Physician Contract Glossary · Compensation
Collection-Based Compensation
Collection-based compensation ties your pay to the money the practice actually collects from your patient encounters, not to what you bill.
In a collections model you are paid a percentage of what the practice actually receives for your work after overhead, usually somewhere between 40 and 55 percent. It rewards high-volume, high-acuity work, and it puts the gap between what you bill and what gets collected squarely on you. If the billing office is slow, if the payer mix is heavy on Medicaid, or if denials pile up, your income drops even though your work did not.
Ask who controls billing and what the group's net collections rate has been. You are betting your income on a back office you do not run, so find out how good it is before you sign.
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