Hospitals and health systems rely heavily on published compensation data for establishing their provider compensation and as part of their documentation for regulatory compliance. Both the pandemic and the Medicare Physician Fee Schedule continue to pose questions as it relates to recently published benchmarks. Emma Miller, FTI Consulting, speaks with representatives from four of the nationally recognized survey companies about the most recent benchmarks and how the data should be utilized. Emma’s panel includes Elizabeth Siemsen, AMGA Consulting, Maria Hayduk, ECG Management Consultants, Michelle Mattingly, MGMA, and Bob Madden, SullivanCotter. From AHLA’s Hospitals and Health Systems Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Hospitals and health systems rely heavily on published compensation data for establishing their provider compensation and as part of their documentation for regulatory compliance. Both the pandemic and the Medicare Physician Fee Schedule continue to pose questions as it relates to recently published benchmarks. Emma Miller, FTI Consulting, speaks with representatives from four of the nationally recognized survey companies about the most recent benchmarks and how the data should be utilized. Emma’s panel includes Elizabeth Siemsen, AMGA Consulting, Maria Hayduk, ECG Management Consultants, Michelle Mattingly, MGMA, and Bob Madden, SullivanCotter. From AHLA’s Hospitals and Health Systems Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
This episode of A H L A speaking of health law is brought to you by A H L A members and donors like you. For more information, visit american health law.org.
Speaker 2:Hi, everyone. My name is Emma Miller, and I'm a managing director at FT I consulting in the Health Solutions Practice. Today, I'm joined by representatives from full organizations that publish provider compensation benchmarks, A G A E, EC G M GMA and Install. We are here to discuss the use of benchmarks in 2023 and beyond. Let's start up with some introductions. Elizabeth, would you like to go first?
Speaker 3:Sure. Uh, my name's Elizabeth Simpson and I'm the director of the survey program for a mga A and am M G A consulting. I've been at the organization for about four years, and I'm getting ready to publish my fourth, uh, survey with the group. Uh, it's a well-known survey that's been around, uh, for 35 years with our most recent survey having, uh, around 190,000 providers represented from 383 different organizations. So happy to be here with everyone today.
Speaker 2:Thanks, Elizabeth. Maria?
Speaker 4:Yeah. I am Maria Hay and I'm an associate principal at E C G. I have over 20 years of experience in physician and a p p compensation planning, medical practice development and operations, um, organization improvement and academic medicine. And I oversee ECGs provider analytics practice, including the production of our national provider and medical group performance studies. Our 2022, our most recent survey included 278 large provider organizations, um, representing 103,000 providers, uh, who practice within medical groups affiliated with integrated health systems, academic institutions, foundations, health plans, and children's hospitals. And I am, um, grateful to be here as well.
Speaker 2:Great. Thank you. Michelle.
Speaker 5:Yes. Thank you for having me. I'm Michelle Mattingly, director of the Data Solutions Department at MGM A, which is just a little bit south of Denver in Colorado. I've been with MGM a for 12 years, focusing primarily on our operations survey suite, uh, when I was an analyst. But in more recent years, I've project managed all aspects of all MGMA SE surveys, including our compensation survey suite and our most recent reported data. Our 2022 report, uh, reported on 192,000 providers from 7,700, uh, organizations.
Speaker 2:Thank you, Michelle, Bob.
Speaker 6:Sure. Thanks, uh, for the opportunity to speak with you all. Uh, I'm Bob Madden, a principal with Sullivan Cotter. I'm based out of Pittsburgh and have been with the firm, uh, for just over 11 years. Our, uh, we do publish a variety of, uh, national surveys. I'd say chief amongst them in the physician comp space would be our 2022 physician compensation and productivity survey report. Uh, that includes data from 790 healthcare organizations representing over 285,000 physicians, PhDs, advanced practice providers, and medical group executives.
Speaker 2:Excellent. Thank you. And thank you all for joining me today. We have a lot to cover. As you were all preparing your surveys, um, to be published in 2022, were there any surprises or emerging trends that were noticed in the data?
Speaker 3:I, I'll start with that, Emma. This is Elizabeth from a mga a you know, it really, you know, as we started the process, we felt really prepared. So that was one piece. So I don't know if there were surprises right out of the gate. Um, I think as a, an outcome of the prior year where we saw the initial impact of the pandemic and the data, I think it really kind of got us saying, okay, we need to really think about how we structure things going forward. Uh, because now, not just do we have the offset of the, in the initial PA pandemic impact that's gonna show up in the data, then you add that the c m s, uh, work, RVU weight changes on top of that. It was kind of a double whammy in, so we knew there was gonna be a big swing in the data. Uh, it was a matter of order of magnitude and how much the, the, the actual volume, not the, the work vu weight related volume, but the volume coming back from a pandemic was gonna kind of kickstart that. So as we, as we got into it, we were, we felt good about the data, we felt good that we were prepared, and were able to make sure that we were putting forth, uh, data with the correct RVOs, um, and, and groups were aligning and participating that and, and giving us the information that we needed. I think, as you know, we've got some space from that timeframe. One thing I think has been interesting that we're continuing to look at is, you know, the number of groups. So, so I believe it was 61% of our participating groups said that they actually stayed with the 2020 work review waits for their compensation calculations in, in 20 20 21. And really looking at if, you know, what was the impact if you did make the change. And it, it does look like, and we're still, like I said, still continue to look at it, that the groups that switched over paid more. And, um, the other piece of that being the groups that didn't switch over kind of may have nullified the overall intent of some of those work overview changes and that redistribute redistribution of, of the dollars. And so it's, it's interesting to kind of watch the two things happening and, and we'll continue to take a look at that and then see how that goes forward into next year's data.
