Is That Deductible? Navigating Physician Collaboration with NPs

Physicians serving as collaborators for Nurse Practitioners (NPs) in states that don’t allow independent practice can find this role both rewarding and financially beneficial. Over my 30 years as a rural physician, I’ve collaborated with dozens of NPs. For much of that time, I did so without compensation, driven by my belief in the value of collaborative practice. Only in the past five years did it dawn on me to charge for this work. Now, as I’ve transitioned into retirement from my clinic, I continue to collaborate with a few independent NPs, earning a modest $500 per month for my services.

However, a critical realization about malpractice insurance dramatically altered my perspective on the financial feasibility of this side hustle. Here’s what I’ve learned and what you should consider if you’re exploring this role as part of your professional micro-business.

The Appeal of NP Collaboration

Collaborating with NPs offers several benefits:

1. Professional Impact: You help expand healthcare access in underserved areas by empowering NPs to practice within regulatory guidelines.

2. Financial Opportunity: A steady $500 or more per month adds up, making it an attractive side hustle.

3. Flexibility: Collaboration can often be done remotely, making it compatible with other professional activities or semi-retirement.

For me, these relationships were truly mutually enriching, as they embodied a dynamic exchange of ideas and expertise that benefited both parties. Nurse Practitioners (NPs), with their deep well of knowledge and commitment to patient care, brought fresh perspectives and innovative solutions to the table.

Their approach often challenged traditional methods, injecting new energy into clinical practice with holistic strategies tailored to meet patients' evolving needs. On my end, I contributed by providing the necessary guidance grounded in legal standards and medical protocols to ensure that patient safety was never compromised. This collaboration ensured strict compliance with healthcare regulations, creating a harmonious balance between innovation and adherence to established practices. Together, we forged a partnership that not only enhanced our professional growth but also significantly improved patient outcomes through this seamless blend of creativity and cautionary oversight..

The Malpractice Insurance Hurdle

By the end of this year, I adjusted my malpractice insurance to focus exclusively on telehealth services, under the assumption that my locum tenens work in Family Medicine-Obstetrics was already covered by the agency's insurance. However, I found out that working with Nurse Practitioners (NPs) was not included in my telehealth policy. To address this gap, adding a rider for NP collaboration incurs an additional cost of $5,000 per year.

With just one NP collaboration arrangement, this cost made continuing in that role untenable. The lesson? Always confirm that your malpractice insurance covers NP collaboration.

In addition to the insurance premium, it's crucial to consider the potential liability exposure when working with nurse practitioners (NPs). While nurse practitioners operate with a significant degree of autonomy, carrying out various medical tasks and making clinical decisions independently, as their collaborating physician, you hold a shared responsibility for their practice. This shared responsibility exists within the boundaries set by the legal framework governing healthcare practices. The collaborative nature of your professional relationship means that any errors or malpractice claims could implicate both parties involved. Understanding this aspect is essential for mitigating risks and ensuring that proper protocols are in place to protect all stakeholders involved in patient care.

What Does This Cost You?

Beyond malpractice insurance, consider these often-overlooked costs:

1. Time: Reviewing charts, responding to inquiries, and maintaining documentation takes time.

2. Travel Expenses: If the NPs’ clinic isn’t nearby, travel costs can add up if you are making site visits.

3. Technology: Secure communication platforms and shared EMRs may require investment.

4. Educational Resources: Receiving coaching or pursing professional education on collaboration can be another expense.

5. Liability Risk: Higher exposure could increase your overall malpractice premium in the long term.

Thankfully, most of these costs are deductible business expenses if you operate as an independent contractor or own a professional micro-corporation.

Is That Deductible? Yes, But Plan Wisely

Here’s what’s deductible for physicians collaborating with NPs:

• Malpractice Insurance: Premiums, including riders for NP collaboration, are fully deductible.

• Travel Costs: Mileage, lodging, and meals related to collaboration duties are deductible.

• Technology and Software: Expenses for secure communication tools, EMRs, or other required tech can be written off.

• Educational Resources: Subscriptions, books, cme, and coaching materials related to your NP collaboration skills qualify as deductions.

• Office Supplies and Space: If you maintain a home office or rent space for collaboration purposes, these are also deductible.

Being intentional about these deductions can make the financial impact of collaboration manageable and even profitable.

The Future of NP Collaboration

I believe NPs play an essential role in healthcare, particularly in rural and underserved communities. However, the financial and liability challenges I faced forced me to step back from these relationships. This transition felt bittersweet, but it also highlighted the importance of financial planning and awareness when taking on collaborative roles.

For those of you considering this side hustle, the key is understanding the full scope of costs and benefits. Collaboration can still be an excellent opportunity, but only if approached strategically.

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