Determining A Provider's Bonus Based On Revenue Generated

For practices that provide provider bonuses based on revenue generated, this calculator helps to measure the potential bonus and cost to the practice.

 

Steps 1 & 2:

Begin by estimating the revenue generated based on the number of days they will work, the number patients per day and the revenue expected per visit. 

 

Step 3:

After entering the practice overhead (prior to provider salaries, bonuses and benefit costs) the calculator will determine the estimated overhead cost to be assigned to the provider.

 

 

Step 4:

Once you enter the provider's annual salary, the calculator will then calculate a safe bonus threshold (the point at which the provider begins earning a bonus).  After entering the bonus rate for the provider, you can then see the provider's total earnings if they meet the revenue projections.

 

 

Practice Profitability:

The last section determines the practice's profitability by deducting the salary, bonus, payroll tax costs and other benefits to show the profitability if the overhead rate continues and the provider meets the revenue goals.

 

A few words about vaccines...if the vaccine drug costs are included in the overhead rate (which it should), then the revenue per encounter should also include vaccine revenue.  By keeping the vaccine cost in the overhead rate,  the calculator below deducts the cost of vaccines before determining the point at which the provider earns a bonus.  Concerns may arise when individual providers see a disproportionate share of newborns.  In situations where large discrepancies do exist, it is best to contact PMI so that a custom model can be built for you. 

 

...for employed providers, they are not allowed to receive A few words about Stark Lawsbonus(es) on ancillary revenue generated by Medicare and Medicaid patients.  Such revenues include laboratory and radiology services, etc.  Care should be taken to address such concerns. If you need help addressing this issue, please contact PMI for assistance.

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