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Disclaimer: The following is a post submitted by Contract Diagnostics, a sponsor of this website.
“Contract Diagnostics is the country’s only firm 100% dedicated to Physician Contract Reviews.
Their proprietary review process focuses around educating their Physician clients on how to negotiate and ask for things, what specifically to ask for, and an overall view of the ‘deal’.”
A lot of individuals have their eyes glaze when they look at pages and pages of legalese typically found in a contract.
Because of this, these individuals just sign on the dotted line trusting that the contract is fair and in their best interest.
However there are many instances where the contract often favors the employer since it is a product created by them and thus have some inherent bias in it.
All is not lost, however, as the employee still has the power to negotiate to try and balance the scales.
I will let the founder of Contract Diagnostics, Jon Appino, take it away so that he can share some insights regarding the most important paper you sign your name to.
Physician contracts can be set up different ways.
Some include RVUs (relative value units), some have collections, and some have salaries.
The RVU model in particular can be tricky to navigate since it’s less straightforward than a traditional salary-based model.
For example, you might have a physician looking at RVUs and trying to understand the benchmark.
If they are paying you $350,000 and setting a 7500 RVU target, how do you know whether that is a good or bad deal?
Let’s look at five clarifying questions that will help you navigate this type of situation.
1. What are others here doing in terms of their numbers?
This helps you understand what the context is.
You don’t want to enter into a situation blindly, not knowing what the expectations are, and whether the RVUs in your contract are in line with what others are doing there.
2. What are your expectations of me in the first, second, and third years?
If 7,000 RVUs is the goal, would hitting that number meet the expectations each year?
Or would that be the minimum I would need to exceed in following years?
I would recommend getting reports each month, so you know whether you are trending toward hitting that particular number.
3. How do you set your metrics?
Do they just come up with metrics internally?
Do they tie it a certain standard such as MGMA, AMGA, Sullivan Cotter, potentially a third-party analysis?
4. What have they done in the past in terms of contracts?
We were negotiating with a neonatology group a while back, and we were told that all physicians are paid the same structure.
We asked when the last time they hired was.
They said nine years ago.
Sometimes, having those questions be asked of them helps the employer to see, okay, you paid everyone the same, but you have to change it.
This might be a really good time to do so.
I think that can play into your contract negotiations.
5. Are my RVUs prorated for termination or maternity leave?
For example, if you work for six months but exceed half of the production metrics, do you still get a bonus?
Or is it prorated to 3,500 for your time of employment?
For females who take maternity leave, what happens when you’re out for three months and not producing RVUs?
Does the compensation structure change?
These five questions will help you understand how to handle an incentive compensation model such as RVUs.
Be sure to ask clarifying questions so you won’t be surprised.
Don’t begin your employment with unanswered questions or issues that may come back to bite you.
If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”
Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.
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