EMPLOYMENT CONTRACT ISSUES
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& Labor Legal Help
& Oral Contracts
PA On-Call Reimbursement: Jerry M. Parsons, PAC/ATC
Relationships and Negotiation
Negotiating Salary by Carolyn Buppert,
Primer on Employment Contracts
ASSISTANT EMPLOYMENT AGREEMENT
and Physician Assistant Employment Contract
privileges and bylaws
Can You Negotiate
Medicaid-Fraud: Rubber stamping
are RVUs and how do they work?
The End of Restrictive
Covenants-Non Compete Clause?
Early Termination clause
Written & Oral Contracts
Having a written contract does not guarantee that
issues will be avoided, or that all parties will have interpreted the agreements
the same. However, a written contract does enhance the likelyhood
all parties communications are "on the same page." A contract can
also provides a vehicle, (law suit) to clarify and compensate for a breach.
An Alternative Dispute Resolution (ADR) clause in a contract or possibly
a Memorandum will also provides a vehicle to resolve disagreements.
Here's two PA's take on the issues:
It must be stated that by and large PA's highly recommend written contracts...these
views are presented so that PAs will make as informed employment agreements/contracts
as is both fair and just for all parties...webmaster
Friday, July 25, 2003
As a PA in my 23rd year in the profession, as
a PA who has quit a job, as a PA who has been asked to leave a job, as
a PA who has been an employee, as a PA who is an employer, I want to comment
on the value of a contract. I have owned and ran 3 different companies
since 1989, and presently own and run a company that has 5 employees.
A contract is a document that specifically spells
out perimeters for both the employee and the employer. Its main purpose
is to make the guidelines by which employee/employer conduct their business
relationship, and the attendant expectations clear and unequivocal. Without
it, there can be disastrous results on either side.
I have been fooled more than once when judging
the “character” of an individual or what their ulterior motives are. A
contract will give both parties certain rights that cannot be violated,
and if need be, enforced to the satisfaction of the individual that is
I have seen those employers that are “generous”
just to get a PA into the practice and then little by little chip away
at what was agreed to at the time of the PA’s employment.
Case in point:
A PA, in a surgical practice without a signed
contract and had been told the practice would pay for her malpractice coverage.
The practice dropped the PA’s malpractice coverage in order to “save money”
without the PA’s knowledge. A suit ensued do to surgical complications.
Today, this PA is now facing this dilemma on her own! If this PA
had a contract in force, which spelled out this benefit, the responsibility
would lay squarely with the physicians and not with the PA. This PA now
faces financial ruin!
The importance of an employment contract is that
it sets the tone of the relationship and spells out the absolute expected
criteria on both sides. Basically, a person is either a fool or one that
has a hard time asking for what he or she thinks they are worth that doesn’t
insist on a contract. The PA, by all means should have the contract reviewed
and suggestions made by a reputable business attorney in order to protect
C. Hamilton Boone,PA-C
Physician Assistant Services
..a surgeon's best instrument..
Let me give an "old man's" spin on contracts
and "at will" employment.
A contract isn't worth any more than the character
of the principles signing it. In most cases, I will take a job with
or without a contract. I have found that a contract means nothing.
There are other considerations that show the good
will of the employer more than a piece of paper with black letters on it.
For instance, are they willing to move you? That's a big investment
on the part of the employer. Most employers aren't going to fire
you for a silly reason after they spent $12K to move you across the country.
Do they give you two weeks vacation, or four weeks to start? These
are two of the "contractual" matters that are more important than any "security"
written into the contract.
Any contract or state law allows the employer
to fire you "for cause." What does that truly mean? It means
that they can always find a reason to terminate you, because there are
no perfect people. If you watch anyone long enough, you'll find a
reason to fire them. Examples? How many of you use the company
computer to send personal e-mail? How many of you call home for personal
business on the company telephone? Who doesn't make a photocopy of
that bill that you received that has an error in it?
I've been fired by the best of them, my friends,
with the best protection in a contract. I can testify that the contract
is basically unimportant. I have just signed a contract with an employer
here in my own city. It has a good salary, but only two weeks vacation.
It ties me up requiring ninety (90) days notice to quit. In that
aspect it's not a good contract. But in San Diego there are so few
PA jobs of any kind that I'm willing to suck it up to stay here until my
15 y/o son has graduated from high school, so it really doesn't matter
I'm 54 y/o, so I feel fortunate that someone will
hire me at this age -- there really IS age discrimination, but even the
employer doesn't realize many times that they're making a decision based
on that. I think that many types of discrimination aren't necessarily
overtly clear to the person discriminating. Does anyone ever admit
to themself that they don't like fat people? But I bet that many
obese PAs are fired due to their weight. And let's not start talking
about racial and religious matters. I believe it's there, but I think
we're past the days of the KKK. I think that the hiring process is
now at the "gut level," and that many people aren't willing to admit to
themselves what their base emotions are.
Well, enough thinking out loud. I hope this
is helpful to someone.
Blessings on you.
BACK TO CONTENTS
What to Do When An Employer DOES NOT USE CONTRACTS,
be extremely cautious: though some employers can be well meaning and kind,
a worst case scenario is the employer assumes complete control and
decision making authority, with little to no regard or respect of the input
by the Physician Assistant, arbitrarily changing scope of practice, job
description, work and/or compensation packages. If this is an accurate
description of your prospective or current employer, you will most likely
be dealing in high levels of anxiety, frustration and resentment.
An Oral v. Written contract should be a major
factor in considering a position with this employer. At a minimum,
try to find former employees, community people to establish their view
of the institution.
Prospective employers who are religious, and/or
non-profit, etc. citing a "trust us, a contract is not needed" position,
could assume since they sacrifice for the "cause" that you are willing,
when they decide you need to make more sacrifices, in hours worked, compensation,
and scope of practice for the "cause" and the good of the "team."
The following excerpts are from
by permission from https://www.timslaw.com
is directed at Missouri residents, but much of the information seems common
sense enough to raise Physician Assistants awareness about general facets
of law to keep in mind wherever you may be employed.
Employment contracts come in all shapes and flavors.
Everyone who works has, at least, an oral contract: "Work for me and I'll
pay you $xx.xx per hour." That's an oral contract. If you work, and don't
get paid, you have a contract claim even though nothing is in writing.
Oral bonus and commission agreements: Their employers
are determining the bonus and commission, and nothing is in writing about
how the employer will decide the amount to pay. People remember that
the employer told them how the bonus and commission plans work, but since
the plans are not written down anywhere, the employer might decide to dispute
the employee's memory - particularly if the employee makes a big score
and would be entitled to a huge bonus or commission. Hence, you have to
prove the terms of an oral contract regarding bonus and commissions.
Depending on the case, it could be easy or hard
to prove the terms of an oral agreement. It's very helpful if the employer
does things the same way for several people. The employer's practices are
useful in proving what the oral agreement most likely was. The employment
manual and handouts are useful. Your own testimony is useful. There's
nothing inherently wrong with you testifying to what you think the agreement
was. The employer will testify to his understanding. Other evidence will
be introduced, other witnesses will testify, and the fact-finder (jury
or judge) will decide whom to believe.
So oral agreements are real contracts. You can
enforce them if you can prove what the oral terms most likely were. But
oral agreements typically do not contain attorney fee provisions, so each
party will have to bear it's own attorney fees no matter who wins. For
practical purposes, that means the amount of money at stake would have
to be significant to justify the expenses of suing. So there is no
dis-incentive for the employer to cheat you. The employer knows that in
most cases you will either forget about it or you'll just go to small claims
court, and that he has nothing to fear from the government or lawyers,
most of the time.
May 5, 2003 Tim reaffirms: "This is a good example
of how the laws work diferently. In Missouri, employers don't have much
to worry about, as I say in the snippet, but in, let's say, Illinois,
everything would change, because Illinois has a Wage Payment and Collection
Act allowing damages and attorney fees, and in Illinois employers have
* much * to worry about. So my snippet is accurate, but only for states
like Missouri that do not have special damage law for breach of oral compensation
Tim Willoughby, Attorney at Law (Licensed
10097 Manchester Rd, Suite 207
St. Louis, Missouri USA 63122
One possible Option to to an Oral or Written
contract might be called a MEMORANDMUM OF UNDERSTANDING
shared between employee & employer
Communications are difficult at best! Often, unknown
to each party, different definitions are being discussed while seemingly
using the same words. What might appear to be agreement can and often
does later turn out to be misunderstandings that lead to conflict, distrust
creating at best an umpleasant environment and at worst a hostile work
In many medical environments you may reach an
understanding with a supervising physician and have the administrative
party thinking in a completely different direction. This could be
open hostility in the making... BACK TO CONTENTS
Here's a sample...
to excellence in their medical practice and patient care...
CHARACTER and VALUE: Physician Assistants
are by character compassionate advanced medical providers and team builders
through individual professional excellence within clearly defined scopes
of practice in a medical partnership with a highly respected Physician,
achieving outstanding patient care that multiplies the capitalization of
the Supervising Physician’s specialized skills, time and billing.
PAs are cost effective medical providers for insurance companies, businesses,
and patients contributing to a solid financial foundation of the whole
health care system and administration.
MISSION and SERVICE: The Physician Assistant’s
mission and service in all medical and surgical specialties are indistinguishable
from such care delivered by physicians, while operating as full accountability
partners with doctors, hospitals, and clinics.
PHYSICIAN ASSISTANTs: Are rigorously
medically trained similar to doctors in scope and practice, and when partnered
with a physician, are licensed medical professionals and advanced medical
practitioners who interdependently, in partnership with their supervising
physician, establish and build a parallel medical practice diagnosing and
treating their own patient roster which in turn, through referring patients
for specialized consulting to their supervising physician, builds the supervising
physician’s practice as well as the whole team. In short, PAs are trained
and certified to give complete and outstanding patient care much like a
Doctor as encouraged by their supervising physician.
SCOPE OF PRACTICE-DEFINED by PA's Supervising
Physician: My Duties will include...
Specific concerns might be addressed and contrasted,
Evaluating, diagnosing, and treating new and existing
patient's medical and surgical conditions.
Initiating and interpreting labs and x-ray studies
including CTs & MRIs.
Performing medical and surgical procedures.
Prescribing and referring patients for specialized
Assisting Physicians in medical and surgical procedures.
