Contract Negotiation for Nurse Practitioners: Tips, Resources, and Salary Calculator

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A nurse practitioner discusses contract terms with her potential employer.When seeking employment, nurse practitioners (NPs) look for a position that best fits their skills, interests and experience. After interviewing and being offered a new position, a crucial part of the job-seeking process begins: nurse practitioner contract negotiation.

Whether you’ve just received your nurse practitioner certification or are a veteran NP with years of experience, you probably haven’t spent a great deal of time or effort learning the fine points of contract negotiation. Yet bargaining for salary, benefits and other compensation as part of a nurse practitioner contract negotiation is one of the most important aspects of achieving your personal and career goals.

According to the U.S. Bureau of Labor Statistics (BLS), as of May 2019 the median annual salary for nurse practitioners was $111,840, with a median hourly wage of $53.77.

These are the median salaries for NPs paid by the profession’s top employers.

  • Outpatient care centers: $119,920
  • General medical and surgical hospitals: $115,790
  • Physicians’ offices: $108,930
  • Other health practitioner offices: $108,660
  • Colleges, universities and professional schools: $105,310

The ability to effectively negotiate a nurse practitioner contract can play a key role in finding an NP position that is rewarding in terms of career advancement and financial compensation.

Preparing for a Contract Negotiation

After receiving a job offer, the first step is to gather information about the position and the employer. The American Association of Nurse Practitioners (AANP) describes some questions to consider when negotiating a nurse practitioner employment contract.

  • Is the position salaried or paid per hour, per day or per patient?
  • What is the value of the services you will provide in terms of practice charges for each patient visit?
  • What is the value of the services you’ll offer in terms of your net worth to the practice?
  • What will the patient load be on a daily or weekly basis?
  • What benefits are included? Health insurance, vacation, sick time, travel allowance, malpractice insurance and continuing education allowance are all negotiable.

Lastly, determine the practice’s expectations for the position and whether they will cover the scope of your NP training and experience. The position shouldn’t entail tasks and responsibilities beyond the scope of your expertise.

Researching Salary Averages

The British newspaper The Observer notes that the simplest way to determine what your salary should be is to compare the salaries for your position on job sites such as Glassdoor. However, Glassdoor data is based on people self-reporting their salaries, which can bring the reliability into question. Salary information on these sites tends to be more trustworthy for positions that have specific job duties and requirements such as licensing and certification.

The BLS lists the five states with the highest average annual salaries for NPs.

  • California: $138,660
  • Washington: $126,920
  • Hawaii: $124,000
  • New Jersey: $123,810
  • Minnesota: $122,850

These are the five states with the lowest average NP salaries.

  • Tennessee: $96,510
  • Kentucky: $99,560
  • Alabama: $99,570
  • Kansas: $100,550
  • South Carolina: $100,680

Researching Employers’ Compensation Strategies

To research the value of the benefits you’re offered during a nurse practitioner contract negotiation, you can use a tool such as job search firm Melnic’s Advanced Practice Salary Guide 2020, which is available to download after completing a survey. Among the compensation information available in the guide is the percentage of advanced practice nurses who receive specific types of benefits.

  • Life and disability insurance: 79%
  • Continuing education funds: 79%
  • 401K or 403B: 75%
  • Healthcare benefits: 71%
  • Annual salary increases: 60%

The report points out that benefits typically represent 25%-30% of the total value of an advanced practice nurse’s total salary. Other benefits offered by NP employers include relocation benefits, state licensing reimbursement, certification reimbursement, sign-on bonuses, profit sharing and merit bonuses.

Understanding Compensation Types

The compensation structure for NPs and other advanced practice providers (APPs) continues to evolve as these positions play key roles in an expanding range of healthcare settings. The Associated Press reports on a survey conducted by workforce strategists SullivanCotter in 2019 that found the growth in the number of APPs in that year exceeded expectations by 7%. The increased reliance on advanced practice nurses as leading members of healthcare teams has led to innovative incentive-based bonuses and other compensation based on performance.

Incentive plans for advanced practice nurses who work in clinical settings are usually based on a handful of metrics. One of these is the work relative value unit (wRVU) used by Medicare to determine reimbursements. Other metrics measure the value of care vs. quality of care and the quality of the patient experience.

Medical products vendor Medelita outlines the seven benefits NPs should negotiate for.

