Advance Practice Provider (APP) Compensation Models: Promoting Team Based Care. Wayne M. Hartley, Vice President AMGA Consulting Services

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1 Advance Practice Provider (APP) Compensation Models: Promoting Team Based Care Wayne M. Hartley, Vice President AMGA Consulting Services 1

2 Presentation Overview AMGA Survey Overview and Demographics APP Survey Data (with select physician comparisons) How NP/PAs are paid What NP/PAs are paid APP Compensation Models Questions and Comments 2

3 AMGA Survey Overview and Demographics 3

4 Survey Overview 28 th Annual AMGA Provider Compensation Survey Data on clinical compensation, work RVUs, net collections, gross productivity, comp to productivity ratios, visits, and benefits 134 Physician Specialties 27 Other Provider Specialties NP and PA breakdowns 4

5 All Participants / All Positions 5

6 North Region 6

7 South Region 7

8 East Region 8

9 West Region 9

10 Demographics 251 groups 73,006 providers Average group size 290 providers (up from 255) About 70% were AMGA member organizations Carved out administrative compensation and financial elements 10

11 APP Survey Data (with Select Physician Comparisons) 11

12 NP/PA Clinical Work Hours NP & PA Clinical Hours (n=131) 25 to 30 hours per week, 2% 41 to 45 hours per week, 4% 31 to 35 hours per week, 22% 36 to 40 hours per week, 73% 12

13 Base Salary Determinants NP & PA Base Salary Determinants 2015 (n=98) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Market salary data 81% Percentage of last year's salary Defined salary range 36% 33% Percent increase based on budget 14% Percentage of concurent production Panel size of work units 4% 8% 13

14 Production Models NP/PA 2015 Physician 14

15 Incentive Pay Prevalence Physician 15

16 Incentive Pay Prevalence NP/PA NP/PA Other Incentive and Discretionary Compensation 2015 (n=44) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Patient Satisfaction 45% The top categories are essentially the same for physicians and APPs. Individual Financial Goals SCIP/Core/ACO Measures Access Other Incentives HEDIS 16% 14% 11% 23% 45% The prevalence of incentives across these categories tends to be lower for NPs/PAs. Peer Chart Review Citizenship Dept RVU Goals Market Adjustments Dept Budget / Goals 11% 9% 9% 7% 5% Cost Containment 5% Controlling Outside Referrals 5% Accessibility/Availability 5% Other Discretionary 5% Seniority 2% Ancillary 2% 16

17 Incentive Pay 2015 Survey 17

18 Primary Care by Region Physicians 18

19 NPs by Region by Specialty Grouping 19

20 Nurse Practitioner and Physician Assistant Subspecialties Total Compensation (2015) Number of Number of Group Physician 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Nurse Practitioner - Medical Specialty 114 1, , , ,855 88, ,532 26,074 Cardiology Cath Lab (Invasive Interventional) ,000 99,710 91,923 86,057 92,200 17,697 Cardiology General , , ,093 90, ,806 24,428 Dermatology , , ,002 96, ,887 65,073 Endocrinology , ,806 95,549 82,608 98,018 24,119 Gastroenterology , ,431 96,284 82,806 96,327 13,706 Hematology and Medical Oncology , ,963 96,517 86, ,273 34,541 Hospitalist Internal Medicine , , ,539 91, ,710 30,068 Nephrology Only , ,749 97,912 90, ,426 31,816 Neurology , , ,487 93, ,395 34,773 Occupational/Environmental Medicine , , ,035 84, ,351 36,306 Palliative Care , ,287 96,571 88,234 97,750 22,948 Physical Medicine and Rehabilitation , ,438 92,269 81,273 94,490 18,811 Pain Management Non-Anesthesiology , , ,284 94, ,375 21,576 Psychiatry , , ,351 91, ,076 38,120 Pulmonary Disease (Without Critical Care) , ,607 94,701 77,813 92,690 26,180 Pulmonary Disease (With Critical Care) , ,375 98,735 74,675 95,396 22,276 Wound Care/Hyperbaric , , ,799 90, ,179 14,917 Nurse Practitioner Primary Care 133 2, , , ,780 86, ,530 31,075 Family Medicine , ,708 99,048 85, ,779 36,465 Family Medicine Branch , , ,370 89, ,256 25,195 Internal Medicine , , ,172 87, ,577 31,749 Pediatrics and Adolescent General , , ,009 87, ,232 35,831 Urgent Care , ,362 98,099 85, ,140 34,750 Nurse Practitioner Surgical Specialty , , ,981 88, ,844 28,748 Pediatrics and Adolescent Neonatology , , , , ,697 18,554 OB/GYN Obstetrics , , ,203 90, ,014 42,959 OB/GYN Maternal Fetal Medicine/Perinatology , , ,333 95, ,138 25,260 Cardiac/Thoracic Surgery , , , , ,611 27,953 Cardiovascular Surgery , , , , ,684 16,233 Emergency Medicine , , , , ,919 20,843 General Surgery , ,119 94,673 88,397 99,537 20,205 OB/GYN General , , ,431 88, ,174 28,850 Neurological Surgery , , ,620 93, ,726 25,301 Orthopedic Surgery , , ,714 90, ,731 59,506 Otolaryngology , ,689 89,636 80,943 91,291 22,748 Urology , , ,376 82,789 99,821 17,687 Vascular Surgery , ,186 98,002 86, ,851 47,139 National Data

