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Reimbursement Gap Between Nurse Practitioners and Physicians

Info: 2079 words (8 pages) Nursing Essay
Published: 11th Feb 2020

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Tagged: nurse practitioner

Reimbursement Gap

 Many political and regulatory issues continue to plague nurse practitioners and their ability to practice autonomously. An issue that remains today is that of a reimbursement gap from third-party payers/insurance companies. Currently, fee-for-service structures and reimbursement systems are based on a provider’s discipline of preparation and not the care provided. These structures drive up the cost of care, decrease access, and create delays in care (NP, 2010). These disparities add to the already noticeable gap between physicians and nurse practitioners. In the paragraphs that follow we will discuss this regulatory issue in more detail.

Problems & Implications

 The current issue at hand is the reimbursement gap between nurse practitioners and physicians from third-party payers. Presently, nurse practitioners can bill at 85 percent of the applicable fee schedule for that service if billed under their own provider number. If a physician bills for the services of an NP, called incident-to billing, Medicare pays at 100 percent of the applicable fee schedule (Wood, 2013). Therefore, the physician did not provide the service but is able to bill for services that the NP provided. Is it fraud to bill for a service that a physician did not provide? It is imperative that nurse practitioners be aware of how their services are billed.

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 How did the development of this issue occur? Reimbursement rates for Medicare were passed by Congress and signed into law by the president in 1997. These reimbursement rates for NPs became effective in 1998 and have remained untouched. Under this legislation, NPs are reimbursed at the rate of 80 percent of the lesser of the actual charge or 85 percent of the fee schedule number of physicians (NP roundtable, 2010). These rates, at the time, were the same rates that were paid to NPs in rural settings and those providing services in long-term care facilities. These rates were signed into law over two decades ago. The nurse practitioner role has changed tremendously since that date.

 Current reimbursement rates have lasting impacts. Reimbursement rates discourage NPs from establishing independent practices as they would receive less reimbursement under their own NPI number than under a physician. If reimbursement rates were equal, it is believed that more NPs would establish their own independent practice. If services provided by NPs were authorized for payment, this may entice physicians to employ more NPs rather than hire additional primary care physicians. More money could be made with a lower cost to employ NPs versus physicians. In short, an NP salary is much less than that of a physician. If facilities can charge the same fee-for-service while paying an NP less, the facility pockets a higher return. Changes to current reimbursement rates would not only benefit healthcare facilities but the healthcare population in general, increasing access to much-needed services.

Proposed Solution

 Current reimbursement guidelines of the Center for Medicare and Medicaid Services (CMS) have remained unchanged since 1997. Direct billing to nurse practitioners allows for 85% of the reimbursement rate that a physician would receive. If the services are reimbursed as “incident to” the physician, the reimbursement rate is 100%. Nationally, 87% of NPs care for Medicare beneficiaries (Kopanos, 2013). It is imperative that NPs are knowledgeable about appropriate billing to prevent incorrect or fraudulent billing even though it may bring higher reimbursement rates.

 Solutions to this issue involve political organizations and the need for policy change. This is a large-scale issue that will require change on many levels. In 2012, legislation that would reimburse NPs at the same rate as primary care doctors failed to pass on the House floor (Waldroupe, 2012). Reasons for the bill not being passed were that insurance companies may decrease the rate of primary care physicians rather than increase the rates paid to nurse practitioners (Waldroupe, 2012). This legislation is about equal pay for equal work. Nurse practitioners are in high demand and often serve patients in rural areas. Without these providers, healthcare access becomes an issue. Until individuals speak up to federal agencies and state insurance commissioners, nurse practitioners will be denied direct and equitable payment for the services they provide.

