INFOGRAPHIC | 2022 Physician Compensation and Productivity Survey

Physician compensation and productivity survey benchmarks

Looking for greater insight into the impact of Physician Fee Schedule changes on wRVUs?

This year’s survey benchmarks for physician and advanced practice provider (APP) compensation and productivity have been materially impacted by recent modifications to the Physician Fee Schedule (PFS). In order to help organizations properly address the ongoing impact of these changes, SullivanCotter’s 2022 Physician Compensation and Productivity Survey includes two sets of benchmarks based on wRVU values from both the 2020 and 2021 schedules.

As one of the most comprehensive datasets of its kind, this survey includes data from nearly 800 organizations on more than 285,500 individual physicians and APPs across 237 specialties – providing health care organizations with critical compensation market data, information evolving workforce practices, and insight into emerging industry trends.

Key Takeaways

  1.  2022 survey data is impacted by the industry’s gradual adoption of the 2021 PFS wRVU values. The 2022 survey includes two wRVU and TCC per wRVU values.
  2. In 2022, work RVU productivity recovered to pre-pandemic levels for many specialties; as a result, TCC per wRVU ratios decreased.
  3. Quality incentive compensation continues to be relatively modest (< 10%); the use of panel size in primary care compensation plan design continues to increase.
  4. The 2023 Physician Fee Schedule final rule includes another round of significant E&M wRVU value changes in hospital and skilled nursing settings and a resulting Medicare conversion factor cut.
  5. Use 2022 market survey data with caution; in particular, reported TCC per RVU ratios may continue to be volatile for many specialties.

Interesting in learning more?

The 2022 report is now available for purchase!


PODCAST | Governing Health - Executive Compensation

Executive Compensation Committee Trends, Developments and Challenges

In this two-part edition of the Governing Health Podcast Series from McDermott Will & Emery, SullivanCotter's Tim Cotter, Managing Director, joins Michael Peregrine and Ralph DeJong to discuss emerging trends and practices in health care executive compensation.

Episode 1 >

Listen to Part I to learn more about important key topics for the board's compensation committee, market data from SullivanCotter's 2022 Health Care Management and Executive Compensation Survey, the projected impact of inflation on next year's salary increases and more.

Episode 2 >

Part II of the conversation includes insight into a number of trends and challenges facing the Executive Compensation Committee. This episode addresses considerations for special compensation arrangements, goal-setting for the upcoming year, and responding to media questions regarding executive compensation.

These episodes also include insight into:

  • Increasing communication between the compensation committee and the C-Suite
  • Addressing pressures felt by executive committee members
  • Expectations for future CEO salary increases and organization departures
  • The segmented approach to leadership plans
  • Performance measures for ESG themes
  • Organizational structural considerations and whether or not these should be a committee concern
  • Revisiting the committee charter to ensure continued relevance

CRNA Compensation: Supporting Recruitment and Retention

Establishing competitive CRNA compensation packages

Originally published by the American Association of Provider Compensation Professionals

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As the demand for the anesthesiology workforce continues to increase but provider supply remains flat or even starts to decline, health care organizations will need to reevaluate their CRNA recruitment and retention strategies in order to ensure effective staffing and coverage.

A critical cornerstone of these strategies is the establishment of competitive CRNA compensation packages and desirable practice environments aligned with evolving CRNA preferences and market trends. Insight into emerging compensation and pay practices, access to reliable market data, and close consideration of employment status and work effort expectations will help organizations to attract, retain and engage this increasingly hard-to-recruit workforce more effectively.

In this article, SullivanCotter provides insight into:

  • Current CRNA recruitment and retention challenges organizations are experiencing
  • Effectively using market data to help determine CRNA compensation - including insight into base salary, incentives, employment status, work effort and premium pay
  • Additional considerations such as practice models, location-specific practice patterns and more

PRESS RELEASE | SullivanCotter Holdings, Inc. Expands Subsidiary Organizations with Strategic Leadership Hires

We're pleased to welcome such an accomplished group of leaders

Chicago, IL | November 9, 2022

SullivanCotter Holdings, Inc., the nation’s leading human capital information management holding company for health care and not-for-profits/tax-exempt organizations, announces several important new hires within its Shared Services leadership team.

“As our clients continue to address a growing list of operational, financial and workforce challenges, we’re working diligently to ensure we remain closely in tune with their needs every step of the way. We’re pleased to welcome such an accomplished group of leaders to the organization and look forward to leveraging their unique perspectives, new ways of strategic thinking, and diverse industry backgrounds as we plan for additional consulting services and innovative product enhancements next year and beyond,” said Ted Chien, President and CEO, SullivanCotter and Clinician Nexus.

New additions to the firms’ leadership teams include:

  • Gina Alexander | Chief Financial and Administrative Officer – With nearly 20 years of health care finance and administrative experience, Gina has a deep-seated knowledge and well-rounded understanding of the industry’s major players – including providers, payers, employers and the government. She leads the transformation of the organization’s Shared Services functions in supporting new advisory and technology services to drive greater value for clients.
  • Mike Erickson | Chief Technology Officer – As a dynamic technology executive with a proven track record for leading high-performing teams as they solve complex business and operational issues, Mike leverages expertise in software architecture, development and implementation to deliver new products and resources to our associates and clients as they look to grow and scale in a rapidly changing marketplace.
  • Tim Goertel | Chief Marketing Officer – With a critical focus on enhancing client acquisition, retention and advocacy, Tim works cross-functionally with our consulting practices and product teams to ensure clients continue to receive best-in-class advisory services, technology solutions and workforce compensation and performance data.
  • Sue Roeser | Chief Human Resources Officer – Committed to fostering a supportive and positive workplace where employee wellbeing, development and learning is a top priority, Sue is an accomplished HR executive who leads a number of strategic initiatives designed to enhance talent management, organizational culture and employee experience.
  • Rachel Wilson | General Counsel – With more than 20 years of experience as a practicing lawyer, Rachel has advised some of the biggest names in health care on complex technology and commercial transactions. In her role, Rachel provides leadership with support and strategic counsel on a range of legal matters such as compliance, contracting, data use and sharing arrangements, intellectual property and more.