Using prescriptive authority to write prescription
medicines for patients.
Write/Dictate progress notes on patients' charts
indicating patient status and treatment procedures performed.
Conducting follow-up patient care.
Providing health education to patients and families.
Supervising and/or coordinating the activities of
patient care and support staff within the clinic.
Training and supervising medical residents engaged
in specific clinical activities.
Teaching and training illness prevention.
Actively participate in community health education.
Performing emergency life saving procedures in cases
such as cardiac arrest, respiratory arrest, massive hemorrhage, or similar
Are among front line medical providers in emergency
Physician Assistants believe when each team member
is honored and celebrated for their skills, abilities, and love of medicine
and patients, the whole team benefits and patients received the best available
medical care making the whole health cares system fundamentally sound.
Physician Assistant’s National, State and hospital
credentials are clear…
1. Physician Assistant’s are NOT trained NOR qualified
for Nursing duties.
2. Nurses are NOT trained NOR qualified to supervise
3. Physician Assistant’s are NOT trained NOR
qualified for Medical Assistant duties.
4. Physician Assistant’s are NOT trained NOR
qualified for Surgical Technician duties.
5. Physician Assistant's ARE trained AND qualified
to supervise, Nurses, Medical Assistants, Surgical Technicians,
and other medical personnel
of the medical team.
ELEMENTS OF YOUR WRITTEN OR ORAL CONTRACT MIGHT
Area of Specialty and Practice Description
Job Description and Responsibilities be very
Supervising Physician's name / and any other
possible supervisor and responsibilities
Required Travel Details
Production Formula and Pay
On Call Schedule and Pay
Review Periods and Process
Pension & Retirement Program and Employer
Profit sharing and/or Corporation Partnership
after one or two years
Liability Insurance Occurance and Tail and Legal
Key Provider Insurance-On Physician and
PA in case of death, the practice survives.
Humanitarian mission: Number of days, paid-unpaid-shared
Number of Holidays
Number of Days for Professional Development/CME
AMOUNT OF REIMBURSEMENT FOR:
Interview Expenses:Travel, Lodging, and Meals,
CME Continuing Medical Education:Travel, Lodging,
Meals and Registration Fees
Tuition Assistance and PA school loans
Professional Journals, etc.
Professional Dues/Fees e.g. AAPA
Licensure / Certification / Credentialing Fees
e.g. NCCPA, STATE
Relocation and Settlement
Technology (PDA, pager, cell phone, computer,
Dispute Resolution / Grievance procedures and
Termination procedures and process
Resignation procedures and process
You can add additional information and understandings
,as suggested below in "A Primer on Employment Contracts," as an ongoing
tool for you and your employer to help make the clearst of understanding
and the best of team working relationships. © BACK
A Primer on Employment Contracts
Michael R. Burke, JD
Defuse legal land mines by learning all you can
Here are five key areas to consider.
Even if you can't significantly alter the terms
of agreement in your employment contract, it's extremely important to understand
what's in it before you sign. Unfortunately, the "legalese" in most contracts
can make this difficult. While you should attempt to understand your agreement
as a whole, focus your efforts on the following key areas.
Your employment contract will usually contain
a generic description of your job duties. Most contracts are not much more
specific than stating that you're expected to provide services on a full-time
basis and act in accordance with the employer's policies and procedures.
If you will not be working full time, it makes sense to ask that the minimum
or maximum number of hours your employer expects you to work be added to
the contract to prevent any misunderstanding.
It is also wise to make sure that call and coverage
responsibilities are spelled out in advance and written into the contract.
Many physicians are disappointed when their coverage obligations end up
being more than what they agreed to during negotiations. In addition, if
the employer requests that you follow its policies and procedures, you
should request a copy so you can refer to them if necessary.
Termination provisions can radically alter the
length of an employment agreement, so review them carefully. The length
of an agreement usually depends on specific circumstances, but in my experience,
most physician groups define the initial term as the period you'll be working
for the practice prior to becoming eligible to buy in. While agreements
with physician groups generally state that either party can terminate the
agreement "without cause" by providing written notice (e.g., 30 to 180
days), agreements with hospitals or health systems often do not contain
such language.Larger organizations may also require you to provide more
notice (e.g., 180 days) prior to leaving so they can ensure sufficient
Many "for cause" termination provisions are not
objectionable (e.g., termination for loss of medical license); however,
some are drafted in such a broad or vague manner that they could leave
you open to immediate termination without sufficient justification. If
you can't negotiate the termination provisions in your contract, ask that
the agreement define a specified period of time (known as a "cure" period)
within which you'll be notified of the proposed termination and then have
an opportunity to correct the reason for it.
Compensation and benefits
Compensation is obviously a key issue for both
physicians and employers. Most physician employees are paid a base salary
plus incentives based on performance. If an employer offers you this salary
arrangement, you may want to consult with a qualified health care attorney
to ensure that it does not run afoul of Stark II legislation, which limits
physician referrals to health care entities with which they have a financial
relationship. Also, be sure that the details of the compensation plan you
were promised during negotiation are included in your employment contract
before you sign it.
Benefits should also be included in your contract.
Packages will vary, but often physician practices will offer fewer benefits
than a hospital or health system. Your employment agreement should also
spell out the number of days off you'll receive for illness, vacation and
continuing medical education, and whether you'll be paid for them. Many
employers (especially hospitals and health systems) are now rolling these
days together and referring to them in the aggregate as "personal time."
The biggest professional expense today is malpractice
insurance, and its skyrocketing cost concerns most physicians and employers
[see "Understanding the Physician Liability Crisis," FPM, October 2002,
There are two basic types of malpractice insurance:
Occurrence (for a malpractice incident occurring
during the year of coverage regardless of when a lawsuit is filed) and
claims-made (for a malpractice claim made during the year of coverage).
Physicians with claims-made coverage will often need "tail coverage" if
they leave their position or are terminated.
Tail insurance covers acts that took place during
employment but that may not be litigated until after employment ends. In
the past, employers were likely to bear the burden of this expense. However,
since the cost of tail coverage has increased, more employers are seeking
to shift all or part of that burden to the employee. This is a point of
negotiation in most employment contracts today.
Restrictive covenants and non-solicitation clauses
Restrictive covenants and non-solicitation provisions
are other hotly negotiated parts of employment agreements. While it is
beyond the scope of this article to discuss this topic in depth, it's important
to note that the enforceability of restrictive covenants varies depending
on state laws [for more information, see "Limiting Restrictive Covenants,"
FPM, April 2001, page 50]. More employers are also focusing on non-solicitation
provisions, which may prohibit you from soliciting patients or employees
from your former employer's practice. Again, the enforceability of non-solicitation
clauses varies depending on the nature of the restriction and the state
in which you practice [for more information, see "Understanding Confidentiality
and Non-Solicitation Clauses," FPM, July/Aug 2000, page 73].
As you can see, many issues are woven into the
fabric of an employment contract. It is of utmost importance that you understand
your agreement so that you are cognizant of your rights and the legal land
mines that must be avoided to fully comply with it.
Editor's note: A future Salaried FP article will
define the legal terms commonly used in most employment contracts.
Burke mburke@KSDBHEALTHLAW.com is a shareholder with the
health care law firm of
KALOGREDIS, SANSWEET, DEARDEN and BURKE, LTD.
987 Old Eagle School Road, Suite 704
Wayne, PA 19087-1708
l (800) 688-8314
l (856) 795-5515
(610) 687-8402 (fax)
Conflicts of interest: none reported.
A Primer on Employment Contracts by Michael Burke
has been prepared by Kalogredis, Sansweet, Dearden and Burke, Ltd. ("KSDB")
for informational purposes only and is not intended to constitute legal
advice. The information in this article is not privileged and does not
create or constitute an attorney-client relationship with KSDB or any of
the firm's attorneys. This article is not an offer to represent you. Do
not act or refrain from acting based upon the information in this article.
Relationships and Negotiation
Paul W. Barada
Salary and Negotiation Expert
One of the most interesting, and often the most
overlooked, dynamics in the negotiation process is the power relationship
that exists between the negotiating parties. Power relationships aren't
like a game of blackjack, but there is one parallel: Who has the better
Like the dealer, the employer has the better hand,
because he has something the candidate wants -- the job opening. Because
others want to play the game, the employer can pick and choose from multiple
candidates, all of whom want the same job. But if the candidate has unique
skills that are in high demand, the power-relationship dynamic shifts from
the employer to the candidate. To use the blackjack analogy, the candidate's
deck is stacked in his favor.
The law of supply and demand also plays a role
in power relationships. For example, the healthcare
facing a national nursing shortage. Because the demand for nurses exceeds
the supply, qualified RNs are in a far more powerful position to negotiate
a better salary and compensation package than if there were a glut of equally
qualified nurses competing for jobs. The reverse can be seen in other sectors
where there's a greater competition for a small pool of opportunities.
Given supply exceeds demand, candidates competing for these jobs aren't
in a good position, power-wise, to negotiate a better employment package.
Generally speaking, the higher the level of skill
and experience required to do a job, the more equal the power relationship
between the employer and the job seeker and, therefore, the more room for
meaningful negotiation. The reverse is true for jobs that require low skill
levels and little experience.
Factors Affecting the Negotiation Process
Power relationships are also affected by other,
less quantifiable variables that shouldn't be overlooked. The most important
is how badly you need a job. Even the most skilled and experienced people
can find themselves out of work through no fault of their own, and that
changes the balance of power. On the flip side, the employer desperate
to find a brain surgeon relinquishes negotiating power, especially if the
prime candidate is happily employed.
What can you do in to retain some power during
the negotiation process? Consider taking these steps:
1. Audit your skills, training, experience
and accomplishments. Objectively evaluate your skill sets and determine
which can be transferred to other occupational categories. An experienced
manager can usually apply those same skills across a broad array of occupations.
2. Develop a focused salary research
strategy. Find out the compensation and benefit packages being paid for
comparable skill sets for the occupation and geographic location you're
3. Do as much homework as possible
on the nature and extent of the demand for the skills, training, education
and experience within your chosen occupational field.
4. Determine your compensation
and the threshold below which you cannot go. This will help you avoid making
a lateral move instead of an upward move.
