Instruction 590-1: Title 38 Physician and Dentist Pay (PDP)

Issuance Date: January 1, 2016

Material Transmitted:

Department of Health and Human Services (HHS) Instruction 590-1:  Title 38 Physician and Dentist Pay (PDP), dated January 1, 2016.

Material Superseded:

HHS Instruction 590-1:  Title 38 Physician and Dentist Pay (PDP), dated March 28, 2013.

Background:

This Instruction has been revised to incorporate the following amendments.

• Removal of reemployed annuitants and intermittent work schedules from the categorical exemptions.  Physicians hired as reemployed annuitants and those on intermittent work schedules are eligible for PDP pay.
• Clarification that employees receiving PDP pay are eligible to accrue credit hours.
• Inclusion of the new delegated amount.  Operating and staff divisions granting PDP are authorized to approve annual pay up to $275,000.  Annual pay exceeding this amount requires approval from the ASA.
• Minor editorial changes for clarity.

This issuance is effective on January 1, 2016.  Implementation under this issuance must be carried out in accordance with applicable laws, regulations, bargaining agreements, and Department policy.

/signed/
John W. Gill
Deputy Assistant Secretary for Human Resources

590-1-00: Purpose

This Instruction implements HHS regulations and procedures for payment of Physician and Dentist Pay (PDP).

590-1-10: Coverage and Exclusions

1. Coverage:   This Instruction covers civilian physicians and dentists (full-time and part-time) at GS-15 and below who:
   1. Provide direct patient-care services, or services incident to direct patient-care services; and
   2. Have been designated for coverage by appropriate authority.
       
   As used in this document, the term “physician(s)” is used interchangeably to refer to a medical officer and/or dentist.
2. Categorical Exclusions:  This Instruction does not apply to physicians who are:
   1. Currently serving in the Public Health Service (PHS) Commissioned Corps;
   2. Serving in an internship or residency training program;
   3. In the Senior Executive Service (SES), Executive Schedule (ES), Senior Level/Scientific (SL/ST), Senior Biomedical Research Service (SBRS), Executive Level (EL), or other senior-level systems;
   4. Receiving Physicians Comparability Allowance (PCA) under 5 U.S.C. § 5948; or
   5. Employed or paid under a Title 42 authority.
3. Former Members of the Uniformed Services:  Former members of the Uniformed Services, i.e., the Army, Navy, Air Force, Marines, Coast Guard, National Oceanic and Atmospheric Administration, and the PHS Commissioned Corps, may receive Physician and Dentist Pay.

590-1-20: References

• 38 U.S.C. ch. 74 (Veterans’ Health Administration - Personnel)
• 5 U.S.C. § 5371 (Health Care Positions)
• Pub. L. 93-638, § 105 (Indian Self-Determination and Education Assistance Act)
• Pub. L. 99-221, § 3(a) (Cherokee Leasing Act)
• U.S. Office of Personnel Management Title 38 Delegation Agreement with HHS, effective July 1, 2014-June 30, 2022.

590-1-30: Definitions

1. Aggregate Pay:  The sum of all payments made to a physician in a calendar year, exclusive of lump sum annual leave, reimbursement of travel, back pay, and severance pay, which may not exceed the rate of pay for the President of the United States (currently set at $400,000).
2. Annual Pay:  The sum of the General Schedule (GS) base pay rate and market pay.  Annual pay is basic pay for purposes of computing civil service retirement benefits, lump sum annual leave payments, life insurance, thrift savings plan, work injury compensation claims, severance pay, recruitment, relocation and retention incentives, continuation of pay, and advances in pay.
3. Basic Pay: is defined as the rate fixed by applicable law or regulation. Basic pay does not include other types of pay such as: bonuses, allowances, overtime, holiday, and military pay or supplemental payments from the Office of Workers' Compensation Programs (OWCP).
4. Compensation Panel:  A group of physicians responsible for the evaluation of physicians and for making recommendations to the approving official for annual pay.
5. Management Official:  A person who has supervisory authority over staff or program management responsibility.
6. Market Pay:  A component of annual pay intended to reflect the recruitment and retention needs for the specialty or assignment of a particular HHS physician.
7. Tier:  A level within the annual pay range for an assignment or specialty.
8. Total Compensation:  The sum of all payments made to a physician including base pay, market pay, recruitment, relocation, and retention incentives, performance awards, or other cash awards. 
9. Total Pay:  The sum of all payments made to a physician.  Total pay includes base pay, market pay, recruitment, relocation, and retention incentives, and excludes cash awards.  In Alaska, Hawaii, and Puerto Rico, where the Office of Personnel Management (OPM) has approved a non-foreign cost-of-living allowance (COLA) under 5 U.S.C. § 5941, total pay also includes the COLA.

