Understanding Your Compensation

1. Understanding Your Compensation A guide to understanding your compensation presented by Evergreen Financial Solutions, LLC

2. How do I earn my compensation? • Employed Physician. Many physicians are considered employees in their practice. They may or may not share in a any specialized compensation plan.

3. How do I earn my compensation?Continued • Shareholder Physicians. Shareholder physicians have certain rights over and above employed physicians. These rights entitle the physician to have special ownership and profit-sharing arrangements in the practice.

4. Employment Agreement • Regardless of the compensation plan, most physicians will be considered employees of their organization. Employment may be in a non-profit or profit hospital, a private practice group, or a solo practice. Understanding your corporate structure is key to understanding your compensation.

5. Understanding the Compensation • Every employment agreement or shareholders agreement should include a section which will address the way in which you are compensated.

6. Understanding the Compensation - Continued • Compensation agreements will address the base pay (draw) you will receive along with any additional compensation you will be entitled to receive should your attain any established benchmarks.

7. Understanding the Compensation – Continued • It is these benchmarks which are imperative in the understanding of your compensation plan.

8. Accrual and Cash Based Accounting • Accrual Based Accounting. This method of accounting records revenues and expenses as they are incurred and not paid. It is considered the most accurate method of accounting and is widely used in larger organizations.

9. Accrual and Cash Based Accounting-Continued • Cash Based Accounting. This method records revenues and expenses as they are received in the form of payments. This is the most common method of accounting used in smaller organizations.

10. Accrual and Cash Based Accounting-Continued • Each method has advantages and disadvantages when reviewing compensation. It is imperative to understand the method used in determining your compensation and how the method may affect any incentive compensation.

11. Incentives • Most compensation plans include additional incentives to promote productivity and quality of care. They offer opportunities for the physician to enhance their income.

12. Incentives - Continued • Incentives may be calculated in various ways. Some incentives are productivity based and include additional compensation for reaching certain productivity levels. Others include overhead in calculating any incentive pay. Some may be calculated from RVU’s (Relative Value Units).

13. Incentives - Continued • It is important to fully understand all the aspects of incentive compensation. At Evergreen Financial Solutions, we can assist you by reviewing the methods used in calculating incentive compensation.

14. Reviews • Evergreen Financial Solutions, LLC provides an overall review of your compensation plan. We assist you in understanding the method used and will provide feedback to assist you in reaching your compensation goals.

15. Reviews - Continued • Evergreen completes this task by working with your current or future employer and assuring the validity of calculations used in your compensation plan. An initial consultation is free of charge.

16. Other Services • Sometimes creating a plan among your fellow colleges creates stress and tension in a group practice. Evergreen Financial Solutions can assist your practice by coordinating and documenting your existing plan or assisting you to develop a new plan.

17. Final Thoughts Upstanding your method of compensation is of significant value. You want to spend your time seeing patients not worrying about your pay. At Evergreen we are there to support you so you can do the work you love and value.