February 10, 2021

Do your pay grades reflect reality?

Hank Smither

Revenue cycle roles have gone through monumental shifts in the last 10 years, and that’s not even considering the shifts that occurred last year. Unfortunately alignments in pay grades have not kept up. Traditional pay scale reviews compare ‘like’ roles to outside organizations to determine appropriate pay grades. But what if the system is broken? This can lead to an artificial ceiling based on historical pay practices in the revenue cycle.

For example, Patient Access roles were traditionally entry-level data entry roles. Over the last decade there was a large shift to increase customer service expectations, collect patient out-of-pocket liabilities, and improve data accuracy. Unfortunately, the Patient Access roles remain one of the lowest paid positions in the revenue cycle at many organizations.

Many organizations profess a commitment to customer service and patient experience, but don’t always align compensation and incentives to achieve that goal.

Realigning Pay Grades

Organizations need to complete a comprehensive review and realignment of revenue cycle position descriptions and pay grades. External benchmarking can remain a component of the review, but only after the positions have been realigned internally.

Leverage a concept from Human Resources called ‘Compensable Factors.’ Compensable Factors are criteria which can be used to objectively evaluate jobs to determine the appropriate compensation. Consider things like experience required, decision making, complexity of work, customer service, and impact of errors. Define a grading scale and allocate points to each job in the revenue cycle. You may be surprised to see how your jobs stack up. From there, you can take key roles and complete an external pay review.

The Framework for Alignment

1. Update your position descriptions

Write them based on what you want your positions to be.

2. Review position descriptions amongst your revenue cycle leadership team

This provides all leaders with a comprehensive view across the revenue cycle.

3. Apply compensable factors and points to the job roles

Work with HR to develop compensable factor criteria, weight, and point values.

4. Review role ranking outcome and discuss outliers

Review positions that don’t seem to fit within the updated structure.

5. Complete an external pay review for key positions

This is still an important step to ensure appropriate pay grade alignment for the revenue cycle, even if you choose to adjust pay for individual roles

6. Align roles to pay grades based on new ranking and alignment

7. Calculate overall impact to pay grade changes

If done correctly, some positions should align to a lower pay grade and others to a higher pay grade

8. Develop a plan for existing staff

Work with HR on a plan to rollout compensation changes and how it will impact each individual depending on where their rate of pay falls in the new pay grade

9. Roll out pay grade adjustments

This will be a happy time for some and not-so-happy for others. Prepare consistent messaging and share the ‘whys’ behind the change.

 

Going through this exercise doesn’t mean everyone gets a raise. At the end of the exercise your position descriptions will accurately reflect today’s job responsibilities and pay will be appropriately aligned. Some of your pay grades may increase, while others decrease. The goal of the exercise is not to give everyone a raise, but rather, ensure equity within your team for the work performed.

If you would like to learn more about our framework for achieving revenue cycle pay grade alignment, please contact Rebecca Haymaker r.haymaker@thewilshiregroup.net. Or look at other Advisory Services offered by The Wilshire Group.

Hank Smither

Managing Partner

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