  • Administrative time (scheduled apart from time spent with patients)
  • A four-day workweek
  • Reimbursement for conferences and unique continuing education opportunities
  • Education leave/days (apart from typical industry conferences and events)
  • Malpractice insurance
  • Shadowing and orientation time (especially for new NPs and those taking jobs that entail new responsibilities)
  • Modified work schedules that extend the time slots allotted to specific patients

Negotiating for a New Position vs. Renegotiating a Current Position

A strategy employed by many NPs who are considering a new job is to use the information they gather about their potential new position to renegotiate their nurse practitioner contract with their current employer. Healthcare recruitment firm CompHealth offers six tips for NPs and physicians assistants who are preparing to renegotiate their employment contract.

  • Be prepared to have your request denied by your employer. Remember that the best way to get what you want is to ask for it and advocate for it.
  • Collect plenty of data about your work. Have a clear idea of the salary and benefits you believe you’ve earned and be ready to explain why you deserve them.
  • Consider the value of non-cash benefits, such as increased paid time off, bonus structures and reimbursement for professional expenses.
  • Don’t feel rushed to accept or decline an offer when you receive it. Take the time you need to review the plan, compare it to other potential offers and prepare to make a counteroffer.
  • Always keep a sunny, optimistic attitude about the negotiation, whether it’s for a new contract or to rework an existing one. Keep in mind that a good contract benefits both parties.
  • Have a bottom-line figure in mind for your salary and be prepared to walk away from the negotiation if the other party isn’t prepared to meet it.

Resources to Prepare for a Nurse Practitioner Contract Negotiation

Nurse Practitioner Contract Negotiation Tips and Resources

Once the objectives for your nurse practitioner contract negotiation are clear and you understand the issues that must be addressed, the next step is to list the contract terms that must be met.

The Houston Chronicle lists the contract elements that NPs may consider to be deal-breakers.

  • For NPs negotiating their first contract, it may be a minimum acceptable salary.
  • Conversely, for experienced NPs who are more flexible about salary, having a flexible schedule or more time off may be their contract priority.
  • In addition to researching the prospective employer, be sure to confirm that you possess all licenses and certifications required to practice in the state in which the employer is located.

Tips for Negotiating a Fair Pay Rate

The salary NPs negotiate as part of their employment contract will be based on their value to the employer, so be prepared to demonstrate that your productivity and the value you bring merits the salary figure you propose in your nurse practitioner contract negotiations.

These are among the factors that are commonly considered in determining an NP’s pay rate.

  • Patient load: Melnic’s guide to negotiating NP contracts emphasizes the value that NPs and other advanced practice providers bring to their employers. They reduce the number of medical complications in patients, shorten the time patients are admitted or treated and improve patient satisfaction.
  • Job duties: Determine whether the employer measures NP productivity by wRVUs, and if so, how they are calculated.
  • Practice capabilities: Let the employer know that you have the certifications, experience, skills and other qualifications the position requires.

Tips for Negotiating Benefits

Health insurance paid time off and other benefits are all negotiable, although doing so requires that you collect information to bolster your case for added benefits. One way to do so is to solicit multiple job offers and compare the benefits packages they include. Use a side-by-side comparison to indicate to a prospective employer what others are offering and ask them to match or exceed those offers.

Taking a Collaborative Approach to Negotiation

When dealing with potential employers, always maintain a positive outlook and exhibit the cooperative and enthusiastic demeanor you’ll bring to the job. Most employers will appreciate the fact that you’ve done your research and are prepared with information about comparable salaries and other benefits for the region and the characteristics of the position.

Responding to Questions Pertaining to Salary

At the start of the negotiation process, the employer is likely to ask you about your salary requirements. For newly licensed NPs with limited work experience, it is often best to respond by saying you’re not sure and to counter by asking the employer what they think is an appropriate salary range. Be cautious about offering a starting salary figure early in the negotiation. You may find yourself locked in before other important terms of the contract can be negotiated.

NP salaries have been increasing by 2% to 3% each year according to Melnic, so confirm with the prospective employer that you will be eligible for annual raises and salary adjustments based on inflation or merit. Ask the employer how they have handled NP pay raises in the recent past. Also ask about the policy for shift differentials and higher pay for working in acute care and other healthcare environments.

