How Much Should a Collaborating Physician Be Paid?

Carolyn Buppert, MSN, JD

Disclosures

January 29, 2019

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Question

A question we frequently receive is, "What is reasonable and customary compensation for a physician who is the 'collaborator' for a nurse practitioner (NP)?"

Response from Expert Carolyn Buppert, MSN, JD
Healthcare Attorney

In 28 states, to enable them to perform physician services, NPs are required by law to have a physician collaborator. Physician services include making medical diagnoses, prescribing medications and other treatments, and ordering diagnostic tests. Collaboration is defined by each state, and usually means providing direction and oversight and being available to the NP for consultation by telephone or other means. Periodic chart review and face-to-face meetings also may be required by state law. Usually, the states requiring collaboration require a written agreement between an NP and a physician that memorializes the components of collaboration.

NPs, physicians, and employers often ask how much physicians should be compensated, if at all, for being an NP's collaborator. The time required of the physician will vary, depending on whether the NP is new or experienced, and the specific dictates of state law.

Whether a physician should be compensated, and how much, also depends on whether the physician and NP are employees of a hospital or other organization, compared with a situation where the physician and NP each have their own private practices. For the employed physician, the collaborative responsibilities may be part of the package of duties the physician performs for the organization for the salary he or she is paid. If the organization does not pay the physician a guaranteed salary, but compensates solely on billings attributable to the physician, then it would be reasonable to compensate a collaborating physician for the time is takes to oversee an NP.

If an NP owns his or her own practice and engages a physician who is self-employed to be the collaborator, then the NP usually pays the physician an hourly rate, a set fee per year, or a combination of the two. Usually the agreement for compensation is covered in a contract—separate from the state-required collaborative agreement—between the physician and NP.

To determine a reasonable fee for the physician, review state law to find out the activities required of the physician. Then estimate the hours per year that the physician can expect to spend on those activities. Assign an hourly rate to those hours. (An Internet search will provide customary hourly rates for physicians.) Tally up the hours, as in this example:

Activity Hours per year Hourly rate Annual rate
Review and sign collaborative agreement 1 $100 $100
Answer NP's calls/practice questions 6 $100 $600
Meet with NP 4 $100 $400
Chart review 12 $100 $1200
Annual Total     $2300

Physicians often worry that being a collaborator means extra liability exposure. They wonder whether they should be compensated for this extra risk. For a discussion of the risk, see Physicians Who Work With NPs: What's the Liability Risk?

Whether a collaborating physician should be compensated for the increased exposure to lawsuits depends on the situation. An employed physician who is collaborating as part of his or her job in the organization is at similar risk to a nursing supervisor or medical executive in an organization, in that anyone who manages or oversees another individual is at some risk of being sued if the person being overseen makes a mistake. If the supervisor or collaborator is available if the employee needs help and takes care to ascertain that the employee is competent and adequately trained, then the supervisor or collaborator should not be held liable for an employee's mistake.

Likewise, if a self-employed physician has contracted to be the collaborator for an NP, and the physician performs the required duties and collaborates when asked, then the physician should not be held liable for an NP's mistakes. However, a physician who is sued will need to defend, and there is likely to be a cost, even if the physician ultimately is not held liable. So, a collaborating physician should be certain that he or she has professional liability insurance that will cover the expenses of defense if the physician is sued because of an NP's actions or inactions.

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