The projected effect of these changes on common specialties is mixed. In general, we note that the 2009 changes impacted favorably specialties for which the wRVU component of reimbursement represents a higher weighting than the practice expense component (e.g., hospital-based specialties such as anesthesiology, critical care and emergency medicine). Conversely, those specialties with a higher practice expense component (e.g., office based specialties such as cardiology, medical oncology, orthopedic surgery, and radiation oncology) are impacted negatively by the new application of the BNA to their practice expense component.

FMV Pitfall Alert 

Employment arrangements that include production-based compensation may be affected inadvertently by changes to the PFS. We observe numerous employment arrangements wherein physicians' base and/or incentive compensation is tied to pre-established wRVU milestones. In using wRVUs to establish base and/or incentive compensation, the parties generally rely on expected consistency in the wRVU "yardstick." However, as the 2008 and 2009 PFS changes demonstrate, the yardstick can and does change, and well intentioned employment agreements can have unintended consequences.

We recommend the following:

• With respect to new employment agreements, the agreement should specifically address how changes in the PFS will be handled in determining physicians' base and/or incentive compensation.
• With respect to existing employment agreements, the compensation payable under the agreement should be reviewed to determine if unintended favorable or unfavorable consequences have occurred solely as a result of changes to the PFS.