What is the Most Common Physician Assistant Compensation Model? | Common PA Salaries
What is the most common compensation model for a Physician Assistant? I would say most contracts that I’ve reviewed and upon all our research here at our firm, it’s mainly a base compensation, so you’re paid a salary. Occasionally, you do have additional bonuses on top of that base compensation. But normally, it’s just outlined in a PA’s employment agreement you’re just going to get a base salary. Another common one I see depending on your specialty is you may be paid hourly. You’ll want to calculate that hourly rate to see where you are in relation to if you feel like you’re getting compensated properly. And then also, sometimes there are day rates or shift rates.
Common Physician Assistant Salaries
So, just upon an 8, 10-hour, or 12-hour shift, you’re compensated with a flat rate. Those are the three different ways: just salary-based compensation, hourly or shift, or day rate. You rarely see physician assistants receiving production or RVUs or collections because most of the time, they’re assisting or have a supervising physician, and physicians normally are paid based on those RVUs or collections or productions. Typically, a PA is just going to be paid a fee. And it depends on how that’s outlined in your contract. As I said, there are also other bonuses that you may be compensated for. Sometimes it’s quality assurance, other times there is some type of production. It just depends. Bigger entities usually have their own unique metrics but that should be easily understood in your employment agreement.
If you read it and it’s difficult, or there are a lot of variables or discretion of the employer, that’s something that you would want to get clarified before you sign on that dotted line. Also, you should be receiving some type of signing bonus upon signing or starting your employment with your new employer. This can range anywhere from around 10,000 to 20,000. Again, this is considered income and it’s normally given to you in a lump sum. Just keep in mind that whatever that number is in that bonus in your contract, you may be receiving less because taxes or income taxes will be taken off the top, so that’s something to keep in mind. Other topics of interest include:
- Red Flags in a Physician Assistant Employment Contract
- What Should go into a Physician Assistant Termination Letter?
And then also, any type of bonus, specifically like a signing bonus or a commencement bonus will typically have some type of strings attached to it, meaning that you have to complete anywhere from one to three years of employment. Otherwise, you’ll have to pay back either that full bonus or that bonus at a prorated amount. So, they’ll forgive a certain portion of it for every month or year that you’ve completed with your employer. And then the last bonus that I normally see on top of your compensation would be some type of retention bonus. It’s normally structured at the anniversary of every year of employment. You can receive anywhere from $5,000 to $10,000. And again, that’s going to be a lump sum, so you will have taxes taken out of the top of that. Retention bonuses normally do not have any payback provisions because it’s conditional on you completing a full year. If you quit in the middle of the year, you lose your eligibility for that retention bonus. You’re not going to receive half of it, you receive nothing. So, those are the normal, I would say, compensation models for a PA.
Negotiating Physician Assistant Compensation
How to negotiate an employment agreement for a physician assistant? When you are negotiating the terms of your employment, the two things you really want to keep in mind are, one, what type of leverage do you have? And two, what are really the most important things that you want to throw that leverage towards, to get the best deal for yourself, and what do you want to negotiate? What can you negotiate? What’s typically negotiated within the industry? Let’s first start with leverage. How much leverage do you have? Well, let’s first think about that. You are a PA, and, in most states, you need some type of supervising physician. So, you want to keep that in mind. And then also, are you right out of school?
You’re going to need a lot of direct supervision. Are you experienced and you can just step into that role? How specialized are you? Again, this all just depends on your state. But really what you’re looking at is how much oversight you need, how much training, or can you just start providing care and collecting for your services? That’s how you judge how much leverage you have. Now, let’s talk about negotiation. I get questions from clients all the time: can I negotiate? Is this something am I going to upset this prospective future employer? And I would say, no, it is customary within your industry to negotiate the terms of your employment contracts. Most of the time they’ll hand you or send you an employment contract and give you one or two weeks to look it over, consider it, and consult with legal counsel, that’s me, and come back with any terms.
