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VA Issues Notice of New Physician Pay Ranges

On December 9, the Department of Veterans Affairs issued a notice of annual pay ranges, which includes base pay and market pay for physicians, dentists and podiatrists in the Veterans Health Administration.  The annual pay ranges are effective February 16, 2020.  The notice of pay ranges is required to be issued once every two years.  Under U.S. Code, the total compensation cannot exceed the annual compensation (less expenses) of the President of the United States, which is $400,000.            Other federal agencies which use the modified Title 38 (VA pay system) are expected to adopt these new pay ranges.

VA uses salary survey data from the Association of American Medical Colleges, Hospital and Healthcare Compensation Service, Sullivan, Cotter, and Associates, Sullivan Cotter and Associates Inc. an independent consulting firm which focuses on physician compensation, Medical Group Management Association, and the Survey of Dental Practice published by the American Dental Association. The preponderance of weight was given to those surveys which most closely resembled the environment of the VA.

In developing the annual pay ranges, two principles were considered. The first principle is to ensure that both the minimum and maximum salary is set at a level that accommodates special employment situations, from fellowships to internationally renowned clinicians. The second principle is to provide ranges large enough to accommodate career progression, geographic differences, sub-specialization and other special factors. Clinical specialties are grouped into four clinical pay ranges that reflect comparable complexity in salary, recruitment and retention considerations.

The current and revised pay ranges are published on page 3.

Although there are a number of increases in pay rates, as noted in the physician pay policy of the Department of Health and Human Services (HHS), Instruction 590-1: “When the VA increases the nationwide minimum and/or maximum amounts of annual pay …, physicians are not automatically entitled to a corresponding increase in their individual annual pay rates.  Only physicians whose existing rate of annual pay falls below the newly prescribed nationwide minimum for their designated pay range will automatically receive an increase in market pay to make their annual pay rate equivalent to the new nationwide minimum.  Compensation Panels review the market pay rates for individual physicians on a periodic basis.”

The HHS Instruction 590-1 further states that “The determination of the amount of market pay of a particular physician shall take into consideration:

1. The level of experience of the physician in the specialty or assignment;

2. The need for the specialty or assignment of the physician at the facility;

3. The appropriate health care labor market for the specialty or assignment of the physician;

4. The board certifications, if any, of the physician;

5. The accomplishments of the physician in the specialty or assignment;

6. Consideration of unique circumstances, qualifications or credentials, if any, and the comparison of these circumstances to the equivalent compensation level of non-HHS physicians in the local health care labor market.

Physicians employed by the Bureau of Prisons (BOP) and the State Department do not receive pay under the title 38 (VA pay) system.  However, there are reports that BOP physicians will be converted to title 38, but FPA could not confirm those reports.