AMENDMENT TO PHYSICIAN EMPLOYMENT AGREEMENT

Name: Contract Date:

This “ATTACHMENT A” may amend the base compensation in your Employment Agreement

and provides a detailed explanation of the PROVIDER PRODUCTIVITY INCENTIVE PLANbased on five 8 hour days.

Base Compensation: $ ______per contract year.

Incentive Program: It is the philosophy of CLINIC that PROVIDER reimbursement should fairly reflect the value that each PROVIDER brings to the agency. Base compensation is remuneration for meeting minimum expectations of performance in quality, patient satisfaction, staff satisfaction, and production. A base line or “budget” production expectation is derived as described below. Value added by the PROVIDER to the agency above the minimum expectation, up to and including a level of “excellence,” will be recognized and compensated through an accelerating incentive plan as outlined below. The simplest and most robust measure of value added is through production figures (patient encounters and Relative Value Units [RVUs]). Production figures also reflect directly upon the financial value a PROVIDER brings to CLINIC. As CLINIC becomes more sophisticated in its ability to measure added value, the incentive program may be enhanced to capture, and compensate, non-production value.

Base Line or Budgeted expectations: A minimum or baseline must be established for every measure of value or work. In as much as billings and payments to the agency are proportional to production figures, the agency’s annual budget is built around the minimum or “budgeted” production expectations of the PROVIDER team.

Encounter Budget: Contract PROVIDER is budgeted a minimum number of encounters per year of 3900. These numbers were derived through benchmark studies of sister agencies, MGMA data, and minimum encounter levels set by the Washington State Medicaid Program. Experience has confirmed that these are healthy levels for established PROVIDERs.

Contract PROVIDER has a unique daily production expectation based on the number of days actually worked in the clinic, divided into the encounter minimum (3900). Actual days per week worked [x] 52 weeks per year [–] vacation days, 10 holidays, 5 CME days, and for the purpose of calculating the bonus we have built in six (6) administrative days and three (3) sick days. Other sick time taken will result in an adjustment to the average encounters per day to make budget.

An example for a standard full time PROVIDER would be as follows, assuming various budgets:

BUDGETED ENCOUNTERS PER YEAR / 3900
Weeks / 52
Clinic days per week / 5
Available Days / 260
DAYS ABSENT FROM CLINIC
Vacation / 20
CME / 5
Holidays / 10
Administrative/Sick / 9
Total Absent Days / 41
Total Available Days / 216
Average encounters per day to make budget / 18.1

All production incentives are calculated from this base line budget number to the nearest tenth. At the beginning of the contract year PROVIDERs have the opportunity to reduce their base line number by selling back vacation days or CME days to increase the number of days in the clinic, thus reducing their base line budget. They can also agree to work additional days in the clinic with the same effect. The example below recalculates the above base line by selling back 10 days of vacation for each contract year.

BUDGETED ENCOUNTERS PER YEAR / 3900
Weeks / 52
Clinic days per week / 5
Available Days / 260
DAYS ABSENT FROM CLINIC
Vacation / 10
CME / 5
Holidays / 10
Administrative/Sick / 9
Total Absent Days / 31
Total Available Days / 226
Average encounters per day to make budget / 17.3

This “Sell Back” option must be exercised within 30 days of contract negotiation completion to provide the maximum benefit to the PROVIDER. PROVIDERs may also “Cash Out” unused vacation days at the end of the calendar year at their current daily pay rate per Vacation Policy and Procedure (2.4.2), but such a “Cash Out” will not impact production expectations or incentives retroactively.

Base line Relative ValueUnits (RVU) are calculated using a rolling annual clinic wide average RVU/Encounter (1.3 per Encounter) multiplied by the PROVIDER’s base line encounter expectation, which may be adjusted annually.

Production Incentives. All production incentives are calculated and paid monthly. The total number of days worked is reported each month by the PROVIDER. This number is multiplied by the daily budgeted encounter expectation (described above) to get the monthly minimum budgeted number of encounters for the month. This number is then multiplied by the RVU/Encounter number, to derive the minimum budgeted number of RVUs for the month.

There are three bonus levels: 110% of budget; 120% of budget; and 130% of budget for either or both Encounters and RVU. Since additional work above the cost of over-head (the minimum budget) brings in accelerating revenues to CLINIC, the bonus accelerates as the work increases. The 110% level pays a possible 3% bonus for Encounters and/or 3% bonus for RVU. The 120% level pays a possible 10% bonus for Encounters and/or 10% bonus for RVU. The 130% level pays a possible 20% bonus for Encounters and/or 20% bonus for RVU.

BONUS LEVELS

(Based on 40 hr. work week and 216 days per year)

Encounters/RVU’s / Base Expectation / Tier I Bonus
Bonus 3% + 3% / Tier II Bonus
Bonus 10% + 10% / Tier III Bonus
Bonus 20% + 20%
Encounters/RVUs
Daily Level / Encounters
3900
18.1 / RVUs
5070
23.5 / Encounters
4290
19.9 / RVUs
5570
25.9 / Encounter
4680
21.7 / RVUs
6084
28.2 / Encounters
5070
23.5 / RVUs
6591
30.5
Compensation / $100,000 / $3,000 / $3,000 / $10,000 / $10,000 / $20,000 / $20,000

IN WITNESS WHEREOF, the parties have executed this Amendment to Employment Agreement on the date and year designated below.

“EMPLOYER”“EMPLOYEE”

CLINIC, INC.

BY: BY:

Executive DirectorProvider, MD/DO

DATE: DATE: