Please tell us about your career and background in provider survey analytics.
I have spent the better part of my career working as a healthcare management consultant or within provider organizations. Before joining ECG more than 20 years ago, I worked for a large academic healthcare organization in the Southeast within its department of anesthesiology, and then for a large health system in the Northwest originally helping it build a multispecialty group and then assisting it with acute care operations improvement activities. A few years after joining ECG, I had the opportunity to work on a project for one of our Northwest clients who had engaged us to conduct a custom market survey of Northwest physicians’ compensation and production. That survey evolved into what is now known as our national Physician and APP Compensation Survey.
The 2020 ECG Physician and APP Compensation Survey is being released this month (September); are there any notable or new market trends you are seeing in the data?
At a high level, the 2020 compensation, WRVU, and net professional collection medians for physicians seeing adult patients increased compared to 2019. The only exception to this is that specialists experienced a 1.6% decline in median net professional collections. Median primary care and specialist physician compensation increased by 3.4%. For primary care, the increase in compensation may be reflective of the significant gains in WRVU medians of 3.1%. As a result, compensation per WRVU medians for PCPs remained relatively stable, increasing by only 0.6%. Compensation per WRVU medians for specialists as a whole, however, decreased by 1.5%. Net professional collections medians increased by 3.7% for PCPs, resulting in a 0.5% change in compensation as a percentage of net professional collections. Meanwhile, specialists experienced an increase in compensation as a percentage of net professional collection medians of 1.8% as a result of increasing compensation on declining net professional collections.
Do you see any variance from the benchmarks that are being published to current market conditions regarding COVID-19’s impact on production and physician compensation?
The 2020 benchmarks we published this month are based on 2019 production and earnings and are not impacted by COVID-19. However, the 2021 benchmarks will absolutely be affected and will reflect the realities of the pandemic. In the second quarter of 2020, physician production in most specialties experienced up to a 50% drop in patient volumes and revenue due to state “stay at home” orders and patients fears of contracting COVID-19. As these orders began to lift, physician production began to rebound. In addition, many physicians experienced a decline in earnings, either as a direct result of lower production and their compensation plans or from actions taken by medical groups to account for lower revenue received during this period. Depending on the level of rebound experienced in the last two quarters of the year, we expect 2021 benchmarks to reflect both lower production and earnings. This will be problematic for groups that utilize the 2021 benchmarks within compensation plans.
Based on these variances, do you have any suggestions for adjustments that should be accounted for when using the benchmarks?
It will be challenging for any medical group to take overall market benchmarks based on 2020 production and earnings and attempt to adjust them to reflect its experience with COVID-19. Furthermore, the healthcare environment in 2021 and 2022 will be unlike 2020. Because of this, our plan is to publish overall benchmarks, along with additional benchmarks that reflect physician production and earnings with similar experiences during the pandemic. As an example, we will be able to group physicians who did not experience much of an impact due to COVID-19 into a cohort and other physicians who did into cohorts that reflect the degree of impact (e.g., 10% decline, 20% decline). Our hope is that by publishing multiple sets of benchmarks, our members and clients will have access to benchmarks that align with their specific organization’s experience.
What suggestion would you have for clients when using the 2020 survey data for determining compensation plans and PSA funding for calendar year 2021?
Benchmarks utilized for 2021 PSA funding will likely be based on 2020 published benchmarks. However, PSA funding is often dependent on actual revenue. Revenue-focused PSAs will need to be assessed to ensure that the total target compensation and available funding required to support that level of compensation are financially sustainable. There is also an FMV argument to be considered, because organizations won’t want to pay physicians outside of the market rate nor give them significant raises for providing the same amount of expected volumes and physician work in 2021. This will not be easy, since we don’t know yet how COVID-19 will impact the physician practice in 2021.
How do you think Medicare’s 2021 PFS will impact the 2021 survey results?
As you know, we are expecting the 2021 PFS to include significant WRVU increases to E&M outpatient visits, along with the introduction of add-on CPT codes (99xxx and GPC1X) that should be used to reflect additional time and visit complexity. While the 2021 PFS change and new CPT codes are not likely to impact the data submitted to 2021 provider surveys since they will be based on 2020 data, we do expect it to significantly impact benchmarks published in 2022 and subsequent years.
In 2022, it is anticipated that industry survey benchmarks calculated from self-reported data will include RVU and RVU compensation rates that are based on a mix of the 2021 RVU schedule and earlier schedules. This mixing of multiple years of RVU schedules is what happened for a period of time after Medicare made a similar change to RVUs in 2007. This is problematic for medical groups since these benchmarks will not align with one single PFS (i.e., 2020 or 2021). Annual production measured under the 2021 PFS is expected to be higher for physicians with outpatient visit volumes, upward of 18% higher. Thus, medical groups will need to ensure that the RVU and RVU compensation rate benchmarks included in their compensation plans are calculated using the same PFS as utilized to measure provider production within their groups; otherwise, there may be unintended financial consequences.
ECG’s benchmarks are calculated from CPT-level provider data submitted by our survey members allowing us to calculate benchmarks using one single PFS at a time. In 2020, ECG will be publishing RVU benchmarks using the 2019 PFS, along with the 2021 PFS. In 2021 and 2022, ECG will be publishing benchmarks using both the 2020 and 2021 PFSs. We do this so that our survey members and clients have access to benchmarks that align with how they are measuring production within their medical groups and compensation plans.
Published September 22, 2020