590-1-40: Policy

1. Discretionary Application:  PDP is available for use to recruit and retain highly qualified physicians.  Payment of PDP is optional in each OpDiv.  (Throughout this Instruction, references to OpDiv Heads imply that authorities may be redelegated).
   1. Within budgetary constraints, HHS policy is to compensate physicians at levels reasonably comparable with those paid to other federal sector physicians in the same local area.
2. Establishment of PDP Amounts:  PDP amounts for physicians will be established on an   individual basis according to GS base pay and market pay.  (See Section 70, Market Pay, and Exhibit A, which describes approval authorities).
3. Relationship to Basic Pay:  PDP (annual pay) is basic pay for all benefits including retirement. 
4. Relationship to Premium Pay under Title 5:  Physicians who receive PDP may not:
   1. Be paid overtime for work in excess of 8 hours per day, 40 hours per week, or 80 hours per pay period;
   2. Earn compensatory time off in lieu of overtime pay or compensatory time off for travel; or
   3. Receive any other form of premium pay under 5 U.S.C. chapter 55, e.g., Sunday, holiday, night pays.
5. Physicians receiving PDP will be covered by the HHS Performance Management Appraisal Program.
6. Other Discretionary Pay under Title 5:  Physicians who receive PDP may receive other forms of discretionary pay under Title 5, such as awards; and recruitment, relocation, and retention incentives (5 U.S.C. §§ 5753 and 5754).  However, they are not eligible to receive a Physicians’ Comparability Allowance (PCA) under 5 U.S.C. § 5948.
   
   The sum of base pay and any discretionary pay that is paid to a physician under Title 5 authority, (e.g., cash awards, performance awards, recruitment, retention, and relocation incentives) is limited on an annual basis to the rate of pay for Executive Level I (EX-I).
7. Aggregate Compensation Limits:  Total compensation of physicians receiving PDP under Title 38 authority, basic pay, and other supplemental pay under Title 5 cannot exceed the amount of annual pay received by the President of the United States as specified in 3 U.S.C. § 102.
8. Effective Dates:  PDP will usually be effective at the beginning of the pay period immediately following approval by the approving official or on a later date specified on HHS Form 691 (Exhibit D).  PDP may not be approved retroactively; however, depending on the circumstances, an administrative error may be corrected retroactively. (PDP will be paid on a biweekly basis).
9. Outside Work:  Because of the work obligation associated with PDP, physicians who wish to perform outside work must submit a prior written request under established Department procedures.  Any activity interfering or conflicting with the employee’s federal work obligation will be disapproved.
10. Part-time Service:  Part-time physicians who have a tour of duty of at least 20 hours    per pay period may be offered PDP.
11. Relationship to Leave under Title 5:  Physicians who receive PDP continue to be covered by the leave provisions of 5 U.S.C. chapter 63.
12. Credit Hours:  Physicians who receive PDP are eligible to accrue credit hours in accordance with 5 U.S.C. chapter 61.

590-1-50: Responsibilities

1. Office of the Assistant Secretary for Administration (ASA):
   1. The ASA/Office of Human Resources (OHR) is responsible for obtaining the concurrence of the Interagency Committee for Health Care Occupations on the HHS PDP Plan.
   2. The ASA/OHR is responsible for preparing the annual report of use of PDP as required by OPM.
2. OpDiv Heads:
   1. OpDiv heads are responsible for ensuring that merit system principles and the requirements of the Title 38 statute, the OPM-HHS delegation agreement, and this Instruction are followed in their use of PDP.
   2. OpDiv heads are responsible for reviewing requests for approval of outside work activities from physicians for possible conflict of interest with federal work obligations.
   3. OpDiv heads are responsible for maintaining auditable program records, and for participating in evaluation of this authority by OPM, HHS, or other administrative authority.
3. Approving Officials (OpDiv Head designee):
   Approving officials are responsible for reviewing and certifying that PDP requests comply with the provisions of law, the OPM and HHS delegation agreement, and this Instruction.

