If I am employed by a hospital, does my compensation have to be limited to a straight salary (plus fringes), or is some kind of productivity bonus possible?
It is important that any productivity bonus formula be structured to meet an exception to the Stark Law and, if possible, a “safe harbor” under the Anti-Kickback statute. Additional constraints on productivity bonus formulas are applicable to hospitals that are exempt from taxation under Section 501( c)(3), since these institutions must avoid the appearance of private inurement, which may result in significant tax penalties for the hospital. Increasingly, physician compensation agreements negotiated by hospitals include some kind of productivity bonus, which may be determined based either on your own individual productivity or the productivity of a department or group of physicians—so long as the volume or value of referrals are not taken into account. Many productivity bonuses are based on relative value units (RVUs), physician-generated “net revenue,” or net collections. Through ever more complex productivity bonus formula, hospitals are seeking to share financial risk with physician