Speaker 5:This is Michelle from MGM A and I'd add on to that, that something we've noticed is I think oftentimes we forget to look in the rear of your mirror. And so the data being reflective of 2021, but being so many months past the height of the pandemic, we forget that there were still two very big waves of covid during the data timeframe. We had the delta during the summer and the omnicon last winter. So it, it's important too to make sure that we're taking into context what also is happening at the same time as the data in addition to the fee C m SV schedule changes as well.
Speaker 4:Emma, this is, uh, Maria. So along those lines, it was interesting. Uh, we, so we did, similar to the other survey organizations, we predicted, um, you know, we prepared and we predicted where we thought the, the data would go, right? And, uh, so we had looked at a past five year trends and said, okay, if we get back to, so, you know, a so-called normal, where would the, where are we gonna end up in terms of compensation and production? Um, and then to Michelle's point, when we look back at 2020 and say, well, where are we now compared to, um, where we were in 2020? That trend really didn't hold true. Um, e except for in primary care and primary care, we are, you know, compensation's up a bit and production has recouped, um, but not, but in the other subspecialties, uh, category areas, the production hasn't recouped, which is resulted in some really big increases in the compensation per work vu rate. So I think the biggest rise, or, you know, uh, trend that was a little different than expected was that we, we really aren't back yet to, um, or we weren't in this data period back to where we were in 2020.
Speaker 6:Yeah. Maria, this is Bob from Sullivan Carter. I'll echo that in everyone else's comments. I think in a vacuum, you can look at a book of c p t codes and predict, uh, you know, in a given specialty what the RVU change ought to be. But again, that's in a vacuum, assuming same store volumes. And I think when we, when we look at patient encounters or visit volumes, in many instances, we are not yet back to sort of pre pandemic levels. So when we all did our various predictions as firms, I think what we predicted still makes sense, but it, it relies on a number of assumptions that have not all yet necessarily come to pass. So some of the published compensation for work RV ratios, for example, are likely a little higher than what we would've anticipated. And that creates a set of sort of cautions and concerns that, you know, we help our clients with and think through as they're, you know, in a, we're in a period of volatility and constant change with the fee schedule and pandemic and volumes. And so making longstanding decisions on specific rates and comp structures during this period is really, really challenging. And so we're, that, that's a lot of our focus now is how do we unpack this data and then also think forward to future survey additions and how we anticipate the data to eventually settle into a more, um, predictable space.
Speaker 2:Yeah, that's really interesting. In terms of like, what, what the reality is and the new data set compared to the predictions, are you, um, are you hearing from clients or, or consultants that are using the data? Are they raising concerns about, um, how they're gonna use the data going forward?
Speaker 4:There are, uh, a handful of concerns as you might expect. Um, you know, largely, uh, you know, the, the number one concern I think Bob hit upon it is these, the changes in how fast the production is coming back and how that varies across the different groups, depending on their covid experience, depending on new waves that have come through different markets and, and, um, you know, even government orders in certain areas. Um, and, you know, and the impact that that has had on the benchmarks. Um, so specific situation, their specific local situations, and then, you know, they're concerned about the benchmarks and whether the, they're all calculated using the same or different fee schedules from 20, you 20, 21, 20 20. Um, and moving forward, they're also worried about, um, how to adhere to their contractual arrangements, you know, specifically those that state that rates should be updated to the newest service, uh, survey data, right? So they're concerned about, um, how to do that being, uh, you know, what have they done in, in terms of, um, adhering to those contracts. In some cases they've just terminated them and entered into new negotiations. And others they've, you know, have a friendly relationship with the providers and they all kind of agree on what should be done next, but, um, but they're very concerned about that. And le and lastly, they're just, there's this underlying concern of what Medicare is gonna do next, right? I mean, we, the 2023 fee schedule just came out at the end of November, beginning of December, and it has some substantive changes as well that are going to, um, those changes are gonna impact the ability for hospital based, uh, physicians to generate RVs as the E N M values for the inpatient visits have gone up. Um, and they just started wondering when things are gonna stabilize, are they gonna stabilize is, you know, Medicare gonna continue, or c m s gonna continue to make these changes that are, that are volatile, that are, uh, can lead to rates going up, rates going down. And um, and then generally speaking, um, in the back of their mind is value-based care, you know, are we getting disconnected from how our payers are, are paying us? And how do we align our incentive programs with, with our payment systems? So, um, those are the things
Speaker 3:That I'm hearing about from our clients.
Speaker 5:Yeah, and I think we've touched on the, at that at a high level, um, a bit ago, but talking about the productivity and what the optics look like on the surface level is that if you focus primarily on worker reviews, maybe we are headed towards a rebound of productivity, but after some analysis, and we actually put together a flyer, because this has been our number one question, uh, since the data was launched in May, is that if you look at encounters, encounters have not rebounded. So it's the c m s fee schedule changes for 2021 that have sort of padded the worker view numbers, but without that context, it's hard to dig further into what productivity expectations should be. The other thing is, some practices were PO or some specialties were impacted positively with the fee schedule. So they may not need to produce as much to maintain the same amount of revenue as they traditionally had, whereas other specialties that are impacted negatively would have to do more just to get to that baseline earning. So there are a lot of layers with this fee schedule and the pandemic and where productivity really is at. But I think we've had to really dig into those numbers more than we ever have had to before to get a solid understanding of what's going on.
