Source: SalaryDr Physician Salary Glossary. 31 physician compensation terms defined. URL: https://www.salarydr.com/glossary
Physician Salary Glossary
31 key compensation terms every physician should know — from wRVU and RVU rate to tail coverage and non-compete clauses. Bookmark this page as a reference when reviewing contracts and offers.
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25th Percentile
A statistical measure indicating that 25% of physicians in a comparison group earn less than this amount. Falling near the 25th percentile may indicate early career status, part-time work, or a lower-paying market.
If the 25th percentile for internal medicine is $230,000, one quarter of internists earn below that figure.
75th Percentile
A statistical measure indicating that 75% of physicians in a comparison group earn less than this amount. Earning at or above the 75th percentile typically reflects high productivity, desirable geography, or senior-level experience.
If the 75th percentile for orthopedic surgery is $900,000, three quarters of orthopedic surgeons earn below that figure.
A
Academic Medicine
Physician employment at a university-affiliated or teaching hospital. Academic positions typically offer lower base salaries than private practice but include protected time for research, teaching, and scholarly activity.
An academic cardiologist at a university medical center may earn $350,000 but spend 30% of their time on research.
B
Base Salary
Fixed annual compensation before bonuses, incentives, or benefits. Base salary represents the guaranteed portion of a physician employment contract.
Varies widely by specialty; primary care $200,000–$280,000, surgical specialties $350,000–$600,000+.
C
Call Pay
Compensation for being available outside normal working hours to respond to emergencies or patient needs. Call pay structures vary from daily flat rates to per-case or per-hour reimbursement.
$500–$2,500 per call day depending on specialty and coverage requirements.
CME Allowance
An annual stipend provided by an employer for Continuing Medical Education activities, including conference attendance, courses, and educational materials required to maintain board certification.
$2,000–$5,000 per year for most employed positions.
Collections Rate
The percentage of billed charges that a practice actually collects from patients and insurers. Collections rate is a key metric for private practice profitability.
90–98% for well-managed practices; lower rates indicate billing inefficiencies or high bad debt.
Cost-of-Living Adjustment
A salary modification based on geographic living costs. Employers in high-cost areas may offer cost-of-living adjustments (COLA) to make compensation competitive relative to local expenses.
A $400,000 salary in rural Kentucky may have more purchasing power than $500,000 in San Francisco after cost-of-living adjustments.
E
Employed Model
An employment arrangement in which the physician works as a W-2 employee of a hospital, health system, or medical group. The employer handles billing, overhead, and administrative tasks in exchange for a structured salary and benefits package.
F
FTE (Full-Time Equivalent)
A standard measure of work commitment used to define employment status. An FTE of 1.0 represents a full-time position, while 0.5 FTE represents half-time. Compensation, benefits, and wRVU targets are often scaled by FTE.
A physician at 0.8 FTE working four days per week would earn 80% of the full-time salary.
J
J-1 Waiver
An immigration waiver that allows international medical graduates on J-1 visas to remain in the United States by committing to practice in a medically underserved area for a specified period, typically three years.
A physician on a J-1 waiver may receive a higher salary or signing bonus due to the commitment to serve in a shortage area.
L
Locum Tenens
A temporary physician staffing arrangement in which a doctor fills a short-term vacancy at a healthcare facility. Locum tenens positions typically pay higher daily rates to compensate for travel, lack of benefits, and schedule flexibility.
$1,200–$2,800 per day depending on specialty and location.
M
Malpractice Insurance (Occurrence vs. Claims-Made)
Two types of malpractice insurance policies. Occurrence-based policies cover any incident that happens during the policy period, regardless of when the claim is filed. Claims-made policies only cover claims filed while the policy is active, requiring tail coverage upon departure.
A surgeon leaving a claims-made employer needs tail coverage (often $20,000–$50,000+) to protect against future claims for past procedures.
Median Salary
The middle value when all physician salaries in a group are ranked from lowest to highest. The median is less affected by extreme outliers than the average, making it a more reliable measure of typical physician compensation.
If 100 cardiologists' salaries are ranked, the median is the average of the 50th and 51st values.
MGMA
The Medical Group Management Association, an industry organization that publishes widely referenced annual physician compensation surveys. MGMA data is commonly used as a benchmark during salary negotiations and contract discussions.
Moonlighting
The practice of working additional clinical shifts outside of a physician's primary employment. Internal moonlighting occurs within the same institution, while external moonlighting is performed at a different facility. Moonlighting is common among residents and fellows seeking extra income.
