An incentive plan for professional fee collections at an indigent-care teaching hospital

The authors describe the implementation and development of an incentive plan to improve professional fee collections at an indigent-care teaching hospital. They theorized that an incentive plan based on relative value unit (RVU) productivity would increase billings and collections of professional fees. Unique RVU targets were set for individual services based on the number of faculty full-time equivalents and average reported productivity for academic physicians by specialty. The incentive plan was based on the level of expected faculty billings, measured in RVUs, for each department. A "base + incentive" model was used, with the base budget being distributed monthly throughout the year, and the incentive held as a "withhold" to be paid at the year's end only if the billing target in RVUs was met. Additionally, a task force worked with physician billing office and the hospital to improve collections. In the first year after implementation of the system was in place, important increases were noted in total RVU productivity (30.5% over the previous year) and in collections (49.5% over the previous year). Sixteen of 23 departments exceeded their incentive targets, and it was possible to make distributions of professional fees to those departments, to be used within the hospital system to enhance clinical services. Moreover, the plan created an overall positive attitude toward billings and documentation of faculty activities. The authors believe that this kind of incentive plan will be increasingly important for academic faculty working in public hospital systems.