590-1-60: Case Documentation, Procedures and Processing

1. Establishment or Changes to Pay:  Management officials proposing PDP must complete HHS Form 691 (Exhibit D) and provide:
   1. A copy of the candidate’s/employee’s qualifications statement or curriculum vitae (CV);
   2. The position description; and
   3. Written market pay justification.
2. Information listed in A above should be forwarded by the proposing official to the compensation panel for review and recommendation to the approving official for a decision.  The decision of the approving official is final.
3. Once approved, cases will be forwarded with supporting documentation to the servicing HR Center for:
   1. Processing of a Notification of Personnel Action (SF-50); and
   2. Maintenance of records in the employee’s Official Personnel Folder (OPF).
   NOTE:  Maintain supporting documentation on the left side of the OPF.

590-1-70: Market Pay

1. Each physician covered by this part is eligible for market pay.  Market pay is intended to reflect the recruitment and retention needs for the specialty or assignment of a particular physician at an HHS facility.
2. At least once every two years, the VA Secretary prescribes nationwide minimum and maximum amounts of annual pay (base pay plus market pay) that will be paid under this paragraph.  These amounts are published in the Federal Register for not less than 60 days prior to the effective date.  The VA Secretary may prescribe different ranges for different specialties or assignments.  In determining pay ranges, at least two or more national surveys of pay for physicians are consulted.  National surveys consulted include data that describe overall physician income by specialization or assignment and benefits in broad geographic scope.
   1. When the VA increases the nationwide minimum and/or maximum amounts of annual pay under this paragraph, physicians are not automatically entitled to a corresponding increase in their individual annual pay rates.  Only physicians whose existing rate of annual pay falls below the newly prescribed nationwide minimum for their designated pay range will automatically receive an increase in market pay to make their annual pay rate equivalent to the new nationwide minimum.  Compensation Panels review the market pay rates for individual physicians on a periodic basis.
   2. In the event that the nationwide minimum and maximum amounts of annual pay are reduced under this paragraph, physicians already on HHS rolls will not experience a reduction in market pay.
3. There may be up to four tiers of annual pay for each specialty or assignment for which a separate range of pay has been approved.  Each tier reflects different professional responsibilities, professional achievements, or administrative duties.  See Exhibit B.
4. The amount of market pay and appropriate tier for a particular physician is recommended to the approving official.
5. The determination of the amount of market pay of a particular physician shall take into consideration:
   1. The level of experience of the physician in the specialty or assignment;
   2. The need for the specialty or assignment of the physician at the facility;
   3. The appropriate health care labor market for the specialty or assignment of the physician;
   4. The board certifications, if any, of the physician;
   5. The accomplishments of the physician in the specialty or assignment; and
   6. Consideration of unique circumstances, qualifications or credentials, if any, and the comparison of these circumstances to the equivalent compensation level of non-HHS physicians in the local health care labor market.
6. Each OpDiv will establish one Compensation Panel that will be responsible for its PDP Program oversight and guidance.  These panels will ensure that there is consistency and appropriateness of pay determinations within the OpDiv and periodically review pay under the PDP Program.
   
   All Compensation Panel recommendations are taken into consideration by the appropriate approving official.  The approving official determines the amount of market pay to be paid a physician after consideration of the range and tier recommended by the panel.  The approving official’s decision is final.