To learn more about SullivanCotter or Clinician Nexus, please visit us online or contact us via phone or email for more information:

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improve outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision and values.

About Clinician Nexus

Clinician Nexus enables health care organizations to build thriving clinician teams with industry-leading technology products, workforce and compensation analytics, and automated workflow solutions. Backed by extensive technical expertise and industry-leading data, we deliver innovative approaches to help clients to plan, educate, and engage their clinical workforce at every stage of the lifecycle. We are committed to providing our clients with outstanding guidance and support as they focus on shaping the future of health care.


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INFOGRAPHIC | 2022 Health Care Management and Executive Compensation Survey

Understand the impact of a competitive talent market and organization-wide pandemic recovery efforts on health care executive compensation

Hospitals and health systems nationwide continue to face uncertainties in regard to inflation, labor costs, a competitive talent market, employee burnout, pandemic recovery and more.

As a result, health care organizations require executives with specialized skills and knowledge equipped to effectively lead through such unprecedented times, and are looking to balance the need for competitive executive recruitment and retention strategies with ongoing financial pressures. By maintaining competitive compensation for executives, organizations are able to effectively build back and restore performance and talent to pre-pandemic levels.

SullivanCotter’s Health Care Management and Executive Compensation Survey includes data from more than 3,000 organizations on nearly 42,500 individual managers and executives – providing health care organizations with critical compensation market data, information on key executive workforce practices, and insight into emerging industry trends.

The survey also provides detailed insight into base salaries, total cash compensation, annual and long-term incentives plans – including performance measures, eligibility and target and maximum opportunity awards paid. National compensation data is reported by organization type and size as well as region and subregion for hospitals.

The 2022 report is now available for purchase!


INFOGRAPHIC | 2022 APP Compensation and Productivity Survey

Gain important market insight into emerging APP compensation, pay practices and workforce trends

Advanced practice providers (APPs) continue to play an important role in enhancing patient access, lowering the cost of care, and addressing the growing physician shortage. As the talent market for these providers grows increasingly competitive, many organizations are reevaluating their APP compensation programs and care delivery models to better support recruitment and retention strategies.

SullivanCotter’s 2022 Advanced Practice Provider Compensation and Productivity Survey includes data from nearly 700 organizations on more than 100,000 individual APPs from across the country – providing health care organizations with critical compensation market data, information on key APP workforce practices, and insight into emerging industry trends.

The survey also provides detailed insight into CRNA compensation and pay practices. As the demand for the anesthesiology workforce continues to increase but provider supply remains flat or even starts to decline, hospitals and health systems are looking to reevaluate their CRNA compensation programs in order to remain competitive and address challenges related to recruitment and retention.

The 2022 report is now available for purchase!


Pay Equity and Living Wage

Pay Equity and Living Wage

Authored by SullivanCotter’s Michael O’Malley – Principal, Nanci Hibschman – Managing Principal and Not-for-Profit Practice Leader, and Amanda Wethington – Principal


There is a parable regarding a vineyard in which a landowner hires men throughout the day to work the land in exchange for a fair wage. Each person hired expects the same wage promised at the end of the day. That wage was paid to those who worked for different lengths of time. Naturally, those who worked longer hours complain but the landowner replies that he paid precisely what was promised.

This story illustrates two forms of pay equity.

One based on comparisons between the work inputs and outputs of other people and one based on expectations. In this instance, we will call the first form of equity “comparative” and the second “noncomparative.” In the case on “noncomparative” equity, if you are paid an amount that you think is right, what others get paid matters a little less. Conversely, if you are paid less than what you are expecting, then what others receive for like contributions pours salt on an existing wound.

Quite a bit of thought goes into what people think is an appropriate wage and how they form their expectations. For one, the perceived procedural integrity by which wages are set makes a difference as people are more inclined to accept their wage as fair if they agree with the process that was undertaken to set the wage in the first place. Secondly, like the landowner, wage offers and acceptances shape people’s expectations. Although workers receive what the employer promised, other factors can soon erode the perceived fairness of the deal once the work begins. The employer may have misrepresented, or the employee misunderstood, the exact nature of the work.

Additionally, employees may realize that the wage they agreed to work for is insufficient for their modest needs. In a way, the wage is seen as coercive. People need the money and accept work that fails to cover their current and future needs. The result of feeling stuck with an insufficient wage cannot easily be dismissed when an employee’s basic needs are left unmet.

The response and reaction to an insufficient wage can be both pragmatic and emotional. On the pragmatic front, people realize they cannot afford to keep the job and simply leave. A more emotional response is grounded in the belief that the wage is fundamentally unfair – which fuels ways that people try to reconcile this unfairness. Perceived injustices are exacerbated over time if others who do not appear to do or contribute more are receiving higher wages. Again, turnover is the most immediate and expeditious response – but there are other more extreme reactions such as corporate sabotage, employee theft, or unwanted viral video backlash.

So, what does a living wage do?

