Comparing the Cost of Care Provided to Medicare Beneficiaries Assigned to Primary Care Nurse Practitioners and Physicians

Projected physician shortages and increases in the demand for health care due to insurance expansions have motivated policy-makers to consider increasing the use of nurse practitioners (NPs) to expand the capacity of the primary care workforce. While evidence exists about the quality of care provided by NPs, little is known about their costs or how they compare to the cost of care provided by primary care physicians.  In this paper, we use Medicare administrative data to assess the cost of services provided to Medicare beneficiaries treated by NPs billing under their own National Provider Identification (NPI) number. The study design is a case-control approach comparing Medicare costs for inpatient and ambulatory services provided by NPs and primary care physicians.  We use propensity score weighted regression to adjust for differences between beneficiaries.  Beneficiaries were assigned to clinicians based on the distribution of the beneficiaries’ total evaluation and management (E&M) expenditures.  The participants in the study are NPs and primary care physicians submitting claims for Medicare beneficiaries continuously enrolled in Medicare fee-for-service in 2009-2010.  The main outcome is the cost of care, defined as the Medicare allowed payment amount on paid claims.  We show unadjusted and adjusted costs, and dollar adjusted total and E&M relative value units (RVUs).  Results indicate that beneficiaries assigned to NPs were more likely to be non-white, younger, female, dually eligible for Medicare and Medicaid, and to have qualified for Medicare due to a disability.  They were less likely than beneficiaries assigned to primary care physicians to have each Elixhauser co-morbid condition, with few exceptions.  After adjusting for demographic characteristics, co-morbidities, and the propensity to see a NP, Medicare allowed payments for beneficiaries assigned to a NP were $1,552 (in dollar adjusted total RVUs); approximately 15 percent less than primary care physician assigned beneficiaries.  When E&M RVUs were examined, NP assigned beneficiaries cost $654; approximately 9 percent less than primary care physician assigned beneficiaries.