Nurse practitioners' independent billing and economic implications for the healthcare system

Healthcare costs within the U.S. have been continuously rising during the past several decades. Office visits comprise more than 50% of all billed outpatient services and are provided by both physician and non-physician providers, such as nurse practitioners (NPs). Evidence suggests that the quality of care provided by NPs in office visits is similar to the quality provided by physicians. However the costs of office visits provided by NPs are usually lower than those provided by physicians. Since NPs are allowed to bill independently in NYS, the objective of this study is to examine the number of office visits billed by NPs and estimate potential cost-savings through increased incentives or regulations for independent billing.

This study used claims data from all private insurers in New York State. The data were subpoenaed by the NYS Office of Attorney General as part of out-of-network benchmark rates investigation. We used these data to evaluate the claims billed by NPs compared to physicians and to examine the cost differences across provider types for office visits. We also utilized the publicly available National Plan and Provider Enumeration System data to obtain the number of NPs and physicians in NYS who can provide office visits. The study included all claims, billed to private insurers in NYS during CY2007. Overall, we included 29,977,347 and 40,510 claims, submitted by physicians and NPs respectively.

We found that although NPs comprised almost 14% of primary office visit providers, they submitted independent bills for only 0.13% of all office visits claims. We also found that NPs' share of office visits ranged between 0.11%-0.32% with shorter visits (i.e. 5- and 10-minutes visits) having a relatively larger share. The amount charged for office visits by NPs was not significantly different from the amount charged by physicians; however the mean negotiated cost with insurers was significantly lower for NPs than physicians. The mean costs of office visits performed by NPs were about 10% lower than those performed by physicians. The median cost for a 40-minute office visit by a physician in 2007 was $118, compared to $96 by an NP.

Given the differences in office visits costs between NPs and physicians, there is great potential for cost savings without changing services performed or compromising quality of care. Changing financial incentives or regulations to increase incentives for NPs' independent billing is crucial for reducing costs of at least 10% of outpatient services performed annually.