How to Write an RFP for Physician Compensation Software

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A field guide from someone who has read many of them.

by Amy Jackson – SVP Product Leader, Compensation Management

Fairly often, we receive a request for proposal (RFP) for physician compensation software. Just as often, I find myself imagining the one I’m really waiting to respond to – the one written by an organization that has not just thought deeply about what they actually need, but has also found a way to ask for it.

That RFP is rare. Not because compensation leaders aren’t thoughtful – they are, as the job essentially demands it – but because most RFP templates for “compensation software” were borrowed from adjacent categories like payroll systems, HR platforms, and general financial tools.

The questions end up testing the wrong things. Every vendor checks every box, and the selection process produces a winner without producing the right answer.
So here’s our contribution to the field: the questions we wish more organizations would ask.

Stop Asking If It “Supports” Your Comp Models and Start Asking Who Builds Them

The most common RFP question we see is some version of this: “Does your system support productivity-based, quality-based, and hybrid compensation models?” The answer is always yes. Every vendor checks that box. It’s not a differentiating question because the real question isn’t capability – it’s ownership and accessibility.

Try asking this instead:

• When we need to change a productivity threshold, who makes that change – our team or yours?
• How long does it take, and what does it cost?
• If we add a new service line next year, can you walk us through exactly what happens?

The answers to those questions will tell you far more about your day-to-day life with a system than a capabilities checklist ever will.

Ask About the 90%, Not the 10%

Most compensation software vendors compete on calculation accuracy, which is a little like competing on “our cars have engines.” Correct calculations are the price of admission – not a differentiator.
The 90% that actually consumes your team’s time and energy isn’t the calculation – it’s everything around it: ingesting data from multiple source systems, managing exceptions, tracking tasks across a team, communicating with providers, preparing for audits, answering the CFO’s questions, and modeling “what happens if” scenarios before committing to plan changes.

Better RFP questions look like:

• How does your system handle data ingestion from Epic, Workday, and our credentialing system – and what happens when files are late, malformed, or missing?
• Can we model the financial impact of a plan change before we deploy it?
• When a provider questions their statement, what does the resolution workflow look like?
• Can you show us what your team’s monthly close looks like from start to finish?

That last one is particularly useful. Ask vendors to walk you through the entire month-end process. You’ll learn a lot about where the product ends and the spreadsheets begin.

…But Also Ask About the 10%

Here’s a test we’d encourage every organization to run: before you select a vendor, ask them to build your most complex compensation model. Not a representative model, not a simplified version – the actual hardest thing you do.

Ask for a pooled RVU model where productivity is shared across a team and distributed by a formula that took your team six months to design. Or a model for the OB surgeon who splits time between employed and professional service agreement arrangements. Or one for the academic hospitalist group with call stipends, administrative time allocations, and a quality component that calculates differently depending on panel assignment. Ask for a model for whatever your messiest, most exception-laden, “we’ve never found software that handles this” scenario is.

The reason is straightforward: if a system can handle 100% of your complexity, it can certainly handle the other 90%. However, the reverse is not true. Plenty of systems do clean productivity math beautifully but quietly fall apart the moment you introduce a pool, a modifier, a mid-period change, or a plan design that doesn’t fit their underlying data model.

Ask vendors to build the hardest 10% – it’s the fastest way to find out if you’re looking at a real solution or a well-designed demo.

Require a Demo With Your Data (Or at Least Your Complexity)

Standard demos are optimized for standard scenarios. Vendors will show you a clean, wRVU-based productivity model that runs well. What they won’t volunteer is what happens when you have OB call coverage, a mid-year FTE change, a rural health clinic modifier, and a physician who started on the 14th of the month – even though that’s your average Tuesday.

A better RFP will specify demo requirements:

• Demonstrate a multi-tiered productivity model with specialty-specific modifiers.
• Show us how you handle a physician with a mid-period FTE change.
• Walk us through what a provider sees when they view their compensation statement.
• Demonstrate the audit trail: if a calculation changes, how do we know what changed and why?

If a vendor can’t demo your complexity, they can’t solve your complexity. A polished UI is not the same thing as a capable system.

Ask About the Implementation Team, Not Just the Implementation Plan

Every vendor has an implementation plan with phases and milestones and a color-coded timeline that looks very reassuring. What the plan won’t tell you is who’s actually going to be in the room with you.

Physician compensation is a domain-expertise discipline. Implementations go sideways not because of technical failures, but because the people configuring the system don’t understand how compensation actually works – and your team spends the engagement teaching them.

Ask:

• Who specifically will lead our implementation, and what is their background in physician compensation?
• What does your post-implementation support model look like – and is that the same team?

Evaluate Strategic Capability, Not Just Operational Functionality

Most RFPs are written to solve today’s problems. “We need a system that calculates compensation correctly and produces statements on time” – that’s a reasonable baseline. However, the organizations getting the most value from their compensation platforms aren’t just using them to automate what used to be manual – they’re using them to answer questions they couldn’t answer before.

Questions like:

• Are our compensation plans driving the behaviors we designed them to drive?
• Which physicians are approaching thresholds, and should we be modeling alternative structures?
• How do our compensation costs compare to benchmarks, and where is our exposure?

If a vendor can’t clearly articulate how their system enables that kind of strategic thinking – not someday in a future roadmap, but today – that’s a meaningful signal.

The Real Goal of an RFP

A well-written RFP does two things simultaneously: it surfaces differentiated information about vendors and forces you to articulate what you actually need. Organizations that struggle with RFPs often haven’t yet done the second part. They’re asking vendors to solve a problem they haven’t fully defined.

Before you write the RFP, spend some time on a harder question: what does “good” actually look like for your team 18 months from now? Not “calculations are accurate” – that’s the floor. What does it look like when your compensation function is genuinely operating at its best?

If you can describe that clearly, you can write an RFP that finds the vendor who can get you there. And if you can’t describe it yet, that might be the most useful thing a vendor conversation can help you figure out.

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