Negotiating the Base Salary
Sometimes you do want to negotiate. There are things that you should advocate for. Sometimes there also might be terms that you don’t understand, and you need clarification for, or you need this employer to define for you. There are some negotiations and back and forth. That’s customary, you should not feel that you’re going to upset them and they’re going to resend this offer. That’s just simply not the case. You’re always going to negotiate some part of your employment contract and your employer expects this. They do not expect you to just sign on the dotted line and agree to all the terms. That’s extremely rare. And I think your employer would be surprised if you came back with that. Now, let’s talk about what we’re going to negotiate. Most people, when they think of negotiation, they think of their base salary. The big money amount on their employment agreement, that’s what they want to negotiate first.
Median Physician Assistant Salary and Total Income
They want to use all their negotiation power for how much money they’re going to be receiving. If you feel like you’re not getting compensated how you should, you absolutely should advocate for yourself and try to negotiate that amount. But what I look for and I think is the most important to negotiate is sometimes it’s the non-compete clause. That’s the first thing that I would probably negotiate. Because a lot of people don’t think about the non-compete clause until their contract ends. And you can negotiate a couple of different parts of the non-compete clause. Normally, it starts with how long does the non-compete? Is it enforceable? Once your contract terminates, your non-compete will start. It’s anywhere from one to three years I’ve seen on a contract. I would never want anything over 12 months. I would push for 12 months or six months, honestly, but most people are going to agree to 12 months.
Negotiation of Non-Compete Clause
So, I would always negotiate down the time. How long are you restricted from competing with this employer? Then next I’m going to look at the locations that the restricted area attaches to. And the restricted area is normally within a mile radius. So, anywhere from 3 to 10 miles, you are restricted from practicing from a three-mile radius from this location. If the miles are unreasonable, anything over 20 miles, in my opinion, is likely unreasonable. You would want to negotiate down that amount. And then you’re also going to look at how many locations is that restriction attached to. If it’s only one location, that’s great. But if you start having that area or restricted area attached to any location you provide services for or any location of the practice, then you’re knocking out huge areas. That can really be unreasonable.
And, it’s going to be really hard and stressful for you to find work after this employment agreement terminates. So, the first thing I always look for and try to negotiate is the non-compete clause. In some states, it’s unenforceable and that’s great. You just want to check your state law or check with an attorney. They can advise you on that. But the non-compete clause, absolutely, I always look for that. Then the next thing I’m going to look for is how do you get out of this agreement? Most employment contracts should have something that’s called a without cause termination, which means you can injure employment with your group for any reason or no reason at all. And you just have to give a specific amount of notice prior to the termination. If your contract does not have this included, I would absolutely negotiate. This would be a huge red flag for me because you just don’t have a crystal ball.
Negotiating a Without-Cause Termination and Compensation
It might not be a good fit; you might need to move out of the area because of family issues or personal reasons. You just don’t know. And so, if you don’t have a without cause termination, you’re really stuck in this contract until the end or you’re at the mercy of your employer, begging them to let you out of it. So, I would always negotiate a without cause termination. The third on my list probably would be your compensation. Sometimes the base is most important. In your compensation model. Normally, for a PA, you’re normally paid either salary, hourly or per shift, or like a daily rate. It’s normally a flat fee. You’re not normally compensated for collections, productions, or RVUS. So, you are going to be negotiating that base amount.
You want to do your research. Are you in a desirable area? Are you in a high-need area? What experience are you bringing to the table? All of those you want to consider when you’re asking for an increase in that base salary. And if you feel like upon your research that you think you should advocate for more, then you absolutely should. Another thing you want to consider when you’re negotiating is looking at your bonuses. That could be a relocation bonus, it could be a signing bonus, or sometimes they even call it a commencement bonus. You’re going to get a certain amount of money upfront. If you’re moving to a new area, I would absolutely negotiate a relocation allowance or bonus or something like that, just so that you’re getting funds that will help you with the transition into this new area.
Salary for Different Specialties
That is something I would negotiate. Then two, your signing bonus. Just about every contract I see for a healthcare provider has some type of signing bonus. If you don’t have one, I would ask for one. That’s something you should negotiate. But with all these bonuses, with the funds that you receive upfront for starting or commencing your employment, you want to be careful because there’s normally some type of payback provision, which means you have to stay employed with your employer for a certain period. It’s normally anywhere from one to three years. You want to read that carefully. You may have to pay back your entire signing bonus if you terminate at any time within that one to three-year window. If I were negotiating, I would ask for that amount to be prorated, which means that for every month that you stay employed, a fraction of that amount is forgiven, so you don’t have to pay back the full amount.
