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How did the 2017-2020 Medicare and Medicaid rule changes impact nurse reimbursement and care delivery?
Executive summary
Medicare and Medicaid rule changes from 2017–2020 shifted payment incentives, documentation rules, and managed‑care oversight in ways that affected nurse reimbursement and care delivery: Medicare expanded some payment and documentation flexibilities for advanced practice registered nurses (APRNs) in the 2020 physician fee schedule while Medicare post‑acute and home‑health rules tied more payment to quality and changed SNF/HHA payment models (e.g., SNF VBP reductions/redistributions and PDGM for home health) that affect staffing and care priorities [1] [2] [3]. Medicaid managed‑care rule changes around pass‑through and supplemental payments and state flexibility altered how states and plans route funds to providers — a change with downstream effects on nursing facility and physician reimbursement in Medicaid managed care [4] [5].
1. Payment redesign pushed money toward “value” and put pressure on margins
From 2017 into 2020 CMS continued to push Medicare away from pure fee‑for‑service by expanding value‑based purchasing and payment‑model levers. The SNF FY2020 final rule reduced SNF Medicare payments by two percentage points and then redistributed about 60% of those dollars as incentive payments tied to performance — a direct financial pressure on nursing facilities to change care processes and staffing priorities to achieve metric‑based bonuses [2]. Home health also moved to the Patient‑Driven Groupings Model (PDGM) for CY2020, changing episode payment units and projected to shift aggregate payments (+1.3% projected) which in turn affects how agencies deploy skilled nursing resources [3] [6].
Alternative viewpoints: CMS frames these as alignment of payment with quality and cost‑effectiveness; providers often argue such shifts increase administrative burden and create revenue uncertainty that can lead to staffing reductions or altered patient selection [2] [3].
2. Medicare physician fee schedule changes eased documentation burdens for APRNs
CMS’ CY2020 Physician Fee Schedule finalized allowing physicians, PAs, and APRNs (NPs, CNSs, CNMs, CRNAs) to “review and verify” instead of re‑documenting notes made by other clinicians — a rule change that reduces documentation time and can free APRNs to spend more time on care delivery rather than duplicate charting [1] [7]. CMS also proposed and finalized other care management code updates (e.g., chronic care/transitional care codes) that affect reimbursement streams tied to non‑procedural work often done by nurses [7].
Limitations: The rule reduces documentation burden but does not itself change the underlying reimbursement rates for many APRN services; payment amount and indirect‑billing practices (85% for some APP services) remain contentious [1] [8].
3. Growth of APRN billing and regulatory attention to indirect billing
MedPAC and other analyses documented rapid growth in NPs and PAs billing Medicare through 2017, doubling to 212,000 clinicians billing in 2017 — a trend that prompted scrutiny of payment policy and “incident‑to”/indirect billing practices that affect whether APRN services are reimbursed at full physician rates or at lower APP rates [9] [8]. Debate persists: proponents of maintaining physician supervision argue for oversight and system integrity; APRN advocates argue for equitable payment and recognition of independent practice [9] [8].
What sources say: MedPAC documents the rise in APRN billing [9]; ClinicalAdvisor and other commentators highlight controversy over the 85% reimbursement practice and analyses suggesting savings if indirect billing were curtailed [8].
4. Medicaid managed‑care rule changes altered supplemental/payment paths that affect nursing reimbursement
CMS’ Medicaid and CHIP managed care rules (notably guidance and final rules from 2017 and updates to the 2020 final rule) focused on federal oversight, state flexibility, and restrictions on pass‑through/supplemental payments — phasing out some pass‑through payments and limiting how states use supplemental payments to providers in managed care, while allowing some short‑term pass‑through transitions [4] [5]. These changes affect funding channels for hospitals, physicians, and nursing facilities and therefore influence how states and plans set provider rates that ultimately determine nursing facility and practicing‑nurse revenue under Medicaid [4] [5].
Counterpoint and caveat: KFF notes CMS is reviewing state‑directed payments and allowed limited temporary pass‑throughs when transitioning services to managed care, indicating ongoing negotiation between federal rules and state practices [5].
5. COVID‑era and 2020 interim rules added telehealth/remote work and temporary flexibilities that touched nursing practice
In 2020 CMS issued interim final rules related to the COVID‑19 public health emergency that adjusted Medicare/Medicaid rules to ensure access, including telehealth, remote physiologic monitoring, and allowing APRNs and other clinicians to verify rather than re‑document medical records — operational changes that expanded where and how nurses provide reimbursable care during the pandemic [10] [1]. Those temporary flexibilities changed care delivery models and billing practices during the PHE, though many were time‑limited or subject to later rulemaking [10].
Bottom line and reporting limitations
Available sources document shifts toward value‑based payment, documentation relief for APRNs, scrutiny of indirect billing, and managed‑care payment reforms that together changed revenue incentives and operational priorities for nurses and nursing organizations between 2017–2020 [2] [1] [9] [4]. Sources do not provide a single unified estimate of net reimbursement gains or losses for nurses nationwide; available reporting instead shows policy levers that redistribute funds, alter billing practice, and change care delivery incentives [2] [3] [5].