Speaker 3:I would add too, it kind of, the, the transition process has been so highly variable. So when you're talking with clients about, and they're saying, what should we do next? And can we use the data and how do we use the data? It really at a base level brings the need for really good socialization of what's happening amongst the medical group. You know, making sure your providers and your comp committee and, and however that structure happens, uh, that they're informed with the latest information so that they have an understanding. Cuz otherwise it can start to look like, uh, there's, you know, someone rearranging things and really having that, that understanding at the medical group level becomes critical as to how groups choose to go forward.
Speaker 6:Yeah, a absolutely agree with, with all the comments. And I would, uh, I would add that I think for many years, leading up to recent times, it's been easier for organizations to administer their compensation plans by simply rolling to the next survey, uh, addition and, you know, updating their rates and thresholds, et cetera, accordingly. And generally that's going to result in affordable and compliant compensation levels. And I just think that, that you can no longer go on, I'll put it in air quotes, autopilot, if you will, with the data you need to unpack it and understand it more now than ever. It's still a very useful set of information and, and a data point. Um, but it's not the only data point to make these well-informed decisions, and I think that's really bubbling up to the surface over the last few years and is likely to continue, um, for the next few as well.
Speaker 2:Yeah, there's definitely, there was definitely a lot of hesitation, um, to roll onto the 2021 fee schedule, and now we're looking at more changes coming in in 2023 that, that we've all been discussing. Here are your clients and survey participants, um, are you hearing a consistent notion in terms of whether they're going to move on to the 20 23 3 fee schedule, or is that something that they're still analyzing, still thinking through and, and trying to make a decision on?
Speaker 5:I can start with this one. This is Michelle at mgm a, um, I'm gonna answer it from the survey lens, but here at M G M A we've traditionally and are continuing to instruct participants to report productivity reflective of the fee schedule that was in place during that year of the data being collected. So everything we collect right now is retrospective. We have been moving in a direction of collecting the raw productivity information. So a practice is c PT coding data, and then calculating from there. So we are ensuring more consistently reported data reflective of the same fee schedule, given the retrospective nature of it though, in 2022 or in 2023 here in January, and about a month we'll be collecting on 2022 data. So we won't start to see the 2023 fee schedule updates until our 2024 survey data. Um, which is again, why we're talking about the 2021 C M S B schedules now is because that's what our, our data is reflective of. So from a data lens, we aren't there yet. We almost get the luxury of kind of seeing what people are doing and then, um, I mean cart before the horse, but using that data then to kind of, um, future predict how things will go.
Speaker 4:Yeah. Emma, I I wanna touch upon something that Elizabeth, uh, brought up and Bob as well, and it, it's about the, the, the socialization of these changes with the physician groups and how that's presenting, um, kind of a delay or challenges in the implementation of the new schedule. So we just did a webinar, uh, we had a poll question, and it looks like, um, you know, it's changes every month, but the, the, the re the results indicated that over 60% had adopted the newer schedules. Um, and so that's, that's our experience, but the biggest concern and issue is really getting the physicians to buy in to adopting the new schedule. So it's in, you know, it's incredibly difficult to get the physicians to understand that the lower rate can result in the same or higher income and, you know, the optics of it or the conversations are definitely challenging. Um, and there's, it, it does require a significant amount of additional internal and external resources just to, just for the communication lift alone, um, around the implementation of the, of the updated, uh, fee schedules. But I do anticipate, I mean, we are already at a majority have adopted, uh, 2021 or 20 22, 20 23 is bringing on its own challenges, uh, with, you know, rates going to be, um, we're gonna have to look at the rates again. But I think the point that Elizabeth made, uh, a significant in, um, in seeing a hundred percent adoption of the new schedules,
Speaker 3:And I, I think that, you know, the, the experience of the 2021 fee schedules kind of, you know, groups got to decide, did that, did that go like we wanted it to, you know, did, what did we learn from that? So where they took a really long time, a lot of groups did to kind of make that transition and implement those, um, new weights, uh, you know, potentially looking ahead to next year, they, they may do it differently and be more efficient now that they've kind of been down this road, uh, once before. But I think it, it calls out, and I think, I think it was Bob who said it it earlier too, looking at you can't, they can't, they can't the easy road. They can't just turn it over each year. And I think it is forcing groups to really just take a look at the construct of their plans and how they, uh, update that each year and how they go forward to make sure that they just have levers that they can pull when something is disruptive, what has occurred, even with the pandemic or the fee schedule changes, gives them the ability to manage through whatever that process is.
Speaker 6:I think when we look at the, the pace of adoption to the 2021 fee schedule, I think we saw very few organizations become early adopters right out of the gate. But really in 2022 is when we started to see more market movement to the 2021 scale. And some of our recent polling indicated that, um, you know, 80 plus percent of the organizations that we polled will be on something more current than 2020 starting next year. So that could be 20 21, 20 22, or even 2023. But I think, um, at least in my own experiences, the organizations that I've helped transition to new fee schedules that have been most successful really took that first year to say, we, we, number one, don't have any market data as of yet because of the lag and the reporting of the data to current state. We don't have data to peg our rates and decisions to, so the best we can do is look to our own internal experience and figure out how are work our views changing sort of in real time as the new fee schedule unfolds. And then in the next year when the first batch of market data does start to become available, bringing that internal experience together with the market data has generally helped a lot of those organizations that have only recently transitioned to the new fee schedule, I think do it in a less disruptive and more positive way. Um, but as everybody else has noted too, that it, it, it at the, ultimately it comes down to communicating to physicians and getting, getting physicians to buy into the concept that a lower incremental rate can somehow lead to more compensation or at the very least, you know, steady state compensation, that that continues to be a challenge.
