If you're an employed physician — or increasingly an NP or PA — there's a good chance some or all of your pay is tied to work relative value units (wRVUs). Understanding them is one of the most valuable things you can do before signing a contract.
What a wRVU is
Medicare's fee schedule assigns every billing code a set of relative value units. They have three parts: work (your time, skill and effort), practice expense and malpractice. Employers usually pay based on the work part — the wRVU — because it reflects what you personally did.
A routine office visit might be worth one or two wRVUs; a complex procedure many more. Your total wRVUs for a year reflect both how many patients you see and how complex the care is.
How pay is calculated
Most RVU contracts use one of two structures.
Pure production. Pay = wRVUs × conversion factor. If your conversion factor is $55 and you generate 5,000 wRVUs, you earn $275,000.
Base plus bonus. You get a guaranteed base salary. Once you pass a threshold of wRVUs, you earn a bonus for each additional wRVU at the conversion factor. Below the threshold, you earn the base only.
The wRVU calculator does this math and shows what happens if your volume is higher or lower than expected.
The numbers that matter most
Conversion factor. The dollars per wRVU. It varies widely by specialty, region and employer. Compare it with survey data for your specialty.
Threshold. Where your bonus starts. A useful check: divide your base salary by the conversion factor. If the threshold is much higher than that number, you're doing a lot of unpaid work before the bonus begins.
Ramp-up. New clinicians rarely hit full volume in year one. Ask whether there's a guaranteed salary for the first one or two years, and how your threshold is set during that time.
Tiers and withholds. Some contracts pay a higher rate above a second threshold. Others hold back a percentage until quality targets are met. Some reconcile at year-end and claw back overpayments.
A worked example
Say you're offered a $260,000 base, a $55 conversion factor and a 4,700-wRVU threshold. At 5,400 wRVUs, your bonus is (5,400 − 4,700) × $55 = $38,500, for total pay of $298,500. The threshold is close to $260,000 ÷ $55 ≈ 4,727, which suggests it's set fairly. But if your volume came in 10% lower, your bonus would drop to about $8,800 — so the threshold carries most of the risk.
How coding affects you
Because wRVUs come from billing codes, documentation and coding directly affect your pay. Undercoding — choosing a lower-level visit than the care supports — is common among new clinicians and quietly reduces pay. Most employers offer coding education; take it.
Questions to ask before you sign
- What's the conversion factor, and is it fixed for the contract term?
- How is the threshold set, and can it change?
- Is there a guaranteed salary during ramp-up?
- Are there tiers, quality withholds or clawbacks?
- Do I get credit for APP supervision, procedures or teaching?
- How are telehealth, call and administrative time credited?
- Can I see a monthly wRVU report?
If you're: Resident / fellow
When interviewing, ask current clinicians how many wRVUs they generate and whether most reach the threshold. Their answers tell you more than the recruiter's projections.
If you're: Employed
Track your wRVUs monthly. If you consistently beat the threshold, you have data to negotiate a better conversion factor or base.
Don't forget the hours
An RVU contract rewards volume, which can mean longer days. Compare offers on pay and time with the effective hourly rate calculator, and put full packages side by side with the job offer comparison.