There are a lot of things you can negotiate. You also don’t want to forget about those ancillary benefits or sort of employment costs. Things that need to get reimbursed like your continuing education, your licensing fees, your dues, and DEA license are very expensive right now. You should negotiate that your employer reimburses you for that. So, you just want to keep all of that in mind and not just focus on your base salary.
What is a Physician Assistant Contract?
Physician assistants are almost always asked to sign a contract before they begin their first day of work. The contract establishes key aspects of their job in a way that is legally set in stone. A few of the elements that may be included in the contract include:
- The Rate of Pay – Physician Assistant (PA) salaries have a wide range of between $60,000 all the way up to $200,000 annually with the median coming in at around $115,000. The contract will establish the rate of pay at a range that both the employer and the employee can agree on. This is the top-line figure in the contract that the physician assistant is likely to pay the most attention to, but it is far from the only factor to consider.
- Schedule – The hours that one is expected to be at work performing their job duties can (and should) all be established in their contract as well. The physician assistant will want to double-check that they understand precisely when they are expected to be at work and how that schedule will work. Is it a fixed schedule? Is it a rotating schedule? These are the types of things to ask about.
- Non-Compete Clause – There may be an aspect of the contract that forbids the PA from seeking employment with another physician’s office or another competitor anywhere else in the area. This type of clause is a common aspect of many PA’s contracts, but it may still give some people a bit of pause. They need to think carefully about if they want to lock themselves into working at one specific facility for the long term or not.
- Benefits – An outline of the benefits that one can expect from their job should also be contained within the contract. This is important because the benefits that one can receive are a big reason to decide to take a specific job or not. Your employer should be capable of offering you a considerable number of benefits for the work that you do for them. If they fail to do so, it may be worth considering taking your services elsewhere.
These and many other elements of your contract should all be laid out for you to examine carefully. Should you experience any confusion or hesitation about any aspect of your contract, you may want to reach out to an attorney to go over it with you. Those papers that you are handed have a lot of significance attached to them that is not to be ignored.
Examining Compensation Formulas
Most people work in jobs where they are given a set rate of pay for each hour of labor that they put into the job. The only decision that they have to make is if they will accept that rate of pay or not. However, physician assistants have a few more considerations to make. Their pay rate may be laid out in a variety of ways.
Base Salary Only
New PA’s that are just coming out of school should expect to work only for a base salary for some period of time. They have not yet proven their skills or value to the employer that they go to work for, and that means that the employer is not going to want to pay more than necessary. For the first six to twelve months, the brand-new PA should expect to make a base salary only. This may come in the range of $70,000 to $100,000 to start until they have proven their value beyond that.
Base Salary + Percentage of Collections
After a PA has put in some time and proven their value, they may expect to negotiate their salary package to include a percentage of the collections that they bring in to their employer. An example of how this might work with a PA who earns a base salary of $80,000 per year at a facility that generated $350,000 in revenue is as follows:
The PA would receive a base salary of $80,000 per year. In addition, the PA would be paid 20% of their collected revenue, after deducting $160,000 (double their base salary) from the total collected revenue. If their total collections are $350K, $350K – $160K = $190K. 20% of $190K is $38,000. For that fiscal year, that PA would earn a salary of $118,000.00
As you can see, the PA earned significantly more than they would have if they had to stick only with the base salary that they were initially offered. This is a favorable deal for the PA.
Physician assistants who have three years or more of experience can consider going for a contract in which they are exclusively compensated based on their ability to bring in new business to the practice. Some might think of this as being a particularly risky thing to do, but many physician assistants see a much higher salary than they would otherwise receive when they align their pay like this.
If the PA happens to work for a particularly profitable clinic, then it is obviously to their benefit to set up their pay to correspond with the rising profits of the clinic. Thus, experienced physician assistants may take a stab at getting their contract to allow them to do this.
Consultation with Chelle Law
For more information on things to look out for in your physician’s assistant contract, please contact us and let one of our talented lawyers sit down with you and get this all figured out. Our team is more than happy to work with you to get you everything that you deserve out of your contract today.
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