Establishing a living wage is an essential component of supporting employee wellbeing, enhancing internal equity, and elevating the operational efficiencies of organizations. For employers, it reduces turnover and heightens morale, organizational commitment, and productivity. It further reduces people’s penchant to compare themselves with others and lessens any perceived injustices. For the employee, it provides a more satisfying and healthier lifestyle by mitigating certain worries and uncertainties through a better standard of living. It allows people to be more fully present at work and home.

Legal minimum wages were initially designed to provide a wage floor that protected workers and assured a measurable quality of living. However, these wages have simply not kept pace with inflation or the changing nature of the workforce and fall short of meeting the current needs of employees. Providing a living wage fosters a multitude of organizational and personal benefits but its greatest virtue and soundest justification may be that it is simply the right thing to do.

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The Governance Institute | Executive Compensation in Pediatric Hospitals

Attracting and Retaining Key Leadership Talent in Pediatric Organizations


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In the current marketplace for talent, pediatric hospitals continue to experience challenges related to executive recruitment and retention and are growing increasingly concerned about burnout among experienced leaders, planned and unanticipated resignations, greater search firm activity, employment opportunities outside the health care industry, and remote work presenting more non-traditional employment opportunities.

In early 2022, SullivanCotter conducted a pulse survey to help pediatric hospitals understand how their peers are addressing 2022 executive salary increase budgets and incentive awards for FY2021 performance. It also highlights other actions organizations are taking to support recruitment and retention.

In an article written for The Governance Institute, SullivanCotter’s Tom Pavlik, Managing Principal, shares data from the pulse survey, highlights key participant responses, and provides actions for pediatric hospitals to consider as they address executive recruitment and retention in an increasingly competitive health care environment.

Looking for additional data and benchmarks?

SullivanCotter recently released it's annual Health Care Management and Executive Compensation Survey Report.

This year's report includes data from more than 3,000 health care organizations on approximately 42,500 individual managers and executives. For more than 30 years, this survey has provided data-driven intelligence on executive and management compensation trends and pay practices to help inform impactful decision-making.


Pay Equity Analysis: Gaining More Than You Think

Pay Equity Analysis: Gaining More Than You Think

Authored by SullivanCotter’s Michael O’Malley – Principal, Nanci Hibschman – Managing Principal and Not-for-Profit Practice Leader, and Amanda Wethington – Principal


Many of us do not envy the work of employee compensation directors and administrators. They must maintain order and operational efficiencies amidst constantly changing demands and priorities. Jobs become “hot” while others grow obsolete. People come and go or change positions due to turnover, transfers, and promotions. Employees receive additional training and acquire valuable firm-specific knowledge over time and receive periodic pay adjustments based on merit or as counteroffers to retain their services. This dizzying array of changes necessitates frequent modifications to salaries and compensation structures.

What does a pay equity analysis have to do with this?

In addition to answering pivotal questions regarding the fairness of pay for protected groups, these analyses provide a deep dive examination into an organization’s pay practices that often cannot be seen with the naked eye.

SullivanCotter’s pay equity analyses frequently lead to additional commentary in the following areas:

Policy Confirmation. Normally, organizations like to see employees advance within their salary ranges as a function of time and performance. Given the many changes previously mentioned, we do not expect the association between pay and grade, years in the current role, and historical performance to be overwhelmingly precise. However, we do expect the analysis to show that compensation is influenced by these three components in a well-managed plan.

Structural Anomalies. Graphical representations of salaries frequently depict sections of organizations that stand out from others. We generally see four incidents of this:

    • Wage compression. Analyses show that people in adjacent grades or who have different lengths of service within the same grades have similar base salaries. This occurs when the internal market (e.g., pay raises) does not reflect true external market conditions and people entering the organization are paid the same or more than current employees with similar skillsets and lengthier tenures.
    • Hot Jobs. When organizations hire one person at a time, it can be easy to miss the cumulative effects of these decisions – especially when the hiring is decentralized. These seemingly one-off decisions make a systematic appearance in our analyses generally as clusters of wages that stand out from others. For example, hot jobs such as scarcer, technology-oriented roles push salaries higher and these seemingly isolated hiring decisions appear as collective aberrations.
    • Outliers. Our analysis often shows areas within the organization that just do not seem to conform to the existing salary structure despite many attempts to incorporate them properly. SullivanCotter often will flag certain sets of positions that appear misaligned with standard pay patterns. Those involved in broad-based pay programs often encounter difficulties with fitting new or unique roles into existing salary structures. In health care, advanced practice providers often require their own pay practices apart from other professionals.
    • Diversity. In the course of our pay equity analyses, we apply a number of different measures based on gender, race and other indicators of diversity to determine whether distributions across the organization are proportionate or not. Our analyses make it easy to see where different kinds of people reside within organizations and whether their career progression has similar trajectories or not.

Some of this information may open new lines of inquiry but, nevertheless, these studies offer a rare, in-depth look at the inner workings of organizational pay practices and how a host of tiny decisions may evolve into larger issues if they remain unrecognized and unmanaged.

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Modern Healthcare | 2022 Annual Executive Compensation Article

Health care organizations report changes in executive compensation to address competitive marketplace for leadership talent


SullivanCotter featured in Modern Healthcare's annual executive compensation issue

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With pandemic-related burnout and unplanned retirements both on the rise, health care organizations nationwide are balancing the need for competitive executive recruitment and retention strategies with ongoing financial pressures.

This year, the median base salaries for health care executives increased modestly while median total cash compensation grew at a higher rate as incentive award payouts reflect a recovery year from the onset of the pandemic.

Featuring data and insights from SullivanCotter's 2022 Health Care Management and Executive Compensation Survey, Modern Healthcare discusses the increasingly competitive marketplace for leadership talent and how it has impacted leadership compensation and pay practices this year.

Looking for additional data and benchmarks?