Listening for Salary Clues During the Interview

The information the prospective employer volunteers during the contract negotiation provides insight into the metrics they use to set salaries and measure NP performance. The answers to these questions you ask during the negotiation will help you understand how the employer measures NP performance.

  • Does the organization bill for the work done by NPs? In other words, do NPs generate revenue for the employer?
  • If the employer uses wRVUs to measure performance, how are they calculated?
  • Are NPs required to bill under their own National Provider Identifier (NPI) number? (The U.S. Centers for Medicare and Medicaid Services explains how to apply for an NPI.)
  • Is the NP starting salary adjusted based on the cost of living in the local market?

Resources for Nurse Practitioner Contract Negotiation Tips

Determining Nurse Practitioner Salaries

NP salary structures differ based on the type of facility and environment in which you’ll work, as Melnic explains.

  • In clinic settings, consider four sources in calculating salaries:
    • The current market rate (based on internet searches)
    • Salary information collected from peers
    • Salaries paid to NPs currently on staff
    • The employer’s own compensation plan and business model
  • In hospitals, NP salaries are typically based on tiers:
    • Tier 1 may be the base salary for someone working the day shift from Monday to Friday.
    • Tier 2 adds a fixed dollar amount for working weekend or evening shifts.
    • Tier 3 adds a fixed dollar amount for being on call 24/7.
    • Working the second or third tier adds from $3,000 to $5,000 to an NP’s annual salary.

In addition, bonuses typically range from 1% to 3% and are calculated in various ways:

  • By merit
  • By the organization’s profitability
  • By the percentage of the amount the employer collects from wRVUs, or from the number of patients seen

Factors that Influence Nurse Practitioner Salaries

An NP’s salary can be based on several factors, including education level, years of experience, licenses and credentials and job location. However, it can also be based on specific skills.

The compensation website PayScale reports on the skills that have the most impact on NP salaries (percentage increase over the average salary for all NPs).

  • Interventional Radiology: 11%
  • Occupational Health: 8%
  • Medicine and Surgery: 7%
  • Intensive Care Units: 7%
  • Clinical Research: 7%
  • Acute Care: 5%
  • Palliative Care: 5%
  • Diagnosis and Treatment Planning: 5%

Comparing Salaries Based on Nurse Practitioner Specialty

One of the factors that have the greatest influence on an NP’s salary is the area of practice. Melnic’s NP salary survey found that certain specialties pay much higher salaries than others.

These are the average salaries after 1 or 2 years of experience and after 10 or more years of experience for various NP specialties

  • Psychiatric Mental Health: $110,000 and $165,000
  • Neonatal: $105,000 and $125,000
  • Adult Gerontology Acute Care: $100,000 and $125,000.
  • Adult Gerontology Primary Care: $100,000 and $120,000
  • Acute Care Pediatric: $100,000 and $120,000
  • Family: $95,000 and $125,000
  • Primary Care Pediatric: $90,000 and $115,000

Using Salary Calculators to Determine Accurate Salary Ranges

One of the most effective ways to determine an appropriate salary range during a nurse practitioner contract negotiation is by using a salary calculator such as Job Search Intelligence.

  • Start by selecting the state and region in which the employer is located.
  • Use the drop-down menus to choose the number of years of work experience the position requires and your highest level of education.
  • Then select the school you graduated from and the state in which you last attended school.
  • Choose your major and then one of three values indicating how relevant your degree is to the job you’re considering (very, somewhat or not at all).
  • Lastly, select your grade point average.

The salary calculator returns entry-level salary information for the position and location, as well as the salary of top earners in the area, the median salary for the occupation and the salary the calculator believes an employer is likely to offer you. The figure excludes benefits and other forms of compensation.

Analyzing Compensation Trends Within Specific Job Markets

As demand for NPs and advanced practice providers increases in all practice settings, incentives represent a larger share of their total compensation, as SullivanCotter notes. Median annual incentive-based salary increased for all NP specialties between 2017 and 2019. In addition, the emphasis on team-based models in clinical settings has led many employers to restructure their compensation plans for NPs to be more like those used in their physician pay programs.

Resources for Determining Nurse Practitioner Salaries

Ensuring Fair Nurse Practitioner Compensation

No matter your level of experience, effective contract negotiation is key to finding success in any nurse practitioner position. Determining a fair level of compensation for a prospective job — and knowing how to ensure you receive that fair compensation — sets the stage for a rewarding career no matter the path you choose.