By Kim Stanger
Many hospitals, physician groups, or other providers compensate employed or contracted practitioners based on the work relative value units (“wRVUs”) they generate, e.g., a physician may be paid $x per wRVU performed. Depending on the contract terms, those wRVU values may soon be affected by the 2021 Medicare Physician Fee Schedule. If you have not already done so, you should review your wRVU compensation formula for the following issues:
1. Changes to RVU Values. The 2021 Medicare Physician Fee Schedule will increase the CMS-assigned wRVUs for several codes, including common E/M codes. (See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched). If your wRVU compensation formula is based on the then-current CMS wRVU values or automatically incorporates the 2021 changes, you may soon owe your physicians more pay than you otherwise anticipated. You may want to adjust your contractual wRVU conversion factor to account for unanticipated and unwarranted increases in practitioner compensation. If your contract does not allow for unilateral adjustments, you may need to obtain the practitioner’s agreement to the change or, alternatively, invoke contract termination provisions. Going forward, you may want to tie the wRVUs to the CMS values that existed at the time the contract was executed rather than the operative CMS values, thereby avoiding the need to monitor or update CMS changes to wRVUs. Continue reading