Many new and seasoned nurse practitioner entrepreneurs will often fall victim to signing a lengthy contract for a business associated service or product at some point in their entrepreneurial journey. I have been there myself… Most of us realize that it was a bad idea as the months go on, but unfortunately, you become “locked” into the contract and have little wiggle room.
What types of contracts am I even talking about? I am referring to contracts that an unknowing nurse practitioner signs for a particular service/product such as:
Medications/Training (like BioTE and other companies that lock you into a contract)
Long leases (anything more than 2 years)
Various other business-related software/services
This is how it usually goes down:
A new nurse practitioner entrepreneur gets so excited during the initial start up phase of their new practice that they do not put significant thought into the future consequences of signing a contract that locks them into a 12-month commitment. They just want to get everything done so they can begin seeing patients and making money! So, they go with whatever marketing company or EMR is most convenient at the time and sign the dotted line locking them in for a 12-month commitment or more…
The problem does not arise immediately, but 3-4 months later when they discover that the service is subpar, that it is not resulting in any significant benefit to their practice, it is expensive, and so forth, they can’t get out without a significant penalty. To put it frankly, it SUCKS. It is a waste of YOUR money.
I was locked into a 12-month commitment for a marketing campaign at multiple Bed Bath and Beyond stores with my men’s health clinic when I first opened. I thought it was a great idea to have the ads throughout the stores at hand washing stations and at the registers. I was not thinking this through… MY PATIENTS DON’T GO TO BED BATH AND BEYOND! Regardless, I was locked in for 12 months paying these marketing SHARKS $250 a month… What a complete waste of money. I received NO patients from those ads in 1 year. I should have took that money to the casino instead, at least I would have had fun with it…
The same goes with business internet. Cable and internet providers will try to lock in business accounts for 3 years. They provide you a miniscule discount, that in the grand scheme of business is NOTHING, to lock you in for a longer term. The problem is that you cannot get out of these contracts, even if the business closes! You must pay a steep penalty to get out. Again, it SUCKS!
I often times hear about nurse practitioners getting locked into a contract with a specific EMR. The sales representative demoing the EMR with the nurse practitioner sells them on it (don’t be fooled, these people make a commission) but the nurse practitioner never really had a chance to truly work with the EMR in the real world. After a couple months, they find that the EMR does not really fit their needs, but they are stuck with it for 12 months at $200+ a month…
This can happen with certain pharmacies and training programs as well. Look at BioTE for example… If you take their training and insert their hormone pellets at your practice, you are locked into a contract that can be as long as 5 years! That means for 5 years you are having to pay them a significant percentage of your profits and can’t use other products… This is not good for the nurse practitioner looking to increase the autonomy of their practice.
This is the point of this article:
DO NOT SIGN LONG TERM CONTRACTS WITH ANYONE FOR ANYTHING!
The only contract you need to be signing that is for any significant amount of time should be your lease, and preferably for 12 months at most. DO NOT SIGN ANYTHING ELSE!
Service term lengths are ALWAYS negotiable. It is better to pay an extra $10 a month to not be locked into a contract than to be locked into one. Remember, the whole point of being an entrepreneur is increasing your freedom. Lengthy service agreements and leases decrease your freedom and can get very expensive if you need to get out! This is also applicable to your personal life! Avoid signing lengthy contracts!
Thank you! This makes so much sense. I have also personally learned this the hard way. Would you say the same applies for GPO services?
Thank you in advance!
The same applies for ANYTHING! Contracts = less freedom. This is one reason why I don’t like some GPOs… the CONTRACTS. It basically forces you to run your business a certain way, that is not freedom.
You are correct! I wish I had seen this post back in October 2020. I signed up with an EMR. I told the sales rep I wanted a telehealth platform with cash pay only since I’m still working on credentialing. He set me up with revenue cycle management and they tried to charge me $1500/month at month six!!! The contract was so lengthy with many +charges and -discounts that I didn’t realize they were going to charge $1500 or 5% of billing claims at month six. I was angry and pulled their reverse psychology on them!!! Why would I pay $1500 or 5% when I barely have two insurers I’m credentialed with?? We tried to work out another contract…the one I should have had the first time but they started charging me from the first contract. I told them they deceived me and intentionally misled me. I canceled the contract based on those premises and called my bank to prevent charges. I’m waiting now to see if I have to take further legal action. Stay away from signing contracts!!!
That is exactly what I am talking about, lengthy ridiculous contracts that make it almost impossible to understand and ultimately screw over the NP! If you hear nothing back and that is it, then I would probably let it go as pursuing legal action might not be worthwhile.
Great article. I remember you saying this some time ago and I always remembered it. This small but valuable piece of information has already saved me money and headache! Thank you Justin
I love to hear you have already saved money! That is awesome news. You are welcome 🙂
Thank you for this article. I am a new NP with one year under my belt, looking for ways to start my entrepreneurial journey. So glad I found these great resource for guidance.
You are very welcome Maria! I am happy you are enjoying the site and I hope you find it helful!