$100–$250 per hour depending on specialty and setting.
N
Non-Compete Clause
A contractual restriction that prevents a physician from practicing medicine within a certain geographic radius and/or time period after leaving an employer. Non-compete clauses vary in enforceability by state.
A non-compete may restrict a physician from practicing within 20 miles of the employer for 2 years after departure.
O
Overhead
The total operating costs of running a medical practice, including rent, staff salaries, equipment, medical supplies, billing services, and insurance. Overhead is a critical factor in private practice profitability and typically ranges from 40–65% of collections.
P
Panel Size
The number of patients assigned to or managed by a primary care physician. Panel size affects workload, revenue, and quality metrics. Larger panels generate more revenue but may reduce time per patient.
1,500–2,500 patients per full-time primary care physician.
Partnership Track
An employment arrangement that provides a pathway to practice ownership or equity stake after a defined probationary period, typically 1–3 years. Partnership track positions may offer lower initial salary with the potential for significantly higher earnings as an owner.
Private Practice
A physician-owned medical practice, either solo or as part of a group. Private practice physicians manage their own business operations and bear financial risk but generally earn higher compensation than employed counterparts.
A private practice gastroenterologist who owns their endoscopy center may earn 30–50% more than an employed peer.
Production Bonus
Additional compensation awarded to a physician for exceeding predefined wRVU, revenue, or collections targets. Production bonuses align physician income with clinical productivity and are common in both employed and private practice settings.
A physician generating 6,500 wRVUs against a 6,000 wRVU target may receive a bonus of $50 per additional wRVU, equaling $25,000.
Q
Quality Bonus
An incentive payment tied to achieving defined patient outcomes, quality metrics, or value-based care targets. Quality bonuses often account for 5–15% of total compensation and are increasingly common in employed settings.
$5,000–$50,000 per year depending on the compensation model and metric thresholds.
R
Relative Value Unit (RVU)
A CMS (Centers for Medicare & Medicaid Services) metric that assigns a standardized value to medical services based on three components: physician work (wRVU), practice expense, and malpractice cost. RVUs are the foundation of the Medicare physician payment system.
Retention Bonus
A payment offered to incentivize a physician to remain with an employer for a specified period, often 2–5 years. Retention bonuses are common in competitive markets and areas with high physician turnover.
$10,000–$75,000 depending on specialty and contract length.
RVU Rate
The dollar amount paid per wRVU generated by a physician. Also called the wRVU conversion factor, this rate determines how clinical productivity translates into compensation. RVU rates vary by specialty, geography, and employer.
$40–$90 per wRVU depending on specialty; primary care $40–$55, surgical specialties $55–$90.
S
Signing Bonus
A one-time payment offered to attract a physician to accept a new position. Signing bonuses typically require a minimum employment commitment and include pro-rated repayment clauses if the physician leaves before the commitment period ends.
$10,000–$100,000+; median roughly $25,000–$35,000 across all specialties.
Stipend
A fixed periodic payment provided to physicians in training, such as medical residents and fellows. Stipends are set by the training institution and increase modestly with each postgraduate year (PGY level).
$63,000–$88,000 per year depending on PGY level and geographic location.
T
Tail Coverage
A supplemental malpractice insurance policy that covers claims filed after a physician leaves a position for incidents that occurred during their employment. Tail coverage is required when departing from a claims-made malpractice policy.
$15,000–$50,000+ as a one-time premium; higher for surgical specialties. Some employers cover tail coverage as a benefit.
Total Compensation
The complete annual value of a physician's pay package, including base salary, production bonuses, quality bonuses, signing bonuses (amortized), retirement contributions, health insurance, CME allowance, and other monetary benefits.
A physician with a $350,000 base salary, $50,000 production bonus, $30,000 employer retirement match, and $20,000 in benefits has total compensation of $450,000.
W
wRVU (Work Relative Value Unit)
A measure of physician productivity that represents the relative time, skill, training, and intensity required to perform a specific medical service. wRVUs are the most widely used metric for physician compensation benchmarking. Higher wRVU generation generally correlates with higher pay.
A level-5 new patient office visit (CPT 99205) generates approximately 3.5 wRVUs, while a complex surgical procedure may generate 20+ wRVUs.
Annual wRVU benchmarks vary by specialty: primary care 4,000–5,500; general surgery 6,000–8,500; cardiology 7,000–10,000+.
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