Speaker 2:Yeah, and I think with the 2021 changes, there was a lot of question around how to transition and what is the best approach. Are you seeing any consistency at all, or is there a prevailing methodology in how organizations are transitioning to a more recent fee schedule?
Speaker 6:Yeah, this is, again, Bob, it's Sullivan Cotter. I'll, I'll take the first stab at that. I, I think we do see several different approaches in the market, but the most prevalent from our experience is really what I'll call a two-step process, where first the organization calculates productivity changes resulting from the new fee schedule, and then adjusts rates and thresholds accordingly to essentially bring compensation to a net neutral level and letting that serve as the baseline. And then step two, in terms of making decisions and implementing, comes around evaluating your physician compensation philosophy, your desire to make additional investments strategically or otherwise in certain specialty areas that might result in more compensation. And as we've all said, you know, leading up to this in the discussion using the market data and specifically the compensation per f t e market data as an important guardrail to make sure that the resulting comp is at least, uh, somewhat grounded in market and using that in conjunction with overall financial affordability and adherence to that compensation philosophy. I think that creates a scenario where organizations can make well-informed decisions as opposed to just targeting a specific market benchmark rate and not doing that kind of thorough internal evaluation first.
Speaker 3:Yeah, I, I agree with Bob. I think, you know, I think with the initial change for the 2021 fee schedule, we saw a lot of variety of how people went about it, but I think over time it landed with kind of the structure that Bob just just laid out where they kind of built an equivalent model with the new schedule to say, all things being equal, this is now the new scale. And then looked back and said, okay, we're gonna add X percent to primary care or whatever it might be, and make those strategic decisions depending on what's happening within their group. And I think you kind of, I've, I've seen less variation from that point. I think originally I, you know, heard stories, people just added 8% across the board or whatever it might be. Um, and they, they were doing a lot of things just without the lens of the, the guideposts of the survey and other things with it. Um, that going forward with this next go round with having the experience of going through it, I think people are like, okay, now I see a clear path and it's gonna be much easier to transition as a re result. The methodologies are gonna get more consistent.
Speaker 4:Yeah. One thing to, uh, add that we haven't, um, touched upon, but, um, I agree completely with Elizabeth and Bob, and that's been our experience as well is, uh, is around the provider or physician contracts, right? And then how organizations are addressing the contracts that they had in place, um, at the time of the change, and what are they doing in terms of, um, adding language, uh, that would help them in the next, uh, occurrence of such a big change. And so some are adding qualifying language to their contracts, uh, regard, you know, such as, uh, you know, quote unquote substantive C m s changes that really give themselves a way out. Um, if something were to happen, um, either such as, uh, the Covid Health emergency or C M S R V U changes, um, many have chosen to reevaluate their contracts and renegotiate, um, you know, really just terminated the contracts as I mentioned earlier. Um, and as Bob alluded to, um, you know, the FM b, they've, they've, they're using the FM b clause in their contracts to help with the process of, um, adopting, uh, newer impacted, um, compensation rates from surveys. And many times those rates really aren't reflective of the market and we'll put, um, uh, organization outside of fair market value pretty quickly. Um, and so I think that, uh, the emphasis there is that all of this is, um, critical, not just, uh, the relationship they have with their physicians, but also the, you know, looking back and saying, okay, what else do we need to do to prepare for the next time, uh, this happens to us?
Speaker 2:Do all these changes impact the way that you collect data or the process that you're gonna take prior to publishing the data?
Speaker 6:Yeah, I'll take that one again. I, this is Bob, but with Sullivan Cotter, I, I think it means we have to keep a pulse on the market to understand the speed at which the market's adopting changes to fee schedules for the purposes of compensation plan administration. So as, as many of us as have mentioned in the 2022 survey report, uh, we publish two sets of work, our view productivity data and compensation per work, our view ratio data, so one set for the 2020 scale and 1 cent for the 2021 scale. And we really did that as we anticipated. It would take time for the majority of organizations to transition to the newer fee schedule, and there would be a need for data for those that remained on the older or 2020 scale. And while we anticipate that the vast majority of the market will be using the 2021 or more current fee schedule beginning next year, um, we will likely only request and publish data on the, the current, uh, fee schedule going forward. So, in other words, the 2023 Survey Edition would reflect 2022 activity under the 2022 fee schedule. We will, however, also be continuing to assist participants who continue to utilize older fee schedules to report their data to us by helping them convert their C p T codes from one scale to the next to ensure that we don't have any misma mismatches in terms of what we're representing the data is and what it actually is. So we, we do wanna be careful there and, and we're, we're really stepping up our, our sort of reviewing and auditing processes to make sure that the, the C P T codes and the work reviews really make sense aligned, uh, to the fee schedule.
