There are several unprecedented external factors simultaneously affecting physician compensation at this time. The COVID-19 pandemic affected overall patient volumes, which impacted annual physician wRVUs and collections. This, in connection with the MPFS changes in 2021 and 2022 have made it more difficult to determine appropriate physician compensation.
In order to best understand how an organization’s financial performance may be affected, organizations should assess the impact of these MPFS changes on both reimbursement and physician compensation. It is important to take a proactive approach. Even if the 3% reprieve takes effect, it is set to expire next year. Annual legislative efforts to mitigate cuts may not always come. LBMC has been assisting our clients in determining the financial impact of the 2021 and 2022 MPFS changes to their particular organization. A number of our clients have chosen to remain on the 2020 MPFS to gain additional time to assess the impact, make the appropriate adjustments, and/or await relevant, comparable survey data.
One other key component in considering physician compensation is determining what compensation benchmark survey data is most appropriate for consideration going forward. Given the potential issues described above, LBMC does not recommend the use of or reliance on the 2021 survey data (based on 2020 data) to establish and document fair market value as 2021 surveys include the impact of COVID-19 but exclude consideration of the 2021 and 2022 MPFS changes.
Complexities within the survey data require more expertise and analysis than in years past. It is more important than ever to consult with external advisors to 1) ensure consideration of all potential impacts from the 2021 and 2022 MPFS revisions, 2) determine the appropriate data to use and how to apply it and 3) reestablish internal and external processes for determining and documenting fair market value.
Content provided by LBMC’s Katie Tarr and Jessica Webster.
LBMC’s Healthcare Compensation Valuation team combines an understanding of complex financial and regulatory matters with an ability to analyze voluminous financial operations information to deliver fair market value opinions to ensure maximum compliance. For more information, contact our team today.