Negotiating Practice Agreements, Contracts, and Salaries for Nurse Practitioners Wendy L. Wright, MS, RN, APRN, FNP, FAANP Adult/Family Nurse Practitioner Owner - Wright & Associates Family Healthcare Amherst, NH Owner Wright & Associates Family Healthcare Concord, NH Partner Partners in Healthcare Education, LLC 1 Objectives Upon completion of this lecture, the participant will be able to: Discuss the process involved in drafting a practice agreement or contract Discuss pros and cons of a no-compete clause Identify the recommended salary based on location, practice and years of experience 2 Contracts Contract is a promise or a set of promises which are legally binding Mutual consent must be obtained Willingness by both parties to adhere to stipulations of the contract Numerous contract templates exist Don t recreate the wheel 3 1
Contracts In the past, nurse practitioners who had formal contracts were unusual Over the past 10 years, an increasing numbers of Nurse Practitioners are entering employment settings where a signed contract is the norm 4 Must Remember Contracts are LEGALLY binding When you sign a contract, you must assume that it will be legally binding and as such, enforced Legal proceedings have been designed to deal with issues related to disputes 5 Why Sign A Contract? Advantages Forces individuals to discuss all details Protective of employee (and employer) Salary Bonuses Duration of Employment Benefits Reasons for termination May offer job security 6 2
Disadvantages Protects employer Legally binding May include a non-compete clause Failure to adhere to contract may result in a breach of contract suit 7 Before You Sign a Contract... Do Your Research and Be Prepared 8 Do Your Research Find out as much as you can about the company/office prior to signing any contract Ask colleagues in the area about the practice Ask nurses as the local hospital about the clinicians and the practice Are they respected? Are they easy or difficult with which to work? How many nurse practitioners work / have worked there? 9 3
Be Prepared Before Signing The Contract Have available Scope of practice State, national Contributions you can make to the practice Contributions made to previous practice Improved patient care Patient satisfaction More MD flexibility Figures re: your contribution to practice Make sure to present them at the appropriate time 10 What Needs To Be In Your Contract? 11 Essential Components Responsibilities of the job Duties (Administrative and Clinical) Scope of practice Terms of Employment Hours Practice sites Call Performance evaluations Administrative assistance Salary and/or Pay Structure Bonuses Benefits Professional issues Non-compete clause Dispute reconciliation 12 4
Practice Information 205,000 Nurse Practitioners in US Majority are family and adult nurse practitioners Majority work in a primary care/outpatient setting Provide chronic and acute care; large focus on chronic disease states www.aanp.org 13 In Certain Locations Full-time Internal Medicine and Family Practice opportunities may be minimal; with some market areas having few openings Other locations i.e. some rural areas numerous positions available 14 Changing Trend Yet.as a whole, there are still a significant number of nurse practitioner employment opportunities available We are seeing a trend is toward opportunities in subspecialties Varies location - location Retail clinics in metropolitan areas Another trend- part-time opportunities Prediction: continued increased demand 15 5
Examples of Advertised Jobs in February 2015 Fulltime NP MIT; College Health Setting Fulltime NP s Internal medicine Dermatology Pain Management Orthopedics Cardiology Full-time NP: Pennsylvania Long Term Care/Short Stay Rehab 16 Salary Although I have listed this first, this is certainly not the only or in many cases, even the most important component of the contract Too many job applicants march into an interview / contract and immediately ask: What is the pay? What are the benefits? 17 Salary Base Salary Base Salary + Production Bonus Hourly You will have to pay your own taxes 18 6
Helpful Statistics NP s see approximately 90% of what a family practice physician sees NP s cost approximately 65% of what a family physician costs 19 Salary Salary Any potential for additional revenue? Bonus? When will you be reviewed? Does everyone get raises? 20 Salary vs. Productivity Important part is to consider all of the possibilities Make sure you understand the formula for which your bonus will be determined 21 7
