Orgs Need to Be More Competitive to Keep Advanced Practice Providers

Advanced practice provider compensation is growing rapidly as organizations face ongoing staff shortages and other healthcare workforce challenges.

 By Jacqueline LaPointe

January 04, 2023 – As healthcare organizations face a workforce crisis, they have to be more competitive to attract and retain advanced practice providers, including nurse practitioners (NPs) and physician assistants (PAs).

Median total cash compensation for advanced practice providers is up by 4.5 percent across all major specialty categories, including primary care, medical, surgical, and hospital-based, according to SullivanCotter’s 2022 Advanced Practice Provider Compensation and Productivity Survey. The survey includes data from nearly 1,300 organizations on more than 1.2 million individual employees.

Healthcare organizations will need to keep up with year-over-year increases in advanced practice provider compensation as they expect the number of physicians to dwindle, among other current and emerging workforce challenges.

Compensation for the providers has increased by over 7.3 percent or more since 2019, depending on specialty. Primary care has seen the faster growth at 10.1 percent, while hospitals have seen 9.1 percent growth.

The last year has prompted even faster year-over-year growth because of ongoing staffing shortages across healthcare organizations and delayed market increases in 2020 because of the pandemic, SullivanCotter reports. In particular, the survey finds that certified registered nurse anesthetists (CRNAs) are seeing rapid total cash compensation growth, with the median hourly rate rising from $86.54 in 2019 to $95.57 in 2022 alone, representing 10.4 percent growth.

“The demand for CRNAs continues to outpace supply, requiring [healthcare] organizations to reevaluate their CRNA recruitment and retention strategies in order to ensure effective and sustainable staffing and coverage,” Zachary Hartsell, principal at SullivanCotter, said in a public statement on the survey.

“A critical cornerstone of these strategies is the establishment of competitive compensation packages and desirable practice environments aligned with evolving CRNA preferences and market trends. We believe the demand and supply mismatch will continue for the next three to five years and organizations should plan accordingly.”

Healthcare organizations are responding to market changes for advanced practice providers by adjusting base pay for key clinical positions and increasing salary budgets, with some organizations going so far as to double the amount they allot for advanced practice provider compensation. This includes a 2 to 3 percent increase in fixed pay, a 2 to 4 percent increase in merit pay, and a 2 to 5 percent increase in market pay, according to the survey.

The survey also shows that organizations are looking into flexible staffing arrangements and remote work opportunities to boost and retain their workforces. To bolster their workforces, organizations are also increasing retention bonuses to decrease turnover in high-demand jobs and raising minimum rates to address market pressures and internal compression. The minimum rate for most organizations has increased to $15 per hour for the lowering paying jobs, the survey says.

Experts at SullivanCotter also recommend that organizations consider regulatory changes impacting advanced practice provider care delivery, including split/shared billing and additional Medicare Physician Fee Schedule modifications to the inpatient evaluation and management (E/M) codes.

The Medicare Physician Fee Schedule released in November 2022 finalized a year-long delay of the split/shared visits policy, which determines which professional should bill for shared visits based on who provided services more than half of the time. The rule also adopted substantial changes to several E/M code families (e.g., hospital, emergency medicine, nursing facility, and home visits) that were recommended by the American Medical Association’s CPT Editorial Panel. Advanced practice providers can increase patient access to care at a lower cost while the healthcare industry prepares for a growing physician shortage, SullivanCotter says. However, organizations will need to support recruitment and retention strategies by ensuring competitive compensation packages and appropriate work environments.