs) for Affected person X’s co-pay for every CPT billed.

On this go to, Dr. Schmoe generated 6.21 wRVUs whereas performing these providers. Dr. Schmoe’s employment contract states that he’s paid $50/ wRVU in his clinic.

Determine 3

As evidenced in Determine 3, Dr. Schmoe generated 6.21 wRVUs throughout Affected person X’s go to at $50/wRVU compensation which yields $310 in compensation for Dr. Schmoe. That mentioned, if the clinic obtained the Medicare AIR and the 20% for the affected person co-pays (once more, owing to the truth that all of those CPTs are billable and don’t “battle” out), the clinic loses $58.67 on this encounter.

In Determine 4 (by way of information), we take one other leap from our good senses (and away from Dr. Schmoe’s wRVU comp plan) to color a separate image.

Determine 4

Dr. X has 535 encounters throughout 2022. Of these, 60% are Medicare sufferers whereas 40% are business payers. Assuming, absurdly so, that he delivers the identical 6.21 wRVUs on each affected person go to, he has mounted comp of roughly $259,000 (the approximate median), and given our allowables in Determine 2, we see that Dr. X would barely cowl his compensation when producing 3,300 wRVUs. That mentioned, that wRVU era is effectively under the 25^th percentile whereas he can be comped $77.91/wRVU.

The aim of this text is to elucidate the challenges inherent in compensation plans in a rural setting. Apart for the traditional inputs, the Medicare and Medicaid reimbursement schemes add an attention-grabbing twist to an already muddied deliverable.

Supplier compensation modeling is decidedly native and should embrace parts similar to affected person demographics, payer dominance, charge schedules and allowables, and payer combine apropos of Medicare/Medicaid inhabitants base. Care should be taken to grasp the entire countervailing forces to drive a compensation plan that’s honest and protects the well being system’s funds.