5. During job interviews, be prepared
your case (https://content.salary.monster.com/articles/unemployed/)
for the unique value you bring to the organization.
6. If in the process of evaluating your
skills, training, education and experience, you discover very little that
puts you in a position of power, consider additional training, education
or even a transitional job that would give you more valuable experience
The more you have to offer an employer, the more
power you'll have during the negotiation process, and vice versa.
BACK TO CONTENTS
FAIRFIELD (GTNS) - A physician living in Fairfield
has been arrested along with three other people in a $4.7 million Medicaid
scheme involving billing for prescriptions for medications never dispensed
and the creation of false medical records to conceal the doctor's absence
from patient treatment and office supervision.
ASSISTANT EMPLOYMENT AGREEMENT
This Agreement is made this 1st day__________________,
between "XYZ"., (hereinafter referred to as “Employer”) and "ABC", (hereinafter
referred to as “Employee”).
1. Employment. Employer employs Employee
and Employee accepts employment upon the following terms and conditions.
Employee pledges faithful adherence to all professional ethics and customs
and to carefully avoid all acts which might injure in any way the professional
reputation of the Employer, and its other employees.
2. Duties. Employer provides professional
services in hospital emergency facilities by duly licensed Physicians and
Physician Assistants (“P.A.”), and Employee accepts employment by the Employer
as a P.A. to assist in fulfilling its corporate purpose. To this
end, Employee will devote Employee’s full-time skill, labor, attention
and best efforts, on an exclusive basis, to perform such duties
as the Board of Directors and President of the Employer may from time to
time determine to be in the best interests of the Employer. Employee
further agrees, at all times during the existence of this Agreement, to
be duly licensed in the State of "123" as a P.A. and maintain “BCLS/ACLS”
certification, and such other certifications as may be mutually agreed
upon, failing which this employment and all rights and obligations shall
immediately terminate. Employer, through its Board of Directors and
President, may assign particular tasks to Employee and also relieve Employee
from responsibility for handling any particular task the Employer feels
would be better served by another employee of the Employer. It is
expressly understood that the Board of Directors of the Employer has the
authority to determine which matters will be accepted for service by Employer
and which employees of Employer shall perform medical services in any particular
case. Employee agrees to perform the required and assigned duties
in accordance with the rules and regulations promulgated by the Board of
Directors and by "unNamed" Hospital Association. Employee will also
keep and maintain such records as are required by the Board of Directors
and to make such reports as are provided or required by Employer and the
"unNamed" Hospital Association. Employee will also observe the records
retention policy of the Board of Directors. Employer’s Board of Directors
will handle all billings for the Employer in accordance with the fee schedule
to be established by the Board of Directors.
It is further agreed as follows:
A. It shall be the obligation of the Employee,
and Employee’s responsibility to:
(1) Report directly to the attending MD/DO for
patient review and to obtain any required authorized signature on a Patient’s
(2) Perform Patient history, regardless
of complaint, recording pertinent patient symptoms and chief complaints.
(3) Perform Patient examination,
including abnormal and/or normal systems evaluation, regardless of
(4) Give concise written instructions
and/or verbal orders to RN/LPN/Paramedic/Technicians.
(5) Make appropriate instructions
for Patient disposition, as they relate to continuing care.
(6) Dictate every chart of patients
seen, by end of each shift.
(7) Maintain complete professionalism
verbally and physically, at all times.
(8) Write prescriptions strictly
in accordance with state laws (no controlled substances).
(9) Arrange for coverage if unable
to work regularly scheduled shift.
(10) Maintain C.M.E. credits as per
(11) Attend and participate in resident
(12) All physical assault patients
shall be reviewed by attending physician.
B. The following Procedures/Protocol
shall not be undertaken by the Employee:
(1) “CSC” patients
(2) Primary complaint of child abuse
(3) Primary complaint of Psychiatric
(4) Primary complaint “DOA”
(5) Any complaint that either the
Employer or the Employee (with Employer’s consent) does not feel reasonably
comfortable with handling
C. Hours Worked Per Month:
(1) Employee shall be required to work full time
for Employer for the twelve (12) consecutive month period beginning _________________.
“Full time” is defined as one hundred fifty (150)
hours per month of clinical service, or more, which the Employee must work
in each succeeding twelve (12) month period.
(2) Employee shall be required to spend three
(3) hours per week on hospital or Employer-related meetings without additional
(3) Employee may be required to work nighttime
3. Term. The employment of Employee
shall commence _________________, and shall continue through __________________,
unless sooner terminated by death or as hereinafter provided. It
shall continue from year to year thereafter until terminated in the manner
described below in this Section 3, in the manner specified in Section 9
below, or elsewhere in this Agreement. Employer reserves the right
to terminate the employment of Employee for any malfeasance or misfeasance
in the performance of Employee’s duties. Employer or Employee may
terminate this Agreement at any time without cause upon not less than thirty
(30) days written notice. In such event, Employee shall continue
to render services and shall be paid regular compensation until the date
of termination. It is further agreed that this Agreement shall automatically
terminate whenever the Employee becomes legally disqualified to render
professional services within this State, loses applicable certification,
or is elected to a public office or accepts other employment that, pursuant
to existing laws, places restrictions or limitations upon the continued
rendering of such professional services.
4. Compensation. Employer shall pay to the
Employee for full-time services an annual base salary of $52,000.00, payable
in regular periodic salary amounts determined by Employer’s Board of Directors.
Employee will also be paid overtime compensation at one and one-half (1-1/2)
times Employee’s regular hourly rate, for any clinical hours worked in
excess of one-hundred and sixty hours per month. The overtime rate
is $43.33 per hour. In addition, Employee will be paid overtime compensation
at one and one-half (1-1/2) times Employee’s regular hourly rate for clinical
hours worked on the following four holidays: New Year’s Day, July
Fourth, Thanksgiving Day and Christmas Day. Vacation or sick time
cannot be counted as hours worked when calculating overtime. Employee
may be required to work nighttime shifts.
5. Continuing Medical Education Leave and Expense
Reimbursement. Employee will be granted up to one week annually with
full pay for continuing medical education (CME). Said CME leave will
not carry over from year to year and cannot be used as additional vacation
Employer will reimburse Employee up to
$2,000.00 annually for reasonable CME expenses incurred by Employee and
approved by Employer.
6. Professional Liability Insurance. Employer
shall provide professional liability insurance coverage with limits, coverage’s
and with such company (ies) as determined in the sole discretion of the
Board of Directors.
7. Working Facilities. Employer will furnish
Employee with medical supplies and such facilities and services as are
suitable to the position and adequate to the performance of the assigned
duties. Employee may be reimbursed for such expenses as in the judgment
of the Board of Directors have been incurred in the furtherance of the
interest of the Employer.
8. Fringe Benefits. Employer will
provide hospitalization insurance which will cover Employee and dependents,
said insurance to include whatever coverage and terms are afforded to similarly
grouped employees of Employer, from time to time. Employer will also
include Employee in any tax-qualified pension or profit sharing plans which
the Employer sponsors for other employees of Employer. In addition,
Employer will pay for professional licensing fees with the State of Michigan.
9. Disability/Disability Insurance. Employer
will provide disability income insurance, said insurance to include whatever
coverage and terms are offered to similarly grouped employees of Employer,
from time to time.
10. Sick Leave. The Employee shall be entitled
to two (2) weeks of sick time on an annual basis. This sick leave
shall be available to Employee in addition to any Total Disability Benefit
Employee may be entitled to pursuant to Section 9 hereof. Unused
sick leave may not be accumulated from year to year. Personal emergency
will be decided by the physicians.
11. Vacation. Employee shall be entitled
to three (3) weeks of vacation with full pay (105 hours) during each year.
The scheduling of such vacations shall be subject to approval by the Employer’s
President or Board of Directors and does not carry over from year to year.
12. Prohibition Against Assignment. Employee
personally agrees and on behalf of Employee’s personal representatives,
fiduciaries, heirs, legatees, distributees, and any other person or persons
claiming any benefit under Employee by virtue of this Agreement, that this
Agreement and the rights, interests and benefits hereunder shall not be
assigned, transferred, pledged or hypothecated in any way by any person
and shall not be subject to execution, attachment or similar process.
Any attempt to assign, transfer, pledge, or hypothecate or to otherwise
dispose of this Agreement or of the rights, interests and benefits thereof
contrary to the foregoing provisions, or the levy of any attachment or
similar process thereupon shall be null and void and without effect, and
shall relieve the Employer or any and all liability hereunder.
13. Arbitration. Any controversy or claim
arising out of or relating to this Agreement, or to a breach thereof, shall
be settled by an arbitrator who shall be an impartial physician and/or
physician assistant, acceptable to the parties. If the Employer and
the Employee cannot agree upon such impartial physician and/or physician
assistant, then each of the Employer and the Employee shall select a third
physician and/or physician assistant. The decision of two of the
three physicians and/or physician assistant on the matter in question shall
be determinative of the question. Any such arbitrating physicians
and/or physician assistant shall act in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered
may be entered in any Court having jurisdiction thereof.
14. Notices. Any and all notices required
or permitted to be given under this Agreement will be sufficient if furnished
in writing, sent by registered or certified mail to his last known address
in the case of the Employee or to its principal office in the case of the
15. Construction and Severability. The law
of the State of Michigan shall govern this Agreement and each numbered
paragraph shall be severable, so that the invalidity of any paragraph shall
not invalidate the other provisions of this Agreement. This Agreement
revokes and replaces all agreements previously entered into by the parties
hereto, whether oral or written, regarding the Employee’s employment with
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be
duly executed on the day and year first written
privileges and bylaws:records and documents
I have recently rcvd ammended bylaws at a hospital where I have rcvd
privileges as an Allied Health Prof. (PA in Orthopaedics) This was an
actual change in bylaws for all APN's and PA's, not individual privileges.
The update requires that the physician see his patients "every day".
Previous bylaws stated that chart orders and notes had to be cosigned every
24 hours. This allowed me to see the patients every other day.
In addition to these changes, I've also been advised that now all pt orders
initiated by the PA/APN must have a notation documented at the time the
order is made, of whether these orders
originated via protocol or verbal order (protocols of course must be
on file). I have reviewed JCAHO and State laws (TX) to the best of
ability and have come to the conclusion that these restrictions are
an internal hospital policy (see Chap 157.055 below). I have the
support of my supv physician who does mult cases at this hospital,
but has the option of using other hospitals if this becomes a major inconvenience
to him. What steps are recommended to try to change/appeal this.
