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ABSTRACT Nurse practitioners (NPs) and physician assistants (PAs) represent a growing share of the health care workforce, but much of the care they provide cannot be observed in claims data because of indirect (or incident to) billing, a practice in which visits provided by an NP or PA are billed by a supervising physician. If NPs and PAs bill directly for a visit, Medicare and many private payers pay 85 percent of what is paid to a physician for the same service. Some policy makers have proposed eliminating indirect billing, but the possible impact of such a change is unknown. Using a novel approach that relies on prescriptions to identify indirectly billed visits, we estimated that the number of all NP or PA visits in fee-for-service Medicare data billed indirectly was 10.9 million in 2010 and 30.6 million in 2018. Indirect billing was more common in states with laws restricting NPs scope of practice. Eliminating indirect billing would have saved Medicare roughly $194 million in 2018, with the greatest decrease in revenue seen among smaller primary care practices, which are more likely to use this form of billing.
There are growing numbers of nurse practitioners (NPs) and physician assistants (PAs) in the United States.1 The number of NPs increased from 91,000 in 2010 to 325,000 in 2021,2'3 whereas the number of PAs increasedfromapproximately75,000 to 149,000 those same years.4,5 Prior research has found that the quality and cost of care provided by NPs and PAs is often comparable to those of care provided by physicians.6-9 These findings, coupled with concerns about physician shortages, have led some policy makers to advocate for greater use of NPs or PAs in the future.2
However, how much and what types of care NPs and PAs provide to Americans is unknown because of the practice of indirect (or incident to) billing. Indirectbilling was originally implemented to offset the costs for physicians of supervising NPs and PAs caring for Medicare beneficiaries.10 If an NP or PA directly bills for a visit, then Medicare and many private payers11 pay 85 percent of what they pay a physician for the same service.10 Under indirect billing, an NP or PA independently evaluates and treats the patient, but the bill is submitted under the supervising...