Wound Care Physician Insights: Changing Compensation Models

A well-known, concerning fact is that the United States has the world’s highest-cost healthcare system without ranking as the highest in terms of quality care. In fact, according to the World Health Organization, the U.S. is said to not even rank among the top 35 countries when it comes to care quality (No. 37)!¹ Yet, it seems one would be hard pressed to find a healthcare employee in this country who philosophically disagrees with the goals of the Institute for Healthcare Improvement’s Triple Aim approach to value-based medicine: improving the patient experience of care (including quality and satisfaction), improving the health of populations, and reducing the per capita cost of care.² We all know, however, that implementation of the Triple Aim and value-based medicine is more easily said than done, especially when considering that most stakeholders are generally only supportive of those goals to the point that income and/or reimbursement are not impacted. The reality of the situation is that all providers will have to refine their practice models and experience a reduction in payment in order to truly improve care quality, reduce total cost, and improve the experience of the largest aging population to ever draw healthcare dollars from Medicare. Because physicians and other qualified healthcare professionals (QHPs) write the orders for nearly all the healthcare that is delivered in the U.S., they are key to driving the success of the Triple Aim and value-based medicine. For many years, Medicare payment to U.S. physicians/QHPs was exclusively based on the relative value units (RVUs) assigned to the Current Procedural Terminology codes for the services and procedures performed by physicians/QHPs. In addition, most of these physicians/QHPs were self-employed or worked in small group practices. Because everyone involved in the healthcare systems is faced with implementing new business models across the continuum, many physicians/QHPs are finding it beneficial to become employees of the larger networks and group practices. Most of these large groups compensate stakeholders with a salary or a combination of a salary and RVUs. Wound care physicians and other QHPs reported that salaries and salary/RVU payment rates vary by system and by practice group. For example, some systems/practice groups set an RVU threshold that must be achieved prior to receiving any RVU payment. Others award bonuses to those who generate the most revenue from certain high-paying inpatient surgical procedures, ambulatory surgery procedures, and outpatient procedures (eg, debridement and hyperbaric oxygen therapy [HBOT]).  While the salary, salary/RVU, and revenue-generating payment systems have been popular with physicians/QHPs, the future payment systems will likely be based on care quality, patient satisfaction, and delivering lowest cost of care (rather than on quantity and/or productivity). Although a significant portion of physician/QHP compensation is still tied to production, compensation plans are shifting to include nonproductivity metrics. (The nonproductivity bonuses de-emphasize the number of patient encounters and number of RVUs performed.) Therefore, everyone involved must shift the focus to identify and create efficiencies in their practice models. The value-based, nonproductivity compensation models that are surfacing feature such metrics as quality documentation, adherence to treatment protocols, on-call coverage, shared savings, bundled payments, capitation, and use of qualified clinical data registries (QCDRs).

Wound care physicians and other QHPs should carefully consider three of the nonproductivity payments. This article will discuss three options and offer feedback as to how those in the wound care industry are navigating new payment trends.

1. PAYMENT FOR SUPERVISING QHPs

The aging American population is creating more demand for healthcare employees, including those specialists who are certified in wound care. Due to the shortage of certified physicians, more healthcare systems and group practices are employing wound care-certified QHPs, who are typically paid salary. However, to align with the new physician payment models, many QHPs report that their compensation programs are beginning to incorporate value-based metrics. Wound care physicians also report that they are paid nonproductivity stipends to supervise these invaluable healthcare team members.

2. PAYMENT FOR ACCEPTING DIRECTOR & LEADERSHIP ROLES

Because wound care can no longer be practiced “in silos,” healthcare systems are looking to wound care physicians and other QHPs to design new models of care while managing existing wound care models. To encourage wound care physicians/QHPs to assume these vital roles, healthcare systems/group practices are expanding the traditional payment for this work by incorporating metrics to pay for achieving value-based wound care program goals across the continuum. For example, now that virtual care and telemedicine are increasingly accepted by payers and patients, wound care medical directors and physician leaders will most likely build these technologies into the management of patients across the continuum. The main reasons physicians/QHPs are looking to incorporate virtual care and telemedicine into the management of chronic wounds are the early evidence of improved health outcomes, cost savings, better access to wound care specialists, and convenience for patients.

3. PAYMENT FOR PARTICIPATING IN WOUND CARE-FOCUSED QCDRs

Because there are no wound care-specific measures in the Merit-Based Incentive Payment System (MIPS), healthcare systems and group practices are paying for their wound care physicians/QHPs to submit their quality measures to wound care-focused QCDRs, such as the US. Wound Registry. The Centers for Medicare & Medicaid Services (CMS) has approved 12 wound care quality measures that better represent the type of work that wound care professionals perform daily.  When physicians report wound care quality measures via a wound care QCDR, healthcare systems, group practices, and even single-practitioner offices have a better chance of achieving enough points to earn a MIPS bonus.  This compensation shift is causing an unsettled operating environment and confusion as to whether wound care physicians/QHPs are supposed to focus on volume or value. Providers should focus on both compensation models in parallel, and compensation will continue to evolve and incentivize these wound care professionals to improve the quality of their care across the continuum. Therefore, they should expect their healthcare systems/group practices to adjust their compensation models. In response to these trends, Today’s Wound Clinic (TWC) recently requested industry professionals to discuss if their compensation is changing and, if so, how. What follows are anonymous responses that prove physicians currently have a potpourri of compensation models:

Response 1:“In 2017, when I first began specializing in wound care, I was employed by the hospital to work in the outpatient wound care provider-based department. At that time, the hospital compensated me with a salary and an RVU bonus – the more procedures I performed, the higher my bonus. I am now employed by a wound management company and I am paid an hourly rate, which I like because I can spend the appropriate amount of time required to investigate why the chronic wound is not healing and to design a multidiscipline plan of care, rather than focus on the number of procedures I perform.”