SullivanCotter recently released it's annual Health Care Management and Executive Compensation Survey Report.

This year's report includes data from more than 3,000 health care organizations on approximately 42,500 individual managers and executives. For more than 30 years, this survey has provided data-driven intelligence on executive and management compensation trends and pay practices to help inform impactful decision-making.


PRESS RELEASE | Health Care Executive Compensation

SullivanCotter's 2022 Health Care Management and Executive Compensation Survey Report highlights impact of the competitive talent market and pandemic recovery on executive compensation

Median base salaries increased by 4.5%

Chicago, IL | August 11, 2022

SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released the findings of its 2022 Health Care Management and Executive Compensation Survey.

This year, the median base salaries for health care executives increased by 4.5%, reflecting an increasingly competitive marketplace for talent at hospitals and health systems nationwide. In addition, incentive award payouts reflect a recovery year from the onset of the pandemic. By maintaining competitive compensation for executives, organizations are able to effectively build back and restore performance and talent to pre-pandemic levels.

Incentive Awards

In 2021, incentive payouts for 2020 performance were below historical levels due to the unprecedented impact of the pandemic onset on both financial and operating performance. The 2022 survey, however, indicated that incentive payouts for 2021 performance returned to levels consistent with historical practices as financial and operating performance within the industry improved, increasing median total cash compensation (equal to base salary plus annual incentives) by 9.7%.

“Although total cash compensation for executives grew year over year, it is important to note that there were no shifts in annual incentive plan prevalence or award opportunity levels. The growth in reported total cash compensation is being driven by higher incentive awards that reflect improved organizational performance after a particularly challenging year. Thus, it shows that the performance-based incentive programs are operating as designed by tempering awards in challenging years and increasing them when performance improves,” said Bruce Greenblatt, Managing Director, SullivanCotter.

Base Salaries

Base salary increases provided to executives for 2021 were modest, with many organizations freezing executive salaries in response to the pandemic onset. In comparison, salary increases provided for 2022 rebounded due to successful business recovery efforts and high demand for talent that is outpacing supply due to burnout, retirements accelerated by the pandemic, and the need for highly qualified leaders to lead organizations through increasingly complex times.

As in previous years, median base salary increases reported in our 2022 survey for health system executives outpaced subsidiary hospital executives by nearly 1.0% due to the larger scope and more complex nature of a system-wide role. Additionally, while executive salary increases rebounded, the overall median annual executive salary increase of 4.5% is less than the annual growth seen in many clinical roles (5% or higher), including Registered Nurses (over 8%), as reported in our 2022 surveys. This reflects organizations’ strategy to reward staff for the day-to-day work that has put extra demand and stress on teams, as well as supporting recruitment and retention efforts.

Planning for 2022 and Beyond

Hospitals and health systems still face uncertainties in regard to inflation, labor costs, a competitive talent market, employee burnout, and more. “While these are industry-wide issues affecting the clinical workforce and staff-level positions as well, organizations must be acutely aware of the impact these challenges may have on executive compensation programs and recruiting and retention strategies. This is particularly important as they look to limit disruption and remain focused on providing the highest quality patient care, improving employee engagement, and advancing other important initiatives designed to support DE&I and ESG,” said Ted Chien, President and Chief Executive Officer, SullivanCotter.

As it relates to executive compensation and talent strategy, organizations should consider the following:

  • With inflation and the talent shortage, anticipate that salary increase budgets for 2023 will likely need to exceed recent norms of 3.0% in order to retain key talent, mitigate inflation effects, and address issues of pay equity.
  • Establish annual incentive plan goals and performance levels recognizing the current challenges (engagement, patient satisfaction, financial and growth) with goal setting while also ensuring that these measures align with future priorities (operational sustainability, DE&I, and ESG).
  • Understand the need for experienced leaders to address response/recovery efforts as well as access, affordability, and community wellness needs. Differentiate rewards so limited dollars are directed to address retention/recruitment and reward high performers critical to the organization’s success; segment total rewards approaches as needed to meet specific business unit needs – thus moving away from a “one size fits all” approach.
  • Make a point to regularly review and refine succession plans; memorialize professional development plans; ensure a strong talent pipeline; determine gaps where external hires may be necessary. Focus on internal leadership development and talent-building where possible to help engage, retain and grow the current leadership team and potentially reduce costs related to external recruitment.
  • Consider all employees’ well-being needs, such as time-off and mental health benefits.

SullivanCotter’s 2022 Health Care Management and Executive Compensation Survey provides critical benchmarking data on compensation levels and pay practices. As the largest and most comprehensive resource of its kind for hospitals and health systems nationwide, the survey includes information from more than 3,000 organizations representing roughly 42,300 individual incumbents.

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improve outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.

For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com, or contact us via email or by phone at 888.739.7039.

Note to media: Additional data and interviews are available on request.


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Pay Equity: Ensuring a High-Quality Analysis

Pay Equity: Ensuring a High-Quality Analysis

Authored by SullivanCotter’s Michael O’Malley – Principal, Nanci Hibschman – Managing Principal and Not-for-Profit Practice Leader, and Amanda Wethington – Principal


Most people responsible for pay equity studies within their organizations have only a superficial knowledge of statistics. Yet, as the primary underwriters and overseers of the work who are ultimately accountable for the overall quality, how can they ensure the analysis is reliable?

Understanding the Complexity of a Pay Equity Analysis

To help organizations better understand the complexities of a pay equity analysis and to ensure the delivery of high-quality results, SullivanCotter has a three-part approach to working with clients:

Listen and Ask

Statistical analysis is simply a way of summarizing the reality to which everyone has access. We encourage clients to be active participants in the project by soliciting their observations and gaining insight into their pay practices and internal challenges. We also mutually discuss how to assemble and operationalize the data. This is not a backroom operation from which we simply emerge with inscrutable results.

