How Employers Analyze Nurse Practitioner Compensation

By Healthcare Attorney Alex Krouse

When it comes to compensation in your employment negotiations, many individuals are uneasy about negotiating these issues as they are unaware of their worth to the organization. This is no different with respect to nurse practitioners in their own employment negotiations. One of the best ways to understand your true value to an organization, is to understand how a health care organization may analyze your role.

The following are some tips and information on how your own organization might determine nurse practitioner compensation.

The first issue to consider is the specialty area that you are employed in. For example, although you may be a family nurse practitioner, you might find yourself working in an emergency department. Therefore, it is important to distinguish between your specialty and the specialty in which you are actually providing professional services. This is an important feature as employers will be analyzing your actual professional role rather than your specialty.

A second factor that impacts compensation discussions are the laws regarding nurse practitioner services in your state. For example, in Indiana nurse practitioners can practice independent of physicians so long as they maintain a collaborative agreement with a physician. This collaborative agreement includes a review of 5 percent of the NP’s charts in which they prescribe per week. Effectively, nurse practitioners in Indiana can own their own clinics and provide independent services. However, other states may prohibit a nurse practitioner from operating independent of a physician or require a certain level of physician supervision. When this is the case, it could result in less bargaining power as the nurse practitioner’s ability to practice is contingent upon some level of physician involvement. These factors are undoubtedly analyzed with respect to compensation structures of nurse practitioners.

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Next, organizations typically analyze the way in which the nurse practitioner is utilized in providing professional services. For example, if you are a nurse practitioner that works with orthopedic physicians and your responsibilities include pre and post-operative visits, then your services are contingent upon the physician specialist being able to provide services. On the other hand, if you are in a primary care setting in which you see your own patients and manage your own panel of the practice’s patients, then your services are not contingent upon the physician. Generally speaking, the more specialized the more contingent your services will be upon the physician.

Finally, the employer looks at two different but equally important factors: productivity and reimbursement. Productivity is one of the main data points used to analyze compensation. For example, if you are in a primary care clinic and you are seeing 3,000 patients a year and another nurse practitioner is seeing 2,000 patients a year, you should be compensated for your productivity. Reimbursement is also important because it ultimately decides the revenue that you bring to a practice or organization. Reimbursement is a complex topic with respect to nurse practitioners, but always ensure you analyze the revenue perspective as you can be positive you employer will.

Compensation can be tricky subject, and something that needs to be analyzed in your own employment negotiations. This is especially true in the states that allow independent nurse practitioners as you have a much better bargaining position as compared to more stringent states. Above all, ensure you analyze these issues or engage someone to assist in analyzing these issues on your behalf as your pay now has a cascading effect on your future compensation.


Alex Krouse is a healthcare attorney at Krieg DeVault, LLP. He regularly works with nurse practitioners across the country on healthcare law issues, in addition to counseling health systems, hospitals, and other medical providers. Please feel free to contact him by email, or connect with him on LinkedIn.


This article is for informational purposes only and should not be considered legal advice. If you have specific legal questions, please contact your attorney. In some jurisdictions, this article is considered attorney advertising. 


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