Response 2: “I am hospital-employed and paid a salary and an RVU bonus. Unfortunately, I am a female physician. The total compensation package for the male physicians is significantly higher than it is for the female physicians.”

Response 3:“In my first year of private practice, I received a guaranteed salary with the potential to earn a bonus based on the revenue collected above my salary guarantee. For some unknown reason, I never generated enough revenue to receive a bonus, even though I was very busy.”

Response 4: “I work for a physician-owned wound management company and I am compensated by a salary. I also receive a quarterly bonus based on the revenue I generate above my salary.”

Response 5: “I am vice president of medical affairs for a wound management company and I am compensated by a salary plus a quarterly bonus based on the revenue generated by the medical directors whom I manage. That bonus has a quarterly cap.”

Response 6: “I have been employed by a healthcare system and compensated with a salary since 2009. In 2018, I also had an opportunity to receive incentives based on meeting national quality measures. This is problematic for me because there are no national quality measures that measure the outcomes of wound care, which is what I do all day, every day. I know I could report wound care quality measures through the U.S. Wound Registry, but my electronic health record vendor will not allow me to transmit my data.”

Response 7: “Three years ago, we surgeons were compensated based on the percentage of collections above fixed costs. As a fictitious example, if the fixed costs were $400,000 and the department collected between $400,000 and $800,000, the surgeons received 50% of the difference. If the department collected more than $800,000, the surgeons received 75% of the difference. This system incentivized surgeons to perform procedures and/or to use products with larger profit margins. However, that compensation program is no longer in effect. Now, surgeons are compensated based on a fixed dollar amount per RVU. We are no longer incentivized by profit margin, but we are still procedure-driven. The RVU compensation has three tiers that are based on thresholds. The dollar amount per RVU and the threshold bonuses vary by specialty. As another fictitious example, the surgeon’s base compensation may be $80 per RVU. If the surgeon performs RVUs that exceed the first threshold by 500 RVUs, the surgeon receives an extra $10,000. If the surgeon exceeds the second and third threshold, he or she receives an extra bonus for each exceeded threshold. As you can see, quality and outcomes, cost of care, and patient experience do not yet influence our surgeons’ compensation. However, the hospital is starting to pay attention to all the surgeons’ reported metrics. I suspect our surgeons’ compensation program will adjust gradually. I believe the first thing to change will be the compensation per RVU. I also believe wound care surgeons will revert to using lower-cost products and procedures that have published evidence. In addition, I believe wound care surgeons will reduce the frequency of procedures, such as surgical debridements. Although many wound care physicians think Medicare is causing all these changes, our experience has been the private payers are leading the change with their bundled payments.”

Response 8: “I am a medical director of a large urban wound care program and the chief medical officer of the 1,000-plus member physician organization at the healthcare system. In a setting where there is a surplus of revenue based on negotiated contracts, that surplus is divided among the physicians based on overall utilization, rather than individual performance. To analyze quality, we presently use the Healthcare Effectiveness Data and Information Set measures and the 32 items that CMS has outlined to measure quality. As far as we are aware, there are no wound care or HBOT-specific quality measures within those.”

Editor’s Note: Wound care QCDRs do have wound care measures that can be reported to CMS and benchmarked against each other.

“Currently, the employed physicians within our system, by contract, have agreed that all additional dollars received based on the individual physician’s quality performance will be retained by the healthcare system. However, it is conceivable that some of the quality-based dollars could be negotiated into incentive dollars for the individual physicians in the future.”

SUMMARY

Employed wound care physicians/QHPs should be prepared for changes in their compensation to align with the Triple Aim and value-based medicine. It is not a matter of “if” but a matter of “when.” The shift to value-based payment is evolving and will vary by healthcare system, by group practice, and by geography. Because wound care physicians/QHPs will be affected at different times, they should  proactively work with their healthcare systems and group practices to reinvent wound care management models across the continuum; to use decision-support tools; to report their wound care quality measures through a QCDR; and to generate, aggregate, benchmark, and share data in order to be  prepared for value-based payment whenever it occurs. Wound care physicians/QHPs should not wait for administration to come to them; they should proactively go to administration with their ideas to improve the quality of care across the continuum. n

Kathleen D. Schaum oversees her own consulting business and is a founding member of the TWC editorial advisory board. She can be reached for consultation and questions at kathleendschaum@bellsouth.net

References

1. World health organization’s ranking of the world’s health systems. WHO. 2009. Accessed online: https://thepatientfactor.com/canadian-health-care-information/world-health-organizations-ranking-of-the-worlds-health-systems

2. www.ihi.org/engage/initiatives/tripleaim/pages/default.aspx