We often are contacted by Nurse Practitioners (“NPs”) who want to set up their own businesses in order to be able to significantly increase their income. In fact, when a nurse practitioner is correctly configured in a viable practice there is a distinct opportunity to make a significantly greater income and to run the business by themselves, without simply being an employee for someone else. But the fundamental issue is, exactly how does this new enterprise get set up so that the NP is practicing in accordance with the law? There are several areas that have to be addressed in order for the nurse practitioner to have a legal and viable entity in place so that the NP can confidently practice without fear of violating the applicable laws.

What are the requirements for a nurse practitioner to set up a legally viable practice in New York?

The first requirement is that in New York State the NP must have a collaborative physician working with him/her. This arrangement must be memorialized in a written practice agreement with written practice protocols if he/she has less than 3,600 hours of experience as an NP. Please note that New York does not require a physician to supervise an NP or to co-sign any of the NP’s orders, records or charts. This Practice Agreement addresses issues such as the following:

  1. Patient referral and consultation;
  2. Coverage for emergency absences of either the NP or the collaborating physician;
  3. Resolution of disagreements between the NP and the physician regarding diagnosis and treatment.
  4. Review of medical records by collaborating physician in a timely fashion;
  5. Identification of written practice protocols that the NP will use;
  6. Any additional provisions that are agreed upon.

Please note that having the Collaborative Agreement is just one facet of the practice. Obviously, when the NP has 3,600 hours of experience, he/she only needs to have a “collaborative relationship” with a physician, as required by law.

What are the space requirements for a legally viable practice in New York?

The NP will need a place to work and that will require either subletting space from someone else, via a written sublease, or leasing space as the tenant from a landlord or other legal arrangement. Such leases are important and the language has to be understood so that there are no surprises that might end up with a breach of the lease and a possible lawsuit. No one needs that.

The NP must be certain that the place where the practice is going to take place is zoned for this type of business. This problem can arise when the NP wants to run the business out of his/her home. You would be surprised at how vindictive neighbors, and competitors, can be when they report unauthorized businesses operating in a residential area.

What insurance does a nurse practitioner need for a legally viable practice in New York?

Of course, insurance is a must for any business, and as an NP you will require general liability coverage, in case someone falls down in your place of business and, also, professional malpractice coverage. The amount of coverage and any deductibles must be understood when making the purchase. Likewise, the type of policy and the stability of the insurance company are important.

What equipment does an NP need?

Another area of concern is in the issue of equipment that an NP uses in his/her day-to-day work. There are standards that have to be met for refrigeration, cleanliness, signage, how medical records are maintained, etc. These may seem like small details, but if you are going into this type of business situation, you want to do it correctly.

The overarching concept here is that NPs are uniquely situated to run a profitable and useful business, but you must start out with all of the issues being dealt with in accordance with various laws. This will require an initial outlay of money to do the setup of the business correctly. This is best viewed as an investment and that money will be long forgotten when you have a well-functioning and profitable practice.

There are other issues to consider but these are some of the foundational concerns.

Please note that this type of work is done at Walker Medical Law with the input from Mr. Thomas Gallo who is an experienced healthcare attorney and a licensed Physician Assistant. Mr. Gallo is a professor at multiple Physician Assistant Programs and is General Counsel to the New York State Society of PAs and other organizations and is well versed in the area of proper business practices.

Please call Walker Medical Law if you have any questions on this subject matter. We are here to help you realize your dreams and do it safely.