Terminating An Employee Contract For More Focused Growth

Those of you who may have been following my blog for a long time, you may recall that about a year and a half ago I started up a second location. The second location has offered quite a few benefits. However, the time has come to look at my business relationship with a nurse practitioner and terminate that agreement. We both agreed that things were not going as planned with our work relationship. This past month we ultimately agreed to terminate our contract with this NP working at my practice. I take full responsibility for what transpired. Looking back, I wish I would have set them up a bit more for success.

This will be a very raw post about what went down with the termination of that agreement with the nurse practitioner. I will also get into how we both determined it would be best to go our separate ways. Of course, this is a one-sided post. I will do my best to be as objective as possible and not turn this into a bashing a nurse practitioner post.

Why I Needed A Second Location

As a solo doctor, you must keep growing if you rely on insurance contracts for your revenue. If you are not growing your practice, almost no insurance company is going to negotiate better rates with you.

There were two insurance programs that refused to credential us at our primary location. This was because of the location of our primary office. Our primary office is in an area where these two insurance plans were no longer accepting new doctors in my specialty. This can happen if that insurance plan decides they have enough doctors in their network in your area. However, I learned that if I open the second location in a different ZIP Code, that I would then be allowed to join those networks.

So, the second location allowed me to obtain better insurance contracts due to increased patient panel size. The second location also allowed me to get on more insurance plans since demographics in those two separate locations are quite different.

I Was Part Of The Problem

There’s no secret that there are a lot of opinions when talking about non physician providers and their role in healthcare. I am referring to nurse practitioners or physician assistants that are practicing independently.

I previously worked in the hospital for several years with these two advanced providers. They wanted to open a practice in the middle of nowhere in my state with no other primary care office for about an hour around them. I agreed to have a mutual benefit of supervising them and then running the day-to-day operations out there

The Ramp Up

I offered two different types of contracts to the nurse practitioners at the second location.

The first option was a revenue-based model. They get paid everything that they bring in minus overhead and a medical director fee.

The other option was salary with incentive bonuses. This method since I took on more risk, I added in more “profit’ per patient seen for my clinic.

They opted to take the incentive model.

Looking back, I’m not sure that this nurse practitioner that we terminated the agreement with fully understood that it takes a lot of time to build up a practice from scratch. Even though I tried to counsel them about this, making little income for three to four months was frightening for them. In a way I became a counselor as they ramped up their location. I kept trying to reassure them that if they work hard, do great work, and are available it will build on itself. I also shared with them that I had the same fears when I started my panel from scratch.

These fears from one of the nurse practitioners became louder and louder as time grew on since one NP never saw a rise in patient volume or income over the course of a year.

One Nurse Practitioner With One Foot In One Foot Out

One of the nurse practitioners was making great money. They are on track to make around $150,000 this year.

The other nurse practitioner continued to vocalize that they had bills to pay and the small paychecks were not covering their high expenses.

To supplement their income, they started taking every other week off in the office to do locums. . I honestly cannot blame them. Everyone has bills to pay and mouths to feed. Afterall, I did the same thing when I started my practice.

Incomes Dwindling

Some days this underperforming nurse practitioner would only see two people in the entire day. However, they took their frustrations out on me and my billing staff. Frequently they started calling, yelling at my staff, and cussing at my biller. We continued to try to tell this NP that if they don’t see patients, they don’t make any money. We were there to support them in growing their panel. They kept arguing that they can’t see more patients because they are not making any money and they felt it was a catch 22 for them.

I completely understand where they came from. To see your income continue to dwindle, and the other NP working beside you do very well, this must be frustrating.

Total Breakdown Leading To Termination Of The Nurse Practitioner

There was a breaking point.

We switched medical records and of course this causes a lot of stress. The NP was frustrated that they were not more involved in the discussion of switching medical records. They felt that they were having something forced on them against their will.

I continued to try to tell them that the current medical record and billing software, it is not able to scale and grow with us. It was getting very clunky with our old system. We had five different systems to work our practice and the new medical record only needs one system.