Speaker 3:And at MJ a, we're doing the same thing. You know, we, we also public collected the data using both fee schedules last year. Um, and that enabled us to really kind of understand the impact of the pandemic volume returning, uh, not all the way in some cases, but then also the understanding the impact of the fee schedule change on the, the data. Um, and that was really helpful. And I think a lot of people gave us, a lot of people a lot of confidence that what we did publish with the 2021 fee schedule waits was accurate. And so with was very helpful in that regard. But going forward, we won't do that again, but it, it does increase the need to really look at how we audit and validate and verify that what we're getting is correct. It also means that we need to provide additional assistance to the people who participate. We have a work RVU converter tool that we use, and we give to our, our clients and our participants to make sure that they're confident of where they're starting from and they're reporting the correct data to us. And it also really helps them really kind of understand what's happening. So it really is about, you know, it, it's no longer gonna be these, it feels like small changes from a year to year where you don't have to pay as close attention that you're getting the accurate work RBU's based on the correct fee schedule, uh, because the, you know, the changes now are more significant, uh, Elise in this this period of a few years. And so we really need to just make sure we're paying attention to that and helping people work through that as well.
Speaker 4:So, um, this is Maria again, unlike Elizabeth and Bob, we actually, we'll continue to be, uh, pro, uh, producing our benchmarks under multiple fee schedules. I think really the paradigm has changed a little bit. I, you know, we did, uh, over, in addition to the roughly 300 survey members that we had medical groups, we had another a hundred medical groups, large groups, who asked us to assess their, uh, RVs, uh, based on their C P T data and look at how the different fee schedules, uh, would change things. And, and we continue to do that. And we just released the, our 2022 benchmarks, um, calculated under the 23 schedule to our members, uh, last week. So, um, I think, and, and, and we continue to get requests for that. Um, I think groups are realizing what Bob mentioned earlier as things are not going to stay on auto pilot, at least for the foreseeable future. And, and they have, uh, wanna be prepared, uh, for the changes. Um, we're, I'm hopeful that, uh, c m s will settle down for a while and we can get back to where we just released the standard benchmarks, which is, um, you know, calculated under the, the c uh, physician fee schedule that aligned with the production. But we've collected C P T data from our members since 2000, since the beginning of the survey, and we'll continue to do that, and we really would, it's not that it's not a challenge for us to calculate our benchmarks under varying schedules, and so we'll just continue to provide that value to our members and hope that over time, um, it won't be, it's, you know, demanded as it is today.
Speaker 5:And this is Michelle from M G M A, and we've actually spent the last six months developing a new process for survey participation to hopefully help streamline the process, um, for participants, but then also assist us better on the backend to ensure more accurate data results. And so our new process really is more of just a, simply taking all the raw files from a practice and exports from their system reports, like their payroll, their, eh, r, their CPTs, their general ledgers, and that's, that's extent of what we're asking of them. And then our process, uh, everything will be mapped on the backend within the platform, really saving the participants' ample time. This will also help us move into, um, the ability to report more on real time and seasonality once we get this new process and this new platform up and running, we can collect that data in more real time, and it won't help now, but hopefully as there are future changes in, in C M S B schedules. So we'll be able to see that change as it happens. And we're not, again, looking backwards and trying to figure out what happened to make forward facing decisions.
Speaker 2:It sounds like there's been definitely a lot of thought, um, put into the collection of the data, the process, and then what will also be useful for, um, the organizations that are using the data. So, so that's great. Um, what are some of the tips and tricks that you can give the people listening into this podcast about using your data sets and what, what's things that they should be thinking about if they're moving on to the fee, uh, the 2023 fee schedule, um, but they're using 2022 data that's been published, or just generally tips and tricks for using data?
Speaker 5:This is Michelle mg may. Again, I'll start with a general tip and trick, and it's, um, one thing that I think we encounter the most when folks are looking at compensation data. And so as a main rule of thumb, we want to make sure that the providers that are being benchmarked are being benchmarked against the appropriate data set. And what I mean by that is, if looking to bring a new provider into a practice, we folks should be looking at our provider placement starting salary data set. That's where we're reporting on newly hired providers into a practice, whether it's directly from residency or fellowship, or an established provider that's new to a practice, those are broken out separately as well. I think oftentimes folks get caught looking at that top high level provider compensation data set when looking to bring in a new hire, but when doing that, they're comparing folks that they're looking to bring into the practice next to somebody who has two plus years of experience, an established patient panel. And it's really not a great apples to apples comparison. So making sure that they're being compared appropriately and likewise comparing academics, um, separately from non academics just due to varying, uh, ways that time is spent. So academics are also splitting their time with teaching and research, so not comparing them against somebody who's fully clinical. Uh, so I think it's best to know the sample size that you're looking at and making sure that you are doing a true apples to apples comparison.
Speaker 3:And I, I think this is Elizabeth from A M G A, I think, you know, when people are looking at the 2023 fee schedule and looking ahead, you know, do their own due diligence, understand their own data, and that that socialization and that preparation at the organization level is really critical. And the benchmark data is a piece of the, is a, is one tool in the toolkit for them. But, you know, if you look at these, uh, changes for 2023, you know, they're saying they could have a similar order of magnitude as the 2021 fee schedule changes. So, um, they need to leverage the experience they they've had with that transition to prepare themselves and what worked and what didn't. And then the market, they data is there to support them in that process and is one resource for them to use. Um, I think it's critical that that dialogue, and I, I said it earlier in the session, you know, that socialization is really their, their their biggest asset, um, to move through, um, any type of transition like this. Um, and so to keep that going, um, and relying on their comp committees and what else in their, within the organization is a really valuable piece for them to focus on and leverage.