21 Nurse Practitioner and Physician Assistant Subspecialties Work RVUs (2015) Number of Number of Group Physician 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Nurse Practitioner - Medical Specialty ,814 3,155 2,084 1,112 2,263 1,306 Cardiology Cath Lab (Invasive Interventional) ,040 2,727 2,548 1,095 2,183 1,161 Cardiology General ,059 2,574 1, ,947 1,187 Dermatology ,840 5,578 4,798 3,525 4,946 1,836 Endocrinology ,424 3,014 2,435 1,520 2,367 1,097 Gastroenterology ,462 2,123 1,611 1,136 1, Hematology and Medical Oncology ,581 2,327 1, , Hospitalist Internal Medicine ,322 3,011 1, ,931 1,079 Nephrology Only 3 6 *** *** *** *** *** *** Neurology ,199 3,158 2,339 1,350 2, Occupational/Environmental Medicine 5 9 *** *** *** *** *** *** Palliative Care ,834 2,528 2,127 1,356 2, Physical Medicine and Rehabilitation 7 8 *** *** *** *** *** *** Pain Management Non-Anesthesiology ,137 4,007 2,874 2,487 3,579 2,391 Psychiatry ,249 3,829 2,852 1,481 2,767 1,238 Pulmonary Disease (Without Critical Care) ,094 2,857 2,248 1,345 2, Pulmonary Disease (With Critical Care) ,572 3,078 1, ,129 1,451 Wound Care/Hyperbaric 7 8 *** *** *** *** *** *** Nurse Practitioner Primary Care 111 1,794 4,939 4,383 3,327 2,203 3,332 1,320 Family Medicine ,652 4,191 3,322 2,260 3,287 1,221 Family Medicine Branch ,553 5,119 3,786 2,155 3,602 1,539 Internal Medicine ,529 3,949 3,041 2,178 3,125 1,282 Pediatrics and Adolescent General ,450 4,974 3,952 3,184 4,063 1,234 Urgent Care ,432 4,706 3,693 2,169 3,655 1,361 Nurse Practitioner Surgical Specialty ,222 3,489 2,174 1,137 2,407 1,422 Pediatrics and Adolescent Neonatology ,609 2,723 1, ,057 1,264 OB/GYN Obstetrics ,987 3,772 2,889 2,199 2, OB/GYN Maternal Fetal Medicine/Perinatology 2 7 *** *** *** *** *** *** Cardiac/Thoracic Surgery 3 8 *** *** *** *** *** *** Cardiovascular Surgery 3 5 *** *** *** *** *** *** Emergency Medicine ,247 5,385 2,990 2,404 3,716 2,166 General Surgery ,399 2,230 1,478 1,217 1, OB/GYN General ,761 4,038 3,064 2,180 3,209 1,231 Neurological Surgery ,586 2,456 2,104 1,039 1, Orthopedic Surgery ,137 3,128 2,672 1,454 2, Otolaryngology ,321 3,457 2,633 2,162 2,733 1,134 Urology ,766 3, ,188 1,790 2,633 1,017 Vascular Surgery 7 9 *** *** *** *** *** *** National Data From our field experience, we know that RVUbased plans are less common for NPs and PAs. However, more and more groups are basing a component of their pay on production to promote efficiency and access. Data show where production is more of an emphasis.

