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How to Pay 1099 Nurse Practitioners and Contractors (RNs for example)

Doctor African American Confident  - mohamed_hassan / Pixabay

Many nurse practitioner entrepreneurs find themselves needing additional provider support about 2 years into their entrepreneurial journey. This is good! It means your niche side practice has grown beyond your wildest dreams and you are tapped out on time and energy. Not only this, but you also might have discovered the awesomeness of passive income. Bringing on another nurse practitioner to your practice will free up your time and it will put passive income cash into your pocket! It is a win win.

But how do you pay this person? How do you setup this arrangement?

Don’t worry too much about this, it is a piece of cake!

I have done this over a dozen times… I currently have 2 nurse practitioners working at my men’s health practice and I had close to a dozen working for my telemedicine practice before I sold it.

First off, you will want to pay this individual as a 1099. MOST states will allow you to pay a provider as a 1099 contractor (some regulatory heavy states don’t though, such as California, so talk with your accountant). The stipulation is that this individual is working for you in an “as needed” capacity and does not have regular hours. Additionally, the individual is not salaried and their term with you is defined in a contract. If the provider will have a set schedule, be salaried, have benefits, and you are controlling what they do, then they are a W2 employee, and you will need to set them up as such. The good news though, is that a contracted nurse practitioner for your practice will be working autonomously and in an as needed basis vs. being there a set number of hours a week which means they qualify as a 1099 in most cases.

Why does this matter? EMPLOYMENT taxes. The employer (YOU) is not responsible for paying employment taxes on a 1099 contractor. Essentially, this saves the employer (YOU) money. For this reason, you want to utilize the 1099 position for your nurse practitioners. You cannot get away with this for your receptionist though. If you are audited, you will have to pay back employment taxes up to 3 years… So, just stick with the 1099 position for your nurse practitioner.

With that out of the way, you will want to define their employment structure. This is what I recommend for the nurse practitioner niche practice:

Have them work on an as needed basis and pay them strictly production.

This is how you do it:

  1. Have them be a 1099 first and foremost.
  2. Have them sign a 1099 employment contract. If you need one, email me theelitenp@elitenp.com.
  3. Set up their payroll through your bookkeeping software or have your accountant do it. It is super simple; you literally just issue them a check/direct deposit monthly. That is it. The 1099 contractor is responsible for paying their taxes. This is not your concern.
  4. Pay them strictly production. I either pay the nurse practitioners a percentage of production or a flat rate. The nurse practitioners working at my men’s health practice make $100 for initial consults and $50 for follow up. It is VERY lucrative for them. They can easily clear $150 an hour.
  5. Let them work on their time and just schedule patients when they are available.
  6. Cover their malpractice if you have the extra income. A part-time policy for a nurse practitioner through CM&F group or Berxi shouldn’t be much more than $1,500 for the year. If you don’t have the cash, then require them to carry their own policy and MAKE SURE your LLC is named as an endorsement on it. Make them show proof to you of that.

That is practically it. There is nothing to it. Obviously, you will want to do your due diligence and do a background check and verify their licensure, but that is another topic and one I will cover in more detail in the Elite NP Human Resources for Small Practices course I am developing. Not sure on the ETA for that, hopefully by the end of year…

That is it folks. Don’t complicate it. Post an ad on Indeed or ZipRecruiter looking for a part-time nurse practitioner and then begin to go over the flood of CVs you will get since we are suffering from market saturation. Interview a few of the top nurse practitioners who have experience and fit your job description. Bring them on board as a 1099, pay them monthly, and watch your freedom increase and a passive income stream develop. You will never regret bringing on another nurse practitioner to help you see patients. I guarantee that.

18 Responses

    1. Subscription based plans. The patients are paying my clinic approximately $160 a month and the NP only sees the patient once every 3-6 months.

  1. My husband (NP) and I (MSN,RN) are following your model, purchased your courses, and opening soon with an vitamin IV/injection and men’s health soon to follow. I’m nervous because we both have full time jobs and have done some networking that will land us some event opportunities. We have a robust network of experienced RNs that are interested in contracting. We went with CM&F and are covered as an Entity. Can you provide us some guidance on how to handle the malpractice piece of this? Should we just clarify in their contracts and let them make the choice to if they want to have their own malpractice?

    1. Rebecca,

      They definitely need to have coverage. You can reach out to CM&F and see how much it is to add these RNs under your policy or just purchase separate policies for the RNs that name your LLC as an endorsement.

  2. How do you find 1099 staff? Also, you mentioned that California does not allow 1099 practitioners…is this also the same for RN staff? I am in California and I plan to open a IV Hydration and Injection business and only want 1099 employees. Is this possible?

    Thank you for the course by the way. It has helped me a lot!

    1. CA is just heavily regulated and they do not favor 1099s. If you are audited, you could have to pay back all the employment taxes.

      I find my contractors on Indeed.

  3. Justin, question for you. If hiring 1099 NPs and having them follow your guidelines in ordering labs through Access Medical, showing them the ropes on the EHR the practice uses, and teaching them how to order meds from Tailor Made Compounding and APS pharmacy, is this still considered “controlling what they do” from a 1099 standpoint? I want to ensure this level of “training” isn’t misconstrued as W2 classification.

  4. Can you send me a copy of the contract you use for 1099? I saw you offer this in a post somewhere. Thanks.

  5. This is so helpful thank you!
    I do have a question,
    I am likely needing to bring on another NP to help me with weight loss (just took your class last month and it’s exploded!)

    If you’re paying them 100.00 new patients, 50.00 follow up’s but follow ups are every week to start and then every 2, eventually just monthly how does that work? This is for semaglutide specifically. Obviously the follow-ups aren’t too involved weekly but would you pay $50 for each of those? If I’m doing $475 for the first month for the patient I’m not sure how this could be profitable paying the NP for the multiple follow ups …

    1. If follow ups are that frequent, then I would drop it to like $25. These follow ups only take 15 minutes…

  6. Thank you for this article.
    I am opening up my IV hydration clinic and wanted to have it staffed by 1099s. For a clinic to maintain 1099 employees, do they just pick up the days they want to work. How do I manage staffing the clinic but keeping it 1099 also?

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