Things Go From Bad To More Toxic

The first few days of the medical records switchover were slightly tough, but on day #5, the underperforming nurse practitioner called my office, started screaming at my front staff, started cussing out my biller then continued to repeatedly call my office phone, my personal cell phone numerous times during the day.

We tried to reason with them that the fact that he was forgetting his password was not our fault. The fact that he did not watch any of the training modules is not my fault. We tried to calm those fears by saying, yes switching medical records is always terrible but it will get better, and it is getting better. Afterall, it was only day 5 of the change and things were starting to already flow very well for the rest of us.

By the end of the day, this nurse practitioner made three of my office staff cry because of the repeated harassing calls and verbal abuse. The other nurse practitioner called me after the sensed the tension at work. I politely told them that I need to have meetings with them about events this week and how we can or might move forward. However, I did tell them both that although frustrated, calling and cussing our my staff is unacceptable.

Underperforming Nurse Practitioner Calls Me And Terminates Agreement

The next day I received a call from the upset NP. I was abruptly told that they were not happy with management and pay and wanted to terminate the nurse practitioner agreement with my practice.

We were both very polite and professional, but I truly let this drag on longer than I should have. It was a red flag that they constantly complained and even when we tried to put on easy telemedicine same day visits, they were always too busy with something else to help out. I released him from the 90 day clause and told him that he was free to leave anytime. I am not in the business of keeping people in a situation where they are not thriving.

The 80/20 Rule

For those of you not familiar with the 80/20 rule, it is the idea that 20% of efforts or inputs can yield 80% of results or outputs. The opposite can be true. 20% of your business can cause 80% of your headaches.

There is always a buildup process when building a business and location. I figured that the 20% of work would eventually not cause 80% of my problems with this second location. With the one NP, that never seemed to improve.

I sat down with my billing staff and had a debrief about what happened after they all I cried the day the underperforming nurse practitioner called them and yelled at them numerous times. We started looking at it objectively.

The underperforming nurse practitioner was bringing in 5% of our gross revenue. However, he caused 32% all billing errors.

One of my billers told me that they were spending all day sometimes on correcting the errors the was present in this practitioners notes, billing, and insurance issues.

The writing was on the wall, I should have managed this NP better and gave them more support much earlier.

Lessons learned

I never want to over stigmatize or generalize. However, I suspect that most people do not like the business side of medicine.

There is a lot of fluctuation when it comes to insurance payments. Some months can be slow, historically January is slow. Other months the payments can finally come through. This can vary by as much as $100,000 per month for our small practice

Although this NP liked the idea of a revenue-based model (putting more money in their pocket per visit), the occasional dips in payment caused a lot of anxiety. This meant that we had to spend a lot of time on the phone explaining why their paychecks decreased because of billing insurance issues.

I think in the future, I will avoid revenue-based contracts altogether. Instead, I will stick with flat salary plus incentives and have metrics that they must meet to make sure that the contract makes sense on both sides.

I harbor no ill will towards these two nurse practitioners, I ultimately ended up divesting the assets to another group.

Currently I am still moving forward with opening yet another location and focusing on becoming a better leader and boss to any new hire.


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2 thoughts on “Terminating An Employee Contract For More Focused Growth

  • May 12, 2022 at 5:27 PM

    In my first position, I got very little support (possibly negative support, since the person brought in to help me only confused things) in regards to billing. In my second position, I had excellent support, with a person whose main job was to educate doctors on billing, conduct chart audits, etc. I estimated my first job lost about $30K a year because I didn’t understand the difference between a level 3 and level 4 visit. All that to say: it may be good for you and your employees to bring in an expert to help train new employees (and maybe come back and review/go over charts) a few times. They can’t fix lack of professionalism, though.

    • May 13, 2022 at 5:40 AM

      Thanks for the advice, it was a learning moment to take a step back and realize that our practice should have had a more structured environment for sucess of this NP. Us sending an email saying, hi these are the training modules please watch them, was not good enough. In fact, it was pretty terrible since he never watched them and we didn’t stress how important it was to get to know the system before implementation. In the future, we will probably have on hands training for EMR use plus a new employee sucess handbook.


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