American Health Law Association: Health Law Connections Magazine Article (September 2021) – Challenges in Using National Survey Compensation Data

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HSG Director Eric Andreoli was published in the September 2021 issue of Health Law Connections Magazine, the official magazine of American Health Law Association. Current challenges in using national survey compensation data was the highlighted topic.

Historically, provider compensation data and productivity data from nationally published surveys have been key components in determining fair market value (FMV) for provider compensation and per work relative value unit (wRVU) compensation rates. Surveys from the Medical Group Management Association (MGMA), the American Medical Group Association (AMGA), and other organizations provide market benchmarks useful for constructing provider offers, designing compensation plans, and determining FMV. A confluence of issues will create problems as organizations use and interpret these survey data in the immediate future.

  • Issue #1: Reduce volume during the COVID-19 pandemic will lead to artificially high per WRVU compensation rates in surveys based on 2020 data.
  • Issue #2: For many specialties, changes to the 2021 Medicare Physician Fee Schedule (MPFS) will result in wRVU production that is significantly higher than levels reported in surveys using data from prior years.

The figure below highlights the number of specialties, and their associated magnitude of change from MGMA’s 2019 survey (reported in 2020) and their 2020 survey (reported in 2021). As you can see from the visual, 59% (42/71) reported specialties had greater than 10% reductions in reported wRVU production while 79% (56/71) specialties had compensation rates within 5% of the previous year. This vast difference results in a significant increase in compensation per wRVU with 85% (60/71) specialties having greater than 5% increases in the compensation per wRVU values.

To further showcase the issues that can arise from using the most recent survey data, review a hypothetical example created by HSG for a family medicine physician. Or please contact us directly at HSG to learn more or discuss how organizations are addressing these issues to protect financial sustainability.

Neal D. Barker

Partner and Managing Director, Compensation and Compliance