Seventeen states now have pay transparency laws, but the requirements aren’t uniform. Some mandate salary ranges in job postings, while others require disclosure only when a candidate asks. For example, Connecticut moved from disclosure-on-request to proactive posting on October 1, 20261, and Delaware’s new pay transparency law will take effect in September 20272. All of this is unfolding against the backdrop of an ongoing physician shortage, which the Association of American Medical Colleges projects could reach 86,000 physicians by 20363.
Now that pay details are easier than ever to find and physicians have more options than at any point in the last decade, organizations that can’t explain their physician compensation processes are more likely to lose the professionals they need most.
The Pay Transparency Joint Self-Assessment is a scored rubric for physician leaders and their finance or compensation partners. It features 10 statements across five disciplines rated on a scale of one to five for a total of 50 points. After your physician leader and finance or compensation partner complete the assessment separately, compare your results. The areas where your scores differ are particularly important, because they can show you where there’s a disconnect between physician leadership and finance.
Download the Physician Pay Transparency Self-Assessment
Why pay transparency is a two-person problem
At almost every health system I work with, physician leaders and finance or compensation leaders believe their pay structures are transparent, but each group measures transparency in a completely different way.
Physician leaders often judge it by whether a doctor can read their compensation agreement and explain how their pay is calculated, while finance tends to look at a physician’s file and confirm there’s a signed FMV opinion and current benchmarking data. Both of these factors matter, but because each side is focused on separate things, nobody sees the whole picture.
This blind spot can increase the risk of compliance issues and physician distrust, and it often goes unnoticed until a doctor decides to leave the organization or an auditor starts asking questions. Many fair market value enforcement cases start as qui tam (whistleblower) lawsuits, and those often begin with someone who understands the regulatory requirements, knows how the organization works, understands the financial terms of the arrangement, and believes there’s an inequity.
You can’t control the first three. But when physicians understand how their pay works and trust the process, they’re much less likely to believe something is unfair, or to look for someone outside the organization to listen. The good news is that you can increase transparency by having both leadership teams compare notes.
Where the assessment came from
I created this rubric from a session I presented to physician leaders at AAPL’s Annual Leadership Conference, called Opening the Black Box: A Framework for Physician Compensation Transparency. Everyone who attended received a copy, but afterward, enough people asked if they could share it with colleagues that we decided to make it available to everyone.
What the self-assessment measures
The Pay Transparency Joint Self-Assessment looks at five areas of physician compensation. Each area includes two statements to rate (10 total).
- Compensation Structure and Documentation. Is all of a physician’s pay (base salary, medical directorship, on-call, and any other stipends) spelled out in one current agreement? When you make an exception, do you document why?
- Fair Market Value and Compliance Rigor. Does every arrangement, including medical directorships and on-call pay, have a current FMV rationale you could produce if asked? Do compliance, legal, and finance all sign off before an arrangement takes effect?
- Benchmarking Practices and Data Sources. Can you name the specific survey and percentile behind each physician’s pay? Do you update that information annually?
- Communication to Physicians. Has every physician had a conversation about their total pay, including any directorship duties folded into their role? Can physicians see their own compensation and wRVU productivity data [link to https://ludiinc.com/solutions/compensation-administration/wrvu-calculator/] without having to ask for it?
- Governance and Review Cadence. Does a group with representatives from HR, finance, compliance, legal, and physician leadership review your pay structures regularly? Have you checked your practices against current state pay transparency laws in the past 12 months?
How to use the self-assessment
- Print two copies. Give one to the physician leader and the other to the finance or compensation partner. Both copies are the same.
- Fill them out separately. Don’t talk through the statements or share answers until you’re both done. The point is to see how you rate each area on your own.
- Compare your scores in each area. Add up your scores for each of the five areas and then compare. How far apart are your ratings? Looking at the overall totals by themselves can hide big differences in individual areas.
- Complete the 90-day action table before you finish. In each area where your scores differ, write down what needs to happen, who’s responsible, and a timeline for completion. Without a name and deadline, you’ll probably run into the same issues next year.
How to read your score
| Total score | What it means |
| 40–50 | Transparent and defensible. Your pay structures are well documented and your physicians understand how their pay works. |
| 25–39 | Emerging. You have the basics in place, but missing documentation, outdated benchmarking, or unclear communication could leave you open to risk. |
| Below 25 | Opaque risk zone. This is where compliance problems and physician distrust are most likely to happen. |
Comparing your scores tells you even more than either total by itself. For example, if your scores for Governance and Review Cadence differ by two points, one of you probably knows something about how pay structures are reviewed that the other doesn’t. If your total scores differ by 10 points or more, the two of you likely have very different ideas about how your compensation program works.
Frequently asked questions
What is pay transparency in physician compensation?
Pay transparency means a physician can see every aspect of their pay and know how it’s calculated, including base salary, productivity pay, medical directorship pay, on-call pay, and any other stipends. It also means your organization can show the documentation and fair market value (FMV) rationale behind each of them if someone asks for it.
Who should complete a physician pay transparency assessment?
Two people would fill out their own copy of this assessment without discussing their answers. The first is the physician leader who signs or negotiates compensation arrangements, and the second is the finance or compensation leader who builds your pay models and keeps your benchmarking and FMV records. Compliance and legal don’t need to complete the assessment, but it’s a good idea to bring them in after you’ve compared results, so you can all work through what you found.
How often should physician compensation benchmarks be refreshed?
At least once a year on a set schedule. Outdated benchmarks are one of the most common problems this assessment uncovers. It’s much harder to defend your processes if someone questions a physician’s pay and your benchmark data is out of date.
Does pay transparency affect Stark Law compliance?
Yes. Under the Stark Law and the Anti-Kickback Statute, Compensation Administration generally needs to be set at fair market value, be commercially reasonable, and can’t be based on the number or value of referrals a physician makes. When each aspect of a physician’s pay is documented and explained, it’s easier to show that your arrangements meet those requirements. If you’re ever audited, records showing that a physician has reviewed each part of their pay can also support compliance.
Bottom line
If a physician asked you today to explain their full compensation letter, could you do it without pulling up three different documents? At AAPL, I called this the one-page test. If you can’t explain a physician’s plan on a single page clear enough for them to check their own pay, start there. Sitting down with your finance partner to answer that question now can save you a lot of trouble if you’re ever audited.
If your physician leaders and your finance team have never filled out the same assessment and compared answers, you don’t know where you stand yet.
Physicians may not need to agree with every element of how they’re paid, but they deserve to understand it.
Download the Free Physician Pay Transparency Self-Assessment (PDF)
If you use the assessment on your own, I’d still like to hear where your scores differed. Those differences can tell you more than anything else in the assessment, and I’d like to compare what you find with what I’m seeing at other organizations.
Sources
- Foley & Lardner LLP, Connecticut Expands Pay Transparency Requirements Starting October 1, 2026
- Ogletree Deakins, Delaware’s New Pay Transparency Requirements to Take Effect in 2027
- Association of American Medical Colleges, The Complexities of Physician Supply and Demand: Projections From 2021 to 2036.
State pay transparency requirements current as of publication. Confirm against counsel for the states where you operate.
This self-assessment is intended to prompt internal discussion and does not constitute legal advice. Consult qualified counsel regarding your organization’s compliance with applicable pay transparency laws, the Stark Law, and the Anti-Kickback Statute.