Show and Explain

Your organization does not require a deep-seated knowledge of statistics to understand what we hope to achieve through a proper pay equity analysis. These goals can be simply explained and illustrated. All of our assumptions are laid bare. All of our rationales for doing things one way versus another are carefully described and documented. We encourage clients to evaluate the technical merits of our work.

Summarize and Advise

Since our focus is on the overall well-being of the organization and its employees, it is important to consider the broader implications of the results and the ways in which clients can support fair and equitable human resources practices across the board. These recommendations are sensibly made with attention to cost in mind so that any changes deemed desirable can be easily implemented.

The quality of our work stems from a longstanding combination of technical expertise and a demonstrated sensibility to your organization’s unique issues. Communicating knowledge of our discipline, undertaking the work in the spirit of mutuality, and fostering a genuine concern for the welfare of the study’s participants make it easy to deliver reliable, accurate, and actionable results. Most importantly, we never consider our pay equity work to be a perfunctory exercise. Our work is informed by a rich understanding of the nature of your jobs and your industry so that analytical procedures proceed with full awareness of the possibilities for positive change.

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Patient Panels and Provider Compensation

Patient Panel Management: Trends, Challenges and the Impact of Value-Based Reimbursement

Originally published by the American Association of Provider Compensation Professionals

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As the market’s focus on population health intensifies, patient panel management is evolving as a core component of successful care delivery. In response, organizations are looking to improve quality, optimize care team operations, and strengthen patient and primary care physician/advanced practice provider relationships.

With risk-based contracting and value-based reimbursement top of mind, many hospitals and health systems re-evaluating their panel management and patient care delivery strategies to better support the achievement of system-wide population health goals.

In this article, SullivanCotter addresses three important areas for organizations to consider as they undertake this journey:

  • Optimizing the role of the advanced practice provider
  • Educating providers on appropriate coding and documentation
  • Aligning provider compensation structures with population health strategies

Becker's Healthcare | Split/Shared Visits: Q&A with Zachary Hartsell

Split/Shared Visits: Zachary Hartsell discusses recent changes to the Physician Fee Schedule with Becker's Hospital Review

What does this mean for hospitals and health systems regarding the existing workflow of physicians and advanced practice providers?

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Every year, the Centers for Medicare and Medicaid Services incorporates changes in policy, regulations and requirements for billing under the Medicare Physician Fee Schedule (PFS). These changes are often adopted by commercial payers.

On Nov. 2, 2021, CMS released the final rule for the 2022 PFS. The final rule went into effect Jan. 1, 2022, and includes some important considerations related to the conditions for submitting split-shared visits for reimbursement that affect planning in 2022 and beyond.

These changes can potentially alter the existing workflow of physicians and advanced practice providers related to billing split-shared encounters. To discuss physician fee schedule changes, Becker's Hospital Review recently spoke with Zachary Hartsell, Principal and advanced practice providers (APP) growth team leader in the APP Workforce at SullivanCotter.

Note: Responses edited for length and clarity.

Question: To begin, can you outline some of the changes that went into effect in 2022 and the additional changes identified for implementation in 2023?

Zach Hartsell: Happy to discuss. Let me start by noting that the changes due for 2023 may now be postponed to 2024 based on the recently published proposed 2023 CMS PFS. I’d like to start by sharing the background on what split-shared visits consist of today, what has already changed, and what is expected to be changing in the future.

Split-shared visits are the evaluation and management services performed jointly by physicians and APPs in hospital-based practices. This includes inpatient, outpatient and emergency department settings. The rules apply to all inpatient professional Evaluation & Management (E&M) CPT codes historically, except for critical care services, procedures and time-based codes.

When physicians and APPs have used the split-shared service, the workflows are often designed so that the entire encounter can be billed under the physician assuming certain qualifications are met. Those qualifications include:

  • The physician must have a face-to-face encounter,
  • The physician must perform a medically necessary and substantive portion of the E&M service,
  • Both the physician and the APP are employed in the same group.

These have been the longstanding rules for more than 15 years. They were initiated through a CMS transmittal and not part of the final rule process.  Since they were essentially a midyear or off-cycle adjustment, I believe there has always been an interest in codifying them within the final rule.

It's also vital to note that there is something different called ‘incident-to billing’, which is only in the outpatient setting and has a separate set of governing rules and regulations. Incident-to will not be impacted by these changes.

As you mentioned, there were changes implemented on January 1, 2022, which were fairly modest, but include the ability to use the split-shared methodology to bill for critical care services. There was also a requirement that a new modifier be added to all split-shared visits, the “-FS modifier”, to differentiate split-shared visits from non-split-shared visits. Finally, in 2022 (and now 2023 with the delayed implementation), providers can use the historical E&M methodology, or they can use the new time-based billing.

Starting Jan. 1, 2024, only the time-based methodology can be used. While this change was initially supposed to be implemented in 2023, the proposed 2023 PFS released in July suggests delaying the time-based changes to 2024. With the time-based methodology, the practitioner — whether a physician or APP — who performs a majority of the visit, defined as greater than 51% of the total time, bills for a visit.

Q: How might the new time-based methodology affect physician/APP workflow and compensation?

ZH: We, at SullivanCotter, consider these changes in three different groups: financial, care team and compliance. All three groups have potential implications for provider compensation.

