Contracts & Negotiations
Production-Based Pay: A wRVU Primer
Many physicians get paid based on wRVUs. We break down this production-based compensation model for physicians entering the job market.
I’m Being Paid How?
Your first job offer is in hand, and your pay will be determined by something called a work relative value unit (wRVU). What is that?
Although common, this production-based form of compensation can be confusing, especially to physicians entering the job market for the very first time.
What is a wRVU?
A wRVU is a standard unit of measurement used to establish value for common health care procedures. Simply put, a wRVU is a number assigned to every codable direct patient care experience.
In production-based compensation plans, you are expected to generate a set number of wRVUs (your wRVU threshold). A dollar value, sometimes called a conversion factor, is assigned to each wRVU generated.
Health care organizations use Centers for Medicare & Medicaid Services (CMS) current procedural terminology (CPT) codes to assign wRVUs.
How do wRVUs determine my pay?
If your salary is determined by wRVUs, your pay may simply be equal to your wRVU total times a set dollar value. While you’ll likely get a stable paycheck throughout the year, your employer will do regular lookbacks to determine that your wRVUs meet or exceed what you are paid.
Alternatively, you could receive a base salary with incentives for wRVUs generated beyond a designated threshold.
For example, consider an offer with a guaranteed base salary of $180,000, built around a wRVU threshold of 3,600 with a conversion factor of $50 per wRVU. If you generate 4,000 wRVUs — 400 above your threshold — you will make an additional $20,000 on top of your base pay.
How to Calculate Your wRVU
Erik Steen, Senior Compensation Consultant with Providence Health System, offers a few quick ways to calculate your wRVU potential before accepting a job offer.
- Estimate your volume. Visualize your work. Think about and record in a spreadsheet how many visits and procedures you will do in a given day or week. You can even do a “low” and “high” estimate. After you are hired, your employer should be able to provide you with your wRVU volume, which will simplify your calculations.
- Look online and add it up. CMS offers wRVU information through its Physician fee schedule look-up. Assign those wRVU values to the work volume you estimated and use that result to estimate your production-based pay.
- Ask questions. Don’t be afraid to ask your prospective employer how current physicians fare on this production-based model. Are they, on average, busy enough to allow them to earn more than the salary guarantee?
The Downside of wRVUs
wRVUs do a reasonable job of ensuring physicians are compensated fairly for their time, but this system does have its downfalls. wRVUs do not account for many administrative things outside of direct patient care that are expected and necessary parts of your job as a physician. These include charting, email or certain telehealth services.
“With the pandemic, there has been recent progress in assigning wRVUs and crediting physicians for telemedicine work,” says Steen. “This change, however, is temporary and may or may not continue.”
Shifting From Production to Value
Production-based compensation models, like those relying on wRVUs, aren’t going away. But many employers are now including value-based pay incentives to reward physicians for good patient outcomes.
As you evaluate job offers, understand how value-based care incentives will factor into your total compensation.
Let Us Help You
Want to learn more about wRVUs and other ways physicians get paid? Provider Solutions & Development offers complimentary resources, including one-on-one career coaching, toolkits, seminars and training.