Speaker 4:The last thing I'd like this is Maria from ECG that I just wanna bring up is the, is the challenge with, um, using the benchmarks and because of the benchmarks are effective rates, right? They're not exactly what organizations are using within their comp plan, it's just an aggregation by us, the survey people of what providers have been paid and what those providers produce. But as value-based, you know, as we move more towards value-based and we have additional providers being paid for a p p supervision and, you know, the layering of earnings, um, we become a little bit more disconnected from, you know, comp compensation or earnings per work r v and especially when we look at total compensation per work rvu, that's not, you know, exactly, that's not what's being paid. Uh, there's other, uh, there's call pay in there, there's other clinical, um, pay medical directorships. And so I would say that the tip here is to, as the others have indicated, is to use the benchmark data as a guide, but really looking at your internal, um, data, your own experience, um, and, and use the benchmark data as a, as one data point, um, in your compensation planning process to make sure that you are within fair market value, that you are aligned with market. Uh, but, but really you need to be aligned also with, you know, your strategic objectives and, um, and your financial, um, sustainability efforts.
Speaker 6:This is, this is Bob. Just to add on to what Maria just said, which was was really well said. Um, the understanding what's in that numerator in terms of compensation per work? RV is important because it's, as, as we see more nuanced compensation plans that have non-work RVU based incentive structures, that all adds into that numerator. And so, um, you know, you can quickly find yourself in sort of a stacking situation where the effective rate that you're paying at the end of the day, um, might, you know, exceed your affordability thresholds or even exceed fmv and CR parameters depending on what you choose as your starting point. And along those lines, you know, using recently reported pandemic period rates, um, as your starting point, I, I would just urge extra caution there. So no one really anticipated the lingering impact of the pandemic and the suppression of visit volumes, uh, in many specialties. So if the rates that are out there in the current survey cycles are perhaps on the higher side because of all of the turmoil and the, the lingering effects of the pandemic, et cetera, we advise clients away from sort of chasing the sort of top market rates today, because what if they're out over their skis and the, the rates happen to normalize or adjust in the next, you know, few years, it's very difficult to then turn around and try to walk those rates back. So just understanding where we're at today and all of the, the volatility, uh, that exists today, use that as well as your own data to, to make well-informed decisions in conjunction with the market.
Speaker 2:Yeah, that's, that's great. Um, great tips and tricks and understanding the data is obviously, um, very important to making sure it's being used correctly. Do you hear of or come across situations where organizations are using data incorrectly or is there something that we should avoid doing? I mean, I've been hearing that we should just use the data as, uh, as one piece of the puzzle as a guide, making sure we understand the data, um, making sure we're comparing apples to apples. But is there anything that, um, we should specifically avoid doing with the data or any specific pitfalls that you could share with us?
Speaker 6:Yeah, I think the pitfalls, I think this group's already we've, we've circled around many of them. Again, I would just, uh, I think one of the biggest and most obvious pitfalls is just sort of blindly updating your comp plan based on whatever the next median rate happens to be, just as an example, without really considering the impact. Um, so, you know, these last, this last year plus hopefully has helped organizations think about how they write their policies and their governance procedures to perhaps, um, learn from the turmoil that we're all going through to be in a better position to add protections and, and buy yourself some time to look at your internal work RVU changes, for example, as well as the new market data to make sure the rates you choose balance that recruitment and retention effort with financial sustainability, and then obviously within fair market value and commercial reasonableness parameters. So I think that's one sort of lens to, to look at, um, you know, potential pitfalls through.
Speaker 3:And, and to add on to that, I think looking at the construct of your, of your comp plan, you know, those groups that had really tightly written rules and regulations in their comp plan about the, the construct and the calculation of the compensation really something really got bit by the work RVU changes that occurred with the fee schedule in 2021. And the way things are going as things continue to change and evolve, um, you know, they could end up in a year or two or three be way out ahead of the market in terms of paying just way too much for compensation, but they're kind of stuck there. And so really leveraging this time to really understand how your comp plan is written and what you need to have in there to help you get through situations
Speaker 4:Like this going forward. Yeah, the flip side of that is, I mean, and Elizabeth, that's a great point. This is Maria, but I mean, I think that there is a risk for some groups to not move forward, right? Stay put, um, kind of the risk averse group, but I think that over time they are going to become a little bit more disconnected from the market as we've seen these fluctuations and groups adopt rates that may or may not be, you know, pretty significantly different from what was paid in the past. So I think that I would urge groups to, uh, strongly consider if they've just been sitting on 2020 or 2019, I reviews, you know, strongly consider, um, you know, what their plan is to move forward. And the other, the other, um, I guess, uh, pitfall or, or advice I would give that may be a little bit too specific, but is, is using multiple data sources, uh, when you're looking out as most particularly now with, uh, the variations we're seeing in the market that we're, uh, due to covid and the fee scheduled change. I think that it is more important than ever that groups, when they look at their plans and look at setting, uh, compensation rates, um, externally, uh, that they're using more than one survey source. And particularly, um, I think all of us are due compensation planning work, and all of us likely, um, include three, four different sources, uh, when measuring the market.