First, you have financial impact - which can be twofold. One potential financial impact that could affect the organization is the change in reimbursement rates. Remember that historically the split-shared visit allows the physician to bill Medicare and receive 100 percent of the physician fee schedule rate. If the billing starts going out under the APP, presumably, organizations will receive the APP reimbursement rate - which for Medicare is 85% of the physician reimbursement rate.  Therefore, if an organization sees the same volume in the future, there could be a reduction in reimbursement. The best outcome here for organizations would be to increase the volume overall by having physicians continue to manage similar volumes as they have seen historically and then have APPs see select patients on their own. Even at a reduced reimbursement rate, this model can be sustainable for many organizations.

The second financial impact is related to physician compensation – specifically physicians with productivity-based compensation models. From a physician compensation standpoint, the new time-based methodology will require physicians to spend more than 50 percent of the time with a patient in order to receive the work RVU attribution for split-shared visit. Many practices that use the same workflows as today, physicians may see a decrease in the work RVUs for seeing the same volume of patients. While physicians may see a decrease in work RVUs, APPs could see an increase in their work RVUs. These potential shifts will likely require organizations to review both their physician and APP compensation plans to understand the impact that work RVU changes will have based on their current formulas and methodologies.

For the care team implications, it is about looking at current APP, physician and staff workflows to identify patients that APPs can see more autonomously with indirect physician supervision. In addition, identifying activities that other care team members can perform in support of both the physician and APP visits. There will need to be intentional discussions around the workflows and responsibilities of both APPs and physicians in hospital and provider-based clinics. Also, there needs to be clear methodologies to delineate the time spent with the APP versus with the physician.

The last area of concern relates to compliance. There is a need to educate physicians and APPs about the related rule changes, the potential new workflows, and the impact on their compensation plans. Additionally, there will need to be effective auditing mechanisms in place to check time-based billing, as well as ways to identify non-compliant workarounds. Regular auditing and education will likely need to continue into 2024.

One of the things that we've heard organizations focusing on is ‘the Impossible Day’ situation. This is where an individual encounter looks okay, but the sum of a day’s work exceeds the time available in the day. For example, you have an APP and a physician working together. The APP sees a patient for 20 minutes, and then the physician comes in and adds 21 minutes of time to the encounter. The physicians time would report as having greater than 50 percent of the time and thus the encounter would be billed under the physician. The concern lies in high volume clinics where if you add up the physician time throughout the day for 30 or 40 patients, the totality of all of the physician time could make it an ‘Impossible Day’. The other element is to look for consistent patterns in coding. For example, if an APP sees every patient for a physician and the physician sees every patient one minute longer than the APP, that could appear to be an improbable pattern. The improbability of that situation could trigger auditors and potentially raise compliance concerns.

Q: Can you share a brief case-based example of this?

ZH: Yes, absolutely. I'm a PA by background and have worked primarily in hospital medicine for the last 15 years. So let's stick with that specialty. Let’s say we have a hospitalized internal medicine patient -somebody with a pneumonia diagnosis - who's being cared for on the hospital medicine team comprised of a physician and an APP. On hospital day two, the APP rounds on the patient in the morning and spends 25 minutes with the patient. During the exam, the APP detects worsening lung sounds as compared to admission the day before. As a result, the APP orders a chest X-ray to evaluate the condition of the pneumonia. Later in the day, the physician and the APP spent an additional 10 minutes together to make afternoon rounds, review the chest X-ray findings, make some modifications to treatment, and briefly meet with the patient to review the chest X-ray results. We have a total of 35 minutes spent which includes 25 minutes for the APP and 10 minutes for the physician. While the APP and the physician worked together for those 10 minutes, you can't concurrently count the time. This means that only 10 minutes can be counted for the afternoon rounds.

The hospital medicine team would bill the encounter as a 99233, which is a subsequent hospital care level 3, based on the time spent. Under the historical medical decision-making approach, this could be billed under the physician as a split-shared visit, assuming that the other criteria are met, or by the APP and reimbursed at 85 percent for Medicare patients. Under the proposed time-based methodology, the visit could only be billed under the APP as the APP provided greater than 51% of the total time of the encounter. The APP would have performed 25 of the 35 minutes, or 72 percent, of the total time spent. The challenge we see with this example is that, while the physician is involved in the care, the physician would not receive work RVU or reimbursement credit. Under this scenario, the physician would not be credited the wRVU productivity and if the physician is paid based on a wRVU productivity-based compensation model, the resulting compensation for the physician would be reduced.  The APPs compensation could be positively impacted if paid on a wRVU basis.

Q: Final question, in terms of physician and APP compensation, are there any modifications that could be considered to help ensure financial stability and regulatory compliance?

ZH:  Yes, we think organizations should focus their attention on a few key areas. First is a continued focus on educating providers to enhance their knowledge. Second is the review and design of intentional care models which support patient care and third is the potential modification of compensation plans to help address the changes and support care delivery.

In the short term, I think it is important for organizations to focus on educating providers about the new rules and how critical it is to ensure accurate documentation and coding - especially in a time-based environment. It is important to remember that many providers have not had experience in a time-based billing environment. It will also be helpful for organizations to focus on the intent of the rules, which is to avoid the duplication of services and provide clarity of the contributions of the APPs.

The real challenge is keeping the momentum to make the needed changes to compliance structures and educate providers on new workflows before the go live on January 1, 2024. The extra time proposed may tempt organizations to delay addressing this issue. This may be a mistake given the degree of cultural change and education required. For example, most organizations have not historically had reliable ways to document or measure how many of the visits were split-shared visits. Future compliance will require an exacting understanding of the number of split-shared visits in the organization, and while the new modifier will help, its limited existence will likely require organizations to perform deeper analytic reviews on their encounter types. In organizations with a high degree of split-shared visits, these changes could have a profound effect and require thoughtful and intentional reviews of hospital revenues and the provider compensation plans.

