For many physicians, employment contracts include a base salary plus a production bonus based on relative value units (RVUs). Employers can reward physicians for exceeding RVU targets — but also penalize them for falling short.

Understanding how RVUs work can help you avoid common contract RVU traps that can compromise your salary and even your employment.

To shed light on these traps, Medscape Medical News spoke to Dennis Hursh, JD, MLT, veteran employment attorney who represents physicians. He’s the author of the book The Final Hurdle: A Physician’s Guide to Negotiating a Fair Employment Agreement.

How did you become involved with representing physicians?

My firstborn daughter was very ill when she was an infant. My experiences at her bedside gave me a new perspective on physicians. Until that point, the medical encounter was friendly and professional but largely transactional. I saw a doctor, got a diagnosis and maybe a prescription, and went on my way. But when my baby girl was in the NICU, two physicians literally didn’t leave her side. Their care was deeply personal and utterly committed. Seeing their devotion inspired me to turn my focus as a lawyer to helping physicians so their financial and other needs were being met, as a way of giving back to the profession that had given my daughter back to me.

What type of services does your practice offer?

We focus on contract reviews when physicians initially enter into an employment contract to make sure their needs are met and that there are no “hidden landmines” in the verbiage. We also represent physicians who run into difficulties with their employers while already employed and review offers of partnership.

What are RVUs?

“RVU” is a measure created by the Centers for Medicare and Medicaid Services (CMS) to inform how much providers should be reimbursed for medical services. RVUs are assigned on the basis of several factors.

When I counsel physicians, I prefer to use the term “work RVUs” (wRVUs), which specifically relate to the physician’s work, expertise, and time spent on a given procedure or service. “RVU” typically covers everything involved in, let’s say, a procedure. This includes the operating room, the equipment, and so on, while “wRVU” focuses on the work actually performed by the surgeon.

wRVUs are typically less relevant for private practice physicians, but hospitals and health systems use that metric to determine productivity. And in a way, I suppose, that’s fair. If Dr Smith and Dr Jones are employed at the same hospital, but Dr Smith sees mostly charity patients while Dr Jones sees private-pay or well-insured patients, then Dr Jones will generate more money, even if both physicians perform the same procedures or see the same number of patients. In that scenario, wRVUs are a fairer way to compensate physicians than compensation based on the hospital’s revenue for each patient.

What factors determine wRVUs?

wRVUs are based on several factors, only one of which is the amount of time spent with the patient. I like to say that the system favors the “hands” over the “head.” What I mean is that a surgeon who spends an hour performing a procedure will be awarded more wRVUs for that hour compared with a primary care physician who spends an hour with a patient and uses his or her head in trying to figure out the diagnosis or treatment plan, even if the condition is rare, complex, or hard to treat.

What types of wRVU-related traps do you see physicians fall into?

The biggest trap I’ve come across is not having verbiage in a contract that allows the physician to receive regular updates regarding their wRVUs. In the absence of such updates, and without any warning, physicians might suddenly receive a communication from the hospital administration that they’ve fallen behind on meeting their wRVUs and might even be penalized.

I’ve been consulted by a number of physicians in that predicament, who were really burned by this lack of information and transparency.

One, a cardiologist, had his pay cut because his wRVUs had fallen well beneath the threshold. In fact, he was told that his employment was about to be terminated. His wRVU numbers landed him in the 10th percentile of productivity. He was really baffled because he had been seeing patients 8 hours a day, 5 days a week.

I advised him to keep track of the patients he saw and to print out his daily schedule. Then we sat down with hospital administrators. They showed him their figures, which reported that he was seeing two to three patients a day. We showed him the printout of his actual schedule. It turned out that there was some type of glitch in the billing system and the fault lay with the billing department. But if he had been receiving regular reports, all along, he would have become aware of this issue much sooner, before his compensation was slashed and before he was threatened with termination.

Fortunately, he wasn’t terminated, but his salary was still diminished as a result, even when he showed the administration that he had been seeing the appropriate number of patients.

Do you advise physicians to keep track of their wRVUs in general?

