How to Negotiate an RVU-Based Physician Contract

Learning how to negotiate an RVU contract is worth more than almost any other career skill for an employed physician: small changes to the rate per work RVU or the threshold add up over years. This guide explains the moving parts and how to check an offer against public data. It is general information, not legal or financial advice; have a health-care attorney review any contract before you sign.

How to negotiate an RVU contract: the usual structure

• Pure productivity: pay = your work RVUs × a dollar rate per wRVU (the “conversion rate”, not to be confused with Medicare’s conversion factor).
• Base plus productivity: a guaranteed salary, plus a bonus for every wRVU above a threshold. The threshold is often the base salary divided by the conversion rate.
• Guarantee period: new physicians often get a guaranteed salary for one or two years while they build a panel, then move to productivity.
• Quality and citizenship pay: a share of pay tied to quality measures, patient experience, teaching or committee work.

The five numbers to negotiate in an RVU contract

1. The rate per wRVU. Ask how it was set and which survey percentile it reflects. A higher rate pays off on every RVU you ever produce.
2. The base salary and threshold. Compare the threshold with realistic volume. If it implies more RVUs than most clinicians in your specialty and state produce, the “bonus” may never arrive.
3. The guarantee length and what happens if you don’t reach the threshold afterwards (is pay reduced, or only the bonus lost?).
4. Which RVUs count: all wRVUs billed under your NPI? Supervised APP visits? Procedures in other facilities? Telehealth? New add-on codes?
5. How RVU values are updated. When CMS changes RVUs (as it does every year), does your rate adjust so your pay doesn’t silently fall? Fix the RVU year in the contract or require an adjustment.

Check targets against public data

Commercial salary and RVU surveys (MGMA, AMGA, SullivanCotter) are the usual benchmarks but are paid products. Public Medicare data can’t replace them, but it can tell you whether a target is realistic relative to your peers. Our analysis of 2023 Medicare billing shows how many Medicare work RVUs clinicians in each specialty generate:

And how a specialty’s typical Medicare workload differs by state, for example internal medicine:

Source: contact.doctor analysis of CMS Medicare Physician & Other Practitioners by Provider and Service (2023) and the CMS Physician Fee Schedule relative value file (2023). Medicare fee-for-service services only, for clinicians with at least 100 Medicare work RVUs; CMS leaves out services given to fewer than 11 patients. Not a measure of total workload: most clinicians also see patients with other insurance. States with fewer than 20 clinicians in the specialty are not shown.

Remember these are Medicare-only RVUs. Ask the employer what share of the practice’s patients have Medicare, and request the actual wRVU production of physicians already in the practice (median and range). If incumbents rarely meet the threshold, negotiate it down.

Demand signals that strengthen your hand

• Shortage areas: practicing in a federal Health Professional Shortage Area can qualify you for loan repayment and, in geographic primary care shortage areas, a 10% Medicare bonus.
• Few local specialists: check the doctors per capita map for your specialty and county.
• An aging local workforce: see aging doctors by state.

Other clauses that matter as much as pay

Non-compete radius and length, tail coverage for malpractice insurance, call schedule and call pay, termination notice, signing bonus and relocation repayment terms, CME time and money, and who owns your patient panel. Get every promise in writing.

Sources

Medicare RVU values: CMS PFS Relative Value Files (opens in a new tab). Shortage-area bonus: CMS HPSA Physician Bonus Program (opens in a new tab). Related: what are RVUs, how to increase RVUs, your first job after residency.