Negotiating salary/benefits

DrZaphod, BSN, MSN, DNP, RN, NP · Mar 9, 2009

Hello,

I graduated early this year as a PMHNP. I did a lot of research on what NPs bring in for physician practices and, although I don't have time to find this info at the moment, I remember that the average was about $250K yearly (collected, not gross).

After about 15% overhead for psychiatrists for bills, lighting, office, etc., that's still plenty.

I have heard and seen so many NPs being taken advantage of without their knowledge. If a physician wants to salary you with no percentage of gross receipts, you would be negotiating poorly.

However, due to just graduating, I needed a guaranteed amount of income. You may be in this same position. So, in my case, I negotiated for a 6 month contract where I get a certain amount monthly, guaranteed, and 60% of my gross receipts. I also get full health insurance and malpractice insurance.

If I make more than this amount for the practice in any month, then that is subtracted.

After 6 months, assuming all goes well, we will be renegotiating for 70%/30%, where I receive 70% of my gross receipts. That allows the physician 15% for overhead and 15% for profit, as well as having coverage. In return, I get access to all that physician's patients.

Hopefully, all APRNs will start negotiating percentage-based incomes rather than salary or hourly, particularly because we are able to bill at 85% of physician's reimbursement through Medicare. If you do the numbers on this, you are shorting yourself and risk being overworked if you take a flat salary - unless the patient load is expected to be extremely light.

In the three interviews I had, I was very successful, although I at first encountered resistance, and at one point, some disrespect. That MD was apparently used to being able to salary NPs at 60,000 annually!

Just remember that the typical salaries of NPs in hospitals and what not are extremely low and you should be making FAR more than that in any sort of private practice setting.

Hope this information was helpful and I wish you the best of luck.

core0 · Mar 9, 2009

Hello,
I graduated early this year as a PMHNP. I did a lot of research on what NPs bring in for physician practices and, although I don't have time to find this info at the moment, I remember that the average was about $250K yearly (collected, not gross).
After about 15% overhead for psychiatrists for bills, lighting, office, etc., that's still plenty.
I have heard and seen so many NPs being taken advantage of without their knowledge. If a physician wants to salary you with no percentage of gross receipts, you would be negotiating poorly.
However, due to just graduating, I needed a guaranteed amount of income. You may be in this same position. So, in my case, I negotiated for a 6 month contract where I get a certain amount monthly, guaranteed, and 60% of my gross receipts. I also get full health insurance and malpractice insurance.
If I make more than this amount for the practice in any month, then that is subtracted.
After 6 months, assuming all goes well, we will be renegotiating for 70%/30%, where I receive 70% of my gross receipts. That allows the physician 15% for overhead and 15% for profit, as well as having coverage. In return, I get access to all that physician's patients.
Hopefully, all APRNs will start negotiating percentage-based incomes rather than salary or hourly, particularly because we are able to bill at 85% of physician's reimbursement through Medicare. If you do the numbers on this, you are shorting yourself and risk being overworked if you take a flat salary - unless the patient load is expected to be extremely light.
In the three interviews I had, I was very successful, although I at first encountered resistance, and at one point, some disrespect. That MD was apparently used to being able to salary NPs at 60,000 annually!
Just remember that the typical salaries of NPs in hospitals and what not are extremely low and you should be making FAR more than that in any sort of private practice setting.
Hope this information was helpful and I wish you the best of luck.

If a physician agrees to that they get exactly what they deserve. You are grossly underestimating what it takes to run a practice unless it is cash only. For example benefits are generally 20-25% of the salary. Billing can consume up to 5% of collections depending on how you do it. In a busy primary care practice office expenses are frequently more than 50% of collections.

As far as what profit is fair. There is a concept called good will. This has a value. To value it at 15% again grossly underestimates the value, especially if you have full access to the physicians patients. One other point if you are taking that much of the gross then you should take the risk also. I would not give you a guarantee. There is a real danger here that you are not going to cover your salary plus expenses. If you don't shouldn't you take that risk also?

David Carpenter, PA-C

mrspopeye · Mar 10, 2009

My first NP job out of school was with a solo MD who had never had a NP. I quit after 9 months and found another job making twice as much with a larger practice that had benefits. My two cents: you must have some type of guaranteed salary, whether that be hourly or salary. I would never go back to a percentage-based pay in this situation, especially just out of school. I assume this doc is self-employed and has a small practice if solo. He cannot possibly give you really great benefits, and if he expects you to be self-employed as well, then you should look into exactly how much that costs you to practice, including the extra taxes you will be paying, etc. I agree with the previous poster that benefits can be worth $20-30K. I would hammer out every last detail in a contract, including your designated support staff, when you will be paid, absolutely every detail. You should know what you are getting when you pay for your "overhead." My doc believed that because I was still technically a nurse, then I should bring back all my patients, draw my own blood, etc. I am not against helping when a nurse is busy, but it is not fair to charge a percentage to cover extra staff and "overhead", then decide not to hire them after the fact, and instruct the nurses not to help me. I cannot emphasize enough how important the details are in your situation. Good luck to you.