Yes, I think it’s a very good idea for physicians to keep track of the number of patients they see and the procedures they perform because errors do occur, and these can affect compensation. Another physician client who was receiving regular productivity reports from her employer saw that her productivity suddenly plunged and that she had accumulated almost no wRVUs for a 1- to 2-week period. She knew how many patients she had seen during that time, and she was determined to get to the root of this bizarre report.

It turned out that several employees in the billing department were out sick at the same time. Because the billing department was understaffed, her work simply wasn’t being posted. Two weeks may not sound like much, but the patients you see during that time might spell the difference between meeting the threshold of wRVUs and earning your bonus or being regarded as underperforming. The fact that she had a clear record of her patients made it possible for her to rectify the underestimation of her wRVUs during that period.

This brings me to the next trap I see frequently, which is that wRVUs are accrued when a service is posted, not when it’s performed. When I review a contract, I always encourage physicians to include a provision that the wRVUs will be earned when the service is actually performed, rather than when the employer gets around to billing for it.

What other wRVU traps do you encounter?

A major wRVU compensation trap takes place when wRVU productivity is adjusted to reflect compensation modifiers. It results from subtle verbiage in the employment agreement that stipulates that wRVUs will be adjusted to reflect CMS modifiers. On the surface, that seems to make sense, and many physicians gloss over this language in the contract, seeing it merely as unimportant boilerplate. After all, because wRVU values originate from CMS, it would seem to make sense that they would be adjusted in accordance with CMS methodology.

But the reality is that wRVU production is actually quite separate and distinct from reimbursement modifiers. The best way to explain this is through an example. Operating on two hammertoes is obviously twice as much work as operating on one hammertoe. So if you’re a surgeon and you operate on two toes of the same patient, one right after the other, you’re performing twice as much surgery as you would if you had operated on only one toe. But the reimbursement for the second toe is 50% less than for the first. From the perspective of CMS, this is fair. The same preparation is required for the operating room, the supplies, the anesthesia, and so on whether the patient is having one toe repaired or two. But the physician is doing twice as much work.

So when hospitals use reimbursement methodology to calculate the physician’s wRVU production, this can lead to a significant reduction in the physician’s productivity compensation. When I review an employment agreement for a physician, I put in a provision that says wRVU production should be determined using only the current CMS wRVU table without regard to reimbursement modifiers.

Do you counsel primary care physicians differently from the way you counsel specialists?

I basically recommend the same approach for physicians in any specialty: You should compare your wRVU thresholds with the median benchmarks published by the Medical Group Management Association (MGMA), which relies on data supplied by employers — including hospitals.

According to the 2025 MGMA Provider Compensation and Productivity Data Report, median wRVUs in hospital-owned practices in 2024 for primary care physicians, surgical specialists, and nonsurgical specialists were approximately 5700, 8000, and 6800, respectively. The issues are similar, regardless of specialty. It’s just that each specialty has a different median benchmark and will have a bonus set by the hospital or health system based on the benchmark of that specialty. I always advise physicians to compare the thresholds that their employer is setting with the MGMA medians to make sure that the expectations they are supposed to meet are reasonable and fair.

Do you have any additional advice?

I think that all physicians should have an attorney review their employment agreement prior to accepting a new position or when there is any type of contractual change. Doctors are extremely proficient in clinical matters. They heal people. They save lives. But they aren’t trained as lawyers, nor should they be — just as I’m not trained as a doctor.

Any doctor knows that an ounce of prevention is worth a pound of cure, and having an experienced, skilled attorney review a contract can prevent all sorts of problems down the road. And of course, if an issue arises during one’s employment, as it did with the physician who was about to be terminated, an attorney can help negotiate with the hospital administration as well.

Hursh is the founder and practicing attorney at Physician Agreements Health Law and is the author of a book about physician contracts.

Batya Swift Yasgur, MA, LSW, is a freelance writer with a counseling practice in Teaneck, New Jersey. She is a regular contributor to numerous medical publications, including Medscape Medical News and WebMD, and is the author of several consumer-oriented health books, as well as Behind the Burqa: Our Lives in Afghanistan and How We Escaped to Freedom(the memoir of two brave Afghan sisters who told her their story).