Lessons Learned From Nurse Practitioner Independent Practice

A Conversation With a Nurse Practitioner Entrepreneur

Joyce A. Hahn, PhD, RN, NEA-BC, FNAP; Wesley Cook, APRN, FNP-BC, CPSN


Nurs Econ. 2018;36(1):18-22. 

In This Article

Lesson 1: Be Familiar with the Impasses and Opportunities of Local Insurance Regulations

As far back as The Balanced Budget Act of 1997, NPs have been afforded provider status by CMS. Provider status means the NP bills and is reimbursed directly by the payer. While APRNs are reimbursed by CMS at 85% of the annual Physician Fee Schedule, reimbursement is direct, allowing productivity to be unmasked to both CMS and the NP's organization.

However, because commercial insurance is regulated at the state level, the credentialing process does not necessarily afford the NP provider status for commercial payers; some payers require indirect billing, or billing under the physician's identification number but still require the NP to be registered with the insurer. While NPs are directly reimbursed for services provided to Medicaid beneficiaries, rates are uneven across jurisdictional boarders.

The private insurers have historically often followed the CMS lead when setting their reimbursement policies but this is not always the case. Private insurance companies have the prerogative to establish their own reimbursement policies. This confounds the NP-entrepreneur's business plan by significantly reducing total market share before patients have decided whether the NP's product is worth their time and monetary resources.

However, with attorney involvement at the onset of business planning, these barriers can be factored in. You'll see this as a refrain throughout: seek the advice of an attorney. If you do this early in your business planning, the attorney can lead you into a more thorough understanding of your rights and duties as a business owner. At the level of understanding local insurance regulations, an attorney can help you procure and interpret local insurance regulations are not disadvantaged in your planning or communication with payers. Keep a copy of these regulations on hand at all times. It helps to quote chapter and verse when speaking to a representative.