And in the meantime, does anyone have access to some basic and broad protocols
that will keep me in compliance throughout this process. I have
been at this hospital for 3 years with no adverse events and have abundant
from nursing personnel that I work with on a daily basis. Being
considered an allied health professional and not a member of the hospital's
"medical staff" may affect how I can attempt to make a change. Any advice
from anyone with previous battles appreciated. As well as any corrections
in my interpretation of JCAHO and state law.
Due to our professional efforts to be treated more and more like the
docs, the entire hospital credentialing process is becoming more and more
time goes on. It now takes me months to get a job, as opposed to weeks
in the past. Why? Because even if they hire me, they need to credential
me. I just
quit the process in an excellent university neurosurgery job, after
the process went on over one (1) year without finality. What was the problem?
They wanted a
record of all my malpractice insurance since I became a PA 24 years
ago. I have no way to get that info, and never kept records in the past,
since no one
ever required it. And now many of my previous employers are no longer
in business, so I can't obtain such info. Some of this is JCAHO driven
and can't be
changed. But it makes it very hard for old guys like me.
Many hospitals allow a seat or two for allied health professionals on
the credentialing committee. We need to be in those seats. Also, our docs
need to be
on those committees to prevent the physician "politicians" from controlling
You raised an interesting question for me, a newer PA (been in practice
2 years at the same position since graduation). What kinds of records and
documents would be helpful for me to obtain and retain throughout my career
as I someday move onto other jobs? For example, I have a copy of my malpractice
insurance face sheet and its subsequent renewals. Are there other things
you would recommend having copies of, etc? Any input would be a great asset
to me and us 'youngsters' in the field.
Karen E. Fields, M.S.P.A.S., PA-C
IF you are in surgery or IF you are in a specialty where you perform
'procedures' I would begin NOW to keep a log of every procedure you perform:
some sort of patient identifier; procedure; your role; complication(s)
and outcome(s). One hospital 'chain' out west is currently requiring documentation
cases every 2 years for a PA, NP, advanced practice RN, etc. to continue
to maintain credentials as a first assistant. In one NY Hospital, the Hospital
was fined by the State for using an 'unqualified assistant' in a Neurosurgical
case. The assistant was a PA, with several years Neurosurgical experience.
However, all the Hospital had in her folder for 'credentials' was her NCCPA
Certificate and her NY State license. As you are aware, both of these
are very generic and give no
indication of neurosurgical exposure, yet alone experience.
~doug Condit Jr.~
At this point, I would say EVERYTHING, including a letter of reference
from every single physician you've had the slightest bit of contact with.
Every single piece of paper of any kind, including all CME diplomas.
I recently threw away ten years of tax records and now only have 14
yrs. That said, I came across a copy of the articles of incorporation
of the first PA State chapter a few years ago and copies of the original
newsletters from the mid 70's. I sent them to the active chapter
historian. I heard later that an active search was going on to find
some of these things. I point this out because the CME letters and
the letters of recommendation can be very important. I was stuck
for recommendations a few years ago and I had only worked for transient
MD's, one gone to rehab, a whole bunch had died off, and I was in a pickle.
Saving some of this junque in a singular file box will bring you memories
and many other forms of assistance in ten or twenty years. ALL awards,
certificates, CME logging form copies, etc.......I really does not take
up that much room. Old contracts, job descriptions, can help you
in the future also. Old ACLS certificates, I still have
a state certificate that lists me as a charter member and I annually scratch
out "chapter" and write charter on my dues certificate. The AAPA
may mandate the categories of membership, but as long as the charter is
on file with the state AG, I am a charter member. I still have a
copy of the "wanted" poster a hospital sent to all floors on my last rotation.
I was the first PA they had ever seen and my SMDs were listed and my picture.
I thought it was kinda nice actually. Really cut through some long
explanations those first days. You can obviously file the history
separately from the certificates, but do plan on filling it all.
Carl W. Jeffcoat, PA-C (ret)
I have been involved in the credentialing and privileging process with
our clinic for well over 10 years. PAs, in our setting, are captured
under that process exactly the same as physicians.
The "onerous" part you mention is a requirement of an effective
credentialing process. Because there are so many bad actors out there,
hospitals and large clinics MUST verify that you are who you say you are.
That means PRIMARY source verification of your credentials - education,
certification(s), all licensures, references, etc. They also will
check the National Practitioner Data Bank and other data sources. We even
do a Google search on our folks, both with initial and renewal applications.
They cannot rely on verification from another source. If your educational
body, licensing board, certifying body or references are slow to respond
to the query (and, often, they are), processing your application is delayed.
If any sort of security background check is required, then credit checks
and other sundry sources will be checked. Once all the ducks are
in a row, then the appropriate department heads, medical director and board
signature are obtained. All of this takes time. For a new person,
we start our checks with their initial interview and then get serious when
they are offered a job and submit the required application(s). Hopefully,
it is complete by the time they start - sometimes it is not. We had
one that took four months after the provider arrived to finally clear -
about the same they tanked out of here for other reasons.
Be patient folks. This is the name of the game. Some of
us have been playing it for a long time - we are on the same field as the
physicians in this regard.
Some advice though: keep records of all of your training, licensures,
employment, residences, certifications, DEA numbers, organization memberships,
and CURRENT references. You will need them.
James A. Davidson, PA-C
Physician Assistant - Occupational Medicine
Hanford Environmental Health Foundation
3080 George Washington Way
Richland, Washington 99352-1658
509.376.4190 #8474 (pager)
85-8474 (on-site pager)
Fairfield police arrested Robert David,
48, of 1503 Wonder Way, Friday morning for his part in the scheme.
Also arrested by investigators from
the Attorney General's Medicaid Fraud Control Units in Fort Lauderdale
and Miami were Lawrence and Debbie Boudreaux and Gladys Washington, all
The Boudreauxes were co-owners of Specialty
Medical Care Centers of South Florida and an affiliated pharmacy, Ambucare
Infusion, Inc. Washington was a registered nurse employed as the center's
director of quality assurance, and David served as one of the facility's
From 1999 to 2001, the Boudreauxes employed
David as a physician at the center. According to the clinic's Medicaid
billing records, David was present to administer professional treatment
to HIV and Hepatitis-C patients and to oversee staff procedures, but he
allegedly was in Iowa and other locations when patients received treatment.
David allegedly ordered a physician's
assistant to initial and mark hundreds of patient records with a rubber
"Robert David, MD" stamp in his absence. The records contained high-cost
medication orders for injections and infusions of Neupogen and WinRho that
were never administered. The pharmacy would then submit bills to Medicaid
for the drugs, resulting in a total of $4.7 million in improper billings.
During the investigation, the attorney
general's Medicaid investigators seized more than $1.6 million in illegally
purchased assets, including a 40-foot motor vessel, an ocean-view condominium,
a Cadillac Escalade and funds in a money market account.
PA compensation plans vary as widely as the multitude
of specialties and settings in which PAs practice. Although oral contracts
are common, putting all agreements into a written contract protects you
if disagreements arise later. The contract should not be written until
all parties have agreed on the essential components.
It is advisable to hire a lawyer to review any contract you intend to
sign. Retain a lawyer who has knowledge of contracts, particularly health
care contracts, and who can help you understand the responsibilities and
expectations outlined in the contract. A local lawyer is best; he or she
is more likely to be familiar with state and local laws. It also is important
to know if the lawyer has handled PA contracts before and how many years
of experience he or she has had in the area of contract law.
Terms and Termination
The term, or length, of the contract must be stated, including your
starting date and the duration of the initial contract. Perhaps more important,
the contract should state whether it can be terminated early if notice
is given. If so, the amount of notice and reasons for justifying early
termination should be carefully described. Termination provisions are either
"with cause" or "without cause."
Termination without cause means the contract can be ended by either
party at any time without reason. Typically, a 90-day notice is required.
You may be able to negotiate for a "balloon buyout" that provides extra
Termination with cause provisions protect employers from liability due
to employees who engage in illegal or illicit behavior. Legitimate causes
for dismissal should be clearly defined.
Payment of bonuses, severance pay, and vacation or sick time reimbursement
should be addressed. Malpractice insurance premiums should be mentioned
to ensure you are not required to refund money your employer has paid for
The contract should state how often a formal job performance review
will be conducted — for a new position, this is typically at one-month,
three-month, and six-month intervals.
Every contract should include an option to renew or a provision to
renegotiate based on a performance evaluation. Performance criteria should
be included or attached to the contract.
Employee versus Independent Contractor
State and federal laws vary. It is important to specify the relationship,
however, because your employer’s liability regarding employment taxes and
pension benefits will be affected. The Internal Revenue Service has guidelines
that you and your tax advisor should examine.
Services to Be Provided
The area of medicine in which you practice and your duties and obligations
should be clearly defined, including working times, sites, and practice
duties. Requirements for rounds and on-call duties should be clearly stated.
Be sure to address whether clauses that may prohibit holding a second job
apply to volunteer health care or nonmedical employment.
Credentials and Privileges
The contract should specify the professional credentials, for example,
NCCPA certification, that you must possess or obtain within a specified
time. It also should specify whether you must apply for or obtain privileges
at certain hospitals.
More disagreements arise over compensation than perhaps any other issue.
Will you be paid a salary, an hourly rate, a percentage of fees billed
or collected, or salary plus bonus based on productivity? If your compensation
will be based on a percentage of fees billed, specify which fees will be
included in the calculation. If you will be paid an hourly rate, include
a minimum number of hours per week or per month to ensure adequate income.
Terms should be clearly defined in the contract — not only the amount
(and/or percentage of productivity income) but also the frequency of calculation
and payment. For comparison purposes, find out what colleagues in your
area earn from a customized salary profile provided by the AAPA for a nominal
Who will pay for malpractice insurance? How much will it cost? Will
you be listed on your supervising physician’s policy or have your own policy?
Be sure to compare the options before you sign the contract.
Become familiar with both occurrence and claims-made policies. An occurrence
policy covers alleged negligence that occurs during the policy period,
regardless of when claims are reported. Claims-made policies cover incidents
that happen and are reported while the policy is in force; for an extra
premium, often a large one, tail coverage will protect you against claims
filed after the policy ends.
