You are a family nurse practitioner (FNP) employed as a contract (1099 independent contractor) in a busy primary care practice for 2 years. The providers in the group include one physician, who is also the owner of the practice, and two other nurse practitioners, who are staff employees (W2 employees). The owner of the practice recently made comments about the need to produce more revenue. You relate with his concerns and feel that you have several strategies that could be helpful. Your contract is up for renewal in 3 months. You are highly satisfied with your job and want to stay with the group. You see 20 patients per day on average and take call every third weekend.
What negotiation strategies should you use to propose a contract renewal? How does your role as a 1099 contractor benefit the practice over the W2 employees? What evidence will you present to the practice to reinforce your value in the practice both in terms of revenue and patient satisfaction? Consider any additional services you may be willing to provide under your contract. Use logical reasoning, and provide evidence based rationales for your decisions.
Keep in mind that your negotiation terms and conditions must be within the legal scope of practice for an ANP.
As revenue generators, NPs must be aware of how their work contributes to the overall revenue of the clinical practice. You see 20 patients per day on average and take call every third weekend. According to Buppert (2011), an NP who sees 15 patients per day at $56 per patient visit, on average, brings in $840 per day. Allowing 1 week off for continuing education, 1 week off for illness, and 4 weeks off for vacation, this NP will bring in $193,200 a year, potentially. However, not all bills are paid. With a 90% collection rate—a reasonable collection rate for an efficient practice—this NP actually will bring in $173,880 per year. An NP who sees 24 patients per day will bring in $1344 per day, or $309,120 per year in accounts receivable. With a 90% collection rate, this NP will bring $278,208 to the practice (Buppert, 2011).
Establishing a salary can be a challenge for NPs. Deducting 40% of the NP’s gross generated income for overhead expenses (rent, benefits, continuing education, supplies, malpractice, lab expenses, and depreciation of equipment) leaves $104,280 for the 15-patient-per-day NP and $166,925 for the 24-patient-per-day NP. Further deducting 15% of that figure to pay a physician for consultation services leaves $88,638 in salary for the 15-patient-per-day NP and $141,887 in salary for the 24-patient-per-day NP. Deducting 10% for employer profit leaves $79,775 in salary for the 15-patient-per-day NP and $127,699 for the 24-patient-per-day NP (Buppert, 2011).
What salary would you propose for the contract renewal? How does your salary proposal fit in with the community standard for an NP in a similar practice? Use logical reasoning, and provide evidence based rationales for your decisions. Keep in mind that your negotiation terms and conditions must be within the legal scope of practice for an ANP.
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