590-1-80: Exceptions to the Maximum of the Annual Pay Range

1. General
   1. Except as provided in paragraphs A.2 through A.4, and B., below, the annual pay for a physician may not exceed the maximum amount in the nationwide pay range prescribed by the Secretary of the VA for a specialty or assignment.
   2. It is expected that the maximum amount in the nationwide pay range will meet most pay and staffing needs.  However, the OpDiv Head may grant an exception to the maximum on an individual, specialty or assignment, and/or facility-specific basis if such action is necessary to recruit or retain well-qualified physicians.
   3. Exceptions to the maximum amount in the nationwide pay range will only be considered if failure to approve the exception would significantly impair an organization’s ability to recruit and retain well-qualified physicians.
   4. Exceptions to the maximum amount of a nationwide pay range are not required for physicians who will exceed the pay range due to a GS step increase or a statutory general increase in pay.
2. Criteria for Approval:  Each organization submitting a request for an exception to the maximum in the pay range for an individual, specialty or assignment, and/or facility-specific basis must demonstrate that a higher maximum is necessary to maintain adequate staffing.  Factors to consider include:
   1. Exceptions to the Maximum Annual Pay Ranges
      1. Higher Maximum Rates: There is substantial evidence or anecdotal information that the maximum rates in the community are higher than the Department’s maximum rate for the specialty or assignment.  However, higher rates in the community may not be the sole basis for making a request for an exception to the maximum of the market pay range; and
      2. Alternative Job Offers: There is evidence that applicants and employees are being offered higher rates of pay for the same assignment or specialty in the labor market.  Historical evidence indicates that the quality of or a lack of candidates is unacceptable for the assignment or specialty.  Documentation of specific recruitment efforts must be provided to support this factor; and
      3. Other Criteria: The organization may submit any evidence of pay-related staffing problems which seriously hamper or have the potential to seriously hamper its ability to recruit and retain physicians in the specialty or assignment.
   2. Individual Exception to the Maximum of the Annual Pay Range
      1. The individual should have outstanding qualifications in a medical or dental specialty or possess a unique combination of education and experience that meets a special need of the organization that may be project specific or critical to the HHS mission.
      2. A discussion of what factors distinguish the individual when compared with other physicians with like length of service, specialty, or assignment; or a discussion of the rare combination of education and experience which the individual has and how it meets a special need of the organization or the mission of HHS.
3. Requesting Exceptions:  Requests for exceptions to the maximum of the nationwide pay range will be sent to the OpDiv head with a recommendation from the Compensation Panel.  Requests shall include the following:
   1. The individual or specialty or assignment for which the exception is requested;
   2. The amount of maximum pay requested;
   3. The reasons for the request, including documentation specific to the criteria in paragraph B; and
   4. Any other pertinent information.

Exhibit A:  Summary of Title 38 Physician and Dentist Pay Approval Authority

Authority	Held By	Delegated To
Establish Title 38 Physician and Dentist Pay policy and procedures.	ASA
Approve requests for PDP when proposed annual pay exceeds $275,000.	ASA
Approve PDP when proposed total compensation exceeds EX-I	ASA	OpDiv Heads
Approve PDP for individuals reporting directly to the OpDiv Head	ASA	OpDiv Heads
Approve exceptions to the maximum of the annual pay range.	ASA	OpDiv Heads

Exhibit B: OPDIV Physician and Dentist Tier Description

Effective November 13, 2016

OPDIV	Coverage:  Centers for Disease Control and Prevention
Tier 1	Staff physician or dentist, nonsupervisory research scientist
Tier 2	Supervisor, Program Manager, Branch Chief, Team Chief or Leader, peer-reviewed Senior Research Scientist having significant impact in the field.
Tier 3	Second-level supervisor who manages an organizational unit that is subdivided into distinct functional groups (i.e., Division Director). Director or Deputy Director of a complex group of organizations that have national program responsibilities (i.e., Center or Institute Director or Deputy Director).

OPDIV	Coverage:  Centers for Medicare and Medicaid Services
Tier 1	Staff physician or dentist
Tier 2	Supervisor, Program Manager, Division Director, Team Director
Tier 3	Second-level supervisor managing an organizational unit that is subdivided into distinct functional groups (i.e., Group Director). Director or Deputy Director of a complex group of organizations that have national program responsibilities (i.e., Center or Office director or deputy).

OPDIV	Coverage:  Food and Drug Administration
Tier 1	Nonsupervisory medical officer and dentist
Tier 2	First-level supervisor (e.g., Branch Chief and Staff Director) and team leader
Tier 3	Medical officer/dentist (Division and Deputy Division Director) with independent resources (personnel, budget, and space). Second-level supervisor managing an organizational unit that is subdivided into distinct functional groups (i.e., Office level). Medical officer/dentist (Office, Deputy Office Director and Center Director) that has responsibility for a complex group or organization that has Agencywide or nationwide impact.

OPDIV	Coverage:  Indian Health Service
Tier 1	Staff physician or dentist
Tier 2	First-level supervisor, Clinical Department Head, Clinical Director at outpatient or free-standing clinic.
Tier 3	Second-level supervisor, Clinical Director of a hospital or medical center National program responsibilities (normally a headquarters function)

OPDIV	Coverage:  National Institutes of Health
Tier 1	Nonsupervisory physician or dentist providing patient care services in support of biomedical research.
Tier 2	Supervisory or program manager physician or dentist functions as a fully credentialed, fully trained clinician with patient care responsibilities.
Tier 3	Physician or dentist with independent resources (personnel, budget, and space) who provides patient-related activities.  Publishes and presents original peer-reviewed scientific research at national meetings. Physician or dentist with responsibility for a complex group or organization that has Agencywide or nationwide impact.  Growing body of published and presented original peer-reviewed scientific research at national and international meetings.  Recognized by receipt of national and international awards.

