Provider Compensation, Productivity Increased to Pre-Pandemic Levels

July 05, 2022 - Provider compensation and productivity increased in 2021, signaling a potential return to pre-pandemic levels, according to the American Medical Group Association’s (AMGA) Medical Group Compensation and Productivity Survey.

The report reflects data from 383 medical groups and over 183,000 providers and executives across the country.

Median provider compensation increased by 3.7 percent from 2020 to 2021. From 2019 to 2020, provider compensation only rose by 0.1 percent.

Productivity, measured in median total work relative value units (wRVUs), increased by 18.3 percent from 2020 to 2021, compared to a 10.2 percent decrease in 2020.

While compensation and productivity increased, the compensation per wRVU ratio fell by 11.0 percent in 2021. This indicates that the compensation associated with individual work units was lower in 2021 than in the previous year. In 2020, the compensation per wRVU ratio increased to 10.8 percent.

“This compensation median indicates provider pay is returning to normal now that the salary guarantees we observed during the early phases of the COVID-19 pandemic are no longer in use to the same degree,” Elizabeth Siemsen, director of AMGA Consulting, said in the press release.

“The compensation per wRVU ratio’s decline was expected as a recovery from the sharp increase of 10.8 percent in the 2021 report. This decline reflects both a recovery from the pandemic’s impact on compensation and clinical volumes and the impact of the CMS wRVU changes implemented in 2021.”

CMS changed its wRVU schedule in 2021, making it difficult to compare 2020 and 2021 data directly, AMGA said. Under the 2021 Medicare Physician Fee Schedule, CMS increased wRVUs for common office and outpatient evaluation and management (E/M) services.

AMGA’s recent report used both the 2021 CMS wRVU weights and prior year values. The analysis isolated the differences between volume increases and increases attributable to the new coding weights.

For example, the 18.3 percent increase in productivity comes from an 11.1 percent increase associated with volume recovery from the pandemic and a 7.2 percent increase due to the wRVU weight changes.

“The value in having both sets of wRVU data ensured accuracy in the results and provided a deeper insight into the market trends,” Fred Horton, president of AMGA Consulting, said in the press release.

“There was significant variety in how groups transitioned their compensation plans to take into account the new wRVU weights. As a result, given the combined exponential impact of recovery, plus the new weights, medical groups must be careful to utilize both a correct methodology and correct data when managing their provider compensation plans.”

Horton stressed the importance of the survey results, as the data reflects how both the pandemic and coding changes have impacted provider compensation.

Compensation, productivity, and compensation per wRVU varied among different medical and surgical specialties.

Primary care physicians saw a 3 percent increase in compensation, a 24.1 percent increase in productivity, and a 16.2 percent decrease in compensation per wRVU.

Some medical specialties saw greater compensation increases than primary care. For example, cardiologists and gastroenterologists experienced a 4.2 percent compensation boost in 2021. Overall, medical specialists saw a 4.1 increase in compensation, a 14.7 percent incline in productivity, and a 7.4 percent decrease in compensation per wRVU.

For surgical specialists, compensation rose an average of 3.9 percent, productivity increased by 11.8 percent, and compensation per wRVU declined 6.7 percent.

Advanced practice clinicians (APCs), including nurse practitioners and physician assistants, saw similar trends in compensation as physicians. Median compensation and wRVUs were higher in 2021 than in 2020, while compensation per wRVUs was significantly lower.

“The trends observed among APCs are not surprising. Given the overall lower volume observed throughout most of 2020, many organizations reduced their utilization of APCs,” Horton concluded. “Now that volume has returned to pre-pandemic levels, APC utilization is returning to pre-pandemic levels as well.”

Medscape’s 2022 Physician Compensation report found that although physician compensation increased in 2021, gender and racial income gaps persisted, as male and White physicians made more money than women and physicians of color.