Coffee and Contracts - Compensation Model: Collections
Financial Residency · Katherine Sarnosky
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Show Notes
This summary discusses the Collections Compensation Model, commonly used in private practice medical settings to determine physician remuneration.
In this model, rather than being paid upon production (like in the RVU model), physicians are compensated based on when the service is reimbursed to the practice.
There can be many variations to this model, such as a base salary with a percentage of net collections beyond a threshold or simply receiving a percentage of all net collections. Another variation involves taking home the collections after overhead costs have been settled.
It's crucial to negotiate effectively under this model and understand opportunities for increasing collections or decreasing overhead costs.
The system encourages practice efficiency, but one must also consider situations when collections are generated when the physician isn't present.
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