Your malpractice policy should cover liability for services rendered
(or not rendered) and all legal costs, regardless of the suit’s outcome
or whether the suit was fraudulent. Try to obtain an ultimate net-loss
policy, which will cover all legal fees.
As a service to its members, AAPA sponsors a professional liability
insurance program. For more information and an application form, call 877/356-2272.
The contract should describe both included and excluded fringe benefits.
Typical benefits include vacation and education leave, travel expenses
related to education leave, professional dues, licensure fees, hospital
medical staff fees, books and professional journals, NCCPA fees, Drug Enforcement
Administration registration fees, health insurance, disability, life insurance,
and retirement plans.
Sick Leave and Disability
The contract should specify if you will continue to be paid if you
become sick or disabled, and, if so, for how long. Often practices have
different disability policies for physicians and other employees; it is
important to understand which one will cover you. If you purchase the policy
yourself, the federal government does not tax it; therefore, it may be
advantageous for you to do this and negotiate a higher compensation package.
Purchasing into the Practice
If you hope to buy into the practice eventually, the conditions of
the buy-in and basic terms of purchase should be spelled out, usually in
a separate letter of intent. This letter should include methods for valuing
the practice assets and the physical site, and it should outline your participation
in business decisions, the length of time it will take before you become
a full partner, and the amount and terms of the purchase.
A restrictive covenant, sometimes called a "noncompete clause," is
a provision in the contract that prohibits you from practicing in a given
geographic area or given medical specialty after you leave a practice.
This is usually for a defined period of time, often a few years after leaving
These clauses are enforceable in most states if the terms are considered
reasonable. A 10-mile restriction might be reasonable in a rural area but
not in a metropolitan area. Consider the following to be red flags for
undesirable arrangements: exclusions from practicing in entire countries
or states; a prohibition from practicing at a particular hospital; or an
employer who says, "Oh, don’t worry about signing that; we would never
enforce it." If you must negotiate a contract with a restrictive covenant,
be sure it is something you can live with. Consider adding a clause that
declares the restrictions void if you are dismissed without cause.
Check that the contract specifies whether disputes between you and
your employer will be settled by mandatory arbitration or in court and
whether the prevailing party will receive lawyer’s fees and costs. The
contract also should include a clause that allows you and your lawyer access
to patient medical records if a lawsuit is brought against you after you
leave the practice. Otherwise, your lawyer may have to subpoena the records,
which is a costly process that can take months.
After meeting with your prospective employer, drafting a contract,
reviewing the employee handbook, and discussing the contract with your
lawyer, are you ready to sign on the dotted line? Perhaps. As you review
each section of the contract, imagine situations that could arise. Ask
yourself, "What would happen if...?" Then make your decision based on a
knowledgeable review of the contract and good common sense.
What are RVUs and How do They Work?
Most recent PA contributions:
I'm a bit testy today so you may want to take that
in consideration! YOU pick a salary and benefits you want and tell them to find
a way to make it happen. Then shut up-putting the burden back where it belongs.
I think at times things like RVUs can seem like a fair leveling of the playing
field and easier for the administration to point to an abstract idea formalized
as a strong negotiation point. No Way! If you have two
SPs wanting you, you have two allies if they have any backbone. You might
marshal some advantage using Salary.com It gives a range of salaries and you
sound like you're in the top bracket not 90% but 100+ %. I hope this
#1 What you have to remember is that you are a DEPENDENT practitioner. That
means you do not have your OWN patients in a typical RVU system.
That also means that you depend on your SPs for your patient load and work
you do. You are actually seeing their patients for them instead of them seeing
them themselves. If your SPs had another Orthopaedic Surgeon see their patients
or do the work you are doing for them, believe me they would have to pay them
fairly or they would not do it.
That being said, you should not be taking a salary decrease just because you
are switching to a RVU system. If your SPs want you in surgery, then that is
fine, but they are going to have to justify to the new "practice managers" why
they want you there and how they are going to pay you for that time as you will
never be able to bill enough RVUs in that setting unless you have all cash
patients or all work comp patients in some state that has a very good work comp
reimbursement for PAs working in surgery.
Your "salary" cannot be based solely on what RVUs you generate. It has to be
part of the SPs RVUs as well. You are doing many parts of the work they are
getting paid for when you do pre-op H&Ps required by the hospitals but not
reimbursed from insurance companies, writing orders, doing rounds and discharge
summaries, post-op visits, etc.
Do not sell your services short. Think of what your SPs are doing because
you are helping them. Are they going home early, not coming in on weekends,
adding more cases on, seeing more patients in the office? I almost bet that all
of those apply?
Maybe you can ask you SPs to form some type of bonus situation where they pay
you on a quarterly basis a percentage of their collections for those
#2 We had the same
problem. When you negotiate with a hospital administrator, the personal level
is gone. They need a certain number of PAs/ARNPs and they know the salary they
HAVE to pay to get them. In my case, when my physicans sold out to the
hospital, the hospital gave me a substantial raise over their initial offer
because my physicians thought I may leave them. My doctors explained to them
that the RVU system didn't work in my case because I do all the free stuff so
they can maximize THEIR RVUs. The hospital finally relented and gave me a nice
raise. Not to the same level the other privately employed ortho PAs in my area
make, but to one of the highest paid PAs here at my hospital. In short, your
doctors have to stand up for you. To the hospital, you're just a
Here's are more PAs thoughts: It's a very confusing system. It
is based entirely on what we bill. Our monthly pay is based on how
many rvu's we generate for each month. This is averaged over 6 months.
The pay scale is graduated so I am paid more for producing more.
i.e. if I generate a 6 month average of 208 rvu's per month, I would be
paid $25/rvu for that month; if I generage a 6 month avg. of 270 rvu's
per month, I would be paid $31/rvu for that month. (209 pays $28, 229 pays
$29, 251 pays $30). This graduated "conversion factor" is different
for each specialty. This is the orthopedic model. It has to
do with the % of writes offs within each department. In other words, the
write offs in ortho are higher (more medicare pts) than they are say in
Occ. Med (more workers comp, company contracted prices and insured pts.).
I am still not exactly sure how this formula works. I work in a very
large multispecialty clinic and there really was not a lot of negotiation
in this process. As for the work we do under a global billing situation,
we only get credit for seeing a post-op pt. in the clinic. This value
was assigned by our admin., it is not billed to say medicare and it is
not subtracted from the surgeons global rvu. Other than seeing a
few post op visits in the clinic, I don't do a lot under the global fee.
I am mostly clinic based, I assist in surgery 1 day a week when we do our
bigger cases....total knees/hips/shoulders/ACL's. I do evening rounds
the night of surgery. The surgeon I work w/does the majority of post
op care. If you are mostly hospital based, this would be different
for you. If you are doing a lot of work under the global fee, you
need to figure out what your time is worth. i.e. if you were not
doing post op care, what would you bill out in the clinic per hour for
seeing pts. where you would be generating rvu's. I know this
is confusing, let me know if I can clarify anything. Make sure you
get reimbursed for what you do and for what your time is worth. You
also have to look at the big picture. You need to compare your pay
& benefits to those in your specialty but also to those ortho PA's
in your part of the country. Our pay is entirely on rvu's generated.
We are alotted a certain amount of days off and cme days throughout the
year but they are not paid days off. in other words, if you are not
at work, you are not generating rvus and you don't get paid. Since
our pay is based on a 6 month average, we don't feel it as much if we take
a week or 2 off. Hope this is helpful.....let me know how your system
works. I think this system works ok for us but too early to tell.....we
have only been on it for 2 months. It definitely is a system based
to incentivize providers to work harder, see more pts. and bill accurately.
Download the National Physician Fee Schedule Relative Value File
of this contract is Richard Branson email@example.com
Physician and Physician Assistant Employment Contract
This employment agreement is between:
_____________________________ (here-in referred to as Employer) and
______________________________ (here-in referred to as Employee) for
the independent contract of professional medical services.
For good consideration, the Employer employees the Employee on the following
terms and condition.
Term of employment
Subject to provisions for termination set forth below, this agreement
will begin ______________________________ and will terminate on the same
date in one year from this date.
Renewal of Agreement
The terms of this agreement may be extended or renewed by mutual written
consent and signed agreement.
An option shall be available to renew the agreement with provision
to renegotiate the reimbursement for services based upon performance and
productivity. Performance and productivity terms shall be noted by Attachment
to this agreement.
Employer agrees to pay employee an annual salary of $______________________________,
payable every two weeks, for professional medical services rendered.
Position and Services
Employer employs Employee in the capacity of Physician Assistant. The
duties are: medical services, as agent of Employer and as outlined by the
Texas Medical Practice Act, that include, but are not limited to, physical
examination, ordering and interpreting diagnostic tests, medical management
of disease, prescribing prescription medications, medical and surgical
procedures, counseling, medical and surgical referrals and any additional
services afforded physician assistants through changes of state regulatory
statute in the future.
Hours of Service
Office hours are:
On Call hours are:
Hospital rounds are:
Standard of Care
Employer and Employee agree to maintain the practice environment within
the standards of care as outlined by applicable state and national statues
regulating the practice of medicine. This includes the appropriate superintendence
of medications, equipment and records used in the practice of medicine
and the care of patients.
Reimbursement of Expenses
Employer agrees to pay for Employee¹s reasonable expenses incurred
for maintaining certification and licensing requirements, including Texas
license fees, DPS and DEA registration fees, and malpractice insurance
on a claims-made basis.
Paid Time Off
Employee shall be entitled to two (2) weeks Paid Time Off (PTO) per
year at full pay.
Time is accrued from the date of employment but is not available until
ninety (90) days of employment has been completed. The first week may be
taken as accrued following ninety days of employment, the second week may
be taken after the eleventh month of employment is completed.
Additionally, Employee is entitled to two weeks (ten working days) of
Paid Time Off at full pay for continuing medical education (CME).
New Years Eve and Day,
Fourth of July,
Christmas Eve and Day.
Billing Practices and Collections / HIPPA
Employer grants Employee authorization to review and advise on the practice¹s
billing and collection procedures and practice - in that the State of Texas
holds all medical licensees under the State Board of Medical Examiners
ultimately accountable for their business practices as well as their medical
Employer and Employee agree to pursue due diligence to provide precise
and accurate ICD-9 and CPT coding of their services.
