How to put together a nurse practitioner contract

Contract Language. By Steven M. Harris, AMNews contributor. June 16, 2008.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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When a nurse practitioner is hired, the terms of the relationship should be clearly defined in an agreement and should not be based merely on a handshake.

Memorializing the terms of the agreement legally protects both the medical practice and the nurse practitioner if a dispute arises.

When a client asks me to draft an agreement for a nurse practitioner, I explain that there are two options. The nurse practitioner can either be an employee of the practice or an independent contractor.

In general, with an employer-employee relationship, the employer has more control over the employee's duties. However, as an independent contractor, the nurse practitioner has greater control in performing the expected duties. Both options have additional pros and cons, but most frequently, the nurse practitioner is hired as an employee.

Sometimes a physician wishes to hire the nurse practitioner as an independent contractor because that means the practice would not have to pay any share of payroll taxes or benefits or pay for liability insurance. But the Internal Revenue Service in some cases has ruled that an independent contractor is really an employee because of the way the employment relationship is set up.

So if the nurse practitioner is hired as an independent contractor, it is advisable to include a provision similar to the following to clarify that the nurse practitioner is retained as an independent contractor and not as an employee:

"Independent Contractor Relationship. Company agrees to retain Contractor as an independent contractor to provide the services described in this Agreement and Contractor agrees to accept such retention on the terms set forth in this Agreement. Company and Contractor acknowledge and agree that this Agreement is not intended to create an employer-employee relationship, a partnership or joint venture, or any other entity or relationship between Company and Contractor (other than the relationship between a medical practice and an independent contractor). Contractor shall not be considered as having employee status or as being entitled to participate in any plans, arrangements, or distributions by Company pertaining to or in connection with any vacation, sick pay, insurance, pension, stock, profit sharing, or other benefits for Company's employees."