NP Business™ Tip: The Cost of Collaboration

In most states, Nurse Practitioners are still required to have some sort of physician involvement in their practice, often in the form of collaboration or "supervision". Since the rules vary from state to state as to exactly what that looks like, you are encouraged to become intimately familiar with your state rules.

Unlike those who are employed, clinicians (NPs and PAs) who own their own practice often have to search out and develop a collaborative relationship with a physician. I am frequently asked how to find a collaborating physician (which was previously discussed), and what should be paid for their service... which is what we'll discuss today.

What is the cost for a collaborator? Of course, the answer to this question is simply, it depends. This figure varies greatly from state to state and region to region. Some communities will find that they are paying much more than clinicians in another region for the same services. Others will find that the cost will vary with the involvement that is required in your licenses. Others don't pay anything at all.

Here are some basic formulas:

Flat Rate: You and the physician agree on a rate of compensation that is paid regardless of the hours of involvement. So no matter how many hours or how little hours that the physician must spend with your or your business, the same rate is paid.

Hourly Rate: This is self explanatory. However, before looking at this model, clearly have a good idea as to what your needs are and the time that would be involved, as this model may not be in your best interests.

Percentage: Some practices compensate collaborative physicians based on the number of patients that are seen. Again, you'll want to clearly know your needs as well as the number of patients you'll be seeing when your practice is at capacity.

Exchange for Services: Some clinicians do not pay in cash, but as an exchange for services. Some NPs work a set # of hours in a physicians practice, not collecting a salary, in exchange for services. One PA I spoke with sends certain patients to their physician collaborator for (appropriate) procedures that are done in that office. Others will take call for the physician in exchange for services.

State rules. It's really important to know what is required in your state, not only by your regulating body, but that of the physician as well. In some states, physicians required to work with only a certain number of clinicians or those within a certain geographic location. Some states, such as NY prohibiting a NP from hiring a physician or owning a practice together.

Contracts: As always, it's important that once you work out your agreement, that you get it in writing. You will want to include the rate of payment/service that is agreed upon, the length of the agreement, how the agreement can be broken if necessary, and the requirements from each party in terms of services and time.

Don't forget to pay attention to any language required by your state, for example, language regarding scope of practice, prescribing, etc. Some states that collaborative agreement templates, and NPBO™ members will find some in the download library as well.

NPBO™ Action Step: Take a look at what is required by your state. Read the regulation and make sure you understand what is needed.

• Make a list of what you need in your agreement. Consider having a separate agreement that addresses just the financial and legal issues.
• If you are already in practice, check to be sure your agreement meets your state laws.
• Network with other clinicians in your area to determine the "going rate" for collaboration.
• Look for ways you may be able to negotiate a fair compensation package with the physician.