MPFS: A Catalyst for Physician Compensation Comprehensive Redesign
With the number of employed physicians continuing to grow, hospitals and healthcare organizations must explore strategies to address physician compensation and employed provider compensation. The 2021 Medicare Physician Fee Schedule (MPFS) changes have created an opportunity for health systems to shift their compensation philosophy and structures to be less dependent on volume and more prominently recognize value. This shift will more closely align provider incentives and payer reimbursement and promote greater long-term financial sustainability of healthcare organizations.
Due to the complexity surrounding these compensation issues, a recent HSG survey identified that 42% of surveyed organizations continue to use the 2020 MPFS to calculate wRVUs for production-based provider compensation plans. In the short term, this ensures providers will continue to earn at current compensation levels for current volume. This also gives organizations time to conduct analysis and develop a strategy for adjusting compensation parameters to coincide with 2022 MPFS implementation. However, while the move to value-based reimbursement and its level of maturity varies by market, HSG believes that it’s imminent for previously untouched markets to take action and redesign compensation philosophies to align with 2021 and 2022 MPFS changes.
For many healthcare organizations and hospitals, overcoming challenges in provider compensation means redesigning elements to better align with organizational goals and objectives. HSG partners with clients on an ongoing basis to overcome challenges with provider compensation. This may include focusing on alignment between productivity and compensation, balancing market rates with organizational sustainability, and/or shifting compensation dollars towards value. To better understand the issues at hand, read the white paper and gain access to additional data points uncovered by our most recent executive survey.
Organizations should shortly transition to using wRVUs from the current CMS Physician Fee Schedule for provider compensation.
The 2021 Medicare Physician Fee Schedule Final Rule is an opportunity to shift your compensation philosophy. Be less dependent on volume and more prominently recognize value.
This whitepaper outlines upcoming challenges in provider compensation as a result of the COVID-19 pandemic and 2021 MPFS changes.
This article provides and example of how misuse of provider compensation survey data can result in a primary care physician earnings 44% higher compensation for constant patient volume.
Physician compensation plans should reflect the culture and values of your healthcare organization along with financial models that are sustainable.