 It is each nurse practitioner’s responsibility to be involved at the policy level to enhance and create change. Nurse practitioners need to take a stand and make their stance known to the public. Simple ways to influence change are to be involved in the American Association of Nurse Practitioners (AANP). This organization allows individuals to make a difference in the strength of our profession and the health of this county. This organization has a passion for improving the health of our nation and supporting the advancement of the NP role (NP roundtable, 2010). This organization promotes policy change that supports the advancement of the NP role. Nurse practitioners can write to their state’s policies representatives to influence change, as well. Often, politicians are not well-versed on every bill that reaches their desk for review. Nurse practitioners are ultimately responsible for their own billing and it is imperative that they bill accordingly. By only billing for direct services, healthcare facilities will not be able to receive full reimbursement, which will impact the facility long-term. Until facilities see the importance of NPs and their role, reimbursement rates will remain stagnant. There needs to be evidence/statistics that reveal the value of NPs. Comparing nurse practitioners to physicians and their outcomes will assist insurance companies in determining that NPs should be receiving the same reimbursement rates. Ultimately, NPs have assisted with increasing healthcare access and decreasing healthcare costs.

Supporters/Opponents of Proposed Solution

 With change, there are always supporters and opponents. Key supporters of decreasing the reimbursement gap are nurse practitioners, AANP, and healthcare facilities that employ nurse practitioners. Key opponents are insurance companies/third party payers and physicians. Barriers are public opinion, resistance to change, and money.

 Supporters believe that nurse practitioners should be reimbursed commensurate with physicians for the same services when delivered to the same type of patients. Nurse practitioners are independently licensed providers of both primary and acute care. They have demonstrated the ability to provide high-quality healthcare and incur the same overhead costs as physicians who provide care to patients. Comprehensive documentation of service delivery is needed to support full reimbursement for and measurement of nurse practitioner contributions to care, patient outcomes, and development of team-based care models (NAPNAP, n.d.). Healthcare facilities are in favor of equal reimbursement as this would incur more money for services provided by NPs. The number of NPs in practice is increasing and more facilities are staffed by NPs, therefore, they are losing out on reimbursement money when NPs provide services independently. Many studies have demonstrated that with respect to clinical outcomes and patient satisfaction levels, NPs are similar to physicians (Bartol, 2016).

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 Physician groups in favor of restrictions of NPs envision a system in which physicians delegate the care of less complex patients to nurse practitioners. These groups argue that physicians are better able to manage complicated diagnostic problems, patients with multiple chronic diseases, and unstable patients. This group claims that patients prefer having a medical doctor as a primary care provider (McCleery, Christensen, Peterson, Humphrey, & Helfand, 2014). Third-party payers are also in favor of current reimbursement practices as this requires less money to be dispensed to facilities that employ NPs.

Steps to Advocate

 As mentioned earlier, implantation of this proposed solutions has many implications. First steps are to become a member of the national nurse practitioner organization, the American Association of Nurse Practitioners. Second, as an organization, AANP needs to advocate on a regional and national level with politicians to make policy changes. It is imperative that healthcare facilities obtain data that reveals how the nurse practitioner role decreases healthcare costs and increases access to care while providing the same services that physicians provide (NP roundtable, 2010). With data to back the request for equal reimbursement, it will be difficult for politicians to argue why equal reimbursement should not occur. Lastly, involving the public and increasing public knowledge is essential to make changes on a national level as many patients utilize nurse practitioners as their primary care provider. This can be done through advertisement on television, Facebook, Twitter, etc. Lack of awareness is one of the major reasons change does not occur.


 In summary, equal reimbursement has been a long-standing issue since 1997, when legislation regarding reimbursement from third-party payers determined that NPs should receive less reimbursement than physicians for the same services rendered. In essence, stating that reimbursement is based on education and not on the services provided. There are many supporters and opponents for equal reimbursement, including third-party payers, healthcare facilities, physicians, nurse practitioners, etc. For change to occur, nurse practitioners must advocate for equal reimbursement at the local, regional, and national level.



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Nurse Practitioners are nurses with advanced training who provide healthcare services similar to those of a doctor. They are capable of diagnosing and treating a variety of health issues. As nurses, they use a holistic approach which focuses on health promotion, disease prevention, and education to treat each individual

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