22 PAs by Region by Specialty Grouping 22

23 Number of Number of Group Physician 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Physician Assistant Medical 94 1, , , ,804 88, ,667 29,672 Cardiology General , , ,172 89, ,228 16,880 Dermatology , , , , ,371 74,917 Endocrinology , ,576 94,952 87, ,219 39,173 Gastroenterology , , ,281 87, ,358 22,794 Hematology and Medical Oncology , ,512 95,917 89, ,917 32,437 Hospitalist Internal Medicine , ,411 99,921 87,827 97,709 23,584 Neurology , ,472 98,422 86, ,458 30,428 Occupational/Environmental Medicine , , ,004 97, ,378 23,884 Orthopedic Medical , , ,037 99, ,226 33,266 Physical Medicine and Rehabilitation , , ,646 86, ,375 36,242 Pulmonary Disease (Without Critical Care) , ,692 86,121 82,605 98,817 43,160 Pulmonary Disease (With Critical Care) , , ,510 94, ,473 19,392 Physician Assistant Primary Care 104 1, , , ,060 88, ,521 32,480 Family Medicine , , ,959 89, ,106 40,744 Family Medicine Branch , , ,721 92, ,307 15,891 Internal Medicine , , ,425 86, ,776 30,189 Pediatrics and Adolescent General , , ,844 88, ,937 34,524 Urgent Care , , ,548 94, ,084 37,695 Physician Assistant Surgical 99 1, , , ,733 96, ,557 32,499 Cardiac/Thoracic Surgery , , , , ,401 24,615 Cardiovascular Surgery , , , , ,122 71,731 Emergency Medicine , , ,435 97, ,792 15,823 General Surgery , , ,925 94, ,632 23,154 OB/GYN General , , ,669 94, ,258 18,857 Neurological Surgery , , ,372 99, ,772 30,770 Orthopedic Surgery , , , , ,957 41,430 Otolaryngology , , , , ,452 28,234 Plastic and Reconstruction , , ,456 99, ,178 32,521 Urology , , ,356 91, ,075 38,464 Vascular Surgery , , ,750 92, ,482 55,916 National Data Nurse Practitioner and Physician Assistant Subspecialties Total Compensation (2015) 23

24 Nurse Practitioner and Physician Assistant Subspecialties Work RVUs (2015) Number of Number of Group Physician 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Physician Assistant Medical ,382 3,526 2,240 1,282 2,517 1,476 Cardiology General ,650 2,321 1,764 1,135 1, Dermatology ,821 6,716 4,984 4,030 5,540 2,160 Endocrinology 5 5 *** *** *** *** *** *** Gastroenterology ,260 3,895 3,243 2,048 3,105 1,223 Hematology and Medical Oncology 4 8 *** *** *** *** *** *** Hospitalist Internal Medicine ,404 3,205 2,542 1,608 2, Neurology ,639 3,127 2,361 1,860 2, Occupational/Environmental Medicine ,244 5,004 4,365 3,096 3,942 1,567 Orthopedic Medical 5 8 *** *** *** *** *** *** Physical Medicine and Rehabilitation 5 7 *** *** *** *** *** *** Pulmonary Disease (Without Critical Care) 3 3 *** *** *** *** *** *** Pulmonary Disease (With Critical Care) ,171 2,542 1, ,614 1,013 Physician Assistant Primary Care ,385 4,735 3,733 2,615 3,714 1,386 Family Medicine ,489 4,793 3,652 2,446 3,657 1,447 Family Medicine Branch ,730 4,283 3,672 2,329 3,428 1,179 Internal Medicine ,799 4,126 2,885 1,604 3,004 1,404 Pediatrics and Adolescent General ,233 5,862 4,228 3,477 4,428 1,528 Urgent Care ,181 5,361 4,364 3,696 4,517 1,361 Again, you can see the areas where RVU production and RVU reporting tend to be higher. Physician Assistant Surgical ,365 3,376 1,930 1,006 2,331 1,660 Cardiac/Thoracic Surgery ,726 1, , Cardiovascular Surgery ,314 5,856 2,364 1,588 3,788 3,516 Emergency Medicine ,821 6,708 4,672 3,436 4,988 2,066 General Surgery ,781 2,116 1, ,603 1,113 OB/GYN General ,043 3,598 2,603 1,802 2,710 1,050 Neurological Surgery ,723 2,902 1, ,188 1,746 Orthopedic Surgery ,508 3,521 2,004 1,035 2,455 1,737 Otolaryngology ,099 4,501 2,823 1,511 3,057 1,507 Plastic and Reconstruction ,759 1, ,377 1,155 Urology ,938 3,440 2,384 1,335 2,461 1,121 Vascular Surgery ,516 2,154 1, ,793 1,487 National Data 24

25 Panel Size Data 2015 Survey Panel Size Specialty Number of Group Responses Number of Incumbent Responses 25 th Percentile 50 th Percentile 75 th Percentile Mean Std. Dev. Family Medicine ,434 1,866 2,325 1, Family Medicine With Obstetrics ,255 1,575 2,042 1, Internal Medicine ,468 1,938 2,408 1, Internal Medicine Office Only Pediatrics and Adolescent General Nurse Practitioner Primary Care Physician Assistant Primary Care ,213 1,542 1,892 1, ,572 2,044 2,464 2, ,372 1, ,095 1,812 1,

