University of Utah Community Physician Group (CPG)
Overview
AMGA CFO Leadership CouncilOctober 15, 2015
CPG Overview
• University of Utah Primary Care providers practicing in 8 U of U Health Care clinics
• 77,000 Primary Care patients along the Wasatch Front• Group has experienced growth over the last several years
• 7.9% 5 Year CAGR Professional Net Payments• 7.1% 5 Year CAGR wRVU (Productivity)• 8.9% increase in year over year visits
• Steady increase in Medical Staff – adding 10 CRNA
2012 2013 2014 Mid Year 2015204060
80100120
61.56
81.46 90.19101.4
# of CFTEs in CPG
# of CFTEs
CPG Footprint
N
Lehi-Future location
2013 Health Science leadership commissioned CPG to develop a new compensation plan
The new plan would need to focus on:• Simplicity • Compete more effectively in local market• Align more closely with national benchmarks• Incent for quality and productivity• Establish minimum productivity standards for
organizational financial stability
Initiative
CPG Compensation Model
1st step was analysis
CPG hired 2 consulting firms to evaluate:• Our current plan • Our readiness to make change • Our financial status
CPG Compensation Model
Consultant conducted a survey in December 2013 asking 19 representative providers for feedback on:
• strengths/weaknesses of current compensation plan • morale level regarding compensation• readiness for change • opinions on future compensation plan design
Readiness & Provider Feedback
CPG Compensation Model
Consultant Results:
Other weaknesses:
• Effectively no PTO
• Perception that bonus program is not sustainable in terms of funding
Other weaknesses:
• Tenure not recognized
• Not able to use best important quality metrics
• Specialists are different from primary care
• Don't like lag in setting base salaries as I'm building my practice
• Different fee schedules affect my compensation
• No comp for admin work
• wRVUs don't always recognize increased patient complexity
• Hard to communicate with assigned Financial Analyst
CPG Compensation Model
CPG Compensation Model
Consultant Results:
CPG Compensation Model
Areas of consensus
Consultant Results:
Transparent• Plan is easily understood and simple to administer
Productivity calculation is real time, based on 3-month rolling wRVU average• Approved leave time is excluded (FMLA, Maternity, Military Leave)• Eliminated base + productivity
Alignment of compensation with national benchmarks minus U of U retirement benefits (over the 90th %tile)
• MGMA, AMGA, SullivanCotter 3 year PCP averages
Incent for Financial, Quality, Access, Patient Experience, and Citizenship measures• FY15: Bonus Plan – shared “pot”• FY16: All providers will be included in incentive plan
Key Principles
CPG Compensation Model
Key Principles, cont.
CPG Compensation Model
Establish minimum production expectation• 50th%tile wRVU minimum expectation (based on the 3 benchmarks)
Hold Harmless• If a provider is at 50th%tile for wRVU then $/wRVU will be equal or better
than current $/wRVU (old plan)o i.e. no wage decrease if on production and at the 50th %tile or greater
• Guarantee salaries will be supported (will discuss in more detail on later slide)
Compensation rates, productivity benchmarks, and conversion factors ($/wRVU) are reviewed annually by CPG Compensation Committee
Compensation Planning and Exceptions • Compensation Committee (Review and Recommend) • CPG Executive Committee (Final Approval)
Key Principles: The FormulaSimple
• (wRVU x $/wRVU) + stipends*: adjusted by quality incentive• Use 3 month rolling wRVU average
• or (Guarantee): adjusted by quality incentive
Example for 3 months: 300 + 200 + 400 = 900/3 = 300 for 3-month wRVU rolling average
o 300 wRVU x $31.37 = $9,411.00 that month
*Stipends - Based on aggregate time of lost wRVU opportunity due to administrative time (i.e. Clinic Medical Director)
CPG Compensation Model
New Plan: Key Principles, cont.
CPG Compensation Model
3-Tiered Methodology
Recognize specialty differences• 3-tiers based on specialty wRVU production benchmarks
• < 50th percentile • 50 - 74th percentile• >=75th percentile
The tiers and primary care conversion factors are based on data provided by Sullivan-Cotter (consultant). They sent us 3-year national averages from 3 major reporting agencies.
