Editor’s note: PCR asked compensation experts to discuss how often facilities should review their compensation plans and what to look for during the assessment. Their responses are below.

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James W. Lord, principal, ECG Management Consultants, Inc.

Although market data must be reviewed annually, the construct of the plan should not need to be revisited unless major strategic, market, or operational shifts have occurred. Typically, a compensation committee meets quarterly to operate the plan, and as things bubble up from that committee, they must be cataloged and a determination must be made about the effect on the plan’s structure. Put simply, the compensation plan should incentivize physicians to achieve the group’s strategic plan. If they are out of sync with that, the plan needs to be restructured.

Marc Bowles, CPC-PRC, CMSR, FMSD, chief marketing officer, The Delta Companies

The key to the process is obtaining physician buy-in throughout. Explain why you need the change. If you don’t have physician proponents for the plan, you will have strong resistance and, as a result, either the plan will fail or you will experience turnover.

Evaluate multiple models, select the most acceptable ones, and bring them before the entire medical staff for review, discussion, and implementation.

David A. McKenzie, CAE, reimbursement director, American College of Emergency Physicians

I’d suggest an annual review based on the release of the Medicare fee schedule and the allocation of RVUs. The vast majority of physician compensation is based directly or indirectly on the Resource-Based Relative Value Sale system using either a payer-specific conversion factor or payments based on a percentage of Medicare’s payments. Facility compensation plans should be constructed considering this same benchmark.

Max Reiboldt, CPA, managing partner and CEO, The Coker Group

All groups should be continually evaluating the fairness and objectivity of their compensation plans. This may entail relatively minor tweaks from year to year. For example, a compensation plan that is heavily based upon work RVU metrics will need to be updated at least yearly, as those metrics are adjusted not only by CMS, but also as industry standards and benchmarks are updated. Although major overhauls to the practice/network’s income distribution plan (IDP) are not recommended every year, it is a healthy exercise to review the plan to ensure that it is re-sponding to the specific operational performance of the practice.

The process should involve a compensation committee. For a group or network of eight or more providers, a specific committee should be entrusted with reviewing and, if necessary, updating the IDP. This will allow an orderly process wherein the committee will complete the review and make recommendations to top management and, ultimately, the partners. H