The Balanced Budget Act of 1997: Reimbursement and the Advanced Practice Nurse

William J. Mazzocco Jr.


January 28, 2000

In This Article

Key Issues

The nonphysician practitioner (NPP) component of the Balanced Budget Act of 1997 focused on four key issues.

First was the enrollment of nurse practitioners (NPs) and clinical nurse specialists (CNSs) as authorized Medicare providers. Because there was some confusion about just who is or is not an NP or a CNS, the Health Care Financing Administration (HCFA) clearly defined each of these various practitioners. Not meeting HCFA's criteria disallowed the practitioner from being accepted as a Medicare provider.

Second, the act standardized NPP reimbursement at 85% of the physician's Medicare fee schedule regardless of where that service was provided. This represented as much as a 20% increase in reimbursement for some services, such as first assistant in surgery.

Third, and perhaps most important, the act ceded supervision and legislative scope of practice issues back to the individual states. This generally removed the requirement for a physician to see the Medicare patient first or even to be in the office when the service was rendered by the APN. The service was billed under the APN's provider number.

Finally, the act permitted the APN to develop a 1099 (independent contractor) arrangement with another entity. This gave APNs considerable employment flexibility but it also shifted the income-tax responsibilities to the independent contractor.


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