26 APP Compensation Models 26

27 APP Compensation Models Even though there is great emphasis on value based models and increased use of APPs, their compensation models have evolved slowly In many organizations, APPs were historically compensated on traditional professional staff or nursing wage scales (as opposed to physician type compensation formulas) Today, they are primarily salary based positions that have evolved to include some production and quality incentives 27

28 APP Compensation Models In our field work, we receive many questions about more contemporary models It is important to have a transitional approach and to think through what you are trying to accomplish Some models to consider include: Salary plus production tiers Salary plus production multiplier Salary plus production and quality incentive 28

29 Salary Plus Production Tiers If your intent is to provide some incentive for increased productivity or access but to prevent competition with other providers (physicians), this approach may be helpful Consider three or four tiers and work with market data (for example): Tier 1 (P25 production): Base plus $3,000 Tier 2 (P50 production): Base plus $6,000 Tier 3 (P75 production): Base plus $9,000 Tier 4 (P90 production): Base plus $12,000 These tiers may vary by specialty and by your base salary starting point (compensation philosophy). Consider total market compensation; base salary needs to be a reasonable starting point and you get the incentive for the highest tier achieved 29

30 Salary Plus Production Tiers For example, you could have a base salary for NP Family Medicine of $98,000 If production is 3,300 wrvu, it approximates median from the previous slide for an incentive of $6,000 Total cash compensation would be $104,000 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner Primary Care 141, , ,780 86,715 Family Medicine 147, ,708 99,048 85,510 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner Primary Care 4,939 4,383 3,327 2,203 Family Medicine 4,652 4,191 3,322 2,260 30

31 Salary Plus Production Multiplier This approach is similar except that there is a small per wrvu payment Consider a base of $95,000 and $4 per wrvu with production of 3,300 wrvu Then, compensation is $95,000 + [$4 x 3,300 = $13,200]= $108,200 This approach may work well for APPs with their own panels where you are providing incentives for production and access 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner Primary Care 141, , ,780 86,715 Family Medicine 147, ,708 99,048 85,510 Model out the impacts before you finalize your formulas!!! 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner Primary Care 4,939 4,383 3,327 2,203 Family Medicine 4,652 4,191 3,322 2,260 31

32 Salary Plus Production and Quality Incentive In team based care settings, you may wish to evolve to more sophisticated models similar to physician pay formulas Again, think about what you are trying to accomplish with the model Consider, for example, the continuum of care for chronic populations like heart failure and cardiology NP/PA roles where you want to promote: Quality care provision Patient education Coordination of inpatient/outpatient/home based care [Notice that wrvu productivity hasn t been mentioned yet ] 32

33 Salary Plus Production and Quality Incentive In this model, quality and production are included With several APP specialties, market data is limited but it can be directionally helpful Let s develop a model that is predominantly base salary, with a production incentive and 10% quality incentive 33

34 Salary Plus Production and Quality Incentive 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner - Medical Specialty 128, , ,855 88,659 Cardiology General 127, , ,093 90,281 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner - Medical Specialty 3,814 3,155 2,084 1,112 Cardiology General 3,059 2,574 1, The market compensation data includes base, incentive and other compensation As dollars are shifted toward incentives, base salary may need to be lowered (or held in place) For this example, you might choose the following: Base Salary: Approximates median Production Tiers: P25=$2K, P50=$4K, P75 or higher = $6K WRVU may not be the focus and you may wish to avoid NP/PA competition with MDs for WRVU. Quality Opportunity: 10% of median compensation for specialty ($10,109) or 10% of actual base salary 34

35 Salary Plus Production and Quality Incentive 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner - Medical Specialty 128, , ,855 88,659 Cardiology General 127, , ,093 90,281 90th 80th 20th Specialty Percentile Percentile Median Percentile Nurse Practitioner - Medical Specialty 3,814 3,155 2,084 1,112 Cardiology General 3,059 2,574 1, So if there is a base of $98,000, wrvu production of 2,200, and 10% quality incentive: Base Salary: $ 98,000 Production Tiers: $ 4,000 (P50=$4K, P75 or higher = $6K) Quality Opportunity (10%)*: $ 10,109 Total Opportunity: $112,109 *Paid based on goal achievement. You might decide not to have a wrvu component and make future increases to the quality opportunity. 35

36 APP Compensation Models Historically, many organizations minimized the role of wrvu productivity on APP compensation In cases where APPs work independently (carry large panels), production and access may be areas for incentives When the focus is on care improvement and quality outcomes, it may be advisable to limit the role of production and focus on care coordination and quality Quality goals may be the same, or supplemental to, the physician goals (e.g., cardiology Core Measures and related goals) Like with physicians, new pay approaches cannot always be additive; you may need to switch around elements of the compensation plan Production based models are possible but market data on production levels and conversion factors are limited 36

37 Questions and Comments Wayne Hartley (612)

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