My Experience 1 st job: Straight salary; no production bonuses but did receive large pay raises 2 nd job: Salary plus incentive bonus which was 20% of my collectables 3 rd job: Salary only Current job: Owner lucky to be paid 22 Must Determine Prior to Negotiation What percent of the patients in the practice are capitated? Are most fee for service? 23 Quality Bonuses Bonus may be paid based upon the percentage of patients meeting HEDIS guideline performance criteria I.e. immunizations, diabetic retinal examinations, CRC screening This is best suited in a highly capitated/managed care practice Buppert, C. Nurse Practitioner s Business Practice and Legal Guide 24 8
Profit Based Formulas Must distinguish between gross profit or net profit What percent of billable s does the practice collect? Ideal: 90%; however, let s talk about this!! Must also review your numbers on a regular basis so you are aware of what you are bringing in to the practice Buppert, C. Nurse Practitioner s Business Practice and Legal Guide 25 Advance for Nurse Practitioners Average Overall Salary (Updated 2/2015) 2014: $101,621.00 2012: $93,032.00 (9.3 years, 62 patients per week) 2011: $90,583.00 2010: $90,770 2009: $89,579 (family: $86,520.00) 2008: $81,524 2007: $81,397 Up by 8.8% in 2 years Up by 55% in 10 years (PA s 35%) 2005: $74,812 2003: $69,203 2001: $63,172 1999: $58,391 http://nurse-practitioners-and-physician-assistants.advanceweb.com/web-extras/online- Extras/NP-Salaries-Continue-to-Rise.aspx accessed 02-01-2015 26 Part Time Hourly Pay 2014: $55.03 2012: $48.49 2011: $47.63 2010: $43.77 2009: $45.85 2007: $40.32 2005: $36.80 2003: $33.89 2001: $32.53 http://nurse-practitioners-and-physician-assistants.advanceweb.com/web-extras/online- Extras/NP-Salaries-Continue-to-Rise.aspx accessed 02-01-2015 27 9
Advance for Nurse Practitioners Salaries 2012 (updated for 2012 salaries): ED NP: $103,722.00 (down) Mental Health: $92396.00 (down) Neonatal NP: $99,810.00 (up) Hospital/Surgery NP: $96,124.00 (up) Retail Clinics: $96,800.00 (up) Family Practice: $89,317.00 (up) Average in practice: 9+ years Patients per week: 65 patients College Health: $80,521.00 (up) http://nurse-practitioners-and-physician-assistants.advanceweb.com/ebook/magazine.aspx?ebk=nppa020112#page=25 28 accessed 02-04-2012 Too Many Nurse Practitioners. Expect to receive what the faculty tell them is to be expected Expect to be paid the national average It may be that in your area the pay scale is lower or higher than the national average Please do your research Ask colleagues in the area Go to www.salary.com and plug in your zip code 29 Nurse Practitioner: Amherst, NH May 2014: 10%tile $86,840.00 25 th percentile $93,597.00 50 th percentile 101,018 75 th percentile $109,761.00 90th%tile $117,721.00 Wright, 2014 Adapted from www.salary.com accessed 05-12-2014 30 10
www.salary.com (2/1/2015) 31 www.salary.com http://swz.salary.com/salarywizard/nurse-practitioner-salary- Details-Melville-NY.aspx accessed Wright, 02-01-2015 2015 32 Current Estimates 43% of solo provider s income goes to overhead Larger practices 23.5% Buppert, C. Nurse Practitioner s Business Practice and Legal Guide 33 11
Reality: Reimbursement from Medicare: Fee for Service 99211: $20.54 99212: $34.64 99213: $58.21 99214: $85.21 99215: $115.71 34 Here s the Latest Nurse practitioner s see: 11 20 patients daily NP s make approximately $80,000 yearly 35 Projected Yearly Income from NP 11 patients daily $58.00 per visit; $153,120 (240 days) 20 patients daily $58.00 per visit; $ 283,200.00 yearly 36 12
What Are We Looking At For Profit? Collectables: 153,120.00 Salary: 80,000 Benefits: 17,500 (25% of pay) Overhead: 70,000 (same as salary for assistants, rent) Profit: $none Buppert, C. Lecture in Albany, NY on 03-25-06 37 Why Are Nurse Practitioner s Let Go?? Collectables: 100,815.00 Salary: 80,000.00 Benefits: 17,500.00 Overhead: 70,000.00 Profit: NONE Loss of 66,685.00 38 Remember. Salary may not be everything Sometimes.the entire package may make up for a few dollars less an hour 39 13
Number of Patients Per Day New graduates Will you be able to start off at 10 per day or similar? When will you be expected to carry a full panel? What is a full panel? Experienced NP s Same as above Expectations for full panel may be within 1 2 months 40 Vacation Benefits to Consider 3 weeks/year is the norm to start 1 additional week at 5 years Sick time 2 5 days/per year is the norm Health insurance/dental insurance Nurse Practitioner s own insurance is often paid by the company 41 Disability insurance Benefits to Consider May or may not be offered Smaller, independent practices are less likely to offer these benefits Retirement benefits Profit sharing? 401K any contribution by the company 42 14
