Sample of Writing by Melissa

Compensation Tips for Physicians and Nurse Practitioners


Searching for your first job as a health care provider or even just a new job can be stressful. This article will help you understand different compensation models you may encounter in your search and help you decide which one is best for you.


Common salary/benefits structures


Flat salary: A flat salary model pays you the same flat salary every pay period, irrespective of the work. There are usually not many incentives or opportunities to make more money each year. This is most common in very busy private practices.


Salary based on percentage of net/gross collections: This compensation model can vary from practice to practice. The general concept is that your annual compensation is based on the total dollar amount of either gross or net collections.  Examples would be:


  • 50/50 model — This is common in primary care practices where overhead costs are high. As a Primary Care Physician, you generate $400,000 in gross revenue; your salary would be $200,000 in a 50/50 model.


  • 70/30 model — As a hospitalist, you generate $300,000 in gross profits; you would receive $210,000 in this model.


  • 80/20 model — You would receive 80% of the profits you generate, after you deduct the expenses accrued by the employer, such as payroll taxes, malpractice insurance, health insurance, billing fees, other benefits, and any other associated costs. If you generate $300,000 in gross profits, your 80% would be $240,000. If your employer’s costs were an additional $50,000, you would deduct that from the $240,000 for a net salary of $190,000.


Salary based on total profits: You would receive a flat annual salary with an opportunity for an annual bonus, based on a percentage of the profits or gross amount collected. This bonus may be based on the amount of money brought in before deductions or on the amount of money left after all deductions have been taken. With this model, it is important to negotiate the ability to audit all financial records and create a process to resolve any discrepancies.


wRVU-based compensation: In an RVU-based compensation method, your salary is based on the acuity of the patients seen and accurate use of the Current Procedural Terminology (CPT) codes. In this model, more acutely ill patients will be associated with a higher CPT code and a higher reimbursement rate. Under the RVU-based compensation model, your work as the physician is the highest paid portion of the total payment. All RVUs are weighted by location of the practice and are then assigned a Conversion Factor to provide a dollar value for each CPT code. Many practices will use this as a base salary and then use one of the examples below as an incentive bonus.


Productivity bonus: You must generate a set number of wRVUs based on Medical Group Management Association percentiles. Your salary is fixed based on the decile of wRVU that you generate. Once you meet your set number of wRVUs, you would be eligible for a productivity bonus. See the table below for an example:


Base Salary: Expected wRVU Actual wRVU Conversion Factor Productivity Bonus (additional wRVU * CF) Total Salary

(Base +Productivity Bonus)

$200,000 5000 5500 $40 500*$40=$20,000 $220,000





You may encounter different formulas based on the number of patients seen, especially if the practices is a fee-for-service based practice.


Quality Bonus

As our health care system evolves into one that is value driven, quality is becoming more important than quantity. Therefore, physicians are receiving more bonuses based on the quality or outcome of the care they provide to patients. This bonus structure works best in a capitated practice.


Quality Bonuses may be based on:

  • Percentage of patients who have met health maintenance criteria
  • Percentage of patients who are fully immunized
  • Decline in emergency department visits by patients in the past yearFor hospitalist physicians/nurse practitioners, some of the criteria for quality bonuses may be:
  • Length of stay
  • Percentage of readmissions based on diagnosis ( as compared to bench-marks)
  • Timely preventative care
  • Timely discharges
  • Patient satisfaction scores (HCAPS)
  • Diagnosis or disease process specific measures
  • Incidence of decubitus ulcers
  • Readmissions to ICU after transfer to general floor







Other items to consider when negotiating your salary are:

  • Sign-on bonus — Many practices will offer a sign-on bonus that will be paid at set intervals of time you complete as an employee (ex: 50% at six months, 50% at twelve months).
  • Relocation —Many practices will provide a stipend to help you move, if needed.
  • Travel — A travel allowance may be provided, if travel is a requirement of the position.
  • CME — Many practices will pay for all CMEs you need to stay current for your license.
  • Paid time off — This is the number of vacation, sick days, or a combination of both you will receive per year.
  • Visa-related expenses — Some practices will reimburse you for the cost of your visa, if applicable.


Even though it can be difficult to think of medicine as a business, it is. Your employer is a business, and you are an important part of that business. You are the only person who can ensure you get the pay you deserve. Negotiate. Be assertive. Ask for what you want, because if you do not ask, you will not receive it. Before sitting down at the negotiation table, know when it is best to walk away. Know what the least you will accept will be and then do not compromise.


Just remember, once you graduate, you will make money. Make sure you look for a job that aligns with your values, lifestyle priorities, and long-term career and lifetime goals.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s