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It’s shared savings season and the check has arrived. Now how do physicians divide it up fairly?
The Medicare Shared Savings Program check arrives in the fall. It is larger than anyone expected, and within a week, the collegiality of your partnership is under more strain than it has seen in years. Everyone agrees the practice earned it. No one agrees on who earned it.
Most practices default to one of two answers, and both are wrong.
The first is to treat shared savings as profit and distribute it by ownership percentage. That is clean, it is what the operating agreement already says, and it quietly tells every nonowner physician that the work they did to produce the savings belongs to someone else.
The second is to distribute by production — work relative value units, collections, revenue per patient — because those are the metrics already built into the compensation formula. That one is worse, because it rewards precisely the behavior that shared savings exist to discourage.