One final note about compensation arrangements. It will be important to review the physician and APP compensation arrangement to ensure financial sustainability with the changes. Once the impact on the care team and on the compensation, plans have been quantified, organizations may need to develop new workflows and policies to address. Examples of the types of questions we will see are: How will protections be built for work RVU decreases by the physicians? What about caps on work RVU increases by the APPs? How will those protections be handled and how will they impact regulatory compliance? At this point there will continue to be a lot of unanswered questions until organizations are able to quantify impact of these changes.


Fairness and Engagement: Where Pay Equity Fits In

Fairness and Engagement: Where Pay Equity Fits In

Authored by SullivanCotter’s Michael O’Malley – Principal, Nanci Hibschman – Managing Principal and Not-for-Profit Practice Leader, and Amanda Wethington – Principal


Enhancing an Employee’s Level of Engagement

While fairness is a core expectation of any quality relationship, there are also a number of other values that people hold in high regard in both their personal and work lives. In the workplace, employees want to feel that they belong and are involved in meaningful and stimulating work. They value learning and development, responsibility, and the ability to respectfully exercise their judgment. The combination of these different attributes can contribute greatly to an employee’s level of engagement.

Maintaining employee engagement is therefore critical and pay equity matters because it is a key component of the total impression employees form based on their lived experiences. It also influences their level of satisfaction and motivation to perform well and work productively. The importance of engagement is ubiquitous in today’s workplace – although its promise as a cure-all has not always met organizational expectations. This may be because concepts like pay equity and other core employee expectations have not been synthesized in the right way.

Historically, engagement has been defined as the sum of what employees like and do not like within the workplace. However, employee engagement may not be as dependent on what people like and dislike as much as the relative balance between their likes and dislikes. Indeed, these “positivity ratios” have been found to predict both relationship quality and durability. People with higher positive to negative experiences report better relationships and greater satisfaction both at home and at work. Studies also show that people with higher positivity ratios are more likely to ‘flourish’ – which is defined as striving toward one’s potential, withstanding normal everyday stresses, and working more productively.

In general, employees with positive to negative ratios of greater than 3:1 are more likely to thrive. The fact that more positive experiences are required to offset negative experiences is consistent with what is known as the ‘negativity bias’. Negative experiences weigh more heavily on people than corresponding positive experiences. The good things that happen to us are less potent and decay faster than negative experiences in such a way that it takes approximately three good experiences to offset a single bad one.

In the case of pay equity…

A perceived pay inequity must be counterbalanced by several other sources of satisfaction – which may be unlikely in an organization that allows inequities to persist. This attests to the weightiness of one injustice and the criticality of maintaining a fair and equitable compensation program.

Importantly, engagement conceived in this manner provides a reliable and stable reference for incentive programs and for tracking change. For example, these positivity ratios can be rolled up across employees by unit managers and used to reward leaders who are more adept at maintaining a positive and motivated workforce. Over time, these ratios can be tracked via surveys alongside other metrics and used to monitor the impact of organizational changes on employee attitudes and performance.

To be effective as a measure of engagement, survey items must satisfy two necessary conditions.

  1. They must have an emotional tone and cannot refer purely to fact-based beliefs such as: “I understand how the performance management system works.”
  2. They must connect to what people want in relational exchanges including workplace policies, programs, and practices in which basic human needs for growth, fairness, inclusion, autonomy, and more are implicated.

This new understanding of engagement dramatically changes how we approach employee motivation and intervene in the workplace. It suggests that any number of changes may increase engagement and make life at work more satisfying and worthwhile. Organizations need not hunt for the one program improvement that will solve everything when any of a number of relevant incremental changes can go a long way in enhancing an employee’s experience.

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remote work health care

INFOGRAPHIC | Remote Work and Geographic Pay

Insight into Remote Work and Geographic Pay

Key policy trends within health care organizations

Attracting and retaining employees as the COVID-19 pandemic continues has proven increasingly difficult for health care organizations. As workers grow
accustomed to remote and more flexible work arrangements, the provision of these offerings can become a competitive advantage in recruitment and retention.

As health care organizations navigate the ‘new normal’, they’ve encountered a number of challenges and benefits related to remote work.

With the increase in remote work, issues regarding geographic pay have also become more complex. While national or headquarters-based compensation structures will continue to be important, considerations around geographic pay are much more nuanced as remote work is now prevalent and talent acquisition strategies extend beyond regional/local geographies.

Learn more from SullivanCotter’s recent Remote Work and Geographic Pay Pulse Survey, which examines how health care organizations are responding to what has changed with respect to remote work policies, geographic pay differentials, and staffing models – all of which have been forever altered by the pandemic.

Looking for additional insight? View a recording of our recent Remote Work and Geographic Pay webinar.

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Remote Work and Geographic Pay | WEBINAR RECORDING

Attracting and Retaining Health Care Talent: Insight into Remote Work and Geographic Pay

View webinar recording >

The COVID-19 pandemic has accelerated dramatic shifts within the health care industry and has become a catalyst for changes to the way in which the workforce operates. This impacts all critical aspects of the human capital strategy – including wellbeing, staffing resources and remote work arrangements. As some organizations are transitioning back into the office, hospitals and health systems need to rethink which employees can and should work remotely, what these arrangements should look like, and how they should be paid.

With the increase in remote work, even within health care, issues around geographic pay have become a priority. Now, instead of having employees work at different, but specified geographic locations, some employees may work from anywhere. Certainly, local compensation structures will continue to be important, especially in health care, but an employer’s considerations around geographic pay have become much more nuanced, with many considering a single pay structure for some employee groups — especially general staff and remote employees.

