Revising an NP Contract

February 1, 2007

We are revisiting the contract our practice has with our NP. My questions include the following: Is a contract required between a medical practice and an NP in the state of Louisiana? If so, are paid benefits required? Is paid vacation generally a part of a contract between a practice and an NP? I want to make sure we are not being overly generous.

Question: We are revisiting the contract our practice has with our NP. My questions include the following: Is a contract required between a medical practice and an NP in the state of Louisiana? If so, are paid benefits required? Is paid vacation generally a part of a contract between a practice and an NP? I want to make sure we are not being overly generous.

Answer: First, my overall response:

Although I do not profess to be an expert in state law, I do know that the terms of your contract are more of a management/HR issue than a regulatory one. Also, I assume you want the NP to stay on. Be careful, then, about radically changing the terms. Wouldn’t you quit a job that suddenly gave you no benefits?

Now, let’s address the details of your questions:

You should have a contract to protect the interests of both your business and your NP. Obviously, you’ll want to cover compensation and benefits but also scope of duties, hiring and resignation policies, and partnership options (if that’s even under consideration). Basically, establish all the ground rules for your relationship to avoid confusion down the road.

A quick review of the jobs posted at the Louisiana Association of Nurse Practitioners Web site shows that most practices are offering benefits in your state, including medical, dental, and paid time off. Some even offer to help pay off education loans and cover CME.

To help defray your expenses, consider asking the NP to share the costs of health insurance by opting for a high-copay/high-deductible plan or requiring her to pay more to cover a spouse or children. Note, however, that you should cover her disability and malpractice insurance.

For compensation, one model you could use is to offer her a base salary plus a scalable bonus or profit-sharing plan, determined by her productivity. If she sees her own patients, thereby increasing the practice’s revenues, you can easily compensate with this type of setup.

Be sure to do the math before making any changes: If you lose the NP, how much revenue will the practice lose? And will the physicians then have to take more call? I imagine it’s not so easy to recruit in Louisiana right now.

Look at the position as an investment - one that costs you money but also generates a more than sufficient amount of revenue to make having a happy NP in your practice a viable endeavor.