Employment Agreements for Advanced Practitioners

July 6, 2016

How should practices formulate employment agreements for advanced practitioners? Here are a few things to consider.

I am often asked by clients whether a written Employment Agreement is needed for advanced practitioners (nurse practitioners and physician assistants).  In my opinion, this relationship should be well documented and, in most states, some form of written agreement with advanced practitioners is legally required.

In drafting an advanced practitioner contract, keep in mind the following:

1. Advanced practitioners may share in call, rounding, and office visits.  Having a defined schedule is essential and provides a clear understanding of the expectations between the parties.  The contract should also define full or part-time status, as well as expectations regarding exclusivity.

2. Does your advanced practitioner have a following among patients?  It’s important to think about how your practice will be affected should the advanced practitioner compete with the practice during their term of employment or thereafter. I always recommend including in the advanced practitioner contract the same confidentiality, non-compete, non-solicitation and non-disparagement provisions that would be included in any physician contract.

3. Have you properly addressed advanced practitioner licensing issues in your contract?  Many states require that a supervising and/or collaborating physician (as well as alternative supervising/collaborating physicians) be designated in the written contract with an advanced practitioner, and that the specific duties of the advanced practitioner be described to assure they fall within the scope of practice of the supervising/collaborating physician.  Additionally, many states further require that the contract specifically delegate prescriptive authority and specify what prescriptions are allowed to be written. Every practice should determine whether the state requires that a copy of such contract to be provided to the licensing authority. Don’t forget notice may also be required should the employment terminate as well.

4. Compensation and benefits are a key component of any advanced practitioner contract.  Clear language indicating how the advanced practitioner is compensated, how bonuses are earned and what benefits apply is important.  It is also important to remember that in many states advanced practitioners cannot co-own a practice with physicians or be paid a percentage of the profits of a medical practice.  Examine the way in which your practice compensates its providers and determine if the same approach works for advanced practitioners before offering an advanced practitioner the employment contract.

5. Malpractice requirements vary from state to state, so be sure to talk to your carrier about how your advanced practitioner will be covered and what the tail commitment should be, if applicable.  I have seen a high number of advanced practitioners walk away without meeting their obligation to acquire tail.  Make sure your contract allows for the cost of tail to be reduced from final amounts that may be owed to the advanced practitioner upon termination, but also be prepared to acquire the tail if needed to assure coverage for the practice.  This is of particular concern in higher risk specialties, such as ob-gyn (where advanced practitioner providers may be certified as midwives), which run a higher risk of malpractice claims.

There are many similarities between the advanced practitioner and the physician employment agreement, but be sure to tailor your contracts to the unique license of the advanced practitioner provider.  A proper contract should reflect the understanding of both parties and offer essential protections to the medical practice.  Consult with counsel to be sure your advanced practitioner provider contracts contain all the essential provisions your practice needs.