Medicare Physician Payment Reform: implications for nurse practitioners

Area of Science:

• Health Policy
• Medical Economics
• Nursing Practice

Background:

• Medicare implemented physician payment reforms in January 1992, introducing a resource-based fee schedule.
• This new schedule replaced the long-standing customary, prevailing, and reasonable (CPR) payment method.
• The Physician Payment Review Commission advised on the impact of these reforms on non-physician practitioners.

Purpose of the Study:

• To analyze the implications of Medicare's resource-based fee schedule on nurse practitioners.
• To recommend revisions to payment formulas for non-physician practitioners under the new Medicare system.

Main Methods:

• Review of the Physician Payment Review Commission's recommendations.
• Analysis of existing Medicare payment structures and proposed fee schedule.
• Comparative assessment of resource costs for physicians versus non-physician practitioners.

Main Results:

• Without legal changes, nurse practitioner services will be reimbursed using the same formulas as under the previous CPR method.
• Current payment formulas do not account for the distinct resource costs incurred by non-physician practitioners.
• The Medicare fee schedule's adoption by other payers (Medicaid, private) is anticipated.

Conclusions:

• Payment formulas for nurse practitioners under the Medicare resource-based fee schedule require revision.
• Revisions should accurately reflect the differing resource costs between physicians and non-physician practitioners.
• Urgent updates are necessary before the Medicare fee schedule is adopted by other public and private payers.