Speaker 5:Yeah. And Michelle from mtm a I also wanted to just expand a little bit on a point Maria made a bit ago about the ratios and how that's total compensation per work rvu, and so there's more built into that total comp figure. A couple other things that we run into are people trying to extract hourly rates from the annual figures, but to the same point that Maria made, there's more than just billable compensation in those annual figures. So trying to divide that number out by an estimated number of hours worked per, uh, year won't necessarily equate to an accurate hourly figure. Likewise, with the compensation to productivity ratios, um, folks trying to calculate that on their own, looking at the total comp table and the worker reviews table, uh, won't also yield the same results as what's reported. We report on those to provide both aspects of the ratio, so the total comp and the work reviews and divide that, um, across each individual. So, so doing their own calculations won't yield the most accurate results. So sticking to, again, we've mentioned using the benchmarks as a guide, but sticking to those and not trying to create your own calculations from within.
Speaker 2:That's all very helpful, thank you. We've talked a lot about covid and the fee schedule changes. Um, other questions that we frequently hear from the consulting side are related to limited data sets, and Maria talked about value-based care earlier, um, also emerging specialties are some of the, the items that I hear, um, from clients, and I'm sure you all do too. Are there any thoughts on if there's gonna be new resources for these types of issues or what organizations should keep in mind when they're, when they're dealing with these types of arrangements and using available data sets or using very limited data that there's available for value-based or emerging specialties?
Speaker 3:This is, uh, Elizabeth from a n g I'll start there. You know, it's interesting, it kind of tags on a little bit to what folks were just saying about the various components of compensation, uh, that gets published. It's not just the productivity compensation and you know, what that value-based, uh, component of the that number, uh, has become more common. People trying to isolate that. What should they be putting their, uh, building into their plans and and does the market data help them determine that? And it's been interesting as we've watched the numbers of groups that include value-based components to their compensation formulas increase each year. Um, it's interesting that when we ask them what percentage of the compensation it ultimately is, that hasn actually hasn't changed much in the last couple of years. It's been around seven or 8%, it's been the average that's paid out. And I, as I think about how do we get at that better, um, and at least even listening to Michelle talk about the, the different pieces of how you put together the comp data that you pull into the survey, it's tricky because these value-based programs and plans are so complex and have so many elements to them. It's not always, uh, clear that if you ask people to carve up the data differently, that you would get data that could compile. So it's interesting to think about how we do that, but it's something that we need to do more of going forward as it expands and moves beyond the seven or 8%, um, and, um, becomes even more prevalent in the marketplace. I think, in terms of issues of new, new emerging specialties and things like that. That's, that's part of our annual process. You know, when we prepare our survey each year, just like the fee schedule changes, we're having conversations about the data elements spec more specialties that we're hearing from clients and things we wanna include. And, um, we always wanna hear from our users as well, if there's something that we're not including, we wanna include it. So it's, I think that continuous improvement mindset, um, is something that we try to do to make sure that we're continuing to stay with the market, uh, report new specialties or specialties becoming more common, um, as we go forward. And I, I assume the others kind of do similar process.
Speaker 5:Yeah, Michelle at mgma, just to kind of further some of the points that Elizabeth just made, I think we all would like to figure out how to tap into the value-based data market. Uh, where we struggle is those requirements vary by specialty and organization type. And so finding a way to collect and report on that data in a consistent manner, ha has been our biggest struggle. We've researched this for several years and I'd imagine my colleagues, uh, ha would agree that they've done the same. So this year we try to tap into it at a high level and in our practice operations, data set reporting on just the number of contracts that have value-based components, revenue from those contracts, hospital admission rate, free admission rate rates. But we're not into the, the components where it starts to affect compensation and what those numbers are with our new survey process and pulling data directly from those system reports. We're hoping to see maybe now that we have our hand in that data directly, if there's some consistent themes that we can start pulling from there. So we're not asking very specific questions, but maybe we're figuring out what the data looks like on the backend to report, but definitely an area I think we've all wanted to get into and just are struggling to figure out how we get into that in a way that helps everybody.
Speaker 4:Yeah, I think I, I echo that. I think that in general, um, couple of things. I think that, you know, panel size, we've all, or at least we've reported out panel size, unadjusted and adjusted for the last few years. Uh, we're seeing similar trends within, uh, how much of earnings is dependent on the value-based metrics. Although, uh, we didn't see seven or 8% this year. We saw 5%, which was a, was a, um, a reduction. And I believe that it was due to groups who were financially, uh, strapped in 2021, uh, looked at some of these other incentive payments, uh, and decided not to pay them out, you know, certain bonuses, for instance. Um, but I think the payers are going to likely drive the value-based metrics and have been the driver of these metrics and, and ultimately comp models are going to follow. Um, as far as the smaller emerging specialties, I think this is where having a national data source or a national, um, uh, consulting firm really will help our, our clients because, you know, some of these specialties may be emerging in Chattanooga, but you know, existed in, in California for a couple of years. And so being able to refer to these different data sets or, or access these resources are, um, can be very valuable to our clients.
