Provider compensation is up as pandemic recedes, but pay per work unit declines

Photo: Kiyoshi Hijiki/Getty Images

Provider compensation increased in 2021 as the volume of services rose again to pre-pandemic levels, according to a report from AMGA Consulting (American Medical Group Association). However, compensation per work unit (wRVU) declined in 2021, with providers compensated 11% less for each individual unit of work in 2021 than they were in 2020.

The report was based on data collected from 383 medical groups, representing over 183,000 providers from 177 physician, advanced practice clinician and other specialties. It noted the decline in compensation per wRVU was expected as a recovery from the sharp increase of 10.8% in the 2021 report.

This decline reflects both a recovery from the pandemic's impact on compensation and clinical volumes and the impact of the Centers for Medicare and Medicaid Services wRVU changes implemented in 2021.

The median provider compensation increased by 3.7% from 2020 to 2021, compared to a minor 0.1% increase from 2019 to 2020.

The report also noted the significant changes CMS made to its wRVU schedule in 2021, making an "apples-to-apples comparison" between 2020 and 2021 more challenging than in years past.

As AMGA collected data for this year's survey, the organization put significant effort into collecting wRVU data utilizing both wRVU weight schedules. When that was not possible, it used a validation process to ensure the data was accurate and reflected the correct wRVU weights.

"As a result, we can calculate metrics using both sets of wRVUs and get a clearer picture of both of the major market influencers in the data and how they affected each specialty," said Elizabeth Siemsen, director of AMGA Consulting. "Ultimately, it is a critical step to see if the changes made by CMS are having the intended effect."

She explained that, with the new wRVU weights, the starting line has moved, and the survey is the mechanism to see how much. Siemsen added that AMGA anticipated the decline in compensation per wRVU, but was eager to see the degree of change.

"Another area of interest are specialties where compensation increased without a corresponding increase in wRVU levels," she said. "It may be a lens into the ongoing staffing challenges and how that may impact different specialties."

Fred Horton, president of AMGA Consulting, said that given the previous year saw an overall reduction in production, he envisioned seeing all specialties experience an increase, especially when adding the new coding values. "It may be, given these staffing challenges, some organizations opted to extend guarantees put in place the previous year to make up for either short support staff levels that impeded professional production or in instances where they were short in providers themselves," he said.

WHY THIS MATTERS

"A wRVU weight change of this magnitude hasn't happened since 2008," Siemsen explained. "But adding that level of change on top of the impact of the pandemic makes the results more complex."

She said that medical groups are relying on the survey data to support the work they have done, and are currently doing, to transition and update their compensation programs.

"The market data is an important piece of that process," she said.

THE LARGER TREND

Siemsen said there are a few questions to investigate that may indicate trends for wRVU in 2022 and going forward.

These include questions about the intended redistribution of compensation dollars amongst specialties. The relationship to net revenue, and to whatever "new normal" the industry may be in, includes significant workforce challenges, which will be a bigger factor in the data going forward.

"Finally, we need to uncover the long-term impact of the pandemic on utilization and the return to the discussion of compensation increases outpacing revenue, and where that cliff is for medical groups," she said.
 

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