Given all these changes, organizations may need to draft and/or update any existing policies that define their remote work and geographic pay strategy and procedures. This will help to support consistent application, communication, and understanding, and will also ensure that policies align with overall sourcing, talent, and compensation strategies. Health care organizations have unique workplace challenges, so it is prudent to look at remote work and its impact on pay and staffing models differently than in other industries.

This webinar highlights data from SullivanCotter’s 2022 Remote Work and Geographic Pay pulse survey to help address some of the top compensation issues that health care organizations are facing in today’s marketplace for talent.

Looking for additional insight? Download a copy of our Remote Work and Geographic Pay infographic.


PODCAST | Shared Services Performed by Physicians and APPs

Amy Noecker, APP Workforce Practice Leader, and Zach Hartsell, Principal, featured in the Stark Integrity podcast to discuss split/shared billing compliance

Listen to podcast >

Due to recent changes to the Physician Fee Schedule regarding modifications to billing for split/shared visits, many physicians and advanced practice providers are facing significant workflow changes.

Members of SullivanCotter’s growing APP Workforce Practice recently sat down with Bob Wade, Esq., to discuss the impact of the changes and what health care organizations can do to address them.

This episode provides valuable insight into:

  • The current state of split/shared billing
  • How to evaluate care team composition and responsibilities by provider
  • Whether compensation arrangements should be adjusted to help ensure financial sustainability and regulatory compliance
  • A breakdown of the time-based methodology
  • Other areas of concern that organizations should be aware of regarding split/shared visit attribution

Looking for additional insight on the changes to the Physician Fee Schedule regarding Split/Shared Visits?

We’ve recently published some content that may be of interest to you.

ARTICLE

Physician Fee Schedule: Understanding Changes to Split/Shared Visits

INFOGRAPHIC

Split/Shared Visits:  Impact and Opportunity

PODCAST 

Revisions to Submitting Split/Shared Visits for Reimbursement


Valuation of Management Services and Management Services Organizations

Considerations for developing effective partnerships in an evolving health care environment

Originally published by the American Association of Provider Compensation Professionals


As health care consumerism takes hold, technology evolves, and the industry continues to prioritize value-based care delivery, the definition of “work” for physicians has changed — and the ways in which physicians are compensated have evolved as well.

There are many forms this can take - such as direct cash compensation, base salary, quality incentives, call pay and more. An often-overlooked form of physician compensation, however, is the benefits received through Management Services Organizations (MSOs) and Management Services Agreements (MSAs).

Learn more about these agreements as your organization explores new partnerships, including information on different financial approaches and service arrangements, a better understanding of the regulatory requirements, and insight into the potential benefits.

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PRESS RELEASE | SullivanCotter Acquires Clinician Nexus

SullivanCotter Announces Formation of New Clinical Workforce Technology Company

Chicago, IL | June 8, 2022

SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for the health care industry and not-for-profit sector, is pleased to announce the acquisition of Clinician Nexus – a clinical experience management technology company located in Minneapolis, MN.

Clinician Nexus is the creator of a powerful and collaborative platform that enables participating hospitals, health systems, and educational institutions to co-manage medical, nursing, and allied health students as they obtain clinical experience. Founded by Katrina Anderson, Bob Bryan, and Tim Schottler in 2016, Clinician Nexus has been successfully connecting health care organizations with students to drive meaningful clinical experiences with the intent to build a well-trained clinical workforce for tomorrow.

The acquisition of Clinician Nexus deepens the firm’s technology talent and enables the creation of two separate entities focused on serving different needs within the health care industry and not-for-profit sector. SullivanCotter will continue to offer market-leading consulting and advisory services while Clinician Nexus will provide workforce and compensation management technology as well as automated workflow solutions designed to support each stage of the clinical workforce lifecycle ꟷ from planning and training to measuring, rewarding, and driving performance. SullivanCotter’s Provider Performance Management Technology™ and Benchmarks360™ Pro and Plus platforms will now be delivered through Clinician Nexus.

“Powered by an industry-leading suite of workforce data, advanced automation capabilities, and a commitment to assisting clients in shaping the future of health care, we are excited to go to market with cutting-edge technology solutions to help them plan, build and enhance their clinical workforce strategies,” said David Schwietz, Chief Information Officer, Clinician Nexus.

With the ultimate goal of supporting the delivery of best-in-class patient care, Clinician Nexus connects organizations with the critical technology, data, tools, and resources required to drive innovative clinical workforce strategies.

“Together with Clinician Nexus, we’ll be able to leverage SullivanCotter’s consulting experience and expertise to develop innovative software solutions, data products, and analytics services for health care organizations nationwide. This will enable us to better support our clients by effectively and efficiently addressing current and future workforce needs as the industry continues to experience dramatic cultural and operational shifts,” said Ted Chien, President and CEO, SullivanCotter.

SullivanCotter will continue to provide advisory services and a comprehensive collection of proprietary benchmarking surveys, administered by Clinician Nexus, to health care and other not-for-profit organizations under its own brand.

For more information on Clinician Nexus and its growing suite of clinical workforce technology products, please visit www.cliniciannexus.com or contact us at 888.739.7039.

About Clinician Nexus

Clinician Nexus enables health care organizations to build thriving clinician teams with industry-leading technology products, workforce and compensation analytics, and automated workflow solutions. Backed by extensive technical expertise and industry-leading data, we deliver innovative approaches to help clients to plan, educate, and engage their clinical workforce at every stage of the lifecycle. We are committed to providing our clients with outstanding guidance and support as they focus on shaping the future of health care.

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improve outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and solutions to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.


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