Speaker 6:Maria, this is Bob. I'll, I'll piggyback on what you talked about. The payer driven nature of the value-based, uh, uh, impact and on compensation, et cetera. And just even measuring a high performing physician might no longer just be about how many work VUS do we produce, but how do we contribute to various value-based or risk-based programs? I think with so much variation out there today and the opportunity to participate in value-based programs, both government-based programs or programs from commercial payers, differences in payer mix covered lives and performance, it's really difficult to sort of evaluate the, in the true impact on value of value-based comp in a simple way. Um, I think we're, we're watching it unfold. We're trying to keep a pulse on the new initiatives and opportunities that are out there and really working with, you know, cl on client specific engagements around what their opportunities are, and then how do we think about adjusting potentially compensation programs to help support the types of behaviors that providers can sort of do to help unlock those opportunities. I think that's where a lot of the value is today. And then, you know, as, as these programs evolve and grow in magnitude, we might start seeing more national trends that'll have value, but I think a lot of it right now is still very sort of client or, or geographic specific, um, types of opportunities. Um, so that's, that's what I'd have to say on that. And then relative to, to emerging specialties, it, you know, typically takes a few years for there to be enough data to report out on and to use reasonably. So, you know, one of the, one of the things we advise clients, and I'm sure everyone else on, on this podcast does as well, is just because we now have sort of a survey with an N of 15 for cash comp, and we by the way, have, we don't yet have sufficient data to report on VUS or even comp per rvu. Just because that data sort of exists in its infancy doesn't mean that necessarily represents the national market cuz there's likely more than 15 people in the country doing it. Um, so being able to tap into, as others had mentioned, sort of that national, um, sort of portfolio of work and client experience to draw on what others are doing in these emerging spaces, sometimes that can sort of inform decisions before the data's even available, the published data that is, um, for compensation planning purposes. So, um, it, it's, it's certainly a nuanced space, but I'm very glad you asked the question.
Speaker 2:Yeah, great response. Thank you. Um, how about split share? We, I definitely continue to get questions about this. Uh, I'm sure you all do and we're anticipating that the new rule will potentially take place in 2024. Um, thinking ahead, what do you expect to see in the data after that takes place? Presumably 2025, I guess when the data is released then.
Speaker 4:Yeah, Emma, then this is Maria. So, you know, back when this was first, uh, came out as a proposal. We did some focus group discussions with our clients to understand, um, how they were going to prepare for this change and how they, uh, expected, uh, the change to impact their, their facility or their organization. And just to remind the listeners, you know, split share is, um, for inpatient, um, activities in e nms, it's allowing or is, um, making it so that we're moving away from medical decision making, um, as the predominant driver of who gets to bill, um, the procedure and um, for, uh, when there's multiple providers present to a system where it is going to be time-based. So if the, it is been an hour with a patient and 45 minutes was the a p p and 15 minutes is the physician, uh, no longer will the medical decision making component drive who gets to bill, which would be the physician in many cases. So the a PPP is going to be billing at 85% of, of that rate of the physician. So with, you know, the first impact is going to be to revenue, uh, for those that now move to, uh, the A P P billing it, but there's some other stipulations, um, that, you know, the providers need to be in the same group. Um, we don't know whether adoption of the new, uh, rule is going to happen easily, uh, from our understanding from within these facilities, uh, whoever, in many cases, whoever enters the bill is the person who gets to drop the bill, um, whoever does the documentation. And so really there's a lot of challenges around this operationally, but what we, but based on the data that we've studied, um, you know, this could impact, uh, for instance, cardiologists, uh, who may need to main drop between 15 to 30% of their production from the inpatient ENMs. Uh, you know, that could have a up to 10% impact on their compensation if they don't fully re replace that activity with some ambulatory, um, activity or procedures. And so, uh, we expect the organizations to see a revenue, um, impact because of the lower billing rate of 85%. Uh, so we're still taking, um, kind of a, we're continuing to study it, but really it's, it's our discussions with our clients to understand how the care teams are being organized, how they're approaching, uh, who drops the bill and who gets credit, and then what are they going to do with, um, the comp plan for these specialists. These physicians are going to be impacted by a loss of VUS in the, for the inpatient emms.
Speaker 3:I mean our, our, you know, work to date's kind of got us at a similar place as, as Maria described, you know, it's still ongoing, kind of truly trying to understand it. And, you know, you said something critical too, like really how are group's gonna implement that and operationalize it there, there's some complexity there that it's something to kind of continue to monitor and see how it comes to fruition.
Speaker 6:Yeah, I think the, the active review of the models of care in trying to, you know, organizations are constantly trying to optimize how apps and physicians are leveraged and how they work together for the betterment of the patients and outcomes. I think organizations are, are challenged right now with thinking, well, if our compensation structure is going to overly sway behaviors in a way that might run counter to how we think a care model is optimally structured, how do we, how much time and how do we, uh, sort of go about maybe unwinding that to try to create a structure that's more sustainable and that still supports, um, an optimal care delivery model in the face of potential, um, reallocations of those split shared work reviews more to the apps than perhaps to the physicians. So we're also looking for C M CMS utilization reports, so once more current utilization reports with that FS modifier, um, that is gonna sort of drive some of these, um, uh, split shared impacts when that data becomes more readily available. Um, you know, we at Sullivan Cotter and obviously all of the other, um, firms on the, on the podcast today will, uh, be doing very diligent studies of that data to estimate, um, the impacts more, um, accurately, um, as time goes on.
Speaker 2:Yeah, there's, there's certainly a lot to take into consideration and to be thinking about, not just related to the, the potential, um, split share changes that are coming forth in 2024, but also the, the noise and the data and um, the impacts that we're seeing from the fee schedule changes. Uh, this has been a great conversation. Thank you everyone for participating and contributing to it. Um, I, I really appreciate it and I know that the HLA community will as well. So thank you everyone.
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