Both parties agree to follow all applicable HIPPA laws and to maintain
confidentiality regarding both patients and the practice.
Termination of Contract
Employer may terminate this contract for just cause only, i.e. failure
to maintain license and certification required for practice in the State
of Texas or felony conviction, including fraud. Employer and Employee may
terminate this agreement by mutual consent and 45 days written notice.
Employee agrees to provide Employer one month (30 days) notice if Employee
prematurely terminates this contract.
Termination of this contract by either party must be made in writing.
Employee shall, upon reasonable written notice, furnish such information
and assistance to Employer as it may reasonably require in connection with
any litigation Employer and Employee is, or may become, a party either
during or after employment
The party¹s respective attorneys shall initially arbitrate any
dispute arising over this agreement or the breach of it, in accordance
with the rules of the American Arbitration Association. If no solution
can be achieved, each party may pursue remedy in the appropriate court
Post Employment Restrictive Covenant
Employee agrees not to actively pursue solicitation of patients from
this collaborative practice to any future medical practice he/she may join
for a period of one year.
If, for any reason, any provision of this agreement is held invalid,
all other provisions of this agreement shall remain in affect. If this
agreement is held invalid or cannot be enforced, then to the full extent
permitted by law any prior agreement shall be deemed reinstated as if this
agreement had not been executed.
Assumption of Agreement by Employer¹s Successors and Assignees
Employer right¹s and obligations under this agreement will inure
to the benefit and be binding upon any successors and assignees.
Additional Work Opportunities
No part of this contract prohibits Employee from pursuing additional
employment to augment personal income provided there is no overt conflict
of interest, schedule conflict, or ethical issue that may be incompatible
to a third party review.
This contract is the entire agreement between Employer and Employee.
Oral modifications shall have no effect. This contract may be altered only
by written agreement signed by both parties,
resource of this contract is Richard Branson firstname.lastname@example.org
Volume 11 • Number 9 • October 2004
Copyright © 2004 American Academy of Family Physicians
Can You Negotiate Better Reimbursement?
Gregory J. Mertz MBA, FACMPE
Gregory Mertz is president and CEO of The Horizon Group, a medical practice
management consulting firm based in Virginia Beach, Va. He has more than
30 years of experience in health care administration and has managed medical
groups from three to 300 physicians.
With the right data and a reasonable approach, you can overcome some
inequities in payers’ fee schedules.
It has been more than a decade since increases in fees have resulted
in increases in income. The introduction of the Resource Based Relative
Value Scale (RBRVS) and the adoption of a national fee schedule by Medicare
virtually eliminated a practice’s ability to generate more income from
insurance plans by increasing what it charges for services.
Today, most health plans operate with fixed fee schedules. Often these
schedules have little in common with the RBRVS, and while some are roughly
based on a percentage of what Medicare pays, they may be tied to payment
levels that are three or more years old. Most physicians who question this
methodology for paying for professional services are told to take it or
Some practices are finding, however, that negotiating with payers for
fairer payments is possible. This does not mean payers are willing to grant
large increases just because you ask. But with the right data and a reasonable
approach, you may be able to overcome some inequities in existing fee schedules.
Do your homework
Solid data and a well-reasoned approach are key to negotiating better
reimbursement rates. Most of the data you will need are readily available,
particularly if your practice uses a computer-based billing system.
Step 1: Determine your most common CPT codes. Most primary care
practices derive the bulk of their revenue from office-visit, hospital
and preventive-medicine codes, so the number of codes you will need to
study may be limited. Be sure the codes on your list account for at least
75 percent of total practice charges. Next to each CPT code, record its
frequency, that is, the number of times you provided the service over a
12-month period. Be sure to include some lab charges or procedures to see
whether different payers have different reimbursement schemes for these
If your practice uses billing software, you should easily be able to
generate reports on your CPT codes and their frequency. If your practice
generates invoices manually, have your billing staff keep tallies of the
CPT codes you have included on your superbills. Three months of data should
be sufficient. If you use this manual method, pick three of your busiest
Step 2: Determine your top payers. Again, if you have an automated
billing system, you can likely run a report on your top payers. Since Medicare
and Medicaid use established fee schedules and do not negotiate, focus
on the three to four other payers that make up the bulk of your reimbursement.
Step 3: Determine your reimbursement for each code. Review the
Explanation of Benefits statements you receive from each of the payers
you selected and note how much they allow for each code on your list. Be
sure to use the “allowed” amount, not the “paid” amount. The paid amount
is the allowed amount minus any co-payments or deductibles the patient
pays to the practice.
In addition, calculate each payers’ reimbursement rates as a percentage
of Medicare’s reimbursement rates. For example, a health plan may pay 110
percent of Medicare’s rate for code 99214. You can find Medicare’s current
rates for your geographic area through the “Medicare Physician Fee Schedule
Look-Up” tool at https://www.cms.hhs.gov/physicians/mpfsapp/step0.asp. There,
you can also find the current relative value units (RVUs) Medicare assigns
to each code.
Because more and more health plans are beginning to use RVUs, it is
important to understand how they work. Under the Medicare RBRVS, each service
is assigned RVUs based on the physician effort, practice expenses and malpractice
risk involved. For example, the total RVUs for a 99214 office visit are
2.2. To calculate the payment for this service, you simply multiply its
total RVUs by the annual conversion factor. Medicare’s conversion factor
for 2004 is $37.34; therefore, its rate for a 99214 office visit is $82.15
(plus or minus geographical adjustments).
• A simple analysis of your fees and your health plans’reimbursement
rates can help you reveal and overcome payment inequities.
• Make sure you review your fees annually and set them reasonably (for
example, at 130 percent of Medicare’s rates).
• Negotiating even small increases for a few codes can generate valuable
income for your practice.
Step 4: Review your fees for each code. Note your current fees
for each CPT code on your list, and calculate your fees as a percentage
of Medicare’s rates. If you find that an insurance company is reimbursing
some of your charges in full, this may mean your fees are too low and the
insurance company may be willing to pay more. Consider raising those fees
or, better yet, standardize all of your fees at some percentage of Medicare,
perhaps 125 percent. If your payers seem to pay more for procedures or
diagnostic studies, establish a tiered fee schedule that sets evaluation
and management services at 125 percent of Medicare while charging 150 percent
of Medicare for other services. Whatever method you choose, be sure to
update your fee schedule annually based on changes to the Medicare fee
Step 5: Organize and analyze the data. Once you have gathered
the above data, organize it onto a spreadsheet or chart, such as the one
shown on page 33. This will help you identify which codes or health plans
should be targeted for improvement.
In general, focus first on the codes with the highest volume and dollar
value, as they will yield the most return for your effort. In addition,
if one health plan’s rates are clearly lower or if one code is paid at
a much lower percentage of Medicare than the others, this may be a likely
target for negotiation. For example, if you find that one of your health
plans pays 99 percent of Medicare for preventive services and 150 percent
of Medicare for lab services, you could use that as a negotiating point,
as most health plans are committed to preventing disease and should provide
proper incentives to do so. What’s more, some insurers pay specialists
at a higher rate than primary care physicians. This is a remnant of the
days when Medicare had two conversion factors (one for surgeons and one
for “cognitive” specialists). If you can demonstrate this inequity, you
may secure better reimbursement rates.
After you weigh these kinds of issues, establish target reimbursement
rates for your negotiations, say 120 percent of Medicare for most services.
A sample is shown in the far right column of the table below. To determine
the impact these target rates would have on your practice, multiply them
by the frequency for each code. The table below reflects this analysis.
It shows a potential 8 percent increase in revenue for the codes targeted.
Once you have completed the fee analysis, you should act on what you
have learned. These are some of your options:
Negotiate individual fees.
Unless you dominate your market, payers are unlikely to grant sweeping
fee increases. However, you may be able to negotiate increases for individual
services if you can demonstrate inequities using your data analysis (from
step 5, above).
|TWO HELPFUL SPREADSHEETS
A fee-analysis spreadsheet, such as the one shown here, can help you
identify which reimbursement rates should be negotiated with payers. In
this example, code 45330 is the easiest target, as the health plan’s reimbursement
rate as a percentage of Medicare is much lower for this service. (It appears
the practice has set its current fee too low.) In addition, the group could
set a negotiation target of 120 percent of Medicare for most services.
Compiling a fee-analysis spreadsheet for each of your major health plans
will help you compare their reimbursement rates and highlight inequities.
Typically, your first contact in the negotiation process should be the
health plan’s provider relations representative. If your argument to this
individual is compelling, the discussion will move up to the contracting
manager or network manager. The medical director essentially has no role
in the business side of the plan. If you are performing a procedure that
is new or not well defined, the medical director might be able to support
your argument for a higher payment for that specific code or a specific
case, but negotiating rates is generally not within the medical director’s
scope. (For a real-life negotiation example, see below.)
Drop the plan.
If a health plan’s payment levels are extremely low, you may be tempted
to bypass negotiations and simply no longer accept patients from that plan.
Whether this is a sound strategy depends on your local market. For example,
if you practice in a highly competitive market, those patients will easily
find another physician and you will simply lose market share. However,
in less competitive markets, patients may complain to their employers that
the loss of your practice has created a hardship and they may pressure
the insurance company to return to the bargaining table. Whatever your
situation, don’t threaten to drop out of a plan unless you intend to follow
through. Most plans will call your bluff.
|AN EXAMPLE FROM THE REAL WORLD
Recently, our firm worked with a hospital-based group of physicians
in Virginia who had never negotiated any of their reimbursement rates with
health plans; they simply accepted whatever was paid. After studying the
reimbursement patterns of the group’s various payers and targeting the
four largest, we contacted one of the plan representatives assigned to
the group’s geographic market and presented our analysis. Key points involved
explaining how the group’s reimbursement targets were set (they used a
resource-based relative value formula tied to 2004 Medicare levels with
a target of 130 percent of current Medicare allowed amounts) and demonstrating
that the health plan’s payments varied between 100 percent and nearly 180
percent of current Medicare rates.
