Physician Compensation

The RVU system

RVU Ch 3, 30

The fundamental unit of RBRVS-based physician payment, expressing the relative resource intensity of a service. Total RVUs equal wRVU + PE RVU + MP RVU, each adjusted by a geographic factor. Productivity-based compensation plans most commonly use the work component as the productivity currency.

wRVU — work relative value unit Ch 3, 30

The physician-work component of the RVU: the time, technical skill, mental effort, judgment and stress of a given service. wRVUs are the dominant productivity currency in physician compensation — total wRVUs in a period, multiplied by the plan's $/wRVU rate, determines the variable payout.

Conversion factor Ch 3, 30

The dollar amount per relative value unit set by CMS each calendar year. A contract that specifies a "$/wRVU" rate uses an internal conversion factor that may differ materially from the Medicare rate — and that can be reset annually without any change in the underlying wRVU values.

RBRVS — Resource-Based Relative Value Scale Ch 30

The framework Medicare adopted in 1992, assigning each service a total relative value composed of work, practice expense, and malpractice components. Geographic practice cost indices adjust each component by location before the conversion factor turns it into a payment.

RUC — Relative Value Scale Update Committee Ch 30

The multi-specialty AMA committee that reviews and recommends wRVU values for CPT codes to CMS. Its recommendations substantially influence the annual fee schedule, though CMS retains final authority over every valuation.

Billed wRVUs Ch 30

Work units credited on services as submitted, whether or not the payer ultimately pays the line. Billed-wRVU plans insulate the physician from payer policy risk, but require strong internal compliance controls.

Paid wRVUs Ch 30

Work units credited only on claim lines the payer actually paid. Denials, coding edits and unit truncations reduce productivity credit directly — which transfers revenue-cycle risk from the organization to the clinician. Which of these two your plan uses is worth knowing before you sign.

CPT — Current Procedural Terminology Ch 30

The AMA-maintained code set describing physician and clinical services. Each code carries an RVU value that determines Medicare payment and drives the wRVU calculation in most compensation plans.

Benchmarks and market value

Benchmarking Ch 8, 14

Comparing compensation, productivity and collections against published survey data — typically MGMA, AMGA or SullivanCotter — to establish market norms and fair market value. Percentile rankings for both pay and production are the standard reference points in negotiation and in valuation opinions.

Percentile Ch 8

Where a physician's compensation or production falls relative to surveyed peers. The 50th is the median; the 75th means outearning three-quarters of the sample. Employers, attorneys and valuation analysts work from the 25th, 50th, 75th and 90th.

Total compensation Ch 29

The full economic value of an arrangement rather than base salary alone — including retirement contributions, insurance, allowances, loan repayment and the tax treatment of each. Benchmarks usually report a narrower figure, which is what makes offers hard to compare directly.

Payment models

Value-based care Ch 3, 16

An umbrella term for models linking reimbursement to quality, outcomes or cost-efficiency rather than volume. It covers pay-for-performance, shared savings, bundled payments, capitation and Advanced APMs — arrangements with very different risk profiles under one label.

Capitation Ch 3

A fixed per-member, per-month payment covering all necessary services for a defined population, shifting utilization risk from payer to provider. Unlike fee-for-service, it rewards prevention and care management rather than service volume.

Bundled payment Ch 3

One fixed payment covering a defined clinical episode — a joint replacement and its 90 days of recovery, say. Providers share savings below the target; under two-sided models they absorb costs above it.

Contracts and compliance

Covenant not-to-compete Ch 13

A clause restricting a departing physician from practising within a defined area for a defined period. Enforceability varies by state; the FTC issued a broad rule in 2024 prohibiting most post-employment non-competes, and litigation has kept the position uncertain since.

Incident-to billing Ch 30

A Medicare rule permitting a physician to bill under their own NPI for services delivered by a supervised non-physician practitioner, where the physician is present in the office suite. The wRVUs and payment credit to the physician — and attribution errors here are a common source of wRVU discrepancies.

Global surgery period Ch 30

A bundling policy under which one payment for a surgical procedure covers pre-operative, intraoperative and post-operative evaluation and management within a defined window. Post-operative visits inside the window generate no separate wRVU credit.

No term matches that. The full glossary in the book runs to 84 entries.