Physician Associate /Assistant World
Committed to excellence in their medical practice and patient care
for the love of medicine and patients
winning the heart of medicine and patients-one patient at a time©
Physician Associate
jobs pages
Hiring A PA
Employer Interview
What a PA
PA State
PAs In
The News
WARNING:The information on this site and specifically this page DOES NOT 
constitute legal advice but is provided for informational purposes only! 
Links and information on are not intended to be referrals or endorsements.
Employment & Labor Legal Help
Written & Oral Contracts
PA On-Call Reimbursement: Jerry M. Parsons, PAC/ATC
Memorandum Of Understanding
Power Relationships and Negotiation
Negotiating Salary by Carolyn Buppert, JD, CRNP
A Primer on Employment Contracts
Physician and Physician Assistant Employment Contract
Hospital privileges and bylaws
Can You Negotiate Better Reimbursement?
Medicaid-Fraud: Rubber stamping MD's authorization
PA's Job Descriptions
What 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 wronged.

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 the PA.

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 to me.

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.
John Castle

Oral Contracts:

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 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 terms."

Tim Willoughby, Attorney at Law   (Licensed in Missouri)
10097 Manchester Rd, Suite 207
St. Louis, Missouri USA 63122
ph:314-821-7500    fax:314-821-4580

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 place.

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...

Committed 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...

  1. Evaluating, diagnosing, and treating new and existing patient's medical and surgical conditions. 
  2. Initiating and interpreting labs and x-ray studies including CTs & MRIs.
  3. Performing medical and surgical procedures.
  4. Prescribing and referring patients for specialized consultation. 
  5. Assisting Physicians in medical and surgical procedures.
  6. Using prescriptive authority to write prescription medicines for patients. 
  7. Write/Dictate progress notes on patients' charts indicating patient status and treatment procedures performed.
  8. Conducting follow-up patient care.
  9. Providing health education to patients and families. 
  10. Supervising and/or coordinating the activities of patient care and support staff within the clinic. 
  11. Training and supervising medical residents engaged in specific clinical activities. 
  12. Teaching and training illness prevention.
  13. Actively participate in community health education. 
  14. Performing emergency life saving procedures in cases such as cardiac arrest, respiratory arrest, massive hemorrhage, or similar emergencies.
  15. Are among front line medical providers in emergency disaster services.
Specific concerns might be addressed and contrasted, e.g.

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 PAs.
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.

Area of Specialty and Practice Description 
Job Description and Responsibilities be very specific
Supervising Physician's name / and any other possible supervisor and responsibilities
Beginning Date 
Work Schedule
Required Travel Details 
Base Salary
Production Formula and Pay 
On Call Schedule and Pay 
Review Periods and Process 
Pension & Retirement Program and Employer Contribution 
Profit sharing and/or Corporation Partnership after one or two years
Liability Insurance Occurance and Tail and Legal Services available
Health Insurance
Dental Insurance
Disability Insurance
Life Insurance 
Key  Provider Insurance-On Physician and PA in case of death, the practice survives.
Signing Bonus 
Humanitarian mission: Number of days, paid-unpaid-shared
Number of Holidays 
Vacation days
Sick Leave 
Number of Days for Professional Development/CME

Interview Expenses:Travel, Lodging, and Meals, misc. 
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, internet) 

Dispute Resolution / Grievance procedures and process.
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 TO CONTENTS

A Primer on Employment Contracts
Michael R. Burke, JD

Defuse legal land mines by learning all you can about your
employment contract.

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.

Work obligations

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 clauses

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 coverage.

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."

Malpractice insurance

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, page 47]. 

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.

 Mike Burke  is a shareholder with the health care law firm of 

987 Old Eagle School Road, Suite 704 
Wayne, PA 19087-1708 
(610) 687-8314
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. BACK TO CONTENTS

Power Relationships and Negotiation
by Paul W. Barada
Monster 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 hand?

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.

Economics 101

The law of supply and demand also plays a role in power relationships. For example, the healthcare industry ( is 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 targeting. 
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 range ( 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 to make your case ( 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.



 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 chart.
(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 complaint.
(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 AAPA guidelines.
(11)   Attend and participate in resident conferences.
(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 committal
(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 compensation.
(3)  Employee may be required to work nighttime shifts.

 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 time.
 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 Employer.

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 the Employer.

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 

duly executed on the day and year first written above.


    By: ____________________________________________



Hospital 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 my
ability and have come to the conclusion that these restrictions are an internal hospital policy (see Chap 157.055 below).  I have the full
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 support
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 onerous as 
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 the process.

John Castle

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 of 350
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.

John Castle

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)
Physician Associate

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
509.376.7763 (voice)
509.372-0522 (fax)
509.376.4190 #8474 (pager)
85-8474 (on-site pager) 

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.
      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 in Florida.
      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 doctors.
      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 compensation. 

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 these premiums. 

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. 

Contract Renewal 
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 fee. 

Malpractice Insurance 
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. 

Fringe Benefits 
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. 

Restrictive Covenants 
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 the practice. 

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 It gives a range of salaries and you sound like you're in the top bracket not 90% but 100+ %. I hope this helps...bill

#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 services?

#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 number

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 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

resource of this contract is Richard Branson

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, 
Memorial Day, 
Fourth of July, 
Labor Day, 
Thanksgiving and 
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 services. 
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.

Litigation Assistance

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 at law.

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,

_________________________          _________________
Employer                                 Date

_________________________          __________________
Employee                                Date

Notary Pubilc:

resource of this contract is Richard Branson

Family Practice Management
Volume 11 • Number 9 • October 2004
Copyright © 2004 American Academy of Family Physicians MONITOR

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 leave it.

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 services.

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 months.

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 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 schedule.

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.

Take action
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).


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.


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.


To brush up on your negotiation skills, read the following articles from the FPM archives. Both are available free online at

“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 reimbursement.

What’s ahead
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 payer response.
Copyright © 2004 Elsevier Inc. All rights reserved. 
source: /das/journal/view/42214869-2/N/15078319?ja=442994&PAGE=1.html&ANCHOR=top&source= 

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 
Medical Economics 

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 group. 

 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. 

Power Points 

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 Supreme Court. 

 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. 

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.

Negotiating Salary
by Carolyn Buppert, JD, CRNP
Annapolis, MD 

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 it here.) 


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 request

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

WARNING:The information on this site and specifically this page DOES NOT 
constitute legal advice but for informational purposes only! 
Links and information on are not intended to be referrals or endorsements.

Please Consult with your legal advisors. 

Robert M. Blumm, MA, RPA-C  Chairman, Surgical Congress AAPA
Blaine Carmichael, PA-C  The Association Of Family Practice Physician Assistants
Dave Mittman, PA  Advanced Practice Communications
Karen Fields, M.S.P.A.S., PA-C is technically owned by  webmaster and is offered as a VOLUNTARILY  FREE site for those in support of Physician Assistant / Associates. is NOT affiliated with any other entity.  Please use the materials and resources on at your own risk & responsibility and always consult your medical provider. There are NO recommendations, warranties, permissions and/or endorsements.  Sponsors and Friends have made a contribution to help add another  voice in support of  Physician Assistant / Associate and the Physician Assistant / Associate Profession. hopes to become self-sustaining. activity, and financial accoutability is open to review and recommendations by it's Sponsors and Friends.  Though is NOT a PA, I trained in the Army as a combat medic, a neuro-psychiatric specialist and a psychiatric social worker - serving stateside during the Viet Nam war, and personally knowing a certified  Physician Assistant, I am very supportive of the high quality and professionalism of PA's who are: Committed to excellence in medical and patient care.©

Back to Top