Exhibit C: Department of Veterans Affairs Title 38 Pay Tables and Covered Clinical Specialties

Annual Pay Ranges for Physicians and Dentists

Effective November 13, 2016

Pay Table 1: Pay ranges

	Minimum	Maximum
Tier 1	$103,395	$225,000
Tier 2	$110,000	$234,000
Tier 3	$120,000	$262,000

Covered clinical specialties and assignment

Endocrinology; Endodontics; General Practice—Dentistry; Geriatrics; Infectious Diseases; Internal Medicine/Primary Care/Family Practice; Palliative Care; Periodontics; Preventive Medicine; Prosthodontics; Rheumatology; and all other specialties/assignments not requiring specific specialty training.

Pay Table 2:  Pay ranges

	Minimum	Maximum
Tier 1	$103,395	$264,000
Tier 2	$115,000	$292,000
Tier 3	$130,000	$320,000

Covered clinical specialties

Allergy and Immunology; Hospitalist; Nephrology; Neurology; Pathology; PM&R/SCI; and Psychiatry.

Pay Table 3:  Pay ranges

	Minimum	Maximum
Tier 1	$103,395	$348,000
Tier 2	$120,000	$365,000
Tier 3	$135,000	$385,000

Covered clinical specialties

Anesthesiology (pain management); Cardiology (noninvasive); Emergency Medicine; Gastroenterology; Hematology; Hematology-Oncology; Nuclear Medicine; Ophthalmology; Oral Surgery; and Pulmonary.

Pay Table 4:  Pay Ranges

	Minimum	Maximum
Tier 1	$103,395	$400,000
Tier 2	$125,000	$400,000

Covered clinical specialties

Anesthesiology; Cardiology (invasive/noninterventional);Cardio-Thoracic Surgery; Critical Care; Dermatology; Dermatology (MOHS); Gastroenterology; General Surgery; Interventional Cardiology; Interventional Radiology; Neurosurgery; Orthopedic Surgery; Otolaryngology; Plastic Surgery; Radiology (diagnostic); Radiology (oncology); Urology; and Vascular Surgery.

Pay Table 5:  Pay Ranges

	Minimum	Maximum
Tier 1	$150,000	$309,000
Tier 2	$145,000	$289,000
Tier 3	$140,000	$270,000

Covered assignments

Chief of Staff and Deputy Chief of Staff.  (Depending upon the level of responsibilities, an assignment as chief of staff may be compensated at all three tiers as warranted.  All assignments with a level of responsibilities amounting to deputy chief of staff, however, are compensated at the tier 3 pay range only.)

Pay Table 6:  Pay Ranges

	Minimum	Maximum
Tier 1	$145,000	$265,000
Tier 2	$145,000	$245,000
Tier 3	$130,000	$235,000

Covered executive assignments

Executive Director; Principal Deputy; Deputy and Assistant Under Secretary for Health; Chief Officer; Chief Consultant; Network Director; Medical Center Director; Chief Medical Officer; National Program Manager; and other Central Office physician or dentist.

Exhibit D: HHS Form 691

Effective January 1, 2016

DEPARTMENT OF HEALTH AND HUMAN SERVICES REQUEST FOR TITLE 38 PHYSICIAN AND DENTIST PAY (PDP)
1. SPECIAL PAY REQUEST         Physician             Dentist			2. ACTION REQUESTED         New Recruitment             Change to Existing PDP         Other (Specify)
3. EMPLOYEE INFORMATION
Name
Position Title / P.D. Number
Organization (Agency/Center/Division)
Official Tour of Duty                                 Full Time                  Part Time          If part time, regular scheduled hours per pay period:
4. AMOUNT OF PDP TO BE PAID
GP or GR Grade / Step					GS Base Pay	$
Clinical Specialty / Board Certification					Market Pay	$
Pay Table Number		Tier Number			Total Annual PDP	$
Type of Incentive                                 Recruitment                  Retention                 Relocation					3 R’s Pay	$
					Total Annual Compensation	$
5. NOTES
6. REVIEWS AND APPROVALS
Recommending Official (Name and Title)				Signature		Date
Compensation Panel Chair (Name)                         N/A				Signature		Date
Approving Official (Name and Title)				Signature		Date
Fund Availability (Name and Title)				Signature		Date
Human Resources Review (Name and Title)				Signature		Date
7. EFFECTIVE DATE

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