Additional Benefits to Consider CME time Nurse practitioners need anywhere from 15 30 hours per year depending upon certification 1 week of CME time 5 days is very reasonable CME money 500 1000/year is the norm 43 Additional Benefits to Consider Fees to consider ANCC and AANP Accreditation Nursing licensure http://www.nursecredentialing.org/certification/examresources/exam Fees.aspx accessed 01-30-2010 44 Additional Benefits to Consider Fees to consider DEA number: not all states allow NP s to get a DEA number If allowed, should apply Credentialing fees Hospital privileges: fees $100.00 $500.00 Flexibility for unpaid time, leave, or vacation 45 15
Malpractice Policies Will the company policy cover you? The majority do You will be added on to the policy Will the company reimburse you if you purchase your own policy? 46 Institutional Plans Be Advised Coverage may be denied for private duty activities You may have no coverage for off duty incidents Your coverage may be canceled following a job change Limits of coverage may be shared by others 47 Benefits of an Individual Policy It will cover defense costs at you Board of Nursing not normally covered by an employer It will cover you as a volunteer If you have more than one job, it travels with you You will be appointed your own lawyer Pays up to $500.00/day while unable to work Covers any amount exceeding employers plan 48 16
Drawbacks of an Individual Policy Some experts propose that you may be more likely to be sued if you have your own policy It is another policy with money to go after 49 Cost of a Policy Family Nurse Practitioner: $900 1400.00 per year Half the cost if working < 20 hours/week 1 million each occurrence/3 million aggregate 1 million each occurrence/6 million aggregate 50 What Type of Policy is Best? Occurrence vs. Claims Made Occurrence Policy: This covers the NP for any incident that occurred while the nurse practitioner was insured Claims: Only covers the NP while the policy is in effect If you purchase a claims policy, make sure you purchase a tail 51 17
Other Benefits Communication devices Cellular phones Pagers Laptops 52 To Me A Huge Benefit is Support staff Will you have a medical assistant or nurse to assist with putting patients into the room? Will you have someone to help return calls? Triage calls? All of these are going to affect your productivity 53 So. If you have negotiated in a percentage of your income from productivity, the lack of assistance is likely going to affect your income 54 18
Be Weary. Of the job that seems to good to be true 55 Avoid Common Pitfalls! Be prepared to negotiate it may be a give and take 5 CME days and 750 dollars vs. 3 CME days and 500 dollars Nurses are not used to having to negotiate 56 Negotiating A Successful Contract Research Listen to other side Discussion Remember never give something for nothing Know your bottom line Be prepared to walk 57 19
No-Compete Clause (Restrictive Covenant) Promise, in writing, which states that the NP promises not to compete with the practice Serves to protect the employer from an NP leaving the practice and setting up shop a few miles down the street with his/her previous patients Document will list the radius within which the NP can not practice Will also list the timeframe within which this document will be in effect after leaving Are currently being upheld in court if the covenant is deemed reasonable 58 Before You Sign the Covenant Consider The hardship it will place upon you should you leave The availability of other practice opportunities if you leave 59 Example of My Covenant Could not practice for 1 year within 10 miles of the practice Numerous opportunities outside of the 10 mile radius 10 mile commute is very manageable in rural NH May not be as manageable if you are employed in a city hospital/practice and you live within the city Or the next practice opportunity is 50 miles away 60 20
Insurance Companies How do you go about negotiating your fees? Prior to contacting professional services representative Review contracts with other carriers What differences exist Attempt to negotiate fees Variables: Are you needed in that area? Are you valuable to them? Caution: discussing fees with others 61 Additional Resources Contract Negotiation for Nurse Practitioners American Academy of Nurse Practitioners Buppert, C. Nurse Practitioner s Business Practice and Legal Guide www.advanceweb.com www.salary.com www.fhea.com Negotiating Your NP Role 62 Wendy L. Wright, MS, RN, APRN, FNP, FAANP 2 Rolling Woods Drive Bedford, NH 03110 WendyARNP@aol.com Phone: 603-472-7097 Fax: 603-472-2597 63 21