Considerations in Structuring Physician Compensation-Per-WRVU Models

October 10, 2022

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By: Matthew McKenzie, CVA and Thomas Torcellini, CVA

The following article was published by the American Association of Provider Compensation Professionals

For hospitals and health systems in the United States, one of the most common methods for compensating physicians for their clinical and procedural services is via the work relative value unit (“WRVU”). In this article, we discuss some of the benefits, as well as potential pitfalls, of physician per-WRVU compensation models.

Compensation-per-WRVU models are common in both employment and independent contractor relationships between providers/provider groups and hospitals as the WRVU can often be the best measure of professional work effort and physician productivity available.

Under a compensation-per-WRVU structure, a physician’s compensation is driven to at least some extent by the level of WRVUs they personally produce. Per Sullivan Cotter’s 2020 Physician Compensation and Productivity Survey, approximately 70% of medical and surgical physician respondents have a WRVU productivity component in their compensation package.

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