Recognize primary-care similarities• Use primary care $/wRVU conversion factors
Adjustment of conversion factor to more closely align with compensation targets• Recognition of U of U benefits: % reduction of the national conversion factors
($/wRVU)
wRVU Tiers, MD DetailProductivity is benchmarked by 3 conversion rate tiers
• Primary care conversion factor ($/wRVU)• Specialty-specific productivity (wRVU)
CPG Compensation Model
FP IM IM/Peds Peds
0-5094
5095-6168
6169+
wRVU Conversion Rate Tiers
TierProductivity
% tileBlended avg
$/wRVU
0-4722 0-4911
4723-5273 4912-5862
5274+ 5863+
1
2
3
31.37$
35.76$
38.26$
<50th 0-4886
50th-74th
75th+
4887-5884
5885+
wRVU Tiers
3 tiers are used – Annual wRVUs, adjusted by cFTE, are measured
against benchmark tiers – Example: 4000 annual wRVUs at 0.75 cFTE
• 4000 / 0.75 = 5333 normalized wRVU• Compare to 3 tiers• Falls into the 50-75th%tile, Tier 2 $35.76/wRVU
CPG Compensation Model
Apply Conversion Factor$/wRVU rate from the appropriate tier is then applied to the 3-month rolling wRVU average
• Example continued– 4000 / 0.75 = 5333 normalized wRVU (Tier 2 = $35.76)– 333.33 = 3 month rolling average– 333.33 x $35.76/wRVU = $11,920 monthly salary– $11,920 x 12 months = $143,040 annual salary
CPG Compensation Model
wRVU Tiers, MD DetailProductivity is benchmarked by 3 conversion rate tiers
• Primary care conversion factor ($/wRVU)• Specialty-specific productivity (wRVU)
CPG Compensation Model
FP IM IM/Peds Peds
0-5094
5095-6168
6169+
wRVU Conversion Rate Tiers
TierProductivity
% tileBlended avg
$/wRVU
0-4722 0-4911
4723-5273 4912-5862
5274+ 5863+
1
2
3
31.37$
35.76$
38.26$
<50th 0-4886
50th-74th
75th+
4887-5884
5885+
* At each annual review, if the next tier is reached, the higher $/wRVU rate will apply to all wRVUs
wRVU Tiers, APC DetailProductivity is benchmarked by 3 conversion rate tiers
CPG Compensation Model
APC
24.88$
27.19$
29.49$
2 50th-74th
Conversion Rate Tiers
TierProductivity
% tile
wRVUBlended avg
$/wRVU
3525-4277
1 <50th 0-3524
3 75th+ 4278+
Incentive Plan• Transition from bonus to bonus plan + risk• For providers on production model• Points calculated quarterly
• Financial 10%• Organization Patient Experience Goal 10%• Quality 40%• Access 20%• Attendance & Citizenship 20%
• Up to 5% of quarterly wages at risk • Potential to earn additional 5%• Points are weighted based on productivity tiers
• Points for higher producers will carry a higher $ value
CPG Compensation Model
% Points Earned Adjustment Factor0% -5.0%
25% -2.5%35% -1.5%40% -1.0%50% 0.0%75% 2.5%
100% 5.0%
Guarantee PrinciplesNew provider guarantees
• Set at 50th%tile CPG conversion rate and national productivity by specialty• Signing bonus available upon Compensation Committee approval • Offered up to 2 years maximum • If provider not able to reach 50th %tile after 2 years, gap coverage supplement,
not salary adjustment, until targets are met
Established provider guarantees• Monthly gap coverage • Guarantee end date is established at guarantee start date• If beyond 2 years past hire date, an individual plan to move to productivity
compensation plan will be approved by Compensation Committee and presented to CPG Executive Committee
• Gap coverage supplement, not salary adjustment, until targets are met
CPG Compensation Model
Example of New Plan Report
Business Case for Increasing ProductivityProvider X 1.0 cFTE <25th %tile
• Current wRVU = 3,919.25• 50th %tile wRVU for FP = 4,887• $64.40 wRVU reimbursement rate
Example Calculation:4,887-3,919.25 = 968 x $64.40 = $62,323 in increase net payments$62,323- $34,616 (increased salary Tier 1 – Tier 2) = +$27,707 Net Revenue/year
If all <50th %tile providers in CPG are brought up to the 50th %tile = $1 million net revenue and increase patient access
CPG Compensation Model
Thank You