The health plan representative agreed to take the information to the
contract manager for analysis. After two weeks, the group received an offer
via e-mail of 120 percent of current Medicare rates, which was roughly
8 percent above the current average level of payment. It was an improvement,
but given that the closest market competitor was reimbursing at 130 percent
of Medicare’s allowable amounts, we asked the contract manager to match
that rate. The contract manager eventually counter offered with 128 percent
of Medicare’s rates but sweetened the deal by allowing automatic annual
increases of 3 percent over the next four years. This would exceed projected
Medicare increases and guarantee payment rates of 144 percent of Medicare’s
rates by the end of the term.
|FPM ARTICLES ON NEGOTIATION
To brush up on your negotiation skills, read the following articles
from the FPM archives. Both are available free online at https://www.aafp.org/fpm.
“You Can’t Always Get What You Want… But Sometimes You Can.” Giovino
JM. November/December 1999:24–27.
“Negotiation Gambits.” Giovino JM, January 2000:60–61.
Close to new patients.
While you may not want to drop a health plan completely, you may wish
to stop accepting new patients covered by the plan. Over time, your number
of patients covered by the plan will decrease as they switch to different
plans or leave the practice and are replaced by new patients with better
Dramatic annual increases in the overall cost of health care are beginning
to meet resistance from employers and government, cost increases lag behind
those in the hospital and pharmacy sectors, the pressure to contain overall
costs will depress future reimbursement. Practices should assume that any
annual adjustments will not be sufficient to keep pace with labor, malpractice
and supply-cost increases and plan accordingly.
This means that, unless physicians want to work harder, they will need
to generate more revenue for the work they now do. While accurate coding
and complete charge capturing can play a key role, physicians should not
hesitate to negotiate with health plans for fairer reimbursement. Practices
that present a well-documented argument may be rewarded with a positive
Copyright © 2004 Elsevier Inc. All rights reserved.
The end of restrictive covenants?
A state supreme court rules that "noncompete" clauses violate public
policy by limiting patient access to medical care.
Dec 16, 2005
By: Berkeley Rice
If you're hiring a new doctor—or if you're a job applicant yourself—the
employment contract probably includes a "noncompete clause" or "restrictive
covenant." This standard provision prevents the new doctor from practicing
in the same geographic area for a specific time period after leaving the
Groups obviously favor restrictive covenants because they protect
the group's patient base and its investment in recruiting and supporting
the new physician. New associates, however, usually resent the clause,
since it prevents them from earning a living in the same area if the job
with the group doesn't work out.
Because of that inherent conflict, disputes over noncompete clauses
often end up in court. A recent decision by the Tennessee Supreme Court
highlights the continuing battle over these controversial contract provisions.
Here's what happened in that case, plus what you need to know about dealing
with restrictive covenants—no matter which side of the bargaining table
you're sitting on.
A noncompete battle in Murfreesboro
When David Udom was hired by Murfreesboro Medical Clinic, a 50-doctor
multispecialty group in Murfreesboro, TN, the internist's contract contained
a typical noncompete clause that forbade him from practicing within 25
miles of the city for 18 months after leaving the clinic. The contract
also contained a "buy-out" clause under which the restriction could be
waived if he paid the clinic the equivalent of a year's salary, and reimbursed
it for any moving expenses the clinic had paid on his behalf.
Udom signed the contract and began working at the clinic in September
2000. In August 2002, shortly before his two-year contract was about to
expire, he was informed that it wouldn't be renewed, and that the noncompete
clause would therefore take effect.
When Udom met with plastic surgeon Daniel Scott Corlew, the clinic's
president, Corlew told him that under the covenant's restrictions he couldn't
practice medicine in Murfreesboro or its immediate surrounding communities.
Nor could he accept a staff job at Middle Tennessee Medical Center, the
local hospital, or at Murfreesboro's VA hospital—even though neither position
would involve direct competition with the clinic for patients. In fact,
Corlew told him, he would have to give up his admitting privileges at MTMC.
After consulting an attorney, Udom informed the clinic that despite
the noncompete clause, he planned to open a solo practice in the town of
Smyrna, about 15 miles from Murfreesboro. He also refused to pay the sum
called for by the contract's buy-out option. The clinic responded by filing
a complaint against him in state court, accusing him of violating the terms
of the noncompete clause.
Following a hearing in January 2003, the judge declared the noncompete
clause valid and binding, and issued a temporary injunction barring Udom
from either opening a practice in Smyrna, or working at MTMC. The judge
also ordered him to deposit $120,000 with the court to satisfy the buy-out
clause, pending a resolution of the case. Udom took out a loan and made
the deposit. But he appealed the ruling, and went ahead and opened his
practice in Smyrna—with the court's permission. The appellate court later
upheld the restrictive covenant, and the case ended up before the Tennessee
In his brief, Udom argued that the covenant was unreasonable,
overly broad, and "against public policy." In response, the clinic insisted
that the covenant was legal and should be enforced to protect its patient
base. Because of "the unique one-on-one relationship between a physician
and patient," the clinic argued, many of Udom's patients might otherwise
leave the group if he opened his own practice in the same area. The clinic
also claimed a legitimate business interest in protecting its investment
in Udom's recruitment, training, office space, and administrative support
during his two-year employment.
The state supreme court rules for Dr. Udom
Last June, the Tennessee Supreme Court reversed the appellate
decision, largely on the basis of "public policy." In support of its decision,
the high court cited the AMA's Code of Medical Ethics, which states that
free choice of physicians by patients, and unrestricted competition among
physicians are "prerequisites of ethical practice and optimal patient care."
Based on those principles, the Code specifically "discourages any agreement
that restricts the right of a physician to practice medicine for a specified
period of time or in a specified area upon termination of an employment,
partnership, or corporate agreement." Such covenants, the Code states,
"restrict competition, disrupt continuity of care, and potentially deprive
the public of medical services."
The high court recognized that some state courts have found that
noncompete clauses violate public policy by limiting patient access to
medical care. Several other state courts have ruled that by preventing
physicians from practicing in their own communities, restrictive covenants
constitute "restraint of trade," thereby violating antitrust statutes.
For such reasons, Colorado, Delaware, and Massachusetts have passed
laws specifically prohibiting noncompete clauses in physician contracts.
Given those judicial decisions and legislation, the high court found it
"curious" that a majority of the states still permit noncompete contracts
between physicians as long as they meet a "reasonableness" standard.
Noting that Tennessee law already prohibits restrictive covenants
among lawyers, the justices saw "no practical differences between the practice
of law and the practice of medicine. Both professions involve a public
interest . . . [and] both entail a duty on the part of practitioners to
make their services available to the public. Also, both are marked by a
relationship between the professional and the patient or client that goes
well beyond merely providing goods or services." Those relationships are
"dependent on the patient's or client's trust and confidence in the physician
consulted or attorney retained," and "often require the disclosure of private
and confidential information." In both contexts, restrictive covenants
have a destructive impact on those relationships.
For those reasons, the high court ruled that a patient's right
to freedom of choice in physicians—and to continue an ongoing relationship
with a physician—outweighs the business interests of a physician's employer.
As the justices explained, "The right of a person to choose the physician
that he or she believes is best able to provide treatment is so fundamental
that we can not allow it to be denied because of an employer's restrictive
covenant. Were we to hold otherwise, many of Dr. Udom's patients would
be denied the opportunity to choose whether or not they wanted to continue
being treated by him." The justices concluded that noncompete agreements
such as the one between Udom and the clinic are "inimical to public policy,"
and therefore unenforceable.
Pleased with his victory, Udom now has a busy practice in Smyrna,
including a few dozen patients who followed him from his former group.
He still has staff privileges at MTMC, and eventually got his $120,000
buy-out deposit back. (He declined to be interviewed for this article.)
What this case means for practices and job applicants
Despite this Tennessee Supreme Court ruling and similar court decisions
and legislation in several states, restrictive covenants are still common
in physician employment contracts. To be enforceable, however, the restrictions
must be reasonable. According to the AMA's general counsel, that means
the restrictions must be no broader—in duration and geographic scope—than
necessary to protect an employer's legitimate business interest. They also
must not be unduly burdensome to the physician employee, or harmful to
the public interest—which courts generally interpret in terms of patient
access to healthcare of their choice.
Noncompete clauses typically prohibit competition from departing
physicians for two to five or more years after their employment ends. Geographic
limits vary from 1 mile in urban settings up to 25 miles in rural areas
where patients are accustomed to driving considerable distances to visit
their doctors. One common rule of thumb is a radius that covers 80 percent
of the group's patient base.
For groups hiring doctors, there's nothing wrong with including
a noncompete clause in the contract as long as it conforms to the standards
established by state law and case law, and the limits are reasonable. That
judgment, however, requires the advice of a healthcare or business attorney
who's experienced in contract law. As a general rule, attorneys warn that
the broader the clause's restrictions, the less likely it is to stand up
in court. In other words, advises Douglas Janney, the lawyer who represented
Udom, "Don't be greedy."
When it comes to enforcing a noncompete clause, Janney sees a
distinction between the rights of doctors who leave a group voluntarily,
and those who are dropped, like Udom. "It's fundamentally unfair to hire
someone, then fire him and try to preclude him from working in the same
community, or forcing him to pay for the right to do so," says Janney.
Even in states where restrictive covenants among physicians are
still legal, however, some medical groups hesitate to invoke them because
going to court to stop a departing colleague from practicing in the same
area can create bad publicity. For that reason, or if your state prohibits
restrictive covenants, there are other legal options to consider that protect
the group's interests if doctors leave.
One such option is a "nonsolicitation clause," which prohibits
a departing doctor from approaching any patients he formerly treated as
the group's employee. Another method is the type of buy-out provision that
Udom's clinic used, which courts generally don't object to—if the amount
is reasonable (see box).
For doctors who apply for jobs with a group, the major lesson
from Udom's case is the importance of reading the contract carefully—not
merely for the obvious topics like salary, hours, and call coverage, but
all the fine print and subsidiary clauses as well. If the contract contains
a noncompete clause, don't just sign it, hoping the group won't invoke
it, or that a judge won't enforce it if a dispute arises later. In most
states, it's still legal unless you can prove that the restrictions are
unreasonable or, as in Udom's case, that they violate public policy.
The smart approach before signing the contract is to ask an experienced
healthcare attorney or business lawyer to review it, and to find out if
the noncompete clause conforms to state law and case law. If it doesn't,
the lawyer can point that out, and try to persuade the group to delete
or modify it. Even if it's legal, he may be able to negotiate better terms,
such as narrower limits on where you can practice if you leave the group
or on what medical services you can offer.
BACK TO CONTENTS
If you or the company end
this employment relationship within the two years, you will owe the company
money to include bonuses, TOWP, sign on bonus, and relocation expenses.
This mainly says that you will be fired at 23+ months and have the whole
thing (about $18,000) to pay back, and have no job.
I can't believe someone would put this in an offer. Nees to have
a big red note written across it that says...My Momma didn't raise no FOOL.
by Carolyn Buppert, JD, CRNP
Reprinted with permission from
The American Journal for Nurse Practitioners
Fall, 1997, pp 34-35.
Even nurse practitioners who normally are confident and assertive become
reticent, tachycardic, and diaphoretic when negotiating their own salaries.
One method of reducing stress when confronting the salary issue is to focus
on hard figures that document an NP’s monetary contribution to a practice
and the costs of an NP to a practice.
NPs bring in income on a fee-for-service basis or on a per-member-per-month
basis. Figuring an NP’s share of income in a fee-for-service practice is
done by multiplying the number of visits by the fee collected per visit.
When a practice’s patients are capitated, an NP’s share of income is figured
by multiplying the number of patients on an NP’s panel by the per-member-per-month
fee coming into the practice.
The cost of maintaining an NP is figured by adding practice expenses
and the cost of physician consultation. Practice expenses can be estimated
or calculated for a particular practice. For a solo practice, expenses
can be 40% to 50% of income, whereas for a large practice, expenses are
typically lower—20% to 30% of income. Practice expenses include rent, salaries,
taxes and benefits for support staff, taxes and benefits for NPs, supplies,
laboratory expenses, depreciation, car, continuing education, and insurance
(malpractice, workers’ compensation, and premises). (Please see Let’s Talk
Money on page 5 of the May/June issue of NP World News for a brief discussion
of practice expenses.)
An NP who needs a great deal of physician consultation should expect
to compensate the NP’s employer physicians for their time. An NP who needs
little consultation should command a higher salary, because he or she needs
little of a physician’s time. Until NPs no longer need a physician on a
written agreement, all NPs should expect to pay something for physician
consultation. Experienced NPs often pay physician employers/consultants
10% to 15% of their net income brought to the practice.
Most employers will want a percentage of an NP’s earnings as profit.
An experienced NP who needs little consultation from an employer physician
might consider his or her contribution to profit to be the 10% to 15% of
net income paid for consultation as noted above. A newer NP should expect
to contribute 10% to 15% of net earnings to an employer as profit, in addition
to 15% to 25% of net earnings for physician consultation. To project an
appropriate salary for a particular NP, it is necessary to
calculate income to the practice based on NP billings;
subtract 10% for unpaid bills;
the calculated figure for practice expenses (20% to 50% of earnings),
the cost of physician consultation (10% to 20% of net earnings, and
a percentage for employer profit.
Fee-for Service Practices In a fee-for-service practice, an NP who
sees 15 patients a day at $35 per patient visit, on average, brings in
$525 a day. Allowing one week off for continuing education, one week for
illness, and four weeks for vacation, this NP will bring in $120,750 a
year, potentially. But not all bills are paid. With a 90% collection rate—a
reasonable collection rate for an efficient practice—this NP actually will
bring in $108,675 per year.
An NP who sees 24 patients per day at the same per-patient rate, will
bring in $840 per day, or $193,200 per year in accounts receivable, With
a 90% collection rate, this NP will bring $173,880 to the practice.
Deducting 40% of the NP’s gross generated income for overhead expenses
(rent, benefits, continuing education, supplies, malpractice insurance,
lab expenses, and depreciation of equipment) leaves $65,205 for the 15-patient-per-day
NP and $104,328 for the 24-patient-per-day NP.
Further deducting 15% of that figure to pay a physician for consultation
services leaves $55,425 in salary for the 15-patient-per-day NP and $88,679
in salary for the 24-patient-per-day NP.
Capitated Practices In a fully capitated practice, an NP who has a panel
of 1,000 patients at an average fee-per-member-per-month of $10 will bring
in $120,000 annually. There should be a 100% collection rate under a capitated
system of reimbursement. Applying 40% to overhead leaves $72,000, and paying
15% for physician consultation and then 10% for employer profit, leaves
$55,080 for the NP’s salary. An NP with a larger panel will make more.
Are These Projections Accurate? One could argue about whether the percentages
used here are correct. In fact, some practices have poor rates of collection,
some practices have higher overhead expenses, and some physicians want
more payment for consultation than the $9,780 per year for a 15-patient-per-day
NP or the $15,649 per year for a 24-patient-per-day NP, and some employers
want more profit than that which is projected here. However, a nurse practitioner
should not be subsidizing a poorly run practice nor should he or she be
overcompensating a physician or employer. And, many practices receive more
than $35 per NP visit, on average. In these practices, the NP’s salary
should be proportionately higher.
Reported Median NP Salaries Comparing these calculated NP salaries with
some of the recently reported median salaries for NPs is an interesting
exercise. Some large medical groups are using the Medical Group Management
Association’s median salary data for 1995. As reported in the February
1997 issue of Clinicians Review, the median NP salary for 1995 was $49,200.
The median primary care physician salary was $133,322. According to another
1995 salary survey, the median salary for an adult nurse practitioner was
$49,143. These data come from Nurse Practitioner Support Services, as reported
in the December 1996 issue of The Nurse Practitioner. Rumor has it that
NP salaries are being driven downward by an oversupply of physicians. According
to the rumor, physicians are willing to take such low salaries that hiring
an NP is no longer cost-effective. There is no evidence that anything like
that is actually happening. Salaries for primary care physicians have continued
to rise. Therefore, an NP at $50,000 to $70,000 is still a bargain, compared
with a physician at $100,000 to $140,000. "NPs are half-price"! said one
clinic director who hires NPs and physicians.
Embarking on a Salary Negotiation
An NP embarking on a salary negotiation needs to gather the following
data from the employer:
What is the most frequently billed CPT code for the practice? What amount
does the practice bill and receive, on average, for that CPT code?
What is the percent of practice income that goes to cover practice expenses?
If the employer is not willing to reveal this information, ask how many
providers share practice overhead expenses. A solo practitioner pays 43%
of income for office expenses, whereas a group practice of 10 to 24 doctors
pays 23.5% for office expenses. Armed with this information, determine
the appropriate rate to deduct for practice expenses.
What is the collection rate for the practice. Remember, 90% is good.
How many patients is the NP expected to see per day?
After obtaining this information, the NP needs to make the following
assessments about his or her speed and comfort level:
How many patients can I see per hour, day, month, or year?
How much physician consultation time will I need a 10-minute consultation
on every patient, a 5-minute consultation once a day, or a 5-minute consultation
once a week, or once a month, or once a year?
The "New" NP What can a newly graduated NP without experience expect?
A newly graduated NP may be able to see only 10 patients a day, with four
or five 10-minute consultations with a physician per day for the first
six months. Plugging in the figures as in the examples above, the NP will
bill 2400 visits per year (two weeks vacation for the new grad) at $35
per visit to total $84,000 in accounts receivable. With a 90% collection
rate, the new NP will bring in $75,600. Deduct 40% for office expenses,
which brings the net income to $45,360.
Because a new NP often requires significant consultation time with a
physician or with an experienced NP, deduct 25% for payment for consultation,
bringing the new NP’s salary down to $34,020. With a 10% contribution to
employer profit, this new NP’s appropriate salary is down to $30,618.
After six months, when the same NP becomes more comfortable and more
efficient, the income number should double, and consultation requirements
should decrease, so that the appropriate salary would more closely approximate
the salary of the 15-patient-per-day NP, and eventually the 24-patient-per-day
NP, used in the examples above. Many employers start a new NP at a salary
significantly higher than $30,618, expecting that low productivity in the
first six months will be balanced by high productivity the second six months.
The Experienced NP Experienced NPs who are seeing more than 15 patients
per day at CPT code level 99213 or higher should be making at least $50,000
per year. If not, there are inefficiencies in the practice or the NP is
not sharing in the profits. One final suggestion for NPs who think their
salaries are too low. Show this article to employers and ask for feedback
and let us know what you hear.
(Editor’s Note: This article "Negotiating Salary" by Carolyn Buppert
was originally published in the July/August issue of NP World News. We
received many favorable comments about the article and requests for reprints.
For readers who missed the article in NP World News, we are reprinting
PA On-Call Reimbursement: Jerry M. Parsons, PAC/ATC
I think what you will find is that the reimbursement for PAs in Ortho who
take call range from nothing (part of their salary) to very well. As far as
expectations of what the PA does for coverage (pt. calls, ER calls, floor calls,
rounds, surgery, etc.) also varies. There is no one good answer for each
situation. I think you have to get a feel for what is common in your area. I
would recommend that whatever you decide, you try to minimize your
availability. It seems that the trend is for PAs to do more and more for call
coverage and the pay seems to be minimal. Most surgeons are now being
compensated to take call which is all the more reason to ask for you fair share
based on the work you do.
I would organize a meeting among your PA colleagues as soon as possible and
discuss the issues. Then you can go as one voice to the group with your
thoughts. I know several years ago we caught wind of a possible addition of
call responsibilities and had a meeting to discuss our concerns. When we met
with the physicians it sure helped to be speaking from one voice. They decided
at that time not to use us because we had decided we really did not want the
extra work and in a way to discourage our use, settled on $50 per hour to be
available for call or basically $600 for 24 hours. I think that is a fair
amount in our economy to discourage overuse of our services. You might even
consider asking for compensation time off the next day as part of your
Additionally, I would recommend that you not receive calls from patients of
the group and use liability as the reason. I believe the group is overextending
its liability by asking the PAs to do this. Also, I would limit your duties to
triaging the ER, receiving calls from the hospital floors, and assisting at
surgery while on call. All calls from outside (non-local) hospitals and other
physicians should go the the surgeon. As for rounds, I would avoid that like
the plague. You should only be doing rounds on your supervising physicians
patients and those should be shared, at least every other day the surgeon